RE: ouchI wouldn't worry too much about analysts ... they tend to go whichever way the wind blows.
In my opinion, I think we are in the mids of a perfect storm for Gold. I think at the very least I think the stocks will hold their value in this crazy economy. What I think is more likely to happen is CAN Gold stocks are going to go Wayyyyyyy higher. Just so you don't think I'm some yahoo pumper .... here’s why I think this.
- 1. We are currently in a state of modest deflation. I believe the largest factor for this is due to commodities tanking. Once this works it's self out inflation will start to kick in. This will be in large part to the U.S. printing off money like there’s no tomorrow. They have NO cash ... Zip. They have over 10 tril in dept and over 40 tril in Medicare and social security obligations, and no money. The only real choice they have is to print cash to pay for it all. That amount of printing can lead to hyper inflation very quickly. Good for Gold.
- 2. One of the largest operating costs in extracting Gold is Oil / fuel costs. With the resent reversal in fuel costs it's only going to cost less to get it out of the ground.
- 3. Labor of coarse is another one of the top operating costs in extracting Gold. With the current Global rescission it bodes well that Gold companies will be able to pick and choose the best miners probably at par, or cheaper than what they pay today.
- 4. I have to research this one a little more but I believe that CAN Gold companies fair much better with the CAN exchange rate being so low. As Gold is sold in U.S., I believe CAN Gold producers will benefit from the exchange rate.
- 5. Lastly Gold is relatively cheap ... adjusted for inflation Gold is not expensive historically. Adjusted to 83 levels Gold should be closer to $1,800.
As always don't speculate on the above information, as it's speculation it's self. Do your own due diligence, and good luck.