Friday, May 22, 2009

For GT Blog May 22, 2009

Hello fellow bloggers and stock market participants.

Just to repeat – I am not a gold bug – I simply believe there are times to own gold stocks and there are times to ignore them. Last week we ran a relative comparison of bullion and a gold index (all US$) – noting the strong relative outperform and new cycle bottom in the hold stocks

The declining US dollar and the rebound in the US 10-y Note yields is obvious and so we assume the worst place to be now is in the US dollar and US Treasuries

However - a falling US dollar is a positive for the Dow Industrials which is loaded with US multinationals – but the strong CDN dollar will hurt our returns – this has us confronted with an investing dilemma

We have to own something because cash earns nothing and so that is why the precious metals complex and the TSX Materials complex seems to the place to be. Our gold silver chart suggests that silver may afford more opportunity than gold and so why not seek out the silver components of the TSX Materials sector?
A visit to the cluttered TSX web site turns up the following silver names - Silver Wheaton Corp. SLW, Silver Standard Resources Inc. SSO, Silvercorp Metals Inc. SVM – other smaller names are ECU Silver, Endevour and Pan American – call your advisor

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