Today for the first time ever, gold reached $1,000 per ounce. So it reached my 2008 benchmark with 9 1/2 months to spare. The bad guys drew a line in the sand at $985 gold and $20 silver, and both of them got blown away. What's next? Well, you have to get to $1,000 before you can get to $2,000.
Oil reached $110/bbl today, and silver nearly $21/oz before it pulled back. The Fed just "created" $200 billion worth of liquidity (I don't want to call it money) to purchase dodgy securities that banks can't sell and don't want on their balance sheets because they are worth little or nothing. So I see more inflation, and higher gold and silver prices ahead.
All is well at my favorite stock, Silver Standard. The Pirquitas mine construction is well underway, and there are no issues to keep it from completion in the 4th quarter. By this time next year, the stock should be re-rated from developer to producer, so it looks severely underpriced in the mid-30s.
The company held a conference call yesterday, so I had the chance to ask the president about the Snowfield project. This is a gold deposit with 3.5 million ounces of gold defined, which is great, but I wanted to know if the company intended to monetize the asset or take it into production. The response was what I hoped for, that it would either be sold or operated as a joint venture, but the company would continue to focus on providing leverage to the price of silver. It is a rare thing to find an exploration company that makes a successful transition to an operating producer, but this company is on track.
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