Banro Corp. fka BAA

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http://sprottglobal.com/thoughts/articles/will-resources-see-a-v-shaped-recovery-after-capitulation-rick-rule-responds-to-your-questions/

>>The weak demand worldwide for commodities today, Rick believes, is partly thanks to stimulus measures over the last 10 years. By seeking to “juice” demand back then, today’s consumption of commodities is tepid, Rick believes.

Will we see a “V-shaped” recovery?

“I think the answer is ‘no,’” says Rick. “I see a gradual recovery, not counting on some exogenous shock. Certainly, if Fed Chairman Yellen were forced to rescind a 25-basis –point rate increase, it would be bullish for the gold. A 25% increase in the gold price would take it to the $1,400 or $1,500-per ounce level, which would probably lead to a doubling of some of the better stocks Would this be a ‘V-shaped’ recovery in the context to of what we’ve seen before? Not really. But would we welcome it? Of course yes.”

Why say that capitulation is “upon us?”

“Conditions are ripe for capitulation,” Rick advises, “any reasons to be hopeful have been taken out of the market after many years of a bad market.

“Capitulation is an emotional response and we’re seeing bad news come out ahead of October, a time of year where investor emotion is typically high.”

Of course, a recovery can still occur even if we don’t have capitulation, according to Rick. “The TSX Venture (where many Canadian mining stocks trade) is off by around 85% from its peak. So the market might not need to go lower. But from an emotional point of view, you usually need a capitulation before the market takes off again,” he says.
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What’s in store for precious metals and commodities generally?

“I think it’s important to distinguish between industrial metals – base metals, ferrous metals, or metals used in energy and agriculture – and precious metals,” Rick explains.

“For industrial metals, you’ll need to see a broad economic recovery – or at least a recovery in demand somewhere,” he says, “and so I think it will take a long time for them to recover.

“For precious metals, on the other hand – and in particular gold stocks – I believe they will benefit as the US dollar reaches a peak and begins to roll over,” Rick explains.

In his view, the US dollar would begin to decline before we saw a broad economic recovery in demand, so we should see gold – and precious metals – move higher before other metals. <<