Friday, December 31, 2010

How high will gold go in 2011 CNN

I think one thing that he failed to mention regarding 'paper' Gold and mining stocks is that they will typically drop if the market crashes. While Gold will be more stable and will even go up in times of crises.

If you do own physical Gold bullion at home, tell NO ONE about it. You will also need a good place to store it.

CNBC Gold / Commodities Dec 31st

Thursday, December 30, 2010

Dec 30th Gold

Gold was down ~$10 in today's trading which was expected after a 3 day run to the upside and topping at $1414 on Tuesday afternoon.

Those vertical dotted lines on the chart are Fibonacci Time Zone tool which is stretched from the high on Oct 14th to the high on Nov 9th. It projected another peak on Dec 6th, but was one day early. The 6th was actually an up day and the 7th a down day, but hit the all time high at $1432 an ounce.  The next peak isfor Thursday the 31st, so we will see shortly if it is an up day as well as a possible breakthrough over the $1432 level. (Optimistic thinking for a Gold bull)

Silver closed at $30.51 and is looking quite strong as it is trading above the 13 day short term moving average and has not dipped below for any length of time over the last few months. Investors are looking to purchase Silver at lower prices and they are coming into the market at every opportunity

The $30 level may be becoming a support level instead of a resistance level. Is it too early to say goodbye to ~20 Silver?  I know some people wish that they purchased more last Summer when it was trading between ~$17 and $18 an ounce.

January is a strong month for Gold based on 'seasonal' data. If the financial markets hold up, the miners should do well along with rising metals prices.

Wednesday, December 29, 2010

Dec 29th Gold

Gold broke to the upside in a pretty big way over the last 2 trading days. Similar to the previous wedge formations.  Will the $1400 level become a base for Gold after the sideways action over the last 3 months?  If so, we may head towards the $1450 area and possibly $1500 in January before a pullback occurs.

Silver has also been strong with a closing price of $31.56.  The Gold/Silver ratio is around the 46 area and should continue to drop going into next year.

Monday, December 27, 2010

Gold Dec 27th - Break up or down?

Gold is in a trading range as mentioned in last weeks analysis.  It is forming another sideways wedge between $1422 and $1361. It is most likely going to break up or down in the near future, possibly this year.  Gold is up 27.7% ytd, so a minor correction is expected by some and should not be very deep. If it does correct, it will affect Gold mining stocks much more as many of them have had 50%+ runs to the upside over the last 3 months.

The MACD Histogram has a slight bias towards the center line, so I'll give an edge to a break to the upside.

CNBC Bubbles 101

The lesson for today, Gold is in a bubble...  I think these guys should really short Gold at these levels.(But they know better. They will just watch as it heads higher. There will be +15% pullbacks, but as long as governments continue adding digital dollars, Gold will head higher.

Saturday, December 25, 2010

Wave of Muni Defaults to Spur Layoffs, Social Unrest: Whitney

QE3 on the's not going to be pretty in the next few years... 


60 Minutes state and pension budget crisis

60 Minutes state and pension debt crisis

TARP and QE2 are complete.  This may be the reason why QE3 will be coming sometime in 2011 or 2012.

Wednesday, December 22, 2010

Gold to $6000 - David Tice

Founder of the Prudent Bear fund David Tice on CNN Money.  Talks about debasing the US currency and the Dow dropping lower than Gold

Tuesday, December 21, 2010

Gold in a trading range

Gold has been in a trading range from the beginning of October when it passed $1315 to a high in early December at $1422.  Gold is up +27% year to date and the last 3 months may be a consolidation period before the next move up. With about 8 more trading days for 2010, it looks like it will finish the year between $1350 and $1422. (Unless there is some major catalyst for a upwards or downwards move from here).

Silver has been in a tight trading range over the last 2 months with a slight upwards bias.  Silver is up 73% year to date, so a consolidation period is due. A potential pull back is also a possibility before the $30 is pierced and realized as a support level, not a resistance level.

Monday, December 20, 2010

The Dark Side of the Gold Boom - Part I: Gold ETFs

Bloomberg Investor interviews regarding Gold

Dec. 20 (Bloomberg) -- Investors and analysts talk about their outlook for gold for 2011 and beyond.

Bloomberg interviews Gold analyists

Wednesday, December 15, 2010

Gold Silver Dec 15th, 2010

Gold has been up and down over the past week with no definitive trend in place.  It ended down $16+ today with a close of $1388, below the 13 DMA. If the previous break low of $1372 is taken out, Gold may start a downtrend with support at the lower trend line of ~1368 and the 50 DMA of 1363.

There are plenty of reasons why Gold should end the year strong:
  • European debt issues
  • China and India demand.  China also opened a 'Lion' fund for investment.
  • Christmas jewelery demand.
  • QE2
  • Financial market uncertanty

Silver closed down 1.78% to $29.26, above the 13 DMA. It should stay above the last break low of $28.07 to remain in a upwards trading range and to keep the trend in tact.

Silver is up 69.7% year to date while Gold is up 27.3%.
The Gold/Silver ratio is 47.4 and dropping. In Feb of this year, it hit a high of 72.08.

Silver is still trading well below the 1980 high of $50 while Gold surpassed the 1980 high of $850 in 2008.
Investment demand remains strong with all of the US Silver eagles out of stock at the US Mint.

From the US Mint website:

Production of United States Mint American Eagle Silver Uncirculated Coins continues to be temporarily suspended because of unprecedented demand for American Eagle Silver Bullion Coins. Until recently, all available silver bullion blanks were being allocated to the American Eagle Silver Bullion Coin Program, as the United States Mint is required by Public Law 99-61 to produce these coins “in quantities sufficient to meet public demand . . . .”
Although the demand for precious metal coins remains high, the increase in supply of planchets—coupled with a lower demand for bullion orders in August and September—allowed the United States Mint to meet public demand and shift some capacity to produce numismatic versions of the American Eagle One Ounce Silver Proof Coin.
However, because of the continued demand for American Eagle Silver Bullion Coins, 2010-dated American Eagle Silver Uncirculated Coins will not be produced.
The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.

We are accumulating physical Silver and ETF's on all pullbacks.

Tuesday, December 14, 2010

J.P. Morgan Cutting Back Big Bets Against Silver

An article from Murray Coleman from Barrons:

With regulators circling and analysts crying foul, J.P. Morgan (JPM) has apparently cut its short positions in futures markets betting against further rises in silver.
The Financial Times is reporting that JPM is denying that any outside pressures are behind any of its metals moves. At the same time, the bank also wouldn’t comment on specific positions.
But traders and analysts have been openly critical of J.P. Morgan as well as other banks, which seem to be taking rather outsized short positions in order to hedge growing long positions in silver.
The iShares Silver ETF (SLV), which is trading down early this morning by 0.7%, has been on a tear this year. So far heading into today, it was up 74.5% in 2010.
That’s even better than the SPDR Gold (GLD), which had gained 26.8% on the year, according to Morningstar data.
An unwinding in silver shorts by big banks could provide another catalyst for even more growth by SLV in the future.

Another article from Reuters:
JPMorgan cuts silver short;denys 90% copper data

Sunday, December 12, 2010

Avino Silver

Avino Silver is company soon to be in production in Durango Mexico that has an interesting history. The Avino mine from 1974 to 2004 produced 16M ounces of Silver, 96k ounces of Gold and 24M ounces of Copper. The mine was shut down in 2004 due to economic conditions.

Avino has since re-acquired the mine and has explored additional regions with drill results as high as 3,623 g/t Silver and 3.84 g/t Gold.  They have an NI 43-101 estimate of 14.7M ounces Silver. The ET Avino vein is estimated at an additional 8.5M ounces, but is not 43-101 complaint. Total estimated Silver ounces - 23.3M. Avino has the capability to expand the mine and explore for additional resources on their property.

Production is scheduled to start in the near future with infrastructure in place and ready with a initial mill capacity of 1250 tpd.

Share Information
Shares Issued: 23,267,227
Options: 1,895,000
Warrants: 2,400,000
Fully Diluted: 27,562,227

 December 10th price: $2.20

For additional information, go to their website for the latest news, financial reports and a video interview of their CEO, David Wolfin with David Morgan.
Avino Silver

Disclaimer: GSR publishers currently own shares of Avino Silver.

China accumulating Gold

There may be a day where you will be unable to purchase Gold due to high demand in both China and India.


Thursday, December 9, 2010

Prospect Generator Model

Here is a link from an article that Brent Cook wrote and published in Sept 2008 - Prospect Generators- Increasing Your Odds of investing Success.  

This model lets the exploration company find potential Gold reserves and builds partnerships with mid and senior miners which takes a percentage stake in the area. The partner will fund the drilling and additional exploration which allows the exploration company to save their money reserve and not dilute shareholder base by issuing additional stock. The exploration company can then focus on acquiring other potential properties. 

Brent Cook - Prospect Generator Model

Another article written by Matt Badiali in April 2009 on Prospect Generators:

Wednesday, December 8, 2010

Bearish metals markets...

Gold finished down for the 2nd day to the 1383 level which is right on the 13 day moving average. (Why do I use a 13 day for the short term moving average?  Because it's a Fibonacci number).  Gold still  has higher lows until it closes below the 1350 level. This would pierce the lower support trend line and a larger correction may be in the works...?  The MACD Histogram and Stochastics are turning down which suggests lower prices.

If your long, there is nothing to worry about and this may be a buying opportunity for those that are not in the market yet. If your a trader of Mining stocks, this may be more serious as some of these stocks can take large downwards swings in one day wiping out short term gains. I am still in the camp where Gold will rally into the end of the year.

Silver closed on the 13 day moving average as well,,,hmm is Silver following Gold? The last break low was 26.40 on Nov 26th. Silver is still technically in an uptrend until the last break low is pierced. The next support area is the lower trend line which is just a little above the 26.40 level.

Like Gold, the MACD Histogram and the Stochastics are heading down.  Nothing to worry about if your a long term holder.  Swing traders may want to take some money off of the table if the 26.40 level is pierced.

Tuesday, December 7, 2010

Dec 7th Gold

A down day for Gold and Silver, not a big deal or trend changer.  Gold continues to trend up within the channel and it would need to drop below 1350 that occured on Nov 26th area to negate the uptrend.   Gold has been up 6 days in a row and had to take a 'timeout' at some point. 

As mentioned previously, IF the institutions and hedge funds sold in November to lock in gains, Gold should have a up month in December and into 2011.

Silver was also down about 4.6% today and was expected after 6 consecutive up days in a row. Silver in general is more volitile than Gold and one should expect wild swings at times. Just like the forcast for Gold, Silver should have a good month in December if institutions have taken their profits for the year.

Monday, December 6, 2010

Cramer touting Gold on CNBC

Suggests people allocate up to 20% of their portfolio into Gold and suggests that people own Gold Mining stocks like Agnico Eagle (AEM) and Eldorado Gold (EGO).  Novagold (NG) is his speculative play as they are an explorer.
I have a position in Eldorado Gold. They are one of the Mid tier producers that have one of the lowest costs at ~$340 an ounce.  They should have a good 4th quarter earnings report with Gold at $1400+ an ounce.

Sunday, December 5, 2010

Silver ETF SIL from Global X funds

Here is a snapshot of a daily 6 month chart of the Global X Silver Miners ETF SIL.  The fund started in April, 2010 and for that last 6 month period, it is up 87% while the Silver ETF is up 67%.

You can go to the Global X website and see all of the fund details. The Silver Miners that the fund holds as of Dec is listed below.

If Silver continues to outperform Gold and stays in the upward trend higher, the Silver miners and this ETF should do well going forward. The financial markets will also determine how the miners will perform as they are just like any other stock and are subject to market whims and declines. (Sometimes the decline in mining stocks are even worse than your typical S&P500 company, just look at them during the financial crises in 2008/2009).

One thing that I like about this ETF is that it spreads the risk out.  If one of these miners were to publish some news that is not taken well by investors, it can get hammered quite hard and for weeks, months and possibly a year or more. The price of the fund will not take a major hit because of diversification of senior, junior and exploration miners.

Disclosure: Own shares long

Friday, December 3, 2010

Gold Dec 3rd, 2010

That is one upside day for Gold, just $24.93... as the debt worries in Europe and the Euro declines.  Gold has now made a solid move higher that sets the trend of higher highs and higher lows.  It is a few dollars away from producing an all time high and may move to the top channel line within a week or two. ($1450+)

The MACD Histogram is on the move up and Gold should see higher prices over the next week or two.  An X-mas gift from Bernanke....  Stay long!

Silver Dec 3rd, 2010

Silver is on the move to another major bull trend going into the end of the 2010 year with a close on Friday at $29.24, a few cents short of the previous high a few weeks ago.  The MACD Histogram is trending up and it looks like the $30 level will be met next week. The way Silver is moving, it may pierce right through the even number 30 level with little resistance, especially if the institutions that are short muster up the nerves to buy back at these levels.

Silver is still undervalued when you base it on Golds run over the past 2 years.  In 1980, gold hit $850 an ounce and Silver hit a high of $50, partially due to the Hunt brothers attempt to corner the market.  In any case, that was the all time high.  Gold has surpassed the $850 level in 2008 and Silver has not even reached $30 in 2010.  Talk about a discount and deal..... Still a bargain at these prices, especially when it's going to double from here.

Wednesday, December 1, 2010

Goldman Sachs Gold Forcast

Goldman's self fulfilling prophesy (They don't loose too much $$$ on their predictions) 

Gold prices will likely continue to trend higher in 2011, supported by a fresh round of quantitative easing in the U.S., before recording a peak around $1,750 a troy ounce in 2012, Goldman Sachs said in a report Wednesday.

The investment bank said it expects downside risks for the precious metal, which has rallied 25% since the start of the year, to increase as economic growth and real interest rates recover.

“At current price levels gold remains a compelling trade, but not a long-term investment,” it said. “With the current round of [quantitative easing] set to end in June 2011, and our U.S. economics team now forecasting strong economic growth in 2011 and 2012, we expect U.S. real interest rates to begin to rise in 2011, likely causing gold prices to peak near $1,750/oz in 2012.”

In the report, Goldman suggested it is a good time for gold producers to begin scaling up hedging of forward production, particularly for 2012 and beyond.