Month: September 2013

By HY Markets Forex Blog

Shares in the European Markets were seen moving higher, extending gains on Tuesday, following Asia’s gains and the positive Chinese data that supported the sentiment. Investors are still concerned over whether the US will intervene in Syria.

The European Euro Stoxx 50 edged 1.13% higher to 2,829 at the time of writing, while the German DAX advanced 1.34% to 8,386.95. The French CAC 40 gained 1.11% to 4,085.16, while the British FTSE 100 added 0.71% to 6,576.82.

European Markets- Economic News

The French industrial and manufacturing production picked up after falling unexpectedly. The Industrial production in France dropped 0.6% month-on-month in July after dropping 1.4% in the previous month. While the country’s manufacturing output declined 0.7%, compared to the 0.4% fall in the previous month, according to the National Institute for Statistics and Economic Studies reports.

Investors are monitoring France after the Federal Reserve Bank of Dallas President Richard Fisher said that France is the nation that is raising concerns when it comes to economy recovery.

Italy posted its final gross domestic data (GDP) for the second quarter, with the quarterly and annual readings coming in even lower than the previous estimates. Italy’s gross domestic product (GDP) declined 0.3% quarterly and dropped 2.1% year-on-year, the National Institute of Statistics reports confirmed.

Meanwhile, Joerg Asmussen, a board member from the European Central Bank is expected to hold a speech in Brussels later today.

European Markets- Syria Conflict

One of the main focuses of investors is the ongoing conflict in Syria. The US President Barack Obama will still try and persuade the Congress to approve the possible US military intervention in Syria after the alleged use of chemical weapons against its civilians.

On Monday, the Russian Foreign Minister Sergei Lavrov said that Moscow would insist that Syria should hand over its chemical weapons under international control.

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The post European Markets In Green On Upbeat Chinese Data appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

By HY Markets Forex Blog

Gold prices were seen falling on Tuesday, as it was dragged lower by worries that the Federal Reserve (Fed) may begin to taper its asset-purchasing program sooner than expected. The fall of gold prices were also caused by the ongoing Syrian tension.

Howard Wen, HSBC Securities analyst stated in a note that “The market is likely to be influenced by discussions over tapering and geopolitical tensions relating to the situation in Syria.”

Gold futures edged 0.60% lower at $1,378.40 an ounce at the time of writing, while silver traded 1.34% lower to $23.400 an ounce.

While the US dollar index, measuring the relative strength of the US dollar versus a basket of six major currency counterparts, declined 0.04% lower to 81.7580.

Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, declined 917.13 tonnes on Monday.

Gold Prices – Syria Conflict

Investors from around the world continue to raise concerns over the ongoing conflict in Syria, as the US President Barack Obama continues to persuade the Congress to approve of the military action to take place in Syria after the Syrian government allegedly used chemical weapons against its civilians.

The Syrian President Bashar al-Assad denied the involvement in the attack; however the US secretary of State John Kerry proposed that if the Syrian President Assad handed over his stockpile of chemical weapons within a week, the US would abandon its plans for a possible military attack.

The Russian Foreign Minister Sergei Lavrov supports the suggestion and said that Moscow would recommend Syria to hand over its chemical weapons under international control.

Fed Scale-back

The recent data released, the US non-farm payrolls had investors worried that the Federal Reserve (Fed) may begin to taper its bond-buying program as early as September. The US payroll figures rose by 169,000 in August, lower than the 180,000 analysts estimated. Investors are looking forward to the next Fed meeting for more clues as to when the Federal Reserve (Fed) would begin to taper its stimulus program. The next meeting is scheduled on September 17-18.

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The post Gold Prices Falls on Syria’s Conflict & Fed Worries appeared first on | HY Markets Official blog.

Article provided by HY Markets Forex Blog

On GBPUSD we are tracking a corrective rally from March low, which is a complex pattern most likely a flat in wave II. And it seems that pair could reach levels above 1.5750 this week after recent bounce from the lower side of a current upward channel. However, this new high will be just a final leg, fifth wave within wave (C), so larger bearish trend remains in view but market just needs more time than  firstly thought.

Pound (Forex: GBPUSD) Daily Elliott Wave Analysis

On the 4h chart we can see that GBPUSD is back above 1.5700, but still showing a bearish wave pattern as we are tracking an ending diagonal placed in wave (C) position that could be now in final stages. Notice that we are tracking wave 5) her, final leg within the pattern that could be looking for resistance area 1.5800-1.5900 area in this week. An impulsive sell-off from here will put the pair in bearish mode.

Pound (Foex: GBPUSD) 4h Elliott Wave Anlaysis

Written by www.ew-forecast.com | Try EW-Forecast.com’s Services Free For 7 Days at http://www.ew-forecast.com/service

By WallStreetDaily.com

Break out the bubbly for biotech stocks.

Yesterday, the Nasdaq Biotechnology Index (^NBI) hit an all-time high at 2,125.57. The sector is on an absolute tear this year – up 48% (and counting). That’s almost triple the return of the S&P 500 Index, mind you.

The outperformance isn’t going unnoticed among the denizens of the Wall Street Daily Nation, either.

Todd L., for instance, sent me this short and sweet fan letter yesterday: “You suck, Lou! You haven’t recommended a single biotech stock this year. Yet it’s the hottest sector in the market. Why are you completely ignoring it?”

Ask and ye shall receive, Todd. Today, I’m going to share the smartest, safest and easiest way to profit from the continued rally…

Avoid Making Stupid Bets

Charles Munger, the unsung hero behind the success at Berkshire Hathaway (BRK.A), once summed up the firm’s investment approach by saying, “At Berkshire we have three buckets: yes, no and too hard. We just throw some decisions into the ‘too hard’ file and go on to the others.”

For many investors, biotech stocks would fall into that “too hard” bucket.

Why? Because the biotech sector isn’t like most other sectors. It doesn’t benefit from broader trends that promise to bring growth to the entire industry. Like, for example, the exploding use of smartphones does for all companies involved in the mobile market.

A company either succeeds or fails based on its own merits.

Put another way, there’s no safety net for poor execution in the biotech sector. Either the science works or it doesn’t. And trying to handicap the odds for individual biotech companies requires a level of expertise that most investors don’t possess.

Not only do we need to understand the biological nuances of particular diseases, we also need to understand the science behind potential drugs aimed to treat them.

Talk about a daunting task. Heck, it’s so difficult to gain a consistent edge in the biotech sector, that some professionals feel the need to cheat. (One of the SEC charges against SAC Capital involves a portfolio manager relying on an unlawful “network of field doctors” to obtain non-public drug trial results.)

Of course, the rewards for getting it right can’t be beat. But, by the same token, the penalty for getting it wrong is steep.

As Mark Lehmann of JMP Securities says, “Returns have been great but the risk is huge… If a company gets a drug to market, the stock can double or triple. If not, the results can be devastating to your portfolio.”

So what’s an everyday investor to do? Simply move on to other opportunities outside biotech, as Munger suggests?

Heck no! The profit potential is too strong to do that. Here’s what I recommend, instead…

How to Exploit Average Intelligence for Above-Average Gains

If you don’t have the time or expertise to sleuth out individual biotech stocks destined to surge, the smartest (and safest) way to invest in the sector is via an exchange-traded fund.

Of course, whenever anyone talks about biotech ETFs, they default to the iShares Nasdaq Biotech ETF (IBB).

It’s the biggest biotech ETF, with roughly $3.7 billion under management. But it’s really nothing more than an over-weighted bet on the four bellwethers in the sector: Celgene (CELG), Gilead Sciences (GILD), Amgen (AMGN) and Biogen Idec (BIIB). The market caps for each company check in at $61 billion, $95 billion, $84 billion and $53 billion, respectively.

A whopping 32% of the fund’s assets are tied up in these mega-cap stocks. Meanwhile, investments in biotech stocks with the most upside potential (i.e. – small and micro caps that are on the cusp of FDA approvals or being acquired) routinely make up less than 1% of the fund’s investments.

Case in point, only 0.53% of the fund’s assets are invested in promising biotech, like Celldex Therapeutics (CLDX).

Not to mention that 97 stocks out of the 125 tracked by the ETF – or almost 80% of its holdings – have portfolio weightings of less than 1%. More than a dozen carry less than a 0.10% weighting.

So no matter how high and how fast these tiny stocks rise, the impact on the overall fund performance promises to be muted.

That’s the downside of a market cap-weighted fund, though. You get too much exposure to the big companies and too little exposure to the smaller ones.

And everyone knows that it’s much harder for a large company (like $61-billion market cap Celgene) to double its business and share price than it is for a smaller company (like $2-billion Celldex).

Enter, SPDR S&PBiotech ETF (XBI).

Instead of being market cap-weighted, XBI is equal-weighted. So an equal proportion of the fund’s assets are invested in each holding.

That means each stock promises to impact the overall fund performance equally, too.

Although it boasts just 58 holdings, it provides much more exposure (55%) to smaller- and micro-cap names, including Celldex. In contrast, large-cap holdings only make up about 14% of the fund’s investments.

Bottom line: The easiest way to overcome the problem of a lack of expertise in biotech stocks is to invest in an ETF, not an individual stock. That way, our downside is protected, thanks to the power of diversification. And to ensure that our upside isn’t capped, too, we just need to focus on funds with more exposure to small caps.

Hope this helps, Todd. If you’re still after a single biotech stock to buy, stay tuned. I’m finishing up my research on a company with a compelling tie-in to the unfolding crisis in Syria. I promise to report back with my findings shortly.

Ahead of the tape,

Louis Basenese

The post The Smartest Way to Play the Booming Biotech Sector appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: The Smartest Way to Play the Booming Biotech Sector

USDCHF is facing the support of the lower line of the price channel on 4-hour chart, a clear break below the channel support will indicate that the uptrend from 0.9147 had completed at 0.9455 already, then the following downward movement could bring price to 0.8500 zone. On the upside, as long as the channel support holds, the fall from 0.9455 would possibly be consolidation of the uptrend, one more rise to 0.9550 area to complete the upward movement is still possible.

Provided by ForexCycle.com

The Forex market possesses huge potential for delivering you good profits. You just have to fulfill one condition and that is investing with proper and a well-researched strategy. Many people usually just enter into Forex market without even having proper information about the Forex thing. As a result they lose lots of money and develop a harsh opinion about Forex. If few hours would have been spent by same investor in studying the dynamics pertaining to currency movements along with their implementation then it goes without doubt that he would have made much profit in his trade.

All the traders do not have much time that they can keep on watching the market all the time. Besides, all the traders do not also possess that skill set for interpreting important market information. This is where the Forex signals come into play and save the traders through some timely as well as accurate indicators. One can consider Forex Signals as a significant investment tool which can be helpful in making some wise decisions regarding the investments. Raw data as well as insights are provided by these signals regarding the market allowing you to go for the trades that have the least possible risks involved in them.

The Forex signals usually follow a given mechanism for assisting the traders to make successful trades. Some of the professional analysts and traders take very huge data from the market to be used as the input. Once they have all the necessary data, they perform some complicated fundamental, mathematical and technical analysis for generating some accurate signals that can alert the traders regarding fluctuations that can take place in Forex market at a given point in time. Afterwards these signals are provided to the traders that have subscribed for the service so that they can use these signals for making appropriate decisions about their future investment in the Forex market and stay risk free.

Forex Signals are often referred to as the ‘technical indicators’ and these are the data points which are normally used for the currency movements predictions. In this article we’ll examine two most famous Forex signals that are being used nowadays.

Signal No. 1: The Relative Strength Index or RSI

The Relative Strength Index indicator is used for measuring ratio of the upwards movements to the downwards movements taking place on market, normalizing the results to range in-between 0 and 100.

When some instrument, just like the currency pair, is moved to seventy or some greater value on RSI, this instrument is then considered as ‘over bought’. Similarly, when some currency pair is moved to thirty or less on RSI then it is considered as ‘over sold’.

Hence, we can say that RSI is necessarily one broad measurement for the market demand in any given currency. However, it should be kept in mind that some spikes or drops might also happen due to so many different reasons, which don’t essentially have to indicate some trend being developed.

When it comes to relative strength it’s particularly beneficial in the spot trading as well as some other mid-range approaches, but it’s not just the single indicator that one should be observing, especially if you have an intention of the implementation of some long-range approaches.

Signal No. 2: The Stochastic Oscillators or SO

The charts that have been derived from SO are often used for indication ‘over sold’ and ‘over bought’ conditions regarding the currencies that are there in exchange market. Typically, percentage scale ranging from 0% to 100% is used for expressing these particular conditions.

This Stochastic Oscillators method was actually derived from some of the observations made in history regarding market phenomena that was centered about closing trades. According to an observation, during the time towards closing, the upwards as well as downwards trends of the conditions started to move towards extreme ends on the scale.

Two lines are used for charting the buying and the selling conditions: one is referred to as %K and the other is referred to as %D. If there is any deviation between the two lines against price action for a specific currency then it can be treated as one solid Forex signal.

Here we end this up and the discussion of the two most famous Forex signals ends here. It is not that these are the only Forex signals in use today. There are some other signals as well that are technically more complex and have been derived from the ‘Elliot Wave theory’ and the ‘Gann numbers’.

This thing which is good about these Forex signals is that it is not necessary that only the people who are math experts can use these Forex indicators because a lot of solutions are out there in the market in the form of some commercial software.

Author Bio

Khurram Shahzad is a financial expert specializing in Forex Trading; he is also a contributor to web site http://www.metatrader5.com/en/trading-platform/trading-signals, which provides comprehensive and extremely simple trading signals.

By The Sizemore Letter

“Tokyo 2020 Olympics could be shot in the arm for struggling Japan.”
–NBC News

“The successful 2020 Olympic bid signals new hope for Japan.”
–Time Magazine

So, that’s all it took.  Twenty years of economic stagnation and all Japan needed to get back on its feet was that the summer Olympics be hosted in its capital.  And after two decades of secular bear market, Japanese stocks are a buy again.  Such a shame no one thought of this sooner.

If you believe that, I recommend you close your brokerage account, withdraw the cash balance in a duffel bag, and then douse it in gasoline and set it on fire.  Because if you believe Japan is investable, you’re inevitably going to lose your money.  We might as well just skip a few steps and go directly to the fiery duffel bag.

But aren’t the Olympic Games good for the economy?

That’s the received wisdom.  But the evidence here is sketchy at best.

London hosted the 2012 Summer Olympics, and by the UK’s own estimates, ticket sales boosted British GDP by a whopping 0.2% in the third quarter of 2012. That’s hardly worth mentioning.

Hotels and food and beverage services picked up a little during the quarter the Olympics were hosted.  But the final analysis by the British government was that the overall impact was modest, and that consumption dollars spent on the Olympics might have simply “displaced other activity.”  In other words, an Olympic ticket came at the expense of a movie ticket that might have otherwise been purchased.

But wasn’t it good for employment?

Not really.  Quoting the UK Office for National Statistics, “Employment agencies showed some strength in the quarter and it is possible that some of this strength was related to the Olympics. However, there was no direct evidence from survey respondents to support this.”

And hosting the Olympics isn’t free.  It cost the UK £9 billion to host the games, which amounted to £142 for every man, woman and child in the country.   (This is the part of the tab that the government picked up; private sponsors paid for quite a bit more.)

Of course, London’s transportation and infrastructure were improved in preparation  for the Games, and the UK will continue to reap the benefits of those improvements for years to come.  That has value, even if it is hard to quantify.

But would this matter to Japan?

Absolutely not.

Japan expects to spend about $6 billion building, among other things, 11 new sporting venues and 10 temporary ones.  But Olympic expenses rarely come in under budget;  Russia’s 2014 Sochi Olympics are on track to cost $50 billion, and the 2012 London Olympics went over budget by nearly 400%.

And the last thing Japan needs is new infrastructure.  At the risk of sounding alarmist, in another few decades there will be no Japanese left to use it.  Japan’s population shrunk by 200,000 people last year, and Japan is the oldest country in the world.  A quarter of the population is over the age of 65…and that number creeps up every year.

Hosting the Olympics provides the proverbial bread and circuses for the population, but it does nothing to address the country’s long-term problems.  With sovereign debts approaching 250% of GDP—and with fewer Japanese taxpayers to service that debt every year—Japan is heading towards a sovereign debt meltdown.

Japan’s domestic market is dying.  Not even Japan’s world-class multinationals see opportunity there today.   As a case in point, Suntory Beverage & Food (Japan:2587), one of Japan’s largest consumer staples companies, announced today that it would be buying the Lucozade and Ribena drink brands from Britain’s GlaxoSmithKline (GSK) for $2.1 billion as a means of diversifying outside of Japan.

Suntory has been aggressively expanding outside of Japan, where the company already generates just shy of a third of its revenues.  Expect this to continue, as it is the company’s only outlet for growth.

So, with all of this said, are their pockets of opportunity based on the Olympics bid?  Maybe.  But I wouldn’t get too attached, as the companies best positioned to profit have already seen their share prices jump.  Taisei Corp, which built the stadium for the 1964 Olympics, saw its shares jump by 17% on hopes that it will be involved in the 2020 games.

The best course of action?  Move on.  Ignore the Olympic hype and seek your investment opportunities elsewhere.

This article first appeared on InvestorPlace.

Charles Lewis Sizemore, CFA, is the editor of the Sizemore Investment Letter and the chief investment officer of investments firm Sizemore Capital Management. As of this writing, he did not hold a position in any of the aforementioned securities. Click here to learn about his top 5 global investing trends and get your copy of “The Top 5 Million Dollar Trends of 2013.”

This article first appeared on Sizemore Insights as Japan Distracts Investors With Olympic Five-Ring Circus

Join the Sizemore Investment Letter – Premium Edition

Article by Investazor.com

Trading breakouts is usually pretty tricky. It can always become a false breakout that could ruin the trader’s trade, by hitting the Stop Loss. To use this kind of systems a trader should find a combination of elements that will lower the probability for a false breakout. As no system is 100% accurate there should always exist a Stop Loss to limit a possible loss.

For this strategy to work, we recommend using currency pairs (or other types of instruments) that usually have high volatility. It can be used on any time frame, but our favorite remains the 15 minutes.

First step is to find a strong upside or downside move, as you can see in the example bellow. The strong move usually suggests that investors are set on a direction. After you have spot such a move, wait for a sideways move (consolidation) that will not go below/above (depending on the primary move) the 23.6 Fibonacci retrace. If these two conditions are met the next move would be to set a buy stop several pips above the high, taking into consideration also the spread.

Chart: GBPJPY, M15

As you can see in our chart, if the Buy Stop is triggered the trader should set a Stop Loss order at the low of the consolidation. There can be several Take Profits levels. First would be a projection of the width of the range, and next could be a projection of the prior move. The second one can give the trader a wonderful risk to reward ratio.

Our example is on an up move, but this strategy can be applied also on a down move. The trader just has to follow the same steps and enter in a trade only if the conditions are met.

The post Simple Breakout Trading System appeared first on investazor.com.

Source: Brian Sylvester of The Gold Report (9/9/13)

http://www.theaureport.com/pub/na/what-western-supply-and-asian-demand-mean-for-gold-brien-lundin

The global rally for gold underway since late June will soon translate to juniors, says Brien Lundin, CEO of Jefferson Financial and the publisher/editor of Gold Newsletter. With so many undervalued companies in safe North American jurisdictions, he sees no reason to add sovereign risk to a portfolio. In this interview with The Gold Report, Lundin details which companies he follows and why, highlighting one area where major discoveries are “lined up like pearls on a string.”

The Gold Report: Brien, judging from the tone of the September 2013 issue of Gold Newsletter, you have renewed excitement for precious metals equities. Why?

Brien Lundin: You’re absolutely right, and it’s all based on the metals markets. In a typical year, the precious metals markets bottom out at the end of July to early August, when physical demand from Asia abates, before kicking back up in late August and September.

This year, gold bottomed out in a final downward thrust at the end of June and then started building back up. At the same time, a lot of anecdotal evidence began to reveal an extremely tight supply situation in the global gold market. Taking all of that together, I was fairly confident in calling a bottom for gold.

Then, the equities started to respond. However, the situation in Syria prompted some safe-haven demand in the last few days and the mining equities stepped back; with safe-haven demand, investors want the metal, not the paper. But that was just a brief blip. I see an open road ahead for gold metal and gold equities.

TGR: Gold is moving higher, but without much of an explanation. What is your take on the situation?

BL: The market has had some strong performance, jumping $15, $25, even $35 in a day. I think those spikes are a result of the extremely tight demand situation in the gold market. In the spring, Western speculators and some of the big holders of SPDR Gold Trust (GLD), the gold exchange-traded fund (ETF), abandoned the market in anticipation of the imminent end of quantitative easing (QE). We also had some manipulation, notably on April 12 and April 15, in a blatant attempt to force the market through sell stops, thus benefiting from short positions. As a result of these speculative selloffs, the market was dramatically oversold.

But this rapid price decline sparked tremendous bargain hunting in Asia. Asian demand more than overcame the selling by Western speculators. The supplies of gold in the Comex warehouses dropped to record low levels. We saw gold being transferred from vaults in the West to the East, causing the rare occurrence of a negative Gold Forward Offered (GOFO) rate—the interest rate difference between gold holdings and LIBOR. That has happened only twice in this bull market, at the beginning of the major bull trend around 2000, and in 2008. Both times it marked a major turnaround in the metal.

There is a lot of evidence that this unprecedented supply situation was behind the sharp, brief upward spikes in the gold price. As you add up these sharp spikes, gold was gradually and then more rapidly coming off that bottom in late June.

There are number of players in the East who want gold and are willing to pay higher prices. There also is a shortage of gold in the West. From a fundamental supply-demand standpoint, we still have some room to go in this oversold rebound.

TGR: Could you expand on why you believe China will soon be “driving the bus” for the global gold market?

BL: The Shanghai Gold Exchange (SGE), putatively a futures exchange, is actually a physical delivery mechanism for the Chinese market. Most of the gold traded on the SGE is actually delivered to end-users. As of the end of June, SGE reported nearly 1,100 tons of gold have been traded so far this year. That equates to all of the metal that had been traded on the SGE in 2012, which itself was a record year.

Put another way, at this rate of consumption, demand on the SGE this year will equal the entire newly mined global output projected for 2013. In effect, all of the new gold supply in the world is being consumed by a single exchange in a single nation.

China will soon exceed India as the largest source of gold demand in the world. There are demographic factors behind this: a deep cultural affinity for gold, a growing population and a rapidly growing middle class. The per-capita use for gold in China is still relatively low but has a lot of upside. As incomes grow in China, gold demand will grow on a per-capita basis even as the population grows. The potential for growth in the demand for gold is almost exponential.

TGR: Who in China is buying gold?

BL: The assumption is that the People’s Bank of China is buying gold to build up the nation’s gold reserves. China also has become the world’s largest gold producer, yet none of the gold it produces ever gets exported.

There is tremendous upside potential in central bank buying of gold in China, in that China holds a huge amount of U.S. dollars in its foreign currency reserves. If it were to increase its gold reserves to the average level of most developed nations, it would quickly absorb all of the available metal in the global gold market.

TGR: Would the gold price be on an even stronger upward trajectory if India hadn’t taken measures to curb gold buying?

BL: Yes, Indian demand would have been much stronger if its central bank hadn’t increased the tariff in phases to 10%. Just as importantly, it imposed an 80/20 rule, which requires that 20% of all of the gold imported into India must be subsequently exported as finished goods. Those rules, imposed without explanation of how to follow them, effectively shut down Indian gold imports from the end of July through the end of August.

TGR: You recently wrote “Gold has bottomed. The market is set up for a large sharp rally when and if a short covering stampede is sparked.” What could those sparks be?

BL: One appears to be the situation in Syria, although we don’t know how that will develop.

A more important and fundamental driver for a short-covering rally would be the flow of economic data in the U.S., where economic growth had been showing signs recently of slowing. That slowdown, if it were confirmed, would eliminate any justification for tapering off the Federal Reserve’s QE program. A growing consensus that QE will be here for a while will be the driver that gets the shorts to abandon their bearish gold positions.

TGR: How does all this translate to gold equities?

BL: The majors had a fairly good rebound and were outperforming gold until the Syria situation erupted. That touched off broader equity market selloffs, and the gold stocks were victimized.

Interest is just starting to filter down to the junior resource stocks. I’m not as negative on that subsector as some of my compatriots. Greed is the most powerful motivator in the investment markets, and greed will draw investors to the juniors like iron filings to a magnet if we see a sustained upward trend in gold and silver.

TGR: What do patterns in the market trends tell you?

BL: This year the gold market has experienced a number of head fakes, where we thought we had a bottom, then it dropped to a lower plateau, then dropped again. I think the June 28 bottom will hold. The fundamental evidence argues for an extremely tight situation in the gold market, which will keep the prices from dropping to an even lower plateau.

A lot of evidence, from stochastics to moving averages, is delivering very strong buy signals. There is anecdotal technical evidence like the negative GOFO rate and backwardation in the near-term futures. All this added together points to higher gold prices and a more sustained rally.

Yet, in the broader market, sentiment is still not very positive for gold. We’re still climbing a wall of worry in regard to sentiment, yet, for those willing to look, an increasing amount of evidence is pointing toward higher prices. This is really the perfect situation.

TGR: Your newsletter reports on a host of companies. Can you tell us about some junior plays with leverage to the gold price, starting with those that have assets in safer jurisdictions like Canada and the U.S.?

BL: Safer jurisdiction is an important point. In this market, there are so many undervalued companies out there that there is no reason to take on sovereign risk if you don’t have to. As we start this rebound, it’s important to look for undervalued juniors that have proven resources or are in production. You can get them at bargain level prices, and they will be the first to respond.

I expect Brigus Gold Corp. (BRD:NYSE.MKT; BRD:TSX) to surprise a lot of people. The company spent a lot of money to upgrade its facilities and prepare for a higher production rate. Its capital expenses will therefore drop considerably going forward, while it benefits from the higher production rate.

TGR: Brigus just recently increased its guidance by 5,000 ounces (5 Koz) through the end of 2013.

BL: And the exploration potential in the Grey Fox deposit gives it a good growth profile.

TGR: Brigus’ new estimate for Grey Fox, issued in July, is up to 736 Koz. How big could Grey Fox get?

BL: It’s hard to tell, but grade is just as important as size. Its grades are so exceptional that, if Brigus were a junior, it would be the exploration story of the year. The widths are good, too. Grey Fox should generate fairly high-margin production given the richness of the mineralization. It will be significant to the company’s growth profile because of its size, and significant to its earnings profile because of the high grades.

TGR: How about some other names?

BL: A number of exploration stories in the U.S. and Canada are undervalued. Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) had great exploration success in 2011 and 2012 in Nevada, then was forgotten by the market in the downturn. It has a great geological staff. I think it has narrowed down on the trend and the mineralization. The company is selling at prediscovery price levels, which I find very attractive.

TGR: Gold Standard Ventures recently raised $5 million ($5M) to continue exploring the Railroad project in Nevada. How important was that?

BL: Its ability to raise money validated its project and its upside. Any experienced, knowledgeable hand in Nevada exploration will tell you that Gold Standard Ventures is as close to a sure thing as you can find in Nevada. It’s the wise guys’ play in Nevada exploration.

Comstock Metals Ltd. (CSL:TSX.V) has a project in the Yukon that could be an analogue to the Underworld Resources Inc. discovery at Golden Saddle—the discovery that sparked the new Yukon gold rush. Recent results were mixed, but did nothing to extinguish the upside potential because it has a number of targets on the project. The question is whether the grades will be high enough over the current widths to justify development in the Yukon. I think it has a really good shot at it.

TGR: Comstock had some good results in the VG zone of the QV project. Is that the tip of the iceberg?

BL: It’s the tip of the exploration potential. It will take a bit of drilling to see if there’s an iceberg underneath. Comstock has good showings from the Shadow and Stewart zones. By no means is the potential for VG cut off at this point. The company knows where the mineralization is trending. There is plenty of potential there.

At this point, the company needs another phase of drilling before the season shuts down to see if it can expand the known gold zones. In my view, there is a joint venture ahead for Comstock. That would advance the project without further financial drain.

TGR: What’s happening with Colorado Resources Ltd. (CXO:TSX.V)?

BL: Similar to GoldQuest Mining Corp. (GQC:TSX.V), Colorado Resources had some blockbuster results on its first few discovery holes, but subsequent holes did not live up to those standards. The company has established the potential for a very large resource at low, but mineable, grades. Its job now is to figure out the targets and maximize the grades.

TGR: Do you have another name?

BL: Another overlooked company working in Nevada is Rye Patch Gold Corp. (RPM:TSX.V; RPMGF:OTCQX). It had a great plan to develop a number of larger-scale, lower-grade satellite deposits in Nevada where, due to the infrastructure, resources can be produced in a hub-and-spoke type of an operation with a central mill.

The key with Rye Patch is its legal dispute with Coeur Mining Inc. (CDM:TSX; CDE:NYSE), in which Rye Patch restaked some claims that Coeur had let lapse. The two companies recently came to an agreement, but the agreement didn’t meet the market’s hopes of a buyout for Rye Patch. However, the agreement did give Rye Patch significant cash flow in the form of a $32M royalty on the disputed claims. This will limit dilution or will allow the company to explore with no drain on its capital resources for years to come.

The next step for Rye Patch is to prove the viability of its resources and exploration targets. It has some walking-around money and a great management team. For a junior, $32M is extraordinary. Today, the company isn’t being valued on the basis of that cash flow. Based on cash flow alone, it is a great speculative investment.

TGR: How does silver fit into what’s happening with gold?

BL: Silver is leveraged to gold. It follows the moves of gold, but it exaggerates those moves both upward and downward.

With gold rising, silver is outperforming gold—a sign of a healthy bull market. In turn, silver equities are a way for investors to leverage the moves in silver. Investors get a double-play action by investing in silver equities.

TGR: Which silver plays are you following?

BL: I like Endeavour Silver Corp. (EDR:TSX; EXK:NYSE; EJD:FSE) and Great Panther Silver Ltd. (GPR:TSX; GPL:NYSE.MKT). Santacruz Silver Mining Ltd. (SCZ:TSX.V; 1SZ:FSE) is a new recommendation of ours.SilverCrest Mines Inc. (SVL:TSX.V; SVLC:NYSE.MKT) has been a very profitable recommendation forGold Newsletter readers.

We also like Silver Standard Resources Inc. (SSO:TSX; SSRI:NASDAQ) and Silvercorp Metals Inc. (SVM:TSX; SVM:NYSE).

TGR: Do you want to expand on any of those?

BL: Santacruz made it into production at an incredibly low cost. It has laid out production plans for its three projects over the next few years. It’s a great growth story.

SilverCrest has two projects in line, is growing production and has a great management team. It offers leverage to the rising silver price and to the company’s growth.

Endeavour Silver has become much more aggressive in its acquisitions over the last year, taking over and turning around mines that other companies had trouble with. That aggressive growth strategy will pay dividends going forward.

Great Panther is a well-managed company with a number of projects under development. It is cutting costs and optimizing operations.

TGR: All of those projects are in Mexico. Are you following any Mexican gold plays?

BL: Mexico is a great mining region. I really like Cayden Resources Inc. (CYD:TSX.V; CDKNF:NASDAQ). The company has two primary projects, one in the Guerrero Gold Belt. It sold off a portion of that project—Morelos Sur—to Goldcorp Inc. (G:TSX; GG:NYSE)—and raised $15.7M in cash to fund another couple of years of exploration without any dilution.

Cayden’s primary exploration project now is El Barqueňo, where it has gotten tremendous trench results over a wide-scale area. It recently received its drilling permits and will start drilling soon. That project’s potential, combined with the company’s cash position, its great management team and its relatively tight share structure, offers a lot of upside.

TGR: The Guerrero Gold Belt is one of the prime areas for gold exploration in Mexico.

BL: It is. Geophysical anomalies mark every big discovery along that belt. A number of multimillion-ounce discoveries line up along that belt like pearls on a string.

Cayden adjoins Goldcorp’s Los Filos project, one of the top two gold-producing mines in Mexico. That’s why Cayden was able to sell some of Morelos Sur and can still sell the Las Calles portion of its property, where it has already demonstrated that the mineralization extends onto its ground from Goldcorp’s operations.

Cayden also has a large geophysical target called La Magnetita, where it has only scratched the surface, so far without very positive results. Given that La Magnetita is the largest geophysical anomaly in the trend, there is still tremendous blue-sky potential there.

TGR: When will it get to drill that?

BL: It has already completed a first-pass drill program. The results indicated the right kind of mineralization, but the grades were low. La Magnetita is such a large target that it will take time and more drilling to find the deposit or kill off the potential. Right now, Cayden is focusing on El Barqueňo, which offers the near-term potential to move the company with some good drill results.

TGR: Gold Newsletter is good at getting out in front of certain companies. What are some new names that have had early success?

BL: Columbus Gold Corp. (CGT:TSX.V) is one. The company has a resource of more than 4 million ounces. People don’t seem to realize that it has upside potential and appears to be an economic project. It’s still selling for a pittance, a fraction of where it should be compared to its peer group.

You also don’t read much about Lara Exploration Ltd. (LRA:TSX.V). The company’s focus is on South America, primarily in Brazil and a bit in Peru. It is a pure prospect generator, with a superb management team that sticks to the business model. It also has a number of strong, smart shareholders, so there has not been a lot of volatility in the stock. Nonetheless, it took a downturn recently when it reported that several of its projects had been dropped by its joint venture partners. But that really is just part of the business plan; it’s a numbers game, rolling through a long list of projects in its pipeline. This is a bargain right now.

TGR: Tell us what people can expect at the New Orleans Investment Conference this November.

BL: We have a tremendous lineup, highlighted by Dr. Ron Paul, the iconic leader of the libertarian movement in the U.S. Dr. Charles Krauthammer, one of the smartest guys in geopolitical analysis out there today, and Peter Schiff, one of the smartest guys in the investment business, will be there. Other big names include Dr. Marc Faber and Dr. Benjamin Carson.

Dennis Gartman, who has made some very accurate calls on the commodities markets, and Dr. Martin Weiss, a leading authority on the bond market and rating financial institutions, are scheduled. And, of course, we have dozens of today’s top experts in every investment area.

TGR: Do you have any parting thoughts on the gold and equities space?

BL: Over the past 12 or 13 years we’ve seen a shift to a secular megatrend in the metals and commodities markets. There have been some tremendous profit opportunities along the way, including periods when junior resource stocks multiplied in value very rapidly. We’ve also seen some severe setbacks.

Right now, we’re seeing an analogue to previous periods where, with courage and cash, investors could reap tremendous gains as the metals rebound. All the evidence is pointing toward a new rally in the metals. It’s time finally for investors to get back into the market.

TGR: Brien, it’s always a pleasure to talk with you.

With a career spanning three decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference, the oldest and most respected investment event of its kind.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:

1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: Brigus Gold Corp., Gold Standard Ventures Corp., Comstock Metals Ltd., Rye Patch Gold Corp., Great Panther Silver Ltd., Santacruz Silver Mining Ltd., SilverCrest Mines Inc., Silver Standard Resources Inc., Cayden Resources Inc., Colorado Resources Ltd. and Goldcorp Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Brien Lundin: I or my family own shares of the following companies mentioned in this interview: Comstock Metals Ltd., Rye Patch Gold Corp., Cayden Resources Inc. and Lara Exploration Ltd. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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By www.CentralBankNews.info     Hyun Song Shin, professor of Economics at Princeton University, will become the new economic adviser to the Bank for International Settlements (BIS) while Claudio Borio, long-time BIS staffer and one of the world’s most respected monetary economists, will head the BIS’ Monetary and Economic Department (MED).
    It appears to be the first time in the 83-year history of the BIS, known as the central banks’ bank, that the position of economic adviser and head of the MED has been divided between two people. It is also the first time the BIS has chosen an economic adviser that is neither European or North American, illustrating the BIS’ shift away from its European roots toward a truly global institution.
    Borio and Shin will become members of the BIS’ executive committee and contribute to the general management of the BIS, the world’s oldest international financial institution that is based in Basel, Switzerland. The BIS board comprises he world’s most powerful central bank governors, such as Ben Bernanke of the Federal Reserve, Haruhiko Kuroda of the Bank of Japan, Mario Draghi of the European Central Bank and Zhou Xiaochuan of the People’s Bank of China.
    Shin, a Korean national, takes up his new job as the seventh economic adviser to the BIS on May 1, 2014. In addition, he will be head of research and have primary responsibility for economic research.
    Borio, currently deputy head of the MED and director of research and statistics, takes over on Nov. 18, the day Stephen Cecchetti, current BIS economic adviser and head of MED, leaves after a planned five-year term that has witnessed sweeping changes to central banking.
    In response to the global financial crises that began in 2007, central banks in advanced economies slashed interest rates to record lows and unleashed massive monetary stimulus through asset purchases,  known as quantitative easing (QE).
   The main challenge facing central banks in coming years will be the unwinding of quantitative easing. With the U.S. Federal Reserve likely to begin reducing its asset purchases in the near term, the prospect of an exit from QE has already caused deep ripples in global financial markets and especially emerging market economies as capital starts to shift away from them and back to advanced economies.
    Another theme that will mark the work of Shin and Borio is coming years will be how central banks incorporate the pursuit of financial stability into the monetary framework.
     Under Cecchetti, the BIS deepened its understanding of how the financial cycle – in contrast to the shorter and more commonly-understood business cycle – impacts economic growth and typically ends in a financial crises. Another of Cecchetti’s contributions to the BIS was to strengthen the links to the global academic community, a shift that began around 2000.
    Borio, who joined the BIS in 1987, is one of the world’s leading authorities on monetary economics and has been instrumental in developing the understanding of financial cycles. He first became known in the early 2000s for arguing that financial imbalances can build up in a low inflation environment and it is appropriate for central banks to respond to such imbalances.
    At that time, most central banks mainly saw their role as keeping inflation low and rejected the notion that they should prick any asset bubbles.
    But together with BIS Economic Adviser Bill White, Borio continued to explore how an environment of low inflation, financial liberalisation and innovation allowed financial imbalances to grow and set the stage for a crises. This research formed the basis for BIS’ repeated warnings of the forces that eventually led to the global financial crises.
     Shin is currently the Hughes-Rogers Professor of Economics at Princeton University and his research has focused on financial institutions, risk and financial stability issues. Prior to moving to Princeton in 2006, was professor of finance at the London School of Economics and holds a doctorate in economics from Oxford University.
    In its statement, the BIS said Shin “comes with an outstanding publication record and his academic research and policy interests are well aligned with the mission of the BIS and central banks.”
    While on leave from Princeton in 2010, Shin served as senior adviser to the Korean president on international economy. He was also an adviser to the Bank of England from 2000 to 2005, a resident scholar at the International Monetary Fund in 2005 and academic visitor to the BIS in 2001, 2002 and 2003.