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Sunday
Feb282010

Kinross appointed to Russian government advisory council on foreign investment

Kinross logo 01 March 2010.JPG



A feather in the cap for Kinross Gold Corporation (KGC) as there latest news release proudly announces that they have been appointed to the Foreign Investment Advisory Council (FIAC):

The Ministry of Economic Development of the Russian Federation has announced the appointment of Kinross to Russia’s Foreign Investment Advisory Council (FIAC).

FIAC was established in 1994 to assist Russia in forging and promoting a favourable investment climate based on global expertise and the experience of international companies operating in Russia. FIAC functions on the basis of direct dialogue between the chief executives of investor companies and the Russian government, with a focus on the crucial aspects of fostering a healthy investment climate.

The council is chaired by Russian Prime Minister Vladimir Putin and includes CEOs from 42 companies. Kinross is the only Canadian company to be named to the council. “Kinross is honoured to be inducted into FIAC, which we view as an endorsement by the Russian government of our status as a valued investor,” said Mr. Burt. “By working directly with the Russian government at a high level, the Council reinforces the government’s ongoing efforts to improve Russia’s investment environment. We look forward to playing an active role in advancing this shared goal.”

Kinross has been active in Russia since 1995. The company currently operates the Kupol gold-silver mine in the Chukotka region of Russia through the Chukotka Mining and Geological Company (CMGC), which is owned 75 per cent by Kinross and 25 per cent by the Chukotka government. Kinross is the largest Canadian investor in the Russian Federation.

Well done Team Kinross, this move will no doubt reap the benefits going forward.

To read the news release in full please click here.

Kinross Gold Corporation trades on the Toronto stock Exchange under the symbol of ‘K’ and on the New York Exchange under the symbol of ‘KGC’


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Saturday
Feb272010

Are Stocks the way to play this bull?

Silver Gold and the HUI Chart 27 Feb 2010.JPG

We have long held the opinion that holding silver and gold mining stocks would give us a leveraged return to silver and gold prices and thus generate better returns from this bull market in the precious metals arena. Taking a quick look at the above chart we can see this it has not been the case for the last few years, which requires us to give our strategy a bit of a shake.

Its true that if we go further back in time and draw the chart again then we can see that the stocks have outperformed the precious metals. However our patience wears thin when the stocks have lagged behind the metals for so long and one begins to wonder if this is now the new trend and it could be entrenched this way for some time to come.

In our humble opinion there is no substitute for owning the physical metal as we have continuously recommended, with the associated mining stocks offering leverage to the metals in return for the risks that they carry with them. However the metals space has changed and we now have funds holding massive amounts of both gold and silver and they are acting as a proxy or a paper version of gold and silver ownership. Whether the funds have the amount of gold and silver that they purport to have is a discussion for another day, however, as a vehicle for traders to ply their trade, it fits the bill. So far these funds have more or less replicated the performance of the precious metals. Yes there are risks but the inherent dangers of mining are removed, geo-political tensions disappear, start-up is not an issue, mega doses of financing are not required, good people with the right experience are not required, etc.

Now, if an investor is looking for leverage to gold and silver prices why not substitute mining stocks for an options play on one of these funds. The need to know a mining company from top to bottom and keep up with their ever changing characteristics is time consuming to say the least. Is it worth the effort? The above chart suggests that we can research and analyze these companies until the cows come home, we are simply not getting a leveraged return on the effort and risks involved.

Taking it a step further, if the quality producing stocks that make up the gold bugs index cant keep up with the metal then what chance have the juniors got? The mantra of juniors, juniors have been trumpeted for some time but will they soar this time around? Historically the juniors have soared later on in the cycle but history does not always repeat itself. This is not 1980, believe it or not, and the circumstances, the investment environment, politics, economics, social aspirations, the transfer of wealth from west to east, the dissemination of knowledge, the speed of change, etc, have all changed since the last bull market.

As a suggestion for those who do want leverage to the precious metals bull, the gold and silver funds together with the careful application of options trades could be a possible solution for you. This way we are exposed to any movement in gold prices which in turn is magnified by the effect of the option. Do remember that loses are also magnified in the same way so its not a strategy for the faint hearted. On the other hand the quality stocks are not performing as anticipated and a non-producing junior stock is a shot in the dark, however, its your money and its your call.

Our premium options trading service, SK Options Trading, has closed the last 7 trades, with an average gain of 51.17% in an average of 37 days per trade, why not drop by and take a peak.



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Got a comment then please add it to this article, all opinions are welcome and appreciated.

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Friday
Feb262010

Snow-cialism

Socialism 27 February 2010.JPG


By Vedran Vuk, Casey Research

There is a silver lining to every snowstorm – getting to know your neighbors both good and bad. With forty inches on my block this week, I’ve learned a lot about my neighbors and, strangely enough, socialism.

My corner of Baltimore seems like a good place to ride out a storm. After all, innumerable cars are plastered with Obama bumper stickers, and windows display signs like “Universal Healthcare Now.” In essence, it’s a very liberal neighborhood in an extremely liberal state. What better neighborhood to be in times of need, right?

The architecture ranges from early 19th to early 20th century row homes, which as a result demands parallel parking. This isn’t a great inconvenience most of the time, but with the snow, it’s an absolute nightmare. First the clouds drop forty inches. Then the city snow plow piles another mountain from the street onto your car.

Successfully liberating the vehicle from its icy prison can take hours. After leaving the spot, anyone can take the laboriously freed space. Restoring regular parking conditions quickly requires everyone chipping in for the common good.

During this street clearing process, my neighbors sorted themselves into four groups:
1.The Saint (1% of the neighborhood) – Every couple of blocks resides a truly amazing human being living to serve others. He’s shoveling out his neighbors’ cars, dumping bags of rock salt down the whole street, and passing out shovels like he owns a hardware store.

2.The Good Citizen (15% of the neighborhood) – A caring person doesn’t just shovel enough snow to drive away. He carves out the front and back. After leaving his spot, someone else can parallel park without digging. If everyone did this, normal parking would resume in a day – if not less.

3.The Self-Interested Person (70% of the neighborhood) – This guy doesn’t really care about helping anyone. He carves just enough in the front to get out. The next person must dig before parking.

4.The Malicious Creep (14% of the neighborhood) – Instead of shoveling snow to the curb, the creep stacks snow onto his neighbor’s car. This saves the creep approximately fifteen minutes while adding an hour to his neighbor’s work.

While my neighbors love Obama and universal healthcare, they obviously aren’t such good socialists on their own block. This is no surprise; everyone on earth is an armchair Mother Theresa. We all have noble thoughts at the coffee shop or over beers. But when the snow shovel has to come out, so does the truth.

So let’s face it. Universal healthcare supporters are much like the folks on my street. There are a couple of saints, a few good people, and a large chunk who are either self-interested or just plain selfish. Most support it either because they will benefit directly, or they think the tax burden will not be placed on them.

Just look at this Gallup poll: only 34 percent believe that healthcare reform will personally increase their costs. Gallup also points out that most don’t think healthcare reform will benefit them personally – hence they are supposedly altruistic. But it’s not altruism when only 34 percent believe that they will do the shoveling.

You don’t think this is true? Just look at the Republican Party’s anti-universal healthcare campaign. The GOP hasn’t appealed to morality or fairness, but instead to selfish elements among universal healthcare supporters. The message is that the plan will cost more for everyone and your healthcare will get worse. So far the campaign has worked.

One can speak sweet nothings while pleasantly sitting around a warm fireplace. But in the end, a snowy day and a shovel will always reveal the selfish nature of a socialist underneath.
If you want to stay in the loop on what the Obama administration is planning and how to protect yourself – even profit from – the ramifications, give The Casey Report a risk-free try. Never get hoodwinked again because you will see the big trends coming long before they get here. Click here to find out more.



All the best and dont forget to vote on where you think that gold prices are going next.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.


Friday
Feb262010

China To Purchase Half of IMF’s Gold

Pravda Logo27 Feb 2010.JPG

Yesterday we reported that India would buy the IMF gold and that was according to an article carried by the Emirates Business, today, Pravda reports that the buyer is China, as follows:







China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.

World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.

The IMF announced an intention to sell 403.3 tons of gold in accordance with the adequate decision made by the board of directors of the fund in September of 2009. India, Mauritius and Sri Lanka purchased about 212 tons of the amount at the end of 2009. India purchased most – 200 tons.

China’s interest in international trade is connected with the development of the nation’s economy, as well as with the growing consumer demand in the country.

“Chinese officials have confirmed previous announcements from IMF experts and said that the purchasing of 191 tons of gold would not exert negative influence on the world market. China is interested in the development of the domestic consumer market,” the agency reports.

Most of Chinese citizens believe that investing in gold jewelry is a good way to avoid inflation, Rough & Polished agency said.

The IMF has received the profit of $7.2 billion from gold sales. A part of the funds is to be used for crediting poor countries.

We will see just what tomorrow brings!


All the best and dont forget to vote on where you think that gold prices are going next.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

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Thursday
Feb252010

Gold, the IMF, and Dirty Jokes

IMF logo Dark.JPG


By Jeff Clark, Casey’s Gold & Resource Report

How many IMF officials does it take to change a light bulb?

As you probably read, the International Monetary Fund announced they would proceed with selling the remaining 191.3 tonnes of gold from the 403.3 tonnes planned. The money is to be used for lending to poor countries. Lending implies the money will be repaid, which, in the case of the IMF, is a joke that isn’t funny. But that’s a topic for another day.

The IMF stated that sales will be conducted in the open market, which is interesting because until now, gold has only been made available to central banks. While the IMF remains open to central banks buying some of the gold, sales will be conducted “in a phased manner over time” to avoid disruptions to the open market.

So, will IMF sales depress the gold price? Well, remember the price rose with the first sale, when it was announced India was buying 200 tonnes of the 212 for sale. But that was an offtake deal, not an open market sale, so the question is legitimate.

One way to look at it is this: global mine production was 80.9 million ounces in 2009, so the IMF’s 6.7 million ounces could be a market-jolting 8.2% addition if dumped all at once. And an 8.2% load would indeed upset a market if we were talking about strawberries or anything else that people buy only for the purpose of consuming.

But most gold isn’t bought for the purpose of using it up. It’s bought for the purpose of holding it. So the relevant comparison for the IMF’s 6.7 million ounces isn’t annual mine production. Instead, we should compare it to the world’s existing stockpile of gold, which is roughly 2 billion ounces. The IMF sale would add just 0.3% to global inventory – hardly a market trasher.
Further, we’ve been down this road before with the IMF. When they sold gold in the 1970s, the price dropped upon the announcement of the sale, but then rose when actual sales took place.

And the dirty joke is this: when the IMF sold gold in the 1970s, it marked a bottom in the price. The late Jerome Smith advised always betting against the government: “When they’re unloading an asset, it’s time to buy.”

The IMF provides some very cushy jobs for the right people, along with a perpetual series of exquisitely catered conferences for the politically connected and politically correct. These people are not exactly known for being the brightest economic decision-makers. However noble their cause, the fact that they’re selling at all in the current environment, given the enormity of the monetary crisis that will only worsen as time goes on, tells me I want to be doing the opposite.

And that’s why the answers to my light bulb joke are as follows:

How many IMF officials does it take to change a light bulb?
None. Doesn’t gold glow in the dark?
One, but only if the ladder is padded.
Two. One to screw it in and one to screw it up.
Three, but nobody can find them.
Four, to form a panel to discuss which way to turn the bulb.
Five. One to change the bulb and four to buy the wine to celebrate.
Nine, to provide a quorum to vote on incandescent vs. fluorescent.
Eleven. One to hold the bulb, and ten to turn the house.
All of them. But only after dinner at L’Arpège (the most expensive restaurant in Paris).

While we’re convinced gold is headed much higher, is the recent correction over, signaling its time to jump in? Get our answer in the new issue of Casey’s Gold & Resource Report, which you can try risk-free here...




All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

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To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

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Wednesday
Feb242010

India to Buy IMF Gold

Reserve Bank of India.JPG

Well thats according to an article carried by the Emirates Business today, the rational being that unlike China who can boost gold reserves internally, India needs to import gold in order to boost supplies.


Gold prices are expected to stabilise with the imminent purchase of gold by India from the International Monetary Fund (IMF).

India's central bank, which has increased its gold holdings to diversify its reserves, looks set to be a buyer again when the IMF begins selling 191.3 tonnes of the precious metal amid volatility in major currencies. Gold prices climbed steadily late last year to touch an all-time high of $1,226.10 an ounce on December 3 after the RBI announced in November it had purchased 200 tonnes of IMF gold.

Prices have steadied just above $1,000 recently, edging up to $1,107.30 an ounce yesterday, after falling one per cent the previous day.

The uncertain outlook for two of the world's major reserve currencies – the dollar and euro – provides a spur for central banks, including India's, to buy gold.

India's gold holdings lag those of major economies despite a big purchase in October.

"India is no stranger to gold. The government is gearing up for growth and wants to recalibrate its reserves," said Mark Pervan, senior commodities analyst at ANZ.

"They can't lift their gold holdings from domestic output, unlike China. And they have shown an appetite to buy in the past."

We guess its now a question of watch this space to see just who steps up to the plate.

Footnote: Please don't forget to vote on whether you think gold is going to $1000/oz or $1200/oz first as per the Peter Grandich challenge.


All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.








Wednesday
Feb242010

Agnico-Eagle Mines Limited: Outperforming SPDR Gold Trust

AEM logo 20 feb 09.JPG
GLD Logo 25 February 2010.JPG

We don't normally watch Mad Money but as this snippet is about Agnico-Eagle Mines Limited (AEM) we found the time as we have an options play open and we expect Agnico to perform better than it has recently.

Over the last five years, Agnico-Eagle Mines Limited (AEM) has jumped 281 percent, beating the SPDR Gold Trust (ETF) GLD’s 148-percent increase. But the stock has been a relatively poor performer more recently, with the third quarter showing problems in everything from maintenance shutdowns and project delays to higher cash costs and weaker-than-expected production.

Then on Feb. 17 Agnico-Eagle reported a better-than-expected fourth quarter, with record production and optimistic guidance. The company also said that it expects gold production to double in 2010 versus last year. And though cash costs will also increase to $399 an ounce from $297, the market price is still at about $1,100 an ounce, leaving AEM a healthy profit.

Does this mean it’s time to recommend Agnico-Eagle Mines again? Watch Cramer’s interview with CEO Sean Boyd to find out.


Options update: We currently hold the AEM $60, May '22, 2010 Call Options which closed today at $2.90 so we are under water at the moment. We will continue to hold and observe for now.

Footnote: Please don't forget to vote on whether you think gold is going to $1000/oz or $1200/oz first as per the Peter Grandich challenge.


All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.








Tuesday
Feb232010

Is Ben Bernanke Smart Enough to Be a CEO?

Ben Bernake.JPG



By Vedran Vuk, Casey Research



Ben Bernanke has got to be laughing it up after being reappointed to another term as Federal Reserve chairman. What else could we expect from the ex-lawyers and lifetime Beltway bandits voting on global monetary policy?

As he starts his second term, I’m once again reminded about how supremely unqualified this man is for the job. Prior to becoming Fed chairman, Ben Bernanke basically had zero experience outside academia. His resume only includes three full-time years working for the Federal Reserve and eight months on George W. Bush’s Council of Economic Advisors. The other 23 years of his career were spent teaching college.

A successful publicly traded company could never choose a similar candidate. Imagine a company announcing, “We’re changing CEOs. Our new choice is an excellent professor of management from Princeton. His organizational skills include writing a syllabus, assembling textbooks, and publishing in academic journals with no real-world consequences. Further, our candidate has worked for three years in a government-like position and eight months in the White House.”

As an investor, I would flip out. Yet, this is the exact guy responsible for setting the entire country’s interest rates. To take a further look at Ben Bernanke, I think that we should use Doug Casey’s own 8 P’s of investing in resource stocks applied in our publications, such as the International Speculator. 

One of Doug’s most important P’s for choosing a company is People. So, how would Bernanke fare should we apply these same standards to him?
Doug points out,

“To state the obvious, Boy Scout virtues like honesty, thrift, courage, and diligence are always good traits for your management teams, as are competence, knowledge, experience and, perhaps most importantly, a track record of success.”

Let’s start with honesty, competence, and a track record of success. As this great YouTube compilation of Bernanke quotes shows, the chairman has a track record of being wrong on just about everything – including  the housing bubble, economic fundamentals, and risky bank loans. That pretty much rules out “track record of success.” 

This leaves only two options for his character – either he’s an honest idiot or a malicious genius. Regardless, he would fail at least two of the three above-mentioned characteristics.
Let’s continue with diligence and thrift. He has been very diligent about printing piles of money to alleviate his deflationary phobia. Maybe that’s a partial credit there. Thrift… please highlight it and make a bookmark in the dictionary. Then, ship the copy to the Fed.  

Well, what about courage? Not only does Ben seem to lack confidence in front of crowds – a strange characteristic for a 23-year college professor – but he’s a complete pushover as well. Whenever the market dips slightly, Bernanke comes out promising endless liquidity and infinitely low interest rates. I’m not sure that we’ve ever had a more cowardly Fed chairman. Bernanke has to be the complete opposite of the tough-as-nails Volcker who raised interest rates to double digits without even flinching. 

On knowledge, I will give him some credit. He’s written a bunch of academic articles and has surely read a lot of books on macroeconomics. But his complete lack of first-hand market experience prevents him from really utilizing that knowledge. Plus, if he really knew so much about interest rates, he would have spent more time making money and less time teaching.
Experience is the key. Think MBA programs in business. Why do these programs help so many managers when the topics covered are nearly identical to undergraduate programs? It’s because the second time around in school, students come to the classroom with experience. The synergy between education and experience is the key. Education alone is useless.
Ultimately, out of the eight characteristics that Doug mentions, Ben Bernanke fails about six or seven. This guy could never make it as a CEO. Yet the man continues leading the country into disaster as the chief executive for U.S. interest rates. This would almost be too funny were it not so frightening.

Bernanke may not pass Doug Casey’s diligent 8 Ps test… but the companies recommended in Casey’s International Speculator sure do. Investing in the best of the best junior resource stocks is a good way to safeguard your assets from the meddling and – let’s face it – downright stupidity of the government. Click here to learn more.




All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.


Tuesday
Feb232010

Gold Poll: The Grandich, Soros, Nadler, Challenge


Poker Bingo Online casino Spielautomaten Polls







We are conducting a poll on where gold will go next, to $1000/oz or to $1200/oz.

As you are probably aware Peter Grandich has recently doubled his bet with this release:

Posted by Peter Grandich at 8:25 PM on Sunday, February 21st, 2010

Hello Perma Bears!!!  I’m doubling my wager to $100,000 and its good for the next 72 hours.

I hope they can learn of my offer before they head for the hills.
 
Go Gold
!

His previous challenge read as follows;

I will wager $50,000 U.S. Dollars that gold closes above  $1,200 before below $1,000 basis the Comex spot price. I  challenge gold perma bears like Kaplan, Nadler and Soros to be the first to put their money up where my mouth is.

As suggested by one of our readers, Ryszard, we should conduct a poll, so this is your chance to vote on it and we will see just how many bulls and bears we have.

Go for it.


All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

Monday
Feb222010

Gold and Silver unmoved by gold sales or a Fed rate increase

USD Gold Silver Chart 22 February 2010.JPG

The recent news that the IMF would be holding more gold sales and the sudden increase in the discount rate by the Federal Reserve Board should have dented both gold and silver, however, these events made little impact on the precious metals as the above chart demonstrates.

We expect the gold to be absorbed quietly and no doubt we will be informed after the event as a large player, such China or India as they continue with their own acquisition programme. The increase in the discount rate isn't much more than sabre rattling as the Fed don't have too much room to move in this area as the economic recovery is still fragile. To be aggressive with rate rises would most certainly bury the recovery. Also weighing heavy on the minds of the powers that be is the possibility of a double dip recession which we see as being on the cards if we do not tred very carefully at this juncture.

Back to the PMs, the thing that interests us is the strength that they have shown at this time despite these two events and it bodes well for the immediate future of both gold and silver. So we will stick to our expectation that gold will push on and challenge its previous all time high in the near term and surpass it on its way to $1400/oz or so.

We see this as a time to get into position and not a time to sell any of your core holdings and yes there will always be detractors and without them we would not have a market.


All the best.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

For those interested in getting a bit more bang for your buck and adding a touch more excitement to your portfolio, then check out our Options Trading Service please click here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address.

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.