Monday, July 18, 2011
$1,600 gold and the bear market in gold juniors
The higher the gold price rises, the more Canadian and stateside investors throw away their Canadian junior gold explorers. When you are broke and trying to put food on the table, you sell what you have without thinking. I often thought $1,000 gold would lead to an explosion in the junior gold sector. I was wrong. It will take the Chinese and Middle Eastern institutional entities to start the next bull market in gold juniors. They are the only ones with the excess funds to drive this market higher. The only question is when?
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7 comments:
I totally agree with you. I also think the government and certain organizations do as much they can to suppress the junior gold sector.
I feel the next major move in the juniors will happen after the world financial system has gone into hyperinflation mode. After this happens the only valuable assets will be gold and silver bullion, coins and shares. I think this will motivate many investors to move their capital into resource stocks. Also the mining stocks have the greatest potential for profits since they are leveraged to precious metals prices.
Dont agree with you. Companies that have found sufficent quantities of mineable ore are doing quite well like Atac; Kaminak; Rainy River; Semifo etc.
It is the early stage explorers that are having problems due to a lack of promotion. Few in this depression economy have the money to gamble on these and it appears there are no big pools of cash around like pension funds or rich widows that a promoter could use to drive a promotion.
Hi,
I agree those companies are doing well. Then there are the other 2,980 out of the 3,000 juniors that are in bear market territory. If you are lucky enough to pick the chosen few who are doing well, excellent. However, ask most of the analysts who follow the juniors and all will agree that the juniors even with gold in the ground are being valued as if gold was at $700/oz. Listen to John Doody on the Financial Sense News Hour this week.
I think there should be a bit of clarification regarding ATAC Resources (ATC). ATC has been selling for well under a $1.00 for the past ten years. It was the Underworld Resources find that started the new Yukon gold rush. This brought attention to the area and helped drive up the price of ATC stock from $1.83 to a high of $8.95 last November.
ATAC and Kaminak are part of the new Yukon area play. I think investors are getting well ahead of themselves since none of the over 130 Yukon gold exploration companies have defined a deposit or a reserve yet. I agree with Brent Cook that most of these companies are a long way away from defining an economic deposit and these stocks are overpriced. Once investors realize this I think you will see a big dip in ATC and KAM.
Maybe the reason for the malaise is that there are simply too many players in the game these days. Everyone is confused by the sheer number of choices to consider.
Brent Cook is a short artist bent on destroying junior exploration efforts so that he and his buddies can cash in on investor nervousness to make it on the short side. Investor nervousness is high these days with the US debt crisis-debacle overhanging the economy. Question everything he says. He deals in outright lies and deceit to further his objectives.
The John Doody interview was well worth listening to. I learned a lot from it. I hope everyone takes the time to listen to it. Thank you.
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