Can Gold Go Higher?

Source: Seeking Alpha, David Moenning (10/11/10)

". . .history says, yes."

Many argue that 2010's gold run is over, however our research suggests otherwise. Some key factors suggest a move higher before year-end. . .

Historic Trends

Since 2001, gold has posted a gain in November/December every single year; and these gains comprise a significant portion of the total yearly gains, with an average of 43.65% of the years' total gains since 2001. Although gold is often sitting at or near its yearly highs at the end of September, gold didn't reach its peak until December in six of the last nine years, suggesting that it still has room to run this year.

Seasonal Factors

While the historic trends show gold experiences a strong year-end seasonal cycle, they don't indicate why. The two most common arguments are stock market activity and jewelry buying. Investors who argue that gold's September strength comes from the "anti-risk trade" may have a case but it fails to explain why both stocks and gold show strength in the November and December months.

Despite the influx of specialty ETFs and retail investments, about 50% of gold demand still comes from jewelry—over half of which originates from India and China. India's gold demand is strong during seasonal festivals, Akshaya Trithiya (late April–early May) and Diwali (mid-October–mid November). Diwali is generally cited as the main driver of year-end gold strength.

Currency Tension and Cyclical Trends

With China's ongoing effort to keep its currency artificially low, other countries have also recently begun selling their currencies. This devaluation competition also benefits gold. Despite selling their currencies, it is interesting to note that central banks have also almost stopped their sales of gold. Gold sales haves dropped to their lowest level since the signing of the Central Bank Gold Agreement in 1999, which was purposefully implemented to limit gold selling.

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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