Aussie Gold Sector Shines Bright

By Neil Charnock & Rowan Charnock


History Always Repeats

Although gold had been rumoured to have been found in Australia as early as 1814, the first gold fields did not appear until thirty years later. Gold discoveries were not considered blessings in the pre 1850’s Australian convict society as the authorities believed gold fever could potentially cause anarchy in the small fledgling British colonies.

How things have changed since those days.  The gold rushes in the second half of the 19th century would completely change the face of Australia. Before 1851, Australia’s combined white population was approximately 77,000. Most of those had been convicts sent by ship over the previous seventy years.

The gold rush completely changed that however. In the two years that followed Edward Hargraves’ discovery at Bathurst, Australia’s population increased to over 540,000. 370,000 immigrants arrived in Australia’s ports during the year 1852 alone.  That is right, gold is the very reason Australia grew as a nation.

The flow of convicts to Australia’s shores stopped. It suddenly seemed like a foolish idea (and indeed no longer a punishment) to give a free boat ride to Australia’s rich gold fields to anyone who had committed a crime in the UK.

The incredible wealth that poured out of Victoria was unthinkable. When the ships returned to England carrying eight tonnes of Australia gold, the London Times declared in 1852: “…this is California all over again, but, it would appear, California on a larger scale…”

Incredibly, Victoria alone produced more than a third of the world’s gold produced in the 1850’s. By 1871 the population of Australia had increased from 540,000 to a whopping 1.7 million. These are just some of the snippets of information of interest now appearing in the GoldOz Gold History section under construction.

Victoria was not the only State in Australia to see massive gold interest. Gold was initially reported to have been discovered in Western Australia at Fly Flat near Coolgardie in 1892 by Arthur Bailey and William Ford.  Bailey reported that he had mined 554 oz of gold on that day and received a “reward claim” of 20 acres of mining lease.

The Kalgoorlie gold rush began in June 1893 with the discovery of rich alluvial gold deposits near Mount Charlotte. This distracted prospectors away from Coolgardie in a similar fashion to other discoveries in the Eastern States a few decades earlier.

From an historical perspective, the Coolgardie gold find proved to be one of immense national significance. During the 1890’s, Eastern Australia experienced a severe depression and people flocked to the areas of Coolgardie in the hope of a better life.

Rebirth of the Gold Rush is Here

Today we have central banks being net buyers of bullion as gold reestablishes itself as a credible and essential part of the global monetary system.  Today the gold mining sector in Australia is a major export earner and a vital part of our economy.  It supports many country towns providing employment and even tourism benefits.

Western Australia is the major force producing a major proportion of Australia’s gold production today which is partly why I studied this state to select a target for my first major GoldOz Educational Report back in August 2009. The gold rush is on and many stocks have blitzed it since October and November of 2008 when I called a bottom.  However this report covered a stock that tripled since August 2009 and outperformed many other gold companies.

We called the breakout in the Aussie gold sector and warned for many months ahead that this would happen. The other significant gold regions are spread across Australia and a part of our study as we unearth the significant miners in today’s era. We called the break out timing of gold itself 9 months ahead in reports at the beginning of 2009.

The public are only just getting the fact that gold is back.  Companies, investors and web sites around the world are booming on the back of gold.  The web site that you find this article on is doing investors, and every body that will listen, a huge favor.  They provide you with an invaluable support in bringing you the vital data from leading writers and services like on-line gold and bullion sales so you can protect yourself and financially prosper from related investments.

Current Conditions

The gold price is currently consolidating around the US$1100 – $1150 level.  The pattern developing is larger than the September 07 to March 08 rally which was larger then the August 05 to May 06 rally. This is quite normal for a fractal pattern in charting terms. Bull markets always do their best to shake you off but I see no reason to change my tactic or stance at this stage and confirm that I still see gold headed for around the US$1400 level in this first half of 2010.

Energy is still of great interest to us at GoldOz because it is a commodity.  We have chosen to branch into energy stocks but only on a highly selected basis and have just released a major energy stock report for Gold Members only at this stage.  But it will be made public later next week and set the stage for further reports from our Due Diligence department in the Gold Members area.  Energy remains one of the best investment segments of our time along with gold, silver, food, fertilizer and commodities that supply new technologies.

Our stock index charts are all showing consolidation and accumulation technicals.  We cover three index segments within the Australian gold sector; Gold Producers, Emerging Gold Producers and Gold Juniors Index thanks to Nick at Sharelynx.  A visit to our site shows these in the free access area for readers of these articles.  Continued price strength combined with diminishing RSI shows that the volume has been weakening however the bid is still there holding up the price.  There is still loads of upside this does not look like a top or end of rally to me.

I am just about to update the chart set for Members and have had a glance at several noting that they look to have almost completed brief consolidation phases also.  Since I see no serious problems in the gold stock charts I conclude that gold and these stocks are still on course.

Good trading / investing.
Neil Charnock


GoldOz has developed a basic Member area (news only) and a Gold Members area with substantial investment tools.  GoldOz web site is a growing dynamic resource for investors interested in PGE, silver and gold companies listed in Australia, ASX share quotes, Aussie Gold Index charts, brokers, bullion dealers in addition to the company research + investment tools via our paid Membership services.

Neil Charnock is not a registered investment advisor. He is an experienced private investor who, in addition to his essay publication offerings, has now assembled a highly experienced panel to assist in the presentation of various research information services. The opinions and statements made in the above publication are the result of extensive research and are believed to be accurate and from reliable sources. The contents are his current opinion only, further more conditions may cause these opinions to change without notice. The insights herein published are made solely for international and educational purposes. The contents in this publication are not to be construed as solicitation or recommendation to be used for formulation of investment decisions in any type of market whatsoever. WARNING share market investment or speculation is a high risk activity. Investors enter such activity at their own risk and must conduct their own due diligence to research and verify all aspects of any investment decision, if necessary seeking competent professional assistance.