David Bond: What a September!

New “stimulus” packages by the European Central Bank and the U.S. Fed have sent gold up 10 percent in the past five weeks, the yellow metal's biggest gain since September of 2011. Barclay's upped its Q4 gold price forecast to $US1,810 per ounce and predicts an average of $1,860 for 2013. That would put silver at $37.20 per ounce on a 50:1 ratio with gold, or at about its current $33 at 55:1. (The gold:silver ratio, which has been all over the map this year from 48:1 to 59:1, on Monday morning was 52:1. This is probably why none of the gold pundits ever weighs in on a silver price prediction.)

Mineweb quotes Natixis Bank thusly: "The market will instead turn to the question of the imminent US 'fiscal cliff' and the need for an increase in the country's debt ceiling shortly thereafter. It is worth recalling that the peak in gold prices in 2011 was related not to QE, but to growing concerns about the health of US finances, and the prospect that the US may be suffering from problems similar to those of European governments."

For Natixis, continues Mineweb writer Geoff Candy, “(T)he question of the debt ceiling and those associated with it are much more likely to influence the price of the yellow metal over the short term than QE3. But, it cautions, that assumes the Fed isn't successful in its efforts to boost the housing market. If that does happen it says, 'it could have a negative impact upon US demand for precious metals.'”

[caption id="attachment_2241" align="alignnone" width="574" caption="Moroccan shepherd girl high in the Atlas mountains"][/caption]

We apologize for our absence in this space last week. We were on our way with friend Gordon Holmes to visit Morocco, a very hospitable constitutional monarchy on the northwest coast of Africa that enjoys beaches on both the Med and the Atlantic. Despite a night's stay in Casablanca, we were unable to locate Humphrey Bogart , Ingrid Bergman or Rick's Cafe, but we did see some tempting silver opportunities high in the Atlas Mountain range between Marrakech and Ouarzazate, and sampled some splendid locally-grown red varietals in those three cities. Despite (or because of?) its Arabian and Muslim demographics, Morocco is decidedly pro-western: it was in fact the first country to recognize, in 1777, the sovereignty of the fledgling United States of America; a friendship treaty between the two nations is the USA's oldest. A polite, Canadian-style demonstration occurred in Casablanca the day before we arrived, involving about 400 people, but it was to show support for Morocco's King Mohammed VI, who backed Western efforts to depose Libyan dictator Khadafy during the Arab Spring uprising. Phosphate mining plays a big role in the Moroccan economy, but copper and precious metals are on the rise there.

The fall conference season kicks off in earnest on Thursday with Cambridge House's Toronto Resource Investment Conference. A month later, on October 25-26, Cambridge House's Silver Summit will celebrate its 10th anniversary at the Davenport Hotel in Spokane. Demand for exhibitor space at both conferences has been unusually high, with new explorers joining the ranks of more seasoned, late-stage project developers and seasoned producers. Expect many new faces at both conferences this year on the exhibit floor and the speakers' dais.

We'll be checking in again on the first day of October. While an inevitable correction is due for the metals at some point after such a rockin' September, opportunities will abound in the junior sector on the dips. By the end of next month, today's prices could be looking dirt-cheap.