RawGreed gold update

Posted on July 14, 2006 , filed under Stocks | Print This Post

On June 13th, 2006, I wrote this post predicting gold’s low in its previous correction would be in the $540-$550 range. It looks like I was correct as gold has firmly remained above my predicted low last month. Gold is currently trading at $660.10. Gold will likely continue to rise in the short-term as tensions persist in India, North Korea and the Middle East. If tensions ease, I expect gold to pullback a bit before continuing its bullish trend. It is unknown if gold’s recent rise due to geo-political terrorist concerns will set a new range for the metal or if it will drop again. With the market being very uncertain, it would not surprise me to see gold drop back to the $610-$650 range. The performance of gold mining stocks appears to reflect the markets uncertainty over the price of gold. Shares of my top two gold mining picks, Yamana Gold, Inc. (AUY) and Tanzanian Royalty Exploration Corp. (TRE) are down from the highest prices reached this week even though gold is trading at its highest level in the past month. Gold is up around $30 or 4.7% this week compared to last Fridays, July 7th, 2006, close of $632.60. AUY is up .07 or 0.7% from 9.89 to $9.96 in the same period. TRE is down .15 or 1.9% from $7.80 to $7.65 in the same period. I expect to see AUY and TRE both jump up today if the price of gold continues to rise.

Looking at the past months performance for gold, instead of the past weeks performance paints a different picture for gold mining stocks. Gold closed at $562.70 on June 13th, 2006 and $659.30 on July 13th, 2006. The one month gain for gold is $96.6 or 17.16% from June 13th, 2006 to July 13th, 2007. TRE has risen $1.47 or 23.78% from $6.18 to $7.65 in the same period. AUY has risen $2.15 or 27.52% from $7.81 to $9.96 in the same period.

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