Steve Todoruk, an Investment Executive at Sprott Global Resource Investments Ltd. since 2003, said recently positive signs were beginning to take shape for the bigger mining firms. Many of these big companies are now healthy enough to start acquiring assets, scooping up the low-hanging fruit in the sector – attractive assets or companies that are still cheap.
Many of these smaller companies are already showing signs of share price strength. Steve tells how the metals and stock markets have behaved over the last six months:
Gold started the year off with an upswing off the multi-year low of around $1,180 per ounce reached in December, 2013. By March, gold was trading at nearly $1,400. Silver had a similar course. It rose from a low of $19 per ounce last December to a high of $22 by mid-March. Many small gold and silver mining and exploration companies saw a big improvement in share price during this period too.
After around mid-March, prices began moving down once again. Gold fell back to around $1,250 by the end of May. Silver retreated back under $19. Many of the juniors gave up their gains as well.
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The miners have started 2014 very well indeed on the back of rising gold prices, so the question is; is this the real deal or another head fake? Is the bottom really in? Could there be a final capitulation just ahead of us? Will the summer doldrums take the PMs lower?
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