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Gold-Silver Ratio Changes Course on Rising Physical Silver Demand

2012-01-10T14:30:00.000-08:00

The gold:silver ratio may have found resistance at 1:59, suggesting silver prices could outperform gold in coming months. The last time we saw a similar technical pattern developing was in June 2010, before the ratio moved from 1:70 to 1:32 in April 2011. During that time, silver prices jumped 180% compared to gold's more modest 58% increase. Now the gold:silver ratio appears to be reversing in silver's favor, well supported by strong demand that continues to vastly outpace that of gold.

Although the World Gold Council thinks global gold investment demand in 2011 rose 33% yr/yr, the Silver Institute says investment demand for silver probably increased 66%. Those projections are further backed by evidence of increasing physical demand, which pushed silver coin sales across the world to record levels. The U.S. Mint, for instance, sold 15% more American Eagle silver bullion coins in 2011. That may not seem like much, but 2010 was also a record year for silver coin sales. By comparison, gold American Eagle coin sales were actually down about 18% in 2011 (in terms of total ounces, not number of coins). As we reported back in July, Australia's Perth Mint's silver coin sales from January to June alone were 66% higher than all of 2010, and in September, the Mint said sales were still at "unprecedented levels." Australian gold coin sales, however, were not nearly as high.

Update on Silvercorp Metals Fraud Allegations

2011-09-14T07:22:00.000-07:00

Although some of our readers and clients have grown concerned about yesterday's considerable drop in the value of Silvercorp Metals' (SVM) common shares, we maintain our view that the company is a legitimate and efficient silver mining operation in full compliance with the regulations of the countries in which it is publicly listed.

The major decline was partially due to: (1) abnormally high short postions (over 20 million shares); (2) unusual options activity (400% above average yesterday); and (3) overall diminishing investor confidence in the company following the release of an anonymous letter distributed two weeks ago. We believe the allegations in said letter to be purely bogus and unfounded as no clear evidence was presented to support such claims. Silvercorp's management has also refuted charges that it was inconsistent in its regularly audited financial filings with China's State Administration of Industry and Commerce ("SAIC") and the Securities and Exchange Commission (SEC), and has provided proof of its cash holdings and silver resource estimates by a qualified third-party expert. Moreover, the company has been fully cooperative with recently initiated investigations by the Ontario Securities Commission ("OSC") and the British Columbia Securities Commission ("BSCS").

Yesterday morning, however, the company was hit with fresh allegations of fraud by a "little" blogger who is facing defamation lawsuits by two U.S.-listed Chinese manufacturers that he also falsely accused of fraud earlier this year. The blogger claims he counted (for a very short period of time) Silvercorp's daily truck deliveries to mills and somehow came to the conclusion that production activity was about a third less than purported, amongst other unreasonable allegations.

It is not surprising that these false reports have come after Silvercorp reported record silver production at higher profit margins than ever. To some, this seems just too good to be true. Nonetheless, there is simply no evidence to support any of the bloggers' allegations.

Therefore, not only do we continue to hold our core position in SVM, we took the opportunity today to significantly add to it. At such low prices, we are of the opinion that Silvercorp has quickly become the most undervalued major mining company in the world and is now more attractive than ever--especially considering the company's share buy-back program. Once OSC and BCSC have wrapped up their investigations, we expect the price of shares to begin to move in the direction of our $15 price target.

Palladium Still a Better Bet Than Platinum

2011-08-29T13:01:00.001-07:00

Palladium continues to defy underlying market fundamentals, suggesting it remains sorely undervalued relative to platinum. At less than half the cost of platinum, palladium's absurdly low price is putting more pressure than ever on total global supply. Although nearly as much platinum is mined annually as palladium (only a 7.5% differential, according to USGS data), palladium is in its fifth consecutive year of supply deficit, which widened 500% last year alone, and platinum is expected to enter a seventh consecutive year of surplus.

The recurring supply deficits are partially attributable to substantial declines in annual sales of Russia's state stockpiles, which have long been used to help meet total global demand (and/or suppress market prices). GFMS data suggests that such sales dropped 27% last year, lending some credence to Russian mining giant, Norilsk Nickel's claims that the government stockpiles have been nearly depleted. Russia's state palladium sales will continue through 2012, according to a finance minister, but it's highly doubtful the total will exceed last year's and even more unlikely there will be any sales at all in subsequent years.

Russia's diminishing state stockpiles aren't only to blame. Norilsk, which contributes about 40% of all the world's palladium mine supply, reported a 5% decline in 1H 2011 production to 1.425 M oz. This indicates a possibility that output will be lower for the full year and beyond, as the company has no apparent plans to dramatically increase production in the near future.

Fortunately, other major palladium-producing countries will pick up the slack. South Africa, which also mines roughly 40% of the world's total palladium, is mostly on track to increase total output despite a series of labor disputes and safety stoppages. The third and fourth largest producers, the U.S. (Stillwater Mining Company) and Canada (North American Palladium), have both reported higher output year-to-date.

So, supply should be stable this year; however, it's physical demand that's the real concern. Since both palladium and platinum are used interchangeably in many industrial applications (particularly in the automotive sector), global physical palladium demand is now growing more than twice as fast--and even faster in the world's largest automobile markets. Chinese palladium demand, for instance, increased nearly 46% last year alone, compared to an 8% drop in platinum demand. The country's burgeoning automotive sector may have slowed somewhat in the first half, but recently published figures for June and July show a significant turnaround following the Chinese government's launch of a "Cash for Clunkers" type of program. Auto manufacturing in China is up about 2.5% so far and it's quite likely the country's palladium imports will surpass last year's total.

Indian auto sales surged 30% in 2010, albeit at a slightly slower pace, and production (yr/yr) has grown by double digit percentages every month this year. Similarly, auto sales in Brazil climbed 10% during the first half to a record high. Production seems to be keeping pace and could continue as China's JAC motors, Japan's Suzuki and S. Korea's Hyundai are all planning to launch new manufacturing operations in Brazil. These trends suggest it's likely palladium imports to both India and Brazil will be higher by year's end.

The U.S.' auto industry may have been severely impacted by the Japanese earthquake in March, but palladium imports were still up during the first half with a noticeable 60% yr/yr increase in June, according to preliminary U.S. Dept. of Commerce statistics.

As long as palladium prices remain far cheaper than platinum, we could continue to see deeper palladium supply deficits and growing platinum surpluses (at least in the short term). Because demand for palladium will continue outpacing supply, there's little doubt that prices will at least reach parity with platinum in the years ahead.

Silver Mining Output Falls Amid Surging Physical Demand

2011-07-20T13:33:00.000-07:00

Investment demand for the most undervalued precious metal continues to surge worldwide, but so far in 2011, silver production has not risen nearly as fast. In its annual Silver Survey, GFMS forecasts global silver production at 790 M oz. (+7.4%), but it's highly doubtful the actual figure will greatly exceed 760 M oz. (+3%) because many of the world's top silver producing countries have already reported quite noticeable declines in production during the first half--a trend that is likely to continue.

After a surprising 7.3% drop in output last year, Peru, now only the world's second largest silver producer, continues producing less. Even though official 2011 projections were optimistic, so far the numbers just aren't stacking up:

Silver Miners Become Most Profitable, Undervalued Companies

2011-07-17T17:51:00.001-07:00

As precious metals prices continue to outpace inflation, mining company profit margins have soared. Like most other companies, silver and gold miners have become the most profitable they've been in years. In fact, several are ranked among the world's most profitable publicly traded companies.

The majority of the world's most profitable companies mine silver and/or gold, as either a primary resource or by-product. Two primary silver companies top the list, edging out all of the technology, pharmaceutical and financial giants:

Rank	Company	Industry	Operating Margin
1.	Silver Wheaton (SLW)	Silver	73%
2.	Silvercorp Metals (SVM)	Silver	62%
3.	Changyou.com (CYOU)	Tech	62%
4.	China Yida Holding (CNYD)	Tech	60%
5.	Fresnillo PLC (FNLPF)	Silver	59%
6.	Visa Inc. (V)	Finance	58%
7.	Giant Interactive Group (GA)	Tech	57%
8.	Bullion Monarch Mining (BULM)	Gold	56%
9.	Mastercard Incorporated (MA)	Finance	51%
10.	Baidu, Inc. (BIDU)	Tech	51%
11.	Royal Gold, Inc. (RGLD)	Gold	51%
12.	Southern Copper (SCCO)	Copper/Silver	50%
13.	Nevsun Resources (NSU)	Gold	50%
14.	Freeport-McMoran Copper & Gold (FCX)	Copper/Gold/Silver	49%
15.	Questcor Pharmaceuticals (QCOR)	Pharmaceuticals	47%
16.	Majestic Silver (AG; FR.TO)	Silver	45%
17.	Lorillard, Inc. (LO)	Tobacco	45%
18.	Barrick Gold (ABX)	Gold	44%
19.	Newmont Mining Corporation (NEM)	Gold	44%
20.	IMPACT Silver Corp. (IPT.V)	Silver	43%
21.	Alamos Gold Inc. (AGI.TO)	Gold	43%
22.	China Biotics (CHBT)	Tech	43%
23.	Newcrest Mining (NCM.AX)	Gold	42%
24.	Philip Morris International Inc (PM)	Tobacco	42%
25.	AstraZeneca PLC (AZN)	Pharmaceuticals	42%

Since silver is up 100% since July 2010, having vastly outperformed gold, it should come as no surprise to see so many of the world's few pure silver companies in the rankings. If silver prices continue to outperform, we can expect to see even higher margins moving forward.

Unprofitable over a year ago, Silvercorp Metals' (SVM) operating margin jumped to a staggering 62% thanks to negative cash costs from silver production. Over the same period of time, SVM has significantly increased its net income by 500% and its total estimated silver resource by 3100%. Yet its market value is only up about 40%, leading us to believe that the company has become sorely undervalued -- much like other junior silver miners.

As such, 5 of our top 10 undervalued junior mining companies are primary silver producers, including Revett Minerals (RVM), which may not be nearly as profitable as Silvercorp, but is just as undervalued. With immediate plans to increase silver production by more than 25% at half the cash costs of the previous year and longer term plans of moving its massive 229 M oz. resource at Rock Creek to production, Revett has extraordinary potential to one day become one of the most profitable companies in the world.

Top 10 Advanced Precious Metals Exploration Companies

2011-06-23T13:34:00.000-07:00

In spite of the major correction in precious metals equities that has transpired over the past few months, most exploration companies we follow are still far too overvalued. This is especially true for companies that have made and defined significant discoveries since 2008.

The surge in investment capital from speculators has allowed such explorers to move their big discoveries through the development stage at lightning speeds. With production plans in place, these explorers seem increasingly attractive to mining companies looking to expand through the acquisition of advanced precious metals projects. Unfortunately, there are few good deals out there.

For example, Vancouver-based junior gold producer, Aurizon Mines' (AZK) CEO, David Hall blamed high valuations earlier this spring for his company's inability to acquire any undervalued gold projects specifically on track to produce, within the next 3 years, at least 100,000 oz. annually. The chairman of the world's second largest gold producer, Barrick Gold (ABX) agreed that precious metals exploration company valuations have become so high that acquisitions have been hard to justify to boards and shareholders.

Our Top 10 Advanced Precious Metals Exploration Companies not only boast control of large, prolific, near-production projects in mining-friendly regions, they're also well financed and free from long-term debt -- and of course undervalued compared to their peers. Now that these companies appear to be extremely oversold, it may be a good time to look into our top picks.

RBY shares, like most equities, bottomed last summer, providing investors great
returns by the end of 2010

You may recall that last year, late June through early August provided an excellent opportunity to invest. This year appears to be no different, suggesting that a positive reversal could be imminent and, as usual, the most undervalued companies will provide us the best returns.

See Full List of Top 10 Advanced Explorers

The Most Undervalued Gold Royalty Company Shows Signs of a Reversal

2011-05-24T11:48:00.000-07:00

After Royal Gold acquired International Royalty Corporation last year, it left the market with just one undervalued gold royalty company from which to choose--Bullion Monarch Mining Inc. (BULM). Presently valued under $ 50 M, the company boasts:

- growing income streams from royalty payments, including a 1% net smelter royalty ("NSR") from the world's largest gold miner, Newmont Mining (totaling $ 4-5 M annually from output at the Leeville Mine in Nevada ).

- a 100% interest in Dourave, an undervalued Brazilian precious metals exploration company that will release a new resource estimate later this year.

- a 100% interest in property in Utah's mineralized Oquirrh mountains, between Kennecott Utah Copper's Bingham Canyon Mine and Barrick Gold's Mercur Gold Mine.

- an 80% interest in EnShale, a petroleum exploration company that holds the estimated resource equivalent of 667 M barrels of oil; Enshale has an "edge" over big oil companies because it mines oil shales, which could be more efficient than pumping.

- cash reserves and no debt.

CONTINUE >>

Soros, Other Billionaires Like Gold Miners and Explorers

2011-05-22T16:07:00.000-07:00

Weeks after George Soros sold 99% of his GLD (SPDR gold ETF) holdings, the media has been awash with misleading headlines such as "Is Soros Right to Get Out of Gold?" and "'Ultimate Bubble' - Soros Sells Out of Gold".

The truth is that Soros is not completely "out of gold" -- he seems to be following other influential billionaires who continue to invest in mining and exploration companies. He maintains 3.4 M shares of emerging gold exploration company, NovaGold Resources Inc. and 1.38 M shares of top 10 miner, Kinross Gold and 21,000 shares of Eldorado Gold. However, Soros increased his position in North American Palladium, which expects to double gold production this year, and he initiated small positions in diversified major miner, Freeport McMoran Copper & Gold, Inc. and gold explorer, Rubicon Minerals.

Soros is not alone. The world's richest man, Carlos Slim Helu produces gold in Mexico, through his Grupo Frisco, which continues to
grow its operations. In January, the company launched an IPO for a spinoff mining venture, Minera Frisco, after announcing plans in November to invest in other Latin American countries. There are even rumors that Slim might attempt to acquire Mexican miner, Fresnillo Plc, which produced nearly 100,000 oz. last year.

CONTINUE >>

Avoid Soaring Silver Premiums

2011-05-02T05:52:00.000-07:00

Silver finally hit an all-time nominal high last week of $49.51 on soaring global investment demand. The white metal has become so popular that investors are willing to pay higher premiums than ever for physical exposure.

In spite of market prices, investors in the Sprott Silver Trust, for example, have been paying over 20% more per ounce. The Chicago Mercantile Exchange/MF Global increased the margin on one 5000 oz. silver futures contract to 11 percent of its value. Premiums for the most popular silver bullion coins, American Eagles seem to average 5-10% or more.

**Walking Liberty Halfs Don't Come with the High Premium**

Notwithstanding, it's still possible to acquire physical silver at market prices through very unpopular circulated, common-date Walking Liberty Half Dollars, which are 90% bullion coins minted from 1916-1947 that contain .36169 oz. pure silver. As of Friday's market rate (approximately $48 per oz.), the metallic content of each coin was worth $17 each and they were available for exactly that price via many coin dealers and private sellers (especially on ebay)..

It is certainly worth considering this option because it has recently been one of the only ways for bullion investors to avoid soaring premiums (bear in mind that there are several scarce dates that carry added value).

Silver Surpasses $40, Moves Closer to Parity with Gold

2011-04-11T01:48:00.000-07:00

**Silver coin premiums now average over 10%**

Since we called a major reversal in precious metals prices on February 8, silver has surged roughly 35%, surpassing $40 for only the second time in history. Although a correction will soon follow, silver is nowhere near topping out, and will continue to outperform gold until parity is reached.

Some PM analysts think our bullish projections are oblivious to silver's "downside risk." Shaken out of the silver market in 2008 after the massive, but quick 65% price correction, such analysts prefer investing in gold which seems to retreat less than silver during global market selloffs.

Notwithstanding, silver prices fell only 1.67% over just one week during last month's major selloff, signaling it is no longer as reactive to industrial demand as platinum, which tanked nearly 7% over a longer period of time.

CONTINUE >>

The American Gold Rush Moves Back East

2011-03-22T04:22:00.000-07:00

With gold prices at all-time highs, exploration companies in the U.S. are looking everywhere for gold. Although Nevada has long been the key place to go, the biggest new finds of the past decade have been elsewhere. Most investors are familiar with the huge deposits found in Alaska, but few are aware of the major re-discoveries of enormous gold deposits on the East Coast--where the first American gold rush began.

CONTINUE >>

Precious Metals Reverse Downtrend as Investors Rush to Buy on the Dip

2011-02-08T13:37:00.000-08:00

It seems to be a good time for adding precious metals to your portfolio--and we aren't the only ones who think so. A China central bank official expressed (coincidentally on Feb. 3, the start of the Chinese New Year) the need to buy gold and silver given presently low prices.

Bullion traders in Hong Kong and London recently reported that Chinese investment activity has surged over the past few weeks. Since we are in the middle of Chinese New Year festivities, this trend is likely to persist. But China isn't the only place seeing considerably increased buying activity:

- The world's largest gold consumer, India reportedly imported roughly 40 tonnes last month (an 18% increase from a year earlier), just ahead of the upcoming Indian wedding season.

CONTINUE >>

Lynas Corp Surges as World's Rare Earths Supply Gets Tighter

2011-01-13T12:39:00.000-08:00

Last August, we told investors to consider Lynas Corp (LYSCF), which controls one of the world's largest known rare earths metals deposits. Since then, the price of shares have skyrocketed well over 200%.

Even more astounding than that, China recently announced that it would cut its 1H 2011 rare earths export quotas by 35%--putting the spotlight back on non-Chinese rare earths companies.

You may recall that China's Ministry of Commerce released a statement in November indicating that 2011 quotas would decline, but only slightly. In fact, the Ministry of Commerce went as far as denying reports that quotas would be cut over 30%. So why is China reneging?

CONTINUE >>

Top 10 Reasons to Own Silver in 2011

2011-01-03T05:41:00.000-08:00

After a strong year, silver started the first trading week of the new year at $31/oz., up over 100% since our February buy alert. Silver prices have not only reached their highest levels in 30 years, but have seen their biggest annual gains in as much time.

Although a short term correction is possible, we expect silver prices to eventually climb considerably higher by this time next year for all of the following reasons:

10. Silver is both a precious and industrial metal. Unlike gold, which has little industrial demand, silver has myriad industrial uses, but has always and continues to be used to preserve wealth.

9. Silver conducts heat and electricity, reflects light better than any other metal. As such, silver is a component in practically every electronic device we use. As wealth continues to expand in BRIC countries, their appetites for electronics will continue to grow, placing further strains on the already tight silver market.

CONTINUE >>

Rubicon Minerals Proves It's Got the Gold

2010-11-30T08:56:00.001-08:00

In August, we called a major positive reversal for shares of Rubicon Minerals (RBY) and told investors to expect another buying opportunity "closer to $3.60" before the release of its F2 Zone (a small portion of the Phoenix Gold project at Red Lake, ON) resource estimate. Shares retraced to $3.50 last month and are now at $6.04, representing a 70% increase. In total, RBY has advanced well over 600% since our 2008 buy alerts.

The company reported yesterday on its NI 43-101 compliant inferred resource estimate of 4 million ounces Au. Bear in mind that this is a preliminary estimate that does NOT take into account over 41,000 meters of drilling completed over the last 4 months including remarkable assays of 568.9 g/t Au over 2.5 meters and 1,406.8 g/t Au over 1 meter--among the world's best of the year.

CONTINUE >>

Top 10 Reasons Gold Is Going Higher in 2011

2010-11-15T04:23:00.000-08:00

Gold prices set last week a new high of $1,424, over 35% higher than its low earlier this year. This bullish trend ending with heavy selling on Friday, has lead many investors to assume that gold has reached its peak. However, the bull market is far from over and prices will go even higher into 2011 for all of the following reasons:

10. Major Global Investment Banks Also Expect Higher Prices. German and French financial giants Commerzbank and Societe Generale recently boosted their 2011 gold forecasts. In the U.S. the outlook is even more positive as JP Morgan recently said it expects gold prices to remain above $1400 throughout 2011 and Goldman Sachs expects gold to soar as high as $1650.

9. Billionaires Still Bullish on Gold. As we reported earlier this
year, a majority of billionaires surveyed by Forbes had favorable opinions on gold prices. There's one billionaire, Thomas Kaplan, who committed a majority of his hedge fund's assets solely to gold investments. John Paulson, recently stated that he has 80% of his assets in gold. However, the world's richest man, Carlos Slim, is literally digging for gold with his company's subsidiary, Grupo Frisco, which plans to open a handful of mines this year.

8. India's Gold Imports Increased Despite High Prices. Indian gold jewelry demand this Fall has remained robust even though analysts expected high prices would deter buyers. Gold's recent thrust above $1400 coincided with the peak of India's Diwali religious festival which has historically spurred jewelry purchases. Even amidst record prices, India imported over 43 tonnes of gold in October, up 19% from 2009.

CONTINUE >>

Silver & Palladium Continue to Outperform

2010-10-17T21:13:00.000-07:00

While gold and platinum continue to attract all the attention, the much more unpopular precious metals--silver and palladium--continue to be, by far, better investment options. Thanks to increasing demand and growing supply concerns, silver and palladium are both up about 50% since our buy alert earlier this year. By contrast, gold and platinum prices are only up about 15%.

As we frequently point out, all precious metals remain undervalued, but silver and palladium are more undervalued compared to both gold and platinum respectively. In April, we suggested that there really is no reason why palladium should not be trading at the same price as platinum. Both have similar annual supply levels, are indifferently used in automotive catalytic converters and as some jeweler's say, "palladium is the same color but less than half the price." However, palladium is facing supply concerns that platinum has yet to bear. Norilsk Nickel, the world's largest palladium producer, reiterated on October 8 that it expects Russia's (which supplies over 60% of the world's palladium) government palladium stocks to run out in 2011—Russia's stockpiles have helped meet global palladium demand for the past few years.

CONTINUE >>

Gold Hits $1,300 on EU Economic Concerns

2010-09-27T04:10:00.000-07:00

Each time this year significant news brings to light Europe's economic and/or debt concerns, the price of gold sets yet another record. Such was the case Friday, when gold prices reached a new high of $1300/oz. That same day, National Bank of Canada forex director cited economic problems in the "eurozone periphery" (i.e. Ireland, Greece, Latvia, and Portugal) and reports showed that Ireland's 2Q GDP surprisingly shrank.

Similarly, when gold prices surpassed June 2010 highs on September 14, S&P downgraded the Bank of Ireland's outlook from "stable" to "negative" noting Ireland's sluggish economy. That same day, the results of a German ZEW survey were released, revealing the lowest level of investor confidence since February 2009. The next day, U.S. Treasury aide, Charles Collyns noted EU "Activity may now be slowing again" and that Greece, Portugal and Ireland are "particularly weak."

CONTINUE >>

Rubicon Minerals Signals Reversal

2010-08-19T06:44:00.000-07:00

After reaching historic highs of $5.24 set in January 2010, shares of Rubicon Minerals (RBY) yesterday showed clear signs of reversing a 7-month downtrend. RBY smashed through a key resistance level, potentially ushering in the next round of positive momentum that could lead to new highs in the intermediate term. However, prices must close this week well above $4.00 for evidence of such confirmation.

The recent bullish action followed the widely distributed (via Wall Street Journal) announcement that Dundee Securities re-initiated coverage of RBY with a price target of C$5.40 and moreover, Rubicon's latest results from ongoing drilling at its flagship property at Red Lake, ON.

CONTINUE >>

Rare Earths Supply Concerns Make Miners Attractive

2010-08-10T10:49:00.000-07:00

Rare earths metals may not be precious, but they're so rare that a single country, China, produces 90% of the world's total supply. Rare earths metals include scandium, yttrium and the 15 lanthanides which often occur naturally with large deposits of niobium (a substitute for steel) and tantalum (a substitute for platinum).

The metals are vital components in a range of high tech items from military missile guidance systems to automotive hybrid batteries. The popularity of hybrids has exploded and Toyota plans to double its production of its hybrid, the Prius, to 1 million units within the next year. Korean and Chinese automakers also expect to boost hybrid production substantially in 2011, placing further strains on the world's rare earths supply.

Unfortunately for the rest of the world, China recently decided to significantly reduce its output. Last month, officials announced a 72% reduction in rare earth metals exports in the second half of 2010. The move triggered a dispute with the US which charges China with hoarding these increasingly necessary metals. Chinese officials claim exports must be cut in order to meet the country's growing needs.

CONTINUE >>

The World's Most Undervalued Platinum Companies

2010-08-06T09:16:00.000-07:00

With operations in the heart of Bushveld, South Africa, which produces over 75% of the world's platinum, 2 undervalued junior platinum group metals (PGM) companies have the potential to become top 10 global producers.

As automobile sales continue to increase in developing countries, platinum and palladium, vital components in catalytic converters, will continue their bullish long term trend. Auto sales in China and India are up nearly 20% and 11% respectively this year. Even PGM jewelry and investment demand has been high as China saw demand rise over 57% last year and now accounts for about 70% of the world's platinum jewelry market. Global platinum and palladium investment demand was also up 19% and 49% respectively in 2009.

Undoubtedly, these facts bring to light the growing need for more PGM producers and these two companies are ready to add to global supply.

CONTINUE >>

$1200 Gold: The Sequel

2010-05-10T03:20:00.000-07:00

Over 2 months after we called a positive reversal in the precious metals market (see Feb. 23 commentary), prices are considerably higher. Several weeks later, we even noted in a commentary that platinum and palladium prices had hit 2-year highs, but gold and silver were soon to follow.

Now gold is preparing to test its all-time high of $1226 set in 2009. Gold prices closed above $1210 on Thursday for only the 3rd time in history. Moreover, on Wednesday prices hit record highs in Euros, British Pounds, and Swiss Francs.

Still significantly lower than their all-time highs of 2008, silver prices are following gold's recent bullish run. According to the chart below, last week seems to have confirmed the continuation of an the uptrend; however, prices must close above $19.

As for gold, if prices surpass the $1226 mark this month then we can expect to see much higher prices by year's end--a figure that's anyone's guess. As such, we expect gold stocks to provide extraordinary leverage for investors.

This week, look for our list of most undervalued gold penny stocks.

Calling China's Bluff on Gold

2010-03-31T02:30:00.000-07:00

Two weeks after a Chinese government official spoke on the use of China's foreign currency reserves to buy gold, prices moved closer to support levels. On March 9, Yi Gang, chief of the State Administration of Foreign Exchange mentioned that it is "unlikely" that gold would be China's primary alternative to forex reserves. According to Yi Gang, the reason for China's limited future investment in gold boils down to the "small" size of its market and that "China's purchase will push up the prices" and "hurt Chinese gold consumers."

Yi Gang's comments may seem rather misleading as they suggest that China's central bank may cease its plans for further gold accumulation. However, his comments are purposed with both lowering gold prices before China buys gold from the IMF or possibly another open market seller, and hinting that it will be accumulating gold by other methods.

First, you'll recall that over two weeks before the statement (Feb. 23), the IMF announced plans to sell gold, which helped push up prices to nearly $1,130--far too high for China to purchase on the open market. But, as we've stated in two previous commentaries, gold has strong support at $1,075 with the possibility of reaching as low $1,050. Last week, after Yi Gang made his comments, gold prices dipped close to this level ($1,083) affording China or any other central bank an opportunity to buy at a discount.

Second, if China fears pushing up gold prices for the sake of harming "Chinese gold consumers" (a likely claim, considering the Chinese government's televised attempts to advocate precious metals ownership), then acquiring gold through mining companies must be its alternative means of buying on the open market.

We already know that China has long been quietly adding to reserves without greatly disrupting prices by mining gold at home, through government-owned companies. Nonetheless, this is not a permanent solution to fulfill China's future gold reserve growth aspirations. Yesterday, the World Gold Council even pointed out that China's recent surge in mining activity could exhaust its gold resources in less than a decade. Thus, China's international gold mining and exploration ventures should garner considerable attention.

The government's gold outfit, China National Gold Group Corp (CNGGC), officially expanded abroad through Vancouver-based Jinshan Gold Mines (JINFF). CNGGC (Jinshan's majority shareholder) and Jinshan entered into a memorandum of understanding (a non-binding agreement) in December with the intentions of adopting the name China Gold International Resources Co. Ltd., becoming an international arm of China's core state gold mining and exploration operations.

Yesterday, Jinshan shares hit 52-week highs above after releasing news earlier this month of increased gold reserves at its Mongolian CSH 217 gold mine.

Clues to the Direction of Gold Prices

2010-03-05T04:45:00.000-08:00

Two weeks after the IMF said it would sell 191 tonnes of gold, prices are up over $20/oz. on speculations that China would be the buyer. A week later, a researcher from a think tank under China's central bank emphasized China's need to invest in gold over the long term, but neglected to comment on the speculations. A mere coincidence?

Here's another one: the IMF's announcement came just a day after the World Gold Council (WGC) sighted an 85% increase in gold ETF demand in 2009 over 2008.

How convenient that billionaire investor, George Soros recently revealed that he had increased his stake in GLD (gold ETF) by over 150%, after calling gold the "the ultimate asset bubble."

Is this telling us something about the direction of gold investment in 2010? Just ask the second largest gold investor, India, which saw January gold imports rise 1900% over the same month in 2009.

Thus earlier this week, gold reached record highs in Indian Rupees and even Euros on increased demand. Are record highs in dollar terms imminent?

Precious Metals Downtrend Shows Signs of a Reversal

2010-02-23T04:00:00.000-08:00

A multi-month downtrend in precious metals is finally showing signs of reversing after coinciding with the following events:

- A credit crisis has hit Dubai, one of the world's top investment destinations, causing a real estate bust, job losses, and lower foreign direct investment inflows.

- As bank lending swelled by 32% in 2009 and contributed to massive inflation and real estate bubbles, Chinese banking authorities moved to Curb domestic bank lending.

- Concerns over Greece's debt (which is, by the way, less as a percentage of GDP than Italy's) provokes European Commission scrutiny.

Once again, the same analysts who have been telling us to sell since 2001, even though gold has climbed each year since, are at it again. Bob Prechter (Elliott Wave Theory) recently called for a 40% further decline in gold prices on TV--somehow the media continues to cover him even though his bearish long term predictions have been wrong year after year (you'll recall that he told us to sell gold last summer, right before the historic climb to $1226/oz.). He and others just don't understand the fundamentals of a long term bull market.

Our support level (discussed in our January 18 commentary) near $1,075 proved to be an excellent entry level although we saw an extremely quick move to $1,050 and has since climbed back above $1,100. Our PM stock, RBY reached price lows unseen since late October, but have since advanced over 20%, coinciding with the following events:

- On Friday, the US Dollar Index hits 8 month highs of over 81 and appears to be reversing direction.

- Last week we learned that China dumped $34 B in US Treasuries, losing its status to Japan as the world's top holder of US debt, and fueling concerns of future dollar weakness.

- Foreign Holdings of US debt fell by a record $53 B in December.

- The start of the Chinese New Year (Feb. 14) coincided with the first signs of a precious metals reversal, as Chinese gold demand increased.

As the markets change course, we're eager to give our clients and readers new undervalued stock picks to provide higher leveraged returns.

Rubicon Strikes Again

2010-02-04T18:14:00.000-08:00

Rubicon Minerals (RBY) recently released more news from its ongoing drilling program indicating new high grade gold intercepts and an expanded high grade gold zone. Highlights include:

- 100,000 meters (m) completed (of 158,000 m)

- intercepts of up to 493 grams/tonne (g/t) gold (au) over 1.6 m

- 20.7 g/t au over 14.3 m

- F2 Zone extended to Southwest

- Gold zone extended at depths of up to 1,300 m

- Surface intercept of 62 g/t au at hole HW-3, suggests new gold zone to West

In addition to the positive results, the company received coverage by major media outlets and in the investor community:

- Rubicon was one of The Wall Street Journal's Canada Hot Stocks

- Motley Fool's Rich Duprey recently named RBY as one of his "5 Stocks Approaching Greatness."

Of course, the investor community showed significant interest in Rubicon's latest results:

"...Rubicon continued to intercept what we believe are encouraging results that support the thesis that the company is delineating a higher-grade gold zone within the larger overall potential resource...Further, we expect that the F2 zone continues to demonstrate expansion potential as it remains open along strike and at depth...We maintain our $5.75/sh target and sector outperform rating."

Eldon Brown, CI Capital Markets, Feb. 3, 2010

"...the results also continue to demonstrate more size potential at F2, including the ongoing expansion to the southwest, at depth, and the identification of a possible hanging wall zone."

Timothy Dundee, Dundee Securities, Feb. 3, 2010

"In our opinion, the aggressive 2010 exploration plan and lining up of necessary mining permits ahead of 2011 should position the company well for production in the near term...We are raising our 12-month target price to US$6.00 (from US$5.50) and maintaining our overweight rating."

Andrew MikitchookThomas Weisel, Feb. 2, 2010

Billionaires and Analysts Bullish on Gold in 2010

2010-01-18T08:36:00.000-08:00

Gold seems to have found significant support above $1075 after having fallen from record highs of $1,226. Now the world's richest along with gold market analysts are looking for fresh highs this year.

Forbes' recent interviews with a few of the world's billionaires revealed that only 3 out of 10 were not bullish on gold prices in the years ahead. Norman Braman stated, "I purchased last spring. When Paulson set up his gold fund I put some substantial money into it." It's quite significant that Paulson, a billionaire was able to convince Braman, another billionaire and perhaps others to make new investments in gold.

Investment bank analysts are equally bullish:

- Goldman Sachs analysts upped their year-end 2010 gold forecast to $1,350.

- Dylan Grice, of French giant Societe Generale said that gold could top out at $1,300.

- Australia-based Macquarie Capital is looking for a 2010 average price of $1,150 per ounce (bear in mind that the 2009 average is only about $975 per ounce).

- George Gero of Toronto-based RBC Capital Markets expects gold prices to return to $1,200 this year, noting that the "technicals are strong."

- RBS analysts were nearly as conservative, having forecast an average price of $1,300 per ounce by 2012.

- ScotiaMocatta (the precious metals trading arm of Canada's The Bank of Nova Scotia)
expects gold to fall within the $850-$1,400 range (2009 range was $800-$1226) or higher, if fear spreads.

Over in China, a state-owned newspaper editorial by a Zhejiang
University economist called for increasing gold reserves by suggesting, "Having sufficient gold ensures that a currency will gain global acceptance, so the renminbi will inevitably need gold as a guarantor as it goes out to the world."

Top 5 Reasons why Platinum is Going Higher in 2010

2010-01-12T13:17:00.000-08:00

Platinum prices surpassed the $1,600 mark today for the first time since 2008. Recently, it has outperformed both gold and silver, having gained 13% since late December lows. By comparison, gold and silver rose just 6.5% and 10% respectively over the same period. So, expect platinum to continue to climb this year for all of the following reasons:

1. South Africa, which supplies between two-thirds and three-fourths of the world's annual platinum supply has consistently recorded lower rates of production over the last 3 years.

2. The rise of the middle class in BRIC countries will put pressure on platinum demand for automotive catalytic converters. Automobile sales for 2010 are expected to rise:

- 10% in Brazil

- between 5 and 10% in Russia

- by double digits in India, which also recorded a 68% rise in December 2009 auto sales

- in China where officials extended the auto stimulus that brought a 43% increase in sales in 2009

3. The launch of the first major Platinum ETF (PPLT) will be backed by the physical metal, adding to the increase in platinum demand. Financial firm, Susquehanna Capital Group turned heads with its purchase of 100,000 shares (for Jan. 8 delivery).

4. In 2009, platinum prices averaged under $1,200/oz, but this year analysts remain bullish. Bank of America/Merrill Lynch and BNP Paribas both expect platinum prices to average $1350 and $1,410 respectively.

5. Platinum prices are well below 2008 highs of about $2,300, while gold is trading at all-time highs. This suggests that platinum prices have room to rise over the next year.

Since platinum is expected to rise this year, you can expect shares of our favorite platinum stocks Anooraq Resources (ANO) and Platinum Group Metals (PLG) to benefit. Both ANO and PLG (as discussed in previous commentaries) have surged over 62% and 56% respectively since Christmas.

- ANO took control of the world's 3rd largest known platinum resources in 2009.

- PLG has just 67 M shares outstanding and has well funded JV partners.

- Both companies, which control a huge chunk of the world's known platinum resources, are valued under $3 a share and are nowhere near all time highs set in 2008.

GDSM Delivers on Dividends

2010-01-11T16:04:00.000-08:00

On Aug 26, 2009, we told our clients and readers about a gold penny
stock with an attractive dividend offer. Today Gold Coast Mining Corp. (GDSM) shareholders received dividends representing 1 share of Media Max Group, Inc. (MXMI) for every 30 shares of GDSM owned before August 31, 2009. Although the payout date was far later than anyone expected (mainly due to DTC delays), GDSM did deliver on its promises and shareholders have free shares of MXMI.

MXMI shares are presently valued between $0.10 and 1.10. While shares may be restricted for quite some time, MXMI has been expanding through: the recent acquisitions of both Luxury Auto Direct magazine and ExtremeChevys.com; establishing partnerships with charities to market vehicle donation drives; and marketing luxury and collectible automobiles.

Presently, both GDSM and MXMI offer traders significant trading opportunities, however, investors should exercise caution. Such stocks are prone to considerable intraday volatility and/or extremely low volume.

Rubicon Minerals Still Hot: Shares Hit Record of $5.04, Analysts Remain Bullish

2009-12-31T07:44:00.001-08:00

Shares of Rubicon Minerals (RBY) hit fresh highs on Monday as gold prices showed signs of reversing a month-long downtrend. The record high of $5.04 roughly represents a 600% increase since our buy alert in late 2008. We remain rather bullish on Rubicon Minerals as the company continues to expand and define its high grade gold zone at prolific Red Lake, ON.

According to analysts, Rubicon's drilling program is still in it's early stages yielding significant potential for more high grade intercepts. However, analysts are somewhat divided on when we could get resource estimates. Until then, RBY is subject to increasing speculation which could drive its price considerably higher.

Analysts' Recent Comments on Rubicon and the Drilling Program

"We believe Rubicon has the opportunity to bring a low-cost gold mining operation into production at a comparatively lower capital cost by exploiting the higher-grade zones within its F2 deposit and by utilizing the existing infrastructure on the property. These characteristics should give the company the advantage to be able to do this independently, which in our opinion, would give Rubicon the ability to be more selective about its future opportunities, either as a producer or as an acquisition target.

While the F2 Zone looks to already host a potentially significant resource, in our opinion there is still exploration upside at depth and in delineating the higher-grade subzones. With its gold-plated address, Rubicon could be an acquisition target either to those already established in the Red Lake gold camp or those looking to establish a foothold. We are initiating coverage on Rubicon Minerals Corp. with an Outperform rating and target price of $5.75 per share based on a 1.75 times multiple to our 2009E NAV of $3.30 per share."

Eldon Brown, Blackmont Capital (12/21/09)

"As closer-spaced drilling enables delineation of the F2 Zone, an initial resource would be expected in 2H/10. Using Detour's price rise during its aggressive drilling period suggests Rubicon shares could trade to $7.00/sh."

Catherine Gignac, Sandfire Securities Inc. (12/17/09)

"RMX has drilled a sufficient number of holes to provide a more concrete understanding of the continuity of mineralization in the 122-10 Zone. Exploration at Phoenix remains at an early stage. Drilling is ongoing and Rubicon plans to begin a 158m drill program in 2010 to expand and further delineate the dimensions of known areas of gold-bearing zones."

Andrew Kaip, BMO Capital Markets (12/16/09)

"To date, 96,500 metres of drilling have been completed within the F2 system. In 2010, Rubicon is set to begin a significant 158,000 meter surface/underground drill program that is expected to take approximately 12 months to complete. We do not anticipate a resource estimate in 2010 at this time."

Daniel Earle, TD/Newcrest Securites (12/16/09)

Stay tuned as the largest phase of the Phoenix Gold project's drilling program is in full swing.

Top 10 Reasons Why Gold is Going Higher

2009-11-23T07:16:00.000-08:00

If you think that the price of gold has reached a top, then think again. Although a correction is likely in the near term, prices are sure to continue their bullish trend in early 2010. $1,165 is not even close to the top for all of the following reasons:

1. Silver, Platinum, and Oil Have Yet to Reach Last Year's Highs

If gold prices were presently at a top, then the price of silver, platinum, and oil would also be at record highs--but that's just not the case. Gold is alone in setting record highs while other commodities are still in rebound mode and have a long way to go.

2. Gold Prices Are Lingering at Record Highs

When gold reached record highs of $850 in January 1980, it was a quick move. The price jumped over $100 in a week and fell over $100 during the following week. Prices didn't revisit $850 for another 27 years!

Fast forward to 2009, we see that gold prices took much longer to move up to record prices and it is taking even longer for prices to correct.

3. Gold is at Record Highs in Dollar Terms Only

Gold priced in Euros, Australian Dollars, British Pounds, Swiss Francs, and Japanese Yen are not even close to highs set earlier this year as evident in the chart below:

4. EU Central Banks are Exhausting Their Gold Sales

You may recall that in the 1990's and early 2000's, EU member states were literally flooding the market with gold. This year, EU member central banks sold
73% less gold, their lowest output since 1994. Furthermore, the Swiss National Bank said it had no plans of selling any gold in the near term.

5. BRIC, Developing Countries Have Only Begun Buying Gold

China's central bank was the first to announce it's gold accumulation plans, but India's recent purchase of 200 tonnes of IMF gold was a prelude to the latest spike in gold prices. Last week, the Bank of Russia announced that it was prepared to buy any gold sold by its State Depository.

Moreover, China has been encouraging its 1.3 billion citizens to purchase silver bullion as evident in this CCTV news report:

Watch Video

6. Global Gold Demand is Low

According to the World Gold Council, global gold demand is much lower than last year, in spite of record prices. Peak demand occurred in the third quarter of 2008, during the height of the economic uncertainty. Globally, gold purchases are down 34% since last year.

7. Americans Still Have Negative Perception of Gold

Many Americans still recall the downtrend of the 1980's and 1990's that brought gold from $850 to $250. This has forever changed their perceptions of gold and has led to far less Americans using it as an investment. How many people do you know with gold or silver investments? Amongst them, how much or how little gold do they own? Imagine if everyone suddenly decided to buy just 1 ounce of gold--not only would the price jump dramatically, but there literally wouldn't be enough for everyone.

8. Investors Are Investing Less than in Previous Years

The average investor is still a bit concerned about the economy to invest in anything, let alone precious metals. Americans, especially are spending less and investing less.

9. Massive Inflation has only just begun

Since last year, the money supply in nearly every major currency, including the Chinese Yuan, has
skyrocketed--perhaps none more than the USD. With such a massive, record-breaking surge in money supply, it's certain that big inflation is on its way.

10. The Global Economy Is on the Rebound

Like most large economies worldwide, the US registered a 3% economic growth rate in the 3rd quarter. Even Japan and Germany, which had been amongst the hardest hit major economies last year, have recently returned to growth. During bull markets, currencies usually decrease in value relative to commodities.

Gold Hits Fresh Highs, Gold Stocks Lag

2009-11-19T03:59:00.000-08:00

This week, precious metals prices continued their bullish trend as gold surpassed a record (nominal) price of $1,150. Silver and platinum prices reached highs unseen in over 15 months, surpassing $18.00 and $1,400 respectively. However, precious metals-related stocks traded well below highs set in recent months.

Russian Central Bank to Acquire 30 Tonnes of Gold

The Russian central bank will buy nearly 30 tonnes of gold directly from the Russian state gold repository this year. The repository will use the funds from the sale to buy diamonds from state mining company Alrosa.

Billionaire Hedge Fund Manager Paulson to Start Gold Fund

John Paulson, head of Paulson & Co., will put up $250 M towards a new hedge fund that invests in gold stocks and derivatives. This move comes after Paulson put 10% of his company's $30 B under management into gold investments earlier this year.

Rubicon (RBY) Launches Phase II Drilling Program at Red Lake

After recently discovering significant extensions to its F2 gold zone, and upon imminent completion of Phase I drilling, Rubicon has outlined a new C$60 M Phase II drilling program for its Phoenix Gold. The new program will include a 12-month stage of 120,000 meters of underground and surface drilling.

US Mint's Silver Eagle Sales Hit 25,000,000

Silver Eagle sales at the US Mint have hit new highs of 25,000,000 for the year. The coin's popularity has picked up in recent weeks as silver prices have surged.

Gold Hits New Highs as Asian Demand Increases

2009-11-12T04:33:00.000-08:00

Gold Hits New Highs as Asian Demand Increases

The proce of gold reached record (nominal) highs this morning of $1,123 as India reported a 45% increase in gold imports. In Vietnam, the government lifted its ban on unlimited gold imports for the first time in over a year. The move is aimed at limiting high speculation, which recently led gold prices in Vietnam to a high equivalent to $1,280/oz.

Continung demand for gold trading in China will be eased with the Hong Kong Mercantile Exchange's announcement that it would offer gold futures contracts by January 2010.

Junior Miners Index ETF Debuts

Yesterday the Junior Miners Index ETF (GDXJ) began trading on the NYSE. 80% of the fund is invested n 38 select precious metals stocks, of which 2.17% is invested in Rubicon Minerals (RBY). Shares reached a high of $499.99 in the opening minute and closed the day near $25.

Roxmark/Premier (PIRGF/RMKMF) JV Expands Gold Zone at Hardrock

Drilling at the the Hardrock JV project in Northwestern Ontario hit high grade gold of up to 71 g/t. Resource estimates for the property are set to be released by year's end.

Gold Hits Record High Near $1,100

2009-11-05T03:54:00.000-08:00

Gold quickly bounced back from a low near $ 1,025 last week to a record high of $ 1,095 yesterday, as the IMF reported on Tuesday that it sold 200 tons of gold to the India Reserve Bank almost 2 weeks ago. Today, Sri Lanka's Central Bank announced that it too has been steadily adding to its gold reserves.

Wesizwe (WSZWF) Takeover Talk Drives Investor Interest

Wesizwe Platinum, a young South African junior platinum producer has been at the heart of talks of an Impala Platinum takeover. Impala Platinum, the world's second largest platinum producer dropped a bid earlier this year for Mvelaphanda Platinum, citing poor economic conditions. Now that an economic recovery is expected, speculation has risen over Impala's attempts to acquire Wesizwe instead.

Exeter Resource (XRA) Discovers New Gold Zone

Today Exeter Resource released details of its ongoing drilling project at Cerro Moro, Argentina, where it discovered more high grade gold and silver. Drill holes included grades of up to 550 g/t au and 23,000 g/t ag West of the Escondida high-grade gold vein.

PC Gold (PCGLF) Hits Bonanza Grade Gold

PC Gold reported drill results on Monday indicating high-grade gold of up to 112.5 g/t. It's been less than 1 month since the company began its drilling program at its Pickle Crow Gold mine, a 7 square mile property in Northwestern Ontario.

US Mint Sales Hit All Time Highs

October gold and silver coin sales were at record highs. Most notably, sales of Silver Eagles neared 3 million last month, twice as many as in October 2008.

5 Undervalued Gold Stocks

2009-11-03T04:06:00.000-08:00

Rubicon Minerals (RBY)

Rubicon is one of the largest landholders in North America's most mineral-rich regions. It is currently drilling at Phoenix Gold, a small portion of its 100 sq. mile properties in the Red Lake, ON region. To date, gold grades of up to 2,600 g/t au have been intercepted right next door to a top-producing Goldcorp (GG) mine. Most recent drill results showed up to 400 g/t au and significant extensions and depth to its central gold vein. In addition to Phoenix Gold, Rubicon fully owns a 593 sq mi property near the prolific Pogo mine in Alaska and a 351 sq mi. property near the Carlin Trend in Nevada.

Great Basin Gold (GBG)

Currently valued at under $1.50, Great Basin Gold is both a low-cost gold miner and an exploration company with new high-grade gold discoveries. Its two 100%-owned properties include the Burnstone, South Africa mine which presently produces 254,000 oz. of gold annually at just $495/oz., next to a Harmony Gold (HMY) mine. Its other property, the Hollister property, is located on the prolific Carlin Trend, producing 120,000 ounces of gold annually at a recently-revised cash cost of $324/oz. Most notably, recent discoveries at Hollister have shown gold grades of up to 2,156 g/t au.

Exeter Resources (XRA)

Exeter currently owns several mineral rich properties in politically-stable Argentina and Chile. The company most recently reported drill results of up to 924 g/t au at its 100%-owned Cerro Moro, Argentina property. Ongoing drilling at its optioned Capische, Chile property has revealed significant gold, silver, and copper resources.

Claude Resources (CGR)

Claude has an active mine at its Seabee, Saskatchewan property and ongoing drilling programs at both Seabee and its Madsen, Red Lake, ON property. Last year, Seabee produced 45,000 oz. au at a total cash cost of C$683; however, it recently reported that it increased its Q3 gold production by a remarkable 80%. Seabee also reported recent drill results with grades of up to 20 g/t au. Gold grades were even higher at Madsen, where up to 141 g/t au were intercepted.

Northern Abitibi Mining Corp. (NOMNF)

Northern Abitibi derives its name from its location in the northern part of the Abitibi subprovince of western Quebec, where it has a joint venture gold drilling project. However, its most promising discoveries have been in Newfoundland. Recent drill results at its Viking, Newfoundland property uncovered grades of up to 27.7 g/t au; however, previous results have included grades of about 218 g/t au. Its 119 sq. mi Taylor Brook property and 47%-owned Voisey Bay property have significant nickel and copper resources.

Precious Metals Extend Decline as Treasuries Shine

2009-10-29T07:04:00.000-07:00

Precious metals prices fell further yesterday as high demand was reported at US Treasuries auctions this week. The decline also coincided with news of Russia's plan to sell 1.6 M oz. of gold, taking advantage of higher prices.

Top Takeover News

Gold Reserve (GRZ), previously the takeover target of Russian minerals giant
Rusoro, announced that its Brisas property has been seized by the Venezuelan government.

Best High-Grade Precious Metals Discovery

Among recent gold discoveries, Great Basin Gold's (GBG) stood out most. Drilling at its Hollister, Carlin Trend, Nevada property showed bonanza gold grades of up to 2,156 g/t. Great Basin also announced that its Hollister property is producing 60,554 oz. of gold at a lower average cash cost of just $ 324/oz.

Top Coin News

The Austrian mint, the world’s largest producer of pure gold coins,
Announced today that it will cut production by nearly a third over the next year. Sales of coins were up over 14% and total bullion sales were up 23% this year

In the U.S., over 110,000 2009 American Buffalo gold coins have been sold since first released on October 15. In just two weeks’ time, coin sales amounted to nearly 64% of the total sales from all of last year.

Rubicon's Big Hit

2009-10-27T06:25:00.000-07:00

Last week, Rubicon Minerals (RBY) announced more impressive drill results at its Phoenix Gold project at Red Lake, ON. The team intercepted high-grade gold measuring 3 to 457 g/t. Although some prior drill holes uncovered higher gold grades, Daniel Earl of TD Newcrest calls this latest discovery, "...one of the deepest high-grade hits to date in the F2 Zone."

This could be one of the most significant hits since the program began. Rubicon CEO, David Adamson, noted the "important extensions to the depth potential and strike length potential of the F2 gold system...The system remains open in all directions and...extends the F2 system beyond our current 9X target areas."

Some analysts believe that that the F2 gold zone is considerably larger than anyone previously imagined. For instance, analysts at Macquarie Captial Markets said the results "increase our assumed volume of the mineralized envelope by well over 75%..."

In our opinion Rubicon's latest results show an absolute minimum resource of 5 million ounces of gold at Phoenix Gold; however, estimates are more likely to be well above 6 million ounces. Consistent with past discoveries of similar significance, Rubicon announced another share offering--this time to raise $75 M in capital. Bear in mind that the company will use the proceeds to step up the drilling program, but more importantly, Rubicon now has more institutional support than ever.

Gold Takes a Break as Indian Buying Season Ends

2009-10-22T03:44:00.000-07:00

This week, we saw a slight decline in precious metals prices as festival gold buying during India's Dhanteras and Diwali settled. The price of gold, silver, and platinum showed significant support near $1,045, $17.40, and $1,350 respectively.

New JV Projects

This week, major gold miner, AngloGold Ashanti (AU) and major diamond miner, DeBeers announced a groundbreaking joint venture project to explore and eventually mine minerals in the ocean.

Top Takeover Talk

China's state-owned China Minmetals Corp is looking for potential takeover targets, specifically gold mines in Australia and Canada, according to a top executive. Thus all eyes are on Canadian and Australian juniors with significant gold reserves.

Best Recent High Grade Discovery

Apollo Gold (AGT) recently announced assay results from its Grey Fox property near Timmins, Ontario, at which high-grade gold between 8 and 277 g/t au was intercepted.

Top Coin News

The new 2009 American Buffalo gold coins went on sale last week and have quickly become the US Mint's best-selling coin. Since then, over 71,000 coins have been sold, far more than the American Eagle gold coin's sales for the entire month of October. Given such high demand for the Buffalo, the US Mint raised its price by $100 to $1,118.88 per coin.

Silver: The Undervalued Precious Metal

2009-10-19T03:47:00.000-07:00

Gold and gold stocks may have set records last week, but silver and silver stocks have yet to rebound to last year's highs. As a result, gold has grabbed the spotlight even though silver has been and continues to be, by far, the better investment.

This year, The price of silver has increased by 63% compared to gold's mere 30% rise. Furthermore, if you bought silver after the 2008 market correction (last November), then your investment would have doubled compared to a 53% gain if you invested in gold.

Even since the start of the precious metals bull market, silver has been a better investment than gold. From November 2001 to March 2008, the price of silver has surged 416% compared to gold's 317% advance from April 2001 to its all-time high last week.

The reason we believe that silver will continue to outperform gold is that silver is still severely undervalued. Just take a look at the 1:60 ratio of the price of gold to silver, which is not only much higher than a historical average of 1:15, but higher than current production rates. Roughly 80 M ounces of gold are produced annually, compared to about 600 M ounces of silver--a ratio of just 1 to 7.5! This implies that silver should be trading at $142 an ounce. Although it may be a long time before silver reaches that price, silver still has a long way to go in order to close the gap between its absurdly undervalued market price and its true value.

Gold & RBY Soar to New Heights

2009-10-15T02:23:00.000-07:00

Yesterday, gold and many precious metals stocks set new records. The price of gold hit a new (nominal) high above $1,070, before quickly retreating. Similarly, shares of Rubicon Minerals (RBY) reached a record price of $4.80, over 20% higher since our September 28th commentary.

New JV Projects:

Last week, Platinum Group Metals (PLG) announced details on a second joint venture project with Japan Oil Gas and Metals National Corporation (JOGMEC). In Japan's efforts to accumulate precious
metals assets, the company will invest $3.2M for 37% interest in the new 60 sq. mi exploration area in South Africa's platinum-rich Bushveld complex. On Monday, shares of PLG jumped nearly 15% and volume remains twice as high as average.

Takeover Targets:

This week, Solitario Exploration (XPL) announced that it has upped its bid for Metallic Ventures (MTLVF) to $18 B after learning that Metallic Ventures received a bid from a third party. The news of the rival bids pushed MTLVF shares up nearly 9% in intraday trading on Tuesday.

Recent High-Grade Discovery:

Exeter Resources (XRA) recently released bonanza-grade drill results between 9 and 942 g/t Au, and 92 and 29,452 g/t Ag at its Cerro Moro, Santa Cruz, Argentina property. This is by far, one of the best high-grade gold and silver discoveries of the year.

Analysts Bullish on 2010 Gold Prices

2009-10-06T06:18:00.000-07:00

If you ask leading analysts, gold prices will continue to reach new highs in the coming months. Last week, a Deutsche Bank analyst announced that gold prices would reach $1,100, saying, "We are positioning for fresh highs in the gold price."

A few weeks earlier, Credit Suisse analysts told clients to expect gold to continue to rise in September and October.

Similarly, RBS analyst, Stephen Briggs said he expects the price of gold to reach $1,100 and that "Gold's long-term history as a harbinger of inflation, or gauge of inflation expectations, is clear..."

They're not only bullish on gold. Industrial metals are expected to rise as well. Societe Generale (SocGen) gave investors a bullish outlook on industrial metals, citing, "very positive fundamentals."

One reason for all the increasingly bullish sentiment regarding precious metals prices is speculation regarding the end of US Dollar hegemony.

Yesterday at the G-7 meeting in Istanbul, US Dollar weakness was a hot topic. Almost immediately after an official statement suggested that no action should be taken to soften the Dollar's decline, gold prices jumped from about $1,003 to $1,020 within a couple of hours.

Furthermore, there are increasing reports that the Dollar will no longer be used as the sole currency for oil trading. Although denied by key officials, the mere speculation was enough to push gold prices to record (nominal) highs of over $1,033 this morning.

Analysts Love Rubicon Minerals

2009-09-28T02:14:00.003-07:00

Shares of Rubicon Minerals (RBY) have lifted over 500% since our buy alert last year and recently closed at an all-time high of $ 4.45, up over 10% since our last commentary. During such time, the company released great news including a possible southwestern extension of the F2 zone at its Phoenix Gold project as well as being listed on the S&P/TSX Global Mining Index. Moreover, analysts have recently increased coverage of RBY and are increasingly bullish:

"With the intersection of a substantial zone of high-grade gold
mineralization in hole 122-10, the company appears to have identified
a new F2-like zone of structurally controlled mineralization."

- Canaccord Adams on 9/15

The discovery of a potential new high-grade gold structure adjacent to the core F2 Zone... further demonstrates the projects substantial exploration potential...these results highlight the accelerated pace of drilling results to the market...our 12-month target price rises to $6.00 per share (from $5.00). We maintain our Speculative BUY recommendation."

- Daniel Earle, TD Newcrest on 9/15

"Hole 122-10 is a significant step for RMX (Rubicon TSX symbol) in identifying look-a-like structures to the F2 Zone. BMO Research expects that RMX will focus drilling on this area and beginning delineating the dimensions of this new zone."

- Andrew Kaip, BMO Capital Markets on 9/15

"...the intersection in hole 122-10 is exceptional, with a particularly
wide gold-bearing interval....deeper than most of the higher-grade intersections reported to date. This opens up a target area of high-grade potential for further drilling."

- Timothy Lee, Dundee Securities on 9/14

"...we are moving our target price from C$4.30 to C$5.00. In our
opinion, the summer drill campaign will in all probability continue to
establish that the F2 Zone is in fact materially larger than what we previously believed (1.5 million ounces)...We continue to recommend RMX as a BUY, and believe that RMX's discovery is in the early stages of being defined."

- Barry Alan, Research Capital on 9/14

"As the shaft continues to be deepened simultaneously with underground and surface drilling, we expect ongoing positive results from all nine areas of the 9x drill program. Thus far, four areas remain largely unexplored, and opportunity remains for the strike to extend beyond the existing boundary of the 9x areas (1,200m length) to
the SW and NE."

- Andrew Mikitchook, Thomas Weisel on 8/31

"...Rubicon's resource will wind up being a lot more than 3 million ounces. Deposits at Red Lake wind up growing consistently over time...Rubicon probably has 5 million ounces or more in their F2 property which would support a price in the $5 plus range in the next two years..."

- Brian D. Pacampara, Motley Fool on 8/27

"we could see a 3.0–8.0m oz deposit in the F2 Zone. Valuing contained ounces at $200–250/oz, we arrive at a range of potential share prices, of C$3.60–12.10 (C$3.65-11.80 fully diluted)."

- Graham Copley, Macquarie Research on 8/18

Still Doubt the Bull Market?

2009-09-13T08:01:00.000-07:00

After last year's huge stock market correction, it's understandable if you're still apprehensive about trading or investing. Since then, the markets have rebounded in the biggest 10-month rally since 1937. So if you still doubt the bull market then you've missed out on all the action. In less than 2 months, the price of gold rose $ 90 and has revisited $ 1,010 for only the second time ever. On Friday, the price of platinum finally broke the $ 1,300 resistance level, up considerably from a low near $800 last year. Silver has performed the best, having advanced over 25% since July.

Our preferred gold stock, RBY hit an all-time high of $ 4.00 last week, up well over 400% since our fall buy alert. If this isn't a bull market, then I don't know what is.

It's not just precious metals either. The DJIA recently broke through the 9500 resistance level, the S&P is firmly above 1000 points, and those troubled bank stocks that were worth pennies per share last fall have rebounded by triple-digit percentages.

So everything's trading above 50-day moving averages, which traders and investors generally regard as the best time to hold. Nevertheless, many think that we're running out of gas and that just isn't so. Surely short-term corrections are expected, but there's still a lot of upwards momentum left.

We can say this with confidence because at the height of the markets in 2008 (before the correction), the price of oil was beyond $ 140. Now it's only half that price (see charts below).

So really, this leg of the bull market has only begun and should run well into 2010. Even in bull markets there are better times to buy than others, so use your best judgment.

RBY Reaches All-Time High

2009-09-03T04:30:00.000-07:00

The bull rages. Today our recommended gold exploration stock, Rubicon Minerals (RBY) reached an all-time high of $ 3.79 per share, after climbing to a new high of $ 3.59 yesterday. Earlier this week, the company updated investors of ongoing drilling at its Phoenix Gold Project in Ontario, which revealed not only more high-grade gold, but a 20% increase in strike length.

Also significant was the fact that RBY's volume was at all-time highs. Yesterday volume was 5 times higher than on average, indicating new investor/trader interest.

As RBY reached new highs, the price of gold advanced by $25 dollars to over $980, its best single-day performance in over a month. Gold is once again nearing the important $ 1,000 mark, but it must break this resistance level this month in order for the bull market to continue. If it does, then we could only guess how high the price of gold and RBY will go.

Recent High-Grade Precious Metals Discoveries Discoveries

2009-08-31T13:31:00.000-07:00

Rubicon Minerals (RBY) just updated us on its ongoing drilling project at Phoenix Gold at Red Lake, Ontario. Results measured more high-grade gold between 3.21 and 46.37 g/t. Moreover, recent drilling revealed a 21% increase in the strike length of the gold vein, suggesting higher gold resources than previously imagined.

Romarco Minerals (RTRAF) released more promising news from its Haile Gold Project in South Carolina. This time, assay results indicated high-grade gold between .9 and 33.7 g/t and confirmed an extension of the Ledbetter pit/gold zone in all directions as well as the presence of gold in the area between both Ledbetter and Snake zones.

Today's news of Aurizon's (AZK) high-grade gold discovery of 3 to 11.8 g/t gold at its Joanna Project in northwestern Quebec is only one reason for excitement. Results also suggest significant gold mineralization farther to the south, thus extending the gold zone.

Today Lake Victoria Mining (LVCA) announced assay results showing high-grade gold in samples of rock dump piles at its Singida Gold Project in Tanzania. An average of 3 g/t of gold was measured, similar to previous assay results from various samples on the property. Earlier, the company released assay results from its Kinyambwiga Gold Project which averaged roughly 3.5 g/t gold, including samples with as much as 13 g/t.

Last week, US Gold (UXG) announced further positive results from samples at its El Gallo property in Sinaloa, Mexico. Discoveries of high-grade silver between 89 and 1350 g/t were found after measuring 10 samples of Phase I testing.

Recent High-Grade Precious Metals Discoveries

2009-08-24T16:43:00.001-07:00

As investors return from summer vacations, they'll want to take a look at some of the following exploration companies that have recently encountered high-grade gold and silver:

Carpathian's (CPNFF) second phase of drilling found a high grade gold in a range of 1.16 to as much as 9.55 g/t gold in some spots. Launched last year, the drilling program takes place at its 100%-onwed Riacho Dos Machados gold project in southeastern Brazil.

Claude Resources (CGR) announced last week that it had intercepted more high grade gold at its Seabee, Saskatchewan mine. Results ranged from 5.96 to 19.36 g/t gold.

For the fourth consecutive week, Lake Victoria Mining (LVCA) released positive news regarding high-grade gold from Tanzanian gold exploration programs. Recent sampling revealed an average gold grade of 3.48 g/t, with a range of .23 and 12.95 g/t.

African Aura (AAZ on TSX only) incredible results between .5 and 44.55 g/t gold at the Kambele Gold Project at the company's 100%-owned Batouri property in eastern Cameroon. Thus far over half of the 44 holes drilled to date returned high-grade gold.

Detour Gold (DRGDF) recently intersected between 1.60 - 9.31 g/t at Detour Lake Gold Project, which includes a 2.5 km gold mineralization zone in eastern Ontario.

Houston Lake Mining (HLKMF) struck big on its Dogpaw Lake property, West Cedartree project in western Ontario. Grades ranged from .84 to over 36 g/t gold, indicating an extension of its gold mineralization zone.

Mirasol (MRZLF) announced positive news from its joint venture project at Joaquin, Argentina. Results from drilling found a range of 30 to 703 g/t silver. The property is 100% owned by Joaquin, however, funded and operated by the experienced, Coeur d'Alene Mines (CDE).

Rubicon Minerals (RBY) Posts Biggest Single-Day Rally in 3 Months

2009-08-20T03:57:00.000-07:00

Yesterday, shares of Rubicon Minerals (RBY) advanced over 12% in intra-day trading as speculation grew about just how much gold is at its prolific Phoenix Gold property at Red Lake, Ontario.

- Bloomberg posted an interview with CEO Adamson who stated, "The size of the system we’re currently defining is as large as the Campbell deposit, and the Campbell system was producing for well over 40 years."

- John Graham, an analyst at Macquarie Research suggested that the property might have anywhere from 3 to 8 million ounces of gold.

- Over the weekend, Peter Zihlman, a Swiss analyst and fund manager reiterated RBY's appeal.

- That same day, Rubicon announced the appointment of a newly-formed Vice President of Operations, Claude Brouchard, who brings over 25 years of mining engineering experience to the company.

So there you have it. Things continue to look better and better. It's worth mentioning again that shares of RBY are up well over 300% since we told our readers and clients about the prolific nature of its Phoenix gold project and we've continued our coverage ever since.

Recent High-Grade Gold Discoveries

2009-08-17T06:07:00.000-07:00

Our first recent high-grade discovery is none short of exceptional and gives us yet another reason to love Northern Abitibi Mining (NOMNF). Today the company reported on assay results at its Viking project in Newfoundland which continues to uncover high-grade gold between 1.9 and 136 grams per ton (g/t) of gold. Stay tuned, because the company expects to release further results in 2 weeks.

You might be surprised to hear from whence our next gold discovery comes--Armenia. Lydian International's (LYDIF) drilling program recently uncovered between 1 and 10.2 g/t gold at its Amulsar project.

Closer to home, Cartier Resources (ECRFF) announced promising results from sampling at its Rambull project in western Quebec last week. Results from three trenches, each 100 m apart, ranged from 1.27 and 27.3 g/t gold.

The California gold rush lives on with Galway's (GWYRF) recent discovery of high grade gold at three different properties. At El Dorado, samples averaged 9.6 g/t gold per ton including 86.03 g/t over 2 meters. At Machuca, the average was 3.85 g/t including 34.92 g/t over 2 meters. At the historic Pie de Gallo mine, 2.84 g/t per ton average including 14.2 g/t over 2 meters.

It doesn't take drilling to find high-grade gold. A recent sampling of tailing piles at Lake Victoria Mining's (LVCA) measured an average of 3.03 grams of gold per ton at its Singida mine in Tanzania. Measuring tailing piles is not only a good way to find more gold, but provides a good assessment of the contents of the ore on location.

Focus Minerals' diamond drilling returned excellent high grade gold finds between 11.62 - 33.03 grams of gold per ton at Tindals Mining Center, Coolgardie Gold Project in Western Australia. Although unavailable for trading in the US, those with access to the Germany stock exchanges can get in on the action.

Niogold Mining Corporation (NOXGF) drilled as much as 43.67 gold at Alexandria Minerals' (ALXDF) optioned Siscoe East Property in Western Quebec. Other holes returned between 1.53 and 1.71 grams per ton.

A Gold Penny Stock with an Attractive Dividend

2009-08-16T08:56:00.001-07:00

Gold Coast Mining Corp. (GDSM) is a new company that finances mining operations, amongst other things. Most recently, it entered into a joint venture agreement with Western Sierra Mining (WSRA) regarding its mineral-rich Oro Cache and SunGold projects near Prescott, Az. Gold Coast has funded initial costs for Western Sierra to explore/mine the properties and will receive 50% of extraction revenues (estimated at close to $7.9 M annually).

In addition, Gold Coast Mining owns a 50% stake in Media Max Group, Inc. (MXMI), the new owner of 10 Hot Web sites such as www.hotautoweb.com. Media Max's web sites generate millions annually from sales. Gold Coast is offering a dividend of 1 share of common stock in MXMI for every 30 owned shares in GDSM, effective August 31. So here's your chance to get free shares of an emerging media company.

Shares of GDSM are presently valued at .0045 (at support), so a $10,000 investment in the company will give you approximately 74K shares of MXMI. Since May, shares of Gold Coast Mining (GDSM) have appreciated over 300%. Nevertheless, there are two important things to consider before trading or investing in GDSM or any pink sheet penny stock: extremely high daily volatility and low volume. GDSM has the potential to move more than 20 to 40% in either direction in intra-day trading. More importantly, volume can be so low that it could be extremely difficult to have your buy and/or sell orders filled, so use your best judgment.

Recent High Grade Precious Metals Discoveries

2009-08-10T04:12:00.000-07:00

This week's high grade gold and silver discoveries were all over the world, from Canada to Australia:

Last week, Richmont Mines (RIC) updated shareholders on its pre-feasibility study that found an average of 6.91 (indicated resources) and 5.15 (inferred resources) grams of gold per ton at its Francoeur mine in southwestern Quebec. Results echo historic production grades of roughly 6 grams per ton.

Northgate Minerals (NXG) announced the completion of its exploration program that found between 1.8 and 4.3 grams of gold per ton at its Stawell mine in Victoria, Australia. The implications of such results are an extended mine life until the second quarter 2012.

Lake Victoria Mining (LVCA) recently reported on the results of 175 samples with an average grade of 7.1 grams of gold per ton, including one hole measuring 140 grams per ton. The results confirm a gold zone of at least 5 kilometers long at its Singida property in Tanzania.

US Gold (UXG) is not just about gold. Its El Gallo project in Sinaloa, Mexico sits atop a growing silver resource. Last week it announced results indicating 5.6 to as much as 61 ounces of silver per ton (192 to 2110 grams per ton).

Northern Abitibi (NOMNF) Mining Corp. continued to give investors remarkable drilling results from its Viking Gold property in Newfoundland. Consistent with previous high-grade gold intercepts, holes showed high grades between 1 to as much as 37.5 grams of gold per ton. One hole included as much as 1035 grams of silver per ton, although much higher than any other hole measured. The implications of the latest discoveries are that the property hosts significant near-surface gold zones.

American Buffalo Still Possible to Find at a Reasonable Price

2009-08-09T08:04:00.000-07:00

For the second time in less than a year, sales of the American Buffalo coin have been suspended. The last time that the only pure gold coin ever produced by the US Mint was suspended was in September 2008. Due to the increasing popularity of the American Buffalo, it's now harder to find than ever. The following online dealers are currently out of stock:

- American Gold Exchange

- Austin Coins

- California Numismatic Investments

- Coast2Coast Coins

- Del Van Collectibles

This bullion coin comes with one of the highest premiums of any gold bullion coin. You can currently find them on Ebay, but they come with a hefty $ 250+ premium:

- Ebay "Buy It Now" average: $ 1,250

- Ebay auction average: $ 1,200

But we did find one dealer that is now selling them for just $ 100 over the spot price of gold. At $1,054 each, Monex is offering the coins; however, you must purchase a minimum of 10 at a time. If you're looking to add a Buffalo to your collection, give them a call (1-800-444-8317) today.

Recent High Grade Gold Discoveries

2009-08-03T06:23:00.000-07:00

Ontario's junior gold exploration companies are once again our focus in this week's update; however, a major gold find in Russia puts the spotlight on a little-known explorer.

It's been over a month since we've been updated on Rubicon's (RBY) expanded drilling program, but the good news has finally arrived. Last week, the company announced more high grade intercepts between 10 and 40 grams of gold per ton at its 100%-owned Phoenix Gold Project at Red Lake, Ontario. Among other updates include ongoing construction on its 20,000 meter shaft extension.

Premier Gold (PIRGF) and Roxmark Mines (RMKMF) recently hit mineralization zones of up to 17.16 grams of gold per ton at their joint venture Hardrock mine. Located near Thunder Bay, Ontario, the project is 70%-owned by Premier.

Few people have heard of Fortress Gold (FTMNF) and even fewer people trade it. But the Vancouver-based explorer is uncovering significant high grade gold zones in Russia. The company recently announced outstanding results between 2.62 g/t to 11.8 grams of gold per ton. The results came as part of its 2009 diamond drilling program at its Amy Prospect of its Svetloye Project.

General Metals (GNMT) received 275 assays from the original Noranda Minerals drilling program in the 1980's indicating average grades of 6.42 grams of gold per ton. The gold zones are located at its 100%-owned Independence Gold Skarn project in northern Nevada.

Precious Metals Post Biggest Single-Day Rally in over 2 Months

2009-08-02T09:34:00.000-07:00

Originally Posted August 1, 2009 at Argmaur.com

Yesterday, precious metals prices rallied to close the week on a positive note, representing the largest single-day surge in over 2 months. The action came after a week of decline pushed gold prices to support levels. The price of gold, silver, and platinum jumped above $ 950, $ 14, and $ 1,200 respectively, sending bullish signals to traders and investors.

Investors turned to precious metals as a safe haven as US economic data revealed that the US GDP fell by 1% in the second quarter.

Once again, platinum and silver stocks are just starting to outperform gold stock movements. Since July 13, our preferred platinum stock, Anooraq Resources (ANO) moved up over 30% compared to our preferred gold stock RBY, which advanced by merely 4%. We're expecting further gains for the next 2 weeks as both precious metals prices rally to new highs.

Recent High Grade Gold Discoveries

2009-07-26T13:37:00.000-07:00

If you're ever looking for fresh high grade gold discoveries, you can always count on a small exploration company in northern Ontario, one of the world's most mineral-rich regions. Last week two such companies release stellar results:

Roxmark (RXKMF) announced surface drilling results indicating high grade gold at its Northern Empire property in Ontario. Grades between 4.57 and 36.4 grams of gold per ton were found, leading the company to continue the drilling program.

MPH Ventures' (MPSFF) Ontario mine also returned excellent drill results at its Geneva Lake and Big Mac Projects. Assay results indicated 4.7 to as much as 15.9 grams of gold per ton.

Recent High Grade Precious Metals Discoveries...Continued

2009-07-21T03:49:00.000-07:00

We've had so many major precious metals discovery announcements yesterday, that we had to give you a detailed update. No surprise, North America is at the heart of all the action, but more specifically our focus is on Canada where several junior exploration companies have just released astounding results...

...and the winner is Metals Creek Resources (MCREF) which announced prolific assay results of up to 64.4 grams of gold per ton. The results come from Porphyry Hill located on the Ogden Property (owned by Goldcorp) in the mineral-rich Timmins, Ontario region. The project, which just began earlier this month is part of a 2000 m diamond drilling program option agreement (with Goldcorp).

Northern Abitibi (NOMNF) continues to report stellar grades at its Viking project in Newfoundland including its most recent intercept of between 18 and 45 grams of gold per ton. Earlier this month, the company announced that it encountered even better gold grades between 25 and 98 grams per ton; and last year, grades of up to 218 grams per ton were encountered.

Yesterday Claude Resources (CGR) reported on results of its ongoing exploration program at its Seabee mine in Saskatchewan, Canada. Results ranged from 13 - 23 grams of gold per ton, somewhat higher than annual processed grades at the Seabee mill. The latest results are expected to have a "positive impact" on future gold output.

Romarco Minerals (RTRAF) released great drilling results from its Haile Mine in South Carolina. Although you may not associate gold with the Carolinas, grades at Haile have ranged from 1 to as much as 19.7 grams per ton with the largest portion measuring 8 grams per ton.

Ressources Appalaches (APP.TO - unlisted in the States) reported on drilling at its 100%-owned Dufferin mine in Nova Scotia. It continued to return high-grade gold at 7 to 12 grams per ton, which is a bit lower than grades of up to 36 grams per ton reported earlier this year.

Recent High Grade Precious Metals Discoveries

2009-07-20T06:14:00.000-07:00

North America is again leading the world in new high grade gold and silver discoveries. Perhaps most exciting for investors was that Ventana Gold uncovered grades of up to 25 grams of gold per ton. As precious metals prices climb higher this week, these following companies are worth a look.

Last week, Ventana Gold (VEN) updated shareholders on its drilling program at La Bodega mine in Northeastern Colombia. The company's fully-owned mine is located in the prolific California-Vetas gold district, right next door to Greystar Resource's (GYSLF) 11.5 M-oz. Angostura mine. Ventana's ongoing drilling at its La Mascota high grade zone yielded between 2 and 25 grams of gold per ton. Out of 120 scheduled holes, the company has already completed 115, and is on schedule to finish the project on time.

Gammon Gold's (GRS) $ 12 M exploration program at its Ocampo, Chihuahua, Mexico mine recently uncovered more high grade gold and silver. Similar to previous intercepts, the most recent results range from about 4 to 7.80 grams of gold per ton and between roughly 330 and 460 grams of silver per ton. With about half of scheduled drilling completed, the company hopes to complete the program by year's end. Stay tuned for results of the deeper third phase of drilling due by the end of the month.

US Gold (UXG) updated shareholders and potential investors on its ongoing drilling at the Limo Project, located in Nevada's mineral-rich Cortez Trend. At 44 square miles, or roughly the size of San Francisco, the property has identified a 15-mile-long gold zone. Recent intercepts ranged from 1.8 to 9.5 ounces of gold per ton, bringing measured and indicated resource totals to about 241,000 ounces of gold.

Lastly, and on the lower end of the spectrum, Northgate Minerals (NXG) released its pre-feasibility study of its Young-Davidson Project near Kirkland Lake and Timmins, Ontario. The study indicated recent drilling results from several zones with high grade gold between 1 and 3.4 grams of per ton.

Is Anglo American the Most Undervalued Major Miner?

2009-07-17T03:57:00.000-07:00

Anglo American (AAUK) is more than just a major miner--it's one of the most diversified metals and minerals holders in the world. With such a wide range of valuable assets, owning shares of AAUK would be a great addition to any portfolio.

Copper, nickel, and zinc rake in a significant portion of the company's profits. As China, India, and Brazil continue to develop at such a fast pace, the demand for these base and industrial metals will inevitably increase.

Make no mistake; the company is still a big player in the precious metals sector. Although it recently sold its stake in major gold miner, AngloGold Ashanti (at the same time gold was trading above $ 950), Anglo American is still exposed to platinum. Through its subsidiary, Anglo Platinum, it's the world's largest platinum producer, supplying roughly 40% of all the world's platinum.

In addition to platinum, Anglo American owns a 45% interest in De Beers, making it one of the largest holders of diamonds in the world. The company's mines are located in some of the most mineral-rich regions on every inhabitable continent. To top it all off, Anglo American has about $ 10 B annual profits.

Like other platinum stocks, AAUK's price is well below highs set a year ago. At under $ 1,200 platinum prices are also a far cry from last year's high of $ 2,280 as well.

The good news is that since hitting a multi-month cyclical low in April, shares of AAUK rose 80% and we've seen fair reversal signals. If the reversal is confirmed, we expect AAUK's prices to climb back to the $ 25-30 range by year's end--near last year's highs.

Presently, the company is in merger talks with smaller diversified miner, Xstrata plc, which is desperately trying to create a mega mining company and increase its platinum reserves. Anglo American rejected the proposal citing an underestimation of its real value. AAUK is attracting quite a lot of attention as investors finally wake up to the realization that it is sorely undervalued.

Recent High-Grade Precious Metals Discoveries

2009-07-13T03:27:00.000-07:00

Our most recent high-grade precious metals discoveries were all in North America including US Gold's (UXG) recent find at its El Gallo, Mexico mine. The company reported a significant expansion of the mineralization zone to both the northwest and southeast and up to about 270 grams of silver per ton over 179 feet.

Last week, Gold Resource Corp (GORO) announced that it has intercepted 21.7 grams of gold per ton over .75 meters as well as 2,920 grams of silver per ton at its La Arista Deposit. One of three high-grade gold and silver deposits, La Arista is located at the company's El Aguila mine in Oaxaca, Mexico.

West Timmins Mining, Inc (WTMNF) announced that it intersected 11.15 grams of gold per ton over 7.3 meters at its Golden River North Zone. The intersection follows similar results reported 2 months ago at the company's 100% owned, 114 sq. km Thorne property in Timmins, Ontario.

On June 30, Anglo Swiss Resources (ASWRF) reported high-grade gold assay results from its Kenville Gold mine. The results showed about one-third of gold assays above 100 grams of gold per ton with the highest measuring at an astonishing 319.3 grams per ton in the North Yule vein. The property is located on over 1,000 acres in southeast British Columbia.

Introducing the World's Newest Platinum Miner

2009-06-22T07:54:00.000-07:00

Move over junior platinum producers, Anooraq Resources (ANO) is the newest to join the club. The small platinum exploration company will complete a transaction on July 1st to obtain 51% ownership in the Lebowa Mine, making it a junior platinum group metals (PGM) producer.

On June 15, shareholders approved the company's R 2.6 B ($ 322 M) purchase of Lebowa from Anglo Platinum (AGPFF), the world's top platinum producer. Upon completion, Anooraq will likely have the third largest PGM resources in the world.

Lebowa is located in the northeastern portion of the prolific Bushveld, South Africa minerals region which contributes 75% of all the world's platinum and contains nearly 80% of resources. Already several years into production, the mine has proven and probable reserves of about 11 M ounces of PGM.

With an expected 100 years of life, Lebowa has an anticipated production rate of 150,000 ounces of platinum per year by 2012. Nonetheless, safety issues hammered Angloplat's platinum production here to just 71,000 ounces last year. Anooraq has since announced a plan to boost production and significantly reduce cash costs by avoiding expensive mining at deep levels and instead concentrating on near-surface levels within 650 m.

In addition to Lebowa, Anooraq owns a 50% stake in several other mineral rich properties in northern and northeastern Bushveld. Closest to production are the Ga-Phasha and Boikganthso mines. The former has 23.9 M ounces of measured and indicated resources and the latter has 7.6 M indicated resources.

ANO shares reached a high of over $ 5 in 2007 and $ 2.91 in 2008; however, last year's platinum price decline has left the stock price at less than $ 1 today. Could this price be considered a real bargain for the third largest holder of PGM resources in the world?

RBY Hits New High after Parabolic Rise

2009-06-12T06:14:00.000-07:00

Our recommended speculative junior gold exploration stock, RBY hit an all-time high of $ 3.13 shortly before closing at $ 3.11. Even as the price of gold has declined from $990 to about $952 yesterday, RBY and other mining stocks continued their upward trend. Congratulations to all our readers and clients who are RBY stockholders.

This week, Rubicon Minerals released an update on its drilling program at its flagship Phoenix Gold project in Red Lake, Ontario:

- Near surface drilling results confirmed more high grade gold measured at 1.25 oz/ton gold over 6.6 feet and 3.6 oz/ton gold over 3.3 feet

- Below surface drilling at 4,714 confirmed the existence of low grade gold

The implications of this week's news are that the Phoenix Gold project will likely contain more gold than anyone previously imagined. The company has recently raised $ 16 M to start a new below surface drilling program that will help us begin to understand just how much gold is there.

Gold Nears $ 1000, Silver Jumps Most in 22 Years

2009-06-01T06:14:00.000-07:00

This morning, precious metals prices surpassed 3-month highs set last week. The price of gold rose to $ 989, just shy of the important $1,000 resistance area. Gold has surged nearly 10% in May, its best month since November 2008.

Meanwhile, silver has risen 27% over the past month, its largest monthly jump in 22 years. Growing demand for silver persists as both a precious and industrial metal.

While gold is trading above its 2008 average price, silver is still lagging. At just above $15 per ounce, silver is still 25% lower than its high of $ 21 set in March 2008.

Mining Stocks Hit New Highs

2009-05-21T06:27:00.000-07:00

In our May 4th commentary, we told our readers that precious metals and mining stocks were due for a "breakout" and we were right on target. Yesterday, the price of gold and RBY climbed to $ 940 and $ 2.20+ respectively. Traders of RBY made in excess of 40% profits in a little more than 2 weeks. These fantastic results are a culmination of our continued efforts to improve our timing of price reversals.

This week, RBY and other mining stocks have set new 52-week highs. Unfortunately for gold traders, the vision of once again re-visiting that $ 1000 mark will have to wait--at least for now. Nonetheless, charts suggest gold will continue to climb over the long term, so we'll have to wait until profit-taking subsides. Besides, the US Dollar Index is in "oversold" territory suggesting that a quick reversal is imminent.

The World's Cheapest Gold

2009-05-19T06:34:00.000-07:00

If you're looking for cheap gold, look no further than our selected mining companies for a 55 to 80% discount off the current market price of gold. Yes, even with rising energy costs and the recent credit crunch, there are still some miners out there--both majors and juniors--that have been able to and will continue to squeeze out gold at total cash costs under $ 400 per ounce. Considering that analysts estimate that the industry average cash cost is about $ 600 per ounce, the following companies are doing rather well:

Gold Resource Corporation (GORO)

In its early stages of production, Gold Resource Corp is targeting an astonishing $100 in total cash costs per ounce of gold for 2009. Its resources are primarily situated in the prolific San Jose de Gracia of southern Mexico and includes El Aguila, El Aire, and La Arista mine which include significant high-grade gold zones. Production at El Aguila is due to begin later this year with 70,000 oz. of gold expected.

El Dorado Gold Corporation (EGO)

Last year, El Dorado produced over 300,000 ounces of gold at $ 257 per ounce. Most recently, the company's reported total cash costs for the Q1 2009 remained low at $ 315 per ounce. The company projects total costs to average near $ 300 per ounce for the remainder of 2009.

Goldcorp (GG)

The world's largest gold mining company prides itself on mining gold less expensively than any other major (Tier I) gold producer. Last year, the company produced a record amount of gold at an average cash cost of just $ 305 per ounce. Along with analysts' estimates, cash costs increased slightly in 2009 to $ 353.

Agnico-Eagle Mines (AEM)

Agnico-Eagle has considerably reduced total cash costs from $ 399 in the first quarter of 2008 to $ 325 for the first quarter of 2009. The company has, however, revised previous production estimates and now expects costs to average $ 340 per ounce of gold this year.

Rusoro Mining (RMLFF)

At $ 315 per ounce of gold in the first quarter of 2009, Rusoro reported record production and declining cash costs through its Venezuelan Choco 10 mill. Last year, cash costs averaged about $ 360 per ounce with higher production and lower costs having occurred in the fourth quarter 2008. The company projects 2009 cash costs to follow a similar range between $ 315 - $ 375 per ounce.

Minera Andes (MNEAF)

Minera Andes recently announced first quarter cash costs of $ 357 per ounce of gold at its 49%-owned San Jose, Chile mine. This represents a 21% decline from 2008's average cash cost of $ 375 per ounce. We expect costs to remain in the $ 350 to $ 375 range.

Yamana Gold (AUY)

After a tough third quarter 2008, Yamana has recently been able to increase production while lowering cash costs. At $ 384 per ounce of gold in 2008 and just $ 379 in the first quarter of 2009, Yamana is reaffirming itself as a low-cost producer. Based on trends, the company is targeting even lower cash costs.

Aurizon Mines (AZK)

First quarter 2009 results from its Casa Berardi, Quebec mine indicated total cash costs of $ 379 per ounce of gold. This represents a 10% decline from the first quarter 2008 and an 11% decline from the previous quarter. The company is targeting an average cost of $ 390 per ounce.

Northgate Minerals (NXG)

Although its first quarter total cash costs were considerably higher than last year's, they are still 20% lower than expectations. At $ 392 per ounce of gold, Northgate has managed to increase production by over 20% and has yielded significant drilling results at its Young-Davidson, Ontario mine.

* The term "cash costs" represents "total cash costs" represent an unstandardized, non-GAAP measure as defined by the Gold Institute and takes the following costs into account: operating, administrative, inventory adjustment, processing, fees, transportation, taxes and royalties. All cash costs are priced in US dollars and calculated on a co-product basis or average cost to produce gold unless otherwise mentioned.

Junior Mining Takeover Targets

2009-05-07T07:18:00.000-07:00

Last week major miners Barrick Gold (ABX) and Newmont (NEM) announced that profits fell 28% and 48% respectively in the first quarter as metals prices and production declined. With all eyes on the mining sector, the majors may need juniors now more than ever.

We've sorted through some likely takeover targets--junior mining and exploration companies that have recently made huge discoveries and are located right next door to the majors.

Northern Dynasty Minerals (NAK)

Northern Dynasty presently controls the Pebble Mine project, in southwestern Alaska, one of the largest recent gold/copper discoveries in the US. This year, all eyes are on Pebble as drilling results estimate that it contains over 94 M oz. in estimated gold reserves and 72 B pounds of copper. It's worth mentioning that the mine is still a distant 7 years from production.

Its location is on a relatively low plain just 65 miles from the coast should ease the development process. Moreover, Alaska is rather supportive of the mining industry and receiving the required permits should be a seamless process.

Perhaps it's most important that Anglo American's (AAUK) $ 1.4 B investment in the mine means that Northern Dynasty doesn’t have to spend much of its own money to bring Pebble up to production.

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Rubicon Minerals (RBY)

Rubicon is an exploration company with over $ 86 M in cash reserves and fully-controlled mineral-rich properties in Ontario (Red Lake), Alaska (near Pongo mine), and 225,000 acres in northeastern Nevada. The company is presently drilling at its 65,000-acre Phoenix property, located right next door to Goldcorp's (GG) active Red Lake mine--the world's most lucrative gold mine. The property already a shaft, hoist, mill and other existing infrastructure to complement its $ 25 M mine development program.

Last year, Goldcorp expanded its presence in the
Red Lake region through the acquisition of Gold Eagle Mines and there's speculation that Rubicon is next. Recent drilling results confirm an extension of the broad F2 zone, in which high grade gold from 3 to a mind-boggling 3,150 grams/ton has been found.

Right now, we can only guess how much gold is at Phoenix, but according to Rubicon CEO David Adamson, "grades and widths are, to date, better than what Gold eagle found in Bruce Channel." If that's even close to being true, then Rubicon would have over 11 M ounces of gold at the Phoenix property alone. That doesn't include Rubicon's adjacent properties at Red Lake.

Here's what analysts have to say about Rubicon and its Phoenix project:

"As its high-grade gold discovery continues to take shape, it may only be a matter of time before Rubicon becomes a takeover target...Goldcorp Inc. appears to be a logical suitor" Timothy Lee, Dundee Securities

"Recent acquisitions in the Red Lake region, such as the takeover of Gold Eagle by Goldcorp, show the importance of making high-grade discoveries in established camps." Barry Cooper, CIBC World Markets

"...F2 it is still [in its] early days and good additional drilling results are highly probable. We continue to recommend RMX (Rubicon's TSX symbol) as a BUY, and believe that RMX’s discovery is in the early stages of being defined." Barry Allan, Research Capital

Midway Gold (MDW)

Midway Gold's Spring Valley property is Nevada's largest new gold discovery. The company's exploration program has already indicated more than 1.8 M ounces of gold at the property that has attracted interest from major miners
Kinross and Barrick Gold. In January, Kinross completed initial drilling at Spring Valley, but in March, Barrick and Midway signed an exploration agreement with the option of a joint venture.

Barrick, which presently owns a 10% stake in the company, would be the most likely buyer. With the help of more than 50 Barrick geologists already stationed in
Nevada, Midway is on its way to fast development of its mine.

In addition to Spring Valley, the company has other exploration programs:

- Pan property in the Battle Mountain-Eureka gold trend have roughly 500,000 ounces in estimated gold reserves

- Drilling at the Midway project, located near Round Mountain, Nevada indicates 12 high-grade gold veins. After permits are received, the company plans to reach the gold zone by October.

- Golden Eagle project is located in the historically mineral-rich Republic Gold Trend in Washington.

Keegan Resources (KGN)

Keegan operates two prolific properties in Ghana, West Africa. By the way, for centuries, the country has been known as the "Gold Coast" and is certainly no stranger when it comes to gold mining. The company's 28 sq. mi Esaase property is estimated to have almost 3.4 M ounces in gold reserves.

Nonetheless, its second Ghanian mine under development takes the cake. Located close to Newmont's (NEM) mine, Asumura is estimated to contain over 19 M ounces in gold reserves, making it one of the world's largest gold discoveries this year.

Because the company paid a small sum for these mineral-rich properties and because of the lower costs of labor, supplies, etc., Keegan is beginning a very lucrative operation that has certainly grabbed the attention of not only Newmont but other majors as well.

Detour Gold (DRGDF)

Acquired from Goldcorp (GG), Detour Gold operates the Detour Lake project in the Abitibi Greenstone belt in Northeastern Ontario. At 242 sq. km, the 100%-owned property is enormous and surrounds a smaller 50%-owned TradeWinds mine.

Drilling results at Detour Lake revealed a nearly 13 M ounce resource. Grades have been mainly between 1 and 4 g/ton and includes a high grade gold zone of an astounding 51 g/tonne. Both Campbell and Placer Dome previously mined the property for a total of over 1.75 M ounces of gold from 1983-99.

NovaGold (NG)

NovaGold and Barrick's 50/50 Donlin Creek, Alaska mine recently added an estimated 14.5 M ounces of gold to total resources. A feasibility study puts total proven and probable reserves at nearly 29 M ounces of gold, mineable at an average cost of under $400/oz. The company expects that Donlin Creek will be able to produce over 1.6 M ounces of gold per year, making it one of the largest new discoveries in the world.

Donlin Creek is in its early development stages and Barrick's expertise and resources will certainly ease the process; however, it won't be an easy one. The mine requires a 75-mile access road that leads to the port, as well as an airstrip, pipeline, tailings facilities, and generators.

In addition, NovaGold gets $ 1-3 M in annual cash flow from its Nome Operations, an 89,000 acre property in northwestern Alaska that includes 3 mines with an estimated 3 M ounces in gold resources.

Andina Minerals

With over 13.8 M ounces in gold reserves at its Volcan mine in Chile, Andina stands as a viable takeover target. Last year, Kinross Gold Corp. (KGC)expressed interest in Andina, but it might not be the only contender. After all, the Volcan mine is located right next door (just 4 mi) to Yamana Gold's (AUY) La Pepa mine, a bit closer than Kinross' Maricunga mine (15 mi).

Also located in north-central Chile, Andina is drilling at Encrucijada and Pampa Buenos Aires. The former property has revealed high grade gold and silver at 8.4 and 100 grams per tonne respectively. The latter is 50%-owned by Rusoro Mining and is in its early stages of testing.

Great Basin Gold (GBG)

Great Basin controls the Hollister Gold project in Nevada's mineral-rich Carlin Trend. With the exception of Rubicon's Phoenix property, Hollister is one of a few projects to consistently hit bonanza grade gold over the past year. Its most recent drilling results found a very small zone with 1,700 grams of gold per ton.

In addition, Great Basin controls the 85,000-acre Burnstone property in Witwatersrand, a superb location in the historically mineral-rich mining region of South Africa. Burnstone is close to major gold miner Harmony Gold (HMY) gold mine as well as a highway, power lines, pipelines, and railways. With an estimated 13 M in gold resources, Great Basin Gold is certainly on the radar.

Claude Resources (CGR)

Claude Resources has its own slice of the mineral-rich Red Lake region at its 10,000 acre Madsen Deep project. Like Rubicon's Phoenix project, Madsen Deep has infrastructure including a mill, shaft and tails pond. The project has historically produced over 2.4 M ounces of gold and new tests are promising. This year it has returned exceptional drill results that also indicate high-grade gold zones.

Located in Saskatchewan, Claude's other property is already a few years into gold production. The 100%-controlled Seabee mine produces an average of about 45,000 ounces of gold per year at the Santoy 7 zone. The company believes that production will begin at the adjacent Santoy 9 zone towards the end of 2009.

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Gold Reserve Inc. (GRZ)

Although its location in socialist Venezuela is enough to deter many investors, Gold Reserve is one of the only junior miners that we've listed that has already received a bid from a major. Gold Reserve actually rejected Russia-based Rusoro Mining's hostile takeover attempt saying that the company was undervalued. A Canadian court later issued interlocutory injunctions, preventing both Gold Reserve and implicated Endeavour from temporarily furthering takeover attempts.

Gold Reserve's 1,200-acre flagship property, Las Brisas, has an estimated 13 M ounces in gold resources and nearly 2 B pounds of copper.

First Majestic Silver (FRMSF)

Our junior silver miner is expected to produce almost 7 million ounces of silver this year, mainly from its 3 Mexican mines--La Encantada, La Parrilla, and San Martin. Silver makes up almost 90% of First Majestic's revenues and accounts for over 260 M ounces in reserves.

What's unique about the company is that it sells silver bars and ingots directly to investors, often capturing a premium over silver market prices. Although the sales program is in its infancy, it's a great addition to the company's cash flow.

China, India Quietly Accumulating Gold

2009-05-04T14:05:00.000-07:00

After a dip to $ 880, the price of gold sent clear reversal signals today as it settled above $ 900. As we approach a full moon later this week, we expect precious metals and mining stocks prices to fully reverse and breakout into an uptrend. We're looking for cyclical highs to occur between May 17th and 24th or the period between the last quarter and new moon.

A renewed interest in precious metals comes as investors begin to understand the significance of recent news from the world's largest gold producer and consumer--China and India. China confirmed all rumors that it had been quietly exchanging dollars for gold. As it has recently become the world's top producer, nearly all of its gold comes from chinese producers. Now, China's reserves stand at 1,000 tons, still far less than US and European totals.

As we expected, lower gold prices in Indian rupees has contributed to a surge in buying. India recently reported that it imported 30 tons--25% higher than April 2008 imports. You'll recall that we said in a February 28th commentary that India's imports were set to rise, but we weren't expecting such a sharp rise in such a short amount of time.

Majors Plotting Merger and Acquisition Moves

2009-04-20T06:47:00.001-07:00

Later this year, we expect some shake-ups in the precious metals mining industry. The major mining companies have been raising cash this year and there are juniors that look too attractive to ignore. We've compiled some information below to help you position yourself for possible merger and acquisition moves on the horizon:

Barrick Gold (ABX)

The king of precious metals miners, Barrick Gold has quickly expanded to become not just a powerful precious metals miner but a growing oil miner as well. Last year it completed purchases of Arizona Star Resources and Cadence Energy, which specialize in both oil and natural gas production.

In 2008 CEO Aaron Regent said he's looking to grow the company through acquisitions in addition to launching a new exploration
program for 2009.

Goldcorp (GG)

The world's second largest gold miner is expected to expand through acquisition after having most recently acquired interests in Lihir Gold Limited and Gold Eagle Mines, which had 8 square kilometers of property in the mineral-rich Red Lake, Ontario region. If Goldcorp's strategy is to consolidate Red Lake, then Rubicon Minerals (RBY) would be an attractive target. Rubicon owns several square kilometers of land in Red Lake and has returned phenomenal drilling results indicating a significant high-grade gold zone.

Newmont Mining Corp (NEM)

No. 3 gold miner, Australia-based Newmont Mining Corp has publically declared its plans to expand through acquisition, but has not given specific details about targets. A Newmont executive told reporters, "We've got a number of targets on the radar screen," and thanks to the company's finances, they'll be well situated for the perfect acquisition opportunity.

In 2007 it acquired Miramar and has most recently acquired remaining interests in its prolific Boddington, Australia mine. Since then, the company has spent time dispelling rumors of a potential merger with Barrick Gold.

Anglo American's (AAUK)

Gold mining giant, Anglo American's $1.4 B investment in Northern
Dynasty's 50% -controlled Pebble, Alaska mine is seen as its first
attempt at acquiring the junior miner. Considered one of the world's
largest active gold-copper mines, the Pebble property has made
Northern Dynasty (NAK)a viable takeover
target.

Kinross (KGC)

Kinross (KGC) has also been in acquisition mode in recent years. In 2008 it completed a merger with Aurelian Resources and acquired interests in both Chapleau Resources Limited and Minera Santa Rosa, which previously controlled the Lobo-Marte gold project in Northern Chile.

Kinross CEO Tye Burt hinted at acquisitions this year at the March 2009 Reuters Global Mining and Steel Summit. He recognized that there are many takeover targets, but not a great deal of potential buyers. More importantly, he said that Kinross has
received tons of proposals from bankers who would love to put together an acquisition package.

Yamana Gold

In a different direction, Yamana Gold (AUY) CEO
Peter Marrone said that rather than focusing on acquisitions of juniors, it is looking at consolidation among the major gold miners. In 2007, Yamana emerged as a major miner after the $ 3.5 B merger with Meridian Gold.

Original Post >>

Gold Demand Hits Record Highs

2009-04-13T07:29:00.000-07:00

As forecast in our previous commentary, the price of gold and mining stocks moved lower over the past 2 weeks. According to the charts below, prices hit support levels on the last full moon and are presently signaling that a reversal is imminent.

The previous retracement in precious metals prices was accompanied by a world equities market rally. Most recently the Dow surged above 8,000 leading many to wonder if the worse of the market correction is over.

The next stage of our long term upwards trend will be seen over the next 2 weeks when precious metals prices advance. We expect to see prices reach new highs as they head to trend resistance levels.

We've seen clear evidence that demand for precious metals is beginning to grow to unseen levels as wealthy buyers are seeking a safe and smart investment:

- US mint spokesperson calls present gold and silver coin demand "unprecedented."

- Russian mints are experienceing record coin demand and Australian Philharmonic coin sales have surged 544%.

- Some analysts believe that present demand is beyond speculation as many wealthy individuals are hoarding large amounts of gold bars.

Besides individual demand, prices will be influenced by central banks as well. As some continue to endlessly print money, others are buying gold. Analysts believe that the IMF's gold sales will have little impact on prices as China, Russia and Japan would be more than happy to buy.

Rise in Gold Demand Puts All Eyes on Mining Industry

2009-03-26T07:19:00.000-07:00

This Week, precious metals and mining stocks reached cyclical highs. As estimated in our last commentary, we observed highs on both March 9th and most recently on the 23rd, the last quarter lunar phase.

The rebound in gold prices were associated with record interest in gold trading and investing. Recently, we received news that the world's largest exchange traded fund, SPDR Gold Trust (GLD) expanded
to 1,041 metric tons, an all-time record. It's not just traders that are increasingly interested in gold, but investors as well. A deluge of reports indicating high demand for gold coins will continue to force world government mints to increase production, coin dealers to increase inventory, and mining and exploration companies to find new resources.

Mining companies are more and more attractive as fears of inflation and expectations of higher precious metals prices persist. Among good news items in the mining sector, we learned that Rubicon Minerals hit yet another high-grade
gold zone at Red Lake, Ontario. According to company executives, this is about the 12th such intersection, leading many to speculate about just how much gold Red Lake holds. Prices jumped ahead to $ 1.59--the highest price since early October. Considering that RBY came off lows below $ 1.30, traders had well over
22% profit opportunities in just 2 weeks.

Expect to see a decline starting at the end of this week and continuing until roughly around April 9th--a full moon. We'll be looking for higher support levels, above $900 for gold and above $ 1.30 for RBY.

Gold, Mining Stocks Set to Reach New Highs in 2 Weeks

2009-02-28T09:49:00.000-08:00

This week we witnessed precious metals and mining stocks markets quickly retreat to support levels after a rally sent prices back to cyclical highs on Monday. Since our buy alert in our Feb. 11th commentary, RBY rose from $ 1.28 to well over $ 1.50--at least 17% in profit opportunities in just 2 weeks.

After Monday's high, RBY dipped to support levels between $1.32 and $1.36. We expect to see new highs reached between March 9th and 20th or during the last quarter lunar phase.

Earlier this week we learned that interest in gold is gaining significant momentum. Gold trading, specifically in the GLD ETF has increased to all-time highs.
As interest in gold persists, gold production is waning, creating temporary supply concerns. Output from 2 of the world's largest producers, South Africa and Australia dropped to new lows.

As mentioned in last week's commentary, higher US gold demand coupled with a strong dollar means that gold priced in Indian Rupees is at all-time highs--in other words, Indians are not buying AT ALL.. According to the charts below (USD/Rupee and INR etf), it looks like the Indian Rupee is set to rise very soon.

Gold Hits 7-Month Highs, Dow Re-Visits 4-Month Lows

2009-02-18T16:19:00.000-08:00

Today, the price of gold moved closer to $1,000 when it hit 7-month highs between $970 and $983. This should serve as a wake-up call to all who have not bought into the precious metals bull market that is in full force. It's worth mentioning that both Gold and RBY are following upwards trends that we had forecast and laid out in two commentaries from December 20th and the 26th.

As gold hit new highs, we observed a new pattern that began in late December: a divergence between the Major Stock Market Indices/industrial metals and Precious Metals/Mining Stocks Sectors/US Dollar. The following chart shows the new direct relationship between GLD (gold ETF) and UUP (US Dollar ETF):

For one, investors have shown that they're just too pessimistic about the major companies trading in the world equities markets and future economic development. This helps to explain the low demand for industrial commodities like copper and oil as well as the dejavu back to November 2008 lows. As money has been converted to hard assets and cash, the US Dollar Index hit new 3-month highs above 87 on yesterday.

The divergence is telling us that fear is high and that investors are either holding cash or rushing to the safe havens--gold, silver, and quality mining stocks. Although we expected this scenario to have occurred sooner, it's happening now because gold and silver recently passed through key resistance levels (discussed in Jan 12th commentary, ). In short, precious metals and mining stocks now have the necessary investor support needed to continue the long term upwards trend.

Remember that gold still hasn't reached all-time highs in US Dollar terms. It's easy to see this when we consider that the world's largest buyers of gold, Indian consumers are refusing to buy gold at such high prices. Presently, the price of gold is at all-time highs in Indian Rupees. As it and other developing-world currencies begin strengthening against the dollar, the price of gold will be more attractive in India. We expect this rise in demand to start in late spring 2009 and continue through the early part of the summer.

Is the divergence pattern we're observing creating a win-win situation for gold, silver, and mining stocks? Well, think about. Now that gold and the dollar are trading directly, gold is being used as a safe haven. When we revert back to the ususal inverse relationship, then not only will we see the increase in demand from India, we'll see gold reach new highs in dollar terms as well--which in our opinion, means you can't go wrong with gold.

Stimulus Sends Metals, Mining Stocks to 6.5-Month Highs

2009-02-11T18:39:00.000-08:00

You may recall that last week's commentary alerted our readers to cyclical lows on or near Monday, February 9th and we were right on target. On the 9th, gold and RBY prices fell to $ 892 and $1.26 respectively and quickly bounced back the next day. Although support levels seem much higher than we expected, it's a good indication that prices must go even higher in the near term.

Today the price of gold and RBY jumped to $947 and $1.51 respectively, highs unseen since last summer. The price spike was associated with the following events:

- Congress' economic stimulus package moves closer to adding another $0.8 T to the Fed's $7.7 Trillion in commitments and adding to inflation concerns.

- RBY executives released news that crews hit yet another high-grade gold zone at its Phoenix Gold property. This is the 7th such discovery within the past 7 months at Red Lake, Ontario, one of the world's historically mineral-rich regions.

In spite of today's price surge, prices quickly retreated. Such action may indicate that speculation was high and that prices have potential to go even higher by the end of the month. We're targeting February 25th as the date we expect to see new highs.

Central Banks will Drive Gold, Mining Stocks Higher in 2009

2009-02-03T19:19:00.000-08:00

In January, we told our readers to look out for January 26 as it would signal the beginning of a new uptrend in the precious metals markets. The week of the 26th pushed gold and mining stocks prices to highs unseen since fall 2008. Most importantly, prices smashed through previous resistance levels.

Over the next few days, we're looking for prices to settle near $840 to $860 for gold and $ 1.05 to $1.15 for RBY on or near February 9, 2009, near the time of a full moon.

As prices pushed higher, world central banks and treasuries have been increasing their gold holdings. In fact, the German Finance Minister made it clear last week that it would be unwise to sell gold reserves at current levels. Furthermore, China and Russia have long stated their intentions to add to reserves, leading us to wonder if central banks will be helping to drive this year's commodities bull market.

Mining and exploration companies will indeed have a market for their extracted minerals. After major market corrections like that of late 2008, the mining companies most poised for future development are the ones that perform the best. Yesterday Rubicon Minerals Corp, which has prime, unmined property near mineral-rich Red Lake, Ontario announced that it received a necessary de-watering permit. We considered this a crucial step in developing the property. The permit was the only thing holding big money from attracting to RBY; now that it's behind us, we can confidently continue trading RBY this year.

Gold, Mining Stocks Confirm Positive Trend Reversal

2009-01-23T15:25:00.000-08:00

We recently suggested that precious metals and mining stocks prices would climb higher after reaching new lows last week and we were accurate (See January 12, 2009 commentary). Over the past week RBY and gold jumped roughly 33% and 8% respectively.

On Monday,Rubicon Minerals executives released more promising results from its Red Lake, Ontario mining operations. After having intersected several bonanza grade gold zones in 2008, the latest discovery was in a "broad zone" over a "wide vertical range." You'll certainly want to pay close attention to the technical report to be filed on January 23 on www.sedar.com in which all results from its mineral-rich F2 zone will be given.

Today, we witnessed RBY jump over 10% in the early trading hours to a high of $1.27. Meanwhile, gold leapt past the $ 900 mark and set record highs in both euros and pounds. Most importantly, both RBY and gold breached previous resistance levels, sending us clear signals (See charts below.

We'd like to reiterate our expectation that a major long-term trend reversal should occur near January 26th. It's rather interesting that Rubicon has chosen to release results on Jan. 23--the last trading day before the 26th. After such time, we expect a much shorter price correction.

Precious Metals Retreat after Reaching 2-Month Highs

2009-01-12T17:12:00.000-08:00

Today the price of gold slid under $ 820 /oz. confirming our forecast in our most recent commentary. Accordingly, RBY's price dipped below $1.00 signaling a buying opportunity is imminent. We'll allow the dust to clear and wait for a clear short-term trend reversal before taking action.

Over the past 2 weeks, the price of gold rose close to $ 900 /oz., silver approached $ 12 /oz., and platinum signaled a clear trend reversal when it hit 2-month highs around $ 1,000 /oz. In the same period of time, we've received reports on recent gold trading trends and inflationary conditions suggesting that the long-term precious metals upwards trend will continue:

- Gold trading surged 20% as distrust in banks and economic turmoil persist.

- Australia's Perth Mint bullion sales rose an astounding 194% in December 2008.

- The Bank of England cut the benchmark interest rate to its lowest level in history, 1.5%.

We expect precious metals and mining stocks prices to rebound within the next few trading days. Look for cyclical highs after next week as well as a major trend reversal near January 26.

Further evidence of the advance in prices is seen in the chart below, which shows gold ounces priced in British pounds. As the pound has weakened against the dollar in 2008, the price of gold in pounds has soared to all-time highs. As the tide begins to turn yet again, we're expecting commodities prices to rebound--this time in dollar terms:

Metals, Mining Stocks in Upward Trend in Early 2009

2008-12-26T08:22:00.000-08:00

In recent weeks, mining companies and precious metals climbed to highs unseen in over 2 months. In a December 11, 2008 commentary, we suggested that our trading stock, RBY would continue to advance beyond $0.90 to new highs by the end of the month and we were accurate. Today, RBY showed promise as it reached $1.10 for the first time since early October.

Our two buy alerts gave traders nearly 40% profits in just 3 weeks.

During the same period of time, gold surged to new cyclical highs and spent December 11th trading as much as 30 cents higher than the price of platinum. The recent momentum comes as economic uncertainty and inflationary policies persist:

- Trust in Banks Corrodes as Goldman Sachs Declares First Loss Ever.

- Fed Cuts Interest Rates to Near Zero.

- OPEC Cuts Production to Stop Sliding Oil Prices.

In light of the higher resistance levels that we've observed this month, we're looking for higher support levels after the next correction. Expect RBY and gold to settle at $.90-$ 1.00 and $800 - $820 respectively.

Cyclical patterns and signals are pointing to the first 2 weeks of January in which we expect the following events to occur:

- Rubicon Minerals will shock investors with gold estimates at its Phoenix/Red Lake Mine.

- One or more larger mining companies will seek to merge with or acquire Rubicon.

- Gold will test the $900 resistance level.

- Oil will stage a huge rally after it settles near $25.

The Next Bubble: It's Already Underway

2008-12-20T13:41:00.000-08:00

President-elect Barack Obama made it clear that his solution for turning around a stagnant economy is
the "largest single investment in our national infrastructure since the creation of the federal highway system."

He and advisers are assembling an astounding $850 B stimulus plan including tax breaks and money directed at huge alternative energy projects.

In a May 2008 commentary entitled, "The 'R' Word" we suggested that the US was in desperate need of investment in infrastructure and that it would create the next wave of economic expansion. Now it's finally a reality.

The cornerstone to any major period of economic expansion is inflation. The next bubble will be fueled by the trillions of dollars that central banks are currently
injecting into our financial system.

Whenever there is significant inflation, or a trend of dollar depreciation, we experience economic growth and development. When in periods of deflation, like the short term period from August to November, we experience economic contraction.

Yes, the next bubble is beginning to expand because more money is entering world markets.

In spite of the over-reliance on credit--loans and inflationary monetary instruments--we think periods of expansion are very beneficial to society. Barrack Obama's investment plan will bring necessary modernization to the country's aging infrastructure.

Similarly, FDR's new deal improved the quality of living for most Americans and modernized the country with additional infrastructure. In the 1950's the federal highway system eased
congestion and made travel quicker and easier for all. More recently, the tech bubble created the interconnected and technologically advanced web-based world in which we presently live--and we certainly couldn't imagine living without it.

Nonetheless, living in periods of economic expansion means you must invest wisely in order for your money to grow. You can beat inflation through sound investments in gold and silver coins at the end of deflationary periods (NOW). The price of gold has shown signs of reversing from its previous short-term downtrend (see chart below). Both precious metals and quality mining stocks are on the verge of a major bull run that will run its course throughout the better part of 2009.

RBY Jumps 20% on News of Another Major Gold Interception

2008-12-11T07:23:00.000-08:00

In our previous commentary we suggested that RBY would move from its support level to new highs at the end of the month and it looks like we're heading in the right direction.

In the last 3 days, RBY's price surged from $ 0.73 to over $ 0.90 and it seems we might have more ways to go. If we breach the .90-1.05 resistance level then we could declare with confidence a new trend. We think this is most likely to occur within a little more than a month from now.

Today, Rubicon Minerals execs complimented RBY's surge with good news of yet another high-grade gold interception up at its Red Lake, Ontario mine. Rubicon Minerals has consistently released positive news that is undoubtedly attracting new investor interest and old investor confidence.

This may be the beginning of a new long term trend. Many traders of mining stocks use the HUI (Gold Bug Index) as an indicator about overall trends for specific mining stocks. The index now shows a clear reversal from our previous sector slump. The price of gold has yet to show us a clear reversal pattern; however, prices have been spending a lot more time above $ 800 than in prior months.

Gold Rises on $ 7.7 Trillion Bailout

2008-12-01T08:15:00.000-08:00

In our last commentary we forecast an up trend that would end roughly around November 27 and we were accurate. Over the past two weeks, our mining stock pick increased by roughly 25%. Friday commenced a short down trend which should reverse close to this month's full moon.

Meanwhile, gold's price surged from $700 on Nov. 20th to about $830 last week--a 20% increase. Strong gold sales, and an increase in demand helped push the price of all commodities:

- India Gold Demand Rises on Safe-Haven Buying - Reuters - Nov. 24

- Saudi Arabia, UAE Lead Gold Demand Increase in Q3 (+51 and 56% respectively) - Saudi Gazette

- US Stocks Post Biggest Two-Day Rally Since 1987 on Citigroup - Bloomberg - Nov. 24

- US Pledges Top $ 7.7 Trillion to Ease Frozen Credit

The last piece of news is perhaps the most astounding. When you add up all the Fed's financial commitments, it comes up to $ 7.7 Trillion. That's all going to be created and pumped into the system--the implications of which are that inflation will soar. Enjoy cheap gas and stock up on precious metals, because when the next major cycle begins in about a month, things will be a lot different.

Is a Year-End Rally Possible?

2008-11-06T14:17:00.000-08:00

In our last two commentaries we suggested that we'd reach cyclical highs at the end of October and we were right on target. The markets saw the biggest gains exactly during the new moon on Tuesday, October 28. Our stock pick RBY (Rubicon Minerals) advanced from a cyclical low of $0.70 to 1.07, well over 50% in under 2 weeks.

In that time frame, Rubicon Minerals released more promising news:

- On October 21 it reported intercepting high-grade gold at its Red Lake, Ontario mine.

- 10 days later, it reported better news with its deepest gold intercept ever.

We expect the next cyclical high to occur near this month's new moon (Nov. 27).

Over the next week, precious metals and mining stock prices will revisit support levels after having already digested the following positive news:

- Central banks worldwide have lowered interest rates to unseen levels.

- Q3 Results indicate large mining companies Barrick Gold (ABX), Iamgold (IAG), amongst others, are still profitable.
-Dubai Gold & Commodity Exchange YTD trading volume is up 40%.

In our last commentary we also called for a fall in the USD Index and it might have finally reversed into a negative trend. If this trend proves itself, then the markets will respond positively. Billionaire investor Warren Buffett, has already begun buying American stocks because "fear is widespread."

By the way, you might recall that in August, Warren Buffett predicted the major market correction. Could he be right this time?

PM Bulls, Why the Long Face?

2008-10-17T11:19:00.000-07:00

In spite of false claims of falling demand, gold and silver are actually victims of hedge fund and investment bank liquidation. Although gold and silver are expectedly at cyclical lows, many investors and even gold bulls are in panic mode.

In fact, there's been a full divergence between gold and silver index prices (on commodities exchanges and ETFs) and the price of the physical metal. For example, the silver American Eagle common date coins usually sell near the market price per silver ounce; however, they're now selling for 50% higher than that amount. That's right, physical silver prices (and gold as well) are not nearly as low as market prices. Furthermore, the US Mint will not sell silver American Eagles until further notice.

Physical gold and silver prices are actually doing quite well this year (see chart below). In 2007, you may recall that gold spent most of the year trading below $ 690 and its 2007 high near $ 840 didn't occur until November. This year, gold has risen above $ 900 each and every single month thus far. Yesterday's pullback below $ 800 should be seen as a great buying opportunity for traders and investors.

Similarly, silver spent the majority of 2007 near $ 13 an ounce reaching highs of just $16. In 2008, silver has remained above $ 16 for most of the year and recorded astounding highs above $21. Over the past 3 months, the correction has brought opportunities to get in on the hottest precious metal.

Physical gold demand has not decreased even in face of global metals ETF and contract sell-offs. Thus the question for precious metals bulls remains, why the long face? Now consider these recent events:

- The America's largest coin dealers continue to report difficulty filling customer orders and an unprecedented surge in business.

- German gold demand is up 10 fold and dealers run out of bullion as investors seek safe haven.

- India will start selling gold by the gram at post offices nationwide.

- The Indian gold buying season, Diwali starts next week, in time for a cyclical high at the end of the month.

During the global market downtrend over the last few months, the dollar has quietly risen into extremely overbought territory and the charts signal a big tumble is imminent (see chart below). Today, just 2 days after the full moon cyclical low, we're calling for a reversal in $ USD index. This usually means positive gains for equities and precious metals -- right on target with our late October new moon high forecast.

Mining Through the Credit Crisis

2008-10-07T16:52:00.000-07:00

The price of gold hit a low near $ 835 a few days after last month's new moon. It's still possible that prices will re-visit lows near next week's full moon. Nonetheless, our mining stock pick hit rock bottom in yesterday's global sell-off, a bit earlier than our anticipated full moon low. RBY's chart looks bullish for the next week but we expect prices to trade sideways for a few days before increasing. Both gold and RBY should then hit cyclical highs near the end of the month.

Gold and other precious metals prices actually advanced yesterday as smart money sought a safe haven. With the first genuine bank run in our lifetimes in full swing, sagging global indices, and ultra low interest rates, it seems precious metals markets are one of the only places to go.

Mining stocks, however, are in doubt as smart money just isn't sure about which ones can survive in a tight credit market. The attendees of the Toronto Resource Investors Conference noted that the mood was much more sour than last year as mining companies themselves fear failing without the necessary exploration loans. In our opinion, credit should still be widely available to sound companies for the following reasons:

- The $ 850 B bailout plan was passed and signed into law

- The Federal Reserve didn't wait for the vote to inject another $ 630 B into world credit markets. This comes after having injected $ 38 B in August and $ 200 B in March of this year alone--truly astounding.

- Over the past week, world central banks injected another $ 500 B into the credit markets.

- Today Australia joins the Bank of England and the ECB in cutting interest rates.

Here's why we think our current mining stock trading pick, Rubicon is a safe bet:

- Since mid-August, average daily volume has more than doubled, signaling that it has at least attracted some new traders and investors.

- As opposed to precious metals and other mining stocks, RBY hit new 2008 highs just 3 weeks ago when the rest of the markets were down.

- This year, it has consistently found new mineral rich zones at its Red Lake, Ontario (Canada's biggest gold producing region this year) suggesting gold grades as high as 10 to 26 ounces per ton. By comparison, big miners Barrick Gold and Newmont Mining have properties with gold grades of under 1 ounce per ton.

- Its other mining properties are in mineral-rich Nevada and Alaska.

- Goldcorp founder, Rob McEwen is trusted and respected in the mining sector and owns a 40% stake in Rubicon.

- The company's properties and exploration technology make it a big acquisition target.

Obviously with so many more greenbacks flowing in our financial system, there should be plenty of credit available. Moreover, there's no way the dollar can maintain itself at present market values. In fact, over the past month, M1 and M2 money supply has exploded at the fastest pace ever. All these trillions of dollars being injected in one form or another mean that precious metals and solid mining stocks are on their way up. Although we're unsure exactly when the bank failures will stop draining investor confidence in mining stocks, at least gold and silver ETFs are good for trading.

Financial Weapons of Mass Destruction

2008-09-22T11:15:00.000-07:00

Early last week, we witnessed a market exhaustion, a big sell-off near the end of a major market correction. Since it was perceived as a crash and occurred in tandem with the downfall of major American financial institutions, the Fed has yet again flexed its muscle. After all, the US markets could have fallen a lot harder. In fact, the US has done very well this year compared to other major world indices:

- As China saw a slowdown in economic growth this year from 11% in 2006 to 8 % this year, the Shanghai Composite Index has fallen big time by a whopping 65% in just 11 months. Could you imagine the severity of the effects of a 65% decline on the Dow or Nasdaq? Moreover, could you imagine the measures that Congress and the Fed would have taken? They would be in pure panic mode. After the initial fallout of financial firm Bear Stearns last October, our markets have corrected only 25% in the same period of time. Yet, after the 65% correction, the Bank of China was much, much slower to intervene, leading us to wonder which one is truly the free market economy.

- On Tuesday, September 16, Moscow's primary stock exchange, the MICEX fell by an astounding 17.5% in one day compared to the Dow's mere 8% fall in 2 days.

As we've seen an economic slowdown, nothing has benefited more than the US dollar:

- As the Dow declined this summer and economic growth has slowed to near par, the dollar has rebounded from trading at $ 1.60 per euro to $ 1.40. The dollar versus the British Pound has improved from $ 2.02 per pound last year to about $ 1.81.

- Since mid July, oil prices have fallen from $ 145 to under $ 100, in addition to other commodities. Gas prices have fallen from a $ 4.50/gallon national average to under $ 3.50 in just a few months.

Market corrections should be seen as an opportunity whereas your currency buys more. If you took advantage of our recent correction and were following market cycles, you would have benefited tremendously in the last 3 trading days whereas the values of gold, silver, other commodities, and bank stocks soared.

Again and again, we have maintained that the banks are responsible for their own failures. Contrary to what John McCain, Barack Obama, and everyone on CNN, CNBC, etc. say have caused it, short sellers are not to blame. Perhaps smart money has finally figured out that these companies are operating on BS figures. Ellen Hodgson Brown attributes these write-downs to the troubled derivatives markets -- the world's largest financial markets. Per the Bank of International Settlements, the derivatives market was previously worth over $ 1 quadrillion -- more than the value of all world economies combined. Derivatives are simply bets on investment estimates, not investments themselves. In 2003, Warren Buffet called them, "financial weapons of mass destruction" because they "generate reported earnings that are often wildly overstated and based on estimates whose inaccuracy may not be exposed for many years."

Thus, Brown contends that the real reason for the injection of billions of dollars to help Freddie, Fannie, Lehman, and AIG was actually an effort to not only save the financial institutions, but the entire derivatives market from default.

Remember that Bank Run? Here It Is!

2008-09-17T09:54:00.000-07:00

On Comedy Central's the Daily Show, Jon Stewart said, "Remember all that money we've been giving to the banks all these years? Well they don't have it." It's funny but true.

In a few previous commentaries we've been saying that the banks haven't been giving good advice regarding precious metals investments. Now, it's clear that they haven't been making good investment decisions themselves. Bank of America, where most Americans keep their money not only has had over $ 50 B in write-downs over the past year, it has agreed to buy Merrill Lynch for yet another $ 50 B.

The printing presses are on full speed as cash is being injected into our financial system in order to save these failing banks. Within the past 2 days the following has occurred:

- Following a 48 B euro ($ 64 B) injection in August, the European Central Bank injected another $ 70 B euros ($ 100 B) today after Lehman's collapse.

- The Federal Reserve injected nearly $ 70 B, the Bank of England added another 5 B pounds ($ 9 b), and the Bank of Japan pumped 2.5 T yen ($ 24 B).

- The Fed approved an $ 85 B loan for troubled insurer AIG, the largest bailout in history.

Bear in mind that Monday was a complete full moon and as we stated last week, it would mark a market low. On Monday, financial companies and nearly every major index fell hard in the largest downfall since September 11, 2007. In a promising divergence, precious metals and mining stocks were up slightly. Instead, yesterday metals and mining companies seemed to have settled near their cyclical lows. Today, the price of gold leaped from $ 777 to $ 842 so far and GLD (Gold StreetTracks ETF) was up more than 7% today in the largest single-day increase all year. Finally, after months and months of talking about a bank run, here's the evidence. It's also worth mentioning that our mining stock pick, RBY was up more than 7 % this morning as well. Expect the next 2 weeks to begin a consolidation phase leading up to the Chinese gold buying season near the end of the month or early October.

Summer Slump in Review

2008-09-11T16:10:00.000-07:00

About 1 month ago, we suggested that a change in cyclical behavior was evident in previous precious metals and mining stocks prices. We labeled this change as a "disruption" caused by the solar eclipse that occurred on August 1, 2008. Now, it seems that we can confirm this behavior. Instead of seeing cyclical highs near a full moon, and lows near a new moon, the opposite occurred for the first time in nearly a year. During last month's waning period from August 16th to 30th , RBY advanced from $1.10 to $1.90 and gold moved from $ 780 to $ 850. Then during this month's waxing period, RBY and gold have been on the decline. Consequently we can expect sector highs around the new moon and lows near a full moon. As we approach a full moon on Monday, September 15, expect prices to settle at support levels.

With the exception of RBY, precious metals and mining stock prices are well into oversold territory - especially silver. Although physical commodities (specifically silver, gold, copper, and oil) demand is surpassing supply, we have to keep in mind that it's no longer a physical market. Most silver and gold is traded on paper only, through futures contracts, and artificially inflates the market. In addition, the fall in commodities prices could easily be attributed to the following:

- Troubled banks and investment fund managers who needed to clean up balance sheets sold commodities contracts and ETFs earlier this year to raise cash. This has also benefited the dollar as demand for cash has grown significantly.

- A sudden decision by European Central Banks to sell nearly 40 tonnes of gold in July and August alone represents the largest amount sold in a 2-month period.

- China's main bourse, the Shanghai Composite has dragged down world markets this year. It has descended by almost 60% since its 2007 high for 3 key reasons. For one, China's strong economic growth rate of 8% is still a lot slower than the 11 % it witnessed from 2004-06. The second reason for the decline lies in the minds of Chinese investors who wrongly expect the government to prop up the markets. The final reason is that some 10% of Chinese GDP is invested in failing mortgage giants Fannie Mae and Freddie Mac.

- The US dollar has reached 52-week highs against the Euro, Canadian Dollar and a 2-year high against the British Pound as banks finances have been mired in write-downs and commodities took a tumble

We never fret when commodities prices fall because we can always take advantage through good trading strategies. When a downtrend is in effect, we can always short sell mining stocks and/or wait for a reversal before buying at a much lower price. As RBY recently reached new 52-week highs, it's a good sign for the rest of the mining stock sector.

Over the weekend we also witnessed the US government assert its role in bailing out more and more banks when it announced the takeover of Washington, DC-based mortgage giants, Fannie Mae and Freddie Mac. Some still worry that the takeover will not benefit stockholders of either company and will not solve their financial problems. Firstly, the Washington Post noted that James B. Lockhart, the same Federal Housing Finance Agency regulator who witnessed the descent of the two lenders is now responsible for their revival. He was the same regulator who, in March, called a government bailout "nonsense." Secondly, American taxpayers frown upon the notion of giving $200B to the private lenders for their bad financial decisions. Thirdly, many economists are questioning how the bailouts will help because there's an underlying problem not just with Fannie and Freddie, but with the entire world financial (credit) system.

On Wednesday, Lehman Bros. announced a massive $3.9 B third-quarter loss, signaling that the bank troubles are far from over. This brings the total amount in write-downs for Lehman to over $8 B, but other institutions have fared worse in write-downs: Washington Mutual , $14 B; Wachovia, $ 22 B; UBS, $44 B; Merrill Lynch, $46 B; and Citigroup, $54 B.

Weeks earlier, we saw the closures of more and more small mortgage-oriented banks across the US. Atlanta area-based Integrity Bank became the 10th US bank failure this year. With so many bank troubles you can see why the US government has been quick to come to the rescue. It has to continue to avert bank runs. This summer, we have discussed the slow but ongoing bank run developing in the world as more and more account holders begin to distrust their banks. So far, confidence in the banking sector has been maintained, but it doesn't take much for a massive withdrawal to take place. Should one occur, we're again reiterating that precious metals and mining stock prices will soar.

Rubi Tuesday

2008-08-27T07:30:00.000-07:00

Yesterday (Tuesday, August 26) we witnessed a 26% increase in the value of our recommended mining stock RBY (Rubicon Minerals) and another 12% increase today. The rise came just 1 week after we reiterated our bullish sentiment on this stock. Rubicon executives reported that it hit yet another Bonanza grade (mineral rich) gold zone at its Red Lake, Ontario mine.

We couldn't be more ecstatic, especially since 2 weeks ago, RBY dipped all the way below $1.10. If the correction didn't scare you, then your investment would have grown by nearly 75% in less than 2 weeks. The new wave above the previous $1.50 resistance level to $1.88 means that we're headed much higher than previously forecast in the long run.

You may recall that on August 4, we presented our research showing upward momentum in RBY as well as other precious metals and mining stocks in the few months following nearly every solar eclipse (much like the one that occurred on August 1, 2008). Today we're pleased to announce that this time was no exception.

Now, it's time for us to wait for the next buying opportunities in the markets whereas we'll see new price levels that haven't been reached in nearly a year. Brace yourselves for an exciting fall 2008.

The "F" Word

2008-08-19T15:58:00.000-07:00

In our last commentary we discussed how fear is generally associated with solar eclipses, the consequences of which lead to higher precious metals prices in the long run. Although a decline was foreseen, precious metals and mining stock prices plunged into unimaginable over-sold territory as investors became frantic. As we are fully aware, fear boggles the mind and leads to confusion. Now, it seems that a buying frenzy in precious metals has begun and nearly every major coin and bullion retailer is facing a huge shortage:

- Gold Demand Increases Despite Price Rise - The Economic Times, 8/19/08

- Heavy Demand for India Gold Amid Dwindling Stocks - Reuters, 8/18/08

- The US Mint Suspends the Sale of Gold American Eagles and is not Accepting Orders - APMex Blog 8/15/08

It's not the first time this year that the US Mint, Kitco, APMEX, Monex, Perth Mint, CNI Numismatics and other precious metals coin and bullion dealers have had trouble filling orders. With prices so low, who wouldn't want to start buying? Besides the fear ushered in by a solar eclipse, the other main catalysts for such a sharp and sudden decline in metals prices were: a full moon, conflicts in the world's major natural gas region, the Olympic games, write-downs, and recent ETF sales:

- As you'll recall, a full moon (one occurred over the weekend), brings about fear and lunacy.

- Russia and Georgian forces battled in secessionist Ossetia causing many to fear a disruption in energy supplies and to fear a start to World War III.

- The Olympic Games have halted metal and industrial production in China as officials exchanged economic production for cleaner air.

- Big bank write-downs over the past 9 months have forced the liquidation of precious metals ETFs, contracts, and mining stock positions in order to raise funds.

- As the popularity of gold and silver has expanded this year, ETF sales and contracts have increased more than the direct purchase of the physical metal in 2008.

- A late summer volume slowdown is typical during the weeks prior to Labor Day and usually means low upward momentum.

Many traders and investors are wondering how metals will recover given that demand has grown but prices remain low. It's not really our job to wonder how, but why. For example, silver has corrected to $ 13 because its price has skyrocketed from $ 5 just 5 years ago to over $ 20 a few months ago. If it's expected to go as high as we've forecast this year, then the recent correction was certainly in order. Think about a slingshot--the more it's pulled back, the farther it will launch.

There's nothing wrong with our present situation in the precious metals market and it's by no means the beginning of a long term trend. When investors wake up and realize that ETFs and contracts are still expected to be backed by the physical metal (which is in short supply), then things will change. Moreover, they'll soon realize that demand for the physical metals has picked up tremendously in such a short amount of time and in such a tight market.

Make no mistake about it -- the long term implications of our present situation are bullish. Things are shaping up quite nicely. Over the past week we've already witnessed RBY (Rubicon Minerals) settle around a support level of $ 1.15 and begin to inch higher. We find no reason to fear what's going on. After all buying at very oversold yet reversing prices should be your primary goal anyway.

Totally Eclipsed Markets

2008-08-04T15:37:00.000-07:00

August 4, 2008 at www.argmaur.com

On Friday, a total solar eclipse was visible from Northern Canada to North India signaling the start of a new cycle. A solar eclipse, unlike a lunar eclipse is when a new moon aligns with both the Earth and sun. Like every new moon, it signals change and a new beginning. Any solar eclipse is special because, historically speaking, precious metals and mining stocks have behaved quite positively after one has occurred.

The last one was an annular solar eclipse that occurred on Feb 7, 2008 and sent RBY (Rubicon Minerals) up 40 % in 2 weeks and GLD (StreetTracks Gold ETF) from $ 87 to over $ 100 in over a month. After the solar eclipse on September 11, 2007, RBY jumped 45% in less than 2 months and GLD moved from $ 66 to $ 77 in 2 months.

This is by no means a coincidence as prices commenced a 2 to 3 - month upwards trend after nearly every solar eclipse. Following a partial solar eclipse on March 19, 2007, RBY increased by 250% and GLD moved from $ 64 to $ 68 in 1 month; and after an annular eclipse on September 22, 2006, ANO (Anooraq Resources) doubled and GLD shot up from $ 56 to $ 64 in 2 months. The last time a solar eclipse occurred in early August was 1999 and and the $XAU (Philadelphia Gold & Silver Index) rose from $ 65 to $ 92 in less than 2 months.

Is the same likely to happen again? If you examine historical prices during the 2 months preceding solar eclipses, you can't help but notice that the precious metals prices have followed a bearish trend similar to what we've witnessed in June and July 2008. If you consider the implications of the ongoing bank run, massive bank write-downs, increasing inflation, weak housing market, and poor performance of the major market indices, then you'll see an overwhelming amount of fear and distrust. Investors are simply running out of options of places to put their money. Today, Citigroup is reportedly closing its Tribeca Global Fund, a convertible hedge fund unit, because of investor redemption (See Bloomberg article). So the bank run that we've been discussing all summer is continuing as investors no longer think that banks and investment groups are safe.

Bear in mind that fear is traditionally associated with a solar eclipse. For instance, the Chinese have held on to traditions of shooting arrows at the new moon, because it represents a dragon swallowing the sun. When fear is heightened the markets respond accordingly, although not instantaneously, and that response has usually been positive for precious metals and mining stocks.

The timing of the Federal Reserve's meeting tomorrow, just five days after the eclipse is not a coincidence either. In September 2007, the Fed cut interest rates just 1 week after one had occurred. This year, the Fed is expected to keep interest rates unchanged. At its last meeting on June 25, 2008, it left interest rates alone and the next 3 weeks sent GLD from $ 87 to $100 and RBY from $1.15 to $1.50.

Perhaps it's a good idea to wait for the Fed's decision before coming to a conclusion. Nonetheless, precious metals prices already seem to be near support levels and we're just beginning our waxing lunar phase, which is usually positive. Of course things could go slightly lower for a while for some metals and mining stocks, but we expect most prices to advance by next week. We think that highs will be reached around October 1-7, during the Chinese Golden Week festival whereas many people traditionally buy gold items.

Whatever happens, one thing is sure--a solar eclipse has ushered in a new cycle and we must connect with it in order to be successful traders and investors. Whenever we succumb to fear we hinder ourselves from tapping into opportunities that are in plain sight. It's time to shift our energy and attention away from the bank crisis and all its effects to the realization that there are great investments in precious metals, energy, commodities, new technology, infrastructure, and efficient consumer based companies.

Bank Troubles Continue

2008-07-30T18:17:00.000-07:00

July 30, 2008 at www.argmaur.com

In spite of the good performance of many large companies, like Union Pacific Railroad and Comcast, to name a few, people still believe our economic situation is worsening. Don't forget that the banks are dragging down the markets--creating an illusion that the entire economy is in trouble. New employment figures and housing data are beginning to look more promising:

- An ADP report showed that the private sector gained 9,000 jobs in July - Reuters

- The Orlando and Phoenix area are showing signs of a positive real estate market reversal. Data from last month confirmed that existing home sales was up slightly in the two highly desirable metro areas - Orlando Business Journal

Home sales have been on the decline in both areas since late 2005 instead of 2006/07 like other major areas. Although prices will not jump back to old highs, they'll stabilize and stay rather low giving new house hunters a bargain.

The other aftereffect of financial problems has been the legitimate run on the banks that we have been discussing. Each week since, we've seen yet more and more proof:

- We witnessed what regulators said was the 2nd largest bank failure in US history as depositors rushed to withdraw from California-based IndyMac - LA Times

- Yesterday (July 29), Merrill Lynch released news that it will write down another $ 6B in mortgage related debts - Reuters

In total, we've seen over $400 billion in total bank write-downs, but it's not limited to the U.S.:

- After losing 55% in value, The National Australia Bank chose to write-down $1 B in mortage-related investments - The West Australian

- Germany's corporate DZ Bank is facing yet another write-down, this time for just €300 M - Reuters

- Royal Bank of Canada, the country's largest, may have nearly $ 1.5 B in third quarter write-downs - Bloomberg

The biggest beneficiary of the recent bank run concerns has been the value of the US Dollar as a decline in the markets has kept it from dropping a lot more than it could have gone. You see, bank runs cause deflationary effects. Demand for the physical currency is heightened when everyone wishes to simultaneously withdraw money. This is how the US dollar has been allowed to stabilize at its current position against other major currencies. In terms of commodities, however, the purchasing power of not just the dollar but all other major currencies will decrease. The reason is that the bank run is already spurring investments in commodities ETFs physical precious metals purchases, bullion storage units, and of course--mining stocks. The most astute investors seek undervalued companies with valuable assets during crises.

Our next new moon starts a new month on Friday. Some of our mining stocks have already reversed a downtrend begun last week. Again, we're bullish on trading Rubicon Minerals (RBY) which should head to $ 1.50 or more within 1 to 2 weeks. Expect most commodities and mining stocks to follow the uptrend within the next few trading days.

Silver & Gold Are Back in Business

2008-07-16T09:01:00.000-07:00

Originally posted on July 15, 2008 at www.argmaur.com

In our last 2 commentaries we described a disruption in the normal cyclical behavior of our selected mining stocks and now things appear to be back on track. The disruption coincided with rare astronomical events that occurred over the past two weeks. On Independence Day, astronomers observed the alignment of planets Mars and Saturn with Regulus. Then on July 5th, a crescent moon (exactly 25% complete) joined the planetary alignment giving astronomers a spectacular show. By Thursday July 10th, Saturn and Mars converged in an occurrence we won't see again for another 14 years.

As we expected, precious metals and some of our mining stocks have increased in value and have returned to normal cyclical behavior. The price of gold went from below $900/oz. to $980 (9%) and silver went from under $17 to a high of $19.40 (+14%) as the threat of war with Iran ensued over the past 2 weeks. Our stock pick (recommended on June 20), Rubicon Minerals (RBY) increased from $1.15 to $1.50 (+30%) on news that miners have intercepted a "Bonanza Grade" (mineral rich) gold zone at its Phoenix, Red Lake, Ontario mine. As we near a full moon, gold, silver, and some mining stocks are now sending overbought signals.

Platinum, oil and our other mining stocks spent the last 2 weeks in a continued correction phase. Nevertheless, on July 10th, platinum, Anooraq Resources (ANO), Apollo Gold (AGT), and ROY (International Royalty) reversed both a short downtrend that began 2 weeks earlier and a longer one that began in late May. The test to see that the correction has ended will be a convergence of the 50- and 200-day moving averages, leading to a greater MA (50). Since it's still possible that platinum, ANO, ROY, and AGT will get back on track with normal cycles, we'll wait until Friday July 18th before taking action; however it seems as though we could expect an uptrend for July 21- 31 for both Anooraq Resources (ANO) International Royalty (ROY).

This week we received more news that affirms the positive outlook for precious metals. Lenders Freddie Mac and Fannie Mae are in lot of trouble, housing prices are still on the decline, inefficient companies are shedding their workforce, consumer inflation persists, and once again, the threat of an attack on Iran are all issues that are forcing the most astute investors to shift their money into commodities. Billionaire investor, George Soros echoed what we said all along: the banking and lender crises are far from over and are the worst in our lifetime (http://www.reuters.com/article/newsOne/idUSN1444921820080715).

Most notable of all was a Reuters article that said UBS, who had previously estimated gold at $850/oz. for 2008, changed its forecast to $1,050 based on a surge in ETF holdings. Remember a few months ago when Goldman Sachs also told investors to sell gold positions at $870/oz? We told our readers not to listen to them and now gold is at $975 an ounce and is on its way back to $1,000 in a month. Now as platinum and mining stock prices reach lows unseen since mid-March, we now have another great buying opportunity. So, if you didn't invest in precious metals or quality mining stocks in mid-March, it's still time to seek, find, and wait for that perfect entry.

Time to Find Investment Opportunities

2008-06-30T13:08:00.000-07:00

As anticipated, our mining stock picks have settled near support levels and have signaled an imminent reversal. The recent downturn in the sector preceded that of the entire stock market last week. To be clear, the banks have caused the market decline through bad investments and unfortunate timing. As aforementioned last week, the current “bank run” is in full swing and not nearly over.

- Analysts Backtrack on Banking Stocks After Saying Worst Is Over – Bloomberg
- Financial Firms May Make Deeper Cuts, Eliminate 175,000 Jobs – Bloomberg
- S&P Cuts Bank of America to Sell from Hold

The banks and the financial news providers will have you believe that we have an overall bad economy—which just isn’t true. We’ve previously suggested that the economy is expanding, production is growing, and American companies are doing better abroad; take a look at these news items:

- US Economy Expanded Faster than Reported with First Quarter GDP Revised Upward to 0.9% - MoneyMorning
- Cost-Cutting Helps Walgreen Raise Profits 2% - New York Times
- GM, Ford Will Export More Cars to China – Yahoo! Business News

Again, precious metals supply levels are being severely tested and the consequences of such actions are explosive prices in the long-term.

- Australia Gold Output Falls 7 Percent in 12 Mos. – Reuters
- Standard Bank (South Africa) and ICBC (Industrial and Commercial Bank of China) Cooperate in Precious Metals Market – Trading Markets.com
- Platinum trading begins in Tokyo, Platinum ETF in Zurich, and a report that Nanomotors with platinum may increase speed – Platinum Today

Precious metals and commodities prices have maintained their support levels despite the actions of mining stocks. Most notable, gold’s price quietly marched pass the $900 level and is on its way to $950. Nonetheless, our major observation was the major mining stock divergence from the stock market. When the major indices tumbled last week, we bore witness to a rise in mining stock prices. Should the diverging trend continue, it will positively impact the mining sector.

Run from the Banks!

2008-06-20T07:23:00.000-07:00

Yesterday marked a full moon and, contrary to our forecasts, our mining stocks did not see cycle highs. Instead, they moved sideways and even decreased slightly over the past 2 weeks. You needn’t worry about recent mining stock behavior as it’s signaling a change in cyclical patterns. The change will likely produce cyclical highs near the new moon and lows near the next full moon—a pattern contrary to what we’ve seen over the past year. Of course, it’s not a coincidence that this change is occurring on this year's summer solstice!

The best thing to do is to monitor technical charts, detach yourself from your urges to sell, and practice patience even if it hurts! If you haven’t yet bought, then the best buys are RBY (Rubicon Minerals between $1.15 and 1.25), ROY (International Royalty between $5.20 and 5.70), ANO (Anooraq between $2.85 and 3.00), and AGT (Apollo Gold between $0.54 and 0.60).

The reason you should hold is because we’re presently witnessing a run from the banks unlike anything we’ve seen in most of our lifetimes. Just look at the following news items from the past 2 weeks:

This Week:

- “Wealthy Investors Shift Funds From Global Banks to Reduce Risks” in which head of Wilmington Trust Corp. said “For the first time in my career, I saw concern about the location of one’s assets.” (Bloomberg Article)

- “UBS Clients Probably withdrew CHF41 B ($39 B in Assets” (Bloomberg Article)

- “RBS Issues Global Stock and Credit Crash Alert” telling clients to “brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks” (UK Telegraph Article)

- “Russians Withdrew $55 B from European Banks” which was the first time they withdrew since 2003. (Kommersant Article)

- “Iran Withdraws $75 B from Europe.” A possible, although denied scenario to prevent blocked assets as part of the West’s threats of sanctions. (Reuters Article)

- Total bank losses and write-downs may amount to $1.3 TRILLION (Bloomberg Article)

- “Morgan Stanley’s Quarlerly Profit Fell 61%” (Washington Post Article)

- “Morgan Stanley Warns of ‘Catastrophic Event’ as ECB Fights Federal Reserve” (UK Telegraph Article)

Last Week:

- “Watchdog Feared a Run on B&B” which discusses how the British Treasury and Bank of England are concerned that mortgage bank, Bradford & Bingley’s might end up like Northern Rock last fall (UK Guardian Article)

- Central Banks express concerns over heightening inflation , signaling rising interest rates are imminent. Are the rate hikes actually a way to attract money to banks?

- “Central Bank Body Warns of Great Depression” discusses a warning realeased by the Bank of International Settlements based in Basel (Banking Times Article)

A financial consultant had it right when he expressed client sentiment and said, “If UBS, ‘the Rolls Royce of the industry’ can’t manage its own capital, then what the hell are they going to do with mine?” That sums up our opinion exactly!

It’s worth mentioning that this new “bank run” follows the panic over both Northern Rock and Bear Stearns, in which clients withdrew $4B and about $10 B respectively (and after both incidents, precious metals surged). That’s peanuts compared to what’s going on now. The only difference is that the media is remarkably silent about our present bank run. If this trend is legitimate, then all that money from the banks has to go somewhere else. It will go to precious metals—a timeless safe haven.

Who Needs Another Rate Cut Anyway?

2008-06-04T05:59:00.000-07:00

Originally Posted on June 3, 2008 at argmaur.wordpress.com

This week brings a new moon, a new trading month, and a new upward trend for precious metals. Instead of focusing on the Fed’s decision to leave rates untouched, think about its intention to tame the inevitable upward momentum of precious metals.

Today we found more indications that point to gold’s positive long term direction. George Soros also thinks the crude oil market is overbought and if he’s right, and it’s hard to doubt a billionaire investor, the money in oil investments needs to go somewhere else. The banks are still reporting losses, with news of Wachovia’s CEO firing, and analysts expect a profit loss for Lehman. Furthermore, the housing industry is still in decline, airlines are having serious financial difficulties, and automakers are reporting slower sales. Apart from investing in precious metals, there really aren’t too many other high-yielding alternatives.

In our last commentary, we discussed how rhodium and platinum supply concerns are going to push metals prices higher in 2008. While rhodium and platinum have already surged, Gold is up by only 5% this year. Well, our predictions about gold supply concerns were affirmed this morning. South Africa, one of the world’s main precious metals producers, reported that gold output fell by a whopping 15.6% during the first quarter.

Undoubtedly, this new moon will take mining stock prices significantly higher.

This morning, RBY (Rubicon Minerals) showed signs of reversing the downtrend that began along with a full moon just 2 weeks ago. This morning, its price dropped down to $1.24 before quickly bouncing back to 1.35. If anyone picked up shares below 1.30, then consider yourself fortunate. Presently, RBY is following the moon’s trend with precision and expect prices near $1.60 by this month’s full moon.

AGT (Apollo Gold) had done quite well between a $0.60 to .61 support range, but dropped today to about .59. Expect upward momentum tomorrow or by Thursday at the latest. The stock should increase to about $ 0.70 in two weeks.

Oh ROY! The metal royalties stock saw its largest increase in months after our May 13th buy alert. All the investors and traders who doubted International Royalty Corp got quite a surprise during the start of last week’s downward momentum. Its price corrected from about $6.00 to about 5.79– just above its 200-day moving average. Expect more sideways action this week and a reversal next week along with ANO. Certainly wait until next Monday or Tuesday before buying.

ANO (Anooraq Resources) is still in the midst of a downtrend and we could see continued negative momentum until we reach a price level between $ 3.10 and 3.15. It lags RBY and the moon’s trends by almost a whole week, if not more. Expect movement between $3.20 and 3.30 for a few days, but wait until its price moves below $3.20 before entering.

PLG (Platinum Group Metals) recently saw one of its largest single-month increases in years. Its price increased from about $ 2.20 to 3.30 or nearly 50%. It has corrected to around $3.04 but expect further downward momentum as this stock’s trend is even lagging ANO and ROY. The stock should settle at a support level between 2.60 and 2.80 by next Wednesday or Thursday at the latest. PLG and ANO are two of the only platinum stocks on the AMEX, but we don’t usually trade the former because it just doesn’t have enough volume. Low volume could mean difficulty filling your buy and sell orders.

Remember that every stock’s trend is unique and nothing is perfect. Although negative news is bound to surface, technical indicators and market fundamentals point to higher metals prices in the end.

Supply Concerns Boost Precious Metals

2008-05-29T04:58:00.000-07:00

Originally posted on May 29, 2008 at argmaur.wordpress.com

Our forecasts for this past week were right on target. Gold is supported in the $870's and most mining stocks settled just below last week’s highs. On May 13th, we recommended buying ANO and ROY and they have skyrocketed last week:

- International Royalty Corp (ROY) increased from $4.80 to 5.90 (+23%) on slightly higher 1st quarter results.

- Anooraq Resources (ANO) shot up from $3.10 to 3.90 (+26%) on news of funding for its acquisition of Lebowa Platinum Mines and on analysts opinions and platinum supply concerns (see Reuters article: http://africa.reuters.com/metals/news/usnL16722072.html?rpc=401&amp

Tuesday’s full moon ushered in a correction, but its worth mentioning that most mining stocks are stabilizing near recent highs and above key support levels. Such actions imply that precious metals are entering a new cycle which may bring further positive momentum. The determining factor will be if gold can stay above its 50-day moving average (roughly $900) and silver above ($17) by Tuesday June 3. Thereafter, expect excellent buying opportunities for our precious metals stock picks.

The new trend is reversing a previous precious metals downtrend that began near the Ides of March. For those who missed the buying opportunity of late March and early April, you’ll get another chance within the next few weeks.

This new cycle is coming amidst reports about a severe shortage in both rhodium and platinum, the king and queen of precious metals (See articles:
Due to supply concerns, rhodium and platinum prices have already increased in value by 50% and 40% respectively this year, outperforming both gold and silver.

Many people worry that precious metals have already peaked, but we think that they’ve still got a long way to go. So, who’s right? We can forecast the long term direction of precious metals by looking at historical prices of each:

- Rhodium prices peaked in 1978 and reversed from a new low in 1998 (See Rhodium historical data at http://66.38.218.33/charts/historicalrhodium.html)

- Platinum prices peaked a year later in 1979 and reversed a downtrend in 1999 (http://66.38.218.33/scripts/hist_charts/yearly_graphs.plx)

- Gold reached a peak in 1980, ending a positive trend that began in 1960 and lasted for 20 years. It reversed from a downtrend 20 years after its peak in 2000.

- Remember that silver usually follows gold, so it’s no surprise that silver reached $ 50 in 1981 and began its new upwards trend in 2001.

What does this information tell us about precious metals cycles? It’s evident that they trend upwards for 20 years, then downwards for 20 years.

Rhodium is now half way into its 20 year trend and is sending signals about the direction of all precious metals. If there’s a rhodium supply concern, then there’s a supply concern for all precious metals. South Africa is producing less metal and the awakening giants, China, India, Brazil and Russia are adding to that pressure.

Mining Companies are Finally Profiting

2008-05-29T04:55:00.000-07:00

Originally posted on May 13, 2008 at argmaur.wordpress.com

The upward trend in precious metals that we had forecast last week was right on target. The positive momentum was aided by good news and healthy 1Q 2008 results from the following miners:

- Rubicon Minerals (RBY)* reported new high-grade gold intercepts at its Red Lake, Ontario site. Since our buy alert, the stock's price climbed about 16%.

- Apollo Gold (AGT)* finally reported a net income of $3.7 million compared to a net loss last year. The stock was up about 10% since our buy alert.

- Barrick Gold (ABX), the world's largest producer, posted a net income of $514 million compared to a net loss last year. Its stock price climbed about 7% since last week.

- Goldcorp's (GG) profit rose 84% and its stock price is up over 10% since last week.

- AngloGold Ashanti (AU) reported higher earnings, an increase in production, and lower mining costs at just $430/oz. Its stock price is up over 10% since last week.

- Rangold (GOLD) said gold reserves at its Ivory Coast site were 52% higher than the previous quarter and profits were 57% higher than last year.

The importance of the aforementioned news is that precious metals mining companies, after several years, are finally profitable. The implications of this are truly astounding considering that mining stock prices have yet to adjust to the market value of precious metals.

If you missed the big profits, then you'll be happy to know that some metals companies such as Anooraq Resources and International Royalty Corp. have yet to release 1Q 2008 results. Expect good news to be released this week and prior to next week's full moon.

As metals stocks stabilize near their weekly highs, expect the upward trend to continue until the price of gold rests comfortably above $ 900. Although it's too early to tell, it seems that precious metals prices will surge this month. One thing is sure, the recent price correction coupled with mining company profits is attracting a slew of new investors. The best advice we can offer is practice patience, even if it hurts. Technical indicators are pointing to higher prices.