Archive for 04/08/2010

More mining acquisitions?

People’s Bank of China made news recently with its new support for the gold industry.

This Bloomberg article talks about the potential for acquisitions by Chinese gold mining companies:

http://www.bloomberg.com/news/2010-08-03/china-plans-to-help-bullion-producers-expand-overseas-central-bank-says.html

Juniors miners are already a great target for acquisitions. Now China is jumping in to this area. Hmm…

An excellent roadmap

Here is a great overview of what could happen over the next year:

http://www.gold-eagle.com/editorials_08/connor080210.html

Note the author sees the dollar moving to 80 in the short term. He sees gold moving inverse to the dollar but I see a possibility that gold will move inverse to the Euro. Regardless, if the dollar goes to 80 and gold moves inversely, it will spike up now and come down later, or if gold moves inversely to the Euro it will fall now and move up later.

Personally, I prefer the scenario of moving inversely to the Euro because that means in a flight to safety gold and the dollar will move up together.

The longer term picture of early next year could be driven by an inverse relationship to the dollar again.

More votes on a correction

Here are a couple interesting articles that talk about a coming correction in gold but within the context that prices should take off from there:

http://www.gold-eagle.com/editorials_08/goldrunner080210.html

http://www.investorplace.com/news-opinion/fear-coming-correction-gold.html

A correction beyond what we’ve just seen may not happen, of course. And then there is the ongoing voice of caution from Ron Rosen talking about a major C leg down that will go into early next year (modified from this July originally). Most savvy commentators are talking about a big move up into early next year. One of these analysts sees trouble for a parabolic top early next year if gold lingers below $1180.

The middle path among all these voices seems to be a moderate decline toward end of August then a pretty spectacular move up into early next year - maybe not the big blow-off top but a good move nonetheless. Be cautious with mining stocks no matter what.

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