A Comment -- General Comments From an Expert (A Commentary)

Gold: Has been very volatile. Really trading against the US$ so the recent move down has been because of the strength in the US$. Thinks the US$ has bottomed and will move somewhat higher.

Copper: Traditionally it has always been housing related. A little bit of reason to have some concerns. Wouldn’t be aggressive on copper in the short term. There’s time yet.

Silver: For the most part this acts with gold. Thinks there is an oversold component here and there should be a bounce, but Buy a low cost producer such as Silver Wheaton (SLW-T).

Market: Was more optimistic on gold than he should have been. It held at $850-$875 and every sign suggested that it was going higher. Got hit with profit taking. Should have some support around $770. Market is close to starting a new up-leg. A little financials, some utilities, industrials, US health care, US consumer discretionary will lead the market and energy will follow in about 1 month and gold after another 6 weeks.

Oil: Fairly comfortable to wear it has pulled back. At $140 or more, it was speculation that was driving it. At $120 plus or minus $15 is a pretty good range.

Oil Stocks: Market is not pricing in $100 oil. It takes a long time for the companies to catch up, as analysts don't feel oil can stay at the high levels. Oil will continue to be in high demand.

Energy: Too early to know if the energy cycle is over yet. Both oil and natural gas were going up in parabolic curves, which is unsustainable and they are now correcting. He is somewhat cautious here.

This is like a wholesale sell off in the gold sector. People are moving to the financials. This is a big sell off. For those who are patient, this could be a very attractive entry point. Doesn’t think gold can come down much more and should edge up, but the question is will stocks follow. It’s very related to the US$. When it’s strong, gold tends to be weak.

Gold: Has always found gold bullion a little difficult to make a forecast on. The breakdown of gold stocks has surprised him. His concern is that gold stocks have more down side than base metals, oil/gas or commodities.

ETFs are great because you can get the broad exposure to the sector. What looks interesting to him now are the 1) non-durable consumer stocks 2) biotech and pharmaceuticals 3) software (specifically companies that have recurring revenue) and 4) rails.

Cdn$: Feels that $0.98 is the base and probably $1.02 for the maximum for this year. Longer term $.98 to $1.05.

Banks: Looking out 3 years, bank stocks will be very much higher and the yield is going to be very attractive. There was a recent bounce in the US financials, which has rubbed off on the Canadian banks. He still feels there are a lot of financial worries so the bank debacle is not over yet.

Oil Income Trusts: Revenues have picked up substantially and they have increased payouts. On a long-term basis, he likes Baytex Energy (BTE.UN-T), Freehold Royalty (FRU.UN-T), NAL Oil & Gas (NAE.UN-T). Arc Energy (AET.UN-T) is a little expensive but has one of the best managements. In both the Montney and Bakken areas.