junior miners ride the gold wave

Junior Miners Ride the Gold Wave
Posted on 19 November 2009
Tags: Chalice Gold Mines, Dollar, Eritrea, Gold Price, Investing, Junior Miners, Nevsun Resources, sunridge gold
Gold Wave

Gold Wave

In recent days news coverage all over the globe states that pressures metals are highly demanded, as investors continue to escape from the dollar to look for a safe haven in gold, silver and copper.

The latest headlines state that gold prices soared to their highest levels in more than a year to above USD 1.150 an ounce, as stronger-than-expected U.S. consumer prices stirred inflation worries.

The Dollar fell against other major currencies such as the Euro on Wednesday as investors took profits on the currency’s biggest rise in three weeks.

This shows the fear and insecurity of investors in respect to the length of the current recession, which is one of the toughest recessions to estimate. Therefore, investors look out for commodities such as gold until they can be very sure to spot a light at the end of the tunnel.

No doubt many new mining markets and businesses are gaining from this development, as it impacts positively their ability to raise capital and increase their share price. Since June 2009 the share price of Chalice Gold Mines increased by 2.4 times, Nevsun Resources 1.95 times and Sunridge Gold 1.65 times.

As long as the dollar remains weak, the gold price will continue to surprise the markets with record breaking levels. Only a better outlook for the global economy and an end of the recession in sight will make the dollar rise again. For gold mining companies, which are due to start operations in near future, this comes like a ride on a wave until they are ready to produce and sell the gold.