Month: December 2013

Article By RoboForex.com

Analysis for December 17^th, 2013

EUR/USD

H4 chart of EUR/USD shows ascending trend, which is indicated by bullish Tweezers and Harami patterns. Three Line Break chart and Heiken Ashi candlesticks confirm ascending movement.

H1 chart of EUR/USD shows correction, which is indicated by Evening Star and Shooting Star patterns inside resistance area. Three Line Break chart indicates descending correction; Heiken Ashi candlesticks confirm ascending movement.

USD/JPY

H4 chart of USD/JPY shows descending correction, which started after Engulfing Bearish pattern. Three Methods pattern, Three Line Break chart, and Heiken Ashi candlesticks confirm descending movement; Harami pattern indicates possible bullish pullback

H1 chart of USD/JPY shows ascending movement, which is bullish Harami pattern. Three Line Break chart confirms ascending movement; Heiken Ashi candlesticks indicate that sideways correction continues.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

AUDUSD stays in a downward price channel on 4-hour chart, and remains in downtrend from 0.9756 (Oct 23 high), and the fall extended to as low as 0.8909. Resistance is located as the upper line of the channel, as long as the channel resistance holds, the downtrend could be expected to continue, and further decline to test 0.8847 (Aug 5 low) support is possible. On the upside, a clear break above the channel resistance will indicate that the downward movement from 0.9756 is complete, then the following upward movement could bring price back to 0.9900 zone.

Provided by ForexCycle.com

By MoneyMorning.com.au

Over the next 10 years there will be a lot of change. In fact it will be so significant you’ll struggle to remember just what things were like back in the ‘Tensies’ (2010-2019).

It will arguably be the most technologically progressive decade we’ve ever seen.

The few days I spent at the LeWeb technology and innovation conference in Paris last week reinforced this point.

The first point is what I mentioned last week in Money Morning. That one of the biggest trends of 2014 will spark off an enormous amount of social change.

Distributed networks, driven by technology, will grow in numbers, size and power. You’re already seeing this with the break down of industry. Manufacturing, TV & entertainment and right now banking are all going through monumental change. And what it’s all leading towards is a connected future…a world of ‘immersive technology’.

I’ve been on this topic for a while now, but ‘immersive technology’ will be huge. It will change how you live your day-to-day life.

There will be other big technologies that will reshape our future. But in terms of what you do day to day and how you live your life, nothing will come close to ‘immersive technology‘.

Day two of LeWeb made this more evident than the first day. I won’t run through all the speakers and what they had to say. But many share a similar view of how everything will interact with…everything.

Connected devices and the internet play a role in it all. But what’s really at the heart of this is how your smartphone becomes your primary interface. Well it could be your smartphone, your tablet, Google Glass or whatever connected device you have.

The point is your world is about to be really connected. And the interface you use will be anything that you can use to view, control and manipulate your immersive world.

Nest Labs: The Connected Home

You’ll first start to see and experience all this change in your own home. In fact it’s possible you’re already experiencing the connected, ‘smart’ home. I’ll take a stab and say you’ve got Wi-Fi. It’s probable you’ve got a smartphone, possibly a tablet and maybe a ‘smart’ TV.

You’ll be able to use your devices to watch TV, maybe even control the TV. You might be a bit more advanced and even have a lighting system you can control from your phone.

Well get ready, because that’s just the beginning of it all. And one man at LeWeb gave a greater insight into the connected home than any other. It was Tony Fadell, Founder & CEO of Nest Labs. And here’s the inside word…Nest Labs is the Apple of Home Products.

Tony helped create the first 18 generations of iPod and first three generations of iPhone at Apple.

Then he left to start Nest Labs. Nest’s first product is the Nest Thermostat. Now they’ve added Nest Protect (the smoke alarm reinvented). These are two products that Nest has reinvented all within the last year and a bit.

But Tony thinks there’s more. Although he didn’t go into specifics. It’s possible Nest has up to ten different products in the pipeline.

While talking to the audience about the connected home he had this to say about the mentality Nest take into the design studio when creating products:

‘How does your person change? How does your car change, how does your home change? And so when we look at that we look at products you must have and how they’re affected by the smartphone and how they can totally change the experience when it is connected.‘

In short, it’s all about how we can connect everything to make life better.

That’s the philosophy at Nest. And it’s with this mentality and approach that they’re disrupting some big markets.

Nest is dealing with what seems to be a common problem for a lot of these revolutionary start-ups. Having the incumbents – their competition – sue them.

As Tony put it, long-standing big players in markets don’t like new competition. In these often monopoly or duopoly markets, innovative start-ups busting open the market aren’t welcome. As Travis Kalanick, founder of Uber put it yesterday, ‘I could definitely wallpaper our office with cease and desist letters.‘

‘If you can’t innovate, you litigate,’ seems to be the way that big business operates when a new, young upstart comes along like Nest (or Uber) to shake things up.

But back to Nest. They decided that litigation was going to come their way. With such good, disruptive products it was inevitable. That’s why Nest decided early on to protect their interests. They’ve got 100 Patents issued, 200 on file and another 200 coming. Because they know that to disrupt these long standing markets, they need to disrupt everything.

Nest Protect: I Bet This Time Next Year You’ll Have One

And it might sound very simple right now but a connected smoke alarm is the very beginning of your connected home.

Right now, reading this you could look around and see probably a dozen things that haven’t changed over the last 20 or 30 years, but that are about to undergo fundamental change.

When was the last time the power point was innovated? How about the oven? Fridge? The lock on the door? The door itself?

With the connected home, you’ll see a new level of functionality. It will mean greater security and comfort for everyone. Imagine knowing what’s going on in your home from anywhere in the world.

Nest is slowly building momentum. The thermostat and smoke alarm are the first two. But there will be more. In fact, I’m almost certain that this time next year you’ll have a Nest product in your home.

Even if you can’t buy Nest locally, you’ll still have one. How is that possible you say?

Well here’s the thing. In the first nine days of Nest Protect being available something strange happened. Their sales data showed Nest Protect was in over 40 countries which they didn’t ship to. That’s right; some very resourceful people had installed and were using Nest even though they couldn’t buy one in their particular country. When Tony Fadell saw the data he simply said, ‘it blew my mind.‘

This indicates two key things. ‘Immersive technology’ is here. It’s arrived and is coming to your home (if it hasn’t already). It’s just the beginning and a company like Nest will drive it.

The other thing is that in markets that haven’t innovated, great change is coming. And it will be driven by huge distributed networks of people using technology to connect, create and share. And they’ll go around, and past, all existing forms of bureaucratic hierarchy to get what they want.

It’s an exciting time. It will be fun to watch it all play out over coming months and years.

Regards,
Sam Volkering+
Technology Analyst

PS: Kris and I believe we’ve found a company set to lead the way in immersive technology. Later on this week we’ll reveal some details about it. In fact, it’s just one part of an exciting development taking place with our premium investment service, Revolutionary Tech Investor.

I can’t reveal the full details yet because we’re still ironing out a few last minute details. All I can say is, if you’ve liked the idea of subscribing to Revolutionary Tech Investor before but you were put off by the premium price tag, I may have some good news for you.

Stay tuned.

Special Report: The ‘Wonder Weld’ That Could Triple Your Money

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By MoneyMorning.com.au

By MoneyMorning.com.au

The ratio I’d like to discuss today is ‘stock market capitalisation to GNP’. As you may have guessed, this ratio tells you whether the combined value of a country’s stock markets is worth more or less than its annual economic output.

Clearly, this ratio can’t tell you whether or not you should buy shares in a specific company. But it can be useful in deciding whether now is a good time to invest heavily in a market, or if you’d be better off holding back.

So what’s the rationale behind this ratio? Let me leave it to Warren Buffett, who in 2001, noted that it had predicted the bursting of the tech bubble.

‘The market value of all publicly-traded securities as a percentage of the country’s business – that is, as a percentage of GNP… is probably the best single measure of where valuations stand at any given moment. And as you can see, nearly two years ago [1999] the ratio rose to an unprecedented level. That should have been a very strong warning signal.‘

Indeed in March 2000 – the very peak of the tech bubble – the ratio reached an all-time high in the US. The Wilshire 5000 stock market index was worth 183% of US GNP.

That was hugely out of whack with history. As you can see from the chart below, this ratio (in the US at least) has been below 100% for most of the time since 1925.

Source: Bianco Research
Click to enlarge

You can also see from the chart that the ratio went as low as 61% in February 2009. So it has highlighted good opportunities to buy as well as flagging up times when the market was grossly overvalued.

Right now, the figure stands at 111.9%, according to Gurufocus. That suggests that the US market is currently overvalued, but not in a ridiculous bubble. Which is pretty much what I said in this article.

Can we use this ratio outside America?

Some people argue that you can use the ratio to value lots of different markets very quickly. Using this approach, if a country’s stock market/GNP ratio is around the 50% mark, it looks very cheap. If the ratio is over the 100% mark, it looks expensive.

This approach broadly seems to work in the States. But I think it’s dangerous to transfer it directly into other markets. The UK is a great example of how the ratio can be misleading. Right now, the ratio for UK market is 129%, suggesting it is more expensive than the US. But I don’t think that’s a fair reflection of the UK, which on many other measures is a good bit cheaper than the US.

Remember that many FTSE 100 companies do most of their business outside the UK. In fact, roughly two thirds of the profits generated by all the FTSE 100 companies are earned abroad. So it’s no surprise that Britain’s total stock market valuation is a significantly higher than GNP. These aren’t UK-focused businesses.

But that doesn’t mean the ratio is useless. Instead of comparing the stock market/GNP ratios between markets, it makes more sense to compare a single market to its own history. At 129%, the UK is currently about halfway between its historic low of 47% and its peak of 205%. So it’s not cheap, but it’s hardly grossly overvalued either.

What about other markets?

I’ve used this ratio once before here, when I wrote that ‘China’s future may be brighter than anyone can expect‘.

At the time, China’s stock market/GNP ratio was 48%. Looking at the market’s own history, the historic low for China is 45%. That’s a strong ‘buy’ signal if ever there was one.

Even then, I would never have suggested that anyone invest in China purely due to this ratio. The historical data for China’s markets is still quite short compared to the US.

But when you can see other positives in a market, this ratio can be very handy in helping you make a decision. And that low ratio is just one of the reasons why I’ve been enthusiastic about China recently.

Ed Bowsher
Contributing Editor, Money Morning

Publisher’s Note:  What Warren Buffett’s favourite valuation ratio says about markets today  originally appeared in MoneyWeek UK 

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By MoneyMorning.com.au

Source: Brian Sylvester of The Gold Report (12/16/13)

http://www.theaureport.com/pub/na/miners-should-launch-a-gold-cartel-or-risk-losing-everything-advocates-stephan-bogner

It’s no surprise that Stephan Bogner, analyst with Rockstone Research Ltd. and CEO of Elementum International—a precious metals trading and storage firm—advises investors to hold physical metals outside the banking system, but he also advocates mining companies keeping gold on their balance sheets and forming a cartel. In this interview with The Gold Report, Bogner discusses which exploration and development companies will be ready to produce when metals prices rise and shares his interest in the diamond, potash and uranium space.

The Gold Report: Stephan, two years ago, Europe was awash in fears of debt defaults and countries exiting the Eurozone. On a scale of 1 to 10, where are we today on Europe’s “fear meter?”

Stephan Bogner: I think we are between 3 and 5. Inflation in the Eurozone fell to 0.7% in October, its lowest level since January 2010. Deflationary risks, a stronger euro and economic weakness have motivated the European Central Bank (ECB) to cut rates to a record low of 0.25%. However, these unprecedented low interest rates substantially devalue savings in the Eurozone and increase the danger of bubbles.

I believe the downward pressure will get worse and companies will suffer. Once the companies start demanding loans, the ECB will pump liquidity into the real economy, and inflation will pick up. The ECB seems to want inflation, but to justify that, it first must strangle the economy so people indirectly demand inflation. They then become the scapegoats during the upcoming inflationary times.

TGR: Are European investors embracing gold as a hedge against these weaknesses?

SB: Along with some central banks, only the smart money is moving into gold and silver at the moment. People should buy when prices are declining and low, but they are not. The masses buy when prices are rising and high.

I anticipate negative real interest rates ahead. Once that happens, people will take their money out of the banking system and look for safe vehicles like gold and silver. It only takes 5% or 10% of depositors withdrawing their deposits to push a bank into bankruptcy. Hence, I anticipate new laws to prohibit cash holdings and to prevent bank runs, especially if nominal interest rates go below zero.

People are increasingly looking for alternatives to banks. Independent vaults offer exactly that. Instead of holding your cash in a bank account, you can buy gold and silver and store it in an independent vault outside the banking system. My firm, Elementum International, stores precious metals in a high-security facility inside a mountain in central Switzerland. Our clients can sell the metals to us at any time if they need cash. That is banking backed by real values.

TGR: Should volatility of the gold price concern investors?

SB: Volatility is seen as something negative and the media is propagandizing that gold is not a safe investment anymore because it is so volatile. However, I somewhat like it being volatile because it shows that the market is alive and that the market forces are fighting a dead-serious war. I would be more concerned if the price moves sideways on low volumes. Volatility means action and investors want to be where the action is. People should not ask who is selling but who is buying.

TGR: How do you see paper versus physical gold?

SB: I see paper as an instrument to drive people out of holding bullion and to get their hands on that gold. Gold prices are beaten down to achieve one thing: redistribution of real values. If investors believe that inflation will come, they should want to hold gold and silver now. However, there are very few physical gold and silver sources from which to purchase substantial quantities, so investors must be smart on how to accumulate. They can accumulate most when buying into a declining price after it has been high.

A lot of speculative money has left the precious metals markets. Someone bought into all that. China is importing huge amounts of gold, and India now imports massive amounts of silver. I think China will back its currency with gold or somehow utilize gold as a monetary asset once gold prices have started to rise toward $2,000/ounce ($2,000/oz) and/or once there is nothing left to purchase from a dried-up physical market. Russia may very well do so, too. There is no other solution to the growing financial excesses but inflation, so investors have got to go for gold. Follow the smart/quiet money and not the dumb/noisy money.

TGR: Is China purposely trying to suppress the gold price, and, if so, how?

SB: Yes, I think it is. Why shouldn’t it do so? China is a large buyer in a small market, so it has to play smart to get its hands on physical bullion. It may do so with paper money and by playing the futures markets and putting pressure on the markets.

However, as soon as the price picks up again and the physical market has dried up, China will no longer manipulate the price to the downside but to the upside. China doesn’t mind price declines in the short term because it is buying for the long term and has an ever increasing interest to appreciate these assets relative to its dollar reserves.

TGR: You have advised gold and silver producers to hold onto their production in an effort to sell at higher prices. In a cash-hungry business like mining, is that feasible?

SB: It is sad that mines are coming into production or increasing output at these low prices.

Deposits should be exploited during high prices not low, when companies can only make losses or marginal profits. If I owned a gold mine, I would stop all operations and wait for better times. I know this is not easy or feasible, especially for public companies, but this is the time for innovation.

TGR: It’s one thing if you own the company, but a CEO needs to have the company perform to keep his job. How does management balance those two priorities?

SB: As soon as a company mines gold or silver, it sells it into the market and trades it for dollars. Instead, the company should use gold and silver as the functional currency for the industry. I’m certain that most companies would participate if such a system was in place. Companies should look for ways to bank their gold as cash assets or take out gold loans, not dollar loans. They should buy physical gold and silver and store it outside the banking system. When they require cash, they can sell part of their holdings.

Many exploration, development and producing companies have millions of dollars of cash in the bank. If they all bought bullion and stored it in an independent vault facility outside the banking system, that would put upward pressure on the price, which would benefit the companies.

Such a system is already in place and it is only a matter of time until mining companies will hold their cash in gold and silver. Shareholders will appreciate such prudent companies that know how to play a depressed market for the benefit of the shareholders. This also would bring a lot of credibility and investor confidence back into this dried-up market.

There are oil and potash cartels; the gold industry should come up with something similar.

TGR: Most cartels, like the Organization of the Petroleum Exporting Countries (OPEC) are privately held businesses. This makes it easier to get consensus. How would that work with publicly held companies?

SB: Public companies are part of the American and Russian potash cartels. A gold cartel would work like the potash market. Mining companies should collectively refrain from selling into the market at spot prices but should instead find buyers themselves, as there are definitely investors worldwide—especially from Asia, as well as the Middle and Far East—that would pay high premiums on the spot price to get their hands on physical bullion.

What is there left to lose for the deeply depressed mining industry but to take revolutionary steps and to fight back smartly? I hate to see the miners just waiting and hoping for better times, getting increasingly beaten up, defenseless. Now is the time to get their act together before the banks force them to hedge and sell forward their business for peanuts, rendering them incapable of benefiting from rising prices in the future.

TGR: Your research reports suggest that you favor small-cap precious metals companies over larger producers. Why are small caps worth the added risk?

SB: During down markets when metals prices are below production costs, producers struggle to stay alive. I only buy producers leveraged to a rising metal price, as they tend to rise stronger by a factor of three to five.

However, if you believe that the gold price will now recover quickly above $1,600/oz, I would recommend buying producers with the highest production costs. They’ve been beaten down the farthest, so they will benefit the most.

If you bet, as I do, that the gold price will go sideways or down for some time before rising, you should look for exploration and development companies active in bringing their deposits into production in the next few years when prices will be higher. When a junior discovers and develops a deposit, its share price will definitely rise because real value has been created. Right now, I see less risk with explorers and developers than with producers.

TGR: You recently went to various investment conferences in Europe and learned more about a number of companies. Please tell us about some of those names.

SB: Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) is a young exploration company starting to make respectable gold discoveries in Nevada, potentially sitting on 20+ million ounces (20+ Moz) gold. If it can prove such a large gold resource, its stock will thrive even if gold continues to fall. This is the kind of exploration and development story I am focusing on right now during declining metal prices, as such stocks have the power to rise no matter what the gold price is doing.

I also like companies with a business model like Zimtu Capital Corp.’s (ZC:TSX.V). Creating, investing in and growing junior mining companies provide a great way for investors to participate in and profit from the public company-building process. Zimtu was behind Western Potash Corp. (WPX:TSX.V), which has a large mineable potash deposit in Canada. If Western Potash can find $700–900 million ($700–900M) from a strategic investor, it will develop that resource into a mine. It’s only a matter of time before this deposit is mined, and I’m very bullish for the mid- to long-term potash price.

I am certain that Brazil is becoming the largest agricultural farming and potash source of the world. For this reason I closely follow the current drill program of Pacific Potash Corp. (PP:TSZ.V) in the Amazonas Basin, a potash-rich basin that could change the fundamentals of the entire market.

TGR: Zimtu has a number of positions in graphite companies. Has it also taken positions in precious metals companies?

SB: Precious metals not so much, with the exception of Equitas Resources Corp. (EQT:TSX.V; T6U1:FSE), which will start drilling early next year on a remarkable copper-gold porphyry on Vancouver Island, andPasinex Resources Ltd. (PSE:CNX), which is focused on base and precious metal exploration projects in Turkey. It has a promising joint venture with the Akmetal Group and started an exploration program a few weeks ago.

I like Zimtu because it is active on many fronts of the commodity markets and is thus somewhat independent from the precious metals prices. For example, Zimtu is involved with diamonds through Arctic Star Exploration Corp. (ADD:TSX.V). Buddy Doyle, who was instrumental in discovering the Diavik diamond mine in Canada as head of diamond exploration for Kennecott Canada [now part of Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK)], is behind Arctic Star. It looks as if he and his team are doing it again, discovering diamond deposits in Canada close to two other world-class diamond mines. I very much like the fundamentals of the diamond market and think prices will start rising substantially in 2014.

The fundamentals of the uranium market, where Zimtu is well positioned with Lakeland Resources Inc. (LK:TSX.V), also are attractive. Lakeland is active in the Athabasca Basin in Canada. The company is backed by Jody Dahrouge, who was instrumental in the J-Zone discovery in the eastern part of the basin and in the Patterson Lake deposits to the south. Other backers include John Gingerich, who worked in the northern part of the basin for Eldorado Nuclear, now Cameco Corp. (CCO:TSX; CCJ:NYSE), and Thomas Drolet, an experienced uranium industry expert.

Zimtu management is also behind Commerce Resources Corp. (CCE:TSX.V; D7H:FSE; CMRZF:OTCQX), a development company with two advanced-stage rare earth elements (REEs) deposits in Canada. I’m very bullish on REEs. Commerce has two projects, the Ashram REE project and the Blue River tantalum and niobium project. The Ashram REE project is remarkable because 1) it has a huge resource, 2) it has high grades, 3) it has a unique distribution with competitive grades of the most highly in-demand elements namely neodymium, europium, dysprosium, yttrium and terbium, and most important, 4) it is hosted by the three minerals that completely dominate current commercial production globally: bastnaesite, monazite and xenotyme. All of the first three (very positive) points are subservient to the fourth and most important point—that really only these three minerals are processed commercially.

The capital expenditure (capex) for Ashram is CA$763M, so it must find a strategic partner. This is only a matter of time because I believe the REE market will soon escalate. Commerce has a new set of drilling and metallurgical results that also will be released shortly, and I am positive that this will revive the stock and bring in a strategic partner, likely from Asia. The Blue River tantalum and niobium project is the world’s largest production scenario, cash positive, for tantalum. The Upper Fir capex is only CA$379M and in the last six months Commerce has increased the resource by over 30% and the recovery rate by 15% over the amounts used as the basis for the completed preliminary economic assessment.

Zimtu is also active in northern British Columbia via Prima Fluorspar Corp. (PF:TSX.V) and Big North Graphite Corp. (NRT:TSX.V), and is about to launch a new company involved with high-purity quartz used for silica. These are the kinds of industrial minerals I’m also bullish on.

Remarkably, Zimtu’s stock investments in all these companies have a book value 50% below the market value at the moment, so the company looks quite attractive, trading at a huge discount, and diversified with different kinds of projects.

TGR: Which small-cap precious metals companies are you following?

SB: I like stocks with prospective deposits that are heavily discounted and trading below or near cash levels. For example, Mundoro Capital Inc. (MUN:TSX.V) is trading almost 50% below cash value despite owning highly prospective deposits in Serbia and Bulgaria. More than 58 Moz gold has been discovered in the Tethyan porphyry copper-gold belt that runs through Serbia, Bulgaria and Turkey. This underexplored belt is similar to the well-explored porphyry Maricunga belt in Chile or the Greenstone belt in Ontario and Québec.

The corporate tax regimes of Serbia (15%) and Bulgaria (10%) are better than Ontario’s (30%). It’s no surprise that senior miners are active in this neglected part of this world, such as Rio Tinto and Freeport-McMoRan Copper & Gold Inc. (FCX:NYSE).

Mundoro’s management is highly experienced and is prudently budgeting its large cash reserves for a project that shows remarkably high-gold grades. Mundoro is a bargain at current prices, and I’m certain this won’t last much longer, as I see a bottom at $0.18/share.

Among the few producers that I like, Klondex Mines Ltd.’s (KDX:TSX; KLNDF:OTCBB) stock has been rising since April. Paul Huet, its president and CEO, has high-grade mining experience, especially with narrow gold veins. Previously, he was with Premier Gold Mines Ltd. (PG:TSX) where he served as chief operating officer, was general manager at Great Basin Gold Ltd.’s (GBG:TSX, GBG:NYSE.MKT) Hollister mine and mine manager at Newmont Mining Corp.’s (NEM:NYSE) Midas mine.

Klondex’s flagship is the high-grade epithermal Fire Creek gold project in north-central Nevada, which is stunningly similar to the Midas and Hollister mines. In September, Klondex updated its NI 43-101 resource, applying a 7 grams/ton (7 g/t) gold cutoff, to host a Measured and Indicated resource totaling around 300,000 ounces (300 Koz) gold at 45 g/t and an Inferred resource of 421 Koz gold, averaging 90 g/t. That may not sound like a lot of gold, but Klondex has the skills to drill very effectively. Klondex has one of the best upside potentials in the entire market.

In regard to development companies bringing deposits into production within the next few years, I likeColumbus Gold Corp. (CGT:TSX.V). It is developing a highly prospective gold deposit into a mine in French Guiana—a safe, but somewhat expensive jurisdiction. When Columbus acquired the property in 2011, it had a resource of 1.8 Moz gold. Columbus increased that to more than 5 Moz by drilling deeper than 135 meters and starting infill drilling. Further infill drilling will add another 2 Moz or so. The deposit is still wide open with excellent upside potential. I’m positive that more than 10 Moz gold can be proven during the next three years.

Columbus recently did a deal with Nord Gold N.V. (NORD:LSE). The Russia-backed company can earn 50.01% by spending $30M and completing a bankable feasibility study by October 2016. Nord Gold is a very aggressive resource company that had no assets in 2007. Since then, it has acquired eight companies and now has nine producing gold mines in four countries and $1 billion ($1B) in revenue. Nord Gold produces more than 800 Koz gold annually, which puts it among the top 20 gold producers worldwide. Columbus just started another aggressive, 28 kilometer drill program and Columbus will have a lot of news flow over the next two to three years. This development company’s stock price will thrive regardless of the gold price.

Sama Resources Inc. (SME:TSX.V) is another remarkable project that hasn’t received any attention from analysts and investors. It is poised to become a world-class nickel-copper-palladium producer in West Africa. The Minerals & Metal Group Ltd. (1208:Hong Kong) owns 18%, the IFC (World Bank group) 12% and African Lion owns 5%. Marc-Antoine Audet is the president and CEO. Benoit LaSalle, founder of SEMAFO Inc. (SMF:TSX; SMF:OMX), is the executive chairman.

Sama’s revised NI 43-101 Indicated resource includes 75 million pounds (75 Mlb) nickel and 61 Mlb copper, plus an Inferred resource of 134 Mlb nickel and 107 Mlb copper. The company is drilling in a newly discovered zone called Yepleu. Newly defined geophysical anomalies, along with nickel-copper sulphides at surface, indicate that Sama’s resource could grow exponentially. Yepleu could turn out to be a company maker shortly, and I believe the surrounding district will become a significant mining center for nickel.

TGR: You believe that silver could decouple from gold in the medium term. Can you explain why?

SB: Silver, unlike gold, is both a currency metal and an indispensable industrial metal. If the gold market is very small, the silver market is tiny. Central banks worldwide hold some 25,000 tons (25 Kt) gold, which has a market value of around $1 trillion. Central banks do not hold silver, but some 30 Kt are held as reserves for silver ETFs, stocks in warehouses from the London Bullion Market Association and COMEX or minted coins from the U.S. and Canada. Those 30 Kt of silver have a market value of only $20B.

If a drop in liquidity hits the silver market, the price will explode upward. Aboveground silver stocks are depleting quickly. A strongly rising or falling silver price does not affect demand or supply—both demand and supply are largely price inelastic, which is somewhat unique in the commodity sector and important to understand. If silver trades at $100 or more tomorrow, industry will not consume less because silver is mostly indispensable or nonsubstitutable. Typically, silver is a relatively small component of a product and thus, a fraction of its total cost. Price escalation is just a matter of time, in my opinion, especially when looking at the depleting warehouse stocks.

TGR: Which silver equities do you follow?

SB: Given that grade is king, one of my favorite stocks, especially during depressed metals markets, isMAG Silver Corp. (MAG:TSX; MVG:NYSE). I believe this company will become one of the largest silver miners in the world, maybe even the largest.

I also like companies that brought mines into production during this depressed market and are still profitable, such as IMPACT Silver Corp. (IPT:TSX.V). It owns four producing mines in Mexico, three of which are adjacent to each other. These three are mined underground from epithermal deposits feeding a 500 ton per day (500 tpd) mill. IMPACT’s fourth mine, Capire, started production as a volcanogenic massive sulfide open pit with a 200 tpd mill in March 2013. Then, the stock traded at $1/share. Its current price of around $0.46/share is quite attractive. I am confident IMPACT Silver can increase grade and output, and it has vast unrealized exploration potential.

I also like the prospects for Dolly Varden Silver Corp. (DV:TSX), an advanced-stage exploration company that owns 100% of a promising high-grade property in the Stewart Complex in British Columbia. Dolly Varden’s property has the potential for precious metal-rich Eskay Creek-type deposits. The company is expanding its historic resource with the goal of restocking production, and is exploring for untested Eskay Creek-type deposits. The property is near the ocean, making it easy to ship ore or concentrate. The company doesn’t yet have an NI-43-101-compliant resource, however its historic resource of 15 Moz silver will be changed into an official resource soon, with upgrade potential.

Another is Aurcana Corporation (AUN:TSX.V; AUNFF:OTCQX), which owns 100% of the low-capital cost and low-risk Shafter silver mine in southwest Texas. It has an NI 43-101 resource of 25 Moz silver in the Measured and Indicated category, with an average grade of 265 g/t silver and 23 Moz in the Inferred category averaging 327 g/t silver. Production started last year, but was suspended pending replacement of some parts. It should start up again in Q4/13.

Modifications to the plant will allow throughput of 1,500 tpd by mid-2014. This is an excellent entry point, as the stock was beaten down severely in October.

Aurcana’s second mine is La Negra, in Mexico. Starting in 1970, Industriales Peñoles S.A. de C.V., discovered, developed and operated the mine, until putting it on care and maintenance in 2000. Peñoles produced 36 Moz silver, 323 Mlb zinc, 70 Mlb copper and 161 Mlb lead. The 2000 NI 43-101 resource estimate shows 150 Moz silver, 270 Mlb copper, 540 Mlb lead and 1.4 billion pounds zinc, so there is more to be mined.

In 2012, Aurcana produced 2.5 Moz silver equivalent and in H1/13 produced 1.4 Moz silver equivalent. In Q2/13, total cash costs per silver ounce, net of byproducts, were $7.79. I like Aurcana’s substantial production upside potential. It’s a nice coincidence that the company didn’t produce at maximum while the silver price weakened.

TGR: Are there any other companies you’d like to tell us about?

SB: I like Sumatra Copper & Gold Plc (SUM:ASX), an emerging gold and silver producer on the Indonesian island of Sumatra. Its most advanced project is the 100%-owned Tembang, which is being fast-tracked into production in 2014. Sumatra’s other advanced project is Tandai, which is being developed under a joint venture with Newcrest Mining Ltd. (NCM:ASX).

Other gold stocks I follow closely include Golden Queen Mining Co. Ltd. (GQM:TSX), which is looking for a strategic investor for its gold project in California. San Gold Corp. (SGR:TSX.V) is a producer, looking to convert its debts. The Malaysian gold producer Monument Mining Ltd. (MMY:TSX.V) is restructuring, cleaning and preparing to double its resources and output. Pilot Gold Inc. (PLG:TSX), Mawson Resources Ltd. (MAW:TSX; MWSNF:OTCPK; MRY:FSE) and Midas Gold Corp. (MAX:TSX) also have compelling exploration and development projects.

TGR: How do you stay so positive in this bear market for precious metals?

SB: After the bear comes the bull; there is no other solution to the globalized financial excesses but gold and silver. Given global population growth, especially in emerging countries, coupled with the natural and inexorable human drive to improve one’s standard of living, when you look at the vanishing supplies of commodities, the question is not when the commodity bull market will end, but if it can end.

TGR: Stephan, thank you for your time and your insights.

Stephan Bogner is mining analyst at Rockstone Research, where he has independently analyzed capital markets and resource stocks for more than 11 years. He is also CEO at Elementum International AG of Switzerland. Bogner earned his degree in economics in 2004 at the International School of Management in Dortmund, Germany. He spent five years in Dubai brokering and reselling physical commodities and now resides in Zurich, Switzerland.

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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: Gold Standard Ventures Corp., Zimtu Capital Corp., Commerce Resources Corp., Prima Fluorspar Corp., Mundoro Capital Inc, Klondex Mines Ltd., Columbus Gold Corp., MAG Silver Corp., Pasinex Resources Ltd., IMPACT Silver Corp., Premier Gold Mines Ltd. and Pilot Gold Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Stephan Bogner: I or my family own shares of the following companies mentioned in this interview: Gold Standard Ventures Corp., Zimtu Capital Corp., Arctic Star Exploration Corp., Lakeland Resources Inc., Commerce Resources Corp., Mundoro Capital Inc., Klondex Mines Ltd., Columbus Gold Corp., Sama Resources Inc., MAG Silver Corp., IMPACT Silver Corp., Dolly Varden Silver Corp. and Aurcana Corporation. I personally am or my family is paid by the following companies mentioned in this interview: Zimtu Capital Corp. 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 George Leong, B.Comm.

It’s less than two weeks prior to the Christmas break, and with the New Year on the horizon, that means it’s time to sit down and really re-evaluate your portfolio.

Now, we could see Santa appear and deliver our Christmas goods (i.e. additional gains) into January. What a wonderful way that would be to begin the year? But I will discuss what’s to come in 2014 in my year-ahead outlook in three weeks’ time. At this point, I’m not positive, but I think it’s going to take some work to make money in the New Year (Santa’s not likely to drop that off under your tree).

The days of the Federal Reserve’s flow of easy money into the stock market, which we witnessed over the last four years, will be steadily fading away unless, of course, the new Federal Reserve Chair, Janet Yellen, decides to extend the bond buying longer than necessary. She does love the use of loose monetary policy to prime the economic engine, just as the exiting Federal Reserve Chair Ben Bernanke did for years.

Naturally, a lot of what the Federal Reserve does will circle around what’s happening in the economy.

The Federal Reserve wants jobs so consumers can go out and spend money, driving up the economic renewal. After all, consumer spending accounts for a whopping 70% of the country’s gross domestic product (GDP) growth. Now, imagine what it’s going to look like when Chinese consumers spend, which is exactly what the government is hoping for in that country. (Read “OECD Predicts China #1 Economy by 2016; Consumer Spending to Soar.”)

On this side of the Pacific Ocean, the key retail sales increased 0.7% in November, which was above the consensus 0.6% estimate and the upwardly revised 0.6% reading in October. This retail data is the last major economic reading until the Federal Open Market Committee (FOMC) meeting this Wednesday. While beating the consensus, the reading may not be strong enough to convince the Federal Reserve to begin its tapering just yet.

Stripping out the auto sales, retail sales jumped 0.4%, above the consensus 0.3%, but below the upwardly revised 0.5% in October.

My sense is that the Federal Reserve will likely hold off on tapering until sometime in the first quarter of 2014.

The Federal Reserve is also unpleased with the weekly initial claims that surprisingly jumped to 368,000, worse than the consensus 315,000 and the 298,000 reading in the previous week. With this weak showing, the Federal Reserve will likely hold off on tapering as the fear of fragility on the jobs market could hamper consumer spending and GDP.

Given this, we could likely see a Santa Claus rally and gains as we move into 2014. While the continuance of easy money in the near-term will help, it will soon be time to be more selective in your stock picking, as the easy profits to be made in stocks are likely gone.

My early thoughts are that technology will continue to be the driver in 2014, but look for non-cyclical stocks, such as the utilities and companies like Colgate-Palmolive Company (NYSE/CL), to continue to deliver should the economy stall.

This article My Early Thoughts on Investing in 2014 is originally publish at Profitconfidential

By Mitchell Clark, B.Comm.

One of my favorite things as an investment analyst is to try to find companies that perform well but consistently so. I’m talking about businesses that aren’t going away and are recession-resistant, at least to the best extent possible.

I think an equity market portfolio really should be a mix of different companies in different industries that also comprises businesses of different sizes at different stages of maturity.

I have a strong affinity for dividend paying stocks, but an equity market portfolio need not be all blue chips. I’m also a fan of index funds, and it’s quite evident that the vast majority of portfolio managers have a very difficult time beating the major indices over long periods.

Having watched so many blue chips trade so similarly over time, it’s clear that they don’t do much until they do. It may just be that no one can consistently anticipate the short-lived, but substantial capital gains that can occur (like this year) as market cycles change. The opportunity cost of not being in the equity market in its strongest years has proven to be substantial.

Stocks are inherently risky securities, but a reasonably stable business that consistently grows its revenues and earnings is absolutely golden in an equity market portfolio, even if it isn’t the fastest-growing enterprise out there.

One company that I really like and that has been an open position since August of 2011 is DENTSPLY International Inc. (NASDAQ/XRAY). The company’s 10-year stock chart is featured below:

Chart courtesy of www.StockCharts.com

The only people I know who like going to the dentist are dental equipment salespeople and stock brokers. DENTSPLY is a very well-managed business that I would say falls under the category of recession-resistant and is welcome in a long-term equity market portfolio.

This Pennsylvania-based company has been around a long time. It manufactures and sells a wide range of dental products. The company actually is a global supplier with a presence in more than 120 countries.

Sales in the third quarter of 2013 grew a modest 1.2% to $704 million. But earnings were another record, coming in at $79.9 million, or $0.55 per diluted share, compared to $53.4 million, or $0.37 per diluted share, in the third quarter of 2012. The company pays a small dividend and is often making international acquisitions.

In an equity market portfolio, positions like DENTSPLY can really help keep capital gains when sentiment changes. The one thing you’re not going to get with this kind of company is runaway capital appreciation, that is, unless it was subject to a takeover.

But I do like mixing things up in a long-term equity market portfolio, and I really like consistency, both in terms of operational performance and investment return. (See “Why These Numbers Are Really What Matters in the Stock Market Right Now.”) I’m not talking about trading here; I’m talking about investing without having to worry about checking your positions every day or every week.

There are plenty of mature, recession-resistant businesses like DENTSPLY in the equity market. As is typically the case, they are often trading right near their highs.

This article Why These Stocks Are Long-Term Portfolio Must-Haves is originally publish at Profitconfidential

Article by Investazor.com

Today on the European session the economic data was pretty mixed. While France reported both manufacturing and services flash PMIs under estimates, Germany and Italy surprised with Manufacturing PMIs above expectations and Services PMIs under. The European Trade Balance is up to 14.5B euros, but was published lower than expectations.

At the EU Parliament in Brussels, Draghi announced that the ECB is waiting for a slow pace recovery of the economy, reflected also by the low inflation. Still he also said that the EU economy should benefit from rising export demand. The ECB president is well aware of the downside risks of low inflation and confirmed the fact that the Central Bank is ready to act.

United States released today the Revised Nonfarm Productivity, which rose by 3.0 percent, Manufacturing PMI (54.4, lower than estimates), TIC Long term Purchases went up to 35.4B, the Capacity Utilization Rate rose by 79% and the biggest surprise, the Industrial Production which rose with 1.1%, well above the estimates of 0.6%.

EURUSD couldn’t breach 1.3800. After it touched 1.3797 earlier today, the price action defined a pretty nice Shooting Star on the H4 time frame. The signal was already confirmed and the Euro started to drop and touched a local low at 1.3750. It has reacted more volatile after the Industrial Production was published for the United States and stood almost unchanged while Mario Draghi was having his speech. From the technical point of view, there are higher chances for the price to get back to 1.3800 in the next several hours.

The Dow Jones Industrial Average dropped in the first half of December back to 15700 where it found a past resistance that was turned into a support. We are expecting a bounce from here back to 15900, because the price reached a pretty interesting demand zone and the fundamental data sustains a rise in the DJI price.

The post European Wrap Up, ECB is Aware of the Risks appeared first on investazor.com.

By Michael Lombardi, MBA

Nearly 100 years ago, on December 23, 1913, the Federal Reserve was created. The central bank was created for many reasons, such as minimizing the impacts of panics, becoming a banker of last resort and “smoothing” economic cycles.

But along the way to keeping the monetary system stable, something happened: the value of money deteriorated.

What you could buy for $1.00 in 1913 costs $23.59 today. (Source: Bureau of Labor Statistics web site, last accessed December 11, 2013.) A simple calculation would show that prices have increased by 2,259% over the last 100 years.

Something else to ponder: there have been more erratic movements in inflation since the Federal Reserve was created than in the century prior to then, when the Fed didn’t exist! Since the Federal Reserve was born in 1913, there were 10 years when inflation in the U.S. economy came in at more than 10%. Between 1800 and 1912, there were only four years when inflation in the U.S. was greater than 10%. (Source: Federal Reserve Bank of Minneapolis web site, last accessed December 11, 2013.)

“What’s your point, Michael?”

The unprecedented amount of paper money the Fed has created (out of thin air) since the Credit Crisis of 2008 will come back to haunt us—that’s my fear.

The Federal Reserve’s balance sheet has grown to about $4.0 trillion. M2 money stock, that’s the supply of paper money in the U.S. economy, has gone up 27% since 2009. (Source: Federal Reserve Bank of St. Louis web site, last accessed December 11, 2013.)

And through its “quantitative easing” program, the Federal Reserve continues to print $85.0 billion per month in new paper money with no end in sight. On top of this, it’s kept interest rates artificially low for years.

All this “printing” will eventually devalue the U.S. dollar and further destroy the buying power of Americans. Our lesson in history has been that the more dollars in circulation, the less those dollars buy. Sure, the official numbers don’t show there’s a problem with inflation (yet), but ask the average American Joe, and he won’t tell you his cost of living is going down.

We are living in unprecedented times. We’ve never had a situation in which the Federal Reserve printed so much new money. Many people are unfazed by this because it doesn’t really make a difference in their everyday life…right now.

But two serious risks have developed: 1) the stock market has become so dependent on the “easy money” policies that prevail today, that should the money printing stop or be significantly tapered, the market could crash; 2) inflation is “chomping at the bit.” Yes, I understand the “official” figures don’t show it, but by the time they do, it will be too late. The damage will already be done.

Bottom line: be very cautious about the stock market and prepare for some serious inflation.

This article Federal Reserve: 100 Years of Destroying the Purchase Power of Money? is originally publish at Profitconfidential