Eric Hommelberg:

Hi there Bill,
Think we’re near the bottom of the junior wash-out and a powerful up-leg could be very well upon us. The daily/weekly and monthly charts of the CDNX/GOLD ratio do speak for themselves, this is most probably the best opportunity to buy juniors since the gold bull market began in 2001:

The weekly CDNX/GOLD ratio chart reveals an extreme undervaluation of the junior shares against gold not seen before in the entire gold bull market that started in 2001. As the saying goes 'BUY LOW' and 'SELL HIGH' it seems that we've arrived at a perfect 'BUY' opportunity here.

 

Now when we take a peek at the monthly CDNX/GOLD ratio chart we'll see the extreme under-valuation again but more importantly we'll notice plenty of room for a giant up-move in the junior shares that could last for more than a year!!

The most interesting part of this chart is without doubt the almost identical setup as in early 2003. Now the year of 2003 turned out to be the best year for the juniors so far and in fact still many juniors are trading at levels below their 2003 peak! Another beauty of this chart is that it leaves plenty of room for a giant up-move for the juniors which could last for more than a year.
All the best,
Eric

 

The major gold/silver shares held their own despite the dabacle in South Africa and a sinking US stock market. The HUI was only off 1.09 to 461.58. The XAU dipped .35 to 185.59.

Just when you think the reasons for gold and silver to head for the moon can't get any better, they do. The expansion of those reasons is likely to continue in the weeks ahead as the problems created by the market managers in the US have led to systemic malfunctions in our markets. The problems are too big to handle without a purge of what caused those problems in the first place. Perhaps the coming GATA ad in the WSJ will be a step in that direction. Regardless, next week is going to be a very exciting one for our camp.

As the systemic nature of US financial market problems is understood by the general public and more of the Planet Wall Street crowd, they are going to flock to gold, silver and the shares.

Gold, silver and those shares remain THE historic investment opportunity of a lifetime!