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GOLD approaching $1000 an ounce

Investment demand in Gold is high, and  this should lead Gold to trade over $1000 an ounce this year. Weakness in the United States dollar is seen as the biggest factor in Golds rise.    Corporations are seeing costs rise dramatically as the search for gold expands. Disruptions in Africa of electricity caused a mines to close down  and risks of other disruptions associated with chaos related to violence will all be supportive of higher gold prices. disruptions continue to spread gold could go much higher appropriately so.   Jeff Macke from Fast Money stated “gold is going to $1000 an ounce and GLD was the way to play it”. His comrads suggested playing gold mining stocks.  In my perspective safety of supply looks to be a key factor in choosing a winner in the mining space.  I would not want a miner with significant exposure to Africa. AUY, GG, AEM, RGLD, BVN,AEM,SA,NEM were all up on the day. AUY is my favorite play because the stock is going higher on increased volume, a recomendation from Cramer, and strong growth prospects.  GG I see people buying heavier call options.  GG, SA  is in exploration stage of development (dicey; but, has upside potential) with it main operations in Canada, BVN (risky; but, I see upside) is linked to Peru, has solid earnings; but, the currency will fluctuate. RGLD is based out of Nevada, the company has had instability in its history (not sure about)

Downside risk to the rise in Gold prices is the record long buyers.  This has been a sign in the past of a top in Gold or at least a temporary consolidation of the price of Gold.  I hate to be the last one to the party, and may wait for a pull back

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January 28, 2008 Posted by | Uncategorized | , , , , , , , , | 1 Comment