Weekly Report: Long positions in ABX and RIO.TO stocks disclosed in last week's blog were stopped-out during the week, and, as of today, I have no position in any of the stocks mentioned below. I initiated two positions last week based on a falling dollar index, however it remained relatively stable closing at 80.23 on Nov 30, 2012 compared to 80.30 one week prior, essentially no change. Gold price declined approximately $30 oz to $1715. ABX declined about $0.75 to $34.50 and RIO.TO declined $0.09 to $5.06 during the same period. I lost $79.85 on my RIO.TO position and $1,289.53 on my ABX position. Total loss equals -$1369.38
From my viewpoint: I see three possibilities the first being that Washington politicians fail to resolve their stalemate, and that results in the USA economy going over the fiscal cliff on January 1, 2013. This is my preference by the way. The dollar strengthens and gold declines to $1,450 oz as the budget becomes suddenly more balanced. If on the other hand, Washington politicians come to a compromise which shows promise of both tax increases and spending cutbacks, then the dollar index remains the same as now, at 80 or slightly above, and gold remains in a range of $1,650-$1,750 oz. The third possibility, and most probable based on past history, Washington politicians manage to kick-the-can down the road once again. Then the dollar weakens and gold climbs to $2,000 oz. Before that happens it would be to my benefit if ABX would decline to near $31 or lower, and RIO.TO declines to $4.65 or lower, price where I would consider initiating a new position in these two stocks. Possibilities #1 and #2? I believe it best to avoid gold and mining stocks as returns would be much better in other investments including real estate.
Disclosure: I have no plans to initiate positions in the stocks mentioned below within the next 72 hours.
Alto Chicama Gold District, Northern Peru
Public traded stocks with operating mines:
Private owned company:
COMARSA - Santa Rosa Mine
Sulliden Gold - Shahuindo property.
Articles and Information published by third parties on the Internet:
ABX I believe that Barrick's Pascua Lama project cost-overrun weighs heavily in the market.
COMARSA - US unblocks COMARSA bank account.
NEM - Zacks upgrade to nuetral.
Peru - good article on financial situation.
Shop Amazon - Cyber Monday Deals Week