"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Friday, April 17, 2009

Who's got the Gold?

Morning Miners!

It is 6:42 am and there's some nicer weather coming at us! Grab a cup and let's watch a short video. If you scroll down close to the bottom of this page you'll find a link to CNBC, double click the play arrow and report back to the coffee room when you're done.

Hmm, pretty interesting. For those of you that were in the shop, here's a quick summary. We've talked a lot about gold this week and the CNBC video shows just how important the investor demand has been in the last several months. The gold Exchange Traded Fund (ETF), GLD, presently holds more gold than Switzerland or China! Here's the top six breakdown of who's got the gold in metric tonnes:

U.S. 8,133
Germany 3,412
IMF 3,217
France 2,508
Italy 2,451
GLD ETF 1,127

The ole Colonel buys gold using the GLD, their bullion is squirreled away in a London Bank. Apparently, a lot of other folks are doing the same thing. That makes me a little nervous, I don't like crowded theaters.

Today we're seeing at least two things that could influence the near term future of gold prices. This morning the S&P 500 is up more than 30% in six-weeks (666.79 intraday bottom, 3/6/09). That seems like a whole lot of optimism for an ailing economy that can barely walk to the bathroom! The second item is a further fall in gold futures this morning. Here's my take: if the broader markets nose dive, gold will probably recover as investors head back to safe havens. If the markets are wishy-washy or continue their upward trend, the Colonel is starting to worry that gold could head down hard.

To hedge my beer bet (gold will see $929 before $844 on or before 5/15), I sold all my silver yesterday. Silver is a hot air balloon when gold is on the rise and drops like a lead one when gold goes bad. Hey, I like to put my money where my mouth is buckaroos. Where do you think gold is headed?

Enough talk, let's walk the walk:

Oil moved up a little in early trading to $52.58; the dollar ("Dixie" or .DXY) is kicking butt on nearly everyone (another bad sign for gold), up 0.82% to 85.905. The commodity index (.CRB) is steady at 225.13.

Gold dropped $10.4 to $869.4 (June contract); Silver broke below $11 at $11.990; Copper pulled back $.15 to $2.1680; Molybdenum still lolly gags below $8.

The DOW is down 25 points to 8099.87; the S&P 500, down 2.75 points to 862.55. Miners are lousy except for General Moly stopping for air:

Barrick (ABX) $27.55 down 2.44%
Newmont (NEM) $38.49 down 3.29%
General Moly (GMO) $1.78 unchanged
Quadra (QUA.T) C$6.14 up 0.16%
Freeport McMoran (FCX) $42.63 down 2.54% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel remains strong (8:21am update, good news for General Moly):

Nucor (NUE) 43.98 up 0.50% - domestic steel manufacturing
ArcelorMittal (MT) 28.7025 up 1.93% - global steel producer


Colonel Possum

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