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  • Building A Core Investment Portfolio For The Next 20 Years: Gold  [View article]

    There are two main challenges in gold investment if paper holdings are not to be
    trusted. Physical gold is around 3% more to the spot price if bought in forms of bars
    etc. The selling fee would be the same or slightly less.

    The main drawback against gold is the lack of returns. Would it be practical to buy
    physical gold and then sell calls at various points above the spot on different time
    frames. In short these are covered calls. Considering the fluctuation in the gold
    price the call options would get a good price.

    The question to the author or any of the readers would be that is it possible to
    do this with a small but a reasonable quantity. Any other ideas to get some return
    on physical gold holding.
    Dec 3, 2014. 05:50 PM | Likes Like |Link to Comment
  • More Impairment Charges Coming For Barrick Gold?  [View article]
    Barrick has got goodwill on the balance sheet to the past acquisitions. This results in deferred tax liability to balance the other side of the balance sheet. Would any body know what happens in case of write downs. Does write downs affect the deferred tax liability?
    Some help would be appreciated
    Aug 8, 2013. 10:57 PM | Likes Like |Link to Comment
  • What It Really Costs To Mine Gold: The First Quarter Eldorado Gold Edition  [View article]
    First of all a very good informative article on true costs of mining gold.
    Being an investor in gold which is a dead investment a little concerned
    about the drop in the gold prices. Going a step further on this article
    is to predict the price trend in the near future in line to the rising

    In the article you have given costs of about 12 companies. The total
    mined gold every year is around 2500 tons. The average cash cost
    of the gold mining industry would be around $ 1000 max and so
    they are likely to produce gold at least till that level. The important
    thing is at what level will the production go down in a big way.

    Recently with increased volatility the option prices have gone up
    in gold. Is it advisable to sell calls keeping physical possession
    of gold? Some advise or help would be appreciated.
    Jul 9, 2013. 11:17 PM | Likes Like |Link to Comment
  • Returning The Dollar To The Gold Standard Is A Really Bad Idea  [View article]
    The world dynamics has passed the stage of a strict gold
    standard. Taking a practical view currencies should be
    backed by non perishable,convenient to store and not bulky
    commodities. This will give opportunities to lot of countries
    having mineral wealth not necessarily gold to expand and
    make their currencies freely marketable. It
    will also limit some of the governments to
    take short term solutions of increasing M1,M2
    Aug 24, 2012. 11:31 PM | Likes Like |Link to Comment
  • End Of An Era For Gold Investors  [View article]
    Hi Michael,

    Any article on gold receives lot of comments and there seems to
    be solid camps for it and against it. There are some points
    which seems to be missed out in the discussions and articles.

    Gold has more influencing factors in the east then the west and
    so it can be related to USD or its interest rates only partially.
    China and India are accounting for more than 55% of the world
    demand. These countries have high inflation and not really
    free currencies.

    Gold is used 50% in jewelry and 15% in industrial/dental use.
    The rest 35% might be converted to bars,medals etc. 65% of
    gold produced is productive and results in contributing to
    GDP of the user countries. 65% of the demand is in elastic
    to a large extent.

    The paper contracts are more than 100 times the value
    of gold's annual production. They seem to be influencing
    the physical metal prices through margins,libor etc.

    The mining balance sheets have been high lighting cash costs
    but their margins (average) after depreciation and other costs
    not included in cash costs is less than 20%. This is not enough
    considering the risk factors.

    Apart from the demand and supply it is the predicted cost curve
    that decides the future price movement of gold and any other
    commodity. The article has not even mentioned the consumption
    or cost of producing gold.
    Aug 6, 2012. 11:07 PM | 1 Like Like |Link to Comment
  • Gold: A Commodity Or A Currency?  [View article]
    Hi Angad,

    Thanks for your reply. It seems that you are convinced about gold
    being unproductive and a dead asset. I am still slightly confused.
    Gold is productive up to the point of production and its usage in
    jewelry and other industries. The hoarded gold by form of bars
    or jewelry is unproductive but so are so many other assets.

    China is encouraging its people to buy gold while India has gone
    the other way. If people buy gold to protect against notional fiat
    currencies and then pledge it to trade and manufacture then is it
    still unproductive?

    I believe gold can become a low velocity currency and can be
    channeled for productive purposes through sound fiscal policies.
    Jun 10, 2012. 02:38 AM | Likes Like |Link to Comment
  • Money Printing To Bring Forth The Next Risk-On Phase  [View article]
    I like your article and the subject. There is just one point where I disagree. All big investors,institutions etc specialize in different
    fields and also have access to different type of analysis and information. They are trend makers and not trend followers.
    The hedge funds and speculators may follow the herd mentality
    in the risk on and risk off periods.

    The large investors with inside information are holding hard assets
    which includes commodities. The depreciating currencies are fast
    becoming transit zones where it is used only when switching from
    one hard asset to the other.

    The world may shift to the barter age with modern automated systems where people will keep their wealth in commodities and
    switch commodities rather than keeping cash.
    May 27, 2012. 02:30 AM | 2 Likes Like |Link to Comment
  • 5 Gold Stocks That Could Plummet In 2013  [View article]
    I am a little surprised at the article and some of its conclusions.
    Requesting some readers to give their ideas on this subject.

    Gold contributes to the GDP when mined, refined, manufactured
    and recycled. 65% of the demand of gold is from jewelry,
    industrial and dentistry and the balance 35% is bars,coins etc.
    The last 35% may lie in vaults or may be pledged or converted
    to jewelry in case of any temporary shortage of the metal.

    This metal has two type of demand which is paper demand and
    physical demand. The paper demand maybe partially linked
    to the USD but the physical demand is getting more de linked
    from the USD.

    The demand for the metal is more for security and its experience
    of maintaining its buying parity values. If this is true then gold's
    buying parity value will remain same even if currencies inflate or

    The subject in the article seems to be over simplified.
    Apr 25, 2012. 11:52 PM | 2 Likes Like |Link to Comment
  • What Is The Fair Value Of Gold?  [View article]
    Hi Mark,
    I read almost all your articles on metals and have found them to be
    very interesting and informative. This one is also very logical.

    The price of gold is affected by other factors also other than USD
    money supply. The main consumption of gold is in India and China
    which account for almost 55% of the total demand. The money supply
    in these countries has increased around 30-40% in the last two years.
    Surely the inflation rates and the money supplies in this part of the
    world would have more effect on the gold price.
    Apr 17, 2012. 05:41 AM | 1 Like Like |Link to Comment
  • Gold: A Commodity Or A Currency?  [View article]
    A very good article. In extreme circumstances gold will be worth its buying power in relation to the other commodities. The other
    commodities will be worth depending on its demand and its cost of
    production. It is a fact that the other commodities would be difficult
    to grade,store and exchange in comparison to gold or PGMs.
    The warehousing receipts which may state quantity and grade can
    be currency if accepted by large segment of population.

    There are lot of developments in an advancing world and lot of
    old theories being re defined. I would love to have some opinion
    from readers about gold being productive or not. Gold does not
    produce returns and is dead investment but still is part of GDP
    when excavated from the ground. If bars which is roughly 30%
    of gold demand becomes a means of exchange for economic
    activity accepted by large segment of people then it is definitely
    Apr 6, 2012. 04:28 AM | 1 Like Like |Link to Comment
  • Gold Just Took One On The Chin From The New Indian Taxes  [View article]
    Hi David,

    The foreign exchange regulations in India do not allow trading
    in GLD etc unless locally listed in Indian currency. The Indian
    equivalents of GLD operate at more than 3% expense level.
    Apr 2, 2012. 09:02 PM | 1 Like Like |Link to Comment
  • Gold Just Took One On The Chin From The New Indian Taxes  [View article]
    Hi David,
    A very good article. Gold has more influencing factors in the east
    than the west. India consumed 933 tons of gold in 2011 out of
    which 567 tons was jewelry and 366 tons was bars/coins. The
    jewelry has less % of machine made and so labor content would
    be around 30% or more on the final product. The duty should
    affect the bars side more than jewelry.

    The duty on the jewelry side will be absorbed in different
    proportions amongst the labor+ retailer + consumer. The
    bars market may get affected in the short run but any further
    increase will lead to smuggling from neighboring countries.

    Requesting the author or any reader to write if they know about
    the local sales tax on jewelry in India. This is usually paid on the
    final product by the end consumer.
    Apr 2, 2012. 05:38 PM | 1 Like Like |Link to Comment
  • Gold Has Found Its Bottom  [View article]
    The article has technical and fundamentals pointing towards a
    rise in the prices. I had some questions on the fundamentals
    if Simit or some other reader can help.

    Additional money from Fed: has become a common point in
    many articles. The M1+ M2 supplies are never mentioned in
    any article even on estimated basis. Are these figures available
    on any government sites? Surely so many economists and finance experts would not be
    giving their forecast without having some idea
    about the total money supply. (USD)
    Mar 27, 2012. 11:41 PM | 1 Like Like |Link to Comment
  • Palladium: The Not-So-Precious Precious Metal  [View article]
    Hi Richard,
    Requesting you to clarify on Norlisk process. The company has
    projected 3% less production of pd this year compared to last.
    Though a likely decision there is no official confirmation on the
    change of process which can bring the world production down by
    35 to 40%. Please write if I have missed any news on the same.

    Still Water might have cash cost of $ 500 but total cost is above
    $700 keeping recycling profit out and distributing costs equally
    between palladium and platinum.

    Question: There are two North American miners producing mainly
    palladium. Can their cost and production be considered marginal
    cost and marginal production in the present scenario?

    I believe 80% production of pd is non elastic and the other 20%
    is elastic which is from the two North American producers.
    Mar 24, 2012. 12:20 AM | 1 Like Like |Link to Comment
  • Palladium: The Not-So-Precious Precious Metal  [View article]
    I am bullish on the metal and agree on the points mentioned in the
    article. I think the present cost of mining and projected costs are
    missing in the article. Palladium mostly comes out as a bimetal
    and so costs are hard to separate. e.g: Norlisk and most of the
    platinum miners in South Africa.

    Considering the above cost should be allocated to the metal
    based on few North American companies producing palladium
    and platinum/palladium. Still Water produces platinum +palladium
    at an average cost of around 700-720 per oz. (Total cost divided
    by production of palladium and platinum). Some ideas by the
    author or readers would help in buying decisions of the metal.
    Mar 21, 2012. 04:50 PM | Likes Like |Link to Comment