OnePath, I have been seeing many signs of capitulation here on the SI boards and from my PM stock buddy in town. (This time is different, selling everything to raise cash, etc.)
Acting like it is the end of the world and we better sell everything before it goes up :)
I think there is a good chance of a summer rally in gold that will push the producers much higher. (Like Yamana from $13 to $22, is what I am wishfully thinking).
The bottom could be in right here at $852 spot, or following one more barf-day, especially considering the shape the world's currencies and financials are in. We had the huge runup to 1,000 from 650 starting last August, we have had a suitably sharp correction within a continuing bull market for tangibles, and I think the next up-swing in gold, silver, palladium and platinum is going to take our breath away.
I am less confident that this rally, if indeed it occurs in PM stocks, would reach into the non-cash-flow specs, because of the thin markets in the summer. That rationale tips me toward AEM and writing the covered calls, SLW and its B warrants, the Yamana warrants on which I am under water; and a few very well financed specs such as Kodiak and SST, which is my baby SLW.
I am also still hanging in there with GUR warrants, having averaged down so that my break even does not look silly.
I like the chances of a uranium rally leading the pack of juniors upward, and GUR gives me a nice group shot led by Cameco UUU and Denison.
Michael |
