The excessive gloom seems to be dissipating as the prices of precious metals are showing some signs of stability. The range still remains narrow, and hence the possibility of a major move cannot be ruled out, but the probability of an outright disaster is less. Stocks from this sector have tested and held the recent lows on a couple of occasions. All this indicates that though there may not be any huge change in sentiments, the stocks may survive for the time being. Future positivity will depend on whether the recent highs of gold-silver are crossed or not. Further, the overall mood of the market may also determine how these stocks move. Coeur has held $13 twice and may get stronger if it is able to spend some time above the current levels ($14.50-$15.0). Companies are, meanwhile, buying assets / stake from development stage companies and even Coeur completed an acquisition in Mexico recently. Coeur recently stated that it may consider increasing stake in the smaller companies surrounding its properties for long term strategic interests. It already has a stake in Pershing Gold Corporation (PGLC), which is gearing up to start production in 2014. Pershing is also looking for strategic investors like CDE to help it meet the production schedule. The valuation parameters for the sector are now based more on future outlook, so the usual metrics can be used more for comparison. For example, most gold / silver companies are trading below book value, but still there is no great enthusiasm amongst investors to load the cart. The reason is that many are predicting a larger fall in the precious metals over the next few quarters. Difficult to be sure about this, but it is certain that even the existing levels are extremely low for these companies. Many are trading below 2008 lows and some have even gone back in time to 2002.
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