D_ultim8 and Uniowner,
Your idea of physical supply/demand driving commodity price is not applicable to gold (it is applicable for all commodities, except precious metals); in other words, gold is not gasoline. More specifically, gold is not consumed, it is accumulated (hoarded by humans) and so it is available on market even few hundred or even thousand years after actual mining happened.
It means that present mining is just a small fraction of gold “supply” and so its influence on prices is extremely low. Even if all gold mines are closed (let’s imagine this purely theoretical situation), financial world will still have enough gold to continue trading.
It can be added here, also, that gold trading on financial markets goes mostly not in physical metal. It goes in phantom way of paper transactions, mostly derivatives. It can be speculated that this trade could continue even without metal presence. Please note here that gold was always traded in paper ways (“always” means modern world here) and it will continue this way in future.
It won’t work, Uniowner. Gold price is not affected by mining volumes. Gold is a unique commodity: producers have zero pricing power. Gold price is set by financial powers.
Please. Dividend doesn’t affect earnings; accounting 101.
On the other hand, cancellation of the dividend improves cash flow.
SCCO rides positive wave at the moment. Macro-economic factors turn positive for copper equities and this company has big potential, on top of present solid performance.
2013 was a year of “lazy investors”. Passive funds easily beat active-traded portfolios. One could invest all funds in Vanguard 500 and enjoy 25% return. The reason was that money moved back into stock market; people (crowd) invest again and large-cap stocks move forward in unstoppable manner.
As most RBY holders and sideline cheerleaders know, year 2014 didn’t start yet. Future is hazy, as usual. One can only look at economic and market signs around and try to predict; it excludes "long-and-strong" types that made single prediction (end of world) many years ago and keep faith.
As of now, world economy turns the corner. Economic growth is picking pace with U.S. economy leading the way. It comes with non-economic price, but it is a different topic, not related to near-term investment decisions. The latter should be based on economic reality and notion of strong growth for 2014 is just too strong now. It would be unreasonable to avoid mainstream investments (e.g. large-cap tech) and it would be reasonable to look at items performing best in really growing economy (industrial commodities). It is also questionable to stay on sidelines; it cost too much in 2013.
Make your choices and diversify your portfolio. Good luck with your investments.
It is questionable to invest based on vague consideration that "sometime in the future (how long is anybody's guess) gold will be higher!", when all gold companies experience big financial squeeze that can easily kill most of them sooner than market stops to be "irrational". At best, gold stocks are good now for a gamble only, small stake to bet on picking temporary bottom: either get quick profit (if lucky) or cut losses (if not lucky).
First of all, the main thing about gold is that its price set through myriad of financial transactions, mostly derivatives; it makes price-setting mechanism non-transparent and, accordingly, price is not quite predictable. Certainly, some gold is bought and sold on the fringes of financial markets and some of these transactions involve pieces of metal and, even more, some of these fringe transactions involve “Chinese”.
The main contribution of China to fringe gold trade is internal buying. China is #1 world gold producer, by official statistics at least, and all gold mined within Chinese borders is bought by Chinese central bank. What does the bank do with this gold later? It is not quite known; it can be assumed that this gold is accumulated in bank reserves.
Also, there are many private Chinese citizens, about 1.5B and some of them buy gold. They do it mostly because they don’t trust own money (yuan) or, better say, they don’t trust own government. It can be assumed that ordinary Chinese buy good amount of gold jewelry.
The facts above mean that, technically speaking, “Chinese” buy gold. However, this fact has nothing to do with gold price-setting mechanism. Amount of gold involved in financial transactions, aka derivative markets, exceeds amount of gold bought by Chinese, or better say any physical amount of gold ever bought by humans, by very big margin. Gold is a financial notion (phantom); it exists without direct connection to bullion or any other physical representation. In this respect, the only thing known about gold is price, denominated in dollars.
Silver follows gold because both metals are considered “precious”, i.e. different from other “industrial” commodities. It means, in investment terms, that PM prices are set by financial transactions, i.e. entirely within financial universe (mostly derivatives market), while industrial metals have their prices set by physical supply (mining and recycling) and demand (consumption).
The main reason why gold and silver are precious is that they are not consumed enough (people hoard them instead), i.e. gold is not consumed at all, while silver industrial consumption is lower than physical supply. In result both metal prices depend on investment supply (it is true mostly for gold) and demand (true for both). Investment supply/demand means financial (derivatives) markets.
Agiraffe, first of all, good luck with your RBY venture. Personally, I don’t think that this company has too many “cards to play” regarding financing. Yes, they are lucky to have cash on hands, but they are also unlucky to get caught in the midst of construction without enough cash to finish it.
Also, I am unaware about “overseas companies” willing to provide money. Do you mean “Chinese”?
In general, gold price is too low. It makes every gold company and every gold mine suspiciously close to break-even point; it excludes obviously those already well below the point. It makes situation challenging for both lenders and borrowers.
Anyway, good luck with your new investment. Just a small note, I know you like mining stocks, including juniors, and it seems to me that industrial metals are in better position now in terms of macro fundamentals.
My dear pio-puke, aka fatboy, the best thing to avoid name-calling is not starting it in first place. No one gave you license to attack and insult other people, something that you and your ilk did here for many years.
Certainly, you can try your hypocrisy when you get a response. No one believes you and your aliases anymore.
PS: I warned pio-puke to avoid insulting me for too many times. He didn’t care. Ok, pio-puke. Don’t complain now.
I see you are not just a loser, ultraific; you are also a liar. You know very well that I have nothing to pray about Claude. Actually, I predicted its demise when you still hoped on turnaround there.
By the way, do you remember our exchange about TC on Claude (CLGRF) board? TC was about twice higher at that point and you tried to pump it then the same way as you do now.
Finally, my remark about “working in mining” is just a small payback to you for your silly attempt to attack me on RBY board. Hopefully, it will serve you a lesson.
Try to make few bucks on stocks, ultraific, before trying to play an expert on these boards.
PS: I apologize for interruption to this message board; just had to return favor to this guy, ultraific. No bad wishes for your stock. Hopefully, it recovers soon.
Also, my best regards to oldtimers here. Some of you could remember me. Good luck with your investments.
Nope. IAG cuts dividend to save cash. It has negative cash flow, as any other gold company at the moment and cancellation of the dividend reduces cash bleeding.
It can be noted, as diversification point, that IAG generates positive cash flow from secondary source: niobium mining. It is a valuable feature giving this stock some positive difference from other gold equities.
Hello, agiraffe. I want to add few comments to your message.
Firstly, regarding “unfavorable ground conditions”, I brought it in as a possible explanation for known change in mining method and downsize in economic numbers (from initial to updated PEA). In other words, if someone lives in real world and accepts numbers as they are presented in the updated PEA then those possibly unfavorable conditions are thing of past. On the contrary, if someone lives in la-la land still believing in enormous amount of gold with extremely high grades (all numbers much higher than they are specified in PEA) then those “unfavorable conditions” are still waiting to drop on this person head.
Secondly, regarding borrowing, I don’t think that traditional loan could be available for RBY. The only way to “borrow” would be through streaming or gold loan. Traditional banks won’t lend to a company without cash-flow producing assets. In good times of bull market banks could accept feasibility study as a semblance of proof that cash flow is right around the corner. This part is hardly available now, when it is hard to find a gold-producing company with positive cash flow. Anyway, RBY doesn’t have feasibility study and so it would not be able to get conventional loan even in bull market.
It is the easiest thing to show pio-puke as a fool, because he is a fool. The latter becomes clear any time he open his stupid mouth. It can be noted that additionally to being a fool pio-puke is also a greedy and lying creature. It makes him more visible than an ordinary fool.
If world economy holds, i.e. growth continues then copper market enters bullish stage in near term and SCCO should go much higher than 30. As of now, positive signs prevail, imho.
No, you are not liable for capital gain taxes in foreign jurisdiction even if stock you own is not American. All taxes will have to be paid in U.S., assuming that you buy and hold stock through account with U.S. brokerage firm. Anyway, it is always a good idea to ask your broker. The latter has duty to explain you all tax-related issues.
The only exception when you have to pay taxes to Canada or any other country is dividend tax. If you own foreign stock that pays dividend then you are charged 15% levy at payment point. However, even this amount can be claimed back later as U.S. tax credit when you file your U.S. taxes.
Hey, pole. Can you tell in your own words (just an identity check) whether GDP rises up or falls “like wounded pigeon”? It would be the best if you limit your reply to one word only: “rises” or “falls”. Thanks.