Digger’s archive
Below is a list of Digger’s articles uncovering the reasons for the price of gold today and what companies can profit from the events shaping the mining industry.
The Currency Markets and the Gold Price
Over the past few months there has been a growing amount of interest in the currency markets especially the pound, the euro and the dollar. Each has faced issues that have exposed weaknesses. The pound has long come into criticism for being overvalued. The euro has been dragged through fresh scepticism by the Greek crisis, and the dollar continues to be questioned as the reserve currency of choice.
The three charts below plot the course of the gold price in 2010, measured in terms of the three aforementioned currencies (taken from the PM gold fix)…
Petropavlovsk’s iron ore prospect
We last wrote about Petropavlovsk back in December 09. Back then we noted the unusual selling of shares from Peter Hambro and Pavel Maslovsky, the two directors. Last week one of our readers drew our attention to the fact we’ve not spoken about them for a while. Fear not, they have been on our radar and as of last week fresh news caught our interest.
Firstly Chief Executive Pavel Maslovsky told Reuters last week that the company is considering a Hong Kong IPO and long term bank loans for it’s iron ore projects. And secondly the Chief Financial Officer has sold just under half his shares in the company (53, 846 shares at just over £10 per share).
Are we in the midst of a new gold rally?
George Soros, the man who made over $1bn by short-selling the sterling pound in 1992, has more than doubled his holding of gold over the past few weeks.
Soros has been investing heavily in the U.S. listed exchange traded fund, SPDR Gold Trust, he now owns over 6 million shares worth around $680 million.
Two recent events offer insights into China’s future gold plays…
22nd February 2010
Two recent events offer insights into China’s future gold plays… China has stopped buying US Treasuries and started to dump them. And China has started accumulating gold positions.
The recent IMF gold sale announcement looks an ideal opportunity for China, and other similar countries with huge dollar reserves, to take advantage of a rising dollar.
Coupled with China’s recent events, will they take the bait?
Record Euro Short Positions Push Gold Price to New High
16th February 2010
On Friday short positions against the euro on US exchanges rose to US$7.6-billion according to The U.S. Commodity Futures Trading Commission. This is the largest ever recorded net short positions against the euro…
News last week continued to play out around the crisis in the eurozone countries, and in particular, Greece. Many pointed to Greece’s negligible contribution to the eurozone GDP (see chart below) but it’s not the extent of Greece’s problems that’s worrying investors, it’s the uncertainty concluded from having no prior precedent. Investors are wary of the first big test for the euro. These are defining moments for its durability and longevity. Uncertainty surrounding Greece’s budget has magnified the sentiment of euro shorts.
The Dollar Rally Threatens to Upset the Gold Price
8th February 2010
The recent bull rally in the dollar has led to a lower gold price but how sustainable is the rally?
Stock Prices are Up and Risk Appetite Returns
2nd February 2010
The gold price is finding resistance at $1075, helped by a slightly weaker dollar it is finding higher ground, but its’ price is heavily dependent on what’s going on politically and economically.
The FTSE 100 was up 1.14% yesterday, the DAX, CAC 40, Dow Jones, S&P 500… all were up yesterday as investors took the increased US manufacturing data as a sign that the US recovery was back on track.
As thoughts of recovery filtered through, risk appetite grew and fed back into the markets. Assets and commodities took center stage at the expense of the USD (US dollar). Oil was up 2.59% to $74.78 per barrel and the gold price finished up 2.15% at $1106.30 per troy ounce.
Investors Fooled by Talk of Recovery
25th January 2010
What a week we’ve just witnessed. In 3 days the entire gains in equities in 2010 have been wiped out. The Dow, Nasdaq and S&P 500 all fell into the red for the year to date. The gold price dropped to its’ lowest in a month. And this all happened at a time when investor confidence had started the week at a 27 month high according to the VIX index…
The CBOE Volatility Index (VIX), also known as Wall Street’s fear gauge, is widely regarded as the best measure of investor confidence in equities. If you look at the chart below you can see that at the start of last week the VIX was at a 27 month low. This means that investors were less fearful of big falls in share prices… They were optimistic. The Investors Chronicle ran an article titled ‘Low volatility signals end to credit crunch’. People were beginning to believe in the recovery.
The Three Major Questions That Will Determine the Gold Price in 2010
18th January 2010
2009 saw the FTSE Industrial Metals and Mining sector return more than 350% for the year. The dollar index fell by 4.2% and gold raced to a new record of US $1,226, eventually dropping to a 24% gain over the year.
In summary 2009 has been a phenomenal year for gold. BUT will this success pass over to 2010?
We look at China’s recent efforts to control it’s economy from overheating and what big questions face the gold price in 2010.
Manufacturing our economies and the Gold Coup of the decade
8th January 2010
The Dollar fell against six other currencies on the U.S. Dollar Index on the back of news from Federal Reserve Governor Elizabeth Duke that “moderate” economic growth is likely to lead to sustained low interest rates.
So whilst the Dollar seems to be struggling but still afloat, the American manufacturing industry seems to be, dare I say, beginning to show symptoms of a recovery.
We look at New Gold and the takeover bid for the El Morro mining project in Chile.
Odd Things are Happening at Russian Gold Miner, Petropavlovsk
29th December 2009
Recent share dealings by board members at the Russian miner brought into light
The Gold price continues its descent
22nd December 2009
As the dollar continued to tumble against other major currencies, investors looked to gold to offset the risk and loss in the dollar. But of late there appears to be resurgence in the dollar. It’s up to a three-month high against the Euro and a six-week peak compared to the Yen.
The Gold Price Interest Rate Ransom
17th December 2009
Gold looks very pivotal right now. All eyes are on the direction of the dollar. Any hints of interest rate rises will induce a bullish dollar sentiment which would in effect result in a lower gold price. Because of today’s uncertainty the gold price is being held to ransom by speculators reacting to news and data.
Record Volumes in the Gold Market indicate a Gold Top
10th December 2009
We look at the volume spikes in the COMEX and GLD on Friday 4th December… and ask what were their causes and what are the implications.
Gold: Booming in the Dubai aftermath
3rd December 2009
The panic of Dubai is settling and the markets are making sense of the events. In it’s wake the gold price continues to boom and it looks unlikely to stop
Now investors are left with a much more fragile footing. The Dubai episode has reminded investors how uncertain creditor rights can be.
It brings into question how safe sovereign debt is… in particular investors are starting to look around at who could be next… maybe Ireland? Maybe Greece?
IMF’s Managing Director Gives Credibility to a Stronger Price of Gold
26th November 2009
Gold soars ahead with news from politicians that governments will continue to poke and prod our economies in order to stimulate them. Well what happens when you poke and prod a dog? It bites back.
Gold’s evolving supply and demand
20th November 2009
Today we take ourselves away from all the hype, from all the news being fed to us and try and decide whether the price of gold is justified. To weigh the decision we look at the textbook factors – supply and demand.
The Gold Price Today effect
13th November 2009
Today I’ll take you through the news that’s motivating higher production levels amongst gold miners, and news that’s causing some to restrict production levels. We’ll see politics being influenced and why the UK investor should be worried…
Events Shaping the Gold Price and Gold Mining
6th November 2009
There were those last week who mentioned a word of caution. A caution about a gold price bubble!! If gold were a person he’d start to feel dizzy by his extraordinary growth. In fact he’d have felt dizzy since 2001, when this bull market started. But we can’t help but think that many analysts and economists all missed the credit crunch. What’s to stop us all from miss interpreting this bull market in gold? Could this be a bubble?
Gold Price Today: Barrick Gold’s 3rd quarter results will show the progress of its de-hedging
29th October 2009
Barrick Gold is the biggest gold miner in the world by market cap and gold production. With third quarter results coming out today we look at how it intends to get rid of its burdening hedge positions and look why the company is doing this now
Gold Price: The Pound vs. The Dollar
22nd October 2009
When we talk of the gold price today, we generally always talk of that price being in US dollars. Today I want to show you how the british pound and the dollar compare when they are used to value gold.
The Dollar-Gold Inverse Relationship
15th October 2009
For the past week the price of gold has performed well. It has maintained its historic high and risen fairly sharply after breaking the $1000 mark. The main reason gold has performed well is because of its inverse relationship with the US dollar. Time and again we see any weakness in the dollar play itself out in the strength of the gold price.
Today we look at the inverse relationship between the dollar and gold. Below courtesy of stockcharts.com I’ve overlayed the gold price (dotted line) against the us dollar index (solid black line).
Gold Futures Hit Record High
8th October 2009
Today we’re looking at the origins and nature of gold futures.
You’ll see we use gold futures as a technical indicator on Gold Price Today. If you’ve been tracking this over the past week you’ll have noticed gold spot and Futures hit a record high last night, with December’s price rocketing to $1042.70 an ounce.
China’s lack of gold reserves and its young gold mining industry
1st October 2009
Over the last few weeks we’ve been paying more attention to China as it emerges from the East. There are three reasons why China poses such an interesting potential return of value for traders.
Gold Price Crashes
23rd Sept 09
The IMF finally decided to sell the 403.3 tonnes of Gold that they’ve been publicly touting about for weeks. On Friday it was announced that the sail of $13 billion of Gold would not disrupt the market and that it would be sold directly to central banks.
China’s Golden era may have Finally Arrived
16th Sept 09
With China hoarding an estimated $1.4 trillion in dollar-based assets, it’s little wonder why they are eyeing any opportunity to buy gold with the decline of the dollar.
Pushing the Gold Milestone
9th Sept 09
Over the past year many economists have cited the $1000 mark as a milestone for the price of gold.
Over the past few days we’ve seen the price of gold push to the $990s. Yesterday this milestone was breached.
Important
Information in Gold Price Today is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision.
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