The surging price of gold is leading to a second big California gold rush, as people looking to hit it big are converging on the "Gold Belt," as it's called.
Individual prospector hopefuls aren't the only ones migrating to the gold space either, as commercial claims have increased to 2,274 in just the first quarter this year, up from the mere 132 during the same period in 2005, according to the Bureau of Land Management.
Confirming the high price of gold as the motivator behind all this activity, Roger Haskins, senior specialist for mining law at the BLM, said, “We have a market imbalance at the moment and there’s more demand than supply. Gold sits in a little niche because it’s speculative. People buy it as a hedge for the future.”
Another metric showing the increasing interest in mining for gold is the membership in the Gold Prospectors Association of America, which has tripled over a extremely short period of time.
The best-known place people are flocking to is the Gold Belt, otherwise known as the "Motherlode," which is close to Highway 49 and the Sierra Nevada mountains.
A growing number of people have been quitting their jobs and prospecting as a way to make a living.
Sunday, March 30, 2008
Friday, March 28, 2008
Better than expected news from the U.S. Department of Commerce concerning consumer spending, evidently gave the U.S. dollar some strength at the end of the week, along with news inflation isn't getting out of control.
As a result, gold fell as those using it as a hedge against inflation sold off some of their holdings.
Other gold news from around the web:
Gold Plummets on Stronger Dollar
Gold prices fell sharply Friday after the dollar ticked higher and crude oil retreated, diminishing the precious metal's appeal as a hedge against inflation.
Gold falls 2 percent in broad commodities sell-off
Gold fell more than 2 percent in a broad commodities sell-off on Friday, with a rise in the dollar and softer oil prices dampening the metal's allure as an alternative investment ... More
Gold-mining shares decline amid dollar strength, benign inflation figures
Shares of gold mining companies fell Friday as the yellow metal came under pressure amid strength in the dollar, falling oil prices and tame inflation numbers ... More
Gold drops towards 930 usd on solid US economic data
Gold continued lower, dropping towards 930 usd after solid US economic data expedited an end of week slide started by weaker oil prices and the dollar's firmer footing.
Gold futures down 2% as other metals fall
Gold futures ended sharply lower Friday, as strength in the dollar and broad weakness in the commodity markets weighed on the precious metal.
Gold for April delivery dropped $18.20 to end at $930.60 an ounce on the New York Mercantile Exchange.
Iamgold Profit Falls 9.3% on Costs at Quebec Mine
Iamgold Corp., owner of the Doyon mine in Quebec, said fourth-quarter profit fell 9.3percent because of costs to find additional gold at the deposit.
Investors confident despite Barrick CEO departure
Barrick Gold's (ABX.TO) deep pool of talent and track record of succession planning is letting investors shrug off the surprise departure of Chief Executive Greg Wilkins, as the company's founder, Peter Munk, temporarily retakes the reigns.
Thursday, March 27, 2008
We may soon have to take up a new mantra, as we push aside diamonds being a girls best friend to gold, as a company in South Carolina says it has made a breakthrough and now offers women the oppertunity to take gold facials.
UMO is the manufacturing company behind the new craze, and women from all over the United States are flocking to get the treatment.
According to COO of the company, Ron Razeggi, he had this to say as to how it works: "The skin tries to reject the gold because it's a foreign object. In order to do that, it builds new cells.
"Right now, the body produces new cells every 28 days. But this accelerates the cell-building and, as a result, it firms and tightens the skin."
Called the "Luxe 24 Karat Gold Facial," the treatment only uses the highest grade of gold leaf, where the gold leaf is laid upon the face and then massaged into the skin, which takes approximately 80 minutes to complete. The cost is about $350.
I guess this isn't something gold investors need to be too concerned with as to creating a supply problem for gold any time soon. But we better watch the ladies. If this catches on, we better hide our gold, or look for the price to increase.;-)
Oh by the way, do the ladies get to keep the gold after their facial?
Wednesday, March 26, 2008
The continual weakening of the U.S. dollar, along with ongoing economic news that confirms a slowing economy, is stimulating gold to rebound after the downturn last week, and it is walking with a swagger again.
April contracts for gold surged by $14.20 to finish the session at $949.20 an ounce on the NYMEX.
News that the Clear Channel Communications (NYSE:CCU) deal was ready to collapse, also reminded investors of the problems in the credit market, which also helped gold to move up.
The Amex Gold Bugs Index (HUI) also increased today, ending at 459.21 points, a 1.9 percent rise.
Some of sectors EFT fund rose as well, with the StretTracks Gold Trust EFT (NYSE:GLD) climbing to $93.80 and the Market Vectors-Gold Miners ETF (AMEX:GDX) increasing to $49.90.
Tuesday, March 25, 2008
Yukon Gold Corporation (OTCBB:YGDC) just got better, as they landed senior geologist Gary A. Cohoon to be Vice President of their explortation unit.
Cohoon has had extensive experience in exploration and expansion of gold, as well as uranium and base metals.
Some of the more notable accomplishments in his career have been the identification for acquisition of the Santa Gertrudis open pit gold mine in Sonora Mexico, the discovery of the Dona Lake Gold Mine in Ontario, and managing the exploration for uranium in the Athabasca Basin in Saskatchewan.
Cohoon will be responsible for the overall exploration and development strategies of the company, along with the geological team.
Near term he will specifically target the Marg deposit in the Yukon, while also searching for and evaluating potential exploration projects for the purpose of acquisition by Yukon Gold.
President and CEO, Ron Mann said about getting Cohoon: "Yukon Gold is extremely pleased that a geologist of Gary's reputation and caliber has joined our team."
Fourth-quarter results for Yamana Gold Inc. (NYSE: AUY) were released today, for the period ending December 31.
In most areas the company had a banner year, as they increased in a number of key markers. The end results stated here don't include those of Meridian Gold or Northern Orion before they were acquired in October, 2007; neither for the complete quarter or year.
Overall sales in the fourth quarter came to $218.6 million, growing by 9 percent over the third quarter. For the year, sales reached $747.1 million, a significant 342 percent increase over 2006.
Results for the fourth quarter in net earnings also were strong, as they grew to $47.1 million, up by 57 percent from the third quarter. Net earnings for the year came in at $157.2 million, a solid 324 percent from 2006.
Before tax adjusted earnings performed even better gaining 686 percent over 2006, and finishing at $259.1 million, with after tax results coming in at $227.6 million. That equaled $0.55 a share.
Earnings for the company's mine operating earnings grew to $384.6 million, a surge of 1,000 percent over 2006.
The company declared a quarterly dividend of $0.01 a quarter per share.
See the full details of the report here.
The news last week was commodities were out of favor. How a few days changes everything, as the U.S. dollar is plunging again, consumer confidence and expectations are down, and housing prices continue to fall.
That means we're going to see commodities climb again, with gold leading the way.
Last week gold dropped by the most it had in almost two years, as investors, or rather speculators, fled the sector. The increase of over $15 an ounce today shows it's back in favor, and probably ready for another climb.
"The low consumer confidence number definitely helps gold because it's seen as a safe haven and an alternative asset," said Carlos Sanchez, analyst with CPM Group in New York. "The prospects of the economic situation and tightening of the credit fallout hasn't disappeared, so we'll likely see gold hold at these levels and probably go higher."
Other commodities on the upside today were agriculture, copper, crude oil and silver futures.
April delivery for gold increased to $16.30, to finish at $935 an ounce on the NYMEX.
Monday, March 24, 2008
While the Shanghai Futures Exchange (SFE) had been allowed to trade gold futures as of January, the same wasn't true for commercial banks in China, which had been barred from doing so.
That has changed now, as the China Banking Regulatory Commission (CBRC) announced commercial banks will now be allowed to sell gold futures under specific guidelines, within their domestic market.
One of the key requirements commercial banks in China must adhere to, is they must have a "capital adequacy ratio of more than 8 percent" in order to even apply for a trading permit. They also must have the necessary qualifications to trade in derivative markets to enter the field.
According to the CBRC, the reasonse for the qualifications is to protect Chinese banks, who have no experience in trading futures.
Sunday, March 23, 2008
While Centerra Gold (TSX:CG) CEO Leonard Homeniuk says the reason he sold his shares in the company were for financial reasons, the plunge in gold prices, along with the drop in the stock prices, had to be part of the reason for the sell off as well.
Homeniuk sold 60 percent of his shares in the company, which equaled almost $6.9 million. His reasons stated were for add more diversity to his portfolio, as well as finanicial planning.
The stock shares were sold between March 11 and March 18 for prices ranging from $13.51 to $14.68. The close for the stock price at the end of the week was $12.34.
He was lucky in his timing, as the stock has consistently dropped over the last week, and the 478,700 shares he sold would have been worth a lot less than he got for them.
Even with selling the stocks, Homeniuk says that he believes the shares are still undervalued.
At this time Centerra has two mines in operation, the Kumtor Gold Mine in Kyrgyzstan and Boroo Gold Mine in Mongolia.
Friday, March 21, 2008
Last year those jewelers in the Middle East thought they were going to have another banner year, but contrary to that assumption, prices have declined, rather than increased by the 15 percent expected because of the alleged demand.
The problem is gold is now considered by the middle class there as a means of generating income because of the high prices.
“Middle income earners are selling rather than buying to gain profit,” said Mohammed Abdullah. “Most of our customers buy gold and jewelry for personal use rather than as a form of investment. We hope prices will drop but in view of what is happening with the market’s fluctuations, I don’t believe this will be the case."
Other gold shop owners said their business is down, but nowhere near some of those that say sales are down by up to 70 percent.
As a more experienced shop owner said, “Our sales dropped only five percent compared to last year.”
It seems what's happening is the surge in the price of gold has brought a lot of newcomers into the field, who don't know how to manage the ups and downs of the business. That is probably what's accounting for the large disparity in sales declines.
Either way, contrary to Asia, physical gold sales have fallen in this part of the world over the last year.
After Thursday's drop in gold prices of over $100 an ounce, Asian jewellers scrambled to buy gold for their trade.
India, unsurprisingly, was a very busy market, as the world's largest consumer of gold continues to buy on the drop in gold prices, as their wedding season is in full swing.
Along with the long-held custom of building up a daughter's dowry from her birth, Indians also distribute it to one another for a number of special occasions. That, and using it for jewellery, as well as an investment, makes gold so important to the Indian people.
Another key Asian buyer of gold has been Vietnam, whose 12 percent inflation rate last year has kept them buying gold as an inflation hedge.
"Vietnam is buying gold even when it's trading at record highs this month. For them it's more for a hedge because inflation was more than 12 percent last year," said a dealer in Singapore. "Nobody wants to keep dollars because it's depreciating."
Other countries where gold is in high demand for jewellers are Thailand and Indonesia.
Thursday, March 20, 2008
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Sunday, March 16, 2008
The commodities market has been heating up so much, I decided to include the fascinating study of gold in the commodity network, which just recently passed the $1,000 an ounce mark (early March 2008).
Other than an occasional article of interest that may be of interest to gold readers, like a significant event in the economy, this web site will focus on the gold market, and things and companies connected and related to it.
Welcome to Everything Gold, and dig deep into the many articles and information to keep you up on what's happening around the world.