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Commentaries & market updates.
The Market Field – UPDATED Market Overview
The Market Field – UPDATED Market Overview
I created today’s commentary and update to show the value of a well known gold producer against the value of the spot gold price. My first two charts below are a chart of spot gold and then a well known major gold producer. I have updated the Bullish Percent Index for the Gold Miners Index further below.
I have drawn a blue horizontal and blue vertical line on the spot gold chart. The vertical line marks a date in February of 2007. On or around that date spot gold traded around a then high of $730. On the second chart, which shows the price action of a well known major gold producer, the blue vertical line marks the same date as the spot gold chart in February of 2007. On that date in February of 2007 the gold producer was trading at or around $32 per share.
Spot Gold Chart
Well Known Major Gold Producer
Today spot gold has a value of $1590 per ounce and that same well known gold producer is trading at $38.22. In my mind there is a huge discrepancy between the spot gold price and the price action of the well known gold producer. I think the gold producer is showing great valuation, even if spot gold declines further in price. Remember fiat currencies are in a race to zero, and Central Banks most likely have not finished printing money.
Inputs that contributed to this discrepancy are:
· Canadian Dollar strengthening
· Cost of labour
· Cost of energy (the low cost of natural gas should really help)
· Forward selling of the product
I still think there is a major difference that is hard to explain.
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The Following is an update to my April 24, 2012 Article – “The Market Field”
The below is the Bullish Percent Index(BPI) for the Gold Miners.
State: Bear Confirmed
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