The big-cap mining stocks don't really need gold to be $1,900 the ounce to have a pretty good time. Our view is that they are likely to be very profitable and throw off strong to enormous cash flow at any gold price above about $1,500 the ounce.
Now that Mr. Bernanke's speech is old news, what was the financial media thinking? A significant number of financial writers anticipated discussion of QE III or QE III Lite, which clearly were never even on the Fed chief's radar this week.
The final week of what has been a tumultuous (to say the least) trading month opened on a downward-trending note for certain precious metals this morning. The mere fact that the market did open for business on Monday was a welcome relief to many.
If the gold market really is ready to go parabolic then this correction is going to be over by next week. But that is likely a little bit premature. What's more likely is a repeat of the 2006 blow off.
Gold looks set to stage a recovery of sorts and has begun to do so. A sharp decline from a high of $1,918 to a low of $1,702 is typically met with a 50% retracement - this being so and tradition being upheld, gold should recover to $1,810.
Silver represents a rising area of importance in everyday lives. It is ever present and growing in the age of the plagues of uncertainty, instability, turbulence, revolutions and fiat money. We expect silver to hit new highs with the miners in 2011.
The biggest decline in gold since 1980 unfolded in recent hours and the rout extended into the morning hours on Thursday as the yellow metal fell yet another nearly $50 to touch the $1,702 mark overseas.
Tuesday's market trading sessions in New York opened under growing selling pressure in the entire precious metals complex. Following a fresh sprint to new overnight highs gold retreated to as low a level as $1,862.00 this morning.
A highly apprehensive crowd of speculators put the pedal to yellow metal and pushed it hard overnight making for fresh records (it is now more costly than platinum!) and bolstering the value of the Swiss franc to new heights as well.