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GoldMarketsCentral.com

A new site has been launched called www.goldmarketscentral.com. It’s a new online investment/sharemarket forum. The forum is FREE to register and use. “GMC” is focused primarily on gold and silver investing, and seeks to connect interested investors from across the world. The forum is divided into a few parts such More »

kohler_may2012_aust_property_bear_market_frontpage

Cool Housing Charts – Aus, US, International

The following housing/property charts caught my eyes over the last three months (presented by Alan Kohler on ABC News) Australian Housing Property bear markets tend to last a long time, typically 15 to 20 years. Real house prices indicate many bad years ahead in Australia (price wise). Per capita real More »

kohler_may2012_3_great_recessions_frontpage

Cool charts from the last three months

The following charts caught my eyes over the last three months (presented by Alan Kohler on ABC News) More »

kohler_april_2012_what_housing_crashes_look_like

Steve Keen sees housing gloom

Professor Steve Keen lays down the facts of the current decline in Australia housing… His full analysis can be viewed >here More »

feature_kohler_jan_2012_weakest_market_recovery_since_1900

Weakest recovery of All Ords in 100 years

Two more interesting charts published by Kohler last night… This is looking like a secular bear market which could last for another decade. Kohler – Australian All Ordinaries in the four big collapses and recoveries since 1900. This [current bear market] was the equal deepest, worse than 1929 and the More »

feature_kohler_jan_2012_chinese_real_estate_collapsing

Chinese real estate market down 34% since June 2011

A compelling chart by Alan Kohler – the Chinese real estate index down 34% since June 2011. Kohler – “If anything, the slide is accelerating. I seem to remember something like that happening in the United States in 2007″ Fourteen months ago I discussed the Chinese real estate bubble in More »

NCM_bubble_chart

Newcrest Mining – 2011 a year to forget

2011 was an awful year for many stocks and stockmarkets around the world. Despite the global debt problems, many companies, particularly in the resources sector are making very healthy profits, are cashed up and have little or no debt. Newcrest Mining fits this criteria, but ended up falling - 27.8% More »

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2011 Annual Tipping Results

Each year, for about seven years now, I have participated in the Annual Shares.com.au Tipping Comp. These are the three stocks I selected for 2011, with the reasoning (the comp used 31/12/10 for opening prices): posted: 2 January 2011 Always struggle to pick three.. narrowed it down to four, so More »

Free universal healthcare is not sustainable in Australia or anywhere over the long run…

The Centre for Independent Studies released a thought provoking paper on the critical need to reform the public health system in Australia – a beast that continues to suck in tax dollars with diminishing output.

Australia will face problems funding the cost of Medicare if expenditure on public hospitals continues to grow at more than twice the rate of national income as it has over the last decade. Since 2001–02, the average annual cost of public hospital care has grown 7.75%, compared to an average general rate of inflation of around 3% and an average GDP growth rate of only 3.1%.

Greg Lindsay:

There is too little constructive debate about health in this country. The left’s view that it is only right and proper in a rich and civilised nation for government to pay for “free” healthcare for all citizens has triumphed. …

The bipartisan political consensus is now running hard up against financial realities. If the political class wants to preserve Medicare, they will have to make the system affordable. The public will need to be walked and talked through the limits to government capacity to tax and spend in order to build support for health reform.

Gold Shares Bloodbath continues

Half of 2013 down, and now the so called ‘defensive blue chips’ are now falling heavily like the gold sector…

au_vs_ncm

NCM is the largest gold stock on the ASX by far, and has clearly has some problems.

Here is a base 100 chart of the gold stocks in the ASX200
asx200_gold_stocks__scottreevecom_30_june_2013

So in percentage terms, all the gold stocks have crashed together (and remember these are some of the better ones on the ASX)
au_30june2013_asx200_percent
au_30june2013_asx200_percent

and a closer look at the handful which I think will be good buys when the dust finally settles… this could still be a while off – (refer to the my Gold Shares Bloodbath post below this one)
asx200_gold_stocks__scottreevecom_30_june_2013_ii

Gold Shares Bloodbath

=======================

  • UPDATE: Post now includes charts for NCM, OGC, PIR, TGZ (as of 10 June 2013)
    =======================
    On Friday 12 April 2013, the US dollar gold price plummeted 5.6 per cent and silver fell 6.0 per cent. At time of writing on 15 April, both continue to slide with gold price in Australian dollars at A$1340 and silver at A$22. Major support lines have now been broken and the heavy falls are likely going to continue for a while yet.

    The bloodbath on the ASX today can be seen in the watch list below:

    gold_asx_15.04.2013

    As is clear above, the one gold major on the ASX, Newcrest Mining fell over 8 per cent in the session. Even the low cost producers got smashed as much as the marginal gold producers… (more on that later)

    As I posted at the end of 2012, Newcrest (and gold shares generally) have been underperforming for over two years now.
    ncm_2013_shoker_goldmarketscentral

    With today’s losses, NCM is currently down 20.8 per cent for 2013.

    In all seriousness who would want to touch gold and silver right now?

    I don’t blame anyone if they are leaving the gold or silver markets right now. Like trading anything, it’s all in the timing and the charts are showing that both gold and silver price will get cheaper (unless there is a major bounce in the next couple of days…unlikely).

    Gold and silver’s fundamentals today are better than they have been for decades. Yet again there is now a large disconnect between what’s happening in the physical market and what the gold price and gold shares are indicating. We have tens of thousands of paper gold and silver contracts flooding the market, yet we have the likes of central banks trying to repatriate their gold reserves, but being told the gold likely doesn’t exist yet. Take the German Bundesbank being told it would take 7 years for nearly 700 tonnes of its gold bullion reserves to be flown back to der Fatherland from Paris and New York (yet this amount of gold could fit on a couple of airliners tomorrow if the gold existed…).

    Most years since the gold/silver secular bull market started 12 years ago, gold and silver always had at least one savage sell off each year. This is why many investors always warn about investing in gold/silver with leverage – it’s easy to get caught out. See this chart I did back in Sept 2011, which shows these severe pull backs. This current sell off is just another example of volatility in gold and silver markets. In the past these sell off periods have all been fantastic buying opportunities. In a debt laden Western World, in a world where Japan is destroying its currency, and China has printed more credit than the entire US financial system since 2009 …. then I’m pretty confident to say that gold and silver will remain being a desired currency to store wealth and maintain purchasing power.

    Back in 2008, the gold price fell 34% from peak to trough before returning to its bull market
    . Silver when from around US$20 to about US$7.50 – when I first became awake to gold and silver’s fundamentals.

    By the time Lehmann Brothers went under, and like.. half the world’s financial industry on 15 September 2008, gold and silver had already been falling for 6-7 months and bottomed soon after the GFC panic started in that September. Perhaps gold and silver is yet again being a leading indicator of things to come later this year?

    The best part about the current sell off is that the lowest cost producers, which high-grade gold near surface are getting sold off just as heavily as the marginal gold stocks. When the dust settles, there will be some big bargains.

    In my opinion (no buy recommendations or advise here… just my opinion), these are some of the gold stocks worth watching. Who knows when they will bottom.

    (Click to enlarge)
    scottreeve_gold_stocks_april2013
    Disclosure: I currently have a small parcel in TGZ.

    My observations are based on gold resource, production, cost… the “economics”. Political/management risks can change the desirable attributes of these stocks rather quickly!
    I would also say that there are few gold stocks in Australia worth touching these days because the cost structure is getting out of control. The last few years there have been too many mid-tier and major gold companies that have put $100s millions into growth and expansion, and are paying for it in their cost structure. Now is the time to find the best of the best in terms of high-grade gold and low cost. Right now South America looks good and as always gold deposits that are very high grade and shallow to get to!.

    ** Important note: Not all gold companies report complete total cash costs. Some companies excludes taxes, exploration, depreciation, depletion expenses, financing etc from their calculation. This can make it difficult to compare companies cost structure – the difference can be large. For example, in January 2013, one Australian analyst found that

    “the average total production cost was $1,170 an ounce, compared with an average reported cash cost of $773 an ounce.”


    Quick background on these companies mentioned above:

    Two weeks ago I charted BDR and DRM and their support lines are clear to see. In the coming days I will update this post with technical analysis of the other stocks. They will also be posted at www.goldmarketscentral.com

    Newcrest Mining
    Newcrest is on my list as it is the only gold major on the ASX. NCM has had consecutive years of underperforming, but when the gold market bottoms, NCM should bounce. Following the stockmarket lows in 2008 NCM rebounded around 90 percent in 6 months (from $21 to $40 p/share). Yes, dogs can turn into market darlings quickly. I suspect one day soon NCM will resolve its expansion issues at Lihir and Cadia and solid returns should result.

    NCM_scottreevecom_10june2013

    Oceanagold
    The Didipio Mine (Philippines) is estimated to be one of the lower cost gold mines (net of by-product credits) globally. Didipio Mine estimated cash costs of FY2013 at negative $370 to negative $50 per ounce, due to net by-product credits from 15,000 – 18,000 tonnes of copper.

    OGC_scottreevecom_10june2013

    Beadell Resources
    Beadell has just commissioned a new gold mine in northern Brazil. One of the starter pits has arguably the highest grade gold deposits in the world with grades at 30.9g/t au (almost 100,000 ounces). Another start pit contains veins of iron ore between the veins of gold bearing ore. BDR is soon to commission an iron ore concenerate plant to sell it as a by-product. This will lower BDR’s total cash cost to the lowest quartile of around US$425 per ounce.

    BDR_scottreeve.com_31.03.2013

    Papillon Resources
    Papillon raised $52.9 million in March 2013 to complete a 100,000 metre drilling program at its project in western Mali. The company already has over 4 million ounces resource from shallow drilling completed to date. There is potential for many millions of ounces to be defined in the coming months.

    PIR_scottreevecom_10june2013

    Teranga Gold
    Teranga has a proven gold mine in eastern Senegal. The company made significant inroads in 2012 by reducing its operating costs by expanding its plant; found a new gold deposit nearby (at grades of 5.3/gt au), and will soon eliminate its hedge book in the coming months.

    tgz_ax_price_weekly.10dec10_to_25jul13

    Doray Mining
    Currently developing one of the highest grade gold projects in Australia at Andy Well. The main pit at Andy Well has a resource grade of 15.1g/t au. First gold production is expected in September 2013 at an annual rate of 74,000 oz per annum. Total cash costs expected to be around A$868 per ounce.

    DRM_scottreeve.com_31.03.2013

    Cheers
    ~ Scott

  • Is Australia too reliant on China?

    With the recent Australian Government visit to China and the announcement of a $31 billion currency swap – its time to ask is Australia too reliant on China for trade?

    According to graphs from Bloomberg, Australia relies on China for a massive 30% of its export demand. This gross dependence leaves Australia particularly susceptible to shifts in the Chinese business cycle.

    Australia reliant on China

    35_countries_rely_on_china_for_exports

    Alan Kohler has another angle on it. It’s clear to see from the chart below that China’s appetite for Australia iron ore and coal has surged our balance of trade with China.
    china_australia_trade_balance

    But with the Chinese steel industry increasing its capacity 7 fold from roughly 100 million tonnes to over 700 million tonnes in the last decade… when ill the iron ore/coal bubble pop? when will the Chinese housing/construction bubble catch up?

    Already we are a significant drop in exports to India.
    india_australia_trade_balance

    Once the mining boom income completely drops off, the real dire state of our Government budgets will be clear for all to see. We’ve wasted so much, and the aging population problem is soon to hit us.

    – Scott

    The new frontier – extracting gold and silver from the sea floor

    We often hear of gold and silver being mined from open pits and underground mines… but more recently there has been some bold entrepreneurs that are going to extra lengths to get gold and silver form the sea floor.

    Here’s a few cool TV series on mining/exploring for gold and silver… if you can get hands on a copy.

    Silver Rush

    A three-part series narrated by Mike Rowe, tells the story of one of the greatest deep-sea treasure quests of all time. The series will take viewers on board Odyssey’s flagship, the Odyssey Explorer, as it launches its most audacious operation ever — locate and excavate three shipwrecks worth as much as a billion dollars all in one season. But will they be able to complete the entire recovery effort in just 90 days before punishing storms roll in?


    silver bullion brought up from one of the shipwrecks (4kms under the surface):
    Silver Rush

    For more info visit Odyssey Marine Exploration

    Bering Sea Gold

    In Nome, Alaska, the gold rush is on. Meet the dredgers, driven by gold fever and sometimes desperate need, who pilot their ragtag dredges and dive with hoses to suck up gold from the bottom of the frigid, unpredictable Bering Sea.

    Bering Sea Gold (Under the Ice)

    The summer season over, 3 teams of miners dive under the ice to dredge gold on the floor of the Bering Sea. Two dredge teams struggle to winterize their operations, train their crews, and get the gold. But one new, scrappy crew of friends hits pay dirt.

    more on these vids at: GMC

    In the not too distant future, mining gold and silver from the seafloor with heavy machinery? It’s not far away..

    Nautilus Minerals

    is the first company to explore the ocean floor for polymetallic seafloor massive sulphide deposits. Nautilus was granted the first mining lease for such deposits at the prospect known as Solwara 1, in the territorial waters of Papua New Guinea, where it is aiming to produce copper, gold and silver.

    Nautilus Minerals
    For more info visit Nautilus Minerals

    As Ron Paul puts it… If you had two ships sink to the bottom of the Ocean A) one with gold and silver on it B) the other with US dollars. Which would the diver go back for? One is real money with intrinsic value, the other can be printed in unlimited quantities.

    Cheers
    Scott

    Stocks and Precious Metals at opposite turning points?

    I feel we are at a major turning point for the major world sharemarkets and full gold and silver. Below is my interpretation of the chart technicals.

    S&P500

    Australian All Ords

    AUD/USD

    AUD/EUR

    Gold (US$)

    Silver (US$)

    Cheers
    Scott

    GoldMarketsCentral.com

    gmc_banner

    A new site has been launched called www.goldmarketscentral.com.

    It’s a new online investment/sharemarket forum. The forum is FREE to register and use.

    “GMC” is focused primarily on gold and silver investing, and seeks to connect interested investors from across the world.

    The forum is divided into a few parts such as:
    • Stock discussion (ASX, TSX, NYSE etc) – over 350 ASX share threads & over 250 international gold company threads
    • ways to invest in precious metals;
    • latest precious metals news;
    • investor education;
    • cool stats such as bubble comparison charts etc.

    The forum uses the latest vBulletin version and has many community interactions apps added:

    • Thumbs up – thank other members if you like their post;
    • vB Experience – achievement rewards based on forum activity and interaction
    • Invite friends (and receive referral prizes (*see below))
    • Featured posts can be sticked to front CMS page, so members can find informative posts quickly
    • Member blogs + more

    There are over 600 individual gold stocks already listed to get discussion rolling.

    If you have a genuine interest in investing in gold/silver stocks, investing in bullion, checking cool stats out, finding the latest news in precious metals trends, then Gold Markets Central .com is the place to be.

    (click on images to expand)
    world_gold_production_bubbles_scott_reeve
    NCM_bubble_charttop12_scottreeve.com_2011_gold_database

    RBA admits our 80 tonnes of gold isn’t stored in Australia

    Australia has one of the most respected bullion mints in the world in Perth, secure vaults in many of our cities, yet leaves our gold in London (if it hasn’t been lent out already!, does it exist?)

    I came across this correspondance on Casey Reserach:

    Dear Brian,

    Thank you for your email. The Reserve Bank has confirmed the following:

    As at end-June 2011 the Reserve Bank of Australia held 80 tonnes of gold in London Good Delivery bars. The Reserve Bank holds 99.9 per cent of its gold reserves in the United Kingdom at the Bank of England. The remaining 0.1 per cent is held at the Reserve Bank’s Head Office in Sydney.

    London is a major global gold trading market and the Bank of England provides a secure and cost-effective storage location for central banks and market participants. The Reserve Bank has processes in place to ensure that the gold reserves are maintained appropriately. It is not considered necessary from management, security or operational perspectives to relocate the gold bars to a facility in Australia.

    The Reserve Bank has reviewed its approach to releasing details about its management of the physical reserves of gold and decided to release the above information.

    Regards,

    Manager | Media & Public Relations Office RESERVE BANK OF AUSTRALIA | 65 Martin Place, Sydney NSW 2000

    James Turk’s Outlook for Gold for 2013 to 2015

    A good, well explained video by James Turk on the gold market and gold’s role in preserving purchasing power.

    James Turk’s Outlook for Gold for 2013 to 2015

    In this latest video James provides an update to a longstanding forecast that he made back in 2003 in Barron’s. This interview was widely talked about because whilst the gold price was USD350 at the time, James stated that he envisioned the gold price to be around USD8,000 sometime between 2013-2015.

    Now 9 years later, James looks back on this forecast and explains how this original price target was determined. As this timeframe is approaching, James goes on to update this forecast considering the current economic climate.

    James argues that the reasons laid out in 2003, that would impact negatively the purchasing power of the dollar, thereby positively impacting the price of gold, are in fact worse than anticipated.

    Kyle Bass – Entaglement

    An interesting video on Kyle Bass.

    The Japan debt time bomb is ticking.

    Periods of huge debt usually ends in war.

    Gold’s 2012 Performance vs 158 Currencies

    [B]Gold’s 2012 Performance vs 158 Currencies[/B]

    ==========================
    Who are we?

    I come in different names, shapes and colours.

    People use me as a medium of exchange.

    Each year I seem to buy less and less things.

    You may recognise some of my names: dollar, pounds, kroner, peso, yen, euro.

    Last year for the 12th consecutive year, nearly all of us lost purchasing power to a former acquaintance, gold.

    We are:

    Fiat currencies
    ==========================

    – All but a few of the 158 currencies listed below lost value to gold in 2012



    It is clear from these numbers that governments worldwide continue to use inflation (money expansion) as a means to destroy your every day purchasing power.

    “Inflation and credit expansion, the preferred methods of present day government openhandedness, do not add anything to the amount of resources available. They make some people more prosperous, but only to the extent that they make others poorer.” – Ludwig von Mises –

    Cheers
    Scott

    Time to take on the green energy myth

    Terry McCrann:

    The latest effort from its so-called ‘chief climate commissioner’ really takes the cake with his absurd claim that Australia could be powered “almost entirely by renewable energy.”

    Oh yeah. Renewable energy now provides about 10 per cent of our electricity. Sounds like we’ve got a running start? We’ve ‘only’ got to expand it tenfold?

    Except what people like Flannery never tell you in all the headline flummery, is that the overwhelming majority of that comes from hydro power. And nobody’s building dams any more.

    Yes, the body of his report does note that some 65 per cent of that 10 per cent comes from hydro. It’s arguably closer to 80 per cent in non-drought years.

    That means barely 2 per cent of our total electricity comes from what the average person would think as ‘renewable’… Wind and solar…

    That means even using his optimistic numbers for current wind and solar generation, we would have to increase our installations of wind and solar by at least forty times what they are today to get 100 per cent of our electricity from these two “plentiful” sources….

    But that’s to produce today’s power. Flannery’s talking about some decades ahead, when our demands will probably have doubled. So make that a 160-fold increase in windmills…

    Solar and wind could even be the cheapest sources of power for retail users by 2030, Flannery trumpeted. As carbon prices rise, he added.

    Yes, the greatest half-truth of the climate propagandists. Make real power sources ridiculously, unnecessarily expensive and suddenly wind and solar become “cheap.”

    When we look at the energy produced in Australia, we are going through the biggest energy boom in our history – it’s just that we are exporting the once “cheap” competitive advantage our country had – cheap uranium, black coal and gas.

    Australia’s energy production by fuel type (total):

    Australia’s energy production which is exported (by fuel type):

    Australia’s actual energy consumption (by fuel type):

    To put this all into perspective… a flow chart showing how much energy Australia exports.

    The rest of the world is happy to buy our high quality black coals, uranium and cheap gas… yet we are being flooded with the “green energy” religious left… Many in this camp are anti dam building, anti nuclear, anti coal, anti methane gas, and… many are anti wind towers cause they kill birds…. The hypocrisy.

    The renewable madness needs to stop. No mandates. No Government hand outs. No carbon taxes. No false sciences. No globalists agenda. Let the free market once again determine the cheapest source of energy.

    – Scott