Gold Q&A: Answers to our Subscribers' Most Pressing Questions

• How about using DUST ETF for precious metals trading?

  March 2, 2012, 12:00 PM

  I would like to suggest mentioning DUST to you subscribers when discussing the HUI stocks on Fridays. It involves a bit of decay as an ETF, but for a few days or a week it is a good trade at 3x leverage. This stock has an advantage over GLL or ZSL in that it goes down when gold goes down or the stock market tanks.

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• Are you using GDX as a proxy for miners, or either the HUI or XAU indexes?

  February 23, 2012, 12:00 PM

  Are you using GDX as a proxy for miners, or either the HUI or XAU indexes?

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• Is it correct to treat junior gold and silver stocks as long-term capital?

  February 23, 2012, 12:00 PM

  This is not the first time you've differentiated between long term and speculative capital, and I wonder if you could clarify this (...) What is your opinion - is it correct, using your terminology to treat junior gold and silver stocks as "long-term capital?"

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• Is it true that low interest rates don’t result in higher stock prices?

  February 10, 2012, 12:00 PM

  Here’s what I just read. Please comment. "Low interest rates are not likely to translate into higher stock prices, because this relationship is based on the assumption that people believe stocks will rise."

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• How do you develop and use your precious metals cycle analysis?

  February 10, 2012, 12:00 PM

  Very good analysis in your recent article. Please tell me how you develop and use your time cycle analysis. Are the time cycle’s duration, beginning and end based on the previous short term cycles and durations? Have you studied this analysis somewhere else or is it from simply observing the previous cycles and then extrapolating?

  This is key, and would really help a short term trader like myself protect the profits he makes in the upswings and also profit from the coming downswings which as you know can be very deep in miners and silver.

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• What do you think of AGQ ETF as a fund tracking silver?

  February 3, 2012, 12:00 PM

  I am interested in investing in silver, and I would like to know more about the ETF AGQ. Would you recommend this investment, or some other ETF with leverage instead? With these ETFs, how much of a relationship is there with the physical metal?

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• What’s your take on gold mining company valuation?

  January 13, 2012, 12:00 PM

  What is your opinion on this method for gold mining company valuation?

  “Start with the number of ounces it has in the ground (a public number accessible to all of us), and simply divide that number into its market cap.

  For example, Kinross Gold Corporation (KGC), as of this writing, has a market cap of $18.821 billion, with 62.4 million ounces of gold reserves. By dividing the number of ounces into the market cap, we get a figure of $301.62.

  To this total we add the company’s cost to dig each ounce of gold out of the ground. In the case of Kinross, that’s $610. That makes the final figure $911.62 – the cost per ounce of gold you pay for buying Kinross stock. This represents a 49% discount on the current price of gold itself (based on the August 16 close of $1,787.10).”

  Then you can compare these discounts for other gold miners and buy the most undervalued ones.

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• Is the economic picture deflationary?

  January 13, 2012, 12:00 PM

  Do you see the economic picture as deflationary, given the problems around the world, in particular in the EU?

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