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XMFSinchiruna (26.54)

Bargains of the Day



May 05, 2010 – Comments (6)

Hi Fools,

Gold has once again shown resilience in the near-term while silver has continued to fall in lock-step with the industrial commodities ... creating what I would consider a solid relative bargain. The gold/silver ratio has again pressed into the upper 60s... which I did not expect to happen again after the recent up-surge ... but that just means opportunity for those who abstained when silver dipped lower. The way I see it, anything under $20 per ounce for silver falls into the realm of deal of the century, and I am a concerted buyer of silver stocks at these levels.

In gold, the best bargain of the day is NovaGold Resources, in my opinion. With the unflappable backing of guys like Soros, this stock is inevitably going to develop its two primary assets: Donlin and Galore. Any sell-off like the one that we have witnessed over the past 2 days presents a golden opportunity.

ECU Silver looks like a nice entry price at $0.66 after reaching $0.72 just the other day. This is a core holding of mine, and has been since 2006 (I remain in the red: advantage ... you fools).

Great Panther also has re-entered ridiculous territory in terms of discounted reserves and production growth.

Happy shopping... these are the kinds of relative bargains that patient precious metals investors pine for.

6 Comments – Post Your Own

#1) On May 05, 2010 at 2:46 PM, Option1307 (30.59) wrote:

The gold/silver ratio has again pressed into the upper 60s

Sinch, I know you've discussed this multiple times in the past so sorry for asking again but what is to say that gold prices don't just come down to make the ratio more reasonable? Instead of silver prices increasing as you are calling for.

I'm not disagreeing with your overall perspective on metals/commodities, just curious on your rational.

Have a good day!

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#2) On May 05, 2010 at 4:58 PM, cbwang888 (25.60) wrote:


SVM made a good comeback from $6.62 day-low to $7.77 close.



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#3) On May 05, 2010 at 5:49 PM, DarkToast (32.12) wrote:

Sinch, care to share your opinion on Rubicon? (RBY)

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#4) On May 06, 2010 at 12:17 AM, XMFSinchiruna (26.54) wrote:


One would need to know whether you are talking long-term or short-term here. In terms of the now, that's not the point of following the ratio. I track the ratio on a daily basis because it informs which of the metals I press into on relative weakness when I have cash I'm looking to put to work.

When the ratio is 65 or higher, I can not easily justify a gold purchase when silver represents such an enormous relative bargain.

Over the long haul, this ratio will not remain above this historically anamolous range above 50:1, and I believe it will reach at LEAST 30:1. That does not happen by a decline in gold, but via the slingshot effect that silver exhibits relative to gold price movements over time.


I have owned Rubicon since 2005, and it has grown into a core holding with a 270% return thus far. You may have noticed it fell back considerably from its high, which I utilized as an opportunity to buy back in after selling a small portion of my stake above $5. 

In short, it's the most impressive set of drill results I've ever seen, in a region that has seen more than a few. It's a little disconcerting that they haven't yet progressed into pre-feasibility studies nor established a resource estimate for the asset, but this is one patient Fool who will not be parting with his Rubicon stake.

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#5) On May 06, 2010 at 10:24 AM, DarkToast (32.12) wrote:

Sinch, thanks for the feedback.

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#6) On May 06, 2010 at 12:32 PM, Option1307 (30.59) wrote:

Thanks Sinch!

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