Resources expert Larry Edelson has just completed a six week tour of Asia; from his final stop in Dubai, he writes, "Gold is being gobbled up like it's going out of style."
The editor of Real Wealth notes, "In my 30 years in the gold market I have never seen the volume of gold trading and the lust for the precious yellow metal like I saw in Dubai." Here's his latest buys in the sector.
He explains, "The major fundamental forces behind high gold prices haven't changed. The U.S. dollar is very weak in the knees and inflation is rampant, despite what the government's numbers say."
He notes that the U.S. dollar continues to lose value against other major currencies. He points to both private and public debt problems as the root cause, along with troubles in the real estate sector and "political infighting" that is maaking foreign investors "think twice" about putting their money in the U.S.
He forecasts that the dollar's decline will continue, which in turn, will push up inflation. He notes, "All you have to do is look at your monthly bills and regular purchases."
To protect against inflation, he believes the best strategy is to invest in gold. And in this sector, he offers two new mining recommendations.
First, he looks to Golden Star Resources Ltd. (ASE: GSS) which conducts mining and exploration activities at the Ashanti Gold Belt in Ghana. He explains, "This year, GSS expects to increase production 94% to 390,000 ounces."
Meanwhile, he notes, sales and profits are "soaring." In the past year, he points out, earbnings per share were 31 cents versus a loss of 11 cent loss in the previous year.
His second gold mining buy is Yamana Gold (NYSE: AUY), with development and exploration properties in Brazil and Argentina. He notes, "In 2006, the company's sales rocketed 270% higher to $169.2 million while operating earnings jumped 300% to $35.1 million."
He says, "Yamana is sitting on a treasure trove of up to 6.8 million ounces of gold and 2.3 billion pounds of copper. Last year, it produced 359,272 ounces of the yellow metal." Finally, he notes the company has no debt, which is says is rare for a mining company. He rates the stock a buy at current levels.
For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free daily website, TheStockAdvisors.com.
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Reader Comments (Page 1 of 1)
5-08-2007 @ 4:51AM
Homero Velazquez said...
I was waiting for such fluctations in currencies several years ago, but I think that this has also something to do with the Euro strength (now 1.36)
But! going now to invest in Gold may be a little risk, because its price is pretty expensive for usual people.
For example,with us in Mexico,the Centenario(50 Gold pesos) has double its price in two years from 4000 pesos in 2004 to more than 8000 pesos today
5-08-2007 @ 8:06AM
Michael Schneider said...
Since Jim Cramer came out for GSS the other night, he likes both Yamana, which has been his top pick and GSS as well. When he started his show he was just recommending the better known "best of breed" companies that turned out not to be the best investments. Free lists of Jim Cramer precious metals and industrial metals "Bull Sign" stocks from his Lightning Rounds since the start of CNBC's Mad Money are available for those interested at http://www.Barreloworld.com.