Stocks and Sectors

Gold Price Today submits:

Over the past few months there has been a growing amount of interest in the currency markets, especially the pound, the euro and the dollar. Each has faced issues that have exposed weaknesses. The pound has long come into criticism for being overvalued. The euro has been dragged through fresh scepticism by the Greek crisis, and the dollar continues to be questioned as the reserve currency of choice.

The three charts below plot the course of the gold price in 2010, measured in terms of the three aforementioned currencies (taken from the PM gold fix).

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Mark O’Byrne submits:

Gold
Gold fell in US trading on Friday from $1,119/oz to $1,098/oz to close with a loss of 0.54% and a loss of nearly 3% for the week. Silver was again more resilient and fell less than 2% last week. Gold has range traded from $1,102/oz to $1,106/oz so far in Asian and European trading this morning. Gold is currently trading at $1,103.00/oz and in euro and GBP terms, gold is trading at €804/oz and £732/oz respectively.

World equity markets are under pressure after mixed US economic reports and Chinese monetary policy tightening concerns. Asian stocks were mostly down, as are European shares so far this morning. Increasing geopolitical tensions between the US and China is likely making markets somewhat jittery (see below).

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Back in September 2009, I had recommended two trades in the PGM (platinum group metal) space. (The the recommendation is here.)

Trade idea:

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David Hunkar submits:

In this post, let me list some of the Tier 1 gold miners and a few copper miners. But before we get into the list, here are some interesting facts about gold:

• US Gold Reserves totaled 8,133.5 tons in September 2008, accounting for 76.5% of its forex reserves.
• Japan holds 765.2 tons of gold which accounts for 1.9% of its forex reserves.
• China’s gold reserves amounted to 1,054 tons in 2009 which was a 76% increase in six years and accounts for 1.9% of its forex reserves.
• China surpassed South Africa as the world’s largest gold producer in 2007.
• China beat India as the world’s largest gold consumer in 2009.

From the World Gold Council:

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Peter Cooper submits:

The Middle East could be enjoying another oil price boom much sooner than expected as Chinese inflation gathers pace after one of the biggest experiments in loose monetary policy in history.

Once an exporter of deflation to the rest-of-the-world, a nasty side-effect of the record stimulus plan in China last year is a surge in inflation that jumped to 2.7 per cent last month. Officials claim this is ‘mild and controllable’. Veteran observers sense an inflation genie let out of the bag.

Handbag shortage

One reader recently commented on shortage of handbags in China. This small example is illustrative of too much money pursuing too few goods. Inflation in prices is the inevitable result.

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Personally, I’m not a big fan of investing in Africa in general. But following Red Back Mining (RBIFF.PK) leads me to believe that the future for gold miners in West Africa is much brighter than one would think.

I first wrote an article for Seeking Alpha back in November detailing Red Back’s incredible year with regards to mine development, drilling results, reserve and resource expansion,etc. But just five months later, Red Back’s story is becoming one of a world class miner in the making.

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Przemyslaw Radomski submits:

When politicians talk it is always a good idea to try and read between the lines.

This Tuesday China’s chief foreign exchange regulator, Yi Gang, told reporters that China is not interested in increasing its gold reserves.

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Prieur du Plessis submits:

Shrugging off some lingering reminders of the credit crisis and recession, investors last week marked the one-year anniversary of the bear market low by pushing many benchmark equity indices to cycle highs.

Wall Street scaled 17-month highs on the back of easing concerns of sovereign debt defaults and increased hopes for a global economic recovery as the U.S. dollar pulled back and the CBOE Volatility (VIX) Index approached 22-month lows. The Index is also referred to as the “fear gauge” of U.S. stock markets and is used as a contrary indicator that moves inversely to equity prices, as seen in the chart below where it is plotted against the S&P 500 Index.

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Anomalous Investments submits:

Kinross Gold (NYSE: KGC, TSX: K) may have kicked off the second Yukon gold rush after it announced on Thursday an acquisition bid for micro-cap exploration company Underworld Resources (TSX-V: UW, USOTC: UNDWF.PK), which values Underworld at approximately US$ 135 million (C$ 139 million).

Kinross has offered 0.141 of a Kinross common share, plus $0.01 in cash, for Underworld Resources. Based on the March 10^th closing price of C$18.54 per Kinross common share on the Toronto Stock Exchange, the implied offer price was approximately C$2.62 per common share of Underworld Resources.

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Zacks.com submits:

Gold mining company Goldcorp’s (GG) adjusted net profits more than doubled to 25 cents in the fourth quarter of 2009 from 12 cents per share in the year-ago period. Earnings which benefited from high metal prices, were also ahead of the Zacks Consensus Estimate of 24 cents.

For the full year 2009, earnings were $588.2 million or $0.80 per share. Goldcorp was able to keep costs down in an inflationary environment. In the fourth quarter, cash costs were just US$289 an ounce.

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