More on Price Fixing Issues
I am a Gold bull. But I think conduct of executives should be something watched over carefully by the Board. Otherwise we have disasters like Enron and Worldcom happening to the world. Lassonde's comments should be taken very seriously and I hope that some Gold buyers will raise legal objections to this. They are the ones who suffer, you see, when prices are kept high by collusion between companies.
IAU is the Ishares answer to GLD, the Streettracks share tied to the Gold price. Liquidity on GLD is 10 times that of IAU, so one gets better prices on GLD trading (lower spreads). GLD remains the proxy of choice for straightout Gold price bets.
Sanjay John G.
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IAU is the Ishares answer to GLD, the Streettracks share tied to the Gold price. Liquidity on GLD is 10 times that of IAU, so one gets better prices on GLD trading (lower spreads). GLD remains the proxy of choice for straightout Gold price bets.
Sanjay John G.
Subscribe now to The Wall Street Journal and get up to 8 weeks FREE
The Prudent Speculator -- Ranked #1 by Hulbert for 10, 15 and 20 year performance...Click Here!
3 Comments:
Didn't know about IAU.
GLD looks good. Technical sell-off at and I think in Gold prices.
Norma M.
Gold miners have always been price takers, not price makers. Gold supply has been increasing at only about 2% per year and most of the gold that has been mined is still out there and potentially a source of supply. At 2% supply relative to total physical gold, gold miners don't have any real pricing power, let alone a single even large gold mining company. That's why they can opine as much as they want on the price of gold without it raising issues.
Price takers and Price setters are terms which look into the past and not the future. A company or industry which is a price setter can become a price taker depending on market dynamics, e.g. Sudden increase or decrease in demand, birth of or demise of competitors, etc. Witness Oil about 8 years ago. There was widespread fear of bankrupcies in the Oil sector with Oil below $15 a Barrel. And today they are all The stocks to own; Oil is up and headed higher.
Gold and Gold stocks are in a similar state. Depressed Gold prices in the 1990's and early 2000's have lead to very low exploration, and coupled with increasing demands of everything worldwide (the global economy is on fire, especially China and India), there is a classic case of gold price takers increasing becoming setters. You will see how it unfolds over the next few years.
Sanjay John G.
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