In adherence to the guidelines of the Central Bank Gold Agreement of Europe, in addition to Switzerland and Sweden, central banks in the region will stop selling gold reserves.
That will put an end to over ten years of selling the gold by the banks.
The CBGA puts a cap on collective sales by the banks.
This could provide even more support to gold, which already enjoys strong support, and is another piece of the underlying fundamentals which are driving gold prices up, taking supply out of the gold market.
Although there will probably be some instances of relatively small sales, expectations are the central banks will follow the overall Central Bank Gold Agreement they made.
Sales from the banks have already plummeted over the last CBGA year, dropping 96 percent to 6.2 tons.
Showing posts with label Gold Reserves. Show all posts
Showing posts with label Gold Reserves. Show all posts
Monday, September 27, 2010
Friday, April 9, 2010
Ivanhoe (NYSE:IVN) Constructing Mongolia Gold, Copper Mine
Ivanhoe Mines (NYSE:IVN) development of their Oyu Tolgoi gold and copper project is about to begin, with a price tag of approximately $5.5 billion committed to the construction.
Production at the mine is estimated to begin in 2013, and an initial investment of $758 million will be put toward the project this year.
Ivanhoe has a strong partner in Rio Tinto (ASE:RIO), which has increased their stake in Ivanhoe in anticipation of the eventual haul the largest gold and copper mine in the world yet to be worked will produce.
Rio Tinto will finance the equipment to use at the project.
Estimates are Oyu Tolgoi has 46 million ounces of gold and 81 billion pound of copper reserves.
Production at the mine is estimated to begin in 2013, and an initial investment of $758 million will be put toward the project this year.
Ivanhoe has a strong partner in Rio Tinto (ASE:RIO), which has increased their stake in Ivanhoe in anticipation of the eventual haul the largest gold and copper mine in the world yet to be worked will produce.
Rio Tinto will finance the equipment to use at the project.
Estimates are Oyu Tolgoi has 46 million ounces of gold and 81 billion pound of copper reserves.
Thursday, April 1, 2010
Gammon Gold (NYSE: GRS) Weaknesses Exposed
Gammon Gold in for a couple of tough years
When you consider we're in one of the most significant bull markets in history, the performance of Gammon Gold (NYSE: GRS), say, over the last five years, reveals an enormous amount of weaknesses in the company, and none of them bode well for them going forward.
The primary short-term problem has been the results of its drilling, which caused estimated gold reserves to plunge by 18 percent last year. That seems to be the primary reason TD Newcrest analyst Steven Green slashed his 12-month target on the share price to $7. He originally had it at $9. As of this writing shares are at $7.19.
Gold mining isn't rocket science as far as understanding it goes. You find gold in the ground and extract it for less than you can sell it for; the end result is profits or losses, like any other business.
The decline in reserves came from the disappointing results at the Ocampo mine in Mexico where drilling over a range of over 115 meters left reserves less than before they started.
Another problem is the reserves they do had has been upwardly revised as to the costs to extract the gold, bringing production guidance down 24 percent in 2010 and 18 percent in 2011.
It's going to be a tough couple of years for Gammon Gold, and other than better cost management, there doesn't seem to be much they can do about it to turn it around.
One thing the company asserts it's going to do is increase production going forward. They'll have to do more than say that though, and come through on the promise.
When you consider we're in one of the most significant bull markets in history, the performance of Gammon Gold (NYSE: GRS), say, over the last five years, reveals an enormous amount of weaknesses in the company, and none of them bode well for them going forward.
The primary short-term problem has been the results of its drilling, which caused estimated gold reserves to plunge by 18 percent last year. That seems to be the primary reason TD Newcrest analyst Steven Green slashed his 12-month target on the share price to $7. He originally had it at $9. As of this writing shares are at $7.19.
Gold mining isn't rocket science as far as understanding it goes. You find gold in the ground and extract it for less than you can sell it for; the end result is profits or losses, like any other business.
The decline in reserves came from the disappointing results at the Ocampo mine in Mexico where drilling over a range of over 115 meters left reserves less than before they started.
Another problem is the reserves they do had has been upwardly revised as to the costs to extract the gold, bringing production guidance down 24 percent in 2010 and 18 percent in 2011.
It's going to be a tough couple of years for Gammon Gold, and other than better cost management, there doesn't seem to be much they can do about it to turn it around.
One thing the company asserts it's going to do is increase production going forward. They'll have to do more than say that though, and come through on the promise.
Tuesday, March 9, 2010
China Downplaying Interest in Gold
As many following China and its acquisition of gold have noted, it has shown they are nervous about their holdings of U.S. Treasury's, and China is now attempting to spin they're not as interested in gold as they were before, seeming to attempt to shore up their interest in U.S. Treasury's, even though they are a very poor investment at this time, and will be long into the future.
More than likely it is also a nod that China may be buying gold again, but doesn't want to show its hand so prices don't skyrocket and make it more expensive to acquire.
Another problem for China is it'll have to ease off buying Treasury's slowly, as it would have a detrimental impact on their manufacturing base and exports.
China has been working up growing its domestic economy in order to not need to buy into U.S Treasury's to grow its markets.
With U.S. consumers having slowed down their spending, even if China buys Treasury's it may not be that helpful to them if Americans don't turn around and buy products from the country.
So while gold is probably the better investment taking into consideration the economic climate, China has to continue playing a balancing game until their domestic economy matures more.
Until then, gold will be better for them to invest in, but for the sake of their manufacturers and exports they'll probably be forced to buy U.S. Treasury's until that changes.
So investing in gold will continue, but it'll probably be much quieter and probably not at former levels, although it's hard to tell with the Chinese which way they'll go and how they're going to do it.
More than likely it is also a nod that China may be buying gold again, but doesn't want to show its hand so prices don't skyrocket and make it more expensive to acquire.
Another problem for China is it'll have to ease off buying Treasury's slowly, as it would have a detrimental impact on their manufacturing base and exports.
China has been working up growing its domestic economy in order to not need to buy into U.S Treasury's to grow its markets.
With U.S. consumers having slowed down their spending, even if China buys Treasury's it may not be that helpful to them if Americans don't turn around and buy products from the country.
So while gold is probably the better investment taking into consideration the economic climate, China has to continue playing a balancing game until their domestic economy matures more.
Until then, gold will be better for them to invest in, but for the sake of their manufacturers and exports they'll probably be forced to buy U.S. Treasury's until that changes.
So investing in gold will continue, but it'll probably be much quieter and probably not at former levels, although it's hard to tell with the Chinese which way they'll go and how they're going to do it.
Monday, March 8, 2010
Eldorado Gold (NYSE:EGO) 42 Percent Increase Gold Reserves
Eldorado Gold Eastern Dragon Project
In case you didn't catch the recent news concerning Eldorado Gold (NYSE:EGO), they reported a huge 42 percent increase in proven and probable gold reserves, equal to 747,000 ounces, at its Eastern Dragon Project in China.
With that data in hand, the mining company has increased it drilling budget by $2.4 million to get a better idea of what they have and to secure the find.
They also want to do more exploring of the mine to confirm vein structures and to see if there are additional gold resources.
Eldorado Gold Eastern Dragon Project
In case you didn't catch the recent news concerning Eldorado Gold (NYSE:EGO), they reported a huge 42 percent increase in proven and probable gold reserves, equal to 747,000 ounces, at its Eastern Dragon Project in China.
With that data in hand, the mining company has increased it drilling budget by $2.4 million to get a better idea of what they have and to secure the find.
They also want to do more exploring of the mine to confirm vein structures and to see if there are additional gold resources.
Eldorado Gold Eastern Dragon Project
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