Looks like gold is going to go into a mini bear for the next little while as it couldn't push past $1250 and technically has made a doubletop. With currencies and markets close to a serious attempt at a rally it could put the yellow metal into sell mode over the next 4 - 6 weeks. If one is trying to time this market I would look to find a bottom at around $1130. At that price point the medium term bull uptrend is still healthy and intact and POG be higher by the end of the year. Another timing factor for Gold is that seasonally it will start to run again at the end of July. It did so last year and if the bull trend remains intact it will most likely do so again.
I think markets will quiet down and go sideways with the Dow caught between 10,000 and 11,000.
So if I am right... we finally get a relief rally here over the next 3 weeks or so and then go sideways during the summer with a trend to go lower by September. That is when the Euro debt crisis starts to expand to the global debt crisis. Well maybe not that doomsdayish but certainly we have not heard the last of these debt problems.
For now, the luster is off gold and might may a nice short over the next 3-4 weeks if $1200 can't hold. $1170 and $130 are key areas of support. The yellow metal may be off during this time but some of the dollars made from the majors and mid tier will flow down into this summer's hottest exploration stories.
Some prospective plays that could pay out this summer are...
Ecometals, they are drilling a blind target looking for a epithermal gold system 600 meters west of Kinross' 13.8M oz Fruta Del Norte project in Ecuador. So far gold results have been uneconomical, but each drill hole indicates they are close to a major hydrothermal system. If they do hit this stock will go much beyond the current .20 cents. It hit $1.34 on anticipation of drilling, but as the first holes disappointed the stock price has taken a hit, but at current price is a great value for risk/reward.
Decade Resources is following up last summers excellent drilling results at their Red Cliff Property in Stewart BC and trying to aggressively expand the the deposit. They released excellent results that were much better than expected in a smaller lower grade zone that makes it look much more economical. They are currently drilling 2 zones and will be aggressively expanding the known resource at the Red Cliff Property. Decade is a long way from being a mine but results last year pushed the stock past $1.70 last summer and continued positive results will put Decade back over $1. Currently its .54 cents.
Creso Exploration. This is a new pick and I do not know as much about the property as I was introduced to it today, but you cannot ignore the intercept Creso took out of hole #2 on their Minto property. Which was one of the longest, highest grading holes I have seen. 35.7 meters grading 18.2 g/t au and 79.6 meters grading 4.61 g/t au scores well over 1000 points on the rating scale and cannot be ignored at a meer .45... CXT.V traded today for the first day and I am expecting huge things out of this company.
Happy Investing... These are my top 3 gold exploration picks. EC has the highest payout but also still has nothing to show for it. Decade is in BC, so you know you have years before any mine is going anywhere. Creso could be a real winner with this project. If the step out holes continue to impress like this then Creso could become the next WTM/LSG.
Happy Investing
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