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31/10/14
21:56
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Originally posted by chuk
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In general I agree JID although the uranium market is very small so perhaps not the best analogy. Yes central bank selling can keep the price down for extended periods as it did in the lead up to the 2000/2001 low when there was large scale and very well publicised central bank sales but I'm not hearing of any significant net sales from central banks this year so I think it's been investor selling rather than central bank and if so, they will run out of gold to sell far quicker than the banks would. That is assuming central banks are being honest with us which I'm not so sure about! There are enough theories around that some large central banks have sold or lent out their entire reserves. However I am not trying to time this market or make investments based on theories which is why I am still staying away from any high cost producers and only looking for the lowest cost producers/developers. My other point was that the theory that gold falls when economies are doing well is completely baseless and misleading. The two big gold booms (1970-1980 and 2001-2008) both occurred when economies were far stronger than they are now and interest rates were much higher than they are now or are likely to get to over the next 5-10 years.
One other point is that the US economic recovery has been modest at best and was dependent on very heavy QE. What will happen now that the economy and markets have to go cold turkey especially with Europe still extremely weak? Will the US begin QE again next year and go to permanent QE like Japan? What will that do for sentiment to gold? Will that mark the final turning point?
I'm not betting on any particular POG outcome, but rather looking for companies that can do very well with with POG averaging around the prevailing spot price, whatever that is at the time. Very few fit that bill IMO which is why I'm not surprised to see the majority down so much at this time with gold around $1200. I'm certainly not interested in holding any gold producers/developers with AISC at or forecast to be around US$1100-$1200/oz, but any that can make good cash flow relative to their market caps at that gold price are of interest to me.
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The corporate side of BSR is that which needs attention.
If cash can be raised then a deal needs to be done, by contract if necessary.
A shareholders vote can be contracted to be exercised in a certain way, or not exercised in a particular way as the case may be. - Last time I looked.