Gold Outperformed in 2010

January 28, 2011

LONDON – The latest Gold Investment Digest from the World Gold Council demonstrates that gold outperformed against equities, treasuries and commodity indices in 2010, while its price volatility fell to 16%, in line with its long-term average.  The study includes a risk-adjusted chart of annualised daily return volatility against annualised returns for a selection of asset classes form the period 31 December 2009 to 31 December 2010, and, with the exception of US Treasuries, gold was the only asset that sat above the 1:1 ratio.  Treasuries showed a return of almost 6% and just less than 5% volatility; gold showed a return of almost 30% against volatility of approximately 16%.

The S&P 500, by contrast, returned roughly 16% against a volatility of over 20%, while the MSCI (ex-US) returned roughly 5% and volatility of almost 20%.

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Gold No Longer “King of the Hill” But Plenty of Investors Remain Bullish

January 28, 2011

TORONTO (Reuters) – The road to higher returns in the first quarter is not paved with gold, according to most Canadian investment advisers, many of whom see more value in energy and financial stocks.

The fading allure of bullion and gold stocks is tied to rising prospects for the global economy, said Howard Atkinson, the president of BetaPro Management Inc, which puts out a quarterly survey on adviser sentiment.

The latest results showed a big drop in expectations for gold following two years of consistently strong sentiment. For the first quarter, 33 percent of advisers said they were bullion bulls, down from 64 percent in the fourth quarter.

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Avanti Mining Signs LOI for Joint Redevelopment of Kitsault Mine

January 27, 2011

Avanti Mining (OTC Other: AVNMF; TSX-V: AVT) has entered into a letter of intent with respect to a potential acquisition by SeAH Holdings of up to a 30% interest in Kitsault.  A valuation of the 30% interest will be based in large part on the final feasibility study completed in December 2010, which estimated the project’s NPV to be approximately $800 million.  Let the negotiations begin as we believe this would be a very positive transaction for the Company.

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Real Gold Makes Way for Imitation in India

January 27, 2011

MUMBAI – Fat and chunky is not in. The `Made in India’ label has undergone a change, especially in the case of gold jewellery.

Earlier, the same tag would conjure up images of thick gold jewellery studded with diamonds, pearls, and gemstones, very bold and ornate in its looks. Now, the trend is veering towards lighter and more delicate pieces.

“Earlier, people would walk in and ask for  strands of gold wire or a thick gold chain, which had stones or gems strewn together. Now, they insist on just one strand by itself,” said Manikbhai Shah, bullion retailer in Mumbai.

Shah is referring to the fact that though Indians are fond of their gold, they are now changing their preferences towards lighter gold pieces, as well as imitation jewellery instead of the real stuff.

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Frank Holmes: The Myth of Gold Volatility

January 27, 2011

SAN ANTONIO (U.S. Global Investors) – Gold is a volatile asset class. This is why we tell investors to put no more than 5-10 percent of their portfolio in gold, and split that among the bullion itself and those companies tasked with exploring for and producing gold.

However, when compared to other commodities last year, gold looks relatively calm. This chart from the World Gold Council (WGC) shows the annualized daily volatility for selected commodities such as copper, silver, tin and others.

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Jeffrey Nichols: Gold Can Still Reach All-Time Highs This Year

January 27, 2011

NEW YORK – January has been a difficult month for gold, so much so that many market mavens – analysts and investors alike – are abandoning their bullish expectations.

From its year-end 2010 price near $1,420 an ounce to its recent low just over $1,320 gold has so far shed some $100 – about seven percent.  Measured from its all-time high just over $1,432 in early December, the recent decline is less than eight percent.  Either way, in percentage terms, this doesn’t amount to much of a correction in the metal’s 10-year old bull market.

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Does it Matter Where a Central Bank Buys Gold – Domestically or Externally?

January 27, 2011

BENONI (Gold Forecaster) – China currently produces 340 tonnes of gold annually.   This may increase by up to 100 tonnes a year or more.   It imported 210 tonnes in 2010.   The demand for gold is increasing in China and this is likely to continue in line with the growth of the Chinese Middle classes.    We do not know for sure how much the People’s Bank of China took into its reserves and are only likely to know in two years time.  

Russia produces around 250 tonnes of gold per annum.   It increases its reserves by 152.4 tonnes by January 1st 2011.  These two nations present different requirements from the local and international gold markets, but does it make a difference where the gold is bought?

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