P O G AND U S D, page-27

It certainly looks like the sell off is overdone in NST relative to other gold producers and as others have said likely to be from US capital exiting to avoid fx losses.

I see no reason for the AUD (or NZD) to appreciate from here as the data is terrible re main exports to China:

(1) Iron ore supply tsunami is lowering USD prices and the big 2's strategy is to simply up volume to compensate for lower margin to keep profit levels up.

(2) Coal tariff imposed by China over weekend will kill coal exports

Great if you are an Australian gold producer that as been suffering expensive Aussie operating costs over the past several years.

To me NST provides one of the best risk-return exposures to the gold sector around. For too long I have been mucking around at the low end of the market looking under rocks for the juniors that will provide multi-bagger returns only to lose money.

In this market, NST offers outsized returns without the risk of going belly up if the POG trend does indeed decline for a period - a fate which many juniors could/ will suffer.

BTW, this piece on Zerohedge today is very encouraging:

http://www.zerohedge.com/news/2014-...its-china-gold-demand-topped-2000-tonnes-2013

It would appear that Chinese consumer (non Govt) gold demand in 2013 was actually over 2,000t ... more than double what the WGC has reported.

Another interesting piece in the puzzle that clicked upon watching an interview with Raoul Pal on Real Vision last week - due to (non Western) Central Bank physical gold demand the price of (paper) gold is falling. WTF?

This is due to the Bullion Banks which use physical gold as collateral for their paper gold derivatives, often leveraged a c. 100 : 1. Less physical gold available (due to non Western Central Bank purchases) means that these derivative trades need to be unwound as the collateral disappears. This makes sense to me. It also bodes well for the future price of gold IMO once this process is finished/ collapses.

Also, on a quick relative analysis I can't see why anyone would buy EVN over NST on the relative current prices. Can anyone help me out here?

Cheers
John