I've just written this for another site I post on. If you are investing in Australian gold producers you might be interested.
I think people have got to start getting over listening to Yellen and let the real numbers on gold speak.
One oz of gold in Australia is today worth about A$1537oz and this one oz of gold will buy you 16.6 tons of iron ore of 62% iron content (<=4% SiO2, <=2.5% Al2O3, <=0.07% P, <=0.05% S, <=0.01% Pb, <=0.01% Zn, <=0.02% Cu, <=0.07% AS, <=0.80% TiO2, <=0.20% Chlorine+Fluorine, <=0.30% K2O + Na2O) with grain size 90% finer than 10mm and at most 40% finer than 0.15mm deliver to warehouses and delivery locations appointed by the Dalian commodities exchange.
One oz of gold in Australia on the 1st of June 2014 was worth about A$1460/oz and this one oz of gold then bought you 12.4 tons of iron ore of 62% iron content (<=4% SiO2, <=2.5% Al2O3, <=0.07% P, <=0.05% S, <=0.01% Pb, <=0.01% Zn, <=0.02% Cu, <=0.07% AS, <=0.80% TiO2, <=0.20% Chlorine+Fluorine, <=0.30% K2O + Na2O) with grain size 90% finer than 10mm and at most 40% finer than 0.15mm deliver to warehouses and delivery locations appointed by the Dalian commodities exchange.
So our one oz of Australian gold buys 1.34 times the amount of iron ore that it bought only 10 month ago
One oz of gold in Australia is today worth about A$1537oz and this one oz of gold will buy you 26.7 barrels of light sweet crude oil delivered free-on-board ("F.O.B.") at any pipeline or storage facility in Cushing, Oklahoma with pipeline access to Enterprise, Cushing storage or Enbridge, Cushing storage.
One oz of gold in Australia on the 1st of June 2014 was worth about A$1460/oz and this one oz of gold then bought you 13.6 barrels of light sweet crude oil delivered free-on-board ("F.O.B.") at any pipeline or storage facility in Cushing, Oklahoma with pipeline access to Enterprise, Cushing storage or Enbridge, Cushing storage.
So our one oz of Australian gold buys 1.97 times the amount of oil that it bought only 10 month ago.
One oz of gold in Australia is today worth about A$1537oz and this one oz of gold will buy you 15.9 Commonwealth Bank shares on the ASX.
One oz of gold in Australia on the 1st of June 2014 was worth about A$1460/oz and this one oz of gold then bought you 17.8 Commonwealth Bank shares on the ASX.
So our one oz of Australian gold buys 0.89 times the amount of Commonwealth Bank Shares that it bought only 10 month ago. Not too bad considering we are now not comparing the value of our gold to absolute real and essential commodities in the real world economy like oil and iron, but instead to a bubble asset traded in a bubble market supported by a bubble housing boom in a country that is soon going to run out of luck. I'll be back with my what one oz of Australian gold buys comparison after the proverbial unmentionable hits the fan. I know what I prefer to have a substantial weighting on in my portfolio.
Eshmun
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