The trio of advisors featured here truly excel in their areas of expertise. John Murphy is a technician par excellence, while Adrian Day and Eric Roseman both have industry-leading reputations within the world of natural resources. Here are their views on precious metals. (Click on each advisor's photo to read his bio.)
"Gold is starting
to gain upside traction against all of the world's key currencies," says
John Murphy, head market analyst at StockCharts.com. "One of the hallmarks of a true bull market in gold bullion is
its ability to rise against all foreign currencies, not just the dollar. The last
time that happened was the 1970s. Gold has broken out to a new record high
vs. the euro after having been in sideways trading range since the start of
2002. Gold to yen is now trading at the highest level in ten years. Maybe most
impressive of all is the ability of gold to rally in the face of a rising
dollar. Some skeptical market observers have taken the view that the rally in
gold since 2002 has been a function of the falling dollar and not much else. The
fact that gold is now rising against all currencies suggests that view no longer
holds true (if it ever did). streetTRACKS Gold ETF (GLD NYSE) has climbed back over its moving average lines and is coming close
to challenging its six-month downtrend line. The five-year view shows that
bullion recently bounced off a rising trendline extending back to the start of
2002. I continue to believe that this is an opportune time to increase one's
exposure to the precious metals sector."
"Though I am not suggesting anyone put over 20% of his
portfolio into silver stocks, I do like the white metal and feel patience will
be rewarded," says Adrian Day, a leading expert
on natural resources, with a deep knowledge of both junior and senior miners.
"The fundamentals are strong and there is a lack of new supply over the next few
years, which should make the metal price sensitive to any increase in demand.
Silver Standard (SSRI NASDAQ) has the most leverage to silver as well as
a strong balance sheet. The stock is a strong buy under 11. Pan American
(PAAS NASDAQ) has production risk, but is highly liquid
and is an institutional favorite. The stock is well priced as a multiple of NAV
and there is little risk in the company and strong growth ahead. The stock is a
buy up to $14. Silver Wheaton (CA:SLW Toronto) is not a producer,
as such, but generates its revenue from producing mines. The stock has a
combination of low risk and positive upside and is undervalued (on an NAV basis)
relative to others."
"We're seeing some very impressive price
action for gold stocks," notes Eric Roseman, editor of The
Commodity Trend Alert
. "With
the dollar charging ahead versus most foreign currencies, spot gold prices should
be below $400 an ounce. Incredibly, gold and silver have remained relatively
strong. Part of the bullish price action is demand. Gold jewelry demand in India surged
72% in the first quarter as prices hit a six-month low. Any short-term decline in
gold is rapidly absorbed by the market, namely from India and China. That is
very bullish market action and strongly supports the trend. We're still buying
Goldcorp ( GG NYSE) and Newmont Mining ( NEM NYSE), which are both enjoying a recovery off their
April low with GG leading the charge over the last two weeks. Also, Canada's
Silver-Wheaton ( CA:SLW Toronto) is the only major
silver mining company earning a profit. This stock will fly as spot silver
eventually breaks through $7.50 and heads to $10 an ounce over the next 12
months."
