Gold

Gold Proving Safe Haven Amongst Bailout Bombs

2008-09-30T16:09:00.001-04:00

Click on the title for a very good read on the current state of Gold and the Dollar.

Gold prices are up

2008-09-29T17:39:00.003-04:00

Well,today the 700 Billion overhaul bill was voted down and the Stock Market took a beating.Gold prices are up quite a bit.I think we'll see the price of gold rise til something about the bank bailout is settled.Global Markets are not doing any better.Those who bought gold a year ago will do very well.

Which Waterways contain gold?

2008-09-28T13:03:00.010-04:00

Which Waterways contain gold?

Generally speaking,waterways that are most likely to contain gold have four characteristics.

1. They should not be dammed.
We know that gold is moved by the force of water and gravity downstream in times of flooding.A dammed river or stream restricts the gold from moving.

2. They should be in a mineral rich area.
Areas in which the rocks show a non sedimentary layering would be an excellent choice.
It doesn't make any sense to look for gold if the geology doesn't support it.

3. Elevation Change. There should be enough elevation change to allow sufficient churning of the waterway materials in spring flooding . A river or stream that does not churn in it's flood cycle has very little chance to move gold.

4. Obstacles in the waterway.
Obstacles in the waterway helps the gold to drop out into pay streaks.This is helpful because the obstacles will slow the water just before and after it.Imagine a river or stream that has no obstacles to slow the water and exposed bedrock that is smooth.Gold will continue to move past these areas til there is a bend to slow the currents.

Where's the Gold in the U.S.

2008-09-28T11:42:00.004-04:00

So Where is all this gold?

States where a significant amount of gold have been found are: Alabama, Alaska, Arizona, California, Colorado, Georgia, Idaho, Michigan, Montana, Nevada, New Mexico, North Carolina, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming. Small amounts of gold have been found in Indiana, Maine, Maryland, Missouri, New Hampshire, Oklahoma, Pennsylvania, Rhode Island, and Vermont.

Gold is many times heavier than ordinary sediments. It takes a lot of force for water to be able to move gold(thanks gravity)downhill, and the gold will tend to drop out in the cracks and crevices, and settle where the water flow slows.With this in mind we can make a educated guess as to where in a stream or river to pan for gold. Dry stream beds can contain placers(pronounced plasser) of gold as well, laid down by long-gone flows of water.Over time the gold will work it's way down to bedrock. Without a source of water nearby,you'll need equipment other than a gold pan to recover it. Metal detectors and dry washing are two methods that come to mind.

Geological reports and maps from the Government will tell you where and in what quantities gold has been recovered in the past. Gold is washed down into placers over time,areas where gold has been found by earlier miners will likely have gold again. The 49'ers didn't get it all. Technology has advanced allowing profitable searches for gold bearing material on old claims. One more reason for checking government records before hunting for gold,is that some public lands are off limits to prospecting, while other areas have been claimed by earlier prospectors.

My sources for this post: Gold Mining in the 21st Century, by Dave McCracken; You Can Find Gold with a Metal Detector, by Charles Garrett & Roy Lagal; Dry Washing for Gold, by James Klein.

World Gold Demand

2008-09-26T20:19:00.003-04:00

Four major sources of demand for gold:

1) Jewelry Industry: The largest source of demand is the jewelry industry. In recent years, demand from the jewelry industry alone has exceeded Western mine production. This shortfall has been bridged by supplies from reclaimed jewelry and other industrial scrap, as well as the release of official sector reserves. Gold's workability, beauty, and worldwide appeal make this precious metal the favorite of jewelers around the world.

2) Industrial applications: Besides jewelry, gold has many applications in a variety of industries including aerospace, medicine, electronics and dentistry. The electronics industry needs gold for the manufacture of computers, telephones, televisions, and other equipment. Gold's unique properties provide superior conducting qualities and corrosion resistance. In dentistry, gold alloys are popular as they are resistant to corrosion and tarnish. For this reason gold alloys are used for crowns, bridges, gold inlays, and partial dentures.

3) Governments and central banks: The third source of gold demand is governments and central banks that buy gold to increase their official reserves.

4) Private investors: Finally, there are private investors. Depending upon market circumstances, the investment component of demand can vary substantially from year to year.

Article source: Compliments of the World Gold Council

Whats a Troy Ounce?

2008-09-26T18:16:00.011-04:00

Troy weight: The system of weights used to weigh gold,silver and other precious metals.It is believed to be that it was a system of weights used at the ancient fair of Troyes, in Champaign, France The troy ounce is supposed to have been brought from Cairo during the crusades. In this weight the pound is divided into 12 ounces, the ounce into 20 pennyweights, and the pennyweight into 24 grains; hence the troy ounce contains 480 grains, and the troy pound contains 5760 grains.

Metric Conversion

1 Troy Ounce = 31.103 Grams
1 Pennyweight = 1.555 Grams
15.432 Grains = 1 Gram
1 Grain = .0648 Grams

What drives the prices of gold ?

2008-09-26T08:15:00.004-04:00

The most important driver of the gold price over the medium and the long-term is the relationship between the US$ and the other major currencies. The official link between gold and the Dollar was broken in 1971 and the trends in the US$ and the gold price have been in opposite directions. We can also look at the gold price relative to the Swiss Franc. We do this because the Swiss Franc is the currency with the highest positive correlation to the gold price.

In the short-term the influences on the gold market can vary from one week to the next and can range from selling by the banking community specifically designed to suppress the gold price(profit taking), to news/propaganda, to the medium/long-term influences mentioned above.

If you want a easy answer: Primarily gold trades inversely to the US dollar. The dollar is down so gold is up.With the dollar being so weak,gold will remain high til the dollar rebounds.

Comments welcome,for i know there is more to the story than what i have touched on.

Welcome to the Gold Blog

2008-09-25T22:46:00.003-04:00

Hello,and welcome to The Gold Blog.The dollar is falling and the economy is in shambles,people thoughts are turning to Gold once again.I want to explore the ins and outs of this investment,the history of Gold and the methods used by gold investors.Some people buy gold stocks,some gold coins or bullion.There is also those crusty old gold prospectors who goes out and find his or her own.I hope to interview some of these miners and get some insight on their methods for bringing the gold home.If your curious about the subject,check back often.