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     holycow
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Username: holycow
Post Number: 171
Registered: 08-2004Rating: N/A
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| | Friday, October 08, 2004 - 09:18 am: |  
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Here is an interesting report on gold...
http://money.cnn.com/2004/10/06/markets/gold/index.htm
"The run-up in gold is completely justified," said Ron Coll, gold analyst with Jennings Capital in Toronto. "As long as the dollar continues to trend lower, gold will trend higher. That's the theme it will follow through the fall and into next year."
"...some observers smell a whiff of speculation in gold prices and think a correction is due."
"Others point out that many people see gold as something to keep them warm at night in the face of impending doom..."
"We see gold not as a trade; we don't even look at it as an investment. We look at it as insurance," said Jean-Marie Eveillard, portfolio manager of the First Eagle Gold (SGGDX: Research, Estimates) fund, which has nearly $600 million in gold and gold-related stocks and securities. "It's the ultimate hedge -- it tends to prosper in difficult times."
What could drive gold higher?
For one thing, there's always the chance that the dollar's decline could turn into a full-fledged rout, if foreign investors decide they've had enough of supporting America's wild deficit-spending binge. Oil prices could surge ever higher, slowing down the U.S. economy. Terror attacks could turn a slowdown into another full-fledged recession.
Eveillard said these are the kinds of disasters that would have to occur to drive gold much higher. But at $420 an ounce, it's become a fairly expensive insurance policy.
...and lastly, news and views that every gold bug loves to hear...
* The U.S. dollar will almost certainly have to(too chicken to use "MUST"?) keep falling , according to most analysts, especially if China agrees to revalue its currency, as so many U.S. officials are pressing it to do.
* China has recently opened up a gold-trading market and allowed its consumers to buy gold, adding to the world's demand for the metal.
* A recent lack of spending on new mines, thanks in part to stiffer environmental regulation, has tightened the supply of gold.
* Even if the war in Iraq somehow ends fairly quickly -- which seems unlikely, at this point -- global military spending, oil prices and the threat of terrorism will still remain high, all of which are boons to inflation and to gold.
...and of course, this has to end with a great summary...
"Right now, we have negative real rates of return on Treasury bills and massive deficit spending," Holmes said. "Historically, a currency can't be strong with those two factors."
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 203
Registered: 08-2004Rating: N/A
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| | Thursday, October 14, 2004 - 11:39 am: |
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here is just a quick note of caution to the resource/base metal folks that this sector may be is on the verge of facing its moment of truth... this morning slam-down of the major resource stocks does not come across to be "accidental", it's more like "incidental". It's not the usual kind of sector rotation play, at least not to me anyway. Check this out and let us know if the "feeling" is mutual. 
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 204
Registered: 08-2004Rating: N/A
Votes: 0
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| | Thursday, October 14, 2004 - 02:58 pm: |
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http://sg.biz.yahoo.com/041013/15/3nr31.html
NEW YORK (Dow Jones)--Commodities stocks came under heavy pressure Wednesday, led by a steep decline in the price of copper, while gold prices closed at their lowest level in more than two weeks.
Meanwhile, a bearish call out of J.P. Morgan's London mining team seemed to set the tone for a pullback in mining shares, with the brokerage firm expressing concerns about a slowdown in global industrial production - a major support of commodities demand.
The selloff in copper came after heavy buying by funds in recent weeks had pushed copper futures up to levels not seen in 15 years. Wednesday's weakness was a result of those same funds unloading the commodity, analysts said.
The group also wasn't helped by a warning from BHP Billiton Ltd. (BHP), which said that while global demand for copper will continue to surpass supplies in the first half of 2005, worldwide supply will overtake demand in the second half of the year...
~~~~~~~~~~~
Chinese economy may overshoot growth target
BEIJING - China's Finance Minister Jin Renqing has said that economic growth of 9 per cent this year would be acceptable, state television reported yesterday, in the first acknowledgment by a senior official that the country might exceed its target of 7 per cent.
China has been trying since last year to slow down its roaring economy, out of fear that rapid growth could ignite politically explosive inflation and threaten the banking industry.
Mr Jin said that while government controls have achieved anticipated results, 9 per cent growth is acceptable, according to China Central Television.
It quoted Mr Jin as saying the controls are aimed at diminishing 'uncoordinated, unstable' factors in the economy, not at dampening overall growth.
The economy grew by 9.4 per cent in the second quarter of this year, according to the government.
Chinese leaders set the 7 per cent target in a report issued in March.
*** here is a layman's view - they set a target at 7%, but later on they said they can accept 9%... but the actual outcome turned out to be 9.4%. Using this value to project the next 4 qtrs will give the annualised growth at 9.4%*4=37.6% p.a. - this is the high end (and quite realistic because the result shows they are having problem containing the runaway growth). The low end would be 7%*4=28%, which gives the range target to between 28%-37.6%. I think that represents a maximum margin (of error) at 34% from their preferred target to actual outcome(?)
My conclusion? Nah! They are going to miss their target in a big way and I would consider the 9.4% per quarter outcome to be more accurate. Bear in mind too that the Olympic games venues and the related infrastructure has yet started in earnest...
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 206
Registered: 08-2004Rating: 
Votes: 1
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| | Thursday, October 14, 2004 - 05:00 pm: |
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Sorry I think I have goofed bigtime - they are talking about 9.4% p.a. and not per qtr. Here is a "new way" to interpret what I have said - look further, try to see four years ahead instead of just one! . Alternatively, learn from me - stop putting your foot into your mouth unnecessarily. Now all I need is a cave to burrow in... don't call me, I'll call you.
HC
"... if you've got a chart, I have an opinion!"
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holycow
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Username: holycow
Post Number: 207
Registered: 08-2004Rating: N/A
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| | Thursday, October 14, 2004 - 05:10 pm: |
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http://news.bbc.co.uk/1/hi/business/3740366.stm
Wednesday, 13 October, 2004, 21:37 GMT 22:37 UK
Copper plunges from 15-year highs
Fears of falling demand for copper in key US and Chinese markets have prompted a plunge in metals prices on both sides of the Atlantic.
Copper futures sank by as much as 12% from 15-year highs on the New York Metals Exchange, before settling 11% lower at $1.2888 a pound.
In the UK, copper fell 8.4% from a 15-year high of $3,145 on 8 October.
Traders described the speculative selling on the London Metal Exchange as unstoppable.
"It was crazy - after the rings it was marked down on the screens and that brought out yet more sell signals," said one floor trader.
However, many had expected copper prices to ease as they had been at a 15-year high earlier in the week.
*****the above news was published today for your perusal. I have incidentally kept the following news (just in case) for my own reference. Note the time - it was published on July 5, now no one can say the analysts are no good. The warning was given at least 3 months in advance!
Monday July 5, 5:26 PM
Copper, Nickel Peaked; Aluminum Mkt To Tighten -Citigroup
By Nicholas Sinclair
Sydney, July 5 (Dow Jones) - Both copper and nickel have likely seen their peak price levels for the current cycle, but aluminum should continue to edge higher in line with reduced smelter production, Citigroup said Monday.
In copper, with mine output increasing and rising treatment charges likely to boost smelter output, metal supply is expected to grow, it said. Meanwhile, the demand outlook is mixed, with the positive effect of an end to Chinese 'destocking' being offset by signs that U.S. 'restocking' is ending, the bank said.
"The market is in deficit in 2004, and inventories are low," it said. "But in 2005 and 2006 we project a balanced market, and in the absence of a resurgence of speculative buying, prices are expected to soften from peak cycle levels."
Citigroup thus projects an average copper price of $1.05 a pound in the second half of 2004, $1.00/lb in 2005 and $0.95 in 2006.
At 0849 GMT, the benchmark three-month copper contract on the London Metal Exchange was quoted at $2,723 a metric ton, or about $1.24/lb.
The main "depressing influences" facing nickel are substitution, mainly in China, and increasing scrap supply, principally in Europe, Citigroup said.
"The effect will be to slow demand growth to 3% in 2004, and around 1% in 2005, from 4.7% in 2003," it explained.
With mine production expected to rise by about 100,000 tons by 2005, the market should move deeper into surplus, pushing prices lower.
HC
"... if you've got a chart, I have an opinion!"
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