Tag Archive | "gold"

BMO Capital Markets Predict Precious Metals to Weaken in 2015

BMO Capital Markets Predict Precious Metals to Weaken in 2015.

gold bearInvestors will be bearish towards gold, silver, and platinum in 2015 because of a stronger greenback and with nickel and aluminum finding a strong support based on fundamental issues.

BMO had lowered its expectations for silver from $1,275 per ounce, to $1,190 an ounce. It also reduced its forecast for silver from $20.25 to $17.50 per ounce.

Natixis Commodities Research mirrors BMO’s new price predictions for gold as it released its own commodities price forecast. According to the risk management services firm, gold will be at $1,170 per ounce in 2015, and slightly increasing to $1,180 in 2016.

Natixis expects that the gradual outflows for gold-backed ETPs will persist until 2015. They don’t anticipate sharp outflows anytime soon since according to their data, most investors have already exited their positions since last year.

Apart from a stronger dollar, BMO said that the basis for their new price forecast is due to the recent downtrend of gold and silver prices. Like Natixis, BMO doesn’t also expect both precious yellow and white metals to increase in prices until the 2nd quarter of 2016 based on predictions for the U.S. dollar.

BMO believes that when treasury yields swing around the negative territory, gold price shocks occur. The good thing about this is that the real rates are now positive so gold may not decline sharply anymore based on the current relationship.

Natixis bases their forecasts on the fact that central banks didn’t purchase a lot of gold for this year. The reason for this is because most central banks who planned on diversifying with gold have already reached their goal. In an article by BullionVault, it was discussed that Russia and Switzerland are two countries that are still actively buying gold this year. Andrey Yurin, director of Moscow’s precious metals repository “Gokhran,” said that the country will buy palladium in 2015 after focusing on buying gold this year. The Swiss National Bank, on the other hand, is faced with a popular vote of buying precious metal reserves in order to return the Franc to a gold-backed currency.


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Investing In Physical Gold Via a Gold Bullion ETF


Buying a Gold Bullion ETF Allows One to Invest in Physical Gold

Gold Bullion ETF

In recent months the commodities market has seen it’s fair share of highs and lows. Gold in particular became victim to the Federal Reserve’s recent comments about tapering the stimulus. While many investors, agencies, and individuals are abandoning the gold ETF market, others see this as a great opportunity for long-term investments. Because of this, we wanted to bring you up to speed on what you can be possibly missing by not participating in buying a Gold Bullion ETF.

What is a Gold Bullion ETF?

So what exactly is a Gold Bullion ETF? Can’t you just buy gold from commodities? We’ll get into the differences between the two shortly, but for now the answer is yes. You could just buy gold from commodities, but the Gold Bullion ETF has a different structure that can greatly benefit those interested in this rare precious metal.

A Gold Bullion ETF tracks the current market price of gold as it trades, and reflects one of the most accurate prices of gold today. Buying or trading Gold Bullion ETF can be accomplished as easily as a traditional stock trade. You simply use the appointed symbol for the particular Gold Bullion ETF you would like to trade with and just place a buy or sell order as you would with any other stock. You can even purchase or sell this commodity via online brokers.

(Photo credit to: ETFTrends.com)

(Photo credit to: ETFTrends.com)

Gold Bullion ETFs don’t mean that you physically own pieces of gold. Don’t expect any deliveries of bars, rounds (coins), ingots, or plates to be delivered to your home. Instead Gold Bullion ETF reflects the current valuation of the amount of gold that particular ETF holds within their own warehouse spacing. Though it is a direct investment in gold, you don’t have to worry about investing in secret, secured storage areas for this sought out commodities. That will definitely help you avoid becoming a victim of some elaborate heist like in “The Italian Job.”

How Does Gold Bullion ETF Differ From Gold ETF?

There are many ways Gold Bullion ETF differ from trading gold ETF derived from futures and options. The biggest one is with Gold Bullion ETF, there is no price decay. This occurs in other gold markets when upcoming contracts are much higher than the current one. Unfortunately as you trade in gold ETF markets, you are forced to pay the higher commodity ETF contract which can cause your investment to lose it’s value. The other major difference between the two is how the value is determined. Unlike gold traded through options, futures or commodities, Gold ETF prices are determined by the measured weight and quantity of gold the Gold Bullion ETF actually possesses, rather than the current market price.

Benefits of Trading Gold Bullion ETF

As we mentioned above, when trading Gold Bullion ETF you don’t have to worry about price decay. This provides you with a lot more potential to make money off of your investments. Though there are management fees associated with Gold Bullion ETF, they account for maybe 1% of gains accrued. Gold Bullion ETF can also serve as a great hedge investment when facing economic uncertainty and currency devaluation. Those who will benefit the most from trading Gold Bullion ETF are those who are looking for long-term investments. Especially right now, with so many selling their investments, you can stand to make quite a bit of money buying it low and waiting for the prices to rise.

(Photo Credit to: Forbes.com)

(Photo Credit to: Forbes.com)

One of the most popular Gold Bullion ETFs is SPDR Gold Trust ETF (GLD), though there are plenty of ones to choose from. A great site to use as reference would be the Definitive Gold Bullion ETF List. This provides you with current market prices from all of the available Gold Bullion ETF in addition to the other commodities available through exchange traded funds.

Gold Bullion ETF Wrap-Up

Like any investment, it’s important to understand what you are investing in and have taken the time to do the necessary amount of thorough research. For those of you looking to have physical position of gold, whether it’s gold bullion bars, coins, plates or ingots, should directly contact a dealer than can delivery physical gold bullion. Just remember, if this is the road you choose to pursue you must make sure you have the necessary space and security to store your investment. If you are simply looking to own an amount that a particular company stores and holds, trading Gold Bullion ETF would be a perfect investment for you. They hold many advantages over other gold investments you can make, and can greatly benefit you as a long-term investment. Make sure you take the time to identify which Gold Bullion ETF or any type of gold investment is right for you. Never make impulsive decisions while trading, as it could be the fastest way to lose thousands.

So what do you think? Are Gold Bullion ETF the right market for you? Or are you looking to physically own gold?

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The Gold Outlook For 2013

Attempting to keep track of the gold outlook each week can make any queasy person running for the bathroom. It’s a constant tumble of some getting their hopes up with highs at closing while other are pulling clumps of hair out with closing lows. Now, everyone is wondering what the future of these precious metals holds for their owners. What can we expect though for the gold outlook the rest of this year? Can we expect a year of cheers? Or will the toupee industry be the new hot investment?

Gold in the News

gold outlookIt was only a few months ago, mid-May to be exact that everyone was asking the same question. Will gold really be able to recover from it’s latest fall? What’s causing this? Is there still a demand for gold? Compared to the past few years, the current gold price is unbelievably low. Some feel that mid-April’s decision to raise cash deposit requirements on gold and silver contracts was one of the key factors, but analysts are still unsure. What they seem to almost fully guarantee is the fact that there is still a high demand for the precious metal and it will begin to reflect in the forthcoming months.

Gold For This Week

Last week gold had a surprising positive start only to continue their downward spiral as the days progressed. It seems the depreciation of the Aussie and Canadian dollar against the US dollar was to blame for this drop. There are many variables that may affect gold and silver for this week coming up. So far the gold outlook is not a positive one. It seems that prices may further fall even if there are some exciting upward moments. Don’t start to cheer yet, they’re not expected to last. Another development that could lead to a further drop are the results of the FOMC meeting’s minutes and Bernanke’s speech. Depending on what the Fed’s future plans are, we just have to wait and see. As of right now, many speculate a Q3 taper.

Should I Invest in Gold? Is it Time to Buy Silver?

gold outlook 2


It’s always good to consider investing in gold when the prices tend to drop lower than normal. Most of those attracted to trading and purchasing gold was actually not the demand for the physical metal but instead as a long term investment. If you are looking to protect yourself from potential hyperinflation or sharp USD devaluations against other currencies gold could be the precious metal for you to invest in. Thankfully the only devaluation seen was between the Aussie and Canadian dollar.

Who Is Being Affected?gold outlook 2

Gold ETF

Recent months have shown the stock market on a rise, but with raised gold import taxes (India) and China’s slowly growing economy international demand can continue to suffer. Out of all exchanges, the ETF market is suffering the most from gold’s falling prices. More specifically the it would be SPDR Gold Shares, the ETF that follows this precious metal. At the beginning of this year the ETF’s price fell almost 14%. Even with ETF holdings year to date drops at 16.4% SPDR Gold rose in 2013’s first quarter to $2.01 billion. That is quite the difference from 2012’s Q1 revenues of only $330 million.

Gold Producers

The ETF market and gold contractors are not the only ones suffering from the dwindling gold prices. Producers like Primero Mining (NYSE: PPP) fell almost 11% (YTF). The fall in gold will most likely minimize the profit margin Primero is currently working with. Another big gold producer suffering is Goldcorp (NYSE: GG) who dropped 16% in Q1. For Goldcorp it wasn’t just gold’s minimal production that hurt them, as copper and silver production also played a major role. With high cash costs and near non-existent profit margins this year may be a difficult one for the precious metals.

Cash Out: Gold and Silver Wrap-Up

From the recent trends, it is not looking too promising for gold. For those considering investing in gold now hoping for a large return later on, don’t hope for a quick flip. If the gold and silver market does begin to rise, investors should snatch as many shares and contracts as possible. If we look at the ETF, if clients continue to drop they’ll have to repurchase the stocks. If this falling gold trend continues it’s likely more investors will abandon this ETF. Considering India’s tax import and China’s slow economic growth I think it will be some time before we see fruitful returns from gold and silver.

What do you think though? What is your gold outlook? Do you think the precious metals will start to rise again?

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Gold Mining Stocks In Trouble


gold barsGold Mining Stocks In Trouble

Gold mining stocks are in a tumble. For the better part of the past decade, gold mining shares have been underperforming gold itself as well as other mining sectors. The major driving factor has been rising cost of production, combined with the recent decline in gold prices. Another factor at play is the availability of gold ETF’s, which has opened up gold availability to more investors. With such easy access to gold, producers are selling directly much less often.

Gold Market

The gold market traditionally functions as a hedge for investors during times of general market volatility. Rising stock prices in other sectors are helping to move investors away from gold and toward more traditional investments. Additionally, the Federal Reserve has mentioned that it may turn back its quantitative easing which if true would help to bolster the US dollar and investments made in that currency. Investors usually flock to gold as a safe haven when the dollar is weakening and during periods of high inflation..

Market Price for Gold Drops

Gold prices are at a 3-year low, down nearly 30% in the first half of the year alone. It started the year at $1675.92/oz and ended the first half of the year at $1234.53/oz, having traded even lower days before. Many retail investors now have a bearish outlook on the near future for gold after its historic decade-long bull market.

Gold Mining Stocks Plummet

We pulled a selection of gold mining companies to look at their abysmal performance over the past year:

Goldcorp Inc. (GG) 20.20B Market Cap
All Time High April 29, 2011 $55.83

  • Sept. 21, 2012 $46.93
  • July 3, 2013 $24.88
  • -46.98% Since September 21, 2012

Barrick Gold Corp. (ABX) 14.71B Market Cap
All Time High April 21, 2011 $55.63

  • Sept. 21, 2012 $42.86
  • July 3, 2013 $14.69
  • -65.73% Since September 21, 2012

Yamana Gold Inc (AUY) 7.32B Market Cap
All Time High November 8, 2012 $20.39

  • Nov. 8, 2012 $20.39
  • July 3, 2013 $9.73
  • -52.28% Since November 8, 2012

AngloGold Ashanti Ltd. (AU) 5.36B Market Cap
All Time High January 31, 2006 $61.18

  • Sept. 18, 2012 $36.91
  • July 3, 2013 $13.87
  • -62.42% Since September 18, 2012

Newmont Mining Corp (NEM) 14.43B Market Cap
All Time High November 8, 2011 $72.13

  • Sept. 14, 2012 $57.20
  • July 3, 2013 $29.02
  • -49.27% Since September 14, 2012


Newmont Mining Corp (NEM)

To see why revenues and operating income of gold mining companies has fallen the past quarter we compared production volumes, cost of production and price of gold bullion for the quarters ending March 31, 2013 and March 31, 2012.
March 31, 2013

  • Consolidated gold production of 1,281,000 ounces (1,165,000 attributable ounces) at Costs applicable to sales of $758 per ounce
  • Average realized gold and copper price of $1,631 per ounce and $3.13 per pound
  • Sales of $2,177
  • Gold and copper operating margin (see “Non-GAAP Financial Measures” on page 53) of $873 per ounce and $0.94 per pound, respectively


March 31, 2012

  • Attributable gold and copper production of 1.3 million ounces and 35 million pounds, down 2% and 35%, respectively, from the prior year quarter
  • Average realized gold and copper price of $1,684 per ounce and $ 4.01 per pound, up 22% and no change, respectively, from the prior year quarter
  • Consolidated revenue of $2,683, an increase of 9% from the prior year quarter
  • Gold and copper Costs applicable to sales of $620 per ounce and $1.98 per pound, up 11% and up 78%, respectively, from the prior year quarter

*Data taken from Edgar Online

Looking at Newmont Mining Corp’s (NEM) costs of production and sales per ounce of gold for the 3 months ending March 31, 2013 and March 31, 2012; it’s pretty clear why the stock has fallen so sharply. Overall cost per ounce of gold has risen to $758USD/oz from $620USD/oz. This has caused a decrease in operating margin per ounce of gold to $873USD/oz from $1,064USD/oz. Overall production has remained mostly unchanged during this period, reducing slightly to 1.28 million ounces from 1.3 million ounces.

If we take a peek a little further into today’s numbers, gold bullion has dropped significantly since the March 31, 2013 reporting date. The average realized price of gold for the company was $1,631USD/oz for the first quarter. As of July 4, 2013 the price of gold bullion is at $1,254.18USD/oz. If the company managed to keep its cost at the same rate of $758 per ounce of gold its operating margin per ounce would be significantly reduced. The company sells its gold at a spot market price. However, it’s impossible to predict the average price it sold gold for during its most recent period. Still, with gold bullion dropping so significantly the company will experience a big decrease in operating margin per ounce of gold produced. It’s important to note that NEM does not guard against risk for the fluctuation in the price of gold. With market prices continuing to plummet the operating margin per ounce of gold will continue to decrease as well as increasing costs to produce an ounce of gold.

Why Gold Mining Companies are in Trouble

As the economy begins to improve investors are fleeing from “safe-haven” investments such as gold, silver, copper, and other precious metals. The latest news from Ben Bernanke is unemployment rates improved better than expected for the previous quarter. Unemployment rates are a lagging indicator to the economy’s overall performance for the past few quarters and improving unemployment numbers indicate an upturn in the general economy. The overall success of the stock market over the past few years coupled with great news from unemployment reports and extremely low interest and inflation rates is causing investors to remove their money from safe investments (such as gold) and return their investing activities to the stock market.

Will there be a turnaround?

The question that often gets asked after a commodity (or really any investment instrument) has dropped is “has it hit bottom yet?”. A good amount of attention to the gold mining stocks is being directed by the Chinese government. They have begun to ramp up purchasing and acquisition of troubled mining companies seen as bargain investments. With the above in mind, it cannot be suggested to go in and purchase mining stocks in this environment without some serious research into their financials.

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Gold Commodity Price Options

Gold Commodity Price and Investment Information

gold commodity price

Gold is one of the best investments in today’s market. Gold is one currency that does not devalue as much as other properties. Though it is a good investment, consumers need to be careful about all of the information out there about gold. There are plenty of websites and other information outlets and all of the investment opportunities can get confusing.

For those looking to make long-term investments, gold is a good market to investigate. It does not require the investor to look at short-term prices or market fluctuations on a regular basis. Instead, gold can offer a long-term investment and an overall safety in terms of financial status.

 Gold Commodity Price within Gold Coin Market

When it comes to buying gold as an investment, the gold commodity price is an important aspect of the purchase. There are many different types of gold, some of which sells at high premiums based on the content of gold they hold. Gold Bullion coins are one example of a good investment. These coins sell at low premiums and their value holds over the years. Overall, gold bullion coins have a great gold commodity price.

There are many different types of investments when it comes to gold coins. The best-selling gold coin is the American Gold Eagle coins. These are the highest selling bullion coins in the entire world. The Krugerrand coins are also very popular, though they are no longer imported to America for the investing individuals. Canadian Maple Leafs are nearly as popular as Gold Eagle coins in some areas of the nation. For those who want to save money, Austrian 100 Coronas and Mexican 50 Pesos can often be purchases for smaller premiums.

Overall, gold makes an excellent investment for long-term purposes. As you investigate the possibilities, make sure to pay attention to gold commodity price to ensure the best investment opportunity.

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CNEX – Cannon Exploration


CNEX, lustrously gleaming, glistening and glowing, this MEDICINAL PICK will cure your GOLD FEVER

GOLD is at new highs and SR&R got the winner of GOLD picks for you.  It is CNEX (Cannon Exploration, Inc.) and the company is aggressively acquiring and developing early stage mineral exploration projects in Canada.  A seasoned team of geologists, technicians and geographic information specialists are commencing work on “the Queen Alexandra property sometime in late May to continue with the next stage of exploration.”
CNEX recently redesigned their website (http://www.cannon-exploration.com).  Management is putting time and money into important and previously neglected areas of the business.  This is all creating a new level of public awareness for the company, which may in-turn lead to a huge BURST in PPS.  A screenshot of the website is below:
Furthermore, SR&R is expecting NEWS come Monday morning.  It may, perhaps, be on the new website layout… or something much MUCH BIGGER.

Combining the factors mention above, with consideration to the recent consolidation at the stock’s NEW PPS LEVEL, it appears the stock is ready to MOVE HIGHER.
We expect BIG THINGS this week for CNEX.

CNEX Stock Chart

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