$40 cents club, page-934

Hot off the press today are comments by an American investment advisor called Jess Felder, who writes a news letter called the Felder Report. On gold he says, from a purely technical stand point he sees a short term break out $200 dollars above where it is currently trading. By years end and longer, he sees it sustaining US $2700 - 2800 dollars. This will be terrific for Australian gold miners, but some of those rises might be negated by a falling US dollar. If his predictions are right of course.

As to what will end the current bear market in gold, he is claiming it will be no single thing. A rally in the price of gold will certainly spike investors interest and he expects that when there is a correction in the broader equities market, this will entice investment Funds back into the gold space. The greatest value is not in gold itself, but in the gold mining companies that dig it out of the ground. The paradox today is that gold mining stocks are dirt cheap because the bear market since 2015 has left most well under valued and unloved - while the precious metal is trading at historical highs. Somethings got to give, and when it most certainly does, hold on for very strong re-rates in gold miners script. Multiples of 2 or 3 are very realistic simply because the fundamentals have never been stronger.

My own take on the Red5/ SLR merger is that it comes at an extremely fortuitous time. The potential cash generation on current gold prices is an open ended way to generate massive cash flow. If gold sets a new bench mark around US $2700 -$2800, that cash generation is eye watering. The appreciation in this companies share price is about as certain as it can get in the investment environment l believe. If you hold for the remainder of the year, my prediction is that many of us are going to make a lot of money.