S&P/ASX Small Ordinaries (ASX:XSO) - The Brains Trust - 2015, page-221 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by loki01 ↑

Pisces

You wrote

"I think this gold story could be a big winner before too long and to give credit where it's due PB was the first one on to it."

I agree with you that PB makes some interesting observations, especially today about short v long term interest rates in Oz, but I doubt that even she will claim that she was the first one onto the gold bounce. Heck there are a heap of people who post on the gold thread who may claim that "honour" if indeed it is an honour. For my part and I think others, I have taken a bet on gold purely based on seasonal factors and I have noted views from analysts who help guide me in that decision, but these do not include PB. I note cha got into goldies and I suppose he used his own analysis.

Perhaps PB did influence you, because when I posted that EVN was looking like a great buy at 43 cents you were pretty negative on taking a punt at that stage.

I think it would be wrong to think that just because equities are doing well then so should hard commodities and precious metals. Hard commodities only do well over certain timeframes and they did very poorly for about 20 years from the early 1980s while the share market was mostly booming. The truth is that over time commodity prices have been falling in real terms. They took a turn for the better as a result of demand shocks - the Japan/Korea boom on the late 1960s-1980 and over 2002-2013 due to high growth in China. As usual supply caught up with demand and in combination with slower economic growth (and less resource intensive activities) prices have been falling. The high oil price has led to technological innovation and substitution resulting in excess supply and now a lower oil price because Saudi Arabia has refused to cut its production.

It would be foolish to assume that commodity prices will come back without some catalyst, such as high economic growth in India. There may be some commodities that could do better if their supply is disrupted or diminished (zinc?).

I am hoping that gold will not go the way of the other commodities because of high Asian demand, especially as their wealth grows. There is always the chance that the Chinese will become like the Japanese who do not import a lot of gold (not sure if the ever did import much). Interestingly when the POG was over USD1600 in 2012 Japan was an exporter of gold to Hong Kong, and Japanese citizens were selling their gold trinkets. In the case of India gold has religious significance and to some extent serves as a store of wealth and I expect strong demand from them so long as the government does not place too many impediments to imports, like it did in 2013.

I agree with 9L's chart showing gold as now being in its strong seasonal period. I do not know of any catalysts for why gold demand should remain as strong post February. I think there is also a chance that the USD may soon retrace for a few weeks and perhaps this will also be helpful for the gold price in the short term.

Bottomline - I am not going to get excited about a bounce in the goldies that I was expecting. However, I am grateful that it is taking place. Given how badly the goldies were sold off, it could be a fairly good bounce in percentage terms for the better goldies.

I suppose that some people took the view that the POG was going to go lower (even if there was a bounce) and that there was no point in holding goldies in the face of potential losses because eventual they are expected to come back down to even lower levels. I know that when I take that view and see the shares fly past higher I have a degree of regret, which is one reason I decided to buy some goldies. Its a bit like holding a lottery ticket, which is OK so long as I can walk away with some gain rather than a loss when the music stops.

loki (just keeping my head, and I hope I know when to fold some of them (my goldies).

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Well Loki you can correct me if I'm wrong but every time I looked on the Gold thread the same people say the same things they've been saying for years so whatever happens someone's always got to be right .Yes I changed my mind on gold once the stocks started going up . I'm not hanging my hat on it but it's as good a place as any to be looking to make money in this market. The momentum is there and you could be surprised as to how far stocks like MML ,NST and RSG which I believe you like ,could go . Sometimes when I've had my head so far into something in the markets I've missed something obvious that all those who don't have the scars and know all the bad things about it benefit from .

Don't see any point hanging around thinking about it when the power is on . The test for gold in this phase will be if the oil price stabilises and the US markets head up again.