Gold And Silver Ready To Fly?
November 23rd 2008 19:06
If you have been following gold, you know trhere has been abig disperity between the physical price of gold and the price set in paper gold on COMEX. Thursday, one day before the $50 jump in the price of gold on COMEX, gold had been trading up to $750. Meanwhile, as Jason Hamlin in Is the Price of Gold Being Supressed? tells us gold coins in the non-rigged free market - Ebay, have reflected the real market:
Last week we learned that not only was China interested in increasing their gold reserves by a factor of ten, but Saudi Arabia bought $3.5 Billion of gold. Peter Cooper reports in Seeking Alpha, that Daudi Arabia is also interested in the precious metals stocks that have extreme leverage to the metals.
Full disclosure: I own shares in one of those silver producers, Coeur d Alene Mines Corporation (CDE). I sold 75% of my shares in the $4 to 5 area before it fell 90%. I have since rebuilt my position in the $0.50 to $0.78 range. CDE closed Friday at $0.50 up $0.14.
Besides, major countries buying Gold, the futures closed in backwardation to cash on Friday. See Mover Mike here and here for an explanation of the term.
* 1 Ounce American Eagle - $954 (19% Premium)
* 1 Ounce Buffalo - $968 (21% Premium)
* 1 Ounce Gold Bar Bullion - $942 (18% Premium)
* 1 Ounce Canadian Maple Leaf - $918 (14% Premium)
* 1 Ounce Krugerrand - $935 (17% Premium)
* 1 Ounce Gold Bar Bullion - $942 (18% Premium)
* 1 Ounce Canadian Maple Leaf - $918 (14% Premium)
* 1 Ounce Krugerrand - $935 (17% Premium)
Last week we learned that not only was China interested in increasing their gold reserves by a factor of ten, but Saudi Arabia bought $3.5 Billion of gold. Peter Cooper reports in Seeking Alpha, that Daudi Arabia is also interested in the precious metals stocks that have extreme leverage to the metals.
Let us not forget that the reverse leverage to the gold and silver price - which has taken their stock prices down to 40-year lows this year - will now act in the opposite direction. Gold and silver shares are going to have their biggest rally in 40 years if the metal prices recover suddenly.
That is why the brightest investors in the Persian Gulf are loading up with these stocks, and the biggest price increases will come among the most depressed of these shares, namely the pure silver producers.
That is why the brightest investors in the Persian Gulf are loading up with these stocks, and the biggest price increases will come among the most depressed of these shares, namely the pure silver producers.
Full disclosure: I own shares in one of those silver producers, Coeur d Alene Mines Corporation (CDE). I sold 75% of my shares in the $4 to 5 area before it fell 90%. I have since rebuilt my position in the $0.50 to $0.78 range. CDE closed Friday at $0.50 up $0.14.
Besides, major countries buying Gold, the futures closed in backwardation to cash on Friday. See Mover Mike here and here for an explanation of the term.
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