Never a Better Time

By Neil Charnock
www.goldoz.com.au


My articles have now changed in nature – for I have had to talk about what will happen for some time now. Right now the focus is on what is happening in addition to what will happen. The next several weeks will go down as the greatest buying opportunity of a lifetime in Australian gold stocks. Current conditions are choppy post breakout on the Comex gold price as our yellow friend (friend in times of peril) has yet to retrace and test the recent break point at $692. Let’s cut straight to a technical update before I elaborate.



In my last article I highlighted how we alerted our clients about the coming breakout. We provide very useful resistance and support levels for the metals and stocks in our Newsletter and again we reached our first target on gold and the price reversed – Colin suggested that trading profits be taken right at the correct time – again.

Now we see the test period where the old resistance becomes support, with a few minor support levels above $692 and a buying range is again suggested. We have also become very strong on some of the gold stocks and take requests for technical analysis at subscriber request which is proving popular too. The time to get in near the bottom is drawing to a close /here for some stocks now – back up the truck.

I have exhaustively outlined reasons to get into gold these past several months and alerted the public to fairly exact buy points on several occasions. Key current reasons that have surfaced are related to the global credit conditions and the derivatives time bomb hanging over the fiat monetary system. If you do not understand this issue I strongly recommend that you get up to speed - and fast (pun intended). There is more going on behind the scenes at the Central Banks at present than they are letting on – things are not right and this is an understatement.

There is no choice but to print and print they (Central Banks) will – a point that I and many others have been making for some time. The need for US money to escape to a safe haven asset, and other investors too – the need to invest in gold has now become so urgent that words cannot express. The need for investors with any amount of capital to get into gold, silver and related stocks has never been greater – period. Any amount of protection you can acquire will be relative.

There has been strong ASX (Aussie shares) and gold price correlation to US markets for a while now however we are likely seeing new signs emerging - of the expected disconnect. Colin Emery calls the ASX the “Resource Bourse” as it is dominated by mining stocks – just like our booming economy. We have little to do with the US and we / our resource economy will disconnect at an increasing rate, so will gold and silver.

The Australian dollar is set to go higher too – here is a slightly out of date chart on the AUD/USD. Since we published this the ratio has returned to 84c or line 2 above. We had warned the AUD was overbought and needed a good cleanout – well we were not disappointed. Due to the sub prime liquidation factor we overshot out down side targets. This was a distortion.



Our upside targets are supplied only to subscribers however I can tell you the path is up. This will present a double bonus for offshore investors; look for timing opportunities as this oscillates in the near term.

I have been contacted by some very interesting investors of late – what I would call the ultra savvy and I do enjoy the company of several such characters thanks to this job. Of late this has been increasing – I equate this to a very important timing factor.
The gold stocks have been behaving exactly as I have expected this past few weeks. We have seen a very strong rebound and choppy behavior. Brilliant trading conditions have produced stellar returns in my own portfolio and I now find myself above pre-crash levels thanks to a broad understanding of this sector. I will be bedding down core positions across developers, juniors and leaders over the next few weeks – time is extremely thin on this issue.

As gold production decreases the juniors that can bring a deposit to production look more and more attractive – so do the near term producers. Here is a chart of the Australian gold juniors – they were briefly way over sold in the panic and have done well. We expect them to so extremely well in the coming up-leg and correct choice is paramount to maximize returns. The conditions I have written about over the preceding months are hereby validated.



Further confirmation – Newcrest Mining (major Aussie producer) now seeks to close its hedge book which follows in the foot steps of Lihir and several global majors – they know they will be under water if they don’t… they have been under pressure for the last two years on this factor.

Don’t waste another minute – look over the investment choices that Kitco and that other services have to offer – and GoldOz for Australia at www.goldoz.com.au – we have an excellent Newsletter and a PDF series on the whole sector (including developers & juniors) and a spreadsheet on the leaders if you prefer the bigger players. Get metals, get shares, get smart – get in now. I do not usually write like this and you can check through my archives – these are unique circumstances.


Good trading / investing.
Regards,
Neil Charnock



REGISTERED ADVISOR – WHO THE ADVICE COMES FROM IN THE GOLDOZ NEWSLETTER:
Colin Emery is currently a Branch Manger and Senior Client Adviser of a Stock Broking Company in Queensland Australia. Prior to his work in Share broking he spent nearly 20 years in Senior Management and Trading positions in Treasuries for major International Banks such as Bank Of America, Banque Indosuez, Barclays Bank, Bank Of Tokyo and Deutsche Bank AG. He spent a number of years as a Senior trader in New York, London, Singapore, Tokyo and Hong Kong with these institutions. He also was Global Head of emerging energy, emission and commodity products for the leading Energy and Commodities brokerage firm of Prebon Yamane Ltd – Prebon Energy for four years before moving to Cairns in 2003 to focus on the Stock market and Private consulting work. The private consulting and advisory work currently undertaken is with companies involved in Resources, Energy and Renewable Energy and Forestry.
Neil Charnock is not a registered investment advisor. He is a private investor who, in addition to his essay publication offerings, has now assembled a highly experienced panel to assist in the presentation of various research information services. The opinions and statements made in the above publication are the result of extensive research and are believed to be accurate and from reliable sources. The contents are my current opinion only, further more conditions may cause my opinions to change without notice. The insights herein published are made solely for international and educational purposes. The contents in this publication are not to be construed as solicitation or recommendation to be used for formulation of investment decisions in any type of market whatsoever. WARNING share market investment or speculation is a high risk activity. Investors enter such activity at their own risk and must conduct their own due diligence to research and verify all aspects of any investment decision, if necessary seeking competent professional assistance.