With markets tanking globally, Merkel may reconsider her position on the redemption pact. If she does and it moves forward
it will give gold a ring side seat in the eurozone for the conceivable future. If she rejects the redemption pact solution, it will
likely ultimately be the end of the eurozone as we know it, putting the global financial system in some degree of turmoil
during the process. After the predictable "strong dollar" selling, gold should have a field day.
That would be in contrast to oil which will continue to be sold should the eurozone break up. A low oil price will help boost
gold miner margins.
No wonder why our gold mining stock insider indicator is hitting multi-year highs (http://bit.ly/KRrWxY). Big bang or bust,
gold insiders seem to be confident that their shares will benefit from either scenario.
Meanwhile, insiders in the more economically sensitive diversified mining group are also buying. They seem to be betting
that whatever the resolution to the eurozone crisis turns out to be, bang or bust, it will eventually allow global investors to get
back on track focusing on opportunity instead of risk. However, if Germany overplays her hand, which we suspect she will,
the ride to getting back on track will be stomach wrenching for investors.
The Global Industry Classification Standard (GICS®) was developed by and is the exclusive property of Morgan Stanley Capital International and Standard & Poor's. GICS® is a service mark of MSCI and S&P and has been licensed for use by INK.
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