Focus on Emerging Companies

The gold market has become the top performing investment sector over the past few months as investors world-wide are still reeling from the financial collapse. 

The approach that we adopted late last year – to focus on emerging gold companies – has paid off well, with big gains in most of our small gold companies. The gold price recovered strongly, after dropping to $712 at the height of the crisis last October. Investor demand for bullion (and the paper equivalents) is offsetting plummeting sales in the jewelry market.

The massive amount of government handouts directed toward stimulating economies around the world has at least stabilized the financial system. The enormous scale of the cash injections – $3 trillion and counting – is leading investors to realize inflation is inevitable.

The deflationists still have a strong case in the near term. However, one need look only a short distance into the future to see the seeds of the next inflationary cycle.

Gold is in the news for the moment. The silver price is following the lead of gold, but is getting less attention in the media.

Over time, the economies of the world will get back on track. Any signs that recovery is on the horizon will see base metal prices begin to rebound.

The case for uranium, looking a year or two into the future, is also compelling. We will have more to say on uranium in an upcoming issue.

For now, we are maintaining our focus on emerging gold and silver producers and companies with advanced-stage deposits. At the same time, we are beginning to look at uranium and base metal companies with well-established deposits.