-- Posted Friday, 25 August 2006 | Digg This Article
| Source: GoldSeek.com
From - Gold Forecaster – Global Watch 24th August 2006
With gold Exchange Traded Funds steadily growing irrespective of the gold price now two interesting features are emerging in their performance.
1. 
Local influences are having differing effects. South Africa has a history of currency volatility far higher than the Australian $, an international feature likely to persist. As a result the demand for the E.T.F. in South Africa is outpacing that in Australia. NewGold, the South African gold E.T.F. has overtaken the older Australian gold-backed ETF in size, growing to 350,000 oz [10.89 tonnes] since launch in November 2004. We see the future of the Rand weakening substantially long-term, against hard currencies, making these gold price related shares more attractive to local South Africans than to Australians, who also have a greater flexibility in their choice of foreign investments than South Africans, bound as they are by Exchange Control limits as they are.
2. The second feature of note that has developed is the performance of the Exchange Traded Fund against gold mining company shares. Charting the annual performance of the J.S.E.’ gold and Top 40 indices against that of NewGold, a period that included a meteoric rise in the price of gold, the E.T.F. and other two indices ended the period at very nearly the same level. However, the gold index, which is sought out because of companies’ gearing to the gold price, showed steep peaks and troughs over the year to May against NewGold’s steadier ascent. While it is true that the lack of company risk in the gold-price-linked E.T.F. shares makes them attractive 
and a reflection of the moves in the gold price, gold shares are hugely geared and likely to earn far more from a gold price move up than are the shares of E.T.F.’. It is a fact that if the gold price moves up or down then the gold shares will move even more both ways. Traders, whether day traders or longer term Traders like the volatility of gold shares, but most long-term investors prefer stable growth. This is reflected in the shares register of the E.T.F.’, where some 95% of NewGold is held by institutional investors, who are now also offered warrants.
But it is also clear that there can be a time lapse between a move in the gold price and moves in shares prices. But the subsequent moves in share prices can be far greater than the equivalent moves in the gold price, both ways. In theory and for traders with alacrity, one can take advantage of both moves. Indeed some of the most established and largest gold shares will move early in a move up in the gold price, with the medium quality following 
and the average Junior following the two. On the way down the reverse is usually true. Clearly a gold mine benefits from an average gold price, which makes up its income, whereas the gold price is independent and leading the average gold price. Like all trading we can see these as general rules not absolutes, but ones from which traders can gain a lead on the gold price and outperform it. There are many ways in which one can outperform the gold price, which utilized in a coordinated manner can produce amazing performance levels.
Gold Forecaster is shortly to enter the fund management field specializing in outperforming the gold price, as we have done in the past. Any Investors of size [$5m+] who are interested, are welcome to contact us.
HIGHLIGHTS in “Gold Forecaster - Global Watch”
Silver – COT, Gold : Silver Ratio EDR, SSRI, PAAS, SIL, SLW, Portfolio / Platinum.
SHARES: HUI, NEM, FCX, NG, VGZ, HMY, Aquarius Plat. Portfolio
Index:
1-2. Market Forecasts / Short-term forecasts across the Board!
2-3. Comex Update
3-11. Central Bank Gold Sales in 2006/ Gold E.T.F. – holding tonnage on the fall in the gold price/ The dilemma facing Producers / Global uncertainty rises/ The U.S. $ & its Prospects / The Oil crisis / Gold: Oil Ratio / Dow Jones / Technical Analysis of the Gold Price: Long / Gold price drivers 2006 / Short term in the U.S. $ / Treasury Notes / CRB Index
11 – 26. International Gold Markets / Silver / Gold vs. Silver / Gold: Silver Ratio / Platinum / Silver & Gold Shares
Trial Sub. 3 months for $99 – go to www.goldforecaster.com
Do you want to receive your own copy of “Excerpts from “Gold Forecaster – Global Watch” ?
- Send your e-mail address to: gold-authenticmoney@iafrica.com
To Subscribe to “Gold Forecaster – Global Watch”, please go to:
Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold-Authentic Money / Julian D. W. Phillips, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold-Authentic Money / Julian D. W. Phillips make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold-Authentic Money / Julian D. W. Phillips only and are subject to change without notice. Gold-Authentic Money / Julian D. W. Phillips assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.
Disclosure: The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. The author of this report is not a registered financial advisor. Readers should not view this material as offering investment related advice. Authors have taken precautions to ensure accuracy of information provided. Information collected and presented are from what is perceived as reliable sources, but since the information source(s) are beyond our control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The information presented in stock reports are not a specific buy or sell recommendation and is presented solely for informational purposes only. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise outside of the trading timeframe listed above. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.
-- Posted Friday, 25 August 2006 | Digg This Article
