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Strategies & Market Trends : Ride the Tiger with CD

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To: loantech who wrote (130839)	9/15/2008 11:18:59 AM
From: Claude Cormier	1 Recommendation Read Replies (5) of 313147

Loantech, It is very hard to say if gold has bottomed or will make new lows. For sure, technically, it has the potential to test the long term trend which is now near $600. Right now, profits are collapsing for big miners. Stocks like Agnico and the gang will likely have negative quarters soon. Very few projects will come to life if gold does not stabilize and move upward. This would have enormous implication for long term gold production which is already in a decline. Although annual production is less important than total above ground supplies, it would imply a major significant distortion in the supply/demand equation. Gold price will eventuall have to explode to fix that equation. IMO, the current deflation scare will be followed by an explosion in US money supply. Gold will then do its thing to $2000++. But we may first need to see a lower level. That I can't be sure and nobody can. This being said, there is really good value to be puchased in this market. I prefer the smaller issues with good cash relative to market caps, good projects and/or cash flows that do not need hundred of millions in an the next few years.

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