RE: Egx a bargain -Gold May Resume Its Rally on Concern U.S. Dollar Will Weaken
May 29 --
Gold may rise, ending a two-week slide, on speculation a
weaker dollar will prompt investors to resume purchases
of bullion as an alternative asset.
Fifteen of 30 traders, investors and analysts from Sydney
to Chicago advised buying gold, according to a Bloomberg News
survey taken May 25 and May 26. Prices fell 1 percent last
week to $651 an ounce in New York.
Seven respondents advised selling and eight were neutral.
Investment demand for gold has sent prices up 25 percent this year, reaching a 26-year high of $732 on May 12, as the dollar fell against 13 major currencies including the euro and yen. Buying of exchange-traded funds backed by gold surged 23 percent in the first quarter to 109 metric tons, valued at $1.9 billion, the producer-funded World Gold Council said May 23.
Gold ``will continue to become the go-to currency,'' said Gregory Orrell, who manages $150 million including $110 million of gold stocks as the president of Orrell Capital Management Inc. in Livermore, California. The dollar may drop amid signs of a slowing U.S. economy as the housing market cools, he said.
Gold futures for June delivery fell $6.50 last week to $651 on the Comex division of the New York Mercantile Exchange. The decline was predicted by a majority of analysts surveyed May 18 and May 19. The Bloomberg survey has forecast the direction of prices accurately in 68 of 109 weeks, or 62 percent of the time.
Lockstep With Euro
The precious metal has moved almost in lockstep with the euro's performance against the dollar this year at a correlation coefficient of 0.92. The maximum reading is 1. The coefficient measures to what degree two variables move in unison.
``Gold is likely to continue its upward trend,'' said Alec Kim, manager at Korea Exchange Bank Futures Co.'s international marketing division. ``The dollar is still weak.''
The dollar may drop against the euro and the yen this week on concern U.S. economic expansion will slow, a separate Bloomberg survey of 51 currency traders and strategists showed.
The economy, which grew at an annual rate of 5.3 percent in the first quarter, may slow the rest of this year.
Morgan Stanley economists last week revised their second- quarter growth estimate to 2.8 percent from 2.9 percent, as a government report showed a smaller gain in spending and a bigger inventory gain. The economy will expand at a 3.5 percent rate this quarter and 3 percent in the second half, based on the median estimate of economists surveyed by Bloomberg April 28 to May 8.
Gold Coins
The rally in gold also has increased demand for coins and small bars in the U.S., which rose 41 percent in the first quarter from a year ago, the World Gold Council said.
``With all this activity in the metals, we're seeing increases in both'' bullion coins and rare coins, said Scott Travers, president of Scott Travers Rare Coin Galleries in New York. He expects gold to reach $800 by the end of this year.
Manufacturing growth slowed this month, economists said. The Institute for Supply Management's factory index probably fell to 55.6 in May from 57.3 in April, based on the median of 61 estimates in a Bloomberg survey. Readings above 50 indicate expansion. The institute's report will be released June 1.
Purchases of previously owned homes declined 2 percent in April to an annual rate of 6.76 million, the lowest in three months, the National Association of Realtors reported May 25. Sales were down 5.7 percent from a year earlier as rising mortgage rates put a brake on the housing market.
`No Froth'
The housing market has been integral to U.S. economic growth, and a slowdown will lead to a contraction in consumer spending and may prompt the Federal Reserve to cut interest rates in the first quarter of next year, Orrell said.
Hedge funds and other large speculators may resume buying of gold futures on the Comex, said Paul Yusem, an individual investor in Lombard, Illinois, who has traded gold futures for six years.
Speculative net-long positions, or bets that prices will rise, fell 12 percent to 111,098 gold futures contracts for the week ended May 23, the U.S. Commodity Futures Trading Commission said May 26. Speculators amassed 177,410 contracts in the week ended Oct. 11, the most since at least February 1983.
``Since the large speculator position is nowhere near the extreme reached in October, this is one measure indicating absolutely no froth in the gold market at all,'' said Yusem, who forecast gold will reach $875 this year.
A futures contract is an obligation to sell or buy a commodity at a set price by a specific date.
posted by Gold Rush 2006 at 11:02 AM | 0 comments
Sunday, May 28, 2006
Flaws in the dollar are going to move the price of gold higher, said James Turk, the founder of Goldmoney, in an interview in Barron's magazine.
"There are problems with the dollar, and that's being reflected in a higher gold price," Turk said. "I still fear we are going to see a panic in the dollar at some point."
Turk said the rise of protectionism in the United States has unsettled wealthy international investors.
The price of gold is "going much higher," and the $8,000 per ounce forecast he made a couple of years ago is "probably as good a target as any," Turk said. A near-term spike to $2,000 is possible, he added.
The price of gold will never again go below $500 an ounce, Turk said.
The U.S. government is trying to fund the federal budget deficit without destroying the dollar and trying to raise interest rates to save the dollar without destroying the economy, he said.
"I don't think they can do it," he said.
posted by Gold Rush 2006 at 4:49 PM | 0 comments
Gold futures climbed Friday in a holiday-shortened trading session as renewed strength in the U.S. dollar lured investors away from the precious-metals market, but prices still ended the week with a loss of more than $6 an ounce.
Gold for June delivery rose $2.50 to close at $651 an ounce on the New York Mercantile Exchange after trading as low as $640.50. Prices climbed $11 Thursday, but that followed Wednesday's drop of $36.20. The contract closed out last Friday at $657.50, so they were down $6.50, or 1%, for the week.
'We cannot expect full-blown participation in the gold-trading pits to show up in terms of commitments to positions either [Friday] or (overseas) on Monday,' said Jon Nadler, an analyst at Kitco.com.
Metals trading on the New York Mercantile Exchange closed early Friday and will remain closed Monday for Memorial Day.
On Thursday, gold rallied $11 after a smaller-than-expected upward revision to first-quarter economic growth estimates weighed on the U.S. dollar, prompting investors to take refuge in the precious metal. .
But prices had dropped more than $36 Wednesday. .
'The current gold-price range may well have $675 as the overhead resistance point that needs to be overcome before traders declare the recent correction as being ready to be archived,' said Nadler.
'In the background, the Iranian situation continues to be on a slow boil as there are doubts that the package of 'carrots' being offered in exchange for cessation of [uranium] enrichment will really be unconditionally accepted by Tehran,' he said.
Nadler expects 'a return of physical buying,' but emphasized that any such inventory build-ups could be light, 'as the summer doldrums would normally be the dominant tempering influence in gold prices.'
'Still , this summer (as last) might keep traders busy if uncertainty keeps the world on edge,' he said.
Meanwhile, in economic data Friday, the U.S. Commerce Department said personal incomes rose 0.5% in April, but those gains were wiped out by a 0.5% gain in consumer prices. Real disposable incomes -- inflation-adjusted and after-tax incomes -- fell 0.1%.
Core inflation, as measured by the personal-consumption-expenditure index, excluding food and energy, rose 0.2% in April after a 0.3% increase in March. That was in line with expectations. For the past 12 months, core inflation rose 2.1%, the fastest gain since March 2005. .
The dollar strengthened against the yen and euro Friday as traders digested the U.S. data, as well as data on Japanese inflation, which came in as expected.
In other metals trading Friday, July copper climbed 10.75 cents to close at $3.815 a pound, ending the week 10% higher.
July silver added 13 cents to finish at $12.73 an ounce, ending 3% above last Friday closing level. June palladium rose $3.10 to close at $355.10 an ounce, up 1.5% from last week's close of $350, while July platinum closed at $1,298.10 an ounce, up $3.10 for the day, but down 0.9% for the week.
On the supply side, inventories of copper fell 471 short tons to 10,065 as of late Thursday, according to Nymex.
Gold inventories were down 32 troy ounces at 7.8 million troy ounces, while silver inventories were at 112.5 million troy ounces, down 1.2 million troy ounces.
Indexes gain
Indexes that track the metals-mining sector climbed following Thursday's losses of around 5%, and the benchmarks ended higher for the week.
The Philadelphia Gold and Silver Index added 0.3% to close at 142.59 points, with shares of Harmony Gold Mining down 1.5% to end at $14.24 after Thursday's 7.6% gain. It was up 1.8% from last Friday's closing level.
The CBOE Gold Index closed at 144.50 points and the Amex Gold Bugs Index closed at 329.17 points, with both benchmarks climbing 0.3% for the session and ending the week 2.4% higher.
Also Friday, the StreetTracks Gold Trust exchange-traded fund rose 40 cents to close at $65.10, while the iShares Silver Trust ETF fell 15 cents to end at $126.70.
The Market Vectors-Gold Miners ETF , the first exchange-traded fund to invest in shares of public gold-mining companies, closed higher by 0.6%, or 23 cents, at $38.55.
Nadler questioned 'how much lighter the correction may have been were the gold ETF products absent from the marketplace.
'There are some opinions out there that these new vehicles have contributed to the rally (certainly, in terms of offtake), but that they also magnify the intensity and swiftness of the corrective phases of the markets,' he said.
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https://finance.yahoo.com/q?s=egx.to
RE: Is EGX a bargain at $2.8-3.0 ?
i am buying more shares -
- EGX to be listed in EURO -
as the largest Gold producer -
EGX - a bargain at fiat$28-30 ? -
one day at $280-300
do your own dd...
don't listen to me! -
https://www.investorshub.com/boards/board.asp?board_id=2127
https://www.stockhouse.com/bullboards/proforum.asp?symbol=$ANGLO&table=PRO
https://www.investorshub.com/boards/board.asp?board_id=5452
.