Gold/Oil Ratio, Forward price direction indicator for gold

[arty]

In Reply To: early birds's post @ Apr 15 2013, 11:50 PM

gold went as low as usd$1380ish, looks horrible, but silver even worse, the pain will be feeled!!

$1356 even as I type, eb

seems even the smarties at Credit Suisse didn't quite anticipate that when they arranged the forward swap with Mutiny the other day that netted my friends at MYG those $11M. Not that I'd sneeze at that kind of profit.

But I suspect the carnage in materials may be about to continue tomorrow.
I'm selfish enough to be happy I didn't get caught too badly - a few thou MYG is all. (Oppies long gone)
But I feel for those, who blindly believed the persistent claims of gold bulls about sky-high rewards just around the corner; it they bough on margin or at imprudent recklessness because some blogger said so - that's tragic.

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[raauul]

In Reply To: early birds's post @ Apr 15 2013, 11:50 PM

BDR seems like it will have nice value in the hedgebook. Might have lucked out a little taking out the hedging as part of project finance, but the directors are very smart operators (Peter Bowler/Rob Watkins x-Agincourt)

Hedged 195,000 oz @ US$1600 over 3 years.

Although a little more complicated;

A total of 195,000 oz hedged over 3yrs or 40% of annualised forecast production. 11% of reserves.

100,000 oz hedged @ BRL(Brazilian Reals)$3,124 per ounce.
95,000 oz @ flat US$1600 per ounce.

Call options sold over 48,485 ounces at strike US$1700 per oz Expiry 31/12/14
Call options sold over 20,250 ounces at strike US$1400 per oz Expiry 31/12/13

I don't fully understand the options, guessing unless a recovery in price the 1700 ones will just lapse?

Forecast production 200,000 oz for CY2013

Cash costs forecast very low with Iron ore credits & high grades (I have seen sub US$500 quoted, lets say US$600-700 to keep it real)

Still in very late commissioning phase but 90% of the startup risk seems to be behind them. If you can stomach a single mine producer in Brazil.

[flower]

In Reply To: wolverine's post @ Apr 15 2013, 10:55 PM

Too many shareholders and boards are averse to hedging or discussing hedging due to irrational fears from the failure of Sons of Gwalia.

Such a shame that some production wasn't hedged by juniors.

From memory the round of company failures in 2004 was caused by a combination of badly framed hedge books and adverse currency movements at exactly the wrong moment.

Since then, as gold started its massive rise shareholders demanded that boards remained fully exposed to the spot price, far as I know the only goldies to have hedge books as recently as 7 days ago were in existence at the demand of their financiers.

the question is "whom" and "how much of their production".

all that info will come tumbling out as their relevant 2012 Q1 reports are ASX announced, thought (and posted) there would be some nasties contained in some of them but never foresaw the need for boards to rapidly rethink their Quarterlies that by now should be in the late stages of composition as they must be published by the end of April.

Watch ASX announcements every morning from now on to read the quarterly you happen to be interested in.

[early birds]

In Reply To: wolverine's post @ Apr 15 2013, 10:55 PM

yeah wolvy, that SGW and CRS over that time.

back to the situation now;
gold backwardation been a little while, so i won't surprise to see some of our gold miner did some of hedgging before this big sell off.
the question is "whom" and "how much of their production".
if we can find out now and take advantage of this blind sell off, good money can be made from this event.
hope peoples like ZGAZ... can bring more of these type of info so we can profit from it!!

gold went as low as usd$1380ish, looks horrible, but silver even worse, the pain will be feeled!!

[wolverine]

In Reply To: early birds's post @ Apr 15 2013, 10:01 PM

Too many shareholders and boards are averse to hedging or discussing hedging due to irrational fears from the failure of Sons of Gwalia.

Such a shame that some production wasn't hedged by juniors.

[OZGAZ]

In Reply To: early birds's post @ Apr 15 2013, 10:01 PM

EB, I believe TGZ (gold) are hedged but not sure at what price, they were smashed today....but their buy/sell depth is very very light

Cheers

Ozgaz

[early birds]

In Reply To: flower's post @ Apr 15 2013, 09:42 PM

remember what i tell you not long ago??
once spot price hit usd$1525 a lot of small or medium miner will hedge their production!!
that is why that smarty Garman been hit last two session.
now try to find someone who did hedgging most of their production before this fall, and been sold down with the others, that will make you good money!
so, not all is lost, just try to find right one.

only had little piece shorts on NCM, that is all i've got, so there isn't big interest in gold for me either, just try to let some of my ego out as i'm kinda a gold bear in this forum.

[flower]

In Reply To: early birds's post @ Apr 15 2013, 09:28 PM

to me usd$1000 looks most likely will be hit this year!!

eb: sincerely hope you are wrong, not for my sake since am not overcommitted, but for all the thousands of gold punters who stand to lose their shirts as their companies go bust.

[early birds]

In Reply To: flower's post @ Apr 15 2013, 07:20 PM

Gold prices broke below $1,400 on Monday, as investors dumped shares of gold miners on worries over their profitability as the yellow metal hit its lowest level since March 2011.

"We've traded gold for nearly four decades and we've never… ever… ever… seen anything like what we've witnessed in the past two trading sessions," Dennis Gartman, the editor of The Gartman Letter said in a note on Monday

http://www.cnbc.com/id/100640665
================================

too early to try pick the bottom for gold flower.
at least wait till it hit around production cost level!!
to me usd$1000 looks most likely will be hit this year!!

[flower]

In Reply To: flower's post @ Feb 21 2013, 06:39 PM

In Reply To: flower's post @ Feb 14 2013, 09:16 PM
Interesting that Colin Twiggs is now using Brent as the oil element rather than WTI which alters the situation a lot--in that Gold is getting very near 10% in the gold/oil ratio which is a gold buy signal:
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The gold-oil ratio is falling. Decline below 10 is a long-term buying signal for gold. In recent years fluctuations have been a lot narrower and a fall below 12 may be sufficient.

Basic update of the current gold ratio: Using Brent spot gold in USD is getting undervalued, using WTI the current ratio indicates spot gold in USD to be fairly valued.

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