Anyone have any thoughts on the apparent difference in Sinclairs comments from Wed to Thurs? Wed he is advising not getting overly bullish due to expirations next week and last night he seemed to say gold hits 480 in one step. It could be he was as surprised as anyone at the size of the budget deficit increase for Feb. or maybe I am misinterpreting his time frame.
On a 5 year chart you have a cup and handle and the handle is complete with the big W and we just broke over major resistance at 18 for where the line was. So you typically take the depth of the cup's right side and add that to 18 and you get a price target and the time frame is about the same duration, so give it 2 years. You can also see graphs from the Royal Gold website showing the sliding scale royalty returns and it's all exponential, not linear. Profits for gold mining companies are directly related to the oil to gold ratio. So you want to watch that ratio. We want to see gold catch up to oil and the CRB by percent move and then we want oil to fall. If the oil to gold ratio changes to become easy energy high POG, it will ignite all precious metal mining stocks. There are no gold CEO's dancing at the computer when oil goes on a tare and gold bumps up halfway. If unhedged. If the mine is hedged, then you want to find out which bank owns the hedges because they get the profits from the gold move not the mines that are hedged. We are into Pipeline Mining Complex and Placer Dome and Kennecott are behind it, probably flawless engineering as good as man can do. Yamana has low cost per ounce being a S. American operation. And RGLD has only 14 employees so we have fixed overhead costs while the profits roll in from gold, silver, and copper. See these guys went around during the dying years and lent cash out to dying mining co's as a pawn broker, in simple terms. Then they said when you get running again in years to come, we want a sliding scale payback percent from everything that comes from the dore pour. So when they gun the mines and go for the gusto, RGLD gets a percent, not a fixed payback amount. That's exponential. With the way fiat paper erodes in time and whatever China wants is safe as for a future business model. Billions of Chinese women will want jewelry and gold is going to get hot and stay hot. Above ground silver was deluged with supply from the great melt of 1980. It too 20 years to wear it out and now it's gone. The main supply to back the Comex is in Mexico and they want alot for their silver bullion coin programs. The traditional ratio in the earth is 15 to 1, silver to gold ratio. Take 445 divided by 15 and that's where silver is supposed to be. So SSRI and PAAS are your silver stocks. Don't bother with most goldstocks. RGLD has silver and copper in it and copper is excellent in the mix because the rally has been from the bottom up. Copper can double from here. Silver can triple and gold can almost double......realistically speaking. If a nuclear bomb goes off somewhere or you have some big banks fail. Gold would lead and maybe beat silver. That's apocalyptic. I'm just trying to be realistic. If the USD drops below 80 cents to the euro, Katy bar the door.
What are your thoughts on GSS? First trade I bought GSS at $3.61 and decided to dump it at $3.40. Reloaded the same 10K shares at $2.95 (almost had a heart attack as GSS went down to $2.69). Is $3.40-$3.60 the best case scenario short-term? I still believe GSS is one of the best values in PM stocks. After they were unable to buy Iamgold, I thought one of the majors would be very interested in buying GSS at these levels. What gives? Several majors have mines in Ghana and can consolidate operations and management
I think GSS will double by May. Shorter term than that, I expect it to play catch up with the HUI and outperform it.
I have re-analyzed it to see if I should go with another company for this run up and have decided it is more undervalued than the rest. The only caveat is it's weak technical position being under it's 50 and 200dma but those should quickly be resolved.