Comments on: The Price of Gold Stocks in January 2012

By: steve

steve — Sun, 03 May 2009 21:33:01 +0000

What was the point o that?

By: Mark T

Mark T — Thu, 09 Oct 2008 20:02:24 +0000

Be careful what you wish for....I would love to see a $5000 gold price but not at the expense of Western civilisation!

By: Steven Shaw

Steven Shaw — Thu, 09 Oct 2008 16:12:51 +0000

A Gold Bugs dream!

By: MK

MK — Thu, 09 Oct 2008 11:17:47 +0000

To be honest with you unless the government turns on the liquidity tap in full swing and can successfully avert this crisis I doubt this will happen. More likely than not what will happen is that gold, along with everything else will deflate as the rate of defaults on loans increases (i.e the destruction of checkbook money). If banks don't lend to each other then the destruction of credit will occur and a dollar will become more valuable in terms of its purchasing power. The sad thing is though less people will have dollars. If the amount of dollars out there decreases so must the amount of dollars that can chase gold and drive it up. Just like all assets - for the assets to be worth that much someone must have the money.

i.e either gold could swing one way severely or the other way severely in my opinion.

By: Coffee Addict

Coffee Addict — Thu, 09 Oct 2008 05:48:41 +0000

I’ll put Jeff’s flippancy aside for a second. The End of Times is not here – or if it is Bill Bonner writes that he feels just fine.

I agree that some gold juniors do have a potential to realise a 50:1 return (if they are lucky) but more important potential is the likelihood of 75% interest takeover in circumstances where a junior with a good resource base cannot fund mine development. This creates a rare scenario of no downside risk – but don’t expect an instant 50:1 return.

I note that Gold is now in the vicinity of AUD 1200/oz at a time when extraction and processing costs are about half that for good prospects. Correct me if I’m wrong as I don’t’ have time to check the figures at the moment.

If the price of gold stays in its current region (in Australian dollars) that will be great as it is in touch with the price that is acceptable to jewellery manufacturers and customers.

Extreme volatility can’t (in my small opinion) help the prospectors and miners – not even peaks of $5000 if they are accompanied by an ongoing roller coaster ride.

OK is USD 5000/oz feasible? It depends on the relative value of the USD BUT long term double digit inflation could certainly put it there. There is a lot of talk about the reserve currency aspects of gold which I think may be overstated. Any demand by central banks would reduce consumer demand. Anyway its best to be conservative at the moment.

On the issue of rebounds YES they must happen as there is still a lot of excess (cheap credit) liquidity, in cash, at the sidelines. Deleveraging is a slow process akin to a slow leak tyre. Eventually there will be a necessary “dead cat” bounce – after which true recovery can begin.

By: ralph hill

ralph hill — Thu, 09 Oct 2008 05:20:13 +0000

Interesting article, but I fear seeing $100 for a loaf of bread before gold hits $5k.

Isn't that what happens to fiat currency ?

By: ram

ram — Thu, 09 Oct 2008 05:13:34 +0000

Gold price, what is it really? Have you tried to buy gold and take physical possession of the metal lately? What price did you have to pay?

By: Curt

Curt — Thu, 09 Oct 2008 04:59:28 +0000

Excellent article. At least there is something to look forward to. But, this time is different when the 30's - with everything moving much faster with computers. If may only take 1-2 years for gold to hit $5000/ounce. By 2012, gold could be at $8500/ounce.