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- Will Gold Drop to $1,200 Before Spurting to $2,000?
- What's Next for the Price of Gold?
- Silver Blasts to 43.05 in access market/gold advances as well
- Belarus central bank halts sales of gold for roubles
- Answering the Sceptics: Ted Butler
- So What Is Silver Shouting About?
- Commodities Ready for Reversal
- Central Bank Gold Reserves : a historical perspective since 1845
- Global Gold Production History
- CNBC
- Chasing High Dividends in Basic Materials Sector: A Look at Sunoco Logistics
- Stock Market Strategy: Liquidity, Yen Carry and the New Paradigm
- Jeffrey Christian: Summer correction in metals before the next bull run
- The Dollar Holds On While Metals Shine
- friday silver ramp data
- Could the Price of Silver Hit $50?
- Buying Gold on the Price Inflation Guarantee
- Gold Miners Represented in GDX: Ripe for a Decline
- Top Commodity Producers That Hedge Funds Love
- USPS ever refuse to insure your coins?
- Today in Commodities: Reflation
- Gold Seeker Weekly Wrap-Up: Gold and Silver Rise Almost 1% and 5% on the Week to New Highs
- What Is Silver Screaming About?
- Rick Rule - Extreme Silver Tightness Causing Delivery Problems
- COT Silver Report - April 15, 2011
- Making Money on Miners, Part V
| Will Gold Drop to $1,200 Before Spurting to $2,000? Posted: 16 Apr 2011 06:08 AM PDT In the long run developments in the financial markets and around the world seem to conspire to whip up a perfect storm for the gold price, taking it up towards $2,000 and further. That new upleg, however, could very well start from a much lower level than now. There are quite a few developments that could easily send the gold price lower in the coming months. Is $1,200 in the cards? Words: 774 | ||||||||||||
| What's Next for the Price of Gold? Posted: 16 Apr 2011 06:08 AM PDT A basic understanding of gold price phases throughout the year [provides the answer to the question:] "What's next for the price of gold?" Let me explain. Words: 758 | ||||||||||||
| Silver Blasts to 43.05 in access market/gold advances as well Posted: 16 Apr 2011 12:20 AM PDT | ||||||||||||
| Belarus central bank halts sales of gold for roubles Posted: 15 Apr 2011 11:50 PM PDT  My only real gold-related story today is this Reuters piece, which has since been pulled. Reader Ken Metcalfe, who sent me the original story, found another link to it over at westindia.wordpress.com. Belarus' central bank has stopped selling gold to local retail customers for Belarussian roubles, it said on Friday, after demand for precious metals soared due to expectations of a currency devaluation. The bank did not explain its decision. No explanation is required, either. Anyone with a room temperature IQ in degrees Fahrenheit can figure this one out. That's why we're all buying precious metals hand over fist...to save us from this very thing. | ||||||||||||
| Answering the Sceptics: Ted Butler Posted: 15 Apr 2011 11:50 PM PDT  Ted e-mailed me this story yesterday. It's not a new piece, as it's dated March 12, 2010...but it's a commentary of his that's worthwhile reading one more time. He starts the essay with this paragraph... "Recently, I was contacted by a reporter for the Financial Times of London. He was looking to write a story about the CFTC's upcoming hearing on precious metals. I could tell in my conversations with him that he was skeptical about my claims of a downward manipulation in the price of silver. As a result, the story he wrote reflected his skepticism, which was rooted in how could such a manipulation exist for as long as I alleged and how could silver be manipulated if it doubled in price over the past five years?" | ||||||||||||
| So What Is Silver Shouting About? Posted: 15 Apr 2011 10:13 PM PDT Buying Silver, instead of gold, looks to offer turbo-charged inflation protection... | ||||||||||||
| Commodities Ready for Reversal Posted: 15 Apr 2011 09:40 PM PDT Commodities Remain Bullish But Getting Peaky. We are expecting more buying this week in the broader markets. We see an especially strong upside push within the commodities group. However, as we have been forecasting for the past few weeks, the cycles and set-ups are ripe for a broader market sell-off beginning on Monday, April 11, 2011, through April 18th. Those are approximate dates but we think they are generally correct. Should something peak-out and skid lower, earlier this week, we will immediately issue another alert so that you can prepare and deal with it. Meanwhile, we encourage traders and investors to tighten stops to hold profits on trades where applicable. Our futures traders should continue to hold their positions. We just got word Toyota will shut-down all of its North American plants due to parts shortages. There is no time-table on a re-start, but since parts arrive using a "just in time" manufacturing plan, this is a serious problem and will negatively impact shares to a slight degree. We are currently working on new stock call options for coal, natural gas, and agricultural products. I am unclear at this time whether I will be issuing any new calls this week, since next week could produce a selling situation. We might get these trades with better prices after a correction. Gold and silver are pressuring to the upside today, just as we did expect. However, we see resistance today on April gold futures at $1,438.50 after they hit a high of $1,440.30 on this Monday. The April Gold Futures have an inverted head and shoulders pattern (bullish) on the daily chart but have hard resistance near $1,437 to to $1,438.00. May Silver's high today was $38.62 with a resistance at $38.48. Futures are near that price now after today's close. May corn is $7.60 last price with a daily May contract high of $7.64. Our recent forecast was $8.00 and we now expect this to be exceeded on the July o.r December, 2011 contracts. Favorite Precious Metals Shares Index GDX Resisting At 62-63 And Looks Toppy.
        This posting includes an audio/video/photo media file: Download Now | ||||||||||||
| Central Bank Gold Reserves : a historical perspective since 1845 Posted: 15 Apr 2011 05:00 PM PDT gold.org | ||||||||||||
| Global Gold Production History Posted: 15 Apr 2011 04:30 PM PDT Goldsheet Links | ||||||||||||
| Posted: 15 Apr 2011 12:46 PM PDT | ||||||||||||
| Chasing High Dividends in Basic Materials Sector: A Look at Sunoco Logistics Posted: 15 Apr 2011 10:37 AM PDT Double Dividend Stocks submits: If you're looking for basic materials stocks paying high dividends, join the crowd. Most basic materials stocks paying dividends have had quite a run over the past year, as it has been the leading sector in price gains, due to strong demand from emerging nations, and a cheap dollar: The sector is still holding its own in 2011, although it has been overtaken by the long out-of-favor health and conglomerates sectors, in addition to industrials. (The conglomerates sector is dominated by GE (GE), which makes up approx. 47% of it.) Here's a look at overall P/E's, projected EPS and PEG figures, and past EPS and sales history for all of the sectors: Only tech outgrew basic materials in both sales growth over the past five years, but basic materials had only average EPS growth. Looking ahead, the projected 1.27 PEG ratio for basic materials stocks is cheaper than the avg. Complete Story » | ||||||||||||
| Stock Market Strategy: Liquidity, Yen Carry and the New Paradigm Posted: 15 Apr 2011 10:23 AM PDT Bret Rosenthal submits: A paradigmatic shift in market behavior occurred after the collapse of 2008. The commonly accepted drivers of market direction, most especially economic cycles, no longer applies in this post apocalyptic financial farce. In fact, constant Fed / Government intervention and outright manipulation has produced a parallel universe where "good" economic news is bad for the markets and "bad" economic news is good for the markets. Liquidity is the key factor an investor must follow. All else on the financial news wires serves only as a cloud to distort financial vision. The "bad" equals good paradigm in force today exists because "bad" leads the Fed to increase liquidity which inevitably finds its way into the commodity and equity markets. To argue this obvious logic, to pretend economic growth is or will be good for the markets evidences an astonishing lack of understanding Complete Story » | ||||||||||||
| Jeffrey Christian: Summer correction in metals before the next bull run Posted: 15 Apr 2011 10:04 AM PDT I still think so too. The markets once again will take everything down one last time. I know you guys hate him..... http://www.financialsense.com/financial-sense-newshour | ||||||||||||
| The Dollar Holds On While Metals Shine Posted: 15 Apr 2011 09:29 AM PDT Brian Dolan submits: USD consolidates, while metals shine The US dollar managed to hold its ground against most other major currencies, and it still remains vulnerable, essentially consolidating near recent lows. Incoming US data over the past week suggest the US recovery is continuing, with strength in manufacturing as the lead driver. Renewed concerns over debt restructuring in the Eurozone re-surfaced, adding pressure to the EUR against most other currencies, and preventing a break above the key 1.4500/30 resistance in EUR/USD (see below). The exception for USD stability was against the JPY, where it gave back some recent gains and posted a bearish engulfing line for the week, suggesting further downside potential ahead. Moreover, weakness in USD/JPY also hints at increasing risk aversion as seen in lower JPY-crosses, higher US Treasury prices and potential stalls in major stock indexes below highs for the year. The return of Eurozone debt fears has the potential Complete Story » | ||||||||||||
| Posted: 15 Apr 2011 09:14 AM PDT using slv, buying thursday close, selling friday close, beginning first friday in february results expressed in percent return: .39% -.85 2.45 4.36 3.66 1.95 2.27 .75 .24 2.92 1.87 that's a nice 10 for 11 run....with several big days. leverage some fiats and convert to physical :banana: | ||||||||||||
| Could the Price of Silver Hit $50? Posted: 15 Apr 2011 09:07 AM PDT By Chuck Butler  04/15/11 St. Louis, Missouri – This morning, I'm seeing news that Moody's has downgraded Ireland's credit rating two notches, and China's economy is still kicking tail and taking names, and a year has passed since my left eye was removed… And there's more! So, let's get to work, Chuck! Once again yesterday, the currencies were choppy… When the Pfennig went out yesterday morning, the dollar was swinging the rally hammer… But, by the time lunch arrived at my desk, the currencies had reversed that dollar rally, and mounted a rally of their own… The big winners on the day though, were gold and silver… Gold was up $15 and silver over $1… Silver at one point yesterday actually touched $42.21! Speaking of silver… There's a story on the Bloomie this morning that talks about silver and how it looks as though it will trade to $50… Nice to see them come along with that thought, given I had it back in November when I told NewsMax, and they printed it in January! Silver then was $25… Now with silver near $42, people are coming out on the limb with me…and for good reasons… Reasons like the fact that holdings of New York futures by small speculators doubled in the past year! OK… I'm going to flip a coin here. Heads I talk about China next, tails I talk about Ireland next… I'll be right back! Alrighty then, heads it is! Well… I'm still waiting for those people that said China's economy would be collapsed by now, to come forward and admit how wrong they were… But NOOOOOOO! They are nowhere to be found! Oh well… We carry on, despite the people that surround us! HA! China's gross domestic product rose 9.7% in the first quarter from a year earlier, also beating consensus forecasts for a 9.5% advance, but down from 9.8% growth in the fourth quarter of last year, China's National Bureau of Statistics said. OK… Remember what I've said for a couple of years now, that I have a customer that lived and owned a business in China for years, and he told me that you can or should only believe half of what China says about their economy… So, if that's the case here, then China's GDP for the first quarter was 4.85%, which is still far better than what's going on in the US, Japan and Europe! And certainly isn't "collapsed"! Inflation is still rising in China though, which means interest rates there are probably going to go up again, which will fuel more speculation in the renminbi (CNY), and push the envelope of currency appreciation. That is as much as the Chinese government wants it pushed, which probably isn't what you're thinking for currency appreciation… Yes, the renminbi will appreciate, in my opinion… But, the moves will be snail-like… So… The global growth picture has cleared up a bit, from earlier this week… With China's economy still booming, the global growth forecasts will shore up, that is, until China's GDP print is forgotten and something else comes along! Fickle, fickle traders… Speaking of China… Foreign Ministry spokesman, Hong Lei, told reporters yesterday that China will continue to buy Spanish bonds… This is one of the reasons that the general consensus is that Spain will not follow Greece, Ireland, and Portugal… And then on the tails flip… Ireland… Above, I told you that midday yesterday the currencies were back to rallying versus the dollar… and that included the euro, which had slipped to 1.4440, but rallied back to 1.45… And just about the time the euro (EUR) was about to take off for a flight to the upper atmosphere of 1.46 and beyond, Moody's came along… Doesn't it always seem that way? The dollar begins to get taken to the woodshed, but a ratings agency comes along and rescues the dollar… This time, Moody's announced that it had downgraded Ireland's credit rating by two notches! Ireland's bonds are now just one grade above "junk"… That's cruel! That's cold, Willis! So… Let me take you back to last week… And this is what I told you last Friday, in the April 8th Pfennig… "The dollar appears to be doing the rope-a-dope again, pinned against the ropes, and getting beaten with jabs and strong blows. Long time readers will recognize this, and think "Hey, usually when the dollar begins doing the rope-a-dope, something happens that brings investors back to dollars, and halts the dollar selling." No wait, that's what I was going to say! HA! But seriously… That's exactly what happens… So, look for signs, signs, everywhere a sign, blockin' out the scenery, breakin' my mind… Could be the media jumping on the Eurozone peripheral countries again…" I can hear you saying… How does that Chuck do that? How did he know the media would jump on the Eurozone peripheral countries again? Only The Shadow Knows… HAHAHAHAHAHAHA! Well… At least the euro has a strong, credible central bank behind them, that believes in their mandate to provide price stability! Speaking of the European Central Bank (ECB), the ECB is maintaining its stance that "upside risks" continue to threaten price stability and that policymakers are monitoring inflation. "It is essential that the recent price developments do not give rise to broad-based inflationary pressures over the medium term," the ECB said. I'll tell you this… When I read things like that, you have to believe that this month's rate hike by the ECB is going to be the first of a series of rate hikes… I know the ECB, and Trichet (ECB President) tried to throw the markets off the scent of the last rate hike being the first of a series, but, everything I've read and seen from the ECB since leads me to believe it was the first of a series… And that should underpin the euro… Yes, the single unit continues to get dragged through the mud by its peripheral country members… But the core of the euro is strong… Today, we'll see the latest stupid CPI report… That's right I said stupid! It's stupid because I have no idea why the Fed or the markets pay any attention to an index that has so many hedonic adjustment to it, that the index number is useless! Most likely this worthless CPI will show US inflation is 2.6%, and our friend John Williams over at Shadow Stats , says that it's really more than double that number! We're also scheduled to see the latest (February) of TIC Flows (net foreign security purchases)… And then finally something that makes sense to me… Capacity Utilization and Industrial Production… More Fed Heads will be out on the speaking circuit today… Thomas Hoenig from the Kansas City Fed, is an über-Hawk… But, he doesn't get to vote, so there! I was doing some reading and research last night, and apparently it was very interesting, because I realized by about bedtime that I had not eaten dinner! UGH! But one of the things I noticed was that next week we have a Swedish Riksbank meeting… I do believe that I told you last month, that I thought the Riksbank would hike rates this month… And so it is on tap for next week… I would be very surprised and disappointed if the Riksbank kept their powder dry next week… Then there was this… Listen to me now and maybe hear me later… I am not trying to be political… I've received a few emails lately accusing me of espousing Republican points of view… Hmmm, I say to myself… Probably newer readers, for if they are, they won't recall me, during the Bush years, banging on that administration for running up $750 billion budget deficits. I banged on them so much, that people that met me the first time, said they thought I was a liberal… I'm neither! I report facts as reported on financial websites, TV channels, and from traders around the world. For instance, yesterday I made mention of the President's plan falling short of the Commission he hired, and the Republican plan… I wasn't touting the Republican plan, just stating a fact. COME ON PEOPLE, have some thick skin. Just because your party is in control right now, and I have to bang on them for budget deficits of $1.4 trillion, doesn't mean I'm being political! In addition, I don't like taxes, period. Tax for this, tax for that; I want small government. And I want the government out of my personal business! I want fewer taxes. And I especially want fewer taxes in the future for my kids and grandkids! I don't recall people getting mad at me for banging on the previous administration for their budget deficits… So… The day I become political, you'll know it! But it won't be in the Pfennig! Thank you… Whew! If only a text could register the force that each key was struck! I was really pounding there… To recap… The dollar rally yesterday morning turned around, and by midday, a currency rally was in place, with gold and silver being the Big Winners on the day. Silver touched $42.21 overnight, but has backed off a bit on profit taking. China's first quarter GDP printed at +9.7%, with inflation also rising. Moody's downgraded Ireland's credit rating two notches to just above "junk" status… And, Chuck pounds on the keys… THIS JUST IN! Silver's profit taking has ended, and silver is rallying again, with it rising to $42.55! WOW! Read more: Could the Price of Silver Hit $50? http://dailyreckoning.com/could-the-price-of-silver-hit-50/#ixzz1JdFdseoH
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| Buying Gold on the Price Inflation Guarantee Posted: 15 Apr 2011 09:00 AM PDT At my age, I have pretty much figured out that people don't like me because they fear me. I don't know why, exactly, but perhaps they fear me because I am a cynical, paranoid, gold-bug old man who thinks that the Federal Reserve has turned into an evil institution by creating So Freaking Much Money (SFMM), now so that it can commit the sin of monetizing new government debt by the truckload, increasing the money supply and guaranteeing a roaring inflation that hurts the poor, and hurts the almost-poor, and hurts the not-quite-poor, and (now that I think about it) it hurts everybody, which hurts me personally because they come whining to me to give them some of MY money! The lesson is that everybody suffers from higher prices to one degree or another. Or maybe people fear me because I know that The Only Thing To Do (TOTTD) when the money supply is being so seriously expanded is to buy silver and gold as a defense against the inflation that will result, and even though I have literally spent hours and hours with these people over the years, monopolizing every conversation to tell them to buy gold and silver, they don't! And then they turn around and get all upset with ME, like it's my fault, when I politely inform them that I figure that not buying gold and silver, especially silver, despite the entire corpus of the last 4,500 years of economic history proving the wonders of doing so, and the idiocy of not doing so, over and over and over again, is, by sheer tonnage of evidence, completely stupid. I mean, how stupid is it not to buy gold and silver when the Federal Reserve is creating so much money that it guarantees – guarantees! – inflation in prices. The fact that most Earthlings do not buy them seems to indicate that most Earthlings are stupid creatures, and that maybe, just maybe, the whole planet should be "sterilized" by sending a couple of Zargmagarth battle-cruisers through hyperspace to deliver a couple jolts from their onboard Exterminator 3000 ray guns, sort of like how America goes swaggering around the world blowing up large pieces of the planet and killing people. Relying solely on anecdotal information and stuff I just make up in my paranoid confusion, I figure that widespread gene malfunctions are causing this stupidity, and it also explains why terrified people do not recognize that (as is classically said in the movies) resistance is futile, both to Zargmagarth battle-cruisers and to the ruinous inflation in prices that is caused by the constant creation of too much money. Normally, I would expect them to say, "Okay, strange visitor from another planet! You win! I'll buy as much gold and silver as I can! Just don't let the Zargmagarths or the Fed destroy us!" It is, you may be happy to know, not too late to turn back the Zargmagarths, but it is, unfortunately, too late to prevent the Federal Reserve from destroying the planet with inflation in prices. And with a dichotomy like that, the decision to buy gold and silver is so easy that you involuntarily giggle in delight, "Whee! This investing stuff is easy!" The Mogambo Guru Buying Gold on the Price Inflation Guarantee originally appeared in the Daily Reckoning. The Daily Reckoning recently featured articles on stagflation, best libertarian books, and QE2 . | ||||||||||||
| Gold Miners Represented in GDX: Ripe for a Decline Posted: 15 Apr 2011 08:44 AM PDT Gold miners, as represented by GDX, have risen over 200% as a group since their 2008 low. While I am not declaring this advance over by any means, there are reasons to delay putting money to work in this group until probably mid May. Price and volume analysis of GDX show that a period of price weakness is likely underway and could last for another month or so. The first chart below shows the predominant 43 day or 8 1/2 week cycle that is prevalent in GDX. The cycle change points are shown by the dashed vertical lines throughout the chart. Notice how price either reacts or changes direction many times around these vertical lines. Of course no cycle is perfect but there is a certain degree of reliability around this timeframe. Click to enlarge Complete Story » | ||||||||||||
| Top Commodity Producers That Hedge Funds Love Posted: 15 Apr 2011 08:05 AM PDT Insider Monkey submits: Commodities are the new technology stocks. Microsoft (MSFT), Intel (INTC), Cisco (CSCO), and Hewlett-Packard (HPQ) turned into value stocks and the value stocks of the last decade became today's growth stocks. Several prominent hedge fund managers like Jim Rogers, Julian Robertson, and Ray Dalio expressed their concerns about the US dollar. Hedge funds are flocking into gold, oil, metals and other hard assets that can retain value in an inflationary environment. The demand from high growing emerging market countries also put a floor under these commodities. Insider Monkey summarized hedge fund holdings in top commodity producers. We follow 175 hedge funds. The industry classifications are obtained from Fidelity. Here are the top commodity producers that at least 5 hedge funds have at least $300 Million invested at the end of 2010:
Complete Story » | ||||||||||||
| USPS ever refuse to insure your coins? Posted: 15 Apr 2011 07:49 AM PDT PO refused to insure 45 silver dollars I was shipping via priority mail. They said it had to go registered mail only if I wanted insurance, as the PO wont pay on coin claims any other way than reg mail. The package was being insured for $1700. I asked if there was a problem insuring smaller dollar coin packages like $100. He said registered for coins and insurance even for $100 items as well as silver coins like 1 oz bullion. This ever happen to you? | ||||||||||||
| Today in Commodities: Reflation Posted: 15 Apr 2011 07:25 AM PDT Matthew Bradbard submits: "Reflation" is a term not used in quite some time, but if commodities continue to surge higher -- as they did this week -- expect this word to re-emerge. The 20-day MA has supported Crude for the last four sessions; in June at $107.70. We're still expecting a trade lower, but on a settlement above $111/barrel, we would exit shorts. Natural gas will end higher on the week, but we still need to see a trade above the 200-day MA to get more long interest; our target remains$4.45/4.50 in July. The 50-day MAs remain the pivot point in the indices; in the S&P at 1310 and 12100 in the Dow. We maintain a slightly bearish bias, but we will need to see prices retreat next week or we will likely move to the sidelines with clients. The dollar maintained the 75.00 level, which is a psychological support line that needs Complete Story » | ||||||||||||
| Gold Seeker Weekly Wrap-Up: Gold and Silver Rise Almost 1% and 5% on the Week to New Highs Posted: 15 Apr 2011 07:11 AM PDT Gold traded mostly modestly higher in Asia and London before it accelerated up in late morning New York trade and ended near its new all-time high of $1487.30 with a gain of 0.94%. Silver soared to a new 31-year high of $42.85 and ended with a gain of 2.06%. | ||||||||||||
| What Is Silver Screaming About? Posted: 15 Apr 2011 06:48 AM PDT The CURRENT SURGE in bids to buy silver might seem dramatic, but it's more measured by far – to date, at least – than the true silver bubble of Sept. 1979 to Jan. 1980. Even so, you may as well call this a record price. In real terms, as Matt Turner at Mitsubishi told me this week, one ounce of silver briefly rose above 40 of today's US Dollars per ounce in 1864, when the American Civil War neared its climax. In nominal Dollars, the Hunt brothers' multi-billion-dollar corner only saw it more highly priced on 5 trading days in Jan. 1980. And while US investors waiting to buy silver are also still waiting for it to record a new intra-day high, it's already broken new ground against the British Pound and for most of the Eurozone, too. | ||||||||||||
| Rick Rule - Extreme Silver Tightness Causing Delivery Problems Posted: 15 Apr 2011 06:43 AM PDT Rick Rule has a lot of credibility in my book... Rick Rule - Extreme Silver Tightness Causing Delivery Problems With gold and silver still on the move, today King World News interviewed Rick Rule, Founder of Global Resource Investor now part of the $9 billion Sprott Asset Management. Rick is known as one of the most street smart pros in the resource sector. When asked about the silver market specifically Rule stated, "Well I think part of what's happening in the silver market is the fact that the market is in backwardation which is to suggest that the spot price is ahead of the futures price. This is the opposite of a contango which is what normally what happens in metals markets. It is obvious that their is incredible tightness in the physicals market." "There has been so much physical buying that it's widely reported that the mints are having difficulty obtaining coin strip in the face of overwhelming coin demand. There has been suspicion with the March settlement and with subsequent near-term settlements that there will in fact be insufficient silver to meet the settlement requirements in those near month futures contracts. It's obvious from those statistics that the near-term silver supply, in particular the physical supply, is extremely tight, and as a consequence of that extremely volatile...We're in an extraordinarily tight market." When asked about gold Rule remarked, "It's very interesting to talk about the dollar and these other currencies in the context of gold because as has been pointed out, gold is the only currency without a political constituency for devaluation." When asked about the US dollar Rule replied, "It is true the dollar is the world's reserve currency so it's the fiat currency that everybody is reserving special wrath for, particularly in view of the profligate nature of US debt issuances. But there's a bigger problem with regards to fiat currencies that people have, because if you are going to somewhere other than gold, what is the fiat haven? I don't see a fiat haven, and that's problematic." Rick Rule is one of the most level headed individuals in the resource world so I take seriously his warnings about tightness in the silver market creating settlement problems in near-term futures contracts. Rick covered gold, silver, the US dollar, uranium, oil and other topics in great detail, including what he is doing with his own money and his KWN interview will be released shortly. You can listen to it by CLICKING HERE. Eric King KingWorldNews.com http://kingworldnews.com/kingworldne..._Problems.html | ||||||||||||
| COT Silver Report - April 15, 2011 Posted: 15 Apr 2011 06:32 AM PDT COT Silver Report - April 15, 2011 | ||||||||||||
| Making Money on Miners, Part V Posted: 15 Apr 2011 05:49 AM PDT In Part IV of my series in analyzing the "evolution" of a mining project, I left off having just discussed the "economic assessment" phase. This is an extremely technical, detailed study of the mineral resource – which provides a wealth of information for investors, and the mining company itself. For the first time, investors are given a clear picture on what precise metallurgical process will be used to extract the metal(s) from the ore, how great the production capacity of the mine will be, the costs of constructing such a mining facility, the profitability of the mine and the "internal rate of return" (IRR) on capital – based upon specific price-assumptions for the metal(s) contained. Of equal importance, once the miner reaches this level of development, they have crossed the boundary from being (merely) an "advanced-stage exploration project" to a "near-term producer", because for the first time the company can now plot a clear-and-direct path to commercial production. This enhancement in status not only tends to lead to appreciation in the share price, but this additional layer of information (and certainty) reduces the risk of the project. This, in turn, tends to reduce volatility in these companies, and when there are inevitable pull-backs in the sector, "near-term producers" tend to hold their value better than the mere advanced-exploration projects. Ideally, the economic assessment only solves/answers the issues and problems of mine construction – rather than creating new problems, but this is not always the case. As I alluded to in Part IV, if the mineral deposit is situated in a particularly environmentally "sensitive" location, or if the process needed to extract the ore is especially toxic/polluting in nature, or if a company is seeking to construct a very large mining facility then there can often be difficulties in obtaining the necessary permitting. This one hurdle can (and does) often tie-up mining projects for several years (and sometimes forever), which is why investors must make a point of keeping companies with potential "permitting issues" to a minimum within their "basket" of miners. The best/easiest way to do this is to focus on mining projects which are located in established mining districts. As a matter of common sense, if a junior miner is drilling-out a mineral deposit which had already been mined for years/decades (during a previous era of high metals prices) then the likelihood is that there will be little-to-no difficulty in having new mining operations approved by the local government. We can further minimize potential permitting problems by focusing on nations/states/provinces with governments which are known to be "mining friendly". In Canada (and a few other jurisdictions) "native land claims" can also be a potentially serious issue for a mining company. Here, there is no substitute for the due diligence which is essential for successful investing. Between reading news releases, contacting the company for further information, and/or communicating with other shareholders, an investor should be able to develop a very clear picture as to whether "land claims" could be an obstacle to commercial production. Assuming "permission" isn't an issue, then the big obstacle facing a mining company at this stage is to come up with the (normally) huge amounts of capital to construct a mine, and commence commercial production. Sometimes a miner will have a much easier road to production, however. With gold and silver prices having been ruthlessly suppressed (by bankers) for several decades, somewhere around 90% of all the world's gold and silver mines were forced to close – as they could no longer break-even at the suppressed/manipulated prices for gold and silver. Some of these mines were either so antiquated, or had been out of commission for so long that any new mining would require essentially a new mining facility. However, there are dozens of junior gold and silver miners (scattered all over the world) who have taken over old mining sites where either mining had never ceased, or where there still remained a wealth of usable infrastructure. For such companies, becoming a producing (profitable) miner may only require a tiny fraction of the capital necessary for creating a brand-new mine. |
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