Fantastic Buying Opportunity, Bought AEM Calls

We bought JAN 17, 2009 $ 60.000 CALL OPTIONS on AEM (Agnico Eagle Mines) today at $5.50, and we our hereby signalling a BUY on these contracts.

The options started trading at $5.20 and shot up to $5.70, before falling back to around $5.00 at the moment. This shows just how volatile the derivatives market can be and therefore one must be prepared for this before trading in options.

Gold is currently trading at $809, which we think will be looked back at as a rock bottom bargain price, so now is the time to load up on gold, gold stock and, if you are confident and have the expertise, perhaps a range of options.

If you haven’t done so already, BUY!

And for those that have, sit tight and hold onto those positions, as we think that this is the bottom in gold and the downside from now on is very much limited.

These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Gold and Silver Investment Summit: London 2008

Last year we had the pleasure of attending the Silver Investment Summit at the Paddington Hilton, London, England.




It was both an enjoyable and valuable experience, which we would recommend for all precious metal investors. This year the organisers are also putting on a Gold Investment Summit in additional to the annual Silver Investment Summit, on the 4th and 5th of November 2008.

We have just recently returned from trip that included London, as well as the USA and Malaysia before returning to New Zealand, and so at this point we do not think we will be able to attend this year’s conference, which is a thorough disappointment. However we strongly urge any investor with an interest in precious metals to attend this conference, which is free of charge, as it will prove a highly valuable experience.

The will be presentations from a number of gold and silver mining companies and the summit will also feature speakers such as James Turk, Paul Tustain, David Morgan and John Lee, all of which have the highest respect for.

To find out more about these conferences, please visit: http://www.silversummit.co.uk/

Golden Buying Opportunity, With a Silver Lining!

Gold made a bottom at $651 on August 16th 2007 before rallying to over $1025 by March 2008. The anniversary of that low is less than a week away and we suspect history is going to repeat itself as gold prepares for anther tremendous rally.

(Click on thumbnail to enlarge chart)


Technically, gold looks to be a good buy at these levels for the following reasons:

Buying gold close to the 200 day moving average is a good strategy, buying below is even better. The RSI for gold is near 30, a classic BUY signal that rarely presents itself and should be taken advantage of.
We see gold holding at $850 on its support line, before building a base and moving much higher in the coming months.
STO is oversold, along with many other technical indicators.

And if gold is oversold, then silver is severely oversold as the chart below shows:
(Click on thumbnail to enlarge chart)


With silver just 33 cents from a support area which starts at $15 and goes through to $14, we view these prices as great chance to load up on silver and silver stocks. The technical situation for silver is similar to the yellow metal, except in this case poor man's gold appears to be more oversold and is perhaps a better buy. Remember that the silver market is more volatile than gold, and tends to have sharper corrections (one of which we have just witnessed), but at the same time it can bounce back higher, and faster than gold, which makes it an excellent trading vehicle for those with the stomach to speculate on the oscillations.

This sell off in precious metals (and oil) has primarily been caused by a strengthening US dollar. Why has the greenback been making gains? Hot air. The USD has been moving up as the Fed has been talking about inflation and the possibility of raising interest rates. We must keep in mind that the Fed hasn't actually raised rates yet, and even if they do, how far will they go? We expect any rise in interest rates to be minimal. And even if they do embark on a rate raising policy, will this stop golds accent to $2000+? Absolutely not. The most it will do is delay gold making an inflation adjusted all time high. Remember that in 1980 gold ran to $850 in the face of double digit interest rates. So even if the Fed takes rates up to over 10%, which represent a quintupling in interest rates, this will not be enough to stop gold and silver marching onwards and upwards.

We have been heavy buyers of gold, silver and the associated mining stocks on this dip. We have signalled multiple BUY signals, including some signals on gold call options and options on mining stocks, as we firmly believe that the downside is limited right now, whilst the upside has fantastic potential.

Our message for this week is simple: BUY gold and silver then hold on for the ride!

BUY GOLD, Call Options

We are hereby signalling a BUY on gold and gold call options, as we believe the yellow metal is oversold and poised for a tremendous rally in the coming months.


We have purchased a significant position in the January 2009 call options with a $95.00 strike price for GLD, the gold ETF.
By doing this we are effectively buying call options on gold itself.

Gold has major support around $875 and we see any further downside as limited so we have purchased these contracts at an average cost of $3.40.

We expect these options to generate a return of at least 100%.


This is a great buying opportunity in gold, BUY!


Footnote: Silver is also a great buy, and we purchased more stock in Silver Wheaton today. Please click here to read details.


These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Precious Metals: Timing!

So far this summer we have managed to acquire a few more gold and silver mining stocks and a few call options as per our plan to deploy our ‘opportunity cash’.

We still have maybe two or three purchases to make but then we will be in position for what we anticipate as being an exciting rally from September through to around February 2009. Labour Day falls on the first of September this year so we reckon we need to be fully invested by about mid August. There could be a dip between now and then but we are not going to bother busting a gut to try and pin point when it may or may not arrive. The important factor as we see it is to be in position. The daily ups and downs will be considered as white noise, which is to be ignored. However, during this rally we will be looking for trading opportunities to present themselves in terms of stock landing in the overbought zone or our call options hitting reasonable profit levels.

Talking of call options we are digging into the possibility of buying them on SPDR GOLD TRUST GOLD SHS (GLD: NYSE Arca) this trust more or less mirrors the movement in gold prices. When we buy an option on a stock it is because we feel that it has been oversold and hope to catch the recovery. With this trust we should get movement directly correlated to gold. A quick look at the chart suggests that the time is getting near for a buy so we will keep a close on it.

Anyway we will be back as soon as we have concluded our deliberations on where we are going to make our last moves for this season.





Keep smiling and keep a watchful but relaxed eye on this bull market.

These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Yamana Gold Incorporated: BUY CALL OPTIONS!

On the 24th July 2008 we made a purchase of the JAN09 Call Options at a strike price of $12.50, paying $2.25 for the contracts in Yamana Gold Incorporated (AUY)

Yamana Gold Incorporated has seen its stock battered down from around $17.00 recently to about $12.50. In our humble opinion the sell off has gone too far with Yamana’s stock price trading well below its own 200dma and the technical indicators are languishing in the over sold zone.

True gold has been hit hard but by now we have come to expect the sell offs to be severe but short lived. This current situation is no different from others that we have been through so rightly or wrongly we have tried to buy these dips. Volatility is to be expected and where possible we intend to use these aberrations to our advantage.

As always an investment decision is yours and yours alone so don’t go too crazy on any one trade and be prepared to take a loss from time to time.

Yamana Gold Incorporated is appearing on a screen near you as it trades as AUY on the New York Stock Exchange and as YRI on Toronto Stock Exchange and as YAU on the London Stock Exchange.


All the best!


These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Where Is the Economy Going in the Next Six Months?

Today’s mailbag contained this article from Bud Conrad the Chief Economist of Casey Research, which we think you will find interesting reading. From time to time we will try and bring you differing views on the economy by a variety of authors, however we would add that these views are those of the contributing writers and are not necessarily the views of the team here at gold-prices.biz.


The Casey Report - Casey Research
As investors, the question we have to focus most of our attention on just now is what impact the credit crisis, the bursting housing bubble and the actions of the U.S. government will have on the economy and investment markets in the next six months.

We have seen the Fed and the federal government move to panic mode as they try to keep the system afloat. As expected, they have cut rates, as well as having given away checks and rearranged the Federal Reserve’s entire balance sheet.

The underlying problems have not been fixed with this massive bailout. There are still many credit pot holes out there and new lending remains highly constrained. Even the government tax rebate checks, rather than boosting the domestic economy, were largely absorbed by higher oil prices. The resulting cut-back in consumer spending, coupled with ongoing constrictions in lending, will cause a severe slowing of the economy.

But the much bigger implication is that the Fed is busy pouring more gasoline on the fire by fighting the collapsing housing bubble, a housing bubble created by excess liquidity, with yet more liquidity. That is the key point that should be taken from this mess. The dollar is now firmly on an even steeper slope to its ultimate demise. Other currencies will be sliding down the same slope, so another paper currency is not the answer.

This, then, is a high-level context for many of our investment recommendations in the months ahead.

Short Term Projections
1. The housing decline is not yet done, because we will need another year to unwind foreclosures in the pipeline. In addition, the exuberance shown by appraisers at the height of the housing bubble still has a long ways to go to fully deflate. What is that house on the market down the road really worth? At this point, no one knows… and no one will know until it and many others are bought by willing buyers (as opposed to unwilling lenders taking them onto their books in a foreclosure).

2. Consumers in the U.S. are not able to expand credit and are increasingly concerned about the outlook for the economy, so they will slow spending both at home and on imports.

3. The financial/banking system is weaker than understood. The complexity of the global system and the ubiquitous presence of interlocking financial and credit instruments and literally trillions of dollars in derivatives has left the world’s banks teetering on the edge.
Adding a push from behind, we have broadly rising inflation and soon the persistently higher interest rates that are the bane of fixed-income investors and financial institutions in general. As the dollar continues its fall, and the banks continue to come under pressure, the lack of confidence in these keystones of the modern financial system will deepen. Already, the Sovereign Wealth Funds that rushed in early in the credit crisis to prop up the big investment houses are now signaling that, at least for the time being, they are going to step back and watch how things shake out.

4. A slowing economy – recession – coupled with inflation, creates a condition often referred to as stagflation, presenting much bigger policy challenges for the government than one or the other alone.

5. The food crisis. Shortages of food production come from rising energy and fertilizer costs. Rising demand comes from a shift in diet, especially in emerging markets, where increasing prosperity leads the citizenry to add more protein to their diets. Important shortages in grains have arisen that don’t allow for a bad crop year. Most concerning is that these shortages are occurring despite good crop production last year, an occurrence that can be blamed, in part, on the diversion of some agriculture production for ethanol and bio-diesel.

These food shortages have already contributed to a doubling and tripling in the price of grains over the last two years. But even these elevated prices have not been sufficient to offset the higher costs of the energy required to produce the crops. And, despite today’s higher prices, agriculture still lags the price increases seen in many other commodities.

[For more information on the subject of food, watch my recent appearance on FOX Business News here.] Higher rates are not good for housing and stocks. In the long term, they will recover in nominal terms, though not in actual terms. That’s because, while their nominal prices may return to current or near current levels, the dollars used to express their value will have much reduced purchasing power… making those assets a mediocre investment for the foreseeable future.
Finally, it is important to recognize that the world remains in the throes of a deep and serious crisis. While many analysts will express the view that the worst is over or that, after a modest downturn, things will bounce back just like they always have, our view is that what we will actually witness going forward is a fairly steady occurrence of crisis and panic. The crisis will accelerate, moving faster, even, than in previous major shifts such as that witnessed in the 1970s.
While history may find we are too pessimistic at this point in time, in our view it is far better to prepare for a worsening crisis and hope that it does not materialize, than to expect business as usual.
Bud Conrad is the Chief Economist of Casey Research, LLC., publishers of Doug Casey’s International Speculator which provides unbiased research and recommendations on the highest quality junior exploration companies.

Casey Research has also recently launched a brand new monthly advisory, The Casey Report, which focuses on the most powerful trends now driving the U.S. and global economy, and how to profit from those trends. As a special introductory offer, when you subscribe to either the International Speculator or The Casey Report before the end of July 2008 you will receive the other free of charge for as long as you remain an active subscriber. Plus, your subscription comes with a full three month money back satisfaction guarantee… so you have nothing to lose when you try these publications today. Learn more about this special offer now.


Have a great weekend.

These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Kinross Gold Corporation: BUY CALL OPTIONS!

On the 24th July 2008 we made a purchase of the JAN09 Call Options at a strike price of $20.00, paying $2.50 for the contracts in Kinross Gold Corporation (KGC)

This may sound familiar to you as we bought these very same call options in KGC on the 16th June 2008 paying $2.68 per contract and sold them on the 28th June 2008 for $5.30 per contract generating a 100% profit in two weeks. We have re-purchased these call options because we think that the sell off in Kinross has been over done.

The $1.2 billion bid that they have tabled for Aurelian Resources Incorporated has spooked a number of investors adding to the selling pressure caused by gold prices heading south. In our very humble opinion the damage is done and the sellers have bolted for the sidelines. Conventional wisdom tells us to buy on dips; this is one heck of a dip, which takes a little courage to buy into. However we have decided to take the plunge wearing our best cavalier hat in the process. We do get it wrong from time to time so don’t go too mad on any of these trades. It is very important to be able to take a hit but not be out of this bull market completely.

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’

Have a great weekend.

These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Kinross Gold Corporation: BUY!

On the 24th July 2008 we purchased more stock in Kinross Gold Corporation (KGC) for an average price of US$18.28, doubling our position in the stock.

As we can see from the above chart there has been an incredible dip in the stock price so we took the opportunity and bought the stock along with some Call Options once again.

The big news is that Kinross have tabled a $1.2-billion bid for Aurelian Resources Incorporated! As we know Ecuador brings with it a certain amount of political uncertainty and presents Kinross with a tremendous challenge. This piece of news sent investors screaming to the sidelines as the very thought of Ecuador pushed them over their own risk threshold.

We, on the other hand, took a long hard look at this move and decided that yes it is risky, but courageous and bold. It may be a little too cavalier for some investors however we have grabbed this opportunity with both hands and so now we will sit, watch and sweat!

The management team is one of the best in this sector and is headed by Tye W Burt who is the President and Chief Executive Officer of Kinross. Prior to joining Kinross Tye Burt held the position of Vice Chairman and Executive Director of Corporate Development of Barrick Gold.

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’

Have a great weekend.

These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.

Agnico Eagle Mines Limited: BUY!

On the 24th July 2008 we purchased more stock in Agnico Eagle Mines Limited (AEM) at US$59.17, more than doubling our position in the company.

On the 15th July 2008 we posted an article on Agnico Eagle in which we said the following:

“There is no doubt about it Agnico-Eagle Mines Limited (AEM) is a class act and deserves a place in everyone’s portfolio, however timing an entry point is also crucial.”

At the time we were of the opinion that we were in for a long wait, however, gold prices took a battering and Agnico’s latest set of results dipped dramatically largely due to the price of Zinc falling out of bed, leading to a sell off in the stock. Going forward Agnico’s performance will be far less dependent on Zinc as the production of gold is being ramped up. When this is widely understood investors will regret unloading this stock and come back to re-purchase it.

Taking a quick look at the chart we can see that Agnico Eagle has dropped about $20.00 is a very short time. The technical indicators have been floored which suggests to us that the downside is now limited as the bulk of the damage has now been done.

Agnico-Eagle Mines Limited trades on both the New York Stock Exchange and the Toronto Stock Exchange under the ticker symbol of AEM.

Have a great weekend.

These are fast changing times and its essential that you stay up to date with what is going on in the market. For our latest commentary and trading signals on gold, click here to subscribe to The FREE Gold Prices Newsletter and click here for The FREE Silver Prices Newsletter.