Gold Market ( Nem)

Posted: 24 Mar 2007 03:13
Registered User Currently Offline	Posts: 16 Join Date: Feb 2007
Donna, Investing in gold has to, in the first instance, be for reasons of being in some way undervalued. This may take at least two forms i.e. people have shied away from this class for a while subsequently depressing the price through lack of demand; or that in spite of there being significant present interest in this asset class, there is still underlying and unnoticed value – particularly as classic Keynsian speculative motive resulting from uncertainty over the near future i.e. a store of value. Investment in gold can take primarily two avenues: buying the actual stuff to own in the form of bullion or minted coins; or buying a share of a gold producer’s business. The advantage of purchasing the gold producer’s business is that you would be entitled to income from his operations, whereas buying the physical yellow metal would incur storage and security costs (should you not want to store it under your, I’m sure, very safe bed mattress) or the lack of income - hence opportunity cost - of buying into an exchange traded fund, where someone else buys the stuff and stores it safely – all on your behalf. When evaluating a gold producer, such as Newmont, you have be cognoscente of the economic environment in which he operates. Gold is a commodity just like corn, copper and coffee. The ups and downs of the respective commodity market determine how much profit Newmont can make and thus your share of that profit. It’s a rollercoaster ride not intended for those with weak stomachs. Commodity markets are also as close to perfectly competitive as one can find i.e. who ever wants to sell, most often has to be a price taker, thereby simplistically resulting in all the sellers having to sell at the same price. So what would make one gold producer any better than others if they’re all selling at the same price? The most important differentiating variable is costs. The mined and refined costs of gold are different all over the world. Gold mined in West Africa is cheap because it is mostly on the surface, but there is only limited opportunity. Gold mined in South Africa is expensive because of being mined at 2 miles below the earth’s surface and requires a lot of time, people and assets to do so, but there’s relative abundance. Gold mined in South America is relatively expensive too, because it’s high up in the mountains and requires significant investment to build infrastructure high up in the Andes. Gold mined in North America and Australia is cheaper because the mines don’t go very deep and there are still plenty of opportunities. The bottom line is this: when evaluating investment in a gold company, compare their costs of production per ounce with others. The most attractive place for your money would invariably be those companies having a greater percentage of their assets in the cheaper areas in the world. As far as the choice of investing in gold, as much as some people would have you believe, there is no answer! Scarborough

Posted: 26 May 2007 16:39
Registered User Currently Offline	Posts: 8 Join Date: May 2007
Some comments on Gold: Not sure if anyone is aware, but Gold use to trade tic for tac with the DOW. The price of Gold = DOW. What is the value of Gold ? My view is first back in March of 06' the fed stopped reporting M1 ( money supply )? Not going to go in depth as to why this may have been done, however ask yourself what is the " true " value of the dollar ? Without M1 we don't know how much paper is really flooding the streets and liquidity markets. NEM ? It's down ? Yes, is it a buy ? Tough question. I like to look at a company's debt and NEM has alittle to much for me to feel comfortable with. Good eyes spot the small plays like " AUY " when it was a $1 a few years back. Small Gold plays, low debt, vast reserves and in a safe country where nationalization is not going to be an issue. I like a small company here in Nevada where I live. GBN Great Basin, Nice reserves, low debt and they have a sweet deal with NEM. If we look at Gold chart, currently it looks to be in a down trend s/t. Upside support didn't hold, broke it's 50 day, came back up and gave it a kiss. I'm bias that Gold is in a near term correction. I'm not an expert, however I believe Gold will see $1000 + based on Demand, unit of worth and the " true " value of the dollar, thus is NEM a buy ? If your view is that Gold is also headed due North then yes. Just some thoughts. Mark

Posted: 20 Mar 2007 08:08
Registered User Currently Offline	Posts: 2 Join Date: Mar 2007
Can you all tell me if this is a good stock.Thank-you