Rob McEwen: Quick Move Up in Gold Coming in the Not too Distant Future!

The move in gold can be very quick. I’ll give an example; We hit lows in July of this year and then in the month of August, metal prices turned around. The price of gold was going up but the mining stocks just took off. There were gains of 25%, 75%, 100% in the sector in the space of less than 20 days.
It illustrates how we can move from a market that’s operating basically on a no-bid basis where no one wants to buy, to suddenly getting into a space where no one is offering any stock and prices are forced up as a result of that. I’m quite convinced we’re going to see that again in the not too distant future, and that’s what makes it exciting in this space.”

 

 

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Submitted by Tekoa da Silva, Bull Market Thinking:

I had the great opportunity recently to reconnect with the founder and former CEO of GoldcorpRob McEwen. He is now the Chairman and Chief Owner of McEwen Mining.

It was an interesting discussion, as Rob indicated we are very close to a significant turnaround in both metals and mining shares, to which the speed of recovery coming out of this bear market, will be absolutely dramatic.

Starting out with an expected catalyst for recovery of the mining sector, Rob said, “The next run in this market is going to be [driven by] gold moving higher…You look at the broad market right now. The stock market is quite high at the moment and on a relative basis, gold is very cheap. So I think some investors will be looking at relative value situations and saying, ‘Maybe I should have some gold in my portfolio now.‘ It’s off quite a bit from its highs, and I still believe our monetary base is being debased and one needs to protect their capital…[so for that reason] I don’t think there’s much more on the downside in gold—maybe five percent.”

In discussing the speed at which a turnaround can occur, Rob noted that, “It can be very quick. I’ll give an example; We hit lows in July of this year and then in the month of August, metal prices turned around. The price of gold was going up but the mining stocks just took off. There were gains of 25%, 75%, 100% in the sector in the space of less than 20 days.”

That blinding recovery according to Rob, “Illustrat[es] how we can move from a market that’s operating basically on a no-bid basis [where] no one wants to buy, to suddenly getting into a space where no one is offering any stock and prices are forced up as a result of that. I’m quite convinced we’re going to see that again in the not too distant future, and that’s what makes it exciting in this space.”

With respect to questions investors should ask themselves and of the CEO’s they invest in—before putting down their capital—Rob advised to consider, “What is their commitment in terms of the time, attention, and effort they put in?…Are they backing their words with their [own] money?…[D]o they have some competitive advantage? Is it a high grade deposit or is it a low cost deposit that gives them margins that allow them to survive downturns such as we’re experiencing now? Is there room to grow?…[and] what have they done before?”

Despite pain experienced by investors over the last few years, Rob concluded that, “I think right now [is] when you should be looking [at the mining sector] because there are going to be some good stories [ahead].”

This was another outstanding interview with one of the great mining wealth-builders of our time. It is required listening for serious investors and market students.

To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to your desktop:

>>Interview with Rob McEwen (MP3)

 

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