I greatly enjoyed the article: Transcription of Finance News Network Interview with Sprott Asset Management CEO and chief investment officer, Eric Sprott. My enjoyment was most likely boosted by my being a long term precious metal bug and having acquired a largish amount of silver at $5 many years ago I have been wondering when to cash in. In the article Sprott suggests that there is plenty more upside to come.

My first brush with silver was just before the Hunt brothers started their now famous attempt at cornering the market… I then re-entered the market using long dated silver call options and around a year ago I converted the “hefty” gains into silver metal.

My wife says we came in on silver and it is likely several decades on that we will go out on silver…. so the article seemed to be written for me as it re-enforces my viewpoint/bias. The great thing about owning the precious metals is that they are capable of giving wonderful gains if you are patient.

The Perth Mint has unveiled the world’s largest and most valuable gold coin.

Weighing in at just over one tonne, the 99.99 per cent pure gold coin has been valued at more than $60 million.

A team of a dozen people have worked since late last year to create the coin which measures 80 centimetres wide and 12 centimetres deep.

Mint chief executive Ed Harbuz says the idea was to make it the biggest and best in the world.

“Well the largest coin in the world up to now has been 100 kilograms, made by a competitor mint and we thought well, we’d better make it so much bigger that it’ll stay the biggest coin in the world for a long time,” he said.

I guess we are still just a colony

Several weeks ago I suggested that the rush to Africa and other developing countries (Peru) etc could be hazardous for gold explorers and producers in my post titled “Out of the (African) Fat and into the Fire?“.

Today’s Reuters article that outlines the emerging risks in Ghana Africa’s second largest gold producer: “Ghana is in talks with gold miners in the country, Africa’s second-biggest producer, over additional taxes so as to benefit from the soaring price of the precious metal, the government said on Tuesday.” suggests to me that there is still plenty to worry about when it comes to who owns what and the stability of those companies that have shifted to the sovereign risk heavy countries. True countries like Burkina Faso etc have some excellent resources with high grades. But time will tell if they are going to end up taking a disproportionate stake or even worse like Bougainvillea.

In the meantime some ASX listed companies are making some excellent finds in our relatively safe Australian region and after factoring in the above seem to make more sense.

For the complete Focus Minerals announcement including figures and tables, please view the following link:
http://media.abnnewswire.net/media/en/docs/ASX-FML-560104.pdf

“Former hedge fund manager William Fleckenstein believes that “it is a virtual certainty that the FOMC will unveil QE3, a third round of quantitative easing. And there is a reasonably higher probability that, whatever form this latest round takes, it will be fairly dramatic and involve a real commitment to more money printing” – and not just the operation twist.” http://wallstreetwindow.com/node/3583

http://resourceinvestingnews.com/21890-silver-the-perfect-alternative-to-gold.html

ONE of the questions investors have to ask themselves is, What is silver – an industrial metal or a precious one?

Possibly for the first time in the existence of the metal, the two may co-exist on relatively equal footing – which is why silver stocks are so appealing to investors at present.

This means news from explorers is now getting more attention. Read today’s article by Robin Bromby

Yesterday I had a roast duck lunch with Alex Papas a good Forex and general broker with long term (40 years) experience. His team includes a long term gold and resources broker. Below is my interpretation of how our conversation could be summarized ….

We discussed the effects of QE3. Essentially QE3 will further debase the US$’s value.

This will be a positive for gold, silver and many other commodities. It will also cause a rise in our AU$. This will most likely be good for our Australian commodity exporters but not so great for our industrials etc. (history will repeat)

His take was that it might be a good time, in ~ two weeks time, to start buying silver as he sees it as being cheap around the US$41 mark. He sees silver as being cheap because of the gold : silver ratio.

He also suggested that the gold bull will be done when the Dow = the gold price in US$. This last happened around ~1980…

The chart “Gold Market Price – Dow/Gold Relative Ratio” and the accompanying text (below in yellow) is quite interesting and seems to suggest that gold can either double from here or the Dow could halve. The trend seems to indicate the former.

Dow/Gold Relative Ratio

When we take the Dow Jones and divide it by the price of Gold we get an analysis tool called the Dow/Gold Ratio, which is comparing the markets directly and we can see which market is outperforming the other market. When the blue line heads higher, the Dow Jones is performing better, when the blue line heads lower, gold is performing better. In the short term this may not be so clear, but in the long term it can describe a very clear story.