Gold News and possibilities

[#1]

Further to Zarp's comments below. Let's suppose the 36 year US Dollar Index support line is broken and the Dollar falls through this support. See http://globalgold.blogspot.com/2006/12/us-dollar-index-usdx-elliott-wave.html . Gold will take off and house prices and the stock market might crash (in the USA). This might only take place in the USA or it might spill over to the rest of the world. If this happens, Gold shares should take off as their profits should multiply quickly owing to leverage. But what will happen? Will the gold shares fall in sympathy with the general stock markets? Will the rest of the world follow the US markets down? Note that even though the US market appears to be going up, for investors outside the US their net asset values are going down! So when will the vicious cycle of selling start? The gold shares will only really go up if the rand price of gold goes up dramatically, ie from R150,000 per kg to say R200,000 whilst costs stay the same. So assuming we see R6.30 soon (in the next six months) as some people are predicting, then if gold goes to $800 then theoretically nothing happens to the Rand gold price. However, I believe that sentiment of gold going over $700 will start to push the gold shares up. And if the Rand goes to R6.30 and the gold price goes to $1000 then we are looking at very interesting times because R150,000 becomes R190,000 and huge profits start pouring into the gold mines. That is why they are called "gold mines" :) Note that in the oil boom $1 invested often produced $200 in a very short amount of time. So I think it's time to get back into Gold Fields. I'm already in SIM, DRD and AFO. See http://www.gold-eagle.com/editorials_98/taylor121598.html for more information.

[#2]

At some point, GFI's WAR investment will start paying off in a big way. WAR is currently the biggest new gold mine in the world, but it hasn't started producing in quantities yet. According to GFI's financials South Deep (WAR) produced 66,000 attributable ounces in the first quarter of 2007 compared with 24,500 for the month of December. I'm assuming they mean the quarter ended December. This attributable ounces is probably because GFI now owns more of WAR as opposed to WAR suddenly producing more gold. However, South Deep's production should increase. Interesting article on MoneyWeb today http://www.moneyweb.co.za/mw/view/mw/en/page84?oid=89002&sn=Detail

[#3]

Just adding : Golds can drop just like 2006( I watch the weeklies for this)....ANG is also near major Point and Figure Support.Looking long and hard at that one..###..and generally,the "We're on SELLS"Plats did NOT register much today (P&F-wise)...BIL and AGL at double-top...Trend-leading BANK Index did NOT rally today...Rand/Yen at super-stretch....so I bought some TOPSBU.(stop-loss at 20%)..and here we go for next week.