Profiting from gold is not as simple as finding a piece of yellow metal that passes the bite test and stuffing it into a mattress. In fact, those considering investing in gold face a number of increasingly complex choices. Here, Mark O’Byrne considers options for every type of gold bug, from the safety of gold bullion coins to newer types of gold investment such as digital or e-gold and ETFs.
At 4.26pm yesterday, the spot price of gold was $US642.60 per fine ounce, up $US1.45 on the previous day’s Sydney close. Amongst gold miners, Newcrest (ASX: NCM) gained 25c to $20.86 and Lihir Gold (ASX: LHG) was up 11c to AUD$3.17 while Newmont (ASX: NEM) was unchanged at AUD$5.50. Buka Gold (ASX: BKG) fell 2.5c to reach a new lifetime low of 10.5c after it said it still couldn’t make money out of the Gympie goldmine and sacked further workers.
The Border Mail reports that shares in Greater Bendigo Gold Mines (ASX: GBM) posted heavy losses in its first day of trading, after listing at a discount to the offer price. The company is holding talks on the potential acquisition of further mines and tenements.
Western Goldfields (TSX: WGI) has posted its results for 2006, stating that it continues to make excellent progress toward bringing Mesquite Mine, located in California, into full production. However, the company reported a net loss to common shareholders for 2006 of USD$11.6 million, up from a loss of USD$5.1 million in 2005.
Monarch Gold Mining Company Limited (ASX: MON) has announced the go ahead for its Davyhurst Gold Project, located 120km northwest of Kalgoorlie. Monarch will immediately commence the refurbishment of the Davyhurst Mill. Refurbishments are budgeted to cost AUD$5 million, and are aimed at bringing the Mill online for first gold production in July 2007.
Analysts are saying that gold investors remain bullish, but that they are also braced for more volatility in the risky global markets, according to Reuters. Fund mangers have called bullion attractive at current prices, saying that gold still had growth potential and was a good way to balance investment portfolios.
Axel Merk, portfolio manager of Merk Hard Currency Fund, predicted that a downturn in gold-prices would be short lived, and said gold was due for a correction after outperforming many asset classes in the weeks before its recent sell-off.
The European Central Bank has reported that there was a decrease of EUR 34 million in gold and gold receivables in the Eurosystem for the week ending 2 March 2007. The bank stated that this reflects sales of gold by one Eurosystem central bank.
Seven kilograms of gold items were stolen from a jewellery workshop in Krasnodar, Russia, on Tuesday, Itar-Tass reports. “Four assailants with a bat perpetrated the robbery,” city police spokesperson Ilya Shakalov said. “Two workshop employees were attacked at 10:00 am Moscow time while carrying a briefcase with seven kilograms of gold jewellery. The assailants came by car. One of them hit a workshop employee with a bat and grabbed the briefcase,” he said.
The Daily Reckoning