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Thursday, December 27, 2012

Jim Rogers' The Current State of Gold's Worth

"If gold stays up this year, this will be the 12th consecutive year that gold rises. That is extremely unusual," says Rogers.

"I don't know of any asset in history that has gone up 12 years in a row without a down year. There may be some, but I don't know about it."

Wednesday, December 26, 2012

Bering Sea Gold CRAZY is Back

New Season Bering Sea Gold Premieres January 4 10/9 C

Preview New Episode Now

Behind the scenes footage revealed on Friday, December 28th, 10/9 C on The Discovery Channel.

Tuesday, December 25, 2012

Little Christmas Cheer for Gold Prices

Conventional wisdom in the gold market has been that when central banks flood the markets with cheap money under quantitative easing programs,gold benefits thanks to its status as an inflation hedge. But that link now appears to have been severed and gold is acting more like riskier assets such as stocks. Stocks have been selling off as fears over the fiscal cliff intensify – if no deal is reached it could topple the US back into recession. Gold shed 60 cents to settle at $1,659.50 an ounce in New York in quiet pre-Christmas trade Monday. The metal regained some of its footing on Friday,after a week that saw the metal give up more than 2% or $35 in value. Gold has been losing ground ever since the US Fed's announcement on December 12 of a major shift in monetary policy.

Wednesday, December 19, 2012

A Discussion on Sluice Box Lengths

These are pictures of KY Goldenrod in Nome Harbor, Summer 2012.  There are two separate sluice boxes that are 20 feet in length.  We run 2200-2300 rpm (35 hp) Kubota engines for each sluice box.  We have had to adjust our sluices numerous times this past season in regards to the sluices quickly clogging with black sand.  We are working out the kinks in hopes of catching more than 75% of the 1-2mm and above and 50% or more of the finer gold in the coming season 2013.  Any suggestions?

Miner #1 asks: What length should a sluice box be?
I understand the width vs. flow issues but not about the length.
Is there a ratio of width to length?
If a 4 foot is good then an 8 foot is better?  At what point is a sluice box too long?

Miner #2 comments:  Keep in mind the faster the water flows over your system the more loss of small gold.  Think of a leaf in the wind, the faster the wind the further the leaf will travel.

Miner #3 comments:  I am a big supporter of long boxes but in the real world a long box doesn't mean a whole lot with respect to recovery ratios and in fact many 3-foot long boxes recover just as well as 8-foot long boxes. I still like long boxes but from a 'scientific' standpoint they aren't neccesary. Modern studies of settling rates of fine gold tend to indicate that a lot of the old studies were flawed and that particles near the bed seldom 'jump' more than a few particle diameters in a typical sluice unless they get picked up by the upper layers of the laminar flow as happens when a large pebble sweeps by. With appropriate classification this isn't a problem so I guess the new 'rule of thumb' would be classify-classify-classify and don't worry about the box length. two-feet is probably long enoug if you classify your materials.  I still prefer to use long boxes but seldom if ever find anything beyond the first 18-inches no matter what type of riffles or mesh is being used. I do think however that power sluices and dredges do need to be at least 48-inches long as they can develop some pretty significant water velocity so a lot of material gets kicked up into the higher water levels.

Miner #4 comments:  I read a widely published in the 1930s account of working placer gold and shoveling in to a sluice box by a mine engineer.  The box was one ft wide and one foot deep running nearly full of water.  He claimed 98% of all his gold was within two feet of where he shoveled in, his box was 8 ft long and he claimed that longer would likely have saved more of the flower size particles but only if a screen classier was incorporated further down the box, the point is that for the most part it comes down to the fineness of the gold  that you are after.  He was shoveling in bank run material with no preclassification and yet 98% of his gold was saved in the first two feet of box.
Obviously the question comes down to one of gold particle size.  The finer the gold the more preclassifying is necessary along with wider box and carpet or burlap to replace riffles.
Only riffles being needed for the course gold along with more water and greater water velocity to keep the gravel from clogging up the box, the course gold quickly finds the bottom and is trapped in the riffles.

Miner #5 comments:  A longer sluice will keep the gold longer, the hydralic miners of old had 100 yard sluices called long toms which they cleaned out weekly, they still blew most of the fines through because it wasn't classified material. Maybe the first sluice runs 1 inch minus material which dumps into a second sluice covered with 1/4 inch or 1/8 inch perforated sheet suspended 1/2 inch over the rifles, Rocks just slide right over perforated sheet (punch plate). You might want to check out Keene engineering, they've got this new black rubber rifled matting to catch the fine stuff ( $8 per 1x30inch strip). I bought a 10 inch wide strip to do the exact same thing (as above), I hav'nt put it together yet but I'm hoping it works on lake Superior black sand.Anyway running the finer material through a second sluice ( or train of sluices) would be the only reason to go longer than 4 feet on a 10 to 12inch wide sluice. Good luck, Bill

The Canadian Prospectors Forum

Thursday, December 13, 2012

Gold Bugs Have Nothing to Smile About Today

Proof Bernanke Can No Longer Move the Gold Price

Gold was little changed on Wednesday – changing hands for $1,713 an ounce in late trade in New York  – despite the momentous announcement by the chairman of the Federal Reserve fundamentally changing US monetary policy.
Ben Bernanke said that the central bank will now target specific employment (6.5%)  and inflation numbers (2.5%) when deciding on policy, a huge change.

                                                                      Ben Bernanke 
But what  should have boosted the price of gold is that Fed's bond-buying program has been upped by $45 billion, bringing total asset purchases to an eye-watering $85 billion a month. And that it expects rates will be near zero until mid-2015.
In the past any mention or even a hint of increased or extended quantitative easing would send investors piling into gold. Anything to the contrary and they would run for the exits.
Not yesterday.
After small swings up and down during Bernanke's comments, gold quickly settled back in its low $1,700s trading range.
The Fed's flooding of markets with cheap money under QE1 kicked off on 16 December 2008. On 15 December 2008 an ounce of gold cost $837.50.
Granted, gold has doubled thanks to the Fed's money-printing.
But if you look at yesterday's lackluster reaction from gold it seems the Fed's actions will no longer move gold any higher.

Friday, December 7, 2012

Morgan Stanley's Top 2013 Picks Gold and Silver

SINGAPORE: Gold, silver and corn will outperform other raw materials next year as a weaker dollar and rising investor demand bolster precious metals while supply curbs aid grains, Morgan Stanley said, listing top picks for 2013.

Silver will track gold, which is poised to gain on low real interest rates, buying by central banks and geopolitical uncertainty, analysts including Peter Richardson and Hussein Allidina wrote in a report on Thursday, reiterating an October call. Corn and soya beans should benefit from harvest delays in South America, they said.

The bank is bearish on aluminum, sugar, nickel and uranium as supplies are set to outpace demand. Morgan Stanley joins Goldman Sachs Group in predicting the so-called super-cycle isn't over. "Higher prices in recent years have brought both a supply and demand response, bringing many to call for the end" of the super-cycle, they wrote. Gold may average $1,853 an ounce in 2013, while silver may be $35 an ounce, Morgan Stanley said.

That compares with gold's average of $1,668 so far this year and $31.1542 for silver. Soya beans may average $15.70 a bushel in 2012-2013, it said.

Wednesday, December 5, 2012

Gold and Silver Lessons from Pawn Stars

Despite being in a bull market for the past decade, precious metals are still widely under-owned by historical standards. The percentage of wealth held in gold and silver today fails in comparison to the last bull market thirty years ago. The investing world is heavily skewed towards paper assets, as traditional education methods focus on these types of investment vehicles far more than others. However, investors looking to diversify away from equities and bonds can learn about hard assets such as gold and silver if they watch close enough.

On Friday, Rick Harrison from the hit television show Pawn Stars appeared on CNBC. He discussed his pawn shop business and how it performs in the current economy, but his view on profits were very interesting in regards to gold. When asked about what kind of margin he tries to receive, Rick explains, “It just depends on what the items are. If you bring me a piece of art that might sit on the wall for two or three years, I’m going to give you maybe 50 percent of what I think I can get out of it. If you bring me a gold coin in the store that I can sell immediately right on the market, I’ll make one percent, I have no problem with that.”

Rick’s statement underlies a key characteristic of gold, which is liquidity. Gold is an asset that can easily be bought or sold in the market without causing a large movement in price or a loss of value. This characteristic helps allow gold to function as a medium of exchange around the world. It can be transported easily from one seller to the next buyer with little debate or confusion. While a painting may have value like gold, its price can be highly subjective and there is no telling when the right buyer will come along and purchase it. Furthermore, gold coins are more convenient to carry in your pocket than a painting. Even though gold as a percentage of held assets is very low, gold demand has been rising.

While Rick did not mention silver in the interview, a prior episode of Pawn Stars showed that the white precious metal is also appealing as a hard asset. In the episode, a young man named Jeff rolls into the Harrison’s family pawn store, located in Las Vegas, with a cart full of silver. In fact, he had 3,372 ounces of silver which he bought 12 years ago near a price of $5 an ounce. Similar to gold, Rick enjoys buying silver because its high liquidity makes it easy to resell. He explains, “I love to buy silver all day, everyday of the week, because there’s a set profit margin. I can sell it on the market immediately.”

The two agreed to a deal where Rick bought Jeff’s silver for about $33 an ounce. The purchase amount was relatively easy to calculate as both gold and silver are a unit of account. Their value is easily measured by weight and the prevailing market price per ounce. The transaction also showed the ability of precious metals to act as a store of value. Twelve years ago, Jeff’s stockpile of silver was worth around $17,000. However, he cashed out at the pawn store for $111,000. In the process, Rick even informs Jeff that silver has many industrial uses. Silver is the best conductor of electricity and nearly every cell phone, computer and television uses silver.

These two segments involving Pawn Stars provide examples of three key characteristics for gold and silver. The two precious metals are a medium of exchange, unit of account and a store of value. These are also requirements for traditional money. Currently, the U.S. dollar is the reserve currency of the world and is easily a medium of exchange and a unit of account. However, since governments and central banks have access to easily increase the money supply, the greenback’s store of value is being attacked by inflation. With more than 5,000 years of history behind them, gold and silver tend to hold their value over the long-term extremely well, as their worth is not eroded by a printing press.

Gold and silver lessons from Pawn Stars
Eric McWhinnie - Wall Street Cheat Sheet | July 30, 2012