I think Northgate is a speculative play that represents a good opportunity to get in gold and other metals fairly economically.
I'm a holder and buying on the way down. They are a company that is producing gold and other minerals. They are not a development stage company and they do have a market for their products.
The real question is what is the entry point in relation to the future potential. There are significant factors that indicate a recession will occur in either 07 or early 08. As equities holders shift to commodities NXG's price will rebound significantly as the picture pans out as expected.
I recently read an article that during 07 and 08 we should expect the dollar to weaken with excessive and uncontrolled government entitlement spending (medical and veterans benefits and retirements, medicare, social security the unfixable problem, and others), inflation will begin moving signifantly higher, and jobs data will point to further layoffs as companies move to trim staff.
Further, home equities have been drained and all but spent in the previous 2 to 5 quarters. This had the effect of propping up the economy while personal income failed to grow sufficiently enough to support sustained consumer spending - there were few to low wage increases.
Geopolitical uncertainty is a major driver for those rushing to safe havens in precious metals. The MiddleEast will continue to influence the West in their effort to remain relevant. When threats communicated come to fruition, about damaging petroleum infrastructure in the MiddleEast, despite heightened security the economic posture, leverage, and power will be shifted to the MiddleEast.
With all of this - I expect Gold to ramp up significantly through 07 and 08. NXG is a pure speculative play with promising rewards for those that buy now and hold through the bottom period.
I will continue to buy NXG on its way down. It will probably bottom between 2.50 and 3 bucks/share.
- Bill |
Male
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