Royal Gold stock fell strongly during the week, but managed a sharp rebound with good volumes on Friday. Fears about reduced QE from the Fed may keep the gold / silver prices under pressure. The stocks have made new lows and gold fell 7% during the week. This fall came after a relative period of calm which stretched over a few weeks. The fall was sudden and surprising. Most precious metal company stocks are way below their book values, and it seems that the sell off is overdone. Many investors like George Soros and Jim Rogers are getting a bit more positive about the prospects of the precious metals. They argue that devaluation of currencies will ultimately increase the price of Gold, and the stocks will rebound sharply if that happens. Jim Rogers has stated that a 20% rise in gold prices may lead to doubling of some gold stocks because they have been beaten down so badly. Gold may be closing in on levels where it may start to find buyers. Some bigger companies are acquiring assets of development stage companies which are now trading at very attractive valuations. Coeur 'D Alene (CDE) has hinted at some acquisitions around its properties in Nevada, though it has not put a timeline or mentioned company names. CDE already has a 5% stake in Pershing Gold Corporation (PGLC), a development stage company in Nevada which is expected to start production of Gold in 2014. Even streaming / royalty companies have gone for some purchases recently. However, the break below recent lows is a little unsettling and the sentiments may take some time to stabilize. Usually, the gloom or the boom is overdone, and that is the best time for buying / selling. Of course, not many can dare right now, but in hindsight things may appear different.
