Resource Market Commentary

Resource Stock Digest (04/28/2009)
"The big news in the gold market is the fact that China has officially acknowledged that they have been increasing their gold reserves. There are a number of articles on the homepage on what the potential implications of this might be.

China continues to use their vast dollar reserves to buy up commodities, above and below ground, which they feel are strategic for their future. Now they are buying gold.

We would speculate that the Chinese hold the same view that we do at Resource Stock Digest. We are still in a long-term commodities bull market that is taking a breather during all the financial shenanigans. The overall stock market has continued to advance, albeit a little slower lately, and we continue to view this as a bear market rally. We do not believe this a 'V' shaped market recovery, but will be a series of 'Ws' as the financial fiasco and unintended consequences play out over the coming years.

We have locked in much of our profits from the bounce that some of our base metals plays have experienced and closed out our copper position. We may not be at the top of the first part of the 'W,' but better early than late. We do keep long-term positions in some of these base metal companies and plan on reentering cheaper in the future. We continue to hold our gold positions and we believe this may turn explosive at any time but will probably take a while longer.

Rare Earths continue to get more headlines in the main stream press and there are several interesting articles on the website. China controls much of this market and has just recently bought into a near-term producer in Australia. This has many companies and countries worried."

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