Dear Readers,

Gold and silver have once again hit new highs.

In our last letter, I said gold would climb to $1500 if it held above $1470 for the week. On Monday, gold fell below that threshold and thus it did not hit our target of $1500. However, it did climb to new highs and support levels continue to move up.

Not long ago in the recent letter

Silver has also climbed to a new 31-year high, closing at nearly $43. While I believe silver will climb higher, I would use some caution as gold may move higher relative to silver in the near term.

Here are the results from last week's survey, " target="_blank">The Human Metal), new highs often leave the potential forshort term weakness from profit takers.

If you're a buy and hold investor, the next few months would a great time to look at precious metal stocks - especially if we see a correction in commodity prices. Many of these stocks have yet to move with the high prices of both gold and silver, but this will eventually catch up - especially if prices stay high over the summer months.

As a matter of fact, there are many gold and silver producers that are making money hand over fist with these high metal prices and the real value of this increase in earnings has yet to be completely factored into share prices.

While investors often feel a slight disconnect between silver equities and silver prices, many of the big silver names have performed relative to silver prices.

Take a look at this chart:

When you compare the performance of silver equities such as Silver Wheaton, Coeur d'Alene Mines, and Silver Standard Resources with the iShares Silver Trust (as seen above), you can see that the performance of each stock almost directly reflects silver prices.

Last week silver equities moved down even as silver prices moved up, but I believe this is merely a temporary disconnect. If silver prices hold at these levels or continue to move up, the big name silver equities should catch up. If silver opens strong next week, look at the big silver names such as Silver Wheaton for a few percentage pop opportunity.

I am still looking for a strong surge by the precious metals juniors toward the later end of the year, as speculation in the sector becomes even more bullish.

The most interesting factor in the recent silver rise is the lack of long exposure by the managed money funds such as hedge funds, commodity funds, and other big money speculators. In the last few months, the managed money funds net long position have decreased nearly 10%, while the price of silver has risen over 30%.

That means the rise in silver prices are mainly as a result of the retail investor. Therefore, downside risk is minimized and the bull market train should continue to gain some speed. Why? Managed money funds often employ tremendous leverage. If silver prices were to drop slightly, many of these futures traders would be forced to liquidate to cover their long positions. Then, of course, the good ol' dominoe effect.

Retail investors, on the other hand, rarely use leverage as part of their investment strategy. As such, if silver prices were to experience a near term drop, they would not be forced to liquidate. The more investment demand into silver by retail investors, the less the metal price can be manipulated (

The silver market is small. There are not a lot of silver miners out there. That means big opportunities for some of the smaller producers to catch up with the market as the demand for silver increases. If you haven't already looked at some of these names, start looking. The silver companies mentioned in last year's letters have all doubled in value, if not more. If silver prices hold above $35 for the rest of the year, there's going to be a serious run by many of the lesser known silver miners. There are still bargains out there.

Overall, this week went as predicted. Precious metals moved to new highs and volatility in the markets increased. At this point, I am still waiting on April 27 (

Keep your eye on precious metals. Even as many call for a correction, gold could still climb above $1500 next week and silver to $45. That would be a major milestone for both. We shall see.

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Until next week,

Ivan Lo

Equedia Weekly

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target="_blank"> target="_blank">Big Gold

1) The main driver behind rising gold prices over the past decade is:

a) Increased jewelry demand in India
b) Greater industrial uses of the metal
c) Investment demand

Worldwide investment demand for gold totaled 44 million ounces in 2010. Because of the growing demand by investors, prices have been forced upward.

→Five exchanges began trading gold contracts for the first time in 2010, and three more introduced mini contracts, collectively the largest number launched since the early '80s. There are now 24 gold vending machines in seven countries, with three more countries adding machines this year. Households in developing countries are now moving away from gold jewelry and buying coins and bars for their savings. I could go on, but suffice it to say that investment demand will continue to be very strong.

2) True or false: recovery from gold scrap was lower in 2010 than 2009.

Scrap rose three consecutive years in a row - until last year. Gold supply from scrap fell 2.1%, to 42.2 million ounces.

→This is significant because gold prices were higher, which would normally increase the amount of scrap coming to market. One of the primary reasons scrap dropped is because investors are holding on to their metal, reportedly because they believe prices are headed higher. Isn't that one reason you're holding on to your bullion?

3) There are many reasons investors have been buying gold over the past 10 years, but what is the #1 reason?

a) Safe-haven asset

b) Gold coins and bars have become more intricate, widespread, and beautiful

c) Supply and demand imbalance

Global fears increasingly led investors to purchase large volumes of gold in 2010 for safe-haven purposes, despite record price levels.

→High levels of investment buying are expected to continue in 2011 because virtually none of the economic, political, and monetary concerns have been resolved.

If you got all three answers correct, you're an investor who understands the basic reasons for owning gold and that those reasons are still in play.

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This presentation uses the term "Inferred Resources". U.S. investors are advised that while this term is recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize it. "Inferred Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of "Inferred Resources" may not form the basis of feasibility or other economic studies. U.S. investors are also cautioned not to assume that all or any part of an "Inferred Mineral Resource" exists, or is economically or legally mineable.

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Rants and Raves

Inside the mind of Equedia's editor - unrated, uncut, and unedited

Is there such a thing as freedom? Its seems nowadays, everything we do or say is monitered.

No matter where you go, there are cameras. No matter what you say, there's something that can record you.

I am not trying to sound like an 80 year old nut with a shotgun screaming its the end of the world, but seriously, even as I type this, someone can monitor my actions.

What scares me even more is our reliance to computer data. Heck, I am lost without my emails or access to the Internet. But the fact is, everything that we are as a society can be erased with the simple push of a button. Your bank account? Takes someone one second to erase. Just asked those who invested with Lehman Brothers.

Imagine if a hacker decidede he wanted to wipe out all of a bank's records? How would they find your money then?

So all of this talk about fiat currencies crashing is actually becoming more real everyday. Theres a reason why gold and silver have risen to these new highs.

I am not a gold bull. I am simply a fiat currency bear. When the Fed can lend as much money as they want to whoever they want, without anyone knowing how much money they actually have to lend, that scares me. If you think the governments of the world are the ones in control, think again.

Don't forget what Rothschild said, "Who controls the issuance of money controls the government!"

"I care not what puppet is placed on the throne of England to rule the Empire. The man who controls Britain's money supply controls the British Empire and I control the British money supply." - Nathan Rothschild