Resource Opportunities
"Speculators are now heavily involved in the metals markets, increasing the degree of volatility. In spite of the uncertainty with regard to the near-term direction in the metals markets, the longer-term outlook remains very bullish.


The gold price is likely to gyrate by tens of dollars as it notches higher over time. Investor demand for gold is being enhanced by the exchange traded funds, or ETFs. Institutional investors that
would not hold bullion are using the ETFs as a way of benefiting from the currency protection inherent in gold.


The base metals are also likely to bounce around, but will remain well above long-term trends until supply catches up to demand. That will require the development of several new mines,
which will take a considerable period of time, likely several years.
The silver market looks particularly interesting, as demand is driven both by precious metal investors and by industrial users of the metal. Demand has exceeded mine supply for a decade and a half, all the while using up surface supplies of the metal.


The time inevitably will come when manufacturers find it hard to find enough silver. When that happens, the
silver speculators will go into a frenzy. It is worth owning a couple of silver companies just for the potential of a silver supply shortfall.


As with all of the metal companies, focus first on selecting a well-run company with good growth potential. Secondly, own the company for exposure to the metal." (March 2006)

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