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« Long Straddle Options Strategy – “Double and Quits” | Main | The Federal Reserve Cuts to 1%! »

Randgold Resources Limited: Up 19.23% today!

Randgold chart 30oct08

Randgold Resources Limited gained $5.05 on volume of 1.3 million shares today to close at $31.31 registering a terrific gain of 19.23%. Randgold Resources Limited is one of our core holdings so it is pleasing to see it put in such a strong day.

As we can see from the above chart Randgold has suffered considerably in recent times along with most of the gold producers. The technical indicators are all pointing north, which we hope is a sign of better things to come. Gold closed at $754.12, which is a modest $13.62 improvement on yesterday. The US Dollar has undergone another 50 basis points haircut, which in turn caused it to lose 2.42% on the US Dollar Index. Sooner or later it will dawn on investors that sitting in dollars and receiving a negative rate of return is akin to a slow financial bath. Some of these funds will be transferred to other currencies and other sectors of the stock market. The outlook for currencies is one of more rate cuts so they are becoming less attractive as an investment. However, gold is managing to put up some resistance, which should appeal to a portion of the investment community who are scanning the horizon for a safe harbour. The more cavalier among them will recognise that the gold producing sector is very much oversold and presents a window of opportunity for them. A few more days like today and this market sector should catch their eye.

Randgold has a market capitalisation of $2.39 billion, a P/E ratio of 39.29 with 76.39 million shares outstanding. The average volume of shares traded is 1.4 million per day. This stock has a 52 week high of $56.28 and a 52 week low of $22.28.

Randgold Resources Limited trades on the NASDAQ under the symbol of GOLD and on the London Stock Exchange under the symbol of RRS.

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Reader Comments (2)

Sorry guys, but I will shorting gold.

May I speak frankly? Assuming our moderator say yes, let me say the following: I think gold is at the heart of our civilization since inmemorial times; gold, while the human being be a human being, with passions and fears, hates and joys, destruction and wars, gold will be at the underground on our material interactions, which means, to be concise, to me, gold will be ever -ever- a good choice to long-term wealth preservation. I love gold, like the most of you, who follows this fine newsletters.

But, at the same time, I must tell you that today are I starting a strategy to shorting gold, for a certain period of time. Maybe one year or when gold hits $400 which is, in my humble point of view, the fair price to be long, for long time. What happens first.

HL is a good prospect to short, GLD, KGC are too.

I believe that is highly likely we are experiencing and change of short-term trend, reversing the bull market on gold of the last several years. A global recession, a victorius deflation at the short term, a huge liquidity trap we are enter into right now, falling commodities prices, oversupply, will offset at the short-term the threat on inflationary forces, because the Fed is not printing more money (at least by now; instead, is selling more T-bills which is in high demand)leaving only the huge, mammouth debt as a pending issue, at all counting for inflationary pressure at the short term (2008-09). There lot of anectodal evidence everywhere I go, people hoarding cash, US dollars to be specific, more than gold. The run for the dollar might not be a coincidence.

As a note, Roubini published an article you guys should read and think about it.

As I said before I like gold -love it, indeed- and will be on it, but I wont leave my emotions dark my reason and coomon sense.

Truly yours,

October 30, 2008 | Unregistered CommenterChimera

Yes, it looks as though gold is getting no relief for now or the near future. However Warren Buffett recently stated that cash holdings will be a terrible long term position. He has also repeatedly warned that inflation is going to be reignited in the future. He has a habit of being right. So enjoy the low inflation for now. Question is how soon will the inflation hit. When it does expect a rush out of cash into tangible investments. Watch closely events after the U.S. elections. Watch for developments after January 1 and the inauguration on Jan. 20. Be mindful that post presidential election years are historically the worst for the Dow over the last century.

November 1, 2008 | Unregistered CommenterSidj

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