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Can Equities Cushion the Blow of Falling Gold Prices?

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The Gold Report: Peter, can you give us your long-term view of the Eurozone as it lurches from bailout to bailout?

Peter Rose: Some major things have to happen in Europe and the sooner, the better. Unfortunately, I think it will get worse in the short term.

But from the mining industry perspective, these crises are bringing a lot of realism to certain governments. Greece has opposed mining, despite having quite good ore bodies, as do Portugal, Spain and Cyprus. Mining companies can generate real revenues, exports and jobs and contribute to the financial coffers.

In addition, the European Union has good rules of law. The tenures are pretty safe, there are pro-mining interests and there are deposits of strategic elements. If you compare the operating costs with Australia, the European infrastructure tends to be better; wage rates are significantly lower. It makes for a pretty compelling story.

TGR: You deal with many junior mining companies. In 2004, the junior mining companies listed on the TSX Venture Exchange (TSX.V) averaged 27 million (27M) shares outstanding. Today, the average is 73M shares. Why have share floats risen so dramatically? Continue reading "Can Equities Cushion the Blow of Falling Gold Prices?" →

Gold Is Plunging -- Which Commodities Are Joining It?

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By: Street Authority

Although the U.S. stock market has generated a healthy glow this year, the commodity complex appears to be entering into a growling bear market. Just consider these stats:

  • After a sharp drop on April 15, gold has plunged nearly 20% since the year began and nearly 30% since hitting an all-time high of around $1,900 per ounce in the autumn of 2011.
  • West Texas crude oil has slipped from $97 per barrel to $87 in just the past two weeks.
  • Copper has slid roughly 12% this year and is off roughly 27% since the summer of 2011 peak.
  • If aluminum breaches the 80 cents per pound mark (it's currently at 82 cents), it will see its lowest levels since the summer of 2009.

Unless these commodities quickly stabilize, they will all start to break key resistance levels and head even lower. Yet it's unwise to lump all commodities together, and the factors affecting one of them is quite distinct from all others. Continue reading "Gold Is Plunging -- Which Commodities Are Joining It?" →

Don't Panic, Buy Silver

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The Gold Report: Precious metal bullion and equities are taking a hit right now in the market. Why do you feel silver is an interesting investment today?

Rick Mills: There is a disconnect this year between silver and gold. They usually trade in lockstep, and their market prices are doing that.

As of April 2, more than 140 tons of gold has flowed out of various exchange traded funds (ETFs) this year, while silver ETFs have added more than 20 million ounces (20 Moz). Maybe that is because silver is more affordable than gold or because silver also has industrial uses.

TGR: But the ETFs do not reflect a price disparity between gold and silver. Continue reading "Don't Panic, Buy Silver" →

5 Critical Threats To The Bull Market

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Nothing good lasts forever, including the amazing bull market that investors have enjoyed this year.

Fueled by ultra-low interest rates, solid corporate earnings and a Federal Reserve that says it will do whatever it takes to jump-start the economy, stocks have been breaking record after record as they surge higher. The Dow Jones Industrial Average has rallied more than 1,800 points since Jan. 1 -- and money keeps pouring into the market. Continue reading "5 Critical Threats To The Bull Market" →

Bullish on Oil Prices? Two Reasons You Might Change Your Mind

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The Energy Report: Marshall, before the Great Recession hit, we appeared to be on target for $150 per barrel ($150/bbl) Brent in mid-2008, and we were hearing forecasts of $200/bbl before the end of that year. But things have changed. I'd really like to get your fix on how you perceive energy markets have been altered over the past five years.

Marshall Adkins: For the oil market specifically, two massive structural changes have occurred since 2008. First, U.S. oil supply from horizontal drilling in tight shale formations has created a reversal of the four decade-long decline we've seen in U.S. oil production. When I say reversal, I'm not just talking a minor blip; I'm talking about erasing a 40-year decline within five years. This truly is a massive structural change to U.S. oil markets.

On top of that, in conjunction with the Great Recession, the world has figured out that there's too much debt, and most of the developed world is going through a deleveraging period. Historically, whenever you deleverage, you get subpar economic growth, and subpar oil demand growth. For the past five years, we've seen significantly lower demand growth for oil compared to the prior two decades. I expect that to continue, and I expect U.S. oil production to continue marching higher. Continue reading "Bullish on Oil Prices? Two Reasons You Might Change Your Mind" →