Mark O’Byrne submits:

Gold

Last week’s early September relief rally continued this morning as equities have risen again in Asia and Europe. Gold is one of the strongest currencies in the world this morning, along with the yen. While the dollar is flat, sterling has fallen sharply against all currencies on UK economy concerns and gold in sterling terms has risen from £806/oz to £811.20/oz (see Cross Currency Table).

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Robert Kientz submits:

Gold and silver, like other commodities, have an intrinsic value, which is not arbitrary, but is dependent on their scarcity, the quantity of labour bestowed in procuring them, and the value of the capital employed in the mines which produce them.

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Jeff Nielson submits:

Sophisticated precious metals investors are well-aware of the rampant manipulation of the gold and silver markets. They are also generally aware of the reason for such manipulation. A rapid rise in the price of gold and silver is like an economic “warning siren” – alerting savers that their wealth (i.e. the purchasing power of their currency) is being rapidly eroded by the monetary depravity of bankers.

In a world with a “gold standard”, this isn’t a problem. With currency which is redeemable in gold (or silver), the value of a currency (i.e. its purchasing power) is anchored by the gold and silver backing it. However, in a world of nothing but “fiat currencies” (i.e. money backed by nothing), a loss of public confidence in paper “money” is the worst nightmare of bankers.

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Marco G. submits:

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I’ve been an investor in Gold Resource Corporation (GORO) since October 2006. I advised them for just under two years, bought shares in the open market, and have since watched their dream become a reality. The stock itself is arguably the best performing gold stock during the 2006-2010 timeframe. The GORO story has everything you look for as a gold stock investor: 1.) A new low cost gold producer 2.) High grade deposit that is still 98% unexplored 3.) Low cost production (sub $200/oz cash cost) 4.) Management owns 20-25% of the company 5.) 1/3 of cash flow going to a dividend [already paid two special dividends since 7/1/10] 6.) Fantastic share structure 7.) 9 year mine life which will be expanded.

First years production is anticipated to be 70,000 oz at a $200/cash cost increasing to 200,000 ounces at a 0 cash cost by year 3. At $1,000 gold, with just over 52 million shares fully diluted, GORO will have $1.07/share in operating cash flow in year one, growing to over $3.81 OCF/share by year 3. Management’s goal is to pay 1/3 of operating cash flow out as a dividend so one could expect dividends to grow from $0.36 – $1.27 per share during this 3 year timeframe. The company has already announced $0.06 in dividends since the start of commercial production on July 1, 2010 which tells investors management is serious about paying them.

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Streetwise Blog submits:

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Frank Holmes submits:

I’ve done a number of interviews on gold recently and the number one question I get most from reporters is—can gold prices go higher?

My answer is yes.

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Goldcorp (NYSE:GG) [TSX:G], the world`s second largest gold producer by market capitalization, has announced that it will acquire Australian mining business Andean Resources (ANDPF.PK) [TSX and ASX: AND], a company whose main asset is its Cerro Negro gold project in Santa Cruz, Argentina, in a C$3.6 billion share and cash deal, beating an earlier $3.2 billion offer by Eldorado Gold Corp.

Both companies are vying for Andean`s Cerro Negro gold project, which is an advanced-stage, high-grade vein system, comprising 215 square kilometers. It currently has indicated resources of 2.54 million ounces of gold and 23.56 million ounces of silver, while inferred resources total 523,000 ounces of gold and 3.12 million ounces of silver.

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Kinross Gold [TSX: K] (NYSE: KGC) and Red Back Mining (RBIFF.PK) [TSX: RBI] have both rejected shareholder advisory business Institutional Shareholder Services’ (ISS) negative recommendation of the two gold mining companies’ potential merger.

In early August, Kinross announced that it would acquire the remaining shares of Red Back that it did not already own, in a US$7.1 billion deal, or C$30.50 per Red Back share.

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Wealth Daily submits:

By Luke Burgess

Due to a sharp decrease in foreign exchange reserves following the Indo-China War in 1962, the government of India enacted the Gold Control Act.

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