Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Thursday, 6 November 2014

Gold price a right bang-up job

Long run precious metals

We have taken a short look in recent days at long run gold prices, including here and here, which showed that over the long term, gold has performed reasonably well, albeit without producing a yield. Returns have exceeded 5 percent per annum over the long haul.

And silver has returned more than 6 percent per annum, with some wild price spikes along the way.

London gold market in a real two-and-eight

But it's the short term markets which are causing excitement and consternation in spades for traders at the moment.

Gold live data flows saw prices way down at US$1139/oz earlier, shedding yet another 2,5 percent before looking somewhat relieved to have found some willing support. 

I'm in the Old Dart myself this week (hence posting at apparently ungodly hours) and by the time the London 3pm gold fix rolls around we might expect to see prices back at around US$1145/oz so.

From a technical perspective, the gold chart has lost its Khyber, so it may pay to stay stewed pruned...

Silver is getting absolutely pebble dashed as well, down by nearly 5 percent at one stage, before a squeeze rebounding (at the time of web-logging it's now down by 3 percent at ~$15.50/oz - see above for how this compares to the market peak). 

Moving on from these woeful forays into Mockney slang, we can see that even by market forecasting standards, gold price predictions have been fearfully unsound over the past few years with prices off ~40 percent since their peak.

Granted, in any market prices can remain irrational longer than market participants can cling to their sanity, but while further falls look plenty likely, prices should find a natural floor in time.

There are no hard and fast rules when it comes to fair market valuations, but all-in sustaining or production costs might be a reasonable enough place to start.