Getting a Beat on the Price of Gold

LONDON (Reuters) – Extreme strain in the global economy has given way to something less hair-raising. So does the last investor in “safe-haven” gold, switch out the lights?  After a storming start to 2012, bullion prices have lost some of their luster in recent weeks in line with a reassessment of global economic health.  Jumbo-sized liquidity taps are off in Europe, while the jury is out on a further round of U.S. quantitative easing.

U.S. data shows a slightly improved trajectory, with employment numbers and consumer credit growth highlighted in a key year for President Barack Obama. Treasury yields reflected that, breaking out of the doldrums and raising potential for tighter policy down the road.  Given that backdrop it is no surprise that gold has retraced since touching a record $1,920.30 an ounce in September 2011.

Gold is currently trading at around $1,660 an ounce.  “Gold is now facing all of these risk reduction measures, so I’d expect the market to be temporarily subdued,” said Ashok Shah, Investment Director at London and Capital Fund.

Brent Cook Describes Evaluating Junior Gold Stocks

TORONTO (The Gold Report) -

The Gold Report: In the late 1990s, when the gold price was falling steadily lower, you vetted companies for Rick Rule’s company, Global Resource Investments. Could you give us a comparison of what this space was like then versus what it’s like now?

Brent Cook: During 1997-2002, we were probably in the most unloved sector in the whole investment world. Gold had collapsed to less than $250/ounce (oz), copper was under $0.85/pound (lb) and anything that didn’t have a dot-com to its name didn’t get much respect. The idea of blowing up rocks to make metal out of them was an archaic concept clung to by the remnants of the industrial revolution; it was a brave new world. By contrast, today gold is over $1,600/oz, copper is $3.80/lb and iron ore has gone from $12/ton (t), to $140/t; we’re in the 10th year of a commodities boom. Back then, it was very difficult for mining companies to raise money.

Junior Miners Still Face Uphill Battle to Secure Financing

TORONTO (Reuters) – Despite steady commodity prices, financing remains a challenge for junior miners, and a sluggish M&A environment means many projects face a long road to development, a financing panel told the Reuters Global Mining and Metals Summit.

While high-grade projects in stable jurisdictions are still a good bet to find money, lower-grade projects that would have been a slam-dunk just a few years ago are facing a grim market.

Enduring Factors Will Propel Gold Comeback

SAN ANTONIO (U.S. Global Investors) – Gold’s been knocked down lately, but several enduring factors have conditioned the yellow metal for an inevitable comeback.

Since the beginning of 2012, gold has trailed its precious metals peers, gaining only about 6 percent compared to double-digit returns for silver and platinum. At the end of February, gold was especially hard hit, following Ben Bernanke’s announcement that there would be no additional quantitative easing and the European Central Bank offering additional LTRO loans to banks.

Common Gold Scams

www.LakeShoreTrading.co.za (JOHANNESBURG) – Recently, I read an article about how Congo born, Dikembe Mutombo, an all-star NBA defender, was nicely scammed in a fake gold deal. Evidently, he and Houston based oil executive Kase Lawal were beguiled into believing that they could purchase around $30 million worth of the precious metal at a hugely discounted price to the prevailing global market price from dealers in the African country of Kenya. It just goes to show how even two intelligent men can be duped by what is such a common gold scam. I mean who wouldn’t want to buy gold at a huge discount to the prevailing price, pick up the metal and then dump it onto some bullion dealer and get paid the market price thus making an absolute killing. This story inspired me to write about several common gold scams that have been around for a while and should be avoided. But, even though they may be well documented, there is a sucker born every minute. It is surprising how the lure of making quick easy money can fool any greedy, well intentioned individual.

Inter-Citic CEO On Gold, China and Stocks: Thom @ Large

By Thom Calandra @ Large www.babybulls.com

SAN FRANCISCO — A China-centric gold developer says China’s consumer price inflation is understated and real estate developers will melt down if the nation’s banks step away from largely vacant offices, subdivisions and warehouses.

The informed warning is good for gold and a wake-up call for soaring housing and commercial real estate prices in China.

Jim Moore of Inter-Citic Minerals (ICI in Canada and ICMTF in USA) gave his forecast before word of declining home prices in many China cities hit the business wire today.

Mr. Moore explained to a group of professional investors how rising gold demand, negative real interest rates and tens of billions of dollars of China cash seeking producers will boost mineral resource juniors that have suffered since the 2008 mortgage debt disaster.

Europe’s QE3 to Boost Gold and Silver

GoldStockTrades.com – Gold is finding support and presenting a potential discount buying opportunity. It is important to buy when the public is disinterested.

Gold is pulling back to long term support and is able to be purchased at a discount. Investors may be seeking riskier assets due to fears of inflation and higher interest rates. Right now industrial metals such as copper/ nickel, oil and blue chips are outperforming due to their value of being hedges against inflation and represent the riskier assets.

Gold and silver which has in the past represented risk off is still in consolidation mode. Eventually investors will realize that the monetary metals can do well in both a deflationary risk off environment as well as an inflationary risk on environment and the trend will turn significantly higher as it has for the past decade.

Promise Among Small Cap Gold Equities in West Africa

TORONTO -

The Gold Report: Mark, do you agree with Patricia Mohr, Scotiabank’s vice president of economics, that gold would need further reflation or another round of quantitative easing to rise above $2,000/ounce (oz) in the near term?

Mark Lackey: Higher inflation in the Western world would certainly help push gold over $2,000/oz in the next 18 to 24 months. But inflation is not the only factor underlying the price of gold. On the demand side, you have growing demand among the middle class in India and China. On the supply side, we are seeing that companies are not always getting to production as quickly as they anticipate. Given all of these factors, gold could top $2,000/oz even without a significant rise in the rate of inflation.

Balmoral Exploration Update

Balmoral Resources (OTCQX: BALMF; TSX-V: BAR) has four drills active. Two drills are currently expanding high-grade gold discoveries on the Martiniere Gold Property and a third is conducting follow-up drilling and testing additional targets on the Grasset Gold Property. Both properties are part of the Company’s 85 kilometre long Detour Gold Trend Project which adjoins the Detour Gold development project. The fourth drilling, being operated in conjunction with GTA Resources and Mining, has recently commenced drilling on the Company’s Northshore Gold Property in Ontario following up on positive results released March 12, 2012 (NR12-06). Initial results from the Detour Gold Trend winter drill campaign are anticipated within the next 3-4 weeks.

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Falling Gold Prices Have Central Banks Buying

(Reuters) – The fall in gold prices has prompted one or more central banks to buy as much as four tonnes of bullion in recent weeks, according to an industry source and a Financial Times report on Friday.

The purchases, worth about $250 million (157.77 million pounds) at current prices, were made through the Bank for International Settlements (BIS), a source familiar with the trades told Reuters.