Today's Grandich Letter BulletinSpecial Bulletin May 21, 2004 9:00AM EST
While there’s no major economic news due out today, the gold and U.S dollar are near some very critical points. A close above $386 on gold can go a long way in suggesting the violent correction is over and a resumption of the uptrend is underway. A close below 90 on the U.S. dollar index can go a long way in suggesting the bear market rally is over and a resumption of the long-term downtrend has resumed.
Meanwhile, the mining share market had a year or two worth of declines in a span of 6-8 weeks. The majority of shares are now deeply oversold and very attractive. While junior resource stocks are even more oversold, they will likely lag the majors and emerging producers until gold gets above $400. However, they as a group have not been this undervalued relative to the price of their underlying metal since the bull market began in 2001/2002
Among our list of companies, ARQ, CDY, CXX, ITF, JPN PFN and PMM are the most undervalued relative to their positive corporate developments.
Quick note – I said at $3.06, NSU was the no-brainer of all-time for me and to expect a takeover or merger. The latest drill results only add to that expectation.