Goombarh 57 - May 3, 2011
Good Afternoon,
Looking for what's forward, I came across this battle of the narrowing triangle in Shanghai. I believe how Shanghai behaves will indicate what is in store for us in the Western world for the next little while. China is the consumer of the metals, commodities and sets the tone for the markets overall:
Note the bounces in July, 2010 and in February 2011. Will the trace bounce off the bottom edge and then break out to the top?
For the answer to that, I looked at a smaller time frame for this trace as in following:
From the closer look, one can clearly see that last bottoms in July 2010 and Feb 2011. A bottom appears to be forming up presently. Whether the move upwards is strong enough to break out, only time will tell. Presently, China's markets are closed for the May 1st holidays and will open next week.
If I was a betting man, I would bet on a strong market push upwards starting next week. This may be true for the precious metals also. Therefore, have patience, the sell in May is not here yet, and the peak for precious metals is still ahead, in my humble opinion.
I would still try to take some monies off the table in the next push upwards, and redeploy the cash later this summer for bargain opportunities.
I note that GBG released a operational report this morning:
Burnstone is ramping up, but only with low grade development ore, so therefore, nothing significant for earnings, only about 5000 oz, this past quarter. The outlook is for about 16,000 ounces for the next quarter. Therefore the gains for GBG will be later this summer. However, I do not think the pricing of GBG stock will ever get lower than it is now.
Until next time,
Marco G.
http://goombarhsedge.blogspot.com/
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Good write up Marco. I linked to this on my blog and posted it on Turd's blog. I think some folks could really use a viewpoint like yours right now.
ReplyDeleteHi Yukon,
ReplyDeleteThx for the plug.
As an aside, if the markets and gold recovers next week and keep moving up, take a look at Goldcorp warrants, risky but cheap.
http://goombarhsedge.blogspot.com/2011/03/goombarh-flash-18-feb-25th-2011-good.html
Marco G.
Further to previous comment, Goldcorp came back up in the afternoon, due to post hours earnings release which were very good, see following
ReplyDeletehttp://finance.yahoo.com/news/Goldcorp-Earnings-More-Than-prnews-2099462307.html?x=0&.v=18
First Quarter 2011 Highlights
- Revenues increased 69% over the 2010 first quarter, to $1.2
billion, on gold sales of 627,300 ounces.
- Operating cash flow increased 108% over the 2010 first quarter, to
$586 million or $0.73 per share.
- Adjusted net earnings increased 150% over the 2010 first quarter,
to $397 million or $0.50 per share.
- Average realized gold price increased 26% over the 2010 first
quarter, to $1,394 per ounce.
- Gold and silver sales account for 86% of first quarter revenues.
- Cash costs totaled $188 per ounce on a by-product basis and $504
per ounce on a co-product basis.
- After investment of $352 million capital in growth projects and
existing mines, free cash flow(3) totaled $234 million for the
quarter.
- Dividends paid amounted to $75 million.
- Quarter end cash balance of $1.3 billion; net cash position of
$575 million.
- Cerro Negro feasibility study update enhances gold production
growth profile.
- Positive study results at Éléonore and Cochenour projects advance
development of next generation Canadian growth projects.
Marco G.