AI
Monday, December 01, 2003 10:18:00 AM
*** Investors wait for bets on gold to pan out ***
It has been a wonderful ride, and I do not think it is over.
=============================================================
G'morning ml,
No, the ride is not over.In my view, it's not even close to the end of the ride althouugh much of the really easy money might have already been made in some of these issues.
Btw, it's nice to see your smiling face again.....
Investors wait for bets on gold to pan out
Jonathan Fuerbringer NYT
Thursday, November 27, 2003
Gold does not have to break $400 an ounce to prove that it is in a bull market. The bullishness has been clear for some time, as the price of gold has surged 52 percent since it hit bottom in April 2001.
But $400 must be breached to prove that the rally, which many investors have probably missed, still has legs. And $450 an ounce has to appear to be within reach to offer a nice profit potential to investors who, unfortunately for them, usually do not pay attention to gold until its price is already going up.
For the gold producers and the gold faithful who lived though the dark times - in which gold fell steadily after trading at more than $800 an ounce in 1980 - there is no problem. Gold, which has been above $390 an ounce for two weeks, is going higher.
"The scary thing is, we don't know how high this price can go," said Ian MacDonald, manager of precious metals at the New York branch of Commerzbank, who has been bearish on gold for 15 years.
But investors attracted by the $400 headline should take note of what is pushing the price of gold higher and consider whether these forces have the momentum to keep the rally going.
The chief argument for gold recently has been the weakness of the dollar. Pierre Lassonde, president of Newmont Mining, a major gold producer, argued that the price of gold is 80 percent dependent on the value of the dollar, which has fallen about 11 percent this year against the euro and about 8 percent against the yen.
Others agree. An analyst at a big hedge fund, who insisted that he not be identified, put the argument bluntly. "I don't think supply and demand matter," he said. "What matters is the esteem people have for paper money and what we are seeing here is a flight to hard assets - gold."
This inverse relationship of gold and the dollar has worked well sometimes in the past, but not always. It has done pretty well during gold's new bull market. The dollar has been in a steady decline against the euro since July 2001 and against the yen since February 2002.
At the same time, it may have been the euro's inability since May to breach the $1.20 level against the dollar that has held gold back from $400 an ounce. When the dollar shot up 1.2 percent against the euro on Monday on expectations of stronger U.S. economic data, gold fell 1.1 percent, or $4.50 an ounce, to $391.50.
On Wednesday, the dollar was down against the euro, and gold was up $4.25 to finish in London at $396 an ounce. It was quoted around midday Thursday at $397.
Gold aficionados maintain that the dollar will continue to fall. They argue that the Bush administration wants a weaker dollar and that confidence in the dollar is being hurt by American foreign policy. The U.S. current-account deficit, reflecting trade in goods and services with the rest of the world, is nearing $500 billion, and that is also a drag on the dollar.
Yet if the economy does manage to continue to grow modestly - after the stunning 8.2 percent annual growth rate for the third quarter that was announced on Tuesday - the dollar might not fall much more, limiting the further upside potential for gold.
Another factor often cited as positive for gold - political instability and global terrorism - has not given a boost to the metal recently. After the truck-bombing of two synagogues in Istanbul on Nov. 15, a Saturday, the price of gold dropped $6.50 an ounce in trading the following Monday. And after the truck-bombing of the British Consulate and a British bank in Istanbul on Nov. 20, gold fell $1.20.
A third force of note is speculators, who have been betting heavily that gold will rise. On the Comex division of the New York Mercantile Exchange on Sept. 2, there was a net balance of almost 123,000 futures contracts outstanding to buy about 12.3 million ounces of gold, the biggest weekly position by far in Commodity Futures Trading Commission data going back to 1983.
Since then, those positions have been trimmed, with the net buying contracts totaling 93,160 as of Nov. 18. While this is still the ninth-biggest weekly net position, the fact that it has shrunk may be another reason gold has still failed to break through $400.
Another positive for gold that has been tempered is the proposal for a so-called exchange-traded fund for gold. Sponsored by the World Gold Council, this exchange-traded fund would allow retail investors to buy gold easily through their brokers in amounts as small as one-tenth of an ounce. Some analysts argue that the price of gold may already have run up in anticipation of this buying. But the U.S. Securities and Exchange Commission has not yet approved the proposal.
"I am sure getting tired of waiting," said John Hathaway, a gold fund portfolio manager at Tocqueville Asset Management.
All this stuttering around the $400-an-ounce level does not mean that gold will not go higher. But it is a warning to investors who are getting in now not to expect gold to rise a further 50 percent.
It is also not a bad idea to listen to analysts who argue that a small amount of gold in a portfolio - something under 5 percent - can be an effective way to diversify one's investments, regardless of the outlook for gold.
The New York Times NEW YORK Gold does not have to break $400 an ounce to prove that it is in a bull market. The bullishness has been clear for some time, as the price of gold has surged 52 percent since it hit bottom in April 2001.
But $400 must be breached to prove that the rally, which many investors have probably missed, still has legs. And $450 an ounce has to appear to be within reach to offer a nice profit potential to investors who, unfortunately for them, usually do not pay attention to gold until its price is already going up.
For the gold producers and the gold faithful who lived though the dark times - in which gold fell steadily after trading at more than $800 an ounce in 1980 - there is no problem. Gold, which has been above $390 an ounce for two weeks, is going higher.
"The scary thing is, we don't know how high this price can go," said Ian MacDonald, manager of precious metals at the New York branch of Commerzbank, who has been bearish on gold for 15 years.
But investors attracted by the $400 headline should take note of what is pushing the price of gold higher and consider whether these forces have the momentum to keep the rally going.
The chief argument for gold recently has been the weakness of the dollar. Pierre Lassonde, president of Newmont Mining, a major gold producer, argued that the price of gold is 80 percent dependent on the value of the dollar, which has fallen about 11 percent this year against the euro and about 8 percent against the yen.
Others agree. An analyst at a big hedge fund, who insisted that he not be identified, put the argument bluntly. "I don't think supply and demand matter," he said. "What matters is the esteem people have for paper money and what we are seeing here is a flight to hard assets - gold."
This inverse relationship of gold and the dollar has worked well sometimes in the past, but not always. It has done pretty well during gold's new bull market. The dollar has been in a steady decline against the euro since July 2001 and against the yen since February 2002.
At the same time, it may have been the euro's inability since May to breach the $1.20 level against the dollar that has held gold back from $400 an ounce. When the dollar shot up 1.2 percent against the euro on Monday on expectations of stronger U.S. economic data, gold fell 1.1 percent, or $4.50 an ounce, to $391.50.
On Wednesday, the dollar was down against the euro, and gold was up $4.25 to finish in London at $396 an ounce. It was quoted around midday Thursday at $397.
Gold aficionados maintain that the dollar will continue to fall. They argue that the Bush administration wants a weaker dollar and that confidence in the dollar is being hurt by American foreign policy. The U.S. current-account deficit, reflecting trade in goods and services with the rest of the world, is nearing $500 billion, and that is also a drag on the dollar.
Yet if the economy does manage to continue to grow modestly - after the stunning 8.2 percent annual growth rate for the third quarter that was announced on Tuesday - the dollar might not fall much more, limiting the further upside potential for gold.
Another factor often cited as positive for gold - political instability and global terrorism - has not given a boost to the metal recently. After the truck-bombing of two synagogues in Istanbul on Nov. 15, a Saturday, the price of gold dropped $6.50 an ounce in trading the following Monday. And after the truck-bombing of the British Consulate and a British bank in Istanbul on Nov. 20, gold fell $1.20.
A third force of note is speculators, who have been betting heavily that gold will rise. On the Comex division of the New York Mercantile Exchange on Sept. 2, there was a net balance of almost 123,000 futures contracts outstanding to buy about 12.3 million ounces of gold, the biggest weekly position by far in Commodity Futures Trading Commission data going back to 1983.
Since then, those positions have been trimmed, with the net buying contracts totaling 93,160 as of Nov. 18. While this is still the ninth-biggest weekly net position, the fact that it has shrunk may be another reason gold has still failed to break through $400.
Another positive for gold that has been tempered is the proposal for a so-called exchange-traded fund for gold. Sponsored by the World Gold Council, this exchange-traded fund would allow retail investors to buy gold easily through their brokers in amounts as small as one-tenth of an ounce. Some analysts argue that the price of gold may already have run up in anticipation of this buying. But the U.S. Securities and Exchange Commission has not yet approved the proposal.
"I am sure getting tired of waiting," said John Hathaway, a gold fund portfolio manager at Tocqueville Asset Management.
All this stuttering around the $400-an-ounce level does not mean that gold will not go higher. But it is a warning to investors who are getting in now not to expect gold to rise a further 50 percent.
It is also not a bad idea to listen to analysts who argue that a small amount of gold in a portfolio - something under 5 percent - can be an effective way to diversify one's investments, regardless of the outlook for gold.
The New York Times NEW YORK Gold does not have to break $400 an ounce to prove that it is in a bull market. The bullishness has been clear for some time, as the price of gold has surged 52 percent since it hit bottom in April 2001.
But $400 must be breached to prove that the rally, which many investors have probably missed, still has legs. And $450 an ounce has to appear to be within reach to offer a nice profit potential to investors who, unfortunately for them, usually do not pay attention to gold until its price is already going up.
For the gold producers and the gold faithful who lived though the dark times - in which gold fell steadily after trading at more than $800 an ounce in 1980 - there is no problem. Gold, which has been above $390 an ounce for two weeks, is going higher.
"The scary thing is, we don't know how high this price can go," said Ian MacDonald, manager of precious metals at the New York branch of Commerzbank, who has been bearish on gold for 15 years.
But investors attracted by the $400 headline should take note of what is pushing the price of gold higher and consider whether these forces have the momentum to keep the rally going.
The chief argument for gold recently has been the weakness of the dollar. Pierre Lassonde, president of Newmont Mining, a major gold producer, argued that the price of gold is 80 percent dependent on the value of the dollar, which has fallen about 11 percent this year against the euro and about 8 percent against the yen.
Others agree. An analyst at a big hedge fund, who insisted that he not be identified, put the argument bluntly. "I don't think supply and demand matter," he said. "What matters is the esteem people have
http://www.iht.com/articles/119311.html
It has been a wonderful ride, and I do not think it is over.
=============================================================
G'morning ml,
No, the ride is not over.In my view, it's not even close to the end of the ride althouugh much of the really easy money might have already been made in some of these issues.
Btw, it's nice to see your smiling face again.....
Investors wait for bets on gold to pan out
Jonathan Fuerbringer NYT
Thursday, November 27, 2003
Gold does not have to break $400 an ounce to prove that it is in a bull market. The bullishness has been clear for some time, as the price of gold has surged 52 percent since it hit bottom in April 2001.
But $400 must be breached to prove that the rally, which many investors have probably missed, still has legs. And $450 an ounce has to appear to be within reach to offer a nice profit potential to investors who, unfortunately for them, usually do not pay attention to gold until its price is already going up.
For the gold producers and the gold faithful who lived though the dark times - in which gold fell steadily after trading at more than $800 an ounce in 1980 - there is no problem. Gold, which has been above $390 an ounce for two weeks, is going higher.
"The scary thing is, we don't know how high this price can go," said Ian MacDonald, manager of precious metals at the New York branch of Commerzbank, who has been bearish on gold for 15 years.
But investors attracted by the $400 headline should take note of what is pushing the price of gold higher and consider whether these forces have the momentum to keep the rally going.
The chief argument for gold recently has been the weakness of the dollar. Pierre Lassonde, president of Newmont Mining, a major gold producer, argued that the price of gold is 80 percent dependent on the value of the dollar, which has fallen about 11 percent this year against the euro and about 8 percent against the yen.
Others agree. An analyst at a big hedge fund, who insisted that he not be identified, put the argument bluntly. "I don't think supply and demand matter," he said. "What matters is the esteem people have for paper money and what we are seeing here is a flight to hard assets - gold."
This inverse relationship of gold and the dollar has worked well sometimes in the past, but not always. It has done pretty well during gold's new bull market. The dollar has been in a steady decline against the euro since July 2001 and against the yen since February 2002.
At the same time, it may have been the euro's inability since May to breach the $1.20 level against the dollar that has held gold back from $400 an ounce. When the dollar shot up 1.2 percent against the euro on Monday on expectations of stronger U.S. economic data, gold fell 1.1 percent, or $4.50 an ounce, to $391.50.
On Wednesday, the dollar was down against the euro, and gold was up $4.25 to finish in London at $396 an ounce. It was quoted around midday Thursday at $397.
Gold aficionados maintain that the dollar will continue to fall. They argue that the Bush administration wants a weaker dollar and that confidence in the dollar is being hurt by American foreign policy. The U.S. current-account deficit, reflecting trade in goods and services with the rest of the world, is nearing $500 billion, and that is also a drag on the dollar.
Yet if the economy does manage to continue to grow modestly - after the stunning 8.2 percent annual growth rate for the third quarter that was announced on Tuesday - the dollar might not fall much more, limiting the further upside potential for gold.
Another factor often cited as positive for gold - political instability and global terrorism - has not given a boost to the metal recently. After the truck-bombing of two synagogues in Istanbul on Nov. 15, a Saturday, the price of gold dropped $6.50 an ounce in trading the following Monday. And after the truck-bombing of the British Consulate and a British bank in Istanbul on Nov. 20, gold fell $1.20.
A third force of note is speculators, who have been betting heavily that gold will rise. On the Comex division of the New York Mercantile Exchange on Sept. 2, there was a net balance of almost 123,000 futures contracts outstanding to buy about 12.3 million ounces of gold, the biggest weekly position by far in Commodity Futures Trading Commission data going back to 1983.
Since then, those positions have been trimmed, with the net buying contracts totaling 93,160 as of Nov. 18. While this is still the ninth-biggest weekly net position, the fact that it has shrunk may be another reason gold has still failed to break through $400.
Another positive for gold that has been tempered is the proposal for a so-called exchange-traded fund for gold. Sponsored by the World Gold Council, this exchange-traded fund would allow retail investors to buy gold easily through their brokers in amounts as small as one-tenth of an ounce. Some analysts argue that the price of gold may already have run up in anticipation of this buying. But the U.S. Securities and Exchange Commission has not yet approved the proposal.
"I am sure getting tired of waiting," said John Hathaway, a gold fund portfolio manager at Tocqueville Asset Management.
All this stuttering around the $400-an-ounce level does not mean that gold will not go higher. But it is a warning to investors who are getting in now not to expect gold to rise a further 50 percent.
It is also not a bad idea to listen to analysts who argue that a small amount of gold in a portfolio - something under 5 percent - can be an effective way to diversify one's investments, regardless of the outlook for gold.
The New York Times NEW YORK Gold does not have to break $400 an ounce to prove that it is in a bull market. The bullishness has been clear for some time, as the price of gold has surged 52 percent since it hit bottom in April 2001.
But $400 must be breached to prove that the rally, which many investors have probably missed, still has legs. And $450 an ounce has to appear to be within reach to offer a nice profit potential to investors who, unfortunately for them, usually do not pay attention to gold until its price is already going up.
For the gold producers and the gold faithful who lived though the dark times - in which gold fell steadily after trading at more than $800 an ounce in 1980 - there is no problem. Gold, which has been above $390 an ounce for two weeks, is going higher.
"The scary thing is, we don't know how high this price can go," said Ian MacDonald, manager of precious metals at the New York branch of Commerzbank, who has been bearish on gold for 15 years.
But investors attracted by the $400 headline should take note of what is pushing the price of gold higher and consider whether these forces have the momentum to keep the rally going.
The chief argument for gold recently has been the weakness of the dollar. Pierre Lassonde, president of Newmont Mining, a major gold producer, argued that the price of gold is 80 percent dependent on the value of the dollar, which has fallen about 11 percent this year against the euro and about 8 percent against the yen.
Others agree. An analyst at a big hedge fund, who insisted that he not be identified, put the argument bluntly. "I don't think supply and demand matter," he said. "What matters is the esteem people have for paper money and what we are seeing here is a flight to hard assets - gold."
This inverse relationship of gold and the dollar has worked well sometimes in the past, but not always. It has done pretty well during gold's new bull market. The dollar has been in a steady decline against the euro since July 2001 and against the yen since February 2002.
At the same time, it may have been the euro's inability since May to breach the $1.20 level against the dollar that has held gold back from $400 an ounce. When the dollar shot up 1.2 percent against the euro on Monday on expectations of stronger U.S. economic data, gold fell 1.1 percent, or $4.50 an ounce, to $391.50.
On Wednesday, the dollar was down against the euro, and gold was up $4.25 to finish in London at $396 an ounce. It was quoted around midday Thursday at $397.
Gold aficionados maintain that the dollar will continue to fall. They argue that the Bush administration wants a weaker dollar and that confidence in the dollar is being hurt by American foreign policy. The U.S. current-account deficit, reflecting trade in goods and services with the rest of the world, is nearing $500 billion, and that is also a drag on the dollar.
Yet if the economy does manage to continue to grow modestly - after the stunning 8.2 percent annual growth rate for the third quarter that was announced on Tuesday - the dollar might not fall much more, limiting the further upside potential for gold.
Another factor often cited as positive for gold - political instability and global terrorism - has not given a boost to the metal recently. After the truck-bombing of two synagogues in Istanbul on Nov. 15, a Saturday, the price of gold dropped $6.50 an ounce in trading the following Monday. And after the truck-bombing of the British Consulate and a British bank in Istanbul on Nov. 20, gold fell $1.20.
A third force of note is speculators, who have been betting heavily that gold will rise. On the Comex division of the New York Mercantile Exchange on Sept. 2, there was a net balance of almost 123,000 futures contracts outstanding to buy about 12.3 million ounces of gold, the biggest weekly position by far in Commodity Futures Trading Commission data going back to 1983.
Since then, those positions have been trimmed, with the net buying contracts totaling 93,160 as of Nov. 18. While this is still the ninth-biggest weekly net position, the fact that it has shrunk may be another reason gold has still failed to break through $400.
Another positive for gold that has been tempered is the proposal for a so-called exchange-traded fund for gold. Sponsored by the World Gold Council, this exchange-traded fund would allow retail investors to buy gold easily through their brokers in amounts as small as one-tenth of an ounce. Some analysts argue that the price of gold may already have run up in anticipation of this buying. But the U.S. Securities and Exchange Commission has not yet approved the proposal.
"I am sure getting tired of waiting," said John Hathaway, a gold fund portfolio manager at Tocqueville Asset Management.
All this stuttering around the $400-an-ounce level does not mean that gold will not go higher. But it is a warning to investors who are getting in now not to expect gold to rise a further 50 percent.
It is also not a bad idea to listen to analysts who argue that a small amount of gold in a portfolio - something under 5 percent - can be an effective way to diversify one's investments, regardless of the outlook for gold.
The New York Times NEW YORK Gold does not have to break $400 an ounce to prove that it is in a bull market. The bullishness has been clear for some time, as the price of gold has surged 52 percent since it hit bottom in April 2001.
But $400 must be breached to prove that the rally, which many investors have probably missed, still has legs. And $450 an ounce has to appear to be within reach to offer a nice profit potential to investors who, unfortunately for them, usually do not pay attention to gold until its price is already going up.
For the gold producers and the gold faithful who lived though the dark times - in which gold fell steadily after trading at more than $800 an ounce in 1980 - there is no problem. Gold, which has been above $390 an ounce for two weeks, is going higher.
"The scary thing is, we don't know how high this price can go," said Ian MacDonald, manager of precious metals at the New York branch of Commerzbank, who has been bearish on gold for 15 years.
But investors attracted by the $400 headline should take note of what is pushing the price of gold higher and consider whether these forces have the momentum to keep the rally going.
The chief argument for gold recently has been the weakness of the dollar. Pierre Lassonde, president of Newmont Mining, a major gold producer, argued that the price of gold is 80 percent dependent on the value of the dollar, which has fallen about 11 percent this year against the euro and about 8 percent against the yen.
Others agree. An analyst at a big hedge fund, who insisted that he not be identified, put the argument bluntly. "I don't think supply and demand matter," he said. "What matters is the esteem people have
http://www.iht.com/articles/119311.html
Dan 
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