It'll take time to see if the relatively benign economic news concerning the weakness of the European Union is the ultimate catalyst is leveraging gold prices to expected levels, along with the somewhat lagging gold mining stocks like Eldorado Gold Corp Ltd (NYSE:EGO) Yamana Gold, Inc. (NYSE:AUY) and Novagold Resources Inc (AMEX:NG), which soared as gold prices once again surpassed record levels.
Gold miners have responded to soaring gold prices as a mixed bag, which in some cases is justified by the unknown or lack of performance, but in many cases, based on the fundamentals, such as in the case of Yamana Gold, seem to not be able to catch the gold price wave, and has lagged behind some competitors with much less reserves and quality management.
When talking about "benign" economic news, I mean by that that other recent news should have devastated the markets and pushed gold prices and miners higher, like the revelation the stress tests for European banks were pathetic, and the banks were much more exposed to sovereign debt than revealed.
So the idea that Europe isn't as strong economically as thought, is rather weak in comparison to the recent stress test revelation.
I think this is why the price of gold skyrocketed Tuesday, because there is a pent-up realization that the economy and its condition has been covered over by rigged reports and focus on the positive only by the mainstream media, which can't seem to report honestly unless their man Obama and the Democrats are made to look bad.
No matter, the truth is slowly coming out to the general population as to the devastate U.S. economy, and even with reports generated to make it appear confusing and mixed, that is slowly dissipating into an understanding of the danger we're still in, and gold is waiting there for investors to put their money into to protect themselves.
The idea of throwing out more stimulus is a surety now, or at least the attempt to do if, and if that happens, gold will again get a big upward bump as investors seek to protect themselves against a debased currency and out-of-control spending.
Gold miners will take part in the response to this scenario as it continues to play out, and they have, in many cases, a lot of room to run before things level out.
Showing posts with label Bank Stress Tests. Show all posts
Showing posts with label Bank Stress Tests. Show all posts
Wednesday, September 15, 2010
Monday, July 26, 2010
NovaGold (AMEX:NG), IAMGOLD (NYSE:IAG), Ivanhoe (NYSE:IVN) Down As Gold Prices Fall
NovaGold Resources (AMEX:NG), IAMGOLD Corporation (NYSE:IAG) and Ivanhoe Mines Ltd. (NYSE:IVN) all fell Monday, as gold tested the $1,180 an ounce mark, ending at $1,183.10 an ounce on the Comex division of the New York Mercantile Exchange.
With most economics seeming to be going against gold's grain, the relatively slow decline in price reveals the uncertainty of the market, and even though there is some risk appetite out there, it's not necessarily robust, for obvious global economic reasons.
Although investors were hailing the strong earnings and better-than-expected housing numbers, it isn't convincing, as there is nothing that is really surprising anyone, as the numbers for last quarter were expected to improve over their recessionary numbers from the year before, making everything look good this time around.
The current quarter is different, and we should see some weak numbers next time, although we're in the midst of this reporting season, so many investors aren't discounting that yet as it pertains to gold and equities.
Speaking of gold miners reporting for this quarter, the majority of them will be very strong, based on the strong gold prices last quarter, just like other commodity prices as well.
One thing I think will happen, and it could be any time, is gold prices are looking for an excuse to run, and investors are looking sideways at them, ready to plow money in them as soon as the negative news continues, which it will.
For now though, until investors realize the extraordinary threat the sovereign debt crisis in the European Union really is, and the joke that was the bank stress tests (which were a public relations ploy, not a true test), gold will continue to experience downward pressure, although probably at the incremental moves we've been seeing recently.
Gold miners like NovaGold Resources, IAMGOLD Corporation and Ivanhoe Mines Ltd. will perform in a similar fashion, although some, like Ivanhoe Mines, should do better than many of their peers.
With most economics seeming to be going against gold's grain, the relatively slow decline in price reveals the uncertainty of the market, and even though there is some risk appetite out there, it's not necessarily robust, for obvious global economic reasons.
Although investors were hailing the strong earnings and better-than-expected housing numbers, it isn't convincing, as there is nothing that is really surprising anyone, as the numbers for last quarter were expected to improve over their recessionary numbers from the year before, making everything look good this time around.
The current quarter is different, and we should see some weak numbers next time, although we're in the midst of this reporting season, so many investors aren't discounting that yet as it pertains to gold and equities.
Speaking of gold miners reporting for this quarter, the majority of them will be very strong, based on the strong gold prices last quarter, just like other commodity prices as well.
One thing I think will happen, and it could be any time, is gold prices are looking for an excuse to run, and investors are looking sideways at them, ready to plow money in them as soon as the negative news continues, which it will.
For now though, until investors realize the extraordinary threat the sovereign debt crisis in the European Union really is, and the joke that was the bank stress tests (which were a public relations ploy, not a true test), gold will continue to experience downward pressure, although probably at the incremental moves we've been seeing recently.
Gold miners like NovaGold Resources, IAMGOLD Corporation and Ivanhoe Mines Ltd. will perform in a similar fashion, although some, like Ivanhoe Mines, should do better than many of their peers.
Friday, July 23, 2010
Gold Levels After Bank Stress Test Results Released
Gold futures and spot gold prices have held their own so far after the release of the stress test results of 91 banks, while the U.S. dollar rose against the euro immediately afterwards.
Results found that of the 91 banks being tested, seven totally failed the test, and were found they couldn't survive losses incurred from sovereign-bond holdings.
Gold dropped right after the results came in, but had rebounded slightly, and are holding level for now.
The U.S. dollar gained 0.8 percent against the euro.
Over the short term, how traders interpret the data of the banks will determine the volatility of gold prices.
Results found that of the 91 banks being tested, seven totally failed the test, and were found they couldn't survive losses incurred from sovereign-bond holdings.
Gold dropped right after the results came in, but had rebounded slightly, and are holding level for now.
The U.S. dollar gained 0.8 percent against the euro.
Over the short term, how traders interpret the data of the banks will determine the volatility of gold prices.
Gold Down on EU Bank Stress Test Uncertainty
Gold may be on its way to the negative for the first time in four days, as concerns over the response of investors to the results of the stress test of European banks as they come in.
At about 1:30 PM EDT, spot gold had dropped $5.10 to $1,189.40 an ounce.
Traders have been lowering their exposure to gold as a result, and so the prices have dipped slightly, although they could rebound, depending on what the results of the stress tests are on the 91 banks in Europe that have been subjected to the tests.
Expectations are if equities fall once the data are released, gold prices will probably come under even more pressure because investors will have to sell their positions to cover losses.
The opposite for gold prices today, as mentioned above, would be true on the other side of it.
At about 1:30 PM EDT, spot gold had dropped $5.10 to $1,189.40 an ounce.
Traders have been lowering their exposure to gold as a result, and so the prices have dipped slightly, although they could rebound, depending on what the results of the stress tests are on the 91 banks in Europe that have been subjected to the tests.
Expectations are if equities fall once the data are released, gold prices will probably come under even more pressure because investors will have to sell their positions to cover losses.
The opposite for gold prices today, as mentioned above, would be true on the other side of it.
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