Good time to buy Gold ?
March 14th, 2009 | by winsonlee |Gold VS Sino Gold
Gold vs Lihir Gold
Gold has reached its $900 level on 9th March after four weeks. Gold has dropped 73$ since the 20th Feb high at $1007.70. Exclude Newcrest Mining (NCM), the next largest gold company will be Lihir Gold (LGL) followed by Sino Gold (SGX). LGL and SGX pretty much fluctuate according to gold price. Although the current economy is not too good, but as long as the gold price is supported, the same will apply to LGL and SGX. If gold found its support at $900, from the chart, LGL will find its support at $3 and SGX at $5. It is expected that gold will reach $1200 and $1400 range.
As on 17 Mar 08 Gold price has reach its all time high at $1011.25. During then SGX is worth $8.18 and LGL is worth $4.37. As on the Feb 09 high, LGL only manage to reach $3.56 and SGX is at $5.98. The peak of the gold price at mar 08 is nearly the same as the on in feb 09 but the share price for both the companies are still far below the mar 08 high.
US is printing money to further pump in to their financial sector. Everyone is foreseeing that inflation is the next disaster that going to hit the world. Inflation happens because of the increase in the supply of paper money in the market. Inflation will decrease purchasing power. Increase of money supply to the market will devalue the currency in a country as well. The next best thing that people will do is to buy Gold. With the limited supply of Gold and the increase demand of gold will push the price even higher. Especially during current economy situation, uncertain investors will definitely turn to gold as a hedge against unforeseen disasters.
So according to the existing economig situation and the share price of LGL and SGX, for me i feel that it is definately a good buy.
