wer'e in good company

Gold tipped to soar

A PRIVATE client adviser tells us all the signs are there's not much time left to get aboard the gold bandwagon before it heads off to $US2100/oz.

"It is imperative that any buying of gold stocks is done early," he says. "Now that many market investors have reduced their gold exposure we are likely to see a much clearer move up in gold stocks as the oversold condition is unwound."

An article from one of the more reliable US gold websites was attached, showing how well gold has done since April last year, being up 5 per cent. By contrast, silver has lost 35 per cent of its value over 12 months, the senior US mining indices are down by 25 per cent and juniors by 46 per cent. Yet gold stocks have been taken out back and given a good kicking along with all the others.

The damage done, for example, to the West African gold sector by investor pessimism has been dramatic. At Friday's close, Azumah Resources (AZM) was at 28c, compared with a 52-week high of 62c. Gryphon Minerals (GRY), which has 2 million ounces in Burkina Faso, closed at 92.5c against its high of $2.05 and Ampella Mining (AMX) at $1.03 is down from $2.46. And all these against a reasonable gold price and sound progress by the companies involved.

Badly hit, too, has been Perseus Mining (PRU) even though it has runs on the board. It closed at $2.50 but has hit $4.05 over the past 12 months. Warwick Grigor at Canaccord-BGF terms PRU's performance "outstanding" with cash costs in the March quarter of $723 an ounce against guidance of $950/oz.

"It is rare to find a company that has consistently delivered on its promises and reported only good news for such a long period," Grigor said in his Friday client note.

http://www.theaustralian.com.au/business/opinion/shanghai-futures-exchange-starts-a-silver-futures-trade/story-fnciihm9-1226348107367

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