The Gold Report: The gold sector entered full-blown panic mode in July with the Bloomberg analysts forecasting a dip below $1,000 per ounce ($1,000/oz) this year, and Deutsche Bank forecasting $750/oz. Is this just fear feeding on fear, or is there something else going on?
Jeffrey Mosseri: It is fear feeding on fear, but there are two other things going on. The first is the strength of the dollar, and the second is the weakness in the price of oil. Combined, these two factors have greatly and negatively affected the prices of all metals in U.S. dollars. Over the past year, gold is up 2040% in many currencies.
TGR: In the last couple of years, the idea that the price of gold is being manipulated downward is no longer dismissed entirely as a conspiracy theory.
"Commerce Resource Corp. recently announced excellent drilling results at its Ashram rare earth deposit."
Douglass Loud: I wouldn't want to use the word "manipulation," but you could have an analyst predicting a gold price of $1,050/oz, followed by someone on the trading desk shorting it down to $1,050/oz, without any collusion.
TGR: How big a role does China have in setting the gold price? Continue reading "Supply and Demand Will Rescue Gold Soon"
The Gold Report: Over two days, July 14 and 15, the price of gold fell over $40 per ounce ($40/oz), more than 3% of its value. To what do you attribute this drop?
Jeffrey Mosseri: I don't think it was a very extraordinary event. Gold has been trading around $1,300/oz. We see sharp upward and downward movements triggered by, for instance, something Federal Reserve Chair Janet Yellen said or a negative report by Goldman Sachs. It looks as if gold will stay in the $1,300/oz range for a little while. We'll see which way it breaks out. We believe it's going to break out on the upside.
Douglass Loud: Gold had been running up for a while, and every so often investors want to take some money off the table.
TGR: How high do you believe gold will go?
"We like North American Nickel Inc.'s Maniitsoq nickel sulfide project in Greenland."
JM: The average sustaining cost of production for gold is about $1,500/oz. If gold continues to trade below that level, at some point no new mines will be brought on. Supply and demand indicates higher prices for gold. At the same time, we're dealing with a seasonal trading pattern. Usually the position for those commodities tightens up around September/October. We think this will happen again this year. Higher prices? Yes. How much higher? We don't know.
TGR: Given that the financing for junior gold companies collapsed years ago, shouldn't the concomitant shortage of new supply have led already to higher prices? Continue reading "Three Reasons Why Gold and Gold Stocks Will Rise"