re: gold bulls n bears beware of an imment large p
because you don't like what I say, there is no reason to get upset and uptide about which was gold would be heading in the weeks to come ... skyrocketing or plunging!!
You may not find the following interesting so please ignore it.
ARHIDAS neither short or long gold or gold stocks but AVO
Party-spoiler or clever realist Major commodities analyst sees minor gold rally
By Thom Calandra, CBS.MarketWatch.com Last Update: 10:14 AM ET Jan. 17, 2003
SAN FRANCISCO (CBS.MW) - With gold's spot price near a six-year high, noted gold analyst Andy Smith on Friday released his annual price forecast for the rallying metal.
CBS MARKETWATCH COMMENTARY
THOM CALANDRA (WEEKDAYS) Noted gold analyst's forecast sure to turn heads TOMI KILGORE (MONDAYS) Dow sticks to its resolution as October rally thrives BAMBI FRANCISCO (TUESDAYS) Extreme investing: cash and Internet start-ups MIKE TARSALA (WEDNESDAYS) How to find real tech stock deals DAVID CALLAWAY (THURSDAYS) King for a day at AOL Time Warner JON FRIEDMAN (FRIDAYS) As AOL Time Warner turns
Free! Sign up here to receive our Internet Daily e-Newsletter!
TRACK THESE TOPICS My Portfolio Alerts Company: Barrick Gold Corporation Add Create Column: Thom Calandra's StockWatch Create Company: Newmont Mining Corporation Add Create Company: Placer Dome Inc. Add Create
Get Breaking News sent directly to your inbox
Create A Portfolio | Create An Alert
Smith, quipping that author J.K. Rowling took longer to produce the fifth Harry Potter book than he had to issue a forecast, is bound to disappoint gold investors with his view. The Mitsui Global Precious Metals analyst calls for an average price of $335 an ounce for 2003.
Spot gold's price Friday was flirting with six-year highs at $358 an ounce. The dollar was faltering, with the euro surpassing the $1.065 mark for the first time since October 1999.
Smith, based in London, pegs the 2003 low for gold at $310 an ounce and the high at $385. This week, several London and New York bullion analysts issued optimistic forecasts for gold. UBS Warburg's John Reade called for an average $353 an ounce in 2003. See: Gold gets Wall St.'s attention.
Smith, in issuing his forecast, asserts that the mixture of war talk, fiscal turmoil in Latin America, reduced producer hedging of the metal and disenchanted stock-market investors have benefited gold to a great degree. The metal was up about $66 an ounce, or 24 percent, in 2002.
Smith, for more than a decade until the September 2001 attacks on U.S. soil, was correctly negative on gold's prospects. He now says "the pace of gold-friendly political and economic shocks hitting the fan since 9/11 cannot possibly be sustained. Into the past 15 months has been crowbarred every kind of crisis experienced in the three previous decades." See: Gold's recent convert is no long-term bull.
In Smith's view, the rush to gold has more resembled a trickle -- a blip on the screen of global capital flows. Smith points out that sales of American Eagle gold coins amounted to $140 million from September 2001 to November 2002, or less than the total takings of the movie "American Pie II."
Smith maintains few new investors are buying actual bullion. "Between September 2001 and the end of November 2002, by far the biggest gold investors were miners themselves, closing or buying back their hedge positions," he says. The world's largest miners, among them Barrick Gold (ABX: news, chart, profile), Newmont Mining (NEM: news, chart, profile), Placer Dome (PDG: news, chart, profile) and Anglogold (AU: news, chart, profile), are reducing their forward-sales of the metal, a practice that for years weakened gold prices by contributing to bullion-bank leasing and selling of the metal.
Charting gold investment from September 2001 through November 2002, Smith estimates hedge-book reduction by those four large miners contributed $4.9 billion of gold purchases. Yet a combination of gold Eagle purchases, inflows into U.S. mutual funds that invest in miners and New York futures speculators who were "long" the metal amounted to just $730 million.
The practice of de-hedging, seen as a great boost to the stock prices of the world's largest miners, is no longer likely to impress investors, Smith says. "Shareholders may rightly perceive that much of the inflammatory derivative matter allegedly ticking in hedge books ... has been detoxed," he says in his report.
In presenting his lengthy forecast on gold (and silver, platinum, palladium and rhodium), Smith gives marquee status to a technical analyst, Amanda Sells. Her view is more optimistic than his.
Sells is an independent consultant to Mitsui Global. She sees "a dramatic change" in gold's long-term position. Sells says five years of resistance to the $320 level" is now busted. While the metal could suffer a setback (to $328 an ounce), Sells predicts "the break is a major one and augurs a significant shift and rise in the trading price of gold, with a move to and beyond the $403 target feasible."
This week, another technical analyst, Jordan Kotick at JP Morgan, stated gold could approach $430 per ounce in coming years. See: JP Morgan technician sees $430 gold possible.
Technicians are paid to create charts and ignore most of the "reasons" why a commodity or security is popular or unpopular. I asked Mitsui's Smith about the technical part of his yearly forecast.
"On Amanda, it is deliberate that some creative tension be built into the report between Amanda's view and mine," Smith told me Friday morning. "Amanda does her own thing. Me mine. I finish my scribbles always before Amanda contributes. I don't have a model linking my approach and hers."
Smith's 2002 gold-price forecast came close to pegging the high point for gold. He forecast a 2002 high of $355 an ounce, a level the metal reached Dec. 19.
Soon after the Sept. 11, 2001, attacks, when gold flirted briefly with $300 an ounce, Smith placed a $340 price target on the metal. "Gold is clearly on death's door with the lack of interest, but these are not normal times," he said at the time.
Smith's comments and published research, sent to Mitsui's institutional clients, turned heads in the gold trade. He had been mostly negative on gold's prospects for 14 years. See the story.
Will this fresh forecast disappoint gold's long-suffering supporters?
"I do not write to win popularity," Smith tells me. "Having written, though, and taken twice as many pages this year to explain a view as it did last year, a fair take would be that I am twice as confused, half as sure."
Smith adds, "And - extrapolating this reasoning further -- the price movement may be less clear, too."
See: Wall Street late to the gold rush.
Bullion bash
Gold-silver fund managers, analysts and mining executives will gather for their next major conference in Vancouver, British Columbia. The late January gathering, the Vancouver Investment Conference, will feature several gold mining analysts and newsletter editors whose hit rates on promising exploration companies were outstanding in 2002, among them Brent Cook, a geologist for Global Resource Investments, and Robert Bishop, longtime editor of Gold Mining Stock Report. See: Canada Gold Show.
