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« Kinross Gold Corp Leads Gold Sector Rebound | Main | Stephen Harper Suspends Canadian Parliament! »

GOLD STOCKS: On the move!

Gold USD HUI Chart 09dec08

As we can glean from the above chart it was a good day for long suffering Gold Bugs. Gold moved up 2.63% today, the USD dropped 1.41% today, and the Gold Bugs Index, the HUI, put on 7.61% to close at 228.78 having formed its third consecutive higher low!

Massive spending plans, the creation of more and more paper money may well achieve the target of proving stimulus to the world economy. However to create more money is to inflate the money supply bringing with it inflation. To use Webb’s definition of Inflation:

“The rise in price of goods and services, or Consumer Price Index (CPI), when too much money chases too few goods on the market."

Too much money, well there are trillions being created as we look on! Long-term wealth protection will be provided gold coinciding with the demise of the dollar.

Some of our favourite gold stocks really sparkled today including:

Agnico-Eagle Mines Limited up 9.30%
Kinross Gold Corporation up 10.25%
Randgold Resources up 5.5%
Yamana Gold Incorporated 4.66%

We are still looking for Yamana Gold Incorporated to up get off the canvass and start punching its weight, even now its P/E ratio is a comparatively low at 11.87.

This may be of interest to you it’s a click of John Ing, of Maison Placements discussing Gold Backwardation on BNN. Backwardation is a term used to describe a situation where a commodity for delivery in the near term month is more expensive than the same commodity for delivery later down the line. It’s a rare event as prices are usually higher at a date in the future than they are today. Just click here.

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Reader Comments (3)

On my birthday, 3rd December, there was a significant backwardation of gold and that continued for several days.

I'm very deep into this phenomenon right now, and it only happened once before during the Great Depression in the '30s.
The moment when gold goes from contango to backwardation is normally when put and long positions are being closed. Its a small anomaly in electronic trading.
This event however, is continuous and implies demand shortages for gold and could be very bullish for gold considering the event that happened for gold in the 1930's.

This could also be the sign, for the end of the dollar rally. Professor Antal E. Fekete even speaks of the end of the fiat currency.

Read further if your interested;


December 9, 2008 | Unregistered Commenterde Graaf

Offcourse, I meant; implies supply shortages for gold.

Have a nice day!

December 9, 2008 | Unregistered Commenterde Graaf

Kinross is certainly looking very good.

Backwardation? Yeah. I saw that too. Something definitely is in the offing. This coming year I think is going to be very interesting.

December 10, 2008 | Unregistered CommenterHal

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