Gold investment statistics commentary Investment World #Gold Council

Volatilty and price movement in gold this quarter.

The key themes for gold during Q1 2012 were:
Rising price in all major currencies with yen investors
benefiting most:Gold prices climbed 8.6% QoQ in US$/oz on the London PM fix, despite a number of headwinds. Though the quarterly return was almost twice the ten-year average of 4.5%, similar gains in gold were seen across all major currencies with yen investors seeing a gain of 16.1% in local currency terms.
Positive volatility for gold in stark contrast to negative volatility for commodities:
While gold's price volatility was elevated, it continued to exhibit a positive (upside) skew. Gold's annualised volatility measured 20.4% during Q1, registering 21.8% on the upside and only 16.4% on the downside.
Long-term correlation of gold to equities remains statistically insignificant:
Despite higher than average short-term correlations to equities and other risk assets during the quarter, gold's performance remains independent of risk asset performance. Regression analysis shows that gold may, at times, move in the same direction as equities, but these moves are almost always related to other macro factors, such as, gold's negative correlation to the US dollar.
Chart 1: Performance of gold (US$/oz) price and volatility during Q1 2012

Chart 1: Performance of gold (US$/oz) price and volatility during Q1 2012 - click to enlarge

Gold’s long-term price trend is maintained during Q1 2012

Gold investment statistics commentary Investment World Gold Council

The MasterMetals Blog

Conservatively positive for #gold in 2012 - Murenbeeld - GOLD ANALYSIS - Mineweb.com | The world's premier mining and mining investment website Mineweb

GOLD ANALYSIS

Conservatively positive for gold in 2012 - Murenbeeld

In his annual presentation at the European Gold Forum in Zurich, Martin Murenbeeld remains positive on the prospects for the gold price this year, but remains more conservative than the out and out gold bulls.

Author: Lawrence Williams
Posted:  Wednesday , 18 Apr 2012 

ZURICH (Mineweb) -

Economist Dr Martin Murenbeeld of Canada's Dundee Wealth Management uses the Denver Gold Group's European Gold Forum in Zurich as the annual platform for detailing his gold forecasts for the year and his reasoning behind his predictions and has come up with some pretty accurate results in the past.  He utilises three pricing scenarios and attaches an estimated weighting to each to come up with final weighted averages.  Last year he was close enough, erring slightly on the conservative side on the predicted annual average of $1476 as against an actual figure of $1571, but was much closer on his year end forecast of $1546 as against an actual figure of $1530 - a 1% discrepancy -certainly an excusable margin of error!

For the current year, although remaining bullish on gold - but conservatively so - he cited 10 reasons why he feels gold will continue its upwards path, albeit perhaps at a slower rate during the current year given that a bit of momentum seems to have fallen out of the market.  In truth, the 10 reasons are mostly those expressed by many others in these pages over the year and basically boil down to the undoubted fact that global financial difficulties remain with us and ultimately will impact the gold market in a positive manner.  His ten key points are: Monetary reflation; Global imbalances, Excessive Forex reserves; Central Banks buying, not selling; Gold not being in anywhere near bubble territory yet; Mine supply only rising marginally; Continuing investment demand; Commodity cycle having years to run; Current geopolitical environment; Inflation in emerging markets.

In many of these points he was very much in agreement with other presenters at the event who were also looking at the overall environment for gold - Philip Klapwijk of GFMS and Ross Norman of Sharps Pixley - who both emphasised some of the same specific points and who also took a relatively conservative, but positive, view of where gold is headed this year.  In general the view at the conference from the economic analysts is that last year's retracement from the yellow metal's high point at the beginning of September was far from unusual in a long bull run - indeed there have been a couple of bigger retracements experienced in gold's recent strong performance - and that it is now in a period of consolidation before moving higher later in the year.  But no-one expects gold's upwards moves ahead necessarily to be smooth.

While Murenbeeld pointed to some bearish possibilities too, he largely discounted these and came up with his three pricing scenarios for the remainder of the year ahead.  The weighted average of these forecasts came out at an overall average price forecast for 2012 of $1760, a year-end price of $1833 and an average 2013 price of $1952 - thus anticipating a continuation of the bull trend albeit at a slower rate than the approximate 17% annual increase seen in recent years.

To an extent the conservative price forecasts have largely arisen from recent indications that the U.S. economy may be beginning to pull out of recession, although many feel that the most recent figures may not represent the underlying picture, and the indications from Ben Bernanke that the Fed is perhaps not considering a third bout of Quantitative Easing.  However to the extent that the Fed still seems to be purchasing U.S. treasuries this does suggest that a stealth QE remains under way any way.  Of course European QE continues apace and there are equivalent monetary easing programmes under consideration, or already under way, in a number of countries including China and Japan.

Indeed as Murenbeeld noted towards the end of his presentation, should another ‘Lehman moment' arise and the Fed be forced to commit to an overt QE3 then gold could perform far better than his forecasts suggest.

See the whole story online here:

Conservatively positive for gold in 2012 - Murenbeeld - GOLD ANALYSIS - Mineweb.com | The world's premier mining and mining investment website Mineweb

Junior miners partly to blame for poor price performance - #Gold JUNIOR #MINING - Mineweb.com

Junior miners partly to blame for poor price performance

While there are a number of external factors behind the recent fall in the valuations of junior miners, there is a sense that the companies themselves should bear some of the blame

Author: Geoff Candy
Posted:  Monday , 16 Apr 2012
GENEVA (MINEWEB) - 

Junior gold stocks have had a torrid time of things over the last 8 weeks, many of their share prices falling significantly as investors battened down the hatches.

But, while there are a number of significant exogenous factors at work on the sector - from Spanish debt levels to uncertainty about whether or not the US will kick off another round of quantitative easing - there is a sense that the juniors themselves should shoulder some of the blame.

Speaking to Mineweb at the Precious Metals Summit in Geneva, Haywood Securities analyst Joe Mazumdar said that one of the problems facing the sector is that, "you've got probably an oversupply of gold equity right now. There's a lot of exploration, a lot of issuers that are just gold stocks - that's all they do and they want to be gold stocks to get that premium and so now we've got oversupply and the demand has come down."

Astur Gold CEO, Cary Pinkowski agrees, telling Mineweb, "On the junior level, there are just too many companies, it is difficult for the investor to tell what is a good project and a bad project because everyone says they have a good project and great management. Five years ago a million ounce gold deposit was rare, now it is not because they have just reduced the cut off grade and say it is economic but, costs have gone up as well. So, to find the good economic projects is difficult."

Pinkowski believes there should be some consolidation in the sector. Adding, "We have realised that with junior companies, to have one asset is ok but to have two or three is the way to go; tighter management teams, more assets."

In some respects, however, the juniors are in a catch 22 situation right now because while fewer companies with more assets would be potentially more appealing to investors, their share prices are so low that most are reluctant to embark on any M&A activity either as predator or prey.

Indeed, one of the over-riding refrains to come out of the companies Mineweb spoke to at the Precious Metals Summit was the sense that there is money out there, it is just sitting on the sidelines and waiting for a reason to come back in.

Joseph Foster, of Van Eck Gold Funds told Mineweb, "I think the market is waiting for a reason to buy gold stocks. The valuations are very attractive with these stocks and we just need a catalyst - another rise in the gold price, a move towards new highs would definitely do the trick."

Another part of this problem is that investors in the current climate, faced with a veritable smorgasbord of opportunities from which to choose is that they are becoming much picker.

As Foster says, "We'd like to see these companies do a better job of meeting expectations, and if they can meet or even better, beat expectations, I think that would go a long way towards attracting investors to the equities."

According to Mazumdar, "Before, equity investors potentially wouldn't have asked all the same questions that debt holders would; now they're asking all the same questions because it's all related - if I finance you for equity, where are you going to get the rest of the money."

He adds, "When I was looking at a report on exploration from 2011 about 2010 - a lot of the exploration funding was done by juniors but less grassroots, more advanced exploration to build resource, because that's what the investors wanted. Now you're building up a lot of companies with this resource base, but with 1) no skillset to build it, 2) not finance to build it and so now what... There are a lot of companies out there that are in that ‘now what' sort of situation."

See the article online here: Junior miners partly to blame for poor price performance - JUNIOR MINING - Mineweb.com | The world's premier mining and mining investment website Mineweb

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