Where's Gold Headed? Ask Silver

Source: Fortune, Nin-Hai Tseng (9/30/10)

"Recent moves in the silver price suggest an end to gold's rally."

For a peek into the future of the price of gold, look no further than its precious metal sibling, silver. The poor man's gold has been on the same streak as the yellow metal, but recent moves have some of the most bullish players wondering if precious metals might be headed toward the end phase of their rally—a point where prices might not get much higher.

Gold futures for December delivery closed Wednesday at $1,310.30 an ounce on a weaker U.S. dollar and expectations that officials will pump more money into the sluggish economy.

While silver futures are still much cheaper closing at $21.95 an ounce, they have outperformed gold on this recent run. Silver this year has jumped 30%, while gold has climbed about 19%. At one point on Wednesday, silver reached its highest level since October 1980, at about $22 an ounce. Historically, when silver catches gold or even surpasses its rate of growth, it indicates the nearing end of the rally.

History has shown that silver becomes increasingly viewed as an alternative to gold when there isn't much certainty in the economy. And many investors these days, as Fortune's Colin Barr points out, have lost faith that U.S. lawmakers will decide on pressing issues surrounding jobs, deficits and taxes.

With silver's rise, it seems virtually everyone is bullish on precious metals—and that's typically when reversals take place. Also, the fact that gold and silver miners have yet to see record prices translate into profits has helped raise red flags to some investors.

"Caution is the word of the day," says Patrik Sharma, managing director of Atyant Capital, a hedge fund focused on gold. Despite the rise in silver, Sharma thinks prices for gold will continue to rise over the next 10 years.

Announcing Streetwise Live! Events
Source: Streetwise Reports (07/13/2020)

Streetwise Reports is offering 100 investors—at no charge—the opportunity to meet via Zoom with executives of precious metals companies as they discuss recent developments at their companies and upcoming catalysts.

"China's export quota could be opportunity for Canadian miners"

Latin America: Six Gold Juniors Amass 100M+ Ounces
Source: Marc Davis, BNW News (05/25/2010)

Latin America, the world's last great mineral frontier for prolific gold discoveries, is proving a godsend for some lucky investors.

Mexico: Gold's Next Powerhouse Player
Source: Marc Davis, BNW News (11/03/2009)

As the world's key gold producing nations struggle mostly in vain to replenish dwindling below-ground supplies, Mexico is bucking the trend in a big way.

Where Have All the Gold Mines Gone?
Source: Brent Cook, Exploration Insights (04/14/2009)

Given the declining global gold production, mining companies’ demand for reserve replacement and the acute dearth of new gold discoveries, there is no doubt that real economic discoveries will be exceptionally valuable. . .the opportunity for stellar profits is the best it has probably ever been. Identifying the few successes, however, will require vigilant and constant technical assessment of geology and drill results, always with an eye to mine economics.

Congo Completes Mining Review, Says Majors Quit Talks
Source: Reuters (12/20/2008)

"Review process is extended an additional 45 days to allow six companies to return to the negotiating table for direct talks with government ministers."

I haven’t spoken to my old mining stock friend, noted and universally respected gold stock guru, Bob Bishop, about Rare Element in a year, but I hear he is still a supporter and very large shareholder. I don’t believe he will hold it against me to remind you that this was one of his favorite holdings when he left the newsletter writing business. . .

It's Only the Beginning for Uranium
Source: www.financialinsights.com (06/03/2005)

Dr. Richard S. Appel, author of Financial Insights, first became bullish on uranium in mid-2003, when it appeared obvious that its supply versus demand equation was fated to seriously drive higher its price. Since then, a series of events in the uranium industry has led Appel to believe that uranium prices will reach never before seen levels.

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