On my way back from kicking rocks on a gold exploration project in the Great White North, I stopped in at the Agora investment conference just held in Vancouver. I had time in between meetings to take in Doug Casey's speech, which was delivered to a standing-room-only audience in the conference hotel's main ballroom. Somewhat to my surprise, given the beating precious metals have taken lately, the talk was very warmly received, with people laughing and clapping numerous times along the way.
But maybe I should not have been surprised; Mr. Market seems to be swinging back toward optimism. There were companies putting out great news a month ago that saw no response at all in their share prices—but now, good news is being rewarded. There are buyers in the market where there were none four weeks ago.
That's significant, but doesn't prove that the hundred-dollar rise in gold over the last month will continue. Bernanke could say something on TV tomorrow that drops gold right back to where it was in late June. I don't think he will, given the violent market reaction to his last trial-balloon remarks about cutting back on the money printing, at least not until he can manufacture much more positive-sounding news to soften the blow.
The inherent impossibility of predicting near-term price movements in a market that can be so shaken by one man's words is a good reminder to us all that the safest way to speculate is to identify long-term trends, place our bets, and then basically hold until it's clear that we are either right or wrong.
In the article below, your Casey metals team has a look at a trend in silver demand that fits this model. I hope you find it as useful as it is encouraging.
Senior Metals Investment Strategist
|Rock & Stock Stats||
One Month Ago
One Year Ago
|Gold Producers (GDX)||27.58||22.22||42.83|
|Gold Junior Stocks (GDXJ)||42.81||33.04||78.00|
|Silver Stocks (SIL)||13.55||10.59||18.21|
|TSX (Toronto Stock Exchange)||12,647.90||11,951.90||11, 639.75|