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XMFSinchiruna (26.54)

$2,000 Gold Will Come from the East



May 24, 2011 – Comments (24) | RELATED TICKERS: CEF , GG , AUY

Much has been made recently of the decision by George Soros to sell the vast majority of his fund's stake in the SPDR Gold Trust (NYSE: GLD) during the first quarter of 2011, emboldening the predictable chorus of bubble babble that plays incessantly in the background behind gold's symphony of sustained upward momentum. But while Soros and several other fund managers were busy locking in impressive gains from gold, an incredible surge in gold demand from Asia continues to pave a rising concrete floor beneath long-term gold prices.

$2,000 Gold Will Come From the East

Per capita demand for gold in China has been increasing at an accelerating rate in recent years, and the WGC considers that "near-term inflationary expectations and rising income levels are likely to support the investment case for gold as an asset class, especially given that Chinese consumers are high savers and are looking to gold to protect their wealth." As a result, the WGC concludes: "We believe that Chinese gold demand could double within the next decade. However, given the recent momentum in Chinese gold demand, we would not be surprised to see this result achieved in a shorter time frame."

Consumer demand for gold in India reached 291.8 tons during the first quarter of 2011, while China chipped in another 233.8 tons of demand (up 11% over the prior-year mark). Together, those two nations account for 57% of total worldwide consumer demand for gold, and more than 12 times the scale of demand originating in the United States!

Thanks for reading, reccing, and replying. :)

24 Comments – Post Your Own

#1) On May 24, 2011 at 12:12 PM, PeteysTired (< 20) wrote:

If you are a ruler of a country, do you want to own fiat dollars or gold/silver?  My bet is they buy physical gold/silverit whenever they can.  I know I buy it and if, for some reason, this becomes the dumbest investment decision ever?  Then, I will add it to the list of other foolish choices like Worldcom, Washington Mutual....... 

Thank God for diverisfication :)

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#2) On May 24, 2011 at 12:21 PM, silverminer (29.70) wrote:

Not much diversification here ... this Fool is all-in.

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#3) On May 24, 2011 at 12:24 PM, kdakota630 (29.41) wrote:

This just in my inbox:  China Overtakes India as No. 1 Gold Purchaser

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#4) On May 24, 2011 at 12:39 PM, silverminer (29.70) wrote:

“It is increasingly seen as an asset allocation choice. Just imagine the total wealth in China and even a small percentage of that choosing to buy gold.”
Yup ... just imagine.

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#5) On May 24, 2011 at 12:49 PM, silverminer (29.70) wrote:

Hey Fools ... hook a brother up.  :) I have twice as many recs here as I do on the actual article itself ... which is where they really count in terms of ensuring widespread circulation. Thanks for reccing at the source.

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#6) On May 24, 2011 at 2:39 PM, XMFSinchiruna (26.54) wrote:

The report said there were four very large companies that own warehouses and named U.S. investment bank JP Morgan (JPM.N), which owns warehousing company Henry Bath.

"They are, therefore, a ring-dealing member of the exchange and they also own the warehouse. That is restrictive," the committee said.

U.S. investment bank Goldman Sachs (GS.N) owns Metro, commodity trader Trafigura owns NEMS, and Glencore (GLEN.L), which has just listed in London, owns Pacorini.

JP Morgan, Goldman Sachs and Trafigura declined to comment while Glencore was not immediately available for comment.

"There's been a dramatic change in ownership," said an analyst who declined to be named. "There's quite clearly, in banking terminology, scope for cross-selling."

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#7) On May 24, 2011 at 2:58 PM, jtnrt (< 20) wrote:


What do you make of GPL press release?  Just would like your thoughts as I own a butt-load of this stock.

GREAT PANTHER SILVER LIMITED (TSX: GPR; NYSE Amex: GPL; the "Company") has decided to postpone the NI 43-101 compliant mineral resource estimate for the San Ignacio Mine property, Guanajuato, pending further drilling. Diamond drilling has continued at San Ignacio, where silver-gold mineralization was intersected and results announced for the first 8 holes (see news releases dated October 28, November 15, December 21, 2010 and March 10, 2011). As drilling continued and results were compiled, steps were taken to prepare an internal NI 43-101 compliant resource estimate. This involved a Quality Assurance ("QA") procedure that was even more stringent than the normal process of inserting standards, blanks and duplicates into the drill core sample sequence. Under the new procedure, drill core from select samples was quartered and assayed to compare to the original results and, during this process, it was observed that there was no consistent correlation between the original and check assays.

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#8) On May 24, 2011 at 3:02 PM, reinman60 (< 20) wrote:

I read this story with great interest.  I hope the OFT takes their job more seriously than the CFTC.

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#9) On May 24, 2011 at 4:30 PM, XMFSinchiruna (26.54) wrote:


I view it just the way Archer describes it ... as a puzzling indication of error in one of the two assay procedures, but one that in no way alters expectations regarding the exciting prospectivity of the deposit.

Great Panther mined its way through veins for years without the benefit of codified reserves, and in no way do I view a delay in the next resource estimate as an impediment to the company's sustained production growth profile.

Great Panther is now my #1 holding, since my recent purchases brought the value above that of my SLW stake. I continue to hold for a double-digit share price.

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#10) On May 24, 2011 at 5:01 PM, XMFSinchiruna (26.54) wrote:

I'm going to go visit a gold mining operation sometime soon, belonging to an operator that many of you are familiar with, and I look forward to reporting the details thereafter. Should be a fun trip.

Which gives me an idea ... just brainstorming here, but if I were to organize a bus trip to visit some corporate headquarters and mining/development operations of junior resource companies in Canada, and assuming I could keep the rate to a reasonable figure ... can I have a show of hands for how many might be interested in partaking and what time of year you think might be best to consider?

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#11) On May 24, 2011 at 5:34 PM, skypilot2005 (< 20) wrote:

On May 24, 2011 at 12:49 PM, silverminer (99.85) wrote:

Hey Fools ... hook a brother up.  :) I have twice as many recs here as I do on the actual article itself ... which is where they really count in terms of ensuring widespread circulation. Thanks for reccing at the source."


Sky Pilot

Web Link Assistant 


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#12) On May 24, 2011 at 10:06 PM, FleaBagger (27.32) wrote:

I don't usually go to the main site (what I like to call the "marketing side"), but I went, recced you there, and your recs there have surpassed the ones here as of this writing - 49 to 39.

I know I don't say this enough, but I really appreciate all you've done, and you were a big factor in my decision to finally pull the trigger on gold and silver a couple years ago, so thanks for that. 

Oops, I wrote this hours ago and forgot to post it, so the counts have surely changed since then. Anyways, may God bless you much. Keep up the good work.

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#13) On May 25, 2011 at 9:53 AM, XMFSinchiruna (26.54) wrote:

This is a sweet deal. They will retain substantial upside exposure to the properties through their equity stake in Everton, and the important 2% NSR. And I agree, the timing is right for Brigus to concentrate on Canadian operations and opportunities.

Brigus Gold Agrees to Sell Remaining Interest in Dominican Republic Properties to Everton Resources
Halifax, Nova Scotia; May 25, 2011– Brigus Gold Corp. (“Brigus” or the “Company”) (NYSE Amex: BRD; TSX: BRD) announces that the Company has signed a letter of intent with Everton Resources Inc. (“Everton”) whereby Everton will acquire Brigus’ remaining interest in the Ampliacion Pueblo Viejo (APV), Ponton and La Cueva concessions in the Dominican Republic (“the Concessions”).

Under the terms of the agreement, Everton will complete a minimum Cdn$5.0 million financing, pay Brigus Cdn$1,000,000 cash and issue Brigus 15,000,000 Everton shares. Brigus will also receive a sliding net smelter return royalty on the Concessions equal to two per cent based on the current price of gold.
“Everton is a strong partner to advance the Dominican Republic projects in the near-term as we remain focused on our core properties in Canada,” said Wade K. Dawe, President and CEO of Brigus.

In addition, Everton is required to incur a minimum Cdn$5.0 million work commitment on the Concessions over the next two years.  Upon completion of a 43-101 compliant measured and indicated resource on the Concessions of a minimum 1,000,000 ounces of gold equivalent (at an average grade of 2.5g/t or higher for APV and 1.5g/t or higher for Ponton and La Cueva), Everton will pay Brigus an additional Cdn$5.0 million or 5,000,000 common shares, whichever has the greater value. 

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#14) On May 25, 2011 at 10:08 AM, Jbay76 (< 20) wrote:


What do you think of GRS wanting to change their name to Aurico Gold Inc.?  I just got their notice of annual meeting and just breezed through the shareholder voting form.  I'll read the accompanying newsletter before voting, but it seems odd that they'd want to put time and effort to change their name...why bother?  Does that really affect their imagine, valuation etc.?  I don't thin so but again I have yet to read the circular. 


On a side note, the brigus deal looks pretty good!

Pertaining to the bus trip, that would be vey educational, and I'd like to do it, but not knowing an approximate cost and duration, I'm stuck saying " it's a really good idea!"

Thanks for all the hard work and insight!

Fool on


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#15) On May 25, 2011 at 10:40 AM, silverminer (29.70) wrote:


Stay tuned for my interview with Gammon/AuRico CEO Rene Marion, due out in a a few days' time. I recommend supporting the name change, because for Gammon it's all about emphasizing the rebirth of a company's growth trajectory following a challenging chapter. Plus the new logo is way more impactful, and yes, believe it or not, those details do matter.

Hypothetically speaking, if we were to envision a 4-5-day bus trip to combine sightseeing with plentiful investment research, including meetings with reps from the likes of Gammon and Alexandria, and site visits to some mining and development operations, and assuming I were able to keep the cost for such a trip to somewhere south of $1,000 per person including lodging and meals, would there be some Fools interested in participating? 

If I can get 20 people to tell me they're substantially interested in participating, I may get serious about trying to set something up.

For those who may be interested, please indicate a preferred month for such a trip.

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#16) On May 25, 2011 at 11:21 AM, golddlog (< 20) wrote:

I would be interested in a bus trip.  As I am in the golf business and summer being my busy time, i could do it if it were anytime October-March in my off season.  Always wanted to go to Canada.  Great idea.  Pat

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#17) On May 25, 2011 at 11:41 AM, 100ozRound (28.74) wrote:

I'm in.  My off season is the exact opposite of golddlog but it doesn't really matter.  I can take time off whenever.  All else being equal, I'd prefer the summer months in Canada.

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#18) On May 25, 2011 at 12:26 PM, Jbay76 (< 20) wrote:

Let me touch bases with my other half as I'm sure she woudl be interested as well.  As for when, I need to see how much time off I have after two summer trips set in stone.  Though next spring woudl be good as well.....

Chris do you have a timeframe in mind?

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#19) On May 25, 2011 at 12:27 PM, Jbay76 (< 20) wrote:

I forgot to thank you for the insight into the name change...I'm juggling a lot as of late...but that's not to take away from my thanks!


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#20) On May 25, 2011 at 1:06 PM, XMFRosetint (44.32) wrote:

Hey Sinch,

 I'd be in for sure. Would this happen relatively soon? I don't really care about what time of year it'd happen, so schedule around other people.

I'm always game to learn more about an industry.

Best wishes,


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#21) On May 25, 2011 at 11:04 PM, skypilot2005 (< 20) wrote:


I was reviewing my portfolio this evening and one of my holdings jumped out at me.  Yes.  It was our old friend Yukon - Nevada.  So, I went right to work on it.

Here’s the “scoop”:

Yukon Nevada Gold has officially raised $59,000,000.00 to upgrade Jerritt Canyon !  Hence the 25% “Pop!”, today.

For context from May 3:

Doubling up on the 4th is looking better and better……..

Sky Pilot

Official Web Link Assistant to Sinch.

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#22) On May 26, 2011 at 8:21 AM, XMFSinchiruna (26.54) wrote:


Thanks SkyPilot,

I bought on that same dip to $0.41, but it's not a stock I would be looking to build into a core holding. Not because I don't think they can succeed in their plan and carry the shares higher, but because there are so many plays out there that I would rate as better investments. I've held a small stake since 2006, so perhaps I'm jaded by the long continuum of weakness and dilution along the way, but I personally do not rate this among my top prospects.

Incidentally, my cost basis from 2006, before reducing that basis with recent purchases, was just over $1. Fell free to dabble, Fools, but please think twice before annointing this one your golden ticket. Share count is 756 million!

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#23) On May 26, 2011 at 9:06 PM, skypilot2005 (< 20) wrote:

On May 26, 2011 at 8:21 AM, TMFSinchiruna (99.00) wrote

“but it's not a stock I would be looking to build into a core holding.”

“perhaps I'm jaded by the long continuum of weakness and dilution along the way, but I personally do not rate this among my top prospects.”

“Share count is 756 million!”

I agree.  I’ve worked my cost basis down to .60.  I’ll need to see some more positive developments to add further.  It is a small portion of my portfolio.  Even through the drop, I did not feel the need to use any of the Dramamine I keep within reach of my mouse.

Your Official Web Link Assistant

Sky Pilot

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#24) On May 26, 2011 at 11:03 PM, skypilot2005 (< 20) wrote:


Good News. 

See the AFTER HOURS release, below. 

Northgate Minerals Corporation On Thursday May 26, 2011, 7:47 pm EDT

Underground Delineation Drilling at Northgate Minerals Young-Davidson Mining Project Confirms Zone Geometry and Grade

I'd like to remind fellow Fools of Sinch's May 11 piece titled:

Don't Miss Northgate's Golden Explosion

Sky Pilot

24/7 Web Link Assistant to Sinch

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