Ed. note: Here is another installment from longtime reader Myron Martin. Myron has agreed to our trading restrictions (he won’t trade the stocks he mentions for three days), but we have not reviewed, approved or screened his stocks or ideas, and the opinions he expresses are solely his own. Myron’s past commentaries can be seen here.
I started writing this on August 16th after a volatile week in the precious metal markets that has seen the price of gold finally break through the $1350 resistance level quite decisively. The question many analysts will be asking is whether the market will hold above this price having reached intraday prices over $1370, and of course that question will be answered before this gets published. Either way, whether it gets knocked back down and needs to make another attempt at a serious breakout back to former highs in the $1400 to $1550 range by month’s end, now is a good time to educate yourself on monetary history. I know of no better way to do that than to invest a half hour in the Mike Maloney informative video called “Hidden Secrets of Money 2“. This is the second installment, which was just released and which I hope will entice you to watch the first video in the series as well.
Regardless of which way the market answers, the fact is that the fall season after Labor Day usually sees a rising trend into year end in the market in total, but precious metals in particular. This means this is a timely period in which to be acquiring the best positioned gold, silver and PGM producer stocks. I have sifted through literally dozens over the past months to find the most compelling buys that will not only survive a difficult market, but have the high grade reserves and money in the bank to take advantage of advances in bullion prices. Gold miners as a group have announced more than $21 billion in write-downs in the past two months alone, providing more realistic evaluations. At the same time consumers have purchased 1,083.2 tons of gold in Q2, which represents a 53% year-to-year jump in investor demand, a very encouraging statistic indeed. (Thanks to the Sprott Group for those statistics; see Sprott’s Thoughts column August 16th.) For additional encouraging statistics access the King World News blog “Asia Shocks West By Demanding Their Gold Be Sent Home“.
A second ...