Category Archives: Precious Metals

Short Covering After a Bear Attack on Gold and Silver

Short Covering After a Bear Attack on Gold and Silver
It appears Goldman Sachs is covering its short on gold as it rebounds above $1400. Meanwhile, they have helped confuse and misdirect the investment community out of gold. This was a classic shakeout and bear trap which is going to start major short covering. Be ready to see increased short covering combined with record physical demand. These are the elements for a price spike and breakout higher in both gold and silver.
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Caveat Venditor: Gold and Silver Investors Beware Of Selling Shakeout

Caveat Venditor: Gold and Silver Investors Beware Of Selling Shakeout
The Venture is cheap priced at $400 au/oz. This is a ten year low testing 2003 levels. Gold is more than 50% higher than its pre credit crisis highs, the S&P 500 is now breaking through 2007 highs and the Venture is still discounted more than 70%. The Venture appears historically mispriced and discounted indicating its buying time for long term value investors, definitely not selling time.
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Major Bear Market Low Forming In The Junior Miners?

Major Bear Market Low Forming In The Junior Miners?
One of the ways to look for a bear market low is to look for panic selling and capitulation after an extended downtrend. Since 2013 began the Venture has had 3 months of losses compared to the Dow Industrials. Remember that just as parabolic rises forecast major tops, cascading waterfalls, capitulation and panic selling usually marks major bear market bottoms. Value investors try to buy near a major low and look for panic selling where fundamentals and balance sheets are disregarded. This may be exactly what is occurring in the junior mining investment arena.The resource area may be in the midst of a three month capitulation and major rotation. Old, tired players are trying to sell at any price making room for the next fresh group of value investors and entrepreneurs picking up discounted assets.
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Top Discounts In The Junior Gold Mining Sector

Top Discounts In The Junior Gold Mining Sector
Investors unsure of which way to turn in this market need only watch the "smart money," says Jeb Handwerger, the editor and publisher of GoldStockTrades.com.Billionaires like John Paulson and Carlos Slim are plucking up mining investments on the cheap... Investors are going to seek out alternative hedges against the deterioration of currency and financial repression worldwide. This isn't just happening in Cyprus, but all over the world where there are citizens losing money in their banks and are experiencing negative real rates. Investors need to look for the assets that will protect and grow their wealth in case public policies continue to destroy wealth and savings.
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Negative Sentiment and Capitulation At PDAC Could Mark Bottom In Junior Mining Sector

Negative Sentiment and Capitulation At PDAC Could Mark Bottom In Junior Mining Sector
We should start seeing an acceleration in merger and acquisition activity as companies seek alternative ways to cut costs and survive. This process is quite healthy and plants the seeds for the junior market recovery. Cash strapped companies should merge with competitors who have more capital. Companies with cash are watching their treasuries very closely as even positive technical and geological developments have been ignored by this market. This negative sentiment usually predicts a major bottom similar to the post Bre-X era and the 2008 crisis. At the moment, the public markets are not supporting the juniors and soon private equity and cash rich miners may pick up fire-sale assets. Conditions are ripe for a major industry consolidation or privatization.
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Why The Smartest and Richest Minds Are Buying Mines

Why The Smartest and Richest Minds Are Buying Mines
I observe large hedge funds making bullish bets on the juniors such as SAC Capital. SAC Capital with over $20 billion under Stephen Cohen's management placed a $240 million dollar bet on the miners. In addition, John Paulson, hedge fund manager and one of the smartest minds in the business continues to be bullish on the undervalued gold miners and especially one of our long term GST recommendations. Do not forget the world's richest man, Carlos Slim made a $750 million bet to buy a Mexican gold miner. Similar to Cohen, Paulson and Slim, I believe we are headed into a period of gut-wrenching inflation where the U.S. dollar could move into new lows and gold could continue soaring into new highs led by the high quality junior miners.
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Keep Your Head When Others Are Fearful of Precious Metals

Keep Your Head When Others Are Fearful of Precious Metals
"If you can keep your head when all about you Are losing theirs and blaming it on you...And---you'll be a Man, my son! " -If by Rudyard Kipling Today a news item from the Wall St. Journal crossed my desk entitled, "A Fearful Time For Gold". Then I read another article entitled, "S&P500 In Longest Winning Streak Since 2004." These articles are an indication of what the majority is thinking and may be a contrarian buy alert for my readers. The majority of investors are usually wrong at turning points. Many investors are becoming impatient with gold selling into an oversold panic in the miners and looking for the latest fast money scheme in mortgages or real estate. Be careful of following this emotional move where investors take on too much risk in banks and housing and overly fearful and pessimistic in mining equities.
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Current Weakness In Gold May Be Buying Opportunity

Current Weakness In Gold May Be Buying Opportunity
Despite current weakness in gold around the $1650 area we expect a turnaround in gold with a new leg up to $1800 area and eventual breakout at $2000 in 2013. Despite noises heard in the Fed minutes of a purported exit from quantitative easing, Central Banks around the world have flooded the markets with fiat currency. Around the world gold has outstripped every competitive currency for the past ten years, yet the mainstream fail to understand the importance of owning gold and the gold miners.
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Fiscal Cliff Deal May Be Sparking Risk On Rally Into The Undervalued Miners

We may be in the beginning of a hyper-inflationary rally. There is plenty of cash on the sidelines who may be seeking alternatives in the form of the undervalued commodities and miners especially as the dollar is forming a bearish head and shoulders formation and the Canadian Venture is breaking out above the 50 day moving average.
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Why Precious Metals, Uranium and Rare Earth Miners May Outperform in 2013

Why Precious Metals, Uranium and Rare Earth Miners May Outperform in 2013
To paraphrase the great trader Jesse Livermore, “We must be like a merchant who foresees future demand, purchases his line and patiently awaits for profit taking time.” Investors in wealth in the earth assets should listen to Livermore’s wisdom. In due time, these commodities which are low priced will come back into vogue. In order to be right in the market, the majority has to believe you are wrong. Great investors like Livermore and Baruch were able to have confidence to hold on even when the positions were not popular.
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