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Peter Brimelow: Gold survives Goldman Sachs
By Peter Brimelow
MarketWatch.com
Monday, April 26, 2010
http://www.marketwatch.com/story/gold-survives-goldman-sachs-bugs-rejoic...
NEW YORK -- Gold rebounds, and the gold bugs are gathering.
When I last wrote about gold, it was after what I called "freaky Friday" -- the steep, chart-disrupting price slump in gold triggered by heavy selling following the Goldman Sachs litigation announcement.
About the only element in the gold-watching crowd not aghast was the hard-bitten group I call the "radical gold bugs," mustered around Bill Murphy's LeMetropolecafe Web site. They were comforted (as so often) by their confidence in Indian buying. And they were even morbidly cheered (they're funny that way) by what they regarded as further proof of their defining belief: that the gold market is often manipulated by public and private interests.
... Dispatch continues below ...
Prophecy Resource Corp. Appoints Rob McEwen to Advisory Board
Prophecy Resource Corp. (TSX.V: PCY, OTC: PCYRF) is pleased to announce the appointment of Rob McEwen to the company's Advisory Board. McEwen is a leading Canadian mining industry entrepreneur. He is the chairman and CEO of U.S. Gold Corp. and Minera Andes Inc. McEwen was the founder and former chairman and CEO of Goldcorp Inc., whose Red Lake Mine in northwestern Ontario, Canada, is considered to be the richest gold mine in the world. During his tenure at Goldcorp, McEwen transformed the company from a collection of small companies into a mining powerhouse, growing its market capitalization from $50 million to approximately $8 billion.
For Prophecy Resource Corp.'s complete statement:
http://www.prophecyresource.com/news_2010_mar11b.php
In contrast, spot gold closed Friday at its high of the week at $1,157 an ounce in New York. The NYSE Arca Gold Bugs (HUI) gold-share index was up 3.3% on the week.
As a result, many gold observers are talking excitedly of a breakout -- for instance, JSMineset's Dan Norcini: "What an impressive performance gold put in today! ... The climb higher was steady signifying that not only a sizeable bout of short covering was occurring, but also an influx of new buying was occurring. ... If gold can muster sufficient strength to clear $1,165, the bears are in trouble, as only $1,175 stands between them and a swift run to $1,200."
Others pointed out that gold's performance was even better than immediately meets the American eye. Gold in several currencies saw all-time highs.
This is well illustrated by the valuable "Gold Index" chart, public-spiritedly made available on the Kitco.com Web site, The chart expresses gold in terms of the U.S. dollar index (DXY), which represents the value of the U.S. dollar in terms of a basket of six major foreign currencies.
See chart:
http://www.kitco.com/kitco-gold-index.html
On this basis, gold made an all-time high Friday afternoon.
Naturally, this greatly pleased the Gartman Letter, which has had more than a third of its model portfolio long gold/short various currencies for quite some time. Editor Dennis Gartman was charmed into waving an olive branch early Friday at the radical bugs' gold conspiracy theories, which he usually loves to deride.
He wrote: "Clearly there is someone of consequence hoping to keep spot gold in U.S. dollar terms from pushing upward through $1,150." (Of course, this level was breached later in the day.)
But most chart-oriented commentaries still want to see a clear close above 2010's early April high. The Aden Report on Wednesday was suggesting gold's rise would gain momentum above $1,163. (The service thinks $1,300 possible on this run.)
Harry Schultz in his Gold Charts R Us service agreed: "$1,165.00 is a barrier; need 2-day close over $1,165.00 for aggressive buying."
Gold Charts R Us -- quite an active trader -- also monitors a number of gold shares, setting "all buy" or "big buy" points on most. On Friday, a number of these closed above these levels. They included Osisko Mining Corp. and Silver Wheaton Corp.
LeMetropoleCafe's weekend commentaries also took encouragement from the gold-share action. The service earlier reported that Friday premiums in India were still "ample" for Indian importing.
But Dan Norcini cast a jaundiced eye on what radical gold bugs view as the problem: "Expect the bullion banks to fight like hell near $1,162."
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Preliminary Feasibility Study Completed for Seabridge Gold's KSM Project
Study Reports Reserves of 30.2 Million Oz. Gold, 7 Billion Lbs. Copper,
133 Million Oz Silver, 210 Million Lbs. Molybdenum
Base Case Life of Mine Cash Operating Costs Estimated at $144/oz. Gold Produced
(Net of Base Metal Credits)
Toronto -- Seabridge Gold Inc. has announced results from a National Instrument 43-101 compliant preliminary feasibility study of its 100-percent owned KSM project in northern British Columbia, Canada. The study was prepared by Wardrop, a Tetra Tech company, a major international engineering and consulting firm.
Seabridge President and CEO Rudi Fronk says, "The study confirms that the KSM project now hosts the largest gold reserve in Canada and one of the largest in the world. KSM is projected to provide an extraordinary mine life of more than 35 years with estimated cash operating costs well below the current average of the major gold producers. Estimated capital costs are in line with those of comparable, large-scale, undeveloped gold-copper projects and KSM has the advantage of being located in a low-risk jurisdiction."
For the complete Seabridge Gold statement:
http://www.seabridgegold.net/readmore.php?newsid=283
