PMs in full meltdown mode again

ozzyfan269

Anyone else think that this is an indicator that the DOW is headed for another plunge?

OPA

Could be ... but the futures are down only slightly ... the $ is stronger though.

rgCoinGuy

Full Meltdown?

RedTiger

<< <i>Anyone else think that this is an indicator that the DOW is headed for another plunge? >>



Not me. I haven't seen much linkage between stocks and gold. Historically, they tend to move more opposite than together, and even then the correlation is not that high.

I did mention some recent days where bonds and gold have moved the same way. TLT is down but not as much percentage wise as GLD.

fc

if that graph keeps up in the same direction.. meltdown may be appropriate.

i expected this earlier and was quite surprised how long gold lasted
in the 850 range...

time will tell.

carew4me

REASON=OIL

MoneyLA

I thought some of the bulls here would call it "manipulation" ?? LOL

Anyway, on the "technical side" gold continues to be in a trading range, and frankly there is nothing out of the ordinary here. The trading range is 800 to 950. I wouldnt get too upset or excited about today's 30-dollar an ounce drop. In the "scheme of things" this is normal for a trading range.

Now, if gold should drop BELOW 800 then the next support comes in at 730.

57loaded

i thought 8 and a quarter was the absolute basement, now.

oppotunity to buy i suppose

fc

<< <i>i thought 8 and a quarter was the absolute basement, now.

>>




when major mines are pulling gold out of the ground for less then
400 an ounce... and once the hysteria dies down... i see gold going
down a lot more then just 825.

COINB0Y

Needs to Fill the Gap between $74.92 and $75.60

notwilight

"meltdown" lol.

So the euro had taken a huge hit, oil is at totally unexpected lows and gold holds at 825. This looks like a very high bottom to me. --Jerry

Deadhorse

<< <i>"meltdown" lol.

So the euro had taken a huge hit, oil is at totally unexpected lows and gold holds at 825. This looks like a very high bottom to me. --Jerry >>




Indeed.

The naysayers just have to have their moment, including that 20/20 hindsight.

Thay haven't had many "I told you so's" in the last several years, so for now they're soothsayers.

57loaded

there is hysteria on both sides of gold, the world economy, and world politics

commodities are volitile, what's not to know?
the COMEX yo-yo is just that and expect it for some months ahead.

long term physical holders of PM may only be wishing they had bought more, especially in a couple of years

i could be wrong but my SWAG was that $825 would be a basement COMEX price for 2009...not intra day ( i was by a few bucks, yes it is only January)

and to answer the OP, the DOW and gold are not operating in any relative form, but anything that will somehow show an easing in recessionary pressures could be positive for the DOW, PM and commodities. replacing jobs with other jobs are NOT inflationary, "printing money" to fill a void on a balance sheet is not inflationary. the cash bubble needs to break before the next phase.

Deadhorse

Full Meltdown!!

You'd think nobody has ever studied a calendar before.

This is exactly what metals do in early January. <sigh>

cohodk

This is exactly what metals do in early January. <sigh

I just looked at the charts of silver since 2002--thinking there maybe a trading angle--but they do not support your assertion.

In 2002 silver rallied the first 2 weeks then fell sharply.
In 2003 silver was virtually unchanged the entire month.
In 2004 silver was volatile with a sharp rally in the first 10 days followed by a correction of that move then sideways trading.
In 2005 silver rallied slowly all month.
In 2006 silver was unchanged until about the 20th when it commenced a sharp 10% rally.
In 2007 silver sold off during the first week then rallied sharply.
In 2008 silver rallied the first 10 days, minor pullback over the next week, then resumption of the rally.

If anything, there has been a propensity for silver to rally to start the new year.

Deadhorse

Typically, January has not been a good month for metals.

There have been a few rallies, but usually they occur later in the month. Early gains often are lost as the month progresses.

I never react, or over react to any movement in January and that was my point. It's not a month to base future movements on.

jmski52

I thought some of the bulls here would call it "manipulation" ?? LOL


It's manipulation.

agentjim007

when major mines are pulling gold out of the ground for less then 400 an ounce

fc please provide your source, I heard it was $700 an oz to mine.

fc

<< <i>when major mines are pulling gold out of the ground for less then 400 an ounce

fc please provide your source, I heard it was $700 an oz to mine. >>



by asking me this you have forced me to spend 10-15 minutes digging
up the articles among hundreds that come out every few days on kitco. I attempted to find the relevant chunks from gold mining companies
production releases. There are so many of these reports coming out
lately i am suprised so few people read them here.

"Goldcorp continues to post impressive cost metrics, with anticipated 2008 costs of about $300 per ounce of gold and about $365 for 2009. I have heaped praise upon intermediate miners like Yamana Gold (NYSE: AUY) and my top pick Agnico-Eagle Mines (NYSE: AEM) on the basis of their low cost structure, but Goldcorp achieves similar margins on a much grander scale."

"Rusoro CEO, Andre Agapov states further that, "To be able to report cash cost numbers from the Choco 10 mill which are under $400 US per ounce is a major achievement. To have arrived here in less than a year is a real tribute to the dedication of our workforce."

"TORONTO, ONTARIO--(MARKET WIRE)--Jan 8, 2009 -- Alamos Gold Inc. (Toronto:AGI.TO - News) ("Alamos" or the "Company") announces fourth quarter gold production of 39,347 ounces, achieving the top end of the Company's quarterly production guidance of 35,000 to 40,000 ounces. Full year 2008 gold production of 151,000 was 42% higher than gold production of 106,200 ounces in 2007. The calculation of total cash costs for the fourth quarter and full year 2008 have yet to be finalized. However, the Company expects that total cash costs for the fourth quarter will be significantly below previous guidance of $395 per ounce, and that total cash costs for 2008 will be approximately $400 per ounce."

ARZ
"In 2009, assuming a Canadian/U.S. dollar exchange rate of 1.20, average total cash costs per ounce are anticipated to approximate US$390 per ounce. Onsite mining, milling and administration costs are expected to average $108 per tonne, in line with 2008 experience."

Redback
"Cash operating costs are still being calculated, however are expected to be in line or better than the forecast of $450 per oz set out in the September 2008 quarterly report."


and so on and so on. the last one is 450 per ounce because i got bored
looking through articles for the larger miners... who mine a lot of gold
at very low costs compared to the others. I consider goldcorp and
yamana to be fine examples of mining companies.. and large.

of course some mining companies live on the edge and if gold goes
down to 700 they are in big trouble.

MoneyLA

here is a new article on kitco.com about the costs of mining gold.

fc

<< <i>here is a new article on kitco.com about the costs of mining gold. >>



nice find. basically it gives the average of the companies they poll
for data. that article must have came out later in the day i posted
my message.

the way i am reading it is that some miners are below 400 and some
are above 600 giving averages in the middle. 700 was too high and
even 600 is only getting close to the average.

One has to wonder with gas/oil and other commodities they use to mine
with... the costs of them have dropped. has that been reflected into
the 2009 projections?

either way, i know if i was buying gold stocks i would target the companies
that are bringing it out of the ground below 400 like Goldcorp.

fishcooker

Sure. As long as they aren't hedged at $390.

jmski52

Sure. As long as they aren't hedged at $390.

fishcooker, good point. Even though I read this stuff about the financials all day long, I wasn't considering any gold stocks - therefore I hadn't bothered to think about the impact of the bogus derivatives overhang on the gold industry.

If the whole financial industry can be trucking along one day, and in the ditch the very next day due to smoke & mirrors, you can bet your bottom dollar (or ounce) that the gold mining companies have more than just dabbled in leverage and forward contracts, probably elevating them both to a fine art, i.e. probably getting themselves dug in as deep as the financials.

Nothing is as it seems. This is where I'd listen to the Doug Caseys and the Jim Sinclairs of the world, the ones who've been integral in the mining industry long enough to have seen it all.

Oh, gold Vaulted up $12.50 in overnight trading. Entirely by accident, I'm sure.

roadrunner

Barrick and Anglogold Ashanti have lots of low priced gold hedges in their balance sheets (ie <$400/oz). Give them credit along with JPM and GS for helping to manage paper gold the past few years. But at some time they either have to buy those hedges back and sell gold at <$400/oz or buy more derivatives to paper over the problem.

If that graph keeps up in the same direction.. meltdown may be appropriate. I expected this earlier and was quite surprised how long gold lasted in the 850 range...time will tell.

Looks like you'll have to wait longer for sub-$800 gold with it recovering back to $840 today. Part of the reasons for the current decline was forced re-balancing of funds that follow the GS commodity index that we discussed 1-2 weeks ago.

roadrunner

ttown

Pm's are on a full "Melt UP"

jmski52

$0.64 is a pretty good day for silver.

Julio

PM'S go up and they go down. Me thinks they are on the way up. I'm really happy I've been a buyer at the recent low prices. Just wish I had not pawned my crystal ball, but even without it I'm still buying. . jws