Return of Gold Juniors Looking Real

We all know it's going to happen.  We all know why, mostly.  We just don't know when and because a watched pot never boils it has become particlarly painful to watch and wait.

Well the waiting looks like it's over.  Time to play.   =)   So find your favorite little junior gold stocks and start thinking about building that sand castle... keeping an eye out for the beach bully—because he will be back to try and make us all fearful, again.

The window for high-return gold equity shopping is now open IMO.

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June 28, 2012, 9:06 a.m. EDT

Top Junior Gold Mining Stocks Gained 28%

Jun 28, 2012 (ACCESSWIRE-TNW via COMTEX) -- TORONTO, Canada: In tracking the small cap stock universe for Wednesday, June 27, 2012, Ubika Research found that the top 10 small cap stock gainers from each of the listed sectors performed as follows: 

Metals & Mining stocks: +24% 

Gold stocks: +28% 

Energy stocks: +21% 

Technology stocks: +9% 

Clean Tech stocks: +9% 

The top individual small cap stock gainers include Strata Minerals Inc. (CVE:CA:SMP) with a 46% gain in metals and mining, Stronghold Metals Inc. (CVE:CA:Z) with a 70% gain among gold stocks, Sundance Energy Corp. (CVE:CA:SNY) with a 67% gain in Energy, Zaio Corp. (CVE:CA:ZAO) with a 31% gain among technology stocks and Run of River Power Inc. (CVE:CA:ROR) with a 17% gain in the cleantech category. 

Read more...

 

Fools Gold? (G: The return of the retail investor)

Retail investors are turning to look at gold again.  Have a read of Christopher Barker's (of The Motley Fool) article "The Best-Kept Secret in Gold".  The really great thing about The Motley Fool is that they do a thorough job when they make a pick.  A fact their community knows well.

I'm tracking the shifting sentiment of retail investors searching (hoping?) for their return to equity markets.  When they do that will herald a return to the healing of stock markets. 

The retail investing community informed by The Motley Fool is sizable so take this note as an indication 'perhaps' that the return of the precious metals bull market is immanent.

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The Best-Kept Secret in Gold

By Christopher Barker, The Motley Fool 


My investment portfolio is chock-full of names you've never heard of. That's just how I roll.

For the small minority of investors out there that actually have made room within their nest eggs for a slice of silver and gold, most will select from a small set of predictable vehicles. Many have no doubt abandoned the mining and exploration equities altogether given their dastardly trailing underperformance -- to an admittedly shocking degree -- vis-à-vis the popular bullion proxies SPDR Gold Trust (NYS: GLD) and the iShares Silver Trust.

For those intrepid souls determined to stand strong with precious metal equity exposure -- presumably sharing my bullish expectation of a major reversal of fortune once the metal prices regain their momentum -- most will likely settle upon the closest things we have to household names in the sector. Although I wholeheartedly condone the inclusion of superstars like Goldcorp and Silver Wheaton (NYS: SLW) within a well-crafted basket of gold and silver selections, I encourage Fools to dig a little deeper into this forlorn and under-followed galaxy of stocks to find their own diamond in the rough. I think I've located one particularly attractive stock that, perhaps in part because it's not listed on a major U.S. exchange, continues to fly under the radar of most U.S. investors.

The second time is a charmThis isn't the first time I've loaded up on shares of Sabina Gold and Silver (Symbol "SBB" on the Toronto Stock Exchange; "SGSVF" for U.S. investors through the OTC market). I first built a position back in 2006 as the company enjoyed terrific exploration success at a polymetallic project called Hackett River in Canada's Nunavut Province. I enjoyed a powerful multi-bagger performance before locking in gains in early 2011. Thereafter, the stock suffered a dramatic decline while the sector turned suddenly sour, and my Foolish bargain-hunting radar began to sound. As a result, I selected Sabina as one of my "Top 10 Gold Stocks for 2012."

To my amazement, the selling proceeded mercilessly into 2012, and Sabina presently sits 38% beneath where I recommended the shares last December. From its 52-week high, Sabina has tumbled 64%! Undeterred, I have continued to increase my stake, such that Sabina Gold & Silver is now a core holding of mine for the second time in this precious metal bull market. I think the second time around will be as charming as the first, and I aim to tell you why I'm so excited about the outlook.

Read full article here

Germany wants Gold to be the 'effective' currency of the Eurzone

Here we go.  The chatter will turn now to using gold to 'manage' the debt.  Watch and learn.  The masters of our world have never been watched in such detail.

They/We MUST DO THIS.  The world cannot work its way out of debt.  It's that simple

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Here's the article in the Globe and Mail by Eric Reguly :

A golden idea to save (or doom) the euro

Gold is back in the news, big time, and not just because the price may be on the verge of another upswing or that Peter Munk is turning Barrick, the world’s biggest gold company, into a CEO meat grinder. It’s because Germany, it appears, wants to make gold the effective currency of the euro zone before the region plunges to the bottom of the seas like a concrete U-boat.

• IMF says Spanish banks need at least $50-billion in aid
• Stumbling economies have central banks girding for more intervention
• Greek economy continues to crumble

The weakest euro zone countries are tapped out financially and economically. But a few of them are brimming with gold reserves. Take Italy, the euro zone’s third-largest economy. The Italians love gold and it’s stashed everywhere, in their central bank and in their jewellery and safe deposit boxes. (I once saw a religious-festival parade of children in a mountain town, with each child groaning under the weight of heavy gold necklaces and other baubles). At last count, the central bank had 2,451 tonnes of gold, valued at close to €100-billion ($128-billion). That’s not a fortune compared to Italy’s €1.9-trillion national debt, but it’s not bad when Rome is raiding the pantry to pay its ever-rising debt.
Germany’s idea is coyly named the European Redemption Pact and it is nothing if not creative. While details are scant, here is roughly how this gilded baby would work. Countries with debts greater than 60 per cent of gross domestic product – the (ignored) limit under the European Union’s Maastricht Treaty – would transfer those debts into a redemption fund, which would be covered by joint bonds. The scheme has been called “euro bonds lite.”
Here’s the catch. Countries using the scheme (most would, including Germany, because of generally high debt-to-GDP ratios) would have to cover 20 per cent of their debt with collateral, payable in gold or currency reserves. Default on the payments and you lose your gold. The “sinking” fund would retire the debt over 20 years.

Read full article here

More on Buffet, Munger, Berkshire and Gold

This is a follow-up on the little article on Warren where it reveals to me the reason why inflation will return and return with the clear intent of destroying the massive debt largely created by greed unbridled by regulation which, to be fair, became and continues to be out-of-date as the world's economy continues to expand.

I like this article by Eric Fry which includes another version of the earlier chart.  It ponders their (Buffet and Munger) establishment view and their approach to talking gold down.

Love this stuff.

=)

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On Jelly Donuts and Gold

Source: Eric Fry, The Daily Reckoning  (6/6/12)

"Gold is not merely a great thing to own amidst extreme circumstances. It can also be a great thing to own amidst merely marginal circumstances, for example, if you happen to be living during the tail end of one of the most powerful, world-dominating economic expansions in human history. . .rather than at the beginning of it."

Gold is "forever unproductive," says Warren Buffett, CEO of Berkshire Hathaway.
"Civilized people don't buy gold," says Buffett's sidekick, Charlie Munger. Civilized people, says Munger, "invest in productive businesses."
So let's see. . .Where does that lead us?

If. . .
A) Berkshire Hathaway invests in productive businesses and;
B) Investing in productive businesses is civilized and;
C) Warren Buffett and Charlie Munger direct Berkshire's investments;
Then. . .
D) Buffett and Munger are civilized.
Gee whiz! That's lucky!
But to make sure the world appreciates just how civilized these two civilized gents are, they continuously (and very publicly) belittle both gold and the uncivilized masses who consider it a store of value.
"Gold gets dug out of the ground," Warren Buffett famously observed, "then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Yes, that's right, anyone from Mars. . .or from Berkshire Hathaway headquarters. But most of the other seven billion folks residing on either Earth or Mars understand that gold has at least some utility. At a minimum, they understand that gold possesses

I like Warren Buffet but I am happy...

I am happy to see his sticking to his knitting.  You can see his from his attitude towards gold in the article from January where he said:

“I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s probably about a third of the value of all the stocks in the United States.”

“For $7 trillion dollars…you could have all the farmland in the United States, you could have about seven ExxonMobils (XOM, quote), and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland (DBA, quote) and the ExxonMobils.”

I am happy because the performance of his stock, Berkshire Hathaway, shows the effect of our present economic condition on the best-in-class of the US economy.  This is what gold will (and is being albeit in the background at present) be used to fix.  The effect of the accumulated shared debt is a knot so tight all growth is being strangled.  It simply must be loosened.  The debt will be reduced in value.

This is why inflation is a good thing.  The alternative actually is austerity which handled poorly will lead to depression and which if handled well by large sainted masses of participants will crawl along much like the chart below for a long time.

The present potential for a bottoming of gold equities offers the greatest leverage for returns on investment within this range and so is, in my opinion, a fertile sector for some stock research. Best of luck everyone.

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Gold Equities & Gold Price Divergence Nearly Over

We've all been waiting for the end of the market distortion that has resulted in gold bullion value and gold equity values going their separate ways.

The battle to keep gold in an 'accumulation' range for central bank buying is almost over.  While gold will be bouncing as the super-traders in the employ of government work hard to keep it in the desired range.  But the equities will be catching up soon as investors sidelined by the fierce short 'para-financial' black-ops traders realize that gold equities are where to be before the run.

You will see more and more articles like the following one in the coming couple of months (even while the talking heads babble on about the confusion that they see all around them).

Accumulate good gold equities now...

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Gold Divergence from Equities is about to End

by John Galt
June 8, 2012 05:30 ET

On my radio program of June 6, 2012 I pointed out how gold has been leading the equity markets. In this commentary, I shall show how the two divergences from 2007 to this year will end and result in a short term collapse in stock prices. First, let’s review the chart of the S&P 500 versus the GLD ETF from 2007 to June 7, 2012:

The initial divergence as highlighted in the chart above shows that gold and equities had a wide spread with no indication of economic problems and the proverbial “risk on” trade that was initiated by the Federal Reserve under Alan Greenspan could continue for some time. There was no reason to invest in gold as the economic perception was that there was not a detectable economic emergency or crisis. That false perception changed after the collapse started in February 2007 as gold climbed sharply only to end the divergence in the summer of 2008 where everything started to collapse. After the reflation trade of 2009 began with the Fed’s QE1, the GLD (aka gold) led the S&P 500 until the summer of 2011 where the second major break in the chart pattern occurred. This break was due to the Federal Reserve’s half measure known as “Operation Twist” where as gold was predicting a massive Quantitative Easing program which never happened.

The second chart puts the past year’s events into sharper focus:



The chart illustrates with the two blue and red arrows the synergy between gold and equities moving in tandem until the break last summer. After the  perceived failure to reflate an economy that would deteriorate in the future was realized, the circled portion of the chart indicates the double top in the GLD/Gold which has been in a long term decline since last summer. Meanwhile equities diverged from the move in gold and rallied one more time in 2012 as the markets have been given a Pavlovian like reaction to believe that the Fed would bail out everyone regardless of the economic consequences.

Gold however has warned that this is not the case. When you analyze the year long bear market in gold prices it becomes apparent that this consolidation has one more major move to the down side and support in the GLD is between 124-128, in the physical gold between $1260 to $1360 per ounce...

Read full article here

Gold's new location: Ground Zero "It's all up from here!"

We are watching the formation and coming confirmation that the bottom in gold is in.  Inevitably this also means that the world's economy is hitting its head on the ceiling for growth as a result of financial damage.

It is already clear that we cannot get ourselves out of the mess created by our management of the fiat system and its built-in requirement for the type of monetary imbalance that encourages the growth of apparent wealth (like apparent wind if you are a sailor).

Because it is clear that austerity will limit the return to economic health political bodies will opt for the solution that will destroy the value of the debt already held.  That solution is inflation.  Printing money. 
Returning us to the human-shared notion that gold is money.  The central banks have been bulking up with gold.  China and the US have already planned how the movement will happen in such a way that China will not lose the wealth it presently holds in US dollars.  That have been and continue to employ US dollars in the accumulation of gold.  They are not alone either, all central banks have been doing the same.  The super-traders job has been to manage the gold price by direct and indirect manipulation. 

Regardless of the co-ordinated misdirection, miss-information and disinformation distributed through various public media one must keep focused on the real prize.  It is coming for those who do not lose their heads in the storm of BS.

As Marc Faber says:

There's No More Downside For Gold

Gold which was trading near one-month highs yesterday, is off 0.47 percent today,and at $1,626.20, is well off its 52-week high of $1,922.
Marc Faber, author of the Gloom, Boom and Doom report was on Bloomberg TV saying gold has bottomed out:

"I'm not sure that Gold will not make a new high this year, but I think we've bottomed out and some gold mining shares have become very very inexpensive compared to the reserves they have.

And i think that in the current environment where it is clear that the worse the economy becomes the more the money printers will be at work, that to own a currency whose supply can not be increased at the will of some clowns that occupy the central banks is a desirable investment."

Read more here.