CDE and UXG Positioned for Strong Gains
Posted on October 29, 2007 , filed under Stocks | Print This Post
These charts and my annotated notes speak for themselves. I took these screenshots in the middle of the trading day last Friday.
I’ve loaded up on US Gold Inc. [[UXG]] and Coeur d’Alene Mines Corp. [[CDE]]. I expect to see a major 15-20% move in UXG if the Fed cuts the interest rate next week. A cut would mean a weaker dollar and in turn stronger precious metals prices. With gold currently at $780, we may see a rise over $800 before the end of the year. I started loading up on UXG at prices between $4.40 and $5.5. UXG may top mid $5’s very shortly.
CDE has a very good shot at clearing $4.50 levels as we approach a bullish centerline crossover. The last time we saw a bullish centerline crossover, CDE experienced a nice .70 pop.
As you can see with my previous article about the COT report, there is a large looming commercial short position that will need to be covered if the Fed drops rates. The commercial shorts covering their positions will fuel a nice rise in gold and silver prices. The environment is currently there for strong gold and silver. Precious metals equities are in as good a position as ever to gain 20-30% plus before the end of the year.
I’ve also purchased a large number of January 2008 and January 2009 options in the other precious metals stocks that I favor.
*Disclaimer: The author currently owns shares of UXG and CDE.
(5 votes, average: 2.4 out of 5)
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Nice move in loading up prior to the Fed cuts.
The Fed did a nice job in trying to sell the public on the chance that they may pause, and now they have to try and sell the public on the idea that they may done.
But, I don’t buy it.
Those jobs numbers were mainly from birth/death adjustments. They even showed job growth in the Real Estate sector?
I think the American public has now been pushed to the limits of belief by the Fed.
- no inflation.
- great job growth.
- strong economy.
- strong wage/income growth.
- and the financial system is safe & sound.
Actually, I think the catalyst that is going to keep the wind behind the sails of gold and gold stocks is the unfolding crisis in the financial system.
I wrote an article on it here:
http://goldsilverstockcharts.wordpress.com/category/michael-ceruleans-gold-silver-commentary/
Tell me what you think.
In my opinion - Citibank, Merrill Lynch and Goldman are all technically BANKRUPT.
This new accounting rule “SFAS 157″ is going to rock the financials once the public get’s a peek behind the curtain of Citi, Merrills, and Goldman Sachs books.
This smells like Enron x 10 to me.
And I think this is a reason that the Dollar may not be poised to rally - “one-sided” trade, or not.
Because it’s no longer just a US Dollar story.
Everyone is familar with the story of gold vs. the US Dollar.
But, the untold story is gold vs. virtually all major currencies.
Just since August - gold is up:
+ 32% agains the US Dollar
+ 23% against the Euro
+ 17% against the Swiss Franc
+ 16% against the Japanese Yen.
It’s NOT just a Dollar/Fed rate cut story any more!
I think we see $1000 Gold, a HUI index above 550 and $100 Oil by April/May next year.
Cheers and keep up the good work - I love your site,
Michael
November 5, 2007
I own both CDE and UXG. CDE has proved to be a major disappointment since I originally purchased it in April 2007. The 3rd Quarter 2007 Earnings report was a disaster, and I wonder why the stock has not fallen. Most be everyone focusing on C and MER???
With regards to UXG, the jury is still out, and I will wait after purchasing an additional 2,000 shares at $4.45/share.
UXG seems to have fallen out of favor since the exploration update and recent market conditions. Speculative stocks seem to get dumped first when times get rough.
Hopefully this thing bounces back a bit, it appears to be headed for $4 or less within the next week or so.
Hmmm…. I to subscribe to Casey’s publication and they still rate UXG a hold.
I still have a few hundred shares of CDE; CDE would seem to be the better bet.
Like your blog.