A lot of pump here:::::but worth a look.
The Untold Secret Behind The Gold Rally
Executive Introduction
by Addison Wiggin
Gold has been depressed for 20 years. Nothing has been able to lift the 'relic' out of its 20-year slumber. As you're no doubt aware, gold companies have been virtually ignored by Wall Street and the investing public, which means one thing: they're cheap . Many sell for less than $1.
But there's a specific reason why select gold investments could be the only story we're still talking about when it comes time to do a 2002 year-end review. And why if you get in now you can catch the next "runaway bull" for strong gains and a chance to recoup any losses you might have sustained following the collapse of the tech market.
But be careful. The major gold stocks -- the ones that haven't been ignored, pilloried or despised by Wall Street -- are "expensive" in the wake of gold's late rally. Why?
The first stocks to move in a gold bull market are the "major" big cap stocks. And the rally we've seen so far is mostly a result of gold companies themselves turning bullish. You see, major gold companies like Barrick, AngloGold, and Newmont Mining have sppent the better part of the bear market betting against their own product. They've "hedged" against financial loss by selling future gold production at today's prices to lock in at the higher price.
But in light of a weakening demand for equities... brought on by an onslaught of scandals, 'conflicts of interest,' high-profile bankruptcies and accounting irregularities at Wall Street's most respected firms... many gold companies are reducing -- or even closing out -- their hedge books.
The result is a sustained upward pressure on the price of gold. And an increasingly bullish stance by major producers. Even though some gold stocks have already doubled and tripled, it's possible the bull market is just beginning. And while many of the "blue chips" are already out of reach... there's another group of stocks that could easily return you triple-digit profits in as little as one month.
Before we get too far, let's take a look at why gold companies are turning bullish after such a long bear market.
The Dollar and the Dow -- Your Best Indicators for a Gold Rally
As Tocqueville Asset Management's John Hathaway outlines in your free copy of "The Investment Case For Gold" (full text provided for you below), the gold price rises when the US dollar weakens. And vice versa. In fact the relationship is quite clear from the following chart:
The US Dollar is Weakening -- This Means Gold Should Continue to Rise
As you can see, the dollar is just starting to fall after rising for much of the 1990s. And Philedelphia Gold & Silver Index (XAU) has clearly turned the corner.Given these rather rapid reversals, the price of gold could still rise much higher than current levels. How high?
As Hathaway indicates in your report below, possibly above the $500 level. Harry Schultz, a long-time friend and associate of The Daily Reckoning, has made a convincing case for the price to reach $539. If it does, investors in well-placed small cap mining companies could see their investments double or triple in a very short period of time. (Working with James Boric, editor of the small cap advisory letter Penny Stock Fortunes , we've selected 5 candidates ripe for quick gains in this environment. Details below...)
The fact that the US dollar is weakening is a solid clue that gold prices have only begun to rise. Let's take a closer look at the dollar over the last seven years. The chart below shows you the US dollar index - a measurement of dollar strength vs. foreign currencies - since 1995:
When the Dollar Bubble Bursts -- Watch Gold Prices Skyrocket
As you can see, the dollar has gained strength for the last seven years - rising from a low of 92 to an extremely high 121. At 121 the dollar is thought by many analysts and currency investors to be overvalued, overbought... and dangerously high.
But do you see what has happened since the beginning of 2002? The dollar appears to have finally peaked. The bubble is starting to burst. As a quick glance at this chart reveals the dollar is do for a correction down to the 100 or 95 range.
As a consequence, fewer and fewer investors will want to hold dollar-based assets. Foreign investors will begin to pull their money OUT of an already beleaguered US market. Stocks could fall to new 10-year lows, further exerting downward pressure on the dollar.
According to the Prudent Bear's David Tice, foreign buying of US stocks is already losing steam. "Net foreign purchases averaged just $5.3 billion a month during January and February," says Tice. "Other than last September, that's the least interest foreign investors have shown in our stock market since April, 2000. February net buying at $2.1 billion was far below the $9.3 billion average over the '97 - '01 period."
A vicious cycle of foreign investors pulling the plug on Wall Street... and an increasing desire by the world's central bankers to STOP using the US dollar as their reserve currency, will in our view, drive the price of gold higher, as it is the safest investment for governments and individuals when markets are in turmoil.
The Best Time To Own Gold is When Investors Lose Faith in the Market
As you can see from the above chart the Philedelphia Gold & Silver Index (XAU) is taking off while the Dow continues to trade sideways -- even declining rapidly on occasion. In fact, since just after the attacks on the World Trade Center and the Pentagon, the XAU has climbed a steady 49%, while the Dow has struggled to stay even.
What's even more extraordinary is the performance of the AMEX Gold Bugs Index (HUI). In the time that the XAU has climbed 49% the HUI has shot up 139%.
The Untold Secret Behind The Gold Rally
The HUI consists of unhedged gold equities -- many of them volatile small cap stocks -- while the XAU is dominated by the three leading blue chip gold hedgers Barrick Gold, Placer Dome and Anglogold. It has almost doubled since last fall's attacks.
The HUI Has Almost Doubled Since Sept. 11
The recent retraction in the gold price and corresponding dip in the HUI makes for a prime buying opportunity. Bullishness with respect to the future of the gold price has led many gold companies to reduce -- even close out -- their hedge books. In early June, Reuters Sydney wrote:
"A rising gold price meant Australian producers will continue to reduce their forward sold hedge positions... On the news "gold jumped about US$5 to nearly $317 an ounce overnight, the highest in 27 months [it's now at $321], leaving more of Australia's estimated 24.3 million ounces of hedges outside the money, the analysts said.
"Hedging -- selling as yet unmined nuggets at fixed prices to lock in revenue and protect against a dropping bullion market -- has fallen out of favour among the world's biggest mining houses, who claim it stymies upward price moves.
"Also, rising markets in the past have punished some heavily hedged companies, which actually lost money when they were forced to buy gold at higher prices than they were able to sell under options agreements."
The fact that gold companies are closing their hedge books is the first sign of a sustained gold bull run. Companies like Barrick, Newmont and AngloGold -- the majors in the industry -- benefited from the first stage of the bull market. In the last three months you could have made profits of 48%, 59% and 96% investing in those three giants. But that's nothing compared to what's about to happen.
The next phase of the bull market could yield triple-digit profits to early investors -- 100%, 200% or more in just weeks. But those profits WON'T come from the major gold and silver companies in the industry. Like I said, they have had their day. Now they're done.
The next wave of profits will come from the small-cap gold and silver stocks -- the junior miners...
Since gold and silver have both been in a bear market for the past 20 years, no one has had any reason to pay attention to the junior miners. As a result, their stocks have dwindled away to almost nothing.
Right now, most are selling for $1, $2 or $3. Practically nothing. But they won't be cheap for long. In the next few weeks, a select group of junior mining companies could find themselves swimming in millions of dollars -- sending their stocks soaring. Why?
For one, the same investors who made 40%, 50% and 90% gains on the major companies may be motivated by the same logic I'm suggesting to you here and begin to shift their funds OUT of the majors and into the juniors. This could flood small-cap mining stocks with amounts of money not seen in over 20 years.
Prices could skyrocket. Early investors could double and triple their money in a week. And once the first wave of investors lay their money down, more will follow. It will be a snowball effect. And it could last for months.
The last great bull market in gold saw prices rise from $100 to $800 an ounce -- over a three-year period. The same is true for silver prices. From 1986 to 1987, silver prices rose from $5 to $11 an ounce. If that happens again, investors in the right stocks could multiply their money ten times or more. Mr. Hathaway makes the case, in your report below, that gold will rise to $500 dollars an ounce before the next phase of the gold bull market is through.
...But Not Every One Will Benefit
But here's the kicker -- not every junior mining stock will skyrocket. They have to meet one CRUCIAL requirement first. The ones that do have to the potential to reward investors with triple-digit profits in less than a month.
Before I turn you over to John Hathaway for a full description of the investment case for a sustained bull market in gold, I'd like to tell you one more thing. My friend and colleague James Boric has recently uncovered five gold and silver companies that meet this important requirement. He tells me of the stocks he's got his eye on, they're the most likely to double.
He's assembled an exclusive report called "Buy These Five Gold and Silver Stocks Before Everyone Else Does -- And You Could Double Your Money In As Little As One Month" In your copy of the report you'll get the names ticker symbols and recommended buy prices. Plus a description of the management and growth strategy for each company as well as short term prospects for benefiting from the rising gold price.
These stocks are inexpensive. Volatile and very liquid. They've jumped up an average of 158% on the crest of the renewed interest in gold and silver across. But don't worry, there's still plenty of room to the upside. In fact, we expect them to be the only story on investors lips by summer's end.
Five Must-Own Gold Stocks That Could Double In a Month
As you've seen already, gold and silver are the ONLY stocks worth investing in right now. Don't let any Wall Street analyst tell you otherwise. Every gold and silver bull market run has two phases. In the first phase, the MAJOR companies get a huge boost. The brand name gold companies like AngloGold, Newmont and Barrick. That has already happened.
But the second phase is just getting started undefined and it will be ten times more profitable than the first. There are FIVE gold and silver stocks that could double, triple or quadruple in the next month. And from there who knows what'll happen. Each one of these stocks could multiply 10 even 20 times by years end. Why?
Everyone of these companies stands in line to profit as spot gold and silver prices continue to rise. For the reasons outline below, we believe they are anything but done rising.
Gold rises when the U.S. market struggles. In the last six months the Dow Jones fell 2%, the NASDAQ is down 20% and the S&P 500 lost 11%. Meanwhile the AMEX Gold Bugs index is UP 87%. Not bad. But it's nothing compared to what investors could make if they own these five gold and silver stocks.
With the War on Terrorism, the impending oil crisis in the Middle East and a weakening U.S. dollar, gold will once again be the ultimate store of value through worldwide... potentially sending small-cap gold stocks through the roof.
And remember these stocks are cheap. They still sell for less a few dollars each. And as you'll read in the report below from Tocqueville's John Hathaway the long-term prospects for a sustained bull market in gold and silver are very good indeed. Which means, not only are these stocks a bargain... but they make a perfect a way to position yourself for long-term gains should the bull market pan out as most resource experts expect it to.
On top of that, if this bull turns into anything like what we saw in the late 70s you will have gotten into the market at the right time... for just pennies on the dollar. If this market pans out the way we expect some of these stocks could end skyrocketing towards $10 dollars and higher, meaning investment returns of 8 and ten times your money.
In fact, we're not the only ones expecting a quick run up. James Boric wrote me an e-mail early this week suggesting a merger announcement involving several of the companies in the portfolio has invited additional interest in the stocks... additional speculation... and a boost of 20% in share price during the last two days before this writing.
Of course, I shouldn't have to warn you. The stocks in this report don't constitute a lesson in value investing. This isn't about analyzing P/E ratios, cash flows and balance sheets. This is calculated speculation. Based on our reasonable expectation that the gold price... and the resource market in general... is at the very beginning of a sustained multi-year bull market. The reasons for our position are clearly defined in the report by Mr. Hathaway below.
But you will only find the 5 stock picks in the special report prepared by James Boric.Of course, you're free to do as you please. While there is some risk involved, if you get in now, you can beat the public rush and ride these stocks up. We're selling the report containing the 5 picks for a very reasonable $69. (Your copy of The Investment Case For Gold is still free... below.)
And to both make the $69 fee that much more attractive for you, and to be sure that you'll get the appropriate sell signals when the time to collect profits has arrived, you'll also get a two year subscription to James Boric's investment advisory service Penny Stock Fortunes . Which amounts to...
5 Great Small-cap Plays In The Gold & Silver Bull - And Two Years Of Penny Stock Fortunes...
...For One Low Price
And...using a proprietary computerized stock picking system -- which has already found winners up 42%, 56% and 77% in the last month -- Boris has uncovered three more junior silver miners that could be only days away from doubling.
Forget about Enron, accounting jitters and a depressed economy. The stocks James follows in Penny Stock Fortunes have outperformed EVERY other class of stocks over the last 30 years. Every month, using his proprietary computered assisted system, James narrows the field down from 9,000 stocks to a handful.
Most don't pass the price or volatility tests. But the ones that do usually go on to make readers big profits -- like the world largest supercomputer company up 50% or a South African gold company up 118% in 2 only months.
James stock selecting system also selected the 5 stocks you'll be reading about in you r copy of Buy These Five Gold and Silver Stocks Before Everyone Else Does -- And You Could Double Your Money in a Month. That's nothing compared to what you could make on just one of these 5 companies -- if our predictions continue to prove correct. We have every reason to believe they will.
That's exactly why we've provided you with the Hathaway report below, plus additional resources, to convince you what we say is true. Still, as with any product you learn about in The Daily Reckoning , if you're not satisfied with with the five companies James has selected to trade your way to a fortune in the second leg of the gold bull, then let me know in the first week. We'll refund your $69. No questions asked. You really have nothing to lose.
Besides, I'm reasonably certain you won't be disappointed. No one can predict where gold and silver will go over the next month, year or ten years... but the case for a sustained bull market during this same period of time is very reasonable. As outlined below we may even see gold strike upwards to $500 an ounce. And then you'll be jumping in your gym shorts, you'll be so happy you own these stocks.
To secure yourself a copy of Buy These Five Gold and Silver Stocks Before Everyone Else Does -- And You Could Double Your Money in a Month, click here, or on the link below. As soon as you do, I'll e-mail the report to you with complete details on the 5 companies I've described above... and your two-year subscription to Penny Stock Fortunes will commence immediately.
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