dieuwer

Micromanaging the Price of Gold

The fun thing about investing in gold and silver, is that you actually have the option to hold your investment in your hand and look at it :)
From time to time, I polish some silver coins and bars on a Sunday afternoon and am very pleased with the result afterwards. It will be hard to sell them when the bull market in precious metals is over...

Micromanaging the Price of Gold

For gold and silver I like to use a "seasonal" investment approach:
if you look at the charts posted above, you will notice that gold, but more so silver, have an impulsive move UP at the end of the odd year ending during the first half of the next (even) year.

Start of impulse: Jul 03, Jul 05, Jul 07; Tops: Jan 04, May 06, Mar 08.

Therefore, I think the odds are very high we will see the start of an impulse NOW, with a top during the first half of 2010.

Long Ideas for an Upcoming Crash

nova, who says there actually will be an election? Perhaps Bush goes mad, declares martial law and nukes Iran.

Long Ideas for an Upcoming Crash

My price targets for gold and silver by the end of 2008 are $1250 and $25, respectively.
If Bernanke is going to hyperinflate and de DOW "miraculously" rises well above 12,000 then all bets are off and we could easily see $2000 per ouce of gold.

How Cheap Are Gold Stocks Relative to Bullion?

There is a much simpler way to estimate if miners will outperform the price of gold or not: look at the gold/oil ratio.
If you take the price of oil as an indicator for operating cost, a decline ratio of gold/oil implies decline profitability because it the miners' cost (oil) increases more than sales (gold).
However, if the gold/oil ratios rises, it implies that sales (gold) outperform cost (oil) which should make the miners more profitable.

It is interesting to note that from 2001 to 2002, the gold/oil ratio was rising, from 2002 until 2006 decline, from 2006 to 2007 rising, and recently declining again. So I am not surprised that miners have become less profitable lately.