Melman on Gold & Silver
May 2012 by Leonard MelmanJust as we were sitting down to write this column, a political bombshell was released when Rick Santorum announced he was terminating his efforts to win the Republican Presidential nomination, virtually assuring the nomination will be to Mitt Romney. The remaining candidates, Ron Paul and Newt Gingrich appear to have no realistic chances.
In our opinion, these dizzying up and down moves reflect not so much a change in the direction of hard data, but rather fluctuations in sentiment regarding the degree of danger relating to the overall international economic structure.
The most important question, of course, is when these deteriorating fundamentals (positive for the precious metals) will overcome the lengthy deterioration in the long-term trading charts for gold and silver and their associated mining shares.
The Province of British Columbia, one of mining’s most active venues, has just issued a clear warning call to all miners that regulatory changes are on the way, and they may not be welcome ones…
...the much more important question is this: does this short-term strong rally necessarily portent a genuine turnaround from the metals share bear market that has been ongoing since mid-2011? For a possible answer, we turn to the long-term, five-year XAU chart.
The first thing a person should do is seriously consider whether they want to go mining as a hobby or a business, and the tax implications of the choice.
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