Lets hope KXL is the major discovery this year that he speaks of:

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August 13, 2008

Gold Update

On Monday evening, August 11, we wrote about an “incredible buying opportunity” in gold as it plunged to nearly $800 an ounce in the Asian markets. Our three recommendations were the HGU (TSX) as well as call options in Goldcorp (G, TSX) and Agnico-Eagle (AEM, TSX) for October and November, respectively. The gold market is alive and well and all three of those trades should be very profitable. Generally speaking, we see gold moving a little higher in the short term as it continues to correct hugely oversold conditions. An eventual re-test of the Monday/Tuesday lows is certainly possible, however (technically, this should be expected), before gold heads significantly higher in the fall.

Recent “expert” comments about the “end of the commodity boom” are hogwash, as we see it, and those who are perpetuating that view are simply on the wrong side of history. Period. $100+ oil is here to stay, and $800 gold is going to look dirt-cheap a year or two from now. We’ll expand on those comments in the near future.

Venture Exchange

The Venture Exchange may have hit an important bottom this morning at 1,966, just 16 points above the 1,950 support level we identified. It bounced off that low and finished the day up 20 points at 1,997. In just 30 trading sessions, then, the Venture Exchange plunged a total of 670 points - 2,636 to 1,966 - or 25%. That kind of a drop is certainly in line with other short-term plunges we have seen over the years with the Venture Exchange and the old VSE. This market is extremely oversold, and today’s action was very encouraging, but whether a substantial rally is now underway remains to be seen. We’d like to see a convincing move over 2,000 tomorrow, a weekly close above 2,000, and then some follow-through next week for confirmation. Also important to watch out for with the Venture Exchange right now and in the coming days and weeks is news of a major discovery - historically, this often has occurred at or near a market bottom (last August was a great example with Noront) and fuels the market for a very sudden and sharp move to the upside.