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Smart Money Europe - New Bold Prediction: By 2015, 10 percent of the S&P 500 will consist of Gold & Silver Stocks!
Over here in the Benelux — that is Belgium, the Netherlands and Luxembourg combined — Smart Money Europe is known for its
‘out-of-the-box’ statements on various asset markets. As independent
analysts, we can openly and freely speak our minds, which is still a
rare phenomenon in financial circles.
Back in the days (over 5 years ago), our future price targets for
gold and silver were downright shocking for most investors. We told
readers that gold would propel towards $5000 per ounce, while silver
could eventually go parabolic up to $300/ounce.
Back then, these kind of predictions equaled blasphemy! Today, with
gold prices tripled and the price of silver almost fivefold, our goals
for both metals sound less off the map, even though our silver targets
still make people frown.
Being astute investors, nothing seems to surprise us anymore with the
current financial mess our political and monetary ‘leaders’ got us into. If they keep kicking
the can further down the road, i.e. flooding debt with even more debt,
we will soon find that our primary targets for gold and silver could be
too conservative!
But that’s not the most urgent problem on our minds.
Lately, something else is bothering us in the gold and silver segment. We already pointed at the mismatch between gold and gold stocks.
We dug a little deeper and found that the current weight of the gold
and silver sector in the total market was completely negligible. Even
with precious metal prices multifold, gold and silver mining shares are
only a small fraction of the most important indices.
Take for instance the S&P 500, the bellwether among global stock
indices. A recent snapshot of its composition shows there are only 2
companies included within the gold ‘sphere’. We want to emphasize
‘sphere’, as Newmont Mining and Freeport-McMoRan Copper & Gold are not exactly what you can call pure gold and/or silver plays.
They only account for 0.4 percent of the total S&P 500! This, of
course, doesn’t correspond with reality. An important sector like gold
and silver, in the midst of a secular bull market, should get a much
larger weighting.
That’s why we believe that gold and silver stocks will make
up for 10 percent of the S&P500 when gold will be crossing the
barrier of $5000/ounce! As our modeling has shown, we should be reaching
this price target for gold by 2015.
Currently, the sector ‘materials’, in which the 2 mentioned stocks are included, makes up for only 3.53% of the S&P 500.
Our newest bold prediction is getting support from respectable insiders.
Rob McEwen, an icon in the gold arena, recently called for a merger
of two mining companies, in which he holds a significant stake. By
merging, a powerful low-cost silver group would arise, but more
importantly, McEwen sees a good change to enter the S&P 500 three
years from now!
As we have been in support of McEwen’s company, with a firm ‘Buy’
recommendation, we can only applaud these kind of actions taken to
create more shareholder value in the gold space.
So even insiders like Rob McEwen expect a big wave of
institutional demand for gold and silver mining stocks in the months and
years ahead. Don’t be fooled out of these ‘jewels’ by the haters in
the mainstream media. On the contrary, make use of the current sell off
to put some money at work in the gold and silver complex: contrarians
will be richly rewarded!
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Industrial silver demand has gone up 12% per year these last 5 years.
The fact this ban the buying and the comex is dry tells me 300$ is a price on the low side.
I target 750$
Why would banning silver purchases make the price higher?
It was not banned. So you might have to sell on your reasoning?
I don't think this will effect the US Mint from minting Gold and Silver Eagles and Buffaloes. This is the US Mint we're talking about here. Probably the only Government entity making a minimal profit. Close the Mint down I don't think so.
Can someone answer these questions for a newbie?
In your opinion, will the new Frank-Dodd July 15 OTC ban on gold/silver cause the price to go up, or go down?
Does this mean that I won't be able to purchase gold/silver from my local coin store or Gainesville Coins? Or does this effect some other form of PM purchases? (Ex: paper)
Sorry to ask such fundamental questions. I lurk here all the time, enjoying the conversation, but it looks like I still have a lot to learn.
This will have no effect on the long term price of gold/silver. Any price control legislation typically is bullish though in my opinion because it just simply never works. You will still for now be able to buy your gold/sliver at your corner store. Remember though in the Roosevelt era the US government confiscated gold and silver from it's citizenry and it could very well come to that again. Owning gold and or silver is considereda privledge.
It's a none "event", just keepon stacking, buy and sell at spot on spotmex.com
I think everyone is missing the implication of the July 15 dateline under DoddFrank, if it in fact applies to PMs. My take is that it will only further decouple the paper and physical prices. In both silver and gold, supply will never keep up with demand; especially as the elites are trying to foment more chaos through war, on the way for the sheeple to prepare for the totalitarian NWO. Too many, even among Westerners (always seemingly slow to face reality), the concept of true wealth preservation is sinking in, in spite of all the disinformation propaganda in the MSM.
Not if investing in gold and silver is illegal for US citizens.
...after today's Comex news, is there any doubt that's where we're headed?
There was no Comex news. Just bad reporting and reader stupidity.
china as owner of biggest gold bullion stock will now feel better...No competition from US bullion holders. If after July 15...