Gold Prices Will Continue Rising

Gold Prices

News on the street has been a number of investors are allegedly believing gold is experiencing a bubble, and so it may be time to get out and take some profits. I don't believe that's true.

The reason I said allegedly above is because of the possibility that speculators who did in fact believe gold prices would fall shorted the market, and so now that they've been getting clobbered over the last couple of months, could be attempting to communicate the gold bubble idea in order to create a self-fulfilling prophecy which they could financially benefit from.

A gold bubble isn't what is moving the price of gold up, but the incredibly ignorant moves of the Obama administration is what's moving the prices, as the inevitalbe inflation coming from the spending of trillions still is generating investment in gold, and that isn't going to end any time soon.

When a bubble happens in any investment sector, it's when the general public finally catches wind of what's going on and stampedes like a herd of cattle toward that investment when prices start to surge based on speculation and ignorance, and not market and economic forces. That's not what's driving gold prices up, and until it is, we're going to continue to see gold prices rise for a long time to come.

Gold Prices

Newmont Mining Corp. Third-quarter Profits Fall by over 50 Percent

Newmont Mining Corp. (NEM) released its third-quarter profits on Wednesday, and said profits plunged by over 50 percent, as shipment of gold and copper declined and production cost rose.

The world's second-largest gold miner had overall revenue drop by 13.9 percent to $1.39 billion.

For the quarter net income fell to $196 million, a huge plunge from the $397 million the company enjoyed a year ago. Share price also fell from 88 cents a share to 43 cents a share during that same time period.

Also falling significantly was income from continuing operations, which last year stood at 73 cents a share, and in the third quarter dropped to 39 cents a share.

Another problem the company has is the challenges related to costs in developing its Western Australia Boddington project, which Newmont thought would be ready for operation sometime in the middle of 2009. Original projections were for 600,000 to 700,000 ounces of gold to be produced on average over a five-year period.

Most mining companies will continue to suffer until the forced liquidation period coming from the tight credit market is over. Until then, this will be the story for mining companies across the board.

Gold Futures Continue to Tumble on Stronger U.S. Dollar

For the eighth time in nine sessions, gold futures fell as the U.S. dollar continues to be one of the major safety choices of investors. The yen is the other choice for regular investors seeking safety.

Gold for December delivery dropped by 2.8 percent or $22 to end the session at $768 an ounce on the Comex division of the NYMEX.

Forced liquidation continues to pummel gold, along with most commodities, as funds seek liquidity.

Gold will eventually recover because of the financing of the bailout by the government of the U.S economy. Once that starts to kick in, we should see a significant weakening of the dollar, increased inflation, and gold starting to rise again. It's only a matter of when, not if.

For now though, lack of liquidity is forcing funds especially to sell gold positions. That's driving down the price of gold for now, while the dollar continues to strengthen.

Cash-hungry Funds Pressure Gold Down for Seventh Straight Session

The gravity of the financial crisis continues to pull gold down rather than up, as it plunged Friday for the seventh session in a row, with investors looking to the U.S. dollar for safety rather than the proven precious metal.

Today December delivery for gold fell by $16.80 to end at $787.7 an ounce, a 2.1 percent drop on the Comex division of the New York Mercantile Exchange. For the week that's an 8.3 percent fall.

What is causing the gravitational pull on gold is the huge size of deleveraging across the world, which is battering everything, including commodities. This has caught a lot of analysts off guard who have expected gold to perform as the typical safe haven it usually is.

Funds desperate for cash are being forced to sell off their gold assets, even as they were hoping to keep them.

While most still think that inflationary pressures should eventually bring the gold price back up, the extraordinary circumstances now playing themselves out make it impossible to really know which way things will go; there's too much we don't know and too many complexities involved for anyone to be able to project with certainty.

That leaves us with probabilities but no surety.

Gold Falls for Second Straight Day on Institutional Sell-off and Strong Dollar

Even though gold futures plummeted for the second straight day, falling $27.50 for December delivery, they still managed to finish the week in positive territory, ending up by close to 3.1 percent. It settled at $859 on the Comex division of the NYMEX. It had went as high as $936.30 earlier in the session before plunging later in the day.

Part of the reason for the decline over the last two days has been institutional investors selling off their positions in order to secure needed cash.

The other obvious reason was the strength of the U.S. dollar, which has been putting downward pressure on the metal.

Gold Plunges Below $820 an Ounce

Dropping to its lowest level in a year, gold dropped by 4 percent to day to finish the session below $820 an ounce; much of that attributed to longs getting out more than a large build-up of short positions.

"It's clearly a technical break. It's clearly the oil and the dollar/euro. You could see some panic here in the gold market now," said Bruce Dunn, vice president of trading at Auramet Trading in New Jersey.

This is the largest one-day loss percentage-wise since March 19, when gold futures fell by 5.8 percent.

The yellow metal ended the day at $818.25/820.85, the lowest price since December 27, 2007.

On the COMEX division of the NYMEX, U.S. gold futures for December fell by $36.50, to settle at $828.30 an ounce.

Gold Plunges to 4-month Low on Strengthening U.S. Dollar

Gold dropped as low as $847.10 an ounce Thursday as a surge by the U.S. dollar weakened the yellow metal's appeal.

With gold last at $850.25/851.65 in New York, Simon Weeks, managing director of precious metals at Bank of Nova Scotia, said, "I think $850 is enough for now, but longer-term I expect to see (gold at) the 200-day moving average, currently at $822, before the correction will be complete."

Most precious metals were pressured by the strengthening U.S. dollar, as it reached a five-week high against the euro. Much of that was driven by better than expected numbers from the U.S. manufacturing index for April.

Gold futures in the U.S. dropped, with the June contract down $14.20 to $850.90 an ounce.

There were also concerns among dealers who watch a drop in bullion holdings in StreetTRACKS Gold Shares, the largest gold ETF in the world. It now holds 580.45 tons, a 10 percent loss over the last 10 days.

Gold Mining Company Shares Down on Dollar Rally

Shares in gold mining companies plummeted as the U.S. dollar strengthened against the euro, and the yellow metal fell in price.

Also affected by the strengthening U.S. dollar was gold futures, which plunged by $20.30 to finish at $888.70 for the June contract on the Nymex. It fell as low as $884.50 before it rebounded. Still it's the lowest price since January 10, 2008. Gold has fallen by 8 percent since its high of $1,038.60.

Some gold company results today:


Gold Fields Ltd. (nyse:GFI) dropped 35 cents, or 2.5 percent, to $13.71.

Newmont Mining Corp. (nyse:NEM) finished down by 85 cents at $43.

Goldcorp Inc. (nyse:GG) declined by $2.14, or 5.6 percent, to $36.30.

Barrick Gold Corp. (nyse:ABX) lost $1.57, or 3.9 percent, to $39.23.

Gold Plunges to Two-Week Low on Strengthening U.S. Dollar

Prices for gold fell to their lowest level in two weeks, as the U.S. dollar made gainst against the euro.

June delivery for gold fell $27.70 to rest at $915.20 an ounce on the Nymex, after dropping as low as $907.30.

On Wednesday gold had surged to $948 an ounce, making investors look for the $1,000 an ounce the yellow metal first reached in March.

Gold was "heavily weighed down by an initial retreat in crude oil and the dollar's rapid ascent," Jon Nadler, analyst with Kitco Bullion Dealers Montreal, said in a note.

Many investors believe gold will reach $1,000 an ounce again by the end of 2008.

Gold Rises on Oil Price Increase and Inflation Concerns

Gold went as high as $936.50 an ounce today before settling at $926.60/928.40 on the last quote in New York. That's a slight increase over Monday's close of $935.30/926.10.

Record-breaking oil prices continue to hold the gold market up, even as other economic data put downward pressure on the metal. Oil closed at $113.79 a barrel, up by $2.03.

Even so, there was some sell-off as prices for U.S. producers was better than expected. That makes it more possible the Fed won't cut interest rates at their next meeting.

"Oil is clearly a factor. Technically also, gold looks better because it broke through a weak trend line resistance," said Michael Jansen, analyst at J.P. Morgan Securities.

"But I think we will continue to consolidate. The recovery from under $900 is not hugely convincing and there are still concerns that the physical market is very subdued. Overall, we will tend to trade in the $900-$950 range for a bit longer."

With the India wedding season in full swing, physical demand for gold remains fairly strong, although high prices have kept other parts of Asia from buying.

Gold futures in the U.S. ended at $932 an ounce for June delivery, up by $3.30.

Gold News Weekend Roundup

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Gold weakens as market cautious before weekend

Gold drifted lower on Friday in a cautious trading tone in spite of a decline in the dollar, and analysts said the market was likely to continue moving in a range in the near term.

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Gold futures end lower, but post a weekly gain

Gold for June delivery fell $4.80 to end at $927 an ounce on the New York Mercantile Exchange. However, gold posted a gain of $13.80 on the week from last Friday's closing level of $913.20 an ounce.

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Opening Glance: Gold Miners Fall

Shares of gold-mining companies fell Friday shortly after the opening bell as the U.S. dollar rallied against key rivals and the price of the commodity fell.

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CCM Research Issues Technical Research Report on Yukon Gold Corp.

Research Chief Technical Analyst, Jason Suttmeier, has written a technical research report on Yukon Gold Corp.

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Gold Hawk Resources Appoints New Chief Financial Officer

Gold Hawk Resources Inc. (TSX:CGK) advises today that Mr. Omar Salas, CMA, will join the company as our new Chief Financial Officer and Vice President Finance, effective May 1, 2008.

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Junior gold miners begin to outpace majors as gold prices remain steady

Gold prices remained steady near the close of the week's session as major gold mining stocks appear to have peaked. But that's not the case with the junior gold mining companies who've yet to catch up to the market.

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After 10-Day High, Gold May Take a Breather

June deliver for gold dropped $5.70, to finish the session at $931.80 an ounce on the NYMEX.

The dollar hitting an all-time low against the euro, and weak against many currencies recently, it really had nowhere to go but up, and that's what it did, causing some pressure on gold, as investors took some profits on the yellow metal.

Some felt this is a signal to get ready to buy gold again, as it is thought the market remains "strongly biased to the upside at this point," said Zachary Oxman, senior trader at Wisdom Financial. "I'd treat this dip as another proxy to buy as the market breaks up to $960.”

With OPEC also continuing to hold to their belief that there is plenty of oil on the market, it could affect gold as well, as Mark O'Byrne, executive director at Gold & Silver Investments Ltd. said, "With oil reaching new record highs, there is likely to be inflation-hedging gold buying."

The European economy could become a factor in pressuring gold prices as well, with some saying “If the ECB succumbs to pressure and starts to slash rates because of slower growth, the dollar may be able to make up some ground, which is going to make gold's life a little more difficult,” said Matt Zeman, a metals trader at LaSalle Futures Group Inc.

Gold Falls Below $880 for First Time in 2 Months

The correction in the gold market continues, as the ongoing rise of the U.S. dollar and migration toward equities has pummeled the precious metal.

Gold fell as low as $872.90, and at 6.00 p.m. EDT was at $883.50. Since the record high of $1,030.80 two weeks ago, gold has fallen by 15 percent.

"Given the elevated level of speculative interest, we would not rule out a deepening of the current correction in prices," said Suki Cooper, precious metals analyst at Barclays Capital.

"However, the overall environment for gold remains positive over the forthcoming months," she added.

Manufacturing and retail strength in the U.S. helped the dollar gain more than expected.

U.S. gold futures for June delivery finished at $33.70, or $887.80 an ounce on the COMEX division of the NYMEX.

Centerra Gold CEO Leonard Homeniuk sells 60% of Shares

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.

Middle East Jewelers Say Gold Sales are Dropping

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.