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Featured Video Why Inflation is a Big Concern
Goldman Sachs told investors to close out their commodities position recently and Bernanke says inflation isn't a problem. But what if they're wrong? Watch the video as Neil Cavuto sounds off on the impact of rising inflation on everything we buy and why prices will continue to move up. |
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Dear Readers,
Gold and silver have once again hit new highs.
In our last letter, I said gold would climb to $1500 if it held above $1470 for the week. On Monday, gold fell below that threshold and thus it did not hit our target of $1500. However, it did climb to new highs and support levels continue to move up.
Not long ago in the recent letter Far From Over, I mentioned that gold has been showing incredible support and the line of least resistance is now to the upside - this hasn't changed.
Silver has also climbed to a new 31-year high, closing at nearly $43. While I believe silver will climb higher, I would use some caution as gold may move higher relative to silver in the near term.
Here are the results from last week's survey, "Are You a Gold Bull or Bear?:
It's apparent that the majority of you are bullish on gold but many of you left comments in favour of silver. While I have liked silver for a long time (see The Silver Conspiracy and The Human Metal), new highs often leave the potential forshort term weakness from profit takers.
If you're a buy and hold investor, the next few months would a great time to look at precious metal stocks - especially if we see a correction in commodity prices. Many of these stocks have yet to move with the high prices of both gold and silver, but this will eventually catch up - especially if prices stay high over the summer months.
As a matter of fact, there are many gold and silver producers that are making money hand over fist with these high metal prices and the real value of this increase in earnings has yet to be completely factored into share prices.
While investors often feel a slight disconnect between silver equities and silver prices, many of the big silver names have performed relative to silver prices.
Take a look at this chart:
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When you compare the performance of silver equities such as Silver Wheaton, Coeur d'Alene Mines, and Silver Standard Resources with the iShares Silver Trust (as seen above), you can see that the performance of each stock almost directly reflects silver prices.
Last week silver equities moved down even as silver prices moved up, but I believe this is merely a temporary disconnect. If silver prices hold at these levels or continue to move up, the big name silver equities should catch up. If silver opens strong next week, look at the big silver names such as Silver Wheaton for a few percentage pop opportunity.
I am still looking for a strong surge by the precious metals juniors toward the later end of the year, as speculation in the sector becomes even more bullish.
The most interesting factor in the recent silver rise is the lack of long exposure by the managed money funds such as hedge funds, commodity funds, and other big money speculators. In the last few months, the managed money funds net long position have decreased nearly 10%, while the price of silver has risen over 30%.
That means the rise in silver prices are mainly as a result of the retail investor. Therefore, downside risk is minimized and the bull market train should continue to gain some speed. Why? Managed money funds often employ tremendous leverage. If silver prices were to drop slightly, many of these futures traders would be forced to liquidate to cover their long positions. Then, of course, the good ol' dominoe effect.
Retail investors, on the other hand, rarely use leverage as part of their investment strategy. As such, if silver prices were to experience a near term drop, they would not be forced to liquidate. The more investment demand into silver by retail investors, the less the metal price can be manipulated (see The Silver Conspiracy).
This scenario was very apparent this week when Goldman and other big name firms called for a sharp pullback. This caused both gold and silver to open the week in a slump, only to bounce back to new highs. We are now in a market where the demand for these precious metals investments has gotten so large that it is becoming harder and harder for the big name firms to mess with our markets. The investors are taking over. On Friday, Goldman came said:
"Mounting downside risks to current exceptionally high crude oil prices are leading us to recommend an underweight allocation to commodities on a 3 to 6-month horizon, but we maintainan overweight on a 12-month horizon on tightening fundamentals over the next year."
What does that even mean? I'll tell you what it means. It means Goldman wants you to sell your commodities and related stocks in the short term so that they can buy it all back at cheaper prices. Interestingly, this time frame does correspond with my predictions that precious metals equities will surge toward the later end of this year.
The silver market is small. There are not a lot of silver miners out there. That means big opportunities for some of the smaller producers to catch up with the market as the demand for silver increases. If you haven't already looked at some of these names, start looking. The silver companies mentioned in last year's letters have all doubled in value, if not more. If silver prices hold above $35 for the rest of the year, there's going to be a serious run by many of the lesser known silver miners. There are still bargains out there.
Overall, this week went as predicted. Precious metals moved to new highs and volatility in the markets increased. At this point, I am still waiting on April 27 (see Beware the April Fool) to see what Bernanke has up his sleeve. Next week's volatility will be no different this as traders remain on edge.
Keep your eye on precious metals. Even as many call for a correction, gold could still climb above $1500 next week and silver to $45. That would be a major milestone for both. We shall see.
Until next week,
Ivan Lo
Equedia Weekly
Questions?
Call Us Toll Free: 1-888-EQUEDIA (378-3342)
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Can You Pass the 2011 Gold Quiz?
By Jeff Clark, Big Gold
CPM Group recently released their 2011 Gold Yearbook, an invaluable resource for us gold analysts. Mostly a reference book, even a gold enthusiast might find it dry reading. But I loved it, and as I studied it on a plane, I kept finding data that made me perk up.
To have a little fun with it, I thought I'd summarize what I read in the form of a quiz. See how many you can get correct. Regardless of your score, I'm sure you'll agree with the ramifications each point makes for the gold market.
1) The main driver behind rising gold prices over the past decade is:
a) Increased jewelry demand in India
b) Greater industrial uses of the metal
c) Investment demand
Worldwide investment demand for gold totaled 44 million ounces in 2010. Because of the growing demand by investors, prices have been forced upward.
→Five exchanges began trading gold contracts for the first time in 2010, and three more introduced mini contracts, collectively the largest number launched since the early '80s. There are now 24 gold vending machines in seven countries, with three more countries adding machines this year. Households in developing countries are now moving away from gold jewelry and buying coins and bars for their savings. I could go on, but suffice it to say that investment demand will continue to be very strong.
2) True or false: recovery from gold scrap was lower in 2010 than 2009.
Scrap rose three consecutive years in a row - until last year. Gold supply from scrap fell 2.1%, to 42.2 million ounces.
→This is significant because gold prices were higher, which would normally increase the amount of scrap coming to market. One of the primary reasons scrap dropped is because investors are holding on to their metal, reportedly because they believe prices are headed higher. Isn't that one reason you're holding on to your bullion?
3) There are many reasons investors have been buying gold over the past 10 years, but what is the #1 reason?
a) Safe-haven asset
b) Gold coins and bars have become more intricate, widespread, and beautiful
c) Supply and demand imbalance
Global fears increasingly led investors to purchase large volumes of gold in 2010 for safe-haven purposes, despite record price levels.
→High levels of investment buying are expected to continue in 2011 because virtually none of the economic, political, and monetary concerns have been resolved.
If you got all three answers correct, you're an investor who understands the basic reasons for owning gold and that those reasons are still in play.
Now let's step it up a little...
Click Here to Continue Reading
More Casey Research Articles
> Oil Hits 32-Month High As Unrest Persists in the Middle East
> Keeping Capital in a Depression
> Gold Mania: Are We There Yet?
> Silver Is Getting Too Popular...Right?
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Broker Triple Play: What the Brokers are Buying
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Ever wonder what the brokers are buying and selling?
With a new year upon us, Kevin Matras was interested to see what the brokers were most interested in and what their best picks were.
Watch the video as Kevin Matras goes over a screening strategy used to see what the brokers are buying.
More Zacks Videos:
> Momentum Stock Picks - April 14, 2011 > Aggressive Growth Stock Picks - April 13, 2011 > Value Stock Picks - April 12, 2011 > Intrinsic Value and Time Value: Options Strategy Video |
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Technical Trading with Harry Boxer
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Harry has more than 40 years of Wall Street investment and technical analysis experience, including eight years on Wall Street as chief technical analyst with three brokerage firms. Watch the video as he walks you through his technical analysis on a whole bunch of stocks he thinks you should be watching from last week. To see more videos, Click Here.
Like his analysis?
Click Here to receive a Free 15-Day Trial to Harry Boxer's Real-Time Technical Trading Diary for Equedia members. |
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Upload Your Own Videos - Embed Videos
Is there a video on Youtube or another website that you want to post without uploading it through our technology?
With our new Embed feature enabled, you can now upload and embed any object or video into your blog post. Many of our users are already embedding videos from Fox, Youtube, and CNBC and sharing them with our users.
Embedding is simple. Just copy and paste the embed codes from another website ino the main blog section of your post (not the exceprt).
Where do you find these embed codes?
Embed codes for videos are usually right beside a video.
Here is an example of where the code is on Youtube, highlighted in yellow:
So share what you find with everyone! To learn more, feel free to email or call us at 1-888-EQUEDIA
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Equedia Tips - The Markets Tab
Using the search function at the top right corner of the website, search for any company. Let's use Research in Motion as an example. Once you reach their profile page, click on the MARKETS TAB. You should now see 12 seperate tabs underneath their logo. Try clicking on them and you will find in-depth information such as:
Detailed Quotes - Depth/Level II - Options - Java Charts - News - Profile - Financials - Insiders trades - Filings - Analyst Consensus - Earnings - Historical Data (Highs/Lows, Volumes, Closing/Opening Prices)
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Additional Features (you may not know)
Equedia has many features (you may have overlooked) that will help you manage your investment life and ensure a more enjoyable and useful experience.
Here are just a few of them:
Calendar subscriptions: Keep track of your business events, subscribe to other events, and have access to your online calendar from anywhere in the world. In the near future, we will be working with public companies to add their events to the calendar so that shareholders will never miss an important event again. So call your companies and get them to participate!
Tagging companies to videos and images: Did you know that all of your videos and images can be tagged to public companies? Do you have a video about Google? How about a blog with an image? How about just a blog? Tag it to Google in your blog post, so that anyone searching for Google's quotes and finances can find your coverage!
Buy, Sell, and Hold Ratings: Once you log in, you can submit your buy, sell and hold ratings on the ratings tab so that other shareholders can see what YOU think. You may also access your associates' ratings and see what they think of the shares you hold.
Blog feed subscriptions: Once you add someone as an associate, you will have access to all of their blog posts through your blog feeds. Simply go to your "blog feeds" tab once you log in!
Search function: By far one of the most overlooked but important functions on Equedia. Using the top right hand corner search function, you can find and add any corporations, media users, or investors to your network.
Markets Tab: Under any corporate profile, you will find this tab. Under this tab, you can find the company's news, level 2 depth (delayed), options, charts, profile, financials, insider trades, filings, analyst overviews, earnings, and historical data (these may not be available for all companies)
There are many more useful features on Equedia.com but we think its better if you experience them for yourself. The more associates you have, the more useful Equedia will become for you. So use the new "invite my contacts" function and get started!
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Forward-Looking Statements
Except for the statements of historical fact, the information contained herein is of a forward-looking nature. Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements expressed or implied by statements containing forward-looking information.
Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that statements containing forward looking information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on statements containing forward looking information. Readers should review the risk factors set out in the Company's prospectus and the documents incorporated by reference.
Cautionary Note to U.S. Investors Concerning Estimates of Inferred Resources
This presentation uses the term "Inferred Resources". U.S. investors are advised that while this term is recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize it. "Inferred Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of "Inferred Resources" may not form the basis of feasibility or other economic studies. U.S. investors are also cautioned not to assume that all or any part of an "Inferred Mineral Resource" exists, or is economically or legally mineable.
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This Week's Most Wanted
The Stock Market's Most Interesting Videos That You Should Watch
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Rants and Raves
Inside the mind of Equedia's editor - unrated, uncut, and unedited
Is there such a thing as freedom? Its seems nowadays, everything we do or say is monitered.
No matter where you go, there are cameras. No matter what you say, there's something that can record you.
I am not trying to sound like an 80 year old nut with a shotgun screaming its the end of the world, but seriously, even as I type this, someone can monitor my actions.
What scares me even more is our reliance to computer data. Heck, I am lost without my emails or access to the Internet. But the fact is, everything that we are as a society can be erased with the simple push of a button. Your bank account? Takes someone one second to erase. Just asked those who invested with Lehman Brothers.
Imagine if a hacker decidede he wanted to wipe out all of a bank's records? How would they find your money then?
So all of this talk about fiat currencies crashing is actually becoming more real everyday. Theres a reason why gold and silver have risen to these new highs.
I am not a gold bull. I am simply a fiat currency bear. When the Fed can lend as much money as they want to whoever they want, without anyone knowing how much money they actually have to lend, that scares me. If you think the governments of the world are the ones in control, think again.
Don't forget what Rothschild said, "Who controls the issuance of money controls the government!"
"I care not what puppet is placed on the throne of England to rule the Empire. The man who controls Britain's money supply controls the British Empire and I control the British money supply." - Nathan Rothschild
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Disclaimer and Disclosure
Disclaimer and Disclosure Equedia.com & Equedia Network Corporation bears no liability for losses and/or damages arising from the use of this newsletter or any third party content provided herein. Equedia.com is an online financial newsletter owned by Equedia Network Corporation. We are focused on researching small-cap and large-cap public companies. Our past performance does not guarantee future results. Information in this report has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. This material is not an offer to sell or a solicitation of an offer to buy any securities or commodities.
Furthermore, to keep our reports and newsletters FREE, from time to time we may publish paid advertisements from third parties and sponsored companies. We are also compensated to perform research on specific companies and often act as consultants to many of the companies mentioned in this letter and on our website at equedia.com. We also make direct investments into many of these companies and own shares and/or options in them. Therefore, information should not be construed as unbiased. Each contract varies in duration, services performed and compensation received.
Equedia.com is not responsible for any claims made by any of the mentioned companies or third party content providers. You should independently investigate and fully understand all risks before investing. We are not a registered broker-dealer or financial advisor. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report OR ON Equedia.com will be the full responsibility of the person authorizing such transaction.
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Please view our privacy policy and disclaimer to view our full disclosure at http://equedia.com/cms.php/terms. Our views and opinions regarding the companies within Equedia.com are our own views and are based on information that we have received, which we assumed to be reliable. We do not guarantee that any of the companies will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect. Equedia.com is paid editorial fees for its writing and the dissemination of material and the companies featured do not have to meet any specific financial criteria. The companies represented by Equedia.com are typically development-stage companies that pose a much higher risk to investors. When investing in speculative stocks of this nature, it is possible to lose your entire investment over time. Statements included in this newsletter may contain forward looking statements, including the Company's intentions, forecasts, plans or other matters that haven't yet occurred. Such statements involve a number of risks and uncertainties. Further information on potential factors that may affect, delay or prevent such forward looking statements from coming to fruition can be found in their specific Financial reports. Equedia Network Corporation., owner of Equedia.com has been paid six thousand three hundred and thirty three Canadian dollars plus gst/hst per month for 6 months which totals thirty eight thousand dollars plus hst of media coverage on Minco Gold Corporation plus 60,000 stock options. Minco Gold Corporation has paid for this service. Equedia.com currently owns shares of Minco Gold Corporation and we may purchase more shares without notice. We intend to sell every share we own for our own profit. We may sell shares in Minco Gold Corporation without notice to our subscribers. Equedia Network Corporation., owner of Equedia.com has been paid $45,000 plus hst for a 19-month consulting agreement and 7 months of media coverage on Kiska Metals Corporation and has been granted 100,000 options at $1.35 vesting over a two year period. Kiska Metals has paid for this service. Equedia.com currently owns shares of Kiska Metals Corporation and we may purchase more shares without notice. We intend to sell every share we own for our own profit. We may sell shares in Kiska Metals Corporation without notice to our subscribers.
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