View from the Montana Log Cabin – Am I worried about gold and gold shares ? No, time to get the buying boots out!
At the moment most of the focus on commodities that I have been seeing has been on gold and oil, and what people are forecasting for the coming months and longer term. But I suggest we are missing a great opportunity here.
Silver has been incredibly volatile this year with large swings, but it is now back at a level where I can see a good chance of a bounce coming, and that in turn offers upside on producers of the precious metal.
Other than a few months around the start of the year, we are now seeing silver back at its lowest levels since mid-2009, and I can see a strong bounce coming soon.
Out-of-favour South American silver and gold producer Hochschild Mining (HOC) says it expects to increase production this year 28% to 32 million oz. of silver equivalent, with all-in costs pared to $12 (£8.50p) or $13 an ounce, still not far off a current market price of $14.15c an ounce.
There is an element of bravery whenever one looks on the bright side of a second line mining stock. While there is the hope that after the best part of 4 years in the doghouse this particular asset class will go up and stay up, the most we have been able to expect realistically is an intermediate rebound.
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