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Silver and gold movements

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Silver and gold movements

On Tuesday you suggested that you were bullish on silver for 24. So can you suggest some silver producers to consider investing in? Secondly, given that gold producers’ share prices are not yet reflecting the strength of the gold commodity yet, what event(s) would you expect to happen to see gold shares really move higher? Is there an increased cost of production issue that’s hampering gold company profits? Thx for your forthright feedback

Answer

Hi,

Silver is hard to buy on the ASX without getting other stuff in there.  We would defer to an ETF for silver exposure, with the ETPMAG preferred.

You are right in terms of costs for Gold companies. It’s actually very hard to mine Gold cost effectively, and this is what has led to underperformance of most gold equities vs the physical. Some of the cost pressures are starting to ease very slightly, and in the case of Evolution (EVN) that we hold, this was a key area of focus for them when we met management 2-weeks ago. They have good assets, made a good recent acquisition, and we think they will do well overtime. Their upcoming quarterly (17th April) does present a risk, hence our decision to trim our holding, however, we like the medium-term direction they are taking to become a true Gold/Copper company.

Operational execution is therefore the key, although clearly Gold at $US2300/oz helps a lot.

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Silver ETF (ETPMAG)
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