Gold shares are now worth 40% of what they were a few months ago. Liquidity cuts both ways, but this is ridiculous. Many are priced for gold at less than $600 per ounce. We're talking about REAL goldmines, not some hole in the ground that may one day produce some metal. Goldcorp (GG) at $25, Golden Star (GSS) at $1.20, Newmont (NEM) at $35, Kinross (KGC) at $12, Goldfields (GV) at $7 is extraordinary, in my opinion.

A portfolio with equal weighting of each would synthesize a producer of some 2.5 million ounces per annum at a cost well below industry standard, with operations across 10+ countries, with some 45 million ounces of proven and probable reserves.

Lihir (LIHR) is fantastic value at 1.80 for the Aussies, by any measure, now that they've ditched their hedgebook.

The silver stocks, of which there are so few, are even more attractive. Silver Standard Resources (SSRI), the awesome non-maturing silver call option, is exceptional value at $15, in my opinion. Pan American (PAAS) also rates highly with me. Just my 2 cents worth!

It’s going to be an interesting few weeks, and we'll see if my analysis holds true - there isn't enough physical to keep gold down here, same as the London Gold Pool of late 60's. The next 2 to 4 weeks are a critical test. Maybe my timing will be too short, as the old "markets can stay irrational longer than you can stay solvent" chestnut kicks in?

Am I concerned? Not as yet - but ask me in 5 more days of London Fixes! I expect we'll be able to point to this recent 3-month period in a few weeks as a defining stress test - and I reckon we'll be back over the $1000 per ounce by the end of the first quarter next year. Let's just get all this election window dressing out of the way.

Giddy-up!