They opened the new Dubai Gold and Commodities Exchange today so gold should easily cross $500 this week (as I predicted last week).
There are a couple of reasons for this, one just being that a new trader in town has to end up with some product in his sack so X% of all the gold in the world will come out of circulation soon.
DGCX director Ahmad Bin Sulayem said “We have heard that the gold traders in London are looking forward to this exchange and that he made us feel really optimistic about this project.”
Yah, it’s kind of like the way everyone looks forward to a new guy with a lot of cash sitting down at the poker table!
This brings gold closer to a 24/7 trading operation which in itself will be destabalizing but, just like the Chineese trader who just got pantsed in copper, I am expecting that the experienced traders will be looking to take back some of those petrodollars real soon.
Expect to hear “Gold gold gold” in the press for a while so this will be one of those “rising tide lifts all ships” scenarios but watch out because someone is going to pull the plug on this and the poor Saudis will be left in an empty tub with nothing but their golden duckies to show for it.
Laggard gold stocks (for a quick in and out trade) include GSS (who can’t make money), HL (one of the worst rated stocks in the Zacks universe) and BVN (which is actually a great SA company with 20% growth).
Aside from BVN and last week’s pick GG, I also like new miner with a cool name, Metallica (MRB) a whole lot, their $1.8 stock price does not begin to do justice to the $9M they finally pulled out of the ground last quarter (40x prior yr qtr) and the .12 per share they made selling it. Four quarters like that and you will have a p/e of less than 5!!!
A nice bonus for this company is that, in their Mexican mines, where they aren’t hitting gold they are hitting (awww) COPPER! All of the company’s estimates were based on $400 gold and $1 copper. With gold at $500 and copper at $1.80 this company is way undervalued.
The company has just over a Million ounces of gold in La Fortuna but it’s all mixed up with ONE BILLION POUNDS of copper! (again – awwwww)
They have $46M in cash for their 83M shares and no debt. Although I wish I had caught this earlier I am thrilled to be catching it now!
