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Precious Metals: Fortune Favours the Brave

Commodities / Gold & Silver Jun 28, 2007 - 12:07 PM GMT

By: Bob_Kirtley


There are times when a dark cloud descends upon us casting a gloomy shadow of doubt over our investment decisions, testing our courage to the point of destruction.

As we write, the price of Gold has dipped to below $640.00 rendering the milestone of $700.00 a little more then a dream we once had. Yes it is tough to see your Gold investment take it on the chin with little or no come back. But are we not forgetting that this is a seasonal event and the month of June is probably the worst there is as the summer time blues weigh heavily on the markets.

How many years did Gold and Silver spend going down and how often did we think that Gold and Silver would never recover? Gold has been through a 26-year bear market until it broke free only a few short years ago and began its slow but relentless march forward. There were always going to be pull backs accompanied by huge helpings of pessimism, we know that, never the less it hurts when it comes and will test your confidence.

We take a completely different view from the doom and gloom purveyors of negativity. This period is a time for opportunists who may have been waiting to enter this market or a time for people like us in that we can now add to our positions. We are just about fully invested as you know, but as a little more cash becomes available we will use it to increase our exposure to the precious metals market. The stocks we have will not be going anywhere: This is not a time to sell! The precious Gold, Silver and Uranium mining companies that we know well will be under more rigorous scrutiny than ever before as we try to time reasonably cheap entry points for our hard earned investment funds.

We are spread over three metals and remain extremely confident that by the end of this year their associated exploration, development and mining stocks will be a lot more expensive than they are today. Do not let analysts over complicate the situation for you with more ‘what ifs' and ‘buts' and ‘maybes' the fundamentals are still there and if anything they have improved. The battle for supremacy has begun and all the contestants in the form of other asset classes and investment vehicles want to be winners, some are even trumpeting the resurgence of the Dollar as it moved up from 81.5 to trade yesterday at a massive 82.31 for a gain of 0.9%. This is not exactly the strongest recovery we have ever seen and hardly worth worrying about.

Finally it is our view that Uranium stocks have to play catch up as the metal is still up there and showing no immediate signs of a return to lower prices so we expect these stocks to experience the biggest percent gain over the near term. However as the negativity starts to dissipate from the precious metals arena we also expect Silver to be a close second and out perform Gold in the next rally . Gold will get the headlines, which will be great, but Silver being such a comparatively small market will return bigger percentage gains and quietly outperform Gold.

We have written many times that we are sticking with the mining stocks of these three assets and look to see Uranium at £200/lb within twelve months, Silver at $20/ounce by year-end and Gold at $1000/once by the year-end. This is not everyone's cup of tea and if it makes you chuckle well we have achieved something today. So if you are a precious metals bug who is tottering on the brink of capitulating try to be patient and hold on, as to sell now is to present someone with a bargain buy – hopefully me!

For ideas on which gold stocks to invest in, subscribe to the Gold Prices newsletter at completely free of charge.

By Bob Kirtley

Bob Kirtley spent many years working on Oil projects including some in Alberta, such as the tar sands installations in Fort McMurray. He lived and worked in many different countries, as that is the nature of the construction business. Planning and cost control are key to a projects success and he tries to apply those disciplines on a daily basis when dealing with investments. His training in such areas as SWOT and Risk analysis can be applied from time to time.  His qualifications include being chartered in the United Kingdom, which is similar to that of a Professional Engineer in Canada, along with a Masters Degree in Project Management from South Bank University, London, England. 

He has been working for a number of years on a full time basis representing a group of investors in England.

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.

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