Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Sunday, March 18, 2007

Interesting Gold Factoids (Sunday Edition)

1) Analysis by Metals Economics Group shows exploration budgets increased to almost $7.13 billion in 2006 —the fourth consecutive annual increase since the bottom of the exploration cycle in 2002 and the highest total since MEG began these reports in 1989. The 2006 edition analyzes this year’s budgets for 1,624 companies (using a $100,000 cutoff), which MEG estimates covers about 95% of worldwide commercially oriented nonferrous expenditures.

Adding in the other 5% of companies gives total expenditures for commercial nonferrous metals exploration of $7.5 billion, surpassing the previous high of $5.2 billion in 1997 to set a new pinnacle of global nonferrous exploration.

2) From Reuters -- Worldwide investment demand for gold is forecast to remain at historically high levels in 2007, with investors continuing to buy large volumes of gold in bullion, coin and jewelry. CPM's 2007 Gold Yearbook report predicted investors would likely add another 39.7 million ounces to their gold holdings in 2007, after investing 43.5 million ounces in 2006. What’s more, central bank gold sales fell to 11.4 million ounces in 2006, down from 20.6 million ounces in 2005.

3) The first gold ETF in India is Benchmark Mutual Fund’s Gold BeES. It launched on February 15.

There are several advantages of investing in GOLD ETFs:

  1. No hassles of safety
  2. No resale concerns
  3. Quality Assurance
  4. No making charges
  5. More tax efficient in absence of wealth tax and long-term capital gains tax

4) The second gold ETF in India is rolling out now, launched by UTI Mutual Fund. The new ETF is called, naturally enough, UTI Gold Exchange Traded Fund. According to Rajesh Bhojani, President of Marketing for UTI Mutual Fund, about 30% of the gold market in India is investors. I wonder what the new gold ETF will do to that percentage?

5) Gold is presenting the best buying opportunity since January…


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