The upward trend in precious metals that we had forecast last week was right on target. The positive momentum was aided by good news and healthy 1Q 2008 results from the following miners:
- Rubicon Minerals (RBY)* reported new high-grade gold intercepts at its Red Lake, Ontario site. Since our buy alert, the stock’s price climbed about 16%.
- Apollo Gold (AGT)* finally reported a net income of $3.7 million compared to a net loss last year. The stock was up about 10% since our buy alert.
- Barrick Gold (ABX), the world’s largest producer, posted a net income of $514 million compared to a net loss last year. Its stock price climbed about 7% since last week.
- Goldcorp’s (GG) profit rose 84% and its stock price is up over 10% since last week.
- AngloGold Ashanti (AU) reported higher earnings, an increase in production, and lower mining costs at just $430/oz. Its stock price is up over 10% since last week.
- Rangold (GOLD) said gold reserves at its Ivory Coast site were 52% higher than the previous quarter and profits were 57% higher than last year.
The importance of the aforementioned news is that precious metals mining companies, after several years, are finally profitable. The implications of this are truly astounding considering that mining stock prices have yet to adjust to the market value of precious metals.
If you missed the big profits, then you’ll be happy to know that some metals companies such as Anooraq Resources and International Royalty Corp. have yet to release 1Q 2008 results. Expect good news to be released this week and prior to next week’s full moon.
As metals stocks stabilize near their weekly highs, expect the upward trend to continue until the price of gold rests comfortably above $ 900. Although it’s too early to tell, it seems that precious metals prices will surge this month. One thing is sure, the recent price correction coupled with mining company profits is attracting a slew of new investors. The best advice we can offer is practice patience, even if it hurts. Technical indicators are pointing to higher prices.
