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« The US Dollar rallies, but for how long? | Main | Agnico-Eagle Mines Call Options Up 89% in 2 Days! »
Thursday
Oct092008

Kinross Gold Corporation: Call Options Update 09 Oct 08

KGC Options Update Chart 10oct08

The above chart shows the status and the progress of the January 2009 Call options that we purchased on 24 July 2008 for $2.50 per contract. We now need the stock price to rally to the $20.00 level to get us back into positive territory.

Gold has been volatile and was trading at $885.00 for most of today’s session, however a late rally has gold trading at $914.50 as we write, which gives us some comfort. We remain fairly comfortable with this position as we have until January 2009 for Kinross Gold to make its run and we are quietly confident that the gold price will go a lot higher from here, dragging Kinross Gold with it in the process.

We will continue researching the options sector with the view to buying more Call Options shortly in order to take advantage of the year-end rally that we believe will challenge and surpass the old highs made by both gold and silver so stay on your toes!

Have a good one.

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Reader Comments (7)

I would like to add, that in times like these, technical analysis does not add to the kind of realism we see. So I wouldn't invest my bucks in it.

More like betting which I don't like.

October 10, 2008 | Unregistered Commenterde Graaf

I suspect the price of gold will be somewhat lower in the coming weeks- my target is around US600/650. We have seen that gold -and even more so silver which has plummeted below U$10 today, are not the performers they should be in these turbulent times. Inflation will fall dramatically as the world economies collapse so this factor will no longer underpin the gold price, and no amount of wishful thinking, from this commentary or any other, will change this fact. Cash is king for the time being and I wouldn't touch any commodity stock with a barge pole!

October 10, 2008 | Unregistered CommenterMike- UK

I saw the takedown of the POG and SOG today on the paper markets. The powers that be are keen on discouraging anybody with big aspirations. A good number of long traders must have lost big through slippage. A big project among these elites is to discourage greed. Why let into the club?

October 10, 2008 | Unregistered CommenterDavid

Welcome to the depression.

October 10, 2008 | Unregistered Commenterde Graaf

John Nadler just posted an interesting article. Something that I didn't know was that nearly two-thirds of gold is used for jewelry purposes. Only 15% for coinage and bars. Now that doesn't bode well for the POG if the global economy keeps tanking.

October 10, 2008 | Unregistered CommenterPaul

If there is such a bear market in gold then why is it the retail investor has such a hard time with getting gold and silver at the shops? Why is Kitco so ill supplied for the precious metals? Nadler also has not explained the high lease rates for gold.

October 11, 2008 | Unregistered CommenterDavid

Let me try to explain:

There is no bear market for gold. Its a bull, but every bull has got its up and downward momentums. In this case the momentum changed significantly as a worldwide recession or lets say depression spirals out.
What does it mean for gold;
Retail investors who want to own the coins and bullions are having a bad time due to institutional investors and ETF funds that are loading into bullion and Eagle coins. Demand is hot. Remember bullion and coins only present 15 percent of the total world gold market.
Next is jewelry with 65 percent gold market share. The Indian people love gold but are not crazy. The months September October November are their festivity months, although they buy their gold accross the year and not at peak highs. When you watched AlJazeera news channel, you see what Indians had to say about that issue.
The retail shops still have their demand, but will decrease in the coming months/years depending of a recession/depression state of the global economy. More job losses means less income and less jewelry demand. The rich will still buy bullion and jewelry, but the middle class (largest group) will postpone or even cancel their requests.
Industrial and dental (14 percent) are having the same issues. Prices for health care are exploding. Its unaffordable. Only a government plan for a social health plan will prosper to health care available to the ordinary man. Its almost becoming a luxury and until that happens, this sector will not grow, only earn big money.

One thing: When a global recession unfolds, demand falls, prices go down and therefore people postpone their purchases in hope for even better bargains, then commodities go down even further and in combination with the credit crisis, you will see a contraction of the M3 money supply which counters inflation. Inflation is no longer an argument in deflationary situations. The spiral needs to be broken to market growth and then the emotion of gold as a safe haven will continue to feed the inflationary situation the dollar really is in.

Gold bull is down. Still there but down. Miners are off the record. Bullion is Hot but not paper gold holdings like ETF and stock papers. Liquidity is needed for bread on the table if people lose their jobs. That is called fear for global depression.

October 11, 2008 | Unregistered Commenterde Graaf

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