bcrafty - re: miners.
As posted beforte, the run in gold equities has been made in 2001-2002.
Most of the well known companies are facing low reserves (5 to 7 years of exploitation) and the only way to find gold quickly would be to buy grassroots with projects and successfull explorers. Those companies are mainly traded in Canada and I don't follow them much as I can't trade them.
(these are the "small run-ups <vbg>).
Meanwhile majors still follow, more or less, the price of gold and are, IMHO, correctly valued.
IMHO, a rally on gold could happen, but there should be two pre-requisites: fall of the Dollar and fall of the general market.
If you want to have leverage to gold, there are some actively managed funds to look into.
Or outright buying futures, or options on futures.
Gold miners performed well this week, unevenly, and might be a sign of a flight to more conservative equities.
But for the Dollar, I don't get it.
Don't fight the Fed, but the Fed is playing with "leaks". One day hinting for 50 bp cut, the other 25 bp cut.
If they cut 25 bp, they could signal to the market that the economy is under control and this could start a rebound of the Dollar.
(A tad short of closing a gap today. Wouldn't need much to start a rebound. A tad short of giving me a buy signal. The Dollar? Yeesh!). Market could follow, so, not the time to buy gold.
OTOH, 50 bp could signal that this would be the last move, and also be interpreted positively.
All in all, IMVHO, signalling that the Fed has started "unconventional" actions: press releases and "leaks". Which remembers me from the days of the bubble.
A nasty side effect of low interest rates could be that pension funds would start issuing bonds ( a la GM) and use the proceeds to buy stocks in the hope stocks would perform better.
As there is limited paper available,.... bubble, the sequel.
Now, look at the calendar:
Wednesday, FOMC announcement
Friday and Monday, 1st half windows dressing,
Friday thereafter, 4th of July (shortened trading week).
My take on this? You asked for it. I don't know.
Two horrible weeks to come where anything can happen. |
