SAR 0.00% $4.69 saracen mineral holdings limited

What is driving the share price ?

  1. 121 Posts.
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    Advanced apologies if this is all obvious, I rarely post but thought about opening a thread on the bigger picture and why the prices are moving in case people disagree or have alternate view points.
    I have traditionally never been a gold bull, until now. I have been accumulating Gold in my portfolio for over a year and SAR has been a staple. I purchased more again yesterday at $3.73 even though I believe it may go down again today, I still think long term it is a $5.00 share based on current projections. This is the reason for this thread. To open discussions on a macro view and discuss why I believe gold shares are important.Some people asked why SAR fell after announcing record profits ? IMO this is because of the larger macro economic issues and not SAR financial reports. As markets rebound from Trumps trade war tweets gold drops. As markets drop Gold rallies. We saw Gold and Silver stocks such as SAR jump when the Dow lost 800 points last Monday. Fundamentals are out the window as over inflated asset prices and fund managers are looking to place and preserve capital.

    Long term the outlook for gold is strong as countries struggle with recessionary pressures and weak economic data. Gold as we know is a hedge against inflation but it also retains value against falling / devalued currencies. Will SAR and other precious metal stocks drop ? Probably. If we have a crisis the first step for gold will probably be a fall. I will accumulate more when this happens.

    Despite Trump telling everyone how strong the U.S economy is, it isn’t. Massive government spending has seen debt and deficit exploding. If we strip out public sector jobs, jobs growth is underperforming. GDP again if we strip government spending is near zero. Booming economies don’t need massive levels of stimulus.

    IMO, I believe we are on the edge waiting to be pushed into another GFC. Economies are drowning in debt. Consumer debt in May was at a record, corporate debt has also ballooned. Non debt liabilities are also set to reach records with rising pension and healthcare costs. The U.S and most central banks will have to go into negative interest rates. Q.E will be required at levels not seen and hyperinflation will follow. The U.S dollar will drop, they may even reset or default on debt and pressure will be put to move away from the U.S dollar as a reserve currency.
    To quote an old article from seeking alpha on the gold cycle, I think we will see
    * Economic/financial crisis leads to asset liquidation and dollar shortage
    * Dollar shortage leads to dollar appreciation and gold depreciation (in dollar terms)
    * One form of asset liquidation – forced gold selling – leads to gold depreciation (gold fell at the start of the GFC )
    * Eventual monetary response creates surplus of dollars
    * Surplus of dollars causes dollar depreciation and gold appreciation.

    Long term, the only game in town whilst this happens will be.....GOLD. IMO DYOR
 
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