Newmont announced on Wednesday that they were going to acquire Canadian Gold Miner Miramar for $1.53 billion dollars. Miramar’s primary asset is a massive gold area in the Hope Bay area of Canada’s Nanavut territory where the total resource size may be in excess of 10 million ounces. At $1.53 billion dollars, Newmont is roughly paying $153/oz for each ounce of gold.
Expect more consolidation between gold majors looking to add significant deposits due to declining mine production and mid-tier gold companies looking to consolidate and become the next major.
Among the investment banks, UBS raised their target gold average to $760/oz in 2008, up from $650/oz and $700/oz up from $550/oz. and Citigroup just raised their average gold price for 2009 to $800/oz and $820/oz in 2010. The 2008 estimate of $750/oz remained unchanged. I see gold up 20% in 2008 and maybe another 10% in 2009.
A lot depends on the US elections but the trend is up. The Gold Price should retest the old high sometime in the 2nd quarter of next year with new highs made late in the year. 2009 should bring a test of the $1,000 level. After that the sky is the limit.
The gold longs have been holding strong in the face of some serious selling which looks to be drying up. This may signal the end of Central Banks ability to keep down the gold price. The key here will be capitulation by the jewelry buyers. Stores in India have been switching to costume gold jewelry and China is encouraging silver and palladium.
The central banks may just decide to step aside as they realize that as the US destroys its currency and they are forced to defend their own it makes no sense to sell gold into the market.
Last week I read an interesting article which bears mentioning for the long-term price of gold. Indian Union State Minister for Mines T. Subbarami Reddy told a seminar in India that the Indian Central Government has decided to stop the importing of gold and diamonds within the next 10 years and that the government plans on emphasizing the exploration of diamond and gold in the nation’s five gold and diamond states.
While this does not affect the price of gold today it is a significant piece of news that bears watching for the long-term.
Showing posts with label Cash for Gold. Show all posts
Showing posts with label Cash for Gold. Show all posts
Thursday, July 21, 2011
Silver and Gold Prices
How can one take advantage of that? If one has silver and gold bullion in the form of coins and bars then it is much better to retain those and not sell them..
When they were bought there was invariably a mark up from the dealer or mint from whom you got them and this should be taken into account when reviewing the actual worth of the bullion.
You might own perhaps, ten or twenty silver and or gold coins, or perhaps bars. Work out the accumulated cost of purchasing these, including the shipping cost. You might be surprised to find out just how much you paid for them.
Dealers are currently screaming for more silver and gold coins and bars. Offering ‘top dollar’ for your coins or bars. Encouraging you to sell. But how much would you really make? And what is the price of losing an asset you have carefully built up over the years?
The dealers are only interested in turnover. Not in collecting coins or bars. It is simply stock to them.
In addition those coins and bars are a highly useful asset in times of severe economic downturn. They are easy to store. Easy to take with you when you travel and, importantly, are always easy to sell.
Just selling because the amount of printed money you can get for silver and gold coins and bars is not really a sufficient reason to sell.
Silver and gold prices reflect real values and it could be said that it is not the value of the silver and gold that is rising but the value of the printed money which is deteriorating.
When they were bought there was invariably a mark up from the dealer or mint from whom you got them and this should be taken into account when reviewing the actual worth of the bullion.
You might own perhaps, ten or twenty silver and or gold coins, or perhaps bars. Work out the accumulated cost of purchasing these, including the shipping cost. You might be surprised to find out just how much you paid for them.
Dealers are currently screaming for more silver and gold coins and bars. Offering ‘top dollar’ for your coins or bars. Encouraging you to sell. But how much would you really make? And what is the price of losing an asset you have carefully built up over the years?
The dealers are only interested in turnover. Not in collecting coins or bars. It is simply stock to them.
In addition those coins and bars are a highly useful asset in times of severe economic downturn. They are easy to store. Easy to take with you when you travel and, importantly, are always easy to sell.
Just selling because the amount of printed money you can get for silver and gold coins and bars is not really a sufficient reason to sell.
Silver and gold prices reflect real values and it could be said that it is not the value of the silver and gold that is rising but the value of the printed money which is deteriorating.
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