silverwood

Gold vs. Value Investing: An Historical Perspective

The possibility that precious metals will rise to new all time highs in terms of USD as they have in most other currencies and stay at or near thoses levels will result in predominately precious metal mining companies being a excellent value play.

A number of reasons for this are:
1. Mining costs have dropped dramatically, ie energy costs and other raw materials needed.
2. Base metal miners who often have precious metals a by-product have curtailed activity as base metal prices have plummeted therefore reducing supply of precious metals.
3. In the 70s bull in precious metals many miners paid a handsome dividend and I believe this will be the case again.
4. Large deposits of precious metals have been harder to find and with what has occurred to the junior miner explorers this will curtail supply of precious metals further.
5. I'm sure there are other factors that could be added to this list so comments are encouraged.

Could There Be a Real Breakout in Gold?

Price action in gold/silver markets appear to have broken out to the upside. One possible explaination for this occuring at this time is the transition from the Bush Administration to the Obama Administration. Traders may view this as a time of weakness and are simply testing the waters so to speak. After all the long term fundamentals for gold/silver have been up and we have just come through a fairly long period of consolidation and base building. This rally presently has all the earmarks of one that will challenge the 08 highs. I say godspeed to it!

Gold's Big Picture

Yeah, it is never dull. My take on when Obama takes office will be of a candidate who has promised to stimulate (read pump in money) and a Cabinet team ( read Sommers and Bernanke, etal ) the promoters of the perception all is well in fiat land, will be quite the juggling act. At some point the gold suppression team will ease off, because of the large costs to do business and allow gold to rise to the next level where the rear guard will then hold that line. Gold will make a new higher high in it's long term bull market at that point. When this will happen is the unknown part. As history will show the Fed will continue on it's coarse of US dollar debasement, so clearly shown in it's track record.


On Jan 14 11:19 AM GMiki wrote:

> Strange week for gold with the commodity indexes readjusting. Looks
> at if we're back to the extremes on the Dow and a "strong" dollar.
> I wonder what will happen when Obama actually takes office. It's
> never dull.