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July 19, 2006

Expert says gold worth $900, Wed., July 19, 2006, 1:29 PM

Paul van Eeden is a trader of junior gold shares, trying to jump on the penny stocks before they grow to multi dollars. He's had more than a few successes.

Paul is being interviewed again today on ROBTV because he has knowledge and insights in an area of penny stock trading that very few persons have. The interview is available at ROBTV from 1pm to 1:30pm today. The Replay will be available soon, and if you are a speculator in these stocks, it is required viewing.

You will also see that Paul has substantial knowledge of the mid cap and large cap mining stocks.

I saw him at the Aurelian AGM, and today he said he rode the stock from 46 cents to about $20. But he urges caution because he says the latest drill hole was sub-par (??) and he cannot see how the discovery would be the required 10 million ounces of gold to make the Aurelian discovery a major mine. I am still waiting for a meeting at the company offices with CEO Patrick Anderson before I have a further opinion.

The one point I took note is that Paul believes that gold ought to be trading at $900. It's a subjective view based on his assessment that the USD is over-priced.

I believe, as you know, that $900 is a reasonable guestimate of where gold will trade in a year or two. I continue to advise to buy the dips.

Moreover, the gold and silver exploration business, which Paul van Eeden follows, is the best play for traders who have an appetite for risk at this point. Even during a bear market, this particular group is where excellent future profits will be made.

His three picks are:
TSX-V: MAD Miranda Gold
TSX-V: LRA LARA Exploration
TSX-V: ALS Altius Minerals

These are penny stocks plus a bit. They have no resource in production or even close to it. Unfortunately this is not an aspect of the market I have the necessary time to focus on.

Posted by Posted by Bill Cara on July 19, 2006 01:29:16 PM | Category: Bullion , Gold , Gold Explorers , Goldminer Producers , Penny Stocks , Silver

Discourse

Recent commentary by Paul van Eden on "321gold" makes ominous reading

http://www.321gold.com/editorials/vaneeden/vaneeden071706.html

Posted by: karzy [TypeKey Profile Page] at July 19, 2006 2:25 PM [link]

Japan's PPI for May was an increase of 3.3% over May of a year ago, the fastest increase in 25 years. Their unemployment rate went down to 4%, the lowest rate in 8 years. Their CPI was the highest in 8 years. Their major companies recently announced an increase in spending of 9%, 3 times what was forecasted in March. Yes, the Yen is up .5% today, but since they announced their overnite rate was only going up from 0 to .25% the Yen is down 2%. This does not look like the end of the carry trade IMHO.

Posted by: alan [TypeKey Profile Page] at July 19, 2006 2:52 PM [link]

What an intelligent and articulate speaker and interview--par for the course for ROBTv.

A few additional takeaways. Paul mentioned he's extremely cautious at the moment and doesn't think any large bets should be placed either way just now. He says he's sitting in 50% cash since May (typically 85-90% invested).

As you say, he likes gold very much as a play on an expected drop in the US dollar, but is wary that the base metals are overvalued here in light of an economic slowdown, and is cautious that gold may fall in sympathy with the base metals, if/when that occurs.

Finally, he openly admits to having experienced several "wipeouts", re-inforcing the (obviously) speculative nature of the penny juniors. He typically holds around 20 stocks, 10 of which are a "core" position, and his portfolio turnover is described as low.

Thanks for the heads-up Bill, well worth the listen.

Doug

Posted by: doug11 [TypeKey Profile Page] at July 20, 2006 10:10 AM [link]