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Azumah Resources (ASX:AZM) is looking good for next year. We have just had some good drilling results, and the next are due at the end of January with the quarterly report. More will follow on a roughly monthly basis through to the rainy season in September.
They are working flat out towards the Bankable Feasibility Study which we should see in the first half of the year, possibly even by April. This could contain the next resource upgrade. Azumah now has $37 million in the bank, so is cashed up for the year and can focus on the job in hand.
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Einschätzung zu Gold
But you can't DO anything with gold!
The gold price is flirting with the $1400 level again, and has every reason to keep rising.
There are many other reasons to be bullish gold. Forgive me if you have seen this before, but I have yet to see a better summary of why gold is a good investment: Sprott's 17 reasons.
Last week I had dinner with a mate in the city who thinks gold is the most pointless commodity on the market, and that anyone investing in it needs their heads checked. For the record I'm not a gold bug, just an investor looking for commodities with good reasons to rise. But I played the part of the gold-bug for the sake of a good argument.
Well, it was a sparring match that went on until stumps, and we had to be broken up a few times. Nor for the first time, it struck me how razzed up the gold-haters get. I really don't get it! You don't see the merit of gold. Ok! I don't see the merit of 'So You Think You Can Dance' but you won't see me protesting in the street about it (too often).
His main arguments were that; a) it's inert and doesn't do anything (accompanied with an excellent impression of a monkey bashing two gold bars together), and that; b) it doesn't pay interest. Both are correct.
But when did being inert stop something being valuable? Have you ever seen how much some mad punters spend on art? A few paintings have reached more than $100 million in recent years. Besides, being inert serves to protect gold as a long term investment. Plenty of gold in today's market was dug up by Greeks or Romans, and has been remelted a dozen times since.
As for interest, I don't much fancy the "risk free return" of US treasury bonds. Anyway, I think "return-free risk" is a better description for what you get. Either way the capital return on gold in the last ten years leaves the interest from bonds in the dust.
Furthermore, bonds aren't shiny. And they don't look nearly as good next to my guns in my mountain hut in rural Tasmania (Just kidding! It's in rural Victoria).
Gold is currently in a rally that has lasted ten years, and is showing no sign of slowing down yet. This is what it has done over the last thirty years. Thanks Murray from Slipstream Trader for this chart, and the fifty others he's sent me this year.
I'm no technical boffin, but I'm spotting a bit of a trend over the last ten years. Arguing against this is like arguing with gravity. Even during the GFC the price stayed above its 35 week average.
Of course, bubbles have happened before and trends have reversed. But until the dude that makes my coffee can tell me the gold price, I will sleep well at night in the knowledge that we are not in a bubble yet.
Something to look out for in the slightly nearer-term, is a seasonal gold price rally. On average the gold price does most of its work between September and February. So statistically we should be seeing further price rises for a few more months.
Averages can be misleading, of course. If you have one hand in liquid nitrogen, and the other in a red-hot fire, on average they are the right temperature. But if you look over a few years of gold charts you can see these patterns are fairly regularly.
This is because gold's two biggest markets are India and China, and a lot of buying is done on the basis of annual festivals in these countries. Chinese new-year is in February, and buying should continue til then at least. It's a nice touch that next year is 'year of the rabbit' symbolising caution and conservatism. With inflation looming as well, the stars are all aligning for good Chinese buying.
Demand is on the up, and for me the real game changer is this increased demand from China. Demand is already large, but has the potential to get much, much bigger. Particularly as the government continues to deregulate the market and encourage ownership. The Chinese historically have a cultural relationship with gold, and so with a whole tranche of newly wealthy middle classes being told it is good to own gold, they are taking to it like a duck to water. The potential effect of this latent demand makes it impossible for me to be bearish.
But the bottom line is that until we see some sensible currency management from Central Bankers, I will stay bullish gold. I saw a sticker on a hot-air hand-drier last week that read 'press here to hear a message from your local politician'. It took a minute for the penny to drop (it was Sunday morning). When i pressed the button I got lots and lots of hot air!
Funny - But I thought it could have read 'Press here to hear a message from the Fed Reserve'. Well, my favourite blast of hot air from the Bearded-One this year was this. Even he's not quite sure whether they are printing money or not! Feeling inspired by the most powerful institution in the world?
No? What to do about it then?
BUY GOLD!
