Gold hits another record
Gold for August delivery climbed to $1,258 an ounce today, June 18, breaking the record set yesterday.
Yes, gold is being propelled to record after record by investors looking for a safe haven from worries about the euro and about global economic growth, and by traders who know a momentum play when they see one.
But central bank activity—or actually a lack of it—is playing a part too.
The latest figures from the World Gold Council show virtually no selling by European central banks in the last quarter—even though under the latest Central Bank Gold Agreement these banks are allowed to sell about 400 metric tons of gold. The only seller of significance so far in 2010 has been the IMF (International Monetary Fund), which has sold just 39 metric tons since mid-February.
Sell Market Vectors Gold Miners ETF (GDX)
I don’t want to get greedy here. Gold is near its all time high of $1227.50 an ounce set on December 3, 2009. You don’t have to look far to find the reasons: the euro debt crisis and inflation fears in China come to mind. I think gold could run higher from here. The euro crisis isn’t over what with the credit rating companies that haven’t rated Greek government bonds as junk threatening to do so. And I think we’ll see at least one more spasm of fear from China.
Update Goldcorp (GG)
A work stoppage here. Higher taxes there. And soon you’re talking about an earnings miss for the first quarter.
That’s what’s behind the 22 cents a share that Goldcorp (GG) reported for the first quarter. The results were 3 cents a share below Wall Street projections.
Nothing significant happened to the downside in the quarter that I can find.
Buy Market Vectors Gold Miners ETF (GDX)
I’m adding more gold to the Jubak’s Picks portfolio today, April 8.
After a rally off the February 8 low on hopes that the global economic recovery was gaining steam, I think we’re due for a swing back to fear on disappointing growth numbers from the European Union, on stubbornly high (and perhaps rising) unemployment figures from the United States as more discouraged workers rejoin the ranks of those actively looking for work, and on worrying growth and inflation data from China. ((For more on these macro trends see my posts http://jubakpicks.com/2010/03/26/coming-to-a-wal-mart-near-you-inflation-from-china/ , http://jubakpicks.com/2010/04/08/the-greek-crisis-goes-on-and-on-an-on-with-no-light-at-the-end-of-the-tunnel/ , and http://jubakpicks.com/2010/04/05/so-yes-weve-got-an-economic-recovery-but-how-strong-is-still-an-open-question/ )
Update Goldcorp (GG)
After the market close yesterday, March 11, Goldcorp (GG) reported fourth quarter 2009 earnings of 25 cents a share (excluding one-time items). That was in line with the Wall Street consensus. Revenue climbed by 27.8% to $778 million. That was substantially above the $732 million Wall Street estimate.
For the quarter Goldcorp reported production of 601,300 ounces of gold.
The news was good enough so that investors can pardon CEO Chuck Jeannes if he sounded like he was crowing. “Achieving record gold production at the lowest cash costs of any major gold mining company while increasing gold reserves for a sixth consecutive year made 2009 a very successful year for Goldcorp,” he said in his company’s press release. “In addition, we brought one of our cornerstone mines, Penasquito, into operational production on time and on budget and repositioned another, the prolific Red Lake mine, for long term success. With Pueblo Viejo advancing on time toward first gold production in late 2011, the three major drivers of our five-year, 57% growth profile remain well on track. We also enhanced our outstanding project pipeline with the recent closing of two acquisitions that brought us the Camino Rojo project near Penasquito and the El Morro project in Chile.
