We believe gold is poised to break out very soon for new highs. We are currently seeing some consolidation. We can already see this today as people are buying up the gold stocks. I see IGR, AAM and ADU are up today. The best performers are going to be the African stocks, though they have already made significant gains, so the Australian laggards like AAM and IGR can be expected to do as well. There are a number of good gold stocks, e.g. CRE. Another nice one is RED 5 Ltd (RED.ASX).
We will of course be doing everything in our power to stop the Rudd government from taxing miners. This is pure fascism. We have witnessed the collapse of the US, and now the European economies, and now we are going to observe their efforts to tax any profits you make from investing in the only form of wealth left with any tangible value. By the way - don't think that you will be gaining. You will gain in nominal terms against a debased USD or EURO, but don't delude yourself to think that gold is any more useful today than it was a decade ago, its just that all other asset classes will be undermined by financial debasement. i.e. Demand based investments like copper, broad equities and relative investments like currencies. The solution of course is to buy gold stocks in those countries where governments are not taxing profits. The message is thus to buy stocks offshore.
The emerging financial peril might actually give Rudd the support he needs to implement this 'fascist' tax. To all those unthinking housewives, salary men and businessmen who thought the previous asset inflation was real, here is your financial reckoning.
Whilst gold stocks with Australian based projects are going to suffer from the Resource Rent Tax debacle, at least in the short term, other Australian gold stocks which have projects abroad will do well. Africa and the outer areas of China (Mongolia) and Central Asia will be hot spots, as well as PNG, so watch for announcements from these areas. i.e. Wide drilling intersections of over 2g/t. Anything over 40m is impressive, over 20m is good. The more holes the better, the more prospects/targets the better, the shallower the better. See our Mining Fundamentals eBook- I did not write it because I was bored :) If you read enough reports you get a sense of what is good..but it does take years....hence the report.
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Andrew Sheldon www.sheldonthinks.com
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