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Despite Gold and Silver Reaching Records...
“Gold has gone up too fast too far...” “Silver
is in a bubble!” We are starting to see more and more of these warning
statements in the past couple of days. But sentiment and underlying indicators don’t
point at major positivism in the segment at all, on the contrary, investors are
still wary of this asset class.
Despite gold and silver reaching new record highs
every day, sentiment in gold and silver mining shares is far from bullish. Especially
junior mining shares are underperforming significantly nowadays. Senior gold
stocks such as Barrick Gold, Goldcorp and Newmont Mining have performed nicely,
mostly in line with the price movement of gold.
So what’s the deal?!
According to top gold fund manager John Hathaway of the Tocqueville Gold Fund – who was recently
interviewed on King
World News – this may change in the short term. Many hedge funds are short
junior mining stocks, and are investing in the senior stocks instead. Many
investors, including savvy professionals, are still sceptical of the baffling
performances junior mining stocks had in the raging bull market during the ‘70s.
But Hathaway believes these short sellers will get burnt by the upcoming bull rage
in junior mining stocks. They will be forced to buy back positions, setting the
stage for incredible performances fuelled by even more fear, greed and panic.
We at Smart Money Europe are confident the
junior stocks will eventually outperform major gold stocks. But due to a lack
of risk appetite, professionals are still flocking to the seniors.
Under the radar screen, M&A activity in the
junior gold and silver field is picking up. On April 4th, New Gold
agreed to acquire Richfield Ventures for a 46% premium based on the company’s
20-day weighted average price. The average premiums paid by seniors to acquire
promising junior assets are quite high, meaning that the juniors are still very
attractive and far from overvalued.
We expect the gold and silver rally to
continue. Gold is set to take out 1500 USD in the short run and silver is on its
way to 50 USD. If gold and silver would be near a intermediate top, as some
pundits are proclaiming, we wouldn’t be seeing the current ‘steady as she goes’
pace of both metals. Daily price performances in the PM complex would run wild,
with percentage gains up in the double digits for the equities of senior gold miners,
and the junior gold and silver stocks going ballistic!
Today, we aren’t
seeing any of such price action whatsoever. So be right and sit tight, the
famous Jesse Livermore once said!
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watch gold when oil hits 200
Gold has gone up too far too fast.
Bullshit, I say.
Priceline at 500, las vegas sands went from 2 to 47. Gold hasn't gone up fast and far enuff.
What? An actual flight to value? Naw, I wouldn't hear of it!
Watch Marc Faber demolish the "gold bubble" nonsense:
http://www.zerohedge.com/article/marc-faber-everything-going-only-federa...
He asked 200 hedge fund managers in Singapore, "How many of you have more than 5% of your personal wealth in precious metals?" Not one hand went up.
When even Asian asset managers have insignificant gold exposure, there ain't no bubble.
But surely its Max Keisser's silver Liberation Army
that will send it to $47 at least to end The JP Morgue
http://maxkeiser.com/
LOL Ive been hearing 'gold and silver are up too far too fast' since silver was $13.
People always find a way to hate the excellent-performing investment they're not invested in.
I remember selling grandma's golden ring to buy potato.
.
I remember all my friends getting more attention than I while at the beach. I too, stuck a potato in my speedo's to enhance my apparent package size. When I strolled about the beach with potato intact, all I got was laughed at. Chicks standing, pointing, giggling at me. That is, until my buddy informed me that I had stuffed it into the wrong side of my speedos.
i sold all my gold for scrap to cash4gold.com and spent the money on netflix subs, superbowl tickets, and taking my kids to disneyland. WOO!!