There's no fever like gold fever. I've been saying for some time...

There's no fever like gold fever. I've been saying for some time that with difficulties in purchasing physical gold due to shortages that gold shares will take off.

Considering gold shares in relation to the US dollar gold price, and here even more so the AUD gold price, are at decades lows, the upside from current prices is absolutely phenomenal.

Now add substantially reduced energy costs and other associated costs and substantial profit increases will be coming for many unhedged gold miners.

Isn't it odd? When the fundamentals for gold companies are the best they have been in decades the share prices have been decimated and are at absolute bargain basement, distress selling levels?

Who would have thought we would see a dividend paying, debt free gold miner trading below its cash in hand backing, valuing its gold and other resources at absolutely nothing?

That is totally, absolutely crazy. Totally irrational imo. Now who says "The market is always right?"

All gold shares will be rerated. The specs will also end up running hard, very, very hard as a wild boom develops.

The idea that good undeveloped gold resources in the ground are worth around 2% of the gold price is absolute nonsense imo. When gold shares were not trashed like today, a back of the hand method of calculating what a stock should be worth was valuing the company at 10% to 20% of its in ground gold.

During boom times a gold explorer proving up a quality resource could trade in excess of the value of its in ground gold as the market factored in higher gold prices and more exploration upside - blue sky!!

Who would imagine that today we'd see a dividend paying gold miner trading below its cash backing, valuing its gold and other resources at absolutely nothing??. That is totally, absolutely crazy. Totally irrational imo.

As gold fever heats up gold companies will have no problems raising cash for new mines and for new exploration.

The standard cry from the vast majority right now is, "It's only a gold project. Nothing can be done with it. Where's the money coming from?"

That will change all right when the gold sector becomes the hottest market sector in town.

Companies with, for example, quality gold resources but not enough cash to move into development or speed up exploration need to just hold their nerve right now and not do anything silly.

Just sit tight and wait for gold fever to develop and their share prices will rise by many multiples making raising cash via placements very, very easy.