Gold & Silver Newsletter 7/20

Daily Newsletter
Friday, July 20, 2012
Argonaut Gold Corvus Gold Huldra Silver Inc.

In this issue…

– Ray Dalio’s Quotes on Gold

– Company News

– The Three Variables

– Premium Snippet

Ray Dalio’s Quotes on Gold…

Ray Dalio is a hedge fund manager and his fund is the biggest in the world and perhaps the most successful over the past 35 years. Here is what he had to say about Gold:

“The upside of Gold is that you cannot produce it yourself like money can be printed, the downside is the lack of any interest payment on it. As economies are undergoing cost cuts, theoretically it supports the shift of assets into gold etc, but  it will take a longer period for gold to become a major holding. In recent years, interest in gold market has led to short term passage of cash, which is unlikely to sustain.
Gold is also being supported by secularly increasing demand. Prior to the financial crisis, gold was substantially under-owned relative to financial assets, and despite stepped-up purchases of gold by central banks and sovereign wealth funds, the shift toward greater holdings of the precious metal is still in its early stages…speculative gold positions had been significantly reduced [by the end of the quarter] and as a result are less likely to be a bearish short-term driver going forward.”

Company News…

First Majestic Produces 2.1M oz Ag-eq in Q2

Corvus Reports Positive Metallurgical Results

First Majestic has also raised its production guidance for the full year as a result of its acquisition of Silvermex Resources. The release also contains information concerning what will be the company’s fifth mine, Del Toro. The project will be quite important to the company’s success in the coming months and years. We explained this and more in an updated report for subscribers.

Meanwhile, the metallurgical results for Corvus are from the Mayflower deposit which can be permitted first and ahead of the main deposit. The met results included 98% recoveries of -200 mesh material. Carl Brechtel, COO commented:

The near total gold recovery in the -200 mesh material indicates that essentially all of the gold in the rock is recoverable which is a very positive indication for heap leaching.  

The three variables…
I interviewed Tiho Brkan last night. The interview is not published yet but after chatting, I surmised there are three variables to deciphering the current economic and market situation:
1) Most markets have already discounted a mild recession but not a full blown recession. Often before a recession people are caught off guard. In 1990, 1999 and 2007, Bonds were not signaling a recession as they are now. 
2) We all know what is eventually coming in Europe and the US, but how do we get there? Seems as though Europe won’t act until a crisis and Bernanke won’t act until things get worse.
3) These things being said, gold stocks are probably the leading risk indicator and should be the first to sniff out what is coming. They are extremely oversold and ready for a major bottom but as of now few are buying. And few are selling.
Interestingly, the resource sector and Bonds have probably priced in a mild recession but equities have not. Tiho believes that when we get Fed action and the like, commodities will resume their bull market but equities will struggle. Tiho believes a full blown recession is coming but has purchased Silver recently and in December. He said Silver is 15% of his fund and will increase the percentage should Silver breakdown here.   

Premium Snippet…

Yesterday we updated subscribers on Silver and the silver stocks. We provided updated reports on several of the companies. Join our service and you can find out which silver company we believe is the best bet for the next two years.    

Consider a subscription to our premium newsletter. It’s less than $1/day. The cyclical bear market is nearing an end and we believe we have identified the companies poised for big rebounds (when the sector bottoms) and poised for significant gains in 2013-2014. For $0.83/day you get guidance from a professional. You get our top picks, intensive coverage of Gold & Silver, our global coverage and more!  

Wishing you health and profits,


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Argonaut Gold Corvus Gold Huldra Silver Inc.