Let the Gold Surge of 2011 Begin


"Seems like just yesterday we saw the onset of a powerful new surge in gold and silver in H210."

It's happening again. Gold broke out above $1,450 Tuesday in convincing fashion and quickly moved above $1,460 early Wednesday before stopping to catch its breath.

It seems like only yesterday I was heralding the onset of a powerful new surge in gold and silver, a surge that made the second half of 2010 a memorably profitable one for well-positioned precious metal investors. Given that remarkable year-end run in 2010, initial price weakness early in 2011 came as no surprise.

Following a swift correction, I pleaded with Fools on Jan. 21 to take advantage of their last best chance to acquire long-term positions in gold and silver. One week later, the year-to-date lows for both metals trickled in. Even mega-cap miner Goldcorp Inc. (TSX:G; NYSE:GG) has tacked on more than 30% since then, while the real superstars have been the silver miners. Silver Standard Resources and Silvercorp Metals have gained more than 50%, and my top-10 pick Great Panther Silver Ltd. (TSX:GPR; NYSE.A:GPL) has two-bagged—all in less than three months' time.

Market commentators were quick to suggest an array of real-time drivers responsible for gold's breakout surge, collectively offering: Portugal's credit downgrade and overall eurozone distress, the budget impasse on Capitol Hill and associated unease over a potential government shutdown, persistent unrest in the Middle East and, of course, the evidence of inflationary concerns observed both in China's rate hike and Fed Chairman Ben Bernanke's rhetoric.

Precious metal investors are well advised to track all relevant geopolitical and macroeconomic events worldwide."

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