Breakout! Charts of 2 of the Hottest Stocks in Precious Metals

Today, we're going to look at two stocks that are very familiar to Oxford Resource Explorer subscribers.

First, a weekly chart of Silver Wheaton (SLW) ...

(Updated chart)

Silver Wheaton popped above its downtrend today. That's good, because it spent a few weeks drifting sideways. We'll need follow-through, but valuation and potential growth are lining up in your favor.

Next, a daily chart of Goldcorp (GG) ...

(Updated chart)

We didn't buy the bottom, but bought it cheap enough that you have some very nice gains in a short time. Kudos if you're an Oxford Resource Explorer subscriber.

And stay tuned for your next Oxford Resource Explorer Weekly Wire, which is coming on Wednesday.

I like how the other positions I recommended to you in ORE look here, too.  And for more analysis of gold, see my post from earlier today.

5 Hottest Stories on Gold -- Is China's Central Bank Buying Bigtime?

Story #1: China may have vaulted ahead of Italy and France last year to become the third-largest holder of gold, according to Bloomberg. China’s central bank probably added 622 metric tonnes last year after reserves increased 380 tons in 2012.

There’s one word for that. Whoa!

Also, this line from the Bloomberg story: “Based on conversations with officials in China and Mongolia, it’s evident that China feels they want as much gold as much as the U.S.”

I’ll do the math for you. That would mean China wants to add another 5,963.5 metric tonnes on top of last year’s buying binge. If it keeps buying at last year’s rate, that would be another 10 years of massive buying by China.

But it could buy less, it could buy more. I’d say it would buy more if it thinks it is buying gold at a discount.

Read the rest of the article

Story #2: Chinese Consumers Are Loading Up, Too!

"Should Chinese demand continue to be around 100 tonnes per month [as in 2013]," said Eugen Weinberg to Bloomberg on Monday, "then we're likely to see a strong recovery in gold prices."

Now forecasting a possible 12% rise in world prices in 2014, and noting that Hong Kong "[is] the trading hub" for China's flows, "This is likely to be make or break for this year," he concludes.

Read the rest of the article.

Story #3: Arab shoppers are buying a LOT of gold.

“The impression is that these shoppers are buying into gold as a sort of defensive asset against social or economic uncertainties in their home countries.

Read the rest of the article

Story #4: Could Gold Coin Shortages Lead to Rationing?

This article is from ZeroHedge, so take it with a large grain of salt. But they’re quoting a source from the Perth Mint.

Story #5: Goldcorp Launches $2.6 Bid for Osisko Mining

Mines are valued dirt-cheap, and the miners know it. The big fish are eager to snap up the little fish. Osisko is up 19.7% on the news as I write this, while Goldcorp is down 3%. If gold prices do head higher from here, this is very accretive to Goldcorp’s value. 

Will we see more takeovers? At these prices? Bet on it!

Read the rest of the story here.

Is the Next Wave of Mergers in Mining on the Way?

Barron's had a story on Friday that I wanted to pass along. Cowen & Co. think that gold miners have a merger wave in the future.

From Cowen:

Major producers with high profile difficulties (e.g. Barrick) and newly promoted CEOs may hesitate to make acquisitions, especially of larger pre-production assets or operating assets. However, those like Goldcorp, Agnico, and Yamana, whose issues have been less severe, will have more leeway with shareholders. The largest North American producers need to continuously develop projects to offset the natural depletion inherent in the mining business. If management teams do not act to purchase advanced assets, many will likely find themselves without replacement production post 2017

Barron's says: "the combo of production needs, the low valuation of speculative project developers, and the widening valuation gap between the small and the large would be three of the factors pushing toward yes."