PMX Communities Inc. (fka PMXO)

[Navyvet004]

Fed Policy to Boost Gold, Silver

Lost the faith in PMXO, on another note here is a interesting article for the shareholders.

An elongated zero-interest-rate policy should lift gold prices. Bullish on Agnico Eagle Mines, Coeur Mining, Gold Resource and Newmont Mining.

http://online.barrons.com/news/articles/SB50001424053111903684104580021242498148112

Sterne, Agee & Leach

Visible continuity from the Federal Reserve Board regarding an elongated zero-interest-rate policy, a reversing trend in the value of the dollar and supportive investor interest should allow gold prices to move higher.

Any added easing from the European Central Bank combined with economic and wealth-driven demand growth from China should aid price trends as well. We have entered a period that has historically provided seasonal support to gold and silver prices and mining equities.

We rate Agnico Eagle Mines (ticker: AEM ), Coeur Mining ( CDE ), Gold Resource ( GORO ) and Newmont Mining ( NEM ) as Buys, with Barrick Gold ( ABX ), Hecla Mining ( HL ) and Pan American Silver ( PAAS ) rated at Neutral. We have raised our price target on Agnico Eagle from $42 to $48.

Visible continuity from the Fed regarding an elongated zero-interest-rate policy (ZIRP) should aid price trends. Despite the Fed's overly optimistic forecast for growth, our chief economist, Lindsey M. Piegza, continues to expect the Fed to remain restrained by a more lackluster reality until at least 2016. Lindsey believes the Fed will remain patient, waiting for realized improvement before adjusting monetary policy.

We have entered a period that has historically provided seasonal support to gold and silver prices and equities. Eleven of the 13 times since 2001, gold prices have increased during this seasonal period (June 30-Oct. 31), with average increase of 6%. Nine of the 13 times since 2001, gold and silver equities as represented by the PHLX Gold/Silver Sector Index have increased during this seasonal period (June 30-Oct. 31), with higher beta than gold prices but the same average increase of 6%.

Our chief market technician, Carter Braxton Worth, believes the current gold chart pattern is extremely bullish. Carter notes that gold prices have been making higher lows, and that the 150-day moving average appears to be have bottomed out, with the prospective completion of the bottoming-out process implying a move to about the $1,500 level. After withdrawals in April, exchange-traded fund flows have more or less stabilized in the last two months. Net long positions in gold and silver on Comex have increased to the highest levels since early 2013. In India, the new government may cut gold import duties in its maiden budget. However, a below-average monsoon season could impact rural gold demand.

As mining management teams continue to communicate with investors, cost and capital successes and goals show a more sustainable business model going forward; we believe the gross underperformance of 2012-2013 can be reversed.

-- Michael S. Dudas
-- Satyadeep Jain