iShares S&P/TSX Global Gold Index ETF (XGD.TO)

(Past Top Pick, July 15 2014, down 34.39%) Was a seasonal trade, took a huge chunk off in August but still owns some. Feels like it is undervalued. May add to it, but watching and waiting to see where it closes on Friday. Before adding, he would like to see the flushing out, big volume, the capitulation, the hammer forming where it really washes out and where it closes back up. This will help evaluate the risk.

(A Top Pick July 14/14. Down 18.11%.) The US$ has a lot to do with this trade. Still likes this and is just waiting to add to it.

He might have chosen CEF.A-T but you can’t have more than one top pick from a year ago. He looks for a 10% price increase in gold this year, but they also reduced costs so you could see more appreciation. Use a basket instead of trying to pick a gold company.

Gold has come down to the marginal cost of production. The days of gold going down are probably behind us. It is going to take more M&A deals before gold takes off. You don’t have a lot of downside risk with this.

Gold stocks have outperformed gold which is a really good sign. We are into a period of seasonal strength. It just completed a double bottom. It should go up to its previous peak now. He prefers an ETF because of the diversification.

Canadian Gold ETF. You can buy bullion or equities. Gold has two periods. Mid Dec. until end of Feb. and the best period is from Mid-July until October. XGD-T is the big gold miners. You saw it form a base pattern over the last month or so. The trend is down but the seasonality tends to kick in here. Thinks you will see momentum coming in to the sector. Tax loss selling has gone. Could be interesting over the next two months.

Gold is a traditional store of value when there is a real or perceived insurrection and/or when there is inflation. He does not see inflation coming back anytime soon. He believes we are moving to a new normal of a “no growth” or at the very least a “low growth” economy. Central banks around the world have been trying to stimulate as much as they can, and they just stopped in the last week or two. All that has done is simply stave off deflation. As a result, he doesn't think gold will be doing anything any time soon.

When you are concerned about the big differences between the best people that can execute or a wildcard coming out of the blue, you’re better off buying a basket. Chart is showing higher lows. Chart indicates that there could be a little bit of downside. Looking for a bit of resistance above $13.40, but if it gets above that, he would be inclined to add to that significantly.

There is this big base developing over the last year or so and is threatening the resistance area right now. Most recent dip in June did not make a lower low. He thinks it will continue to chop around here until there is inflation; however he thinks there is a bigger threat of deflation than inflation at present. It is tradable on a short term basis. Buy at $12.65 sell at $13.50-14 if you want to trade it. Use a stop loss.

If it got below $12.07 then it would mean that something has changed. It is trying to break out.

Want to add gold because of how it has pulled back? XMA is half rocks and trees as well as gold.

Is in a classic reverse head and shoulders pattern. It hasn’t happened yet but it probably will do so starting around the middle of July. Right now gold equities are outperforming gold so he will use this instead of bullion.

The valuation on gold stocks relative to gold is at 25 year lows. Management are trying to address some of the costs. They are cheap but have been for 2 years so it could be a value trap. Gold may not go up because QE has not caused inflation.

Market leading ETF for gold. Physical bullion would be CGL-T. He is not saying the gold run is not over. He would not buy this, but the questions was ‘which one’.

Has never been a gold bug. If we were going to have $5000 gold, it would’ve happened years ago. Expect golds will come back once people are willing to take more risks than they have been to date.