In this issue:

• Investor Gold Exposure

• Are We Near a Top?

• Timing the Move

Gold and Gold Mining Shares As a Percentage of Global Assets

From our readings of Casey Research we found a great chart and comments from Eric Sprott of Sprott Asset Management, we bring this to your attention:

Eric Sprott -  ...."The conventional wisdom is that gold is in a bubble. It isn’t so. At the just-concluded Casey’s Gold & Resource Summit, Eric Sprott showed a slide showing gold and gold mining shares as a % of global assets. As you can see in the chart, which I am republishing here, gold holdings are currently a fraction of what they’ve been historically.

We have a long way to go before gold can be considered fully valued, so sit tight and be right."

...."Get yourself positioned to take advantage of this once in a lifetime ride."

Are We Near A Top?

Take another look at the chart above. We are at historically low levels on investors' exposure to gold. Yes, we have had a nice move up in gold but gold and silver shares have greatly lagged and there is a strong argument to be made for a monster rally very soon. The gang at CNBC is finally starting to talk about the daily highs in gold, but we are in the early stages. Ask your friends and family. How many of them are even aware of what is happening with gold? Probably None!!

First I doubt many mutual funds have gold investments and they can move a lot of money once they start buying. Then as always happens, the public, will enter as we approach a final peak in shares. While you might believe that gold is in a bubble it is probably because you are reading articles on gold websites, such as Kitco, Financial Sense, Goldseek and others. Again, ask your friends and family, they have never heard of these websites and have no clue, as yet, that they will one day be buying shares and warrants, albeit as substantially higher prices.

Timing the Move:

We see the opportunity for a great trading top coming in Jan/Feb 2011. Depending on how this sets up we could possibly have the peak in gold. However, we find it difficult to believe that the shares and warrants can peak this soon. We would not be surprised to see a situation like the performance of Oil (see chart below) where Oil had a "blow off" but there are still great opportunities in some of the oil shares.

For a variety of reasons, we see the potential top for shares and warrants from Jan/Feb 2011 to as far out as Jan/Feb 2014. Think Fibonacci Numbers here: take the previous peak in Jan 1980 and add 34 (a Fibonacci Number) you get to Jan/Feb 2014. A better time and a better setup.

Bottom line is that there is a lot of time for you to get positioned to participate in the coming market move. True there will be much volatility but as the express goes, "Risk is the price you pay for opportunity".  We suggest you management this risk by allocating only a portion of your investments to this sector depending on your own level of confidence.

We will do our best to guide you through this exciting period and the 'once in a lifetime opportunities' which we see possible.

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Some of my closed out positions:

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    Dudley

Dudley Pierce Baker - Owner/Editor - Guadalajara/Ajijic, Mexico
Lorimer Wilson - Director of Marketing and Contributing Editor - Toronto, Canada
Bruce Ross - Webmaster and Administrative Assistant - Phoenix, USA