Caza Gold

Richard (Rick) Mills
Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

Caza Gold Corp. TSX.V – CZY is a new gold resource company focused on acquiring, exploring and developing prospective gold mining properties in Mexico. Currently Caza holds two attractive gold exploration projects.


Santiago, Chihuahua The Santiago gold project (962 hectares) is located 12 km east of the town of Batopilas – a famous high-grade silver district – 20 km east of Goldcorp’s multi-million ounce El Sauzal Gold Mine and 230 km southwest of Chihuahua City in Chihuahua State, Mexico.

Infrastructure is very good with state power lines crossing the properties and labor, supplies and services all available locally.

The Santiago project has been owned by the same family for over 100 years and has never been explored by modern methods.

Caza can acquire a 100% interest in the Santiago concessions (173 hectares) by making US$2 million in cash payments over a 5 year period, spending US$200,000 on exploration within the first 2 years, and by granting a 2% net smelter royalty on mineral production to the vendor.

As part of the Moris package acquisition Caza acquired a 100% interest in a 791 hectare portion of EXMIN’s Huimayvo concession surrounding the Santiago concessions.

The Santiago property covers a prominent iron oxide-silica-clay alteration zone (traced for over 500 m) surrounding multiple, parallel, high-grade, gold-quartz-sulfide veins.

Recent rock-chip sampling by Caza geologists (who sampled three of the eight known veins in the North Zone) returned consistently high grade gold assays including 30.3 grams per tonne (gpt) gold over 2.3 m in the Veta Blanca, 144.0 gpt over 1.5 m in the Veta Tajos and 17.7 gpt gold over 2.5 m in the Veta Verde.

Pathfinder elements are elevated in the alteration zone and may be indicators of better gold grades at depth outside of the high grade vein zone.

Moris District, Chihuahua The Moris gold project (16,209 hectares) is located in the Moris district of western Chihuahua State, Mexico 250 kilometers west of Chihuahua City. Western Chihuahua is a well mineralized region with multiple gold-silver epithermal vein deposits – the Moris (Hochschild), Ocampo (Gammon Lake), Pinos Altos (Agnico Eagle) and Dolores (Minefinders) mines.
Access is by paved and all-weather gravel roads from the town of Ocampo 20 km to the east. The town of Moris has good infrastructure and is serviced by a 1,500 foot airstrip.

Caza controls several prospective mineralized zones including possible extensions to the Moris mine and both recent and historic gold prospects in the Tecolote and Balleza-La Cienega sub-districts.

The Balleza-La Cienega area provided most of the historic gold-silver production from the Moris district.

Multiple small mines exploited high-grade veins along structural zones several kilometers in length.

The Balleza target consists of a wide zone of silicification and quartz stock-works within, and near, a large dacite dike similar to the Dolores deposit of Minefinders.

Sampling results are encouraging: out of a total of 135 samples – including silicified dike, stockwork zones, and veins – 74 were above a 0.3 gpt cutoff grade and averaged 2.27 gpt Au. Twenty four silicified dike samples averaged 1.66 gpt Au.

Two continuous chip samples were collected from the dike zone with silicification and stockwork veining. One sample was 16.5 m containing 1.75 gpt Au (Hochschild) and another, over 15 m, contains 1.715 gpt Au (Caza). These chip samples are 180 meters apart in similar silicified dike rocks along strike.

The resistant silicified knob of the dike is 500 m long by 150 m wide and bounded by a well defined fault zone. Car sized mineralized boulders with strong quartz veining cover the hill below the silicified knob. Hochschild drilled two holes to the south of the silicified dike outcrops, one of which intersected a wide mineralized interval of 62.4 meters grading 0.53 g/t Au 100 meters below the outcropping dike.

No follow-up drilling was ever conducted on these properties and the mineralized zones remain open along strike and down dip.
The Tecolote vein system outcrops west of the Moris mine and includes numerous gold bearing vein, stock-work and silicified zones up to dozens of meters in width over a 2.5 km strike length and 500 m in vertical extent.
The three holes drilled in 2006 by Hochschild intersected a strong gold mineralized system, including 0.6 gpt gold over 40.8 m and 1.1 gpt over 17.1 m.


Greg Myers, Ph.D., P.Geo. – President and CEO

Greg has 30 years experience in mining as an exploration and production geologist, manager and executive in Mexico, Peru, and North America working for BHP Billiton, Phelps Dodge, Kennecott, Newmont, and other companies. Dr. Myers has had several successes including: 7 new discoveries in old mine districts, significant mine expansions, major acquisitions, completed several feasibility studies and re-starts of past-producing gold and copper mines.
Bradford Cooke, M.Sc, P.Geo. – Chairman

Brad is the founder, chairman and CEO of Endeavour Silver Corp. and Canarc Resource Corp. Brad has 34 years experience as a professional geologist, manager and executive in the mining sector including mineral exploration and project management for Shell, Chevron, Noranda and corporate development and finance for several junior mining companies.

Stewart Lockwood, LLB, MBA – Corporate Secretary and Director
Stewart is a partner in Vector Corporate Finance Lawyers. Stewart has 22 years experience in corporate and securities law where his focus was on natural resources and mining. Stewart’s a past Chair of the B.C. Securities Commission Security Policy Advisory Committee and worked for several years as a securities regulator at the VSE.

Anthony Hawkshaw, BBm, – CA and Director

Tony is the Founder and CFO of Rio Alto Mining with 30 years experience as a professional accountant, manager and executive in the mining industry. Tony has worked for Falconbridge Nickel, Echo Bay Mines and Pan American Silver

Craig Gibson, Ph.D., P. Geo., – Consultant

Craig has more than 20 years of experience as an exploration geologist for large and small companies in Latin America. Craig has extensive experience managing project operations from the startup through development stages. His track record includes participation in exploration programs that have resulted in several discoveries in Mexico. Craig is fluent in Spanish, with extensive experience both living and working in Mexico and Peru.

Marco Montecinos, Geologist, – Consultant

Marco has over 25 years experience in exploration projects and business development in the Americas. Marco has worked as Senior Consultant to Intrepid Mines, Ltd in the Americas and Australia, as Vice President of Exploration for Montana Gold, numerous junior, intermediate and senior companies including Francisco Gold, Phelps Dodge, Placer Dome, Billiton, Alta Gold and Nerco Minerals. Marco was instrumental in the discovery of the Marlin Deposit in Guatemala and other gold deposits in Nevada, Mexico, and Central America. Marco is a native of Chile and fluent in Spanish.

Share Structure

Shares Issued: 35.15 million
Warrants and Options: 8.11 million
Fully Diluted: 43.26 million
Insider Shares:3.1 million
Working Capital: CA$2.5 million
Debt: nil


Caza Gold is a brand new, extremely well managed, cashed up ground floor entry opportunity. Opportunities such as this do not come along very often. Caza Gold TSX.V CZY should be on every investors radar screen.
Is it on yours?

Richard (Rick) Mills

If you’re interested in learning more about the junior resource market please come and visit us at Ahead of the Herd is based on community intelligence for the growth and preservation of capital from stock trading

Membership is free, no credit card or personal information is asked for.


Richard is host of and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse,, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.


Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Richard Mills does not own shares of Caza Gold Corp. TSX.V – CZY
Caza Gold Corp. TSX.V – CZY is an advertiser on his website Ahead of the Herd is based on community intelligence for the growth and preservation of capital from stock trading

Ahead of the Media Group Inc.a division of Ahead of the Herd Holdings Inc. All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. Ahead of the does not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. The publisher, editors and consultants of Ahead of the may actively trade in the investments discussed in this website and newsletter. They may have substantial positions in the securities recommended and may increase or decrease such positions without notice. Neither the publisher nor the editors are registered investment advisors. Subscribers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this website and publication should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law.

Gold & Gold Stock The Key Signals

Super Force Signals
A Leading Market Timing Service
We Take Every Trade Ourselves!
Weekly Market Update Excerpt
Nov 19, 2010

Gold and Precious Metals

Gold Bullion 6 month chart

Super Force Signals Gold Bullion Analysis
Gold has a Super Force Buy Signal as of Friday Nov. 12th .
Note the latest recommendations from the Super Force Signals:
Buy: 135.41 via SGOL Nov. 12

Sell: 141.73 via SGOL.
Buy: 131.70 via SGOL.
The “bullion equivalent” buy: $1354. Nov. 12

The “bullion equivalent” sell: $1417.
The “bullion equivalent” buy: $1317.
The Gold market had no sooner given a Super Force sell signal, and price began to dive immediately lower; Friday Nov. 12th marked a rough day for the markets.
The downside plunge was met with my Super Force signal buys on all Precious metal sectors.
I view the current action in the Gold Market as a superb opportunity to reload positions, from which you have booked solid gains in the last months.
It also opens similar opportunity up for those who missed the move in the first place.
I have marked on the SGOL chart above, an area of initial support followed by an area entitled “Floor Support”. Remember that term, “floor support”.
The initial support has already held, followed by a bounce.
It appears to me, unfortunately for those expecting an immediate parabolic move up, that price will eventually break through initial support. “Floor Support” is in the 1260 area.
My largest planned buys are in this ultra-key 1260 area. I bought this week anyways, and booked profits into strength via my SF60 Trading Service. I follow all signals myself. All.
I hope to begin issuing voice alerts next week to add clarity to my signals. I’m testing some equipment now. Place orders into the area around the price identified by my alert signals.

SGOL Chart 2:

Gold Bullion Chart

My target for this correction is the 1260 area. That seems logical when considering the depth of the average corrections in this Bull Market.
The only sensible way to play a correction is to buy as price goes lower. It would be not just a total mistake, but a possible lifetime catastrophe, to wait and target a price and end up missing this great opportunity.
I’ve been a buyer into weakness already. I have lightened up into strength. Volume does seem to be indicating we will roll over and likely see further weakness. Volume, volume, volume! Never take your eye off the gold market volume ball!
I suspect, unlike the last correction, we will likely get further buy signals in the Surge Index System. I would recommend systematic buying.
I buy every one percent down when I feel we’re close to a bottom. I will keep Super Force Subscribers updated every step of the way.


Super Force Gold Juniors Analysis:
I issued a Super Force Buy Signal on GDXJ on Friday Nov.12, the buy price $38.74.
I put out a sell on Tuesday, Nov. 9, at $42.18. This signal from Sell to Buy saved you 8.1%!
Just prior to that SFS scored a gain of 24% in just weeks.
GDXJ has been the leader in the precious metal sector for quite a while. Few understand this fact. Note in the above chart how the warning indicated a buy opportunity was coming.
A look at the volume in the above chart causes concern, it’s warning of further down side action. Note the heavy distribution on the declining days, followed by soft volume on up days.
The Superforce60 Trading Service scored you solid price profits already this week. That’s all that matters to the professional: Now. Thursday offered profit taking in many sectors.
While I’m trading in this sector, I’m also building a larger core of stock.
As you can see on the above chart, I’m targeting the 33-34 area for GDXJ. Can you handle a move down there? Again, I’m buying all the way down. When we get closer to my target zone, expect to see me buying every one percent marker down.
The Big Picture. Price will not be just higher, but dramatically higher. Add to key core positions.

GDX 9 month Chart

GDX Chart. 3 yr Weekly

Super Force Gold Stocks Analysis
A Super Force Buy Signal was issued Nov 12th on Gold stocks GDX at $59.61. Saving you 5.0% from sell to buy
A Super Force Sell Signal . Issued Nov 09th on Gold stocks GDX at $62.73.
Also Super Force Buy Signal had been issued on Oct 19th for GDX at $54.26. This is a gain of 15.6% in a couple of weeks, followed by savings of 5.0%!
The commentary on GDX is: Price has rocketed, and the Surge Index System grabbed your profits. A quick turn was tracked by the Surge Index System offering up new buys Friday the 12th.
To me the most important fact to get right now is how far the GoldStocks are behind Gold itself. GDX is trailing Gold by 45% sincelate 2008. Look at the weekly charts in this update. Gold is up substantially and a look at the GDX 3 yr chart shows zero progress for GDX.
In normal times GDX would be leading. We all know that these are not normal times. But consider this: THERE IS NOT ENOUGH GOLD! The only way to get more Gold is to mine it!
That makes GDX A GREAT BUY. It also underscores why the Juniors (GDXJ) are in great demand.
Keep these facts in mind during this correction. The fundamentals couldn’t be any more positive than they are.
Again, I’m buying systematically all the way to the bottom of the correction. Look the targets over closely. Bottom Line: I WANT TO OWN MORE GOLD STOCKS.

Silver Chart

There was a Surge Index 25 Buy Issued on Silver Nov. 12th at 25.71
I have laid out the areas of support and resistance for Silver. It will be key to see how silver responds after the major move to the upside in the past many months.
Silver is an asset that I hold a large core position in, and one likely going much higher in the long term. I added to positions of physical silver locked in at the spot price of 25.00, the low, so far.

Unique Introduction for 321Gold Readers: If you send me an email I’ll send you 3 of my Super Force Surge Signals this week, as they happen! The Gold and Trading Communities are starting to take notice of Super Force, and so you should! Send me your email address to:
I’ll make sure you are on the list! Thanks!

The SuperForce Proprietary SURGE index SIGNALS:

25 Surge Index Buy or 25 Surge Index Sell: Solid Power.
50 Surge Index Buy or 50 Surge Index Sell: Stronger Power.
75 Surge Index Buy or 75 Surge Index Sell: Maximum Power.
100 Surge Index Buy or 100 Surge Index Sell: “Over The Top” Power.

Stay alert for our surge signals, sent by email to subscribers, for both the daily charts on Super Force Signals at and for the 60 minute charts at

About Super Force Signals:
Our Surge Index Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building. We are two business owners with excellent synergy. We understand risk and reward. Our subscribers are generally successful business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.

Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.


Anticipating Volatility and the Rise of Emerging Markets

By Frank Holmes

CEO and Chief Investment Officer

U.S. Global Investors

Life is about managing expectations and we believe understanding market cycles helps investors navigate through the volatility of their investments. We often remind investors to “Anticipate Before You Participate” and I strongly urge you to read through our special presentation on managing volatility. Read the presentation here.

This table shows the monthly volatility based on 10 years of data for a number of different investments. You can easily see each asset class has its own unique DNA of volatility.

Standard Deviation Based on 10 Years of Data Rolling 1 MonthAs of 11/12/2010

Source: U.S. Global ResearchNYSE Arca Gold BUGS Index (HUI)11.1%MSCI Emerging Markets (MXEF)7.2%S&P 500 Index (SPX)5.1%Gold Bullion4.9%U.S. Dollar (DXY)2.5%
For gold stocks, it’s a normal event to see a positive or negative move of 11 percent over just one month’s time. For emerging markets, it’s just over 7 percent. Understanding this volatility is essential to removing emotional reactions and making the best investment decisions.

Recently, I’ve noticed many new faces on business television commenting about a bubble forming in commodities due to the Federal Reserve’s Quantitative Easing (QE2) policy and resulting weakness in the U.S. dollar. Both of these are a part of the commodity equation but focusing on them omits several long-term factors driving commodities.

I do not see a bubble at this time but our quant models are showing we are due for a short-term correction. Investors need to anticipate this correction and not lose sight of the long-term trend.

We believe government policies are a precursor to change, and as a result, we monitor and track the fiscal and monetary policies of the world’s largest countries both in terms of economic stature and population.

This table shows the population size and economic stature of the emerging world—represented by what we like to call the E7—versus the developed world—the G7.

You can see that the emerging world currently holds roughly half of the world’s population but less than one-fifth of its economic clout. Already we are seeing a tremendous transformation of the emerging world and we don’t think this imbalance will remain the case for long.

Most significant has been the doubling of the world’s population since 1970, with 40 percent of the world’s population being in China and India—we affectionately call this region Chindia. Chindia has evolved from being isolationists 40 years ago to center stage on the global scene today.

With this population surge and integration into the global economy comes a need for new and improved infrastructure. Did you know that when the U.S. built its Interstate Highway System in the 1950s it consumed roughly half of the world’s available commodities?

Today’s equivalent of President Eisenhower’s highway buildout is the network of subways and rapid transit systems China is constructing. This graphic from CICC charts the world’s top ten cities by total length of rapid transit. With 410 kilometers of tracks, Shanghai reigns as king over cities like London, New York, Tokyo and Madrid.

Even more surprising is the pace at which they have been able to lay so many tracks. The first subway cars rolled down the tracks in London and New York during the 1860s but Shanghai’s first subway wasn’t operational until 1993. That means it took China 17 years to build what it took the UK and the U.S. 150 years to construct.

Shanghai and Beijing are the largest systems in China but recently many of the smaller cities, often referred to as Tier 2 cities, are hopping on board. The Chinese government has already approved construction for 28 rapid transit systems and 36 other cities have submitted applications for construction, according to CICC.

Our China analyst Michael Ding witnessed this firsthand while traveling in China last week. Michael was surprised to see a subway being constructed in his hometown of Dalian, a city of about 6 million. I had a similar surprising experience in New Delhi a couple of years ago when I traveled on the city’s new, pristine subway system.

While short-term factors like the U.S. dollar’s volatility and the Federal Reserve’s QE2 program seem to grab the most attention, I believe the doubling of the world’s population, massive infrastructure expansion like China’s subways and the “free market policies” being embraced by the government leaders in the emerging world are much more significant.

Index Summary

The major market indices were higher this week. The Dow Jones Industrial Average lost 2.2 percent. The S&P 500 Stock Index gave up 2.17 percent, while the Nasdaq Composite finished 2.36 percent lower.
Barra Value underperformed Barra Growth as Barra Value finished 2.22 percent lower while Barra Growth lost 2.13 percent. The Russell 2000 closed the week with a loss of 2.35 percent.
The Hang Seng Composite finished lower by 2.71 percent; Taiwan was down 1.58 percent, and the KOSPI fell 1.33 percent.
The 10-year Treasury bond yield closed at 2.78 percent, up 25 basis points for the week.
All American Equity Fund – GBTFX • Holmes Growth Fund – ACBGX • Global MegaTrends Fund – MEGAX

Domestic Equity Market

The figure below shows the performance of each sector in the S&P 500 Index for the week. The best-performing and only positive sector for the week was energy, which rose 0.95 percent. Financials were the worst performers, followed by technology and industrials.

Within the energy sector, the best-performing stock was Halliburton, up 12 percent. Other top performers were Consol Energy, Range Resources and Cabot Oil & Gas.


The coal group was one of the best-performing groups for the week, up 2.5 percent, led by Consol Energy. The company rose as Chevron agreed to buy Atlas Energy, which helped crystallize the valuation of Consol’s Marcellus Shale holdings. rose 6.7 percent as the company released earnings this week which surpassed investor expectations.
Halliburton held a successful analyst day in which investors were encouraged by international growth and rising margins.

Dean Foods was the worst performer in the S&P 500 this week, falling by more than 26 percent as the company missed earnings expectations and also guided the fourth quarter below consensus.
Cisco Systems was the second-worst performer, falling 17 percent as the company cited waning government purchases of its equipment. Cisco said that state government orders fell 48 percent.
Boeing fell by 11.5 percent as the new Dreamliner suffered another setback when a test flight was forced to make an emergency landing after a fire on board.

There may be an opportunity for gain in merger and acquisition (M&A) transactions in 2010. Corporate liquidity is high, thereby providing the means to pursue acquisitions.

Should investors’ expectations for an improving economy not come to fruition on a reasonable timeframe, it could be a threat to stock prices.
As governments around the world begin to wind down the monetary and fiscal stimulus programs put in place during the economic crisis, it will likely present a headwind for stocks.

U.S. Government Securities Savings Fund – UGSXX • U.S. Treasury Securities Cash Fund – USTXX

Near-Term Tax Free Fund – NEARX • Tax Free Fund – USUTX

The Economy and Bond Market

Economic news flow was relatively light after an action-packed week last week. The market continued to digest the implications of quantitative easing (QE2), the mid-term elections and employment data. Bonds sold off this week, sending yields higher by as much as 25 basis points on a combination of QE2 trade unwind and speculation that troubled European lenders will be supported by the rest of the Euro region. The stress and concerns surrounding peripheral European countries can be seen in the chart below, which shows the current Irish 10-year bond price, which currently yields about 8 percent.


Mortgage rates fell to a record low of 4.17 percent.
Consumer debt continued to decline in the third quarter as necessary deleveraging is taking place.
The University of Michigan Confidence Index rose modestly in November.

Soaring Irish bond yields highlight the remaining risks and concerns surrounding the Euro region.
China raised its bank reserve ratio as it steps up efforts to slow inflation and to offset some of the spillover from the U.S. QE2 program.
Wholesale inventories rose 1.5 percent in September, matching the largest increase in two years. This is a potential red flag for manufacturing, as the restocking process is likely completed and this data points to slowing sales.

Inflation is unlikely to be a problem for some time, giving central bankers and other policy makers around the world room for expansive policies.

Inflation expectations as measured by TIPS spreads have risen sharply over the past month. Inflation expectations will be key data points to drive Fed policy changes going forward.

World Precious Minerals Fund – UNWPX • Gold and Precious Metals Fund – USERX
Gold Market

For the week, spot gold closed at $1,368.75 per ounce, down $24.90, or 1.79 percent for the week. However, gold equities, as measured by the Philadelphia Gold & Silver Index, actually gained 0.55 percent. The U.S. Trade-Weighted Dollar Index surged 2.09 percent for the week on somewhat of a reversal that QE2 was fully priced by the markets.


World Bank President Robert Zoellick wrote in the Financial Times that gold should be used as an “international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”
Zoellick later said that he was not advocating a return to a gold standard for exchange rates, but described the metal as “the elephant in the room” that policy makers needed to acknowledge.
“The dollar is losing its relevance especially with the emergence of Asia economies, so a more neutral benchmark may be required. Gold, amid all the recent uncertainty, is proving its worth,” said ANZ’s senior commodity analyst, Mark Pervan.

Gold reached an intraday record high early in the week of $1,422 as investors bought the metal on inflation concerns and reemerging euro sovereign debt problems. However, as the week came to a close, a new round of profit taking emerged on concern over rate hikes in China and increased CME margin requirements for silver speculators.
Gary Shilling, who correctly predicted the collapse in the U.S. housing market, noted the stock market is overvalued and foresees a significant selloff within a year.
The Federal Reserve is targeting an increase in asset prices, particularly in stocks, to create a wealth effect, and investors have responded by bidding up prices significantly before the official announcement. A sustained recovery does not appear to be in the cards after insiders sold a record $4.5 billion of their personal holdings in company stock last week

China is boosting domestic minerals exploration spending in an effort to reduce the country’s dependence on imports of iron ore and copper. China plans to spend $4.48 billion over the next five years to explore for minerals in 21 provinces to reduce its reliance on imported mineral products.
Commerzbank expects gold to reach $1,450 per ounce by the end of 2011, supported by quantitative easing from the U.S. and worries about countries trying to devalue their currencies.
“The dollar is going to be debased in a major way, and that’s reflected in a rising gold price,” said Felix Zulauf, president of Zulauf Asset Management. “If it remains within conventional boundaries, then I think $2,500 within the next two, three years is possible. Most likely it will eventually get outside of conventional boundaries when the situation worsens, and then it can go much higher in terms of U.S. dollars.”

A Bloomberg poll of over 1,000 investors, analysts, and traders resulted in 75 percent of them saying that QE2 will have little or no effect on joblessness and more than half also said that the action will not increase U.S. growth over the next year.
In terms of the Fed, David Rosenberg of Gluskin Sheff noted we may have seen the last of quantitative easing. In 2011, there will be three new voting Federal Reserve Bank presidents who have verbally opposed the easing initiatives.

Global Resources Fund – PSPFX • Global MegaTrends Fund – MEGAX

Energy and Natural Resources Market


West Texas Intermediate (WTI) oil prices climbed to their highest level in over two years Wednesday, buoyed by the U.S. Energy Information Administration (EIA) inventory report showing significant draws in all three major oil stock categories.
Frontline, the world’s biggest supertanker operator, said it’s seeing “huge” demand for crude-oil imports from China, potentially reversing a slump that contributed to mostly unprofitable charter rates since June.
OPEC raised its forecast for global oil demand in 2011 by 310,000 barrels per day. OPEC’s growth estimate for oil demand in 2011 is now 1.17 million barrels per day compared to 1.05 million barrels per day previously, but is still well below the EIA report at 1.44 million barrels per day and the International Energy Agency (IEA) report, which was at 1.22 million barrels per day in October.
Gold imports by India increased 25 percent to 20 tonnes due to a surge in demand for jewelry during the Diwali festival, according to the Bombay Bullion Association.

China’s imports of copper in October declined 25.8 percent month-over-month to 273,510 million tonnes.
Crude steel production in China dropped 3.8 percent year-over-year in October as the government imposed power restrictions to meet energy efficiency targets. Output was 50.3 million metric tons, according to data from the National Statistics Bureau.

Analysts at Merrill Lynch aggressively upgraded price forecasts for base metals based on a combination of U.S. Federal Reserve QE and dollar debasement and emerging market demand. They forecast copper to average $5.10 per pound in 2011 and $5.44 per pound in 2012.
According to Alcoa, China would like to curtail another 600,000 tonnes of aluminum smelter production before the end of 2010 to meet energy efficiency targets.
Bloomberg reported that Coal India may bid for one of Massey Energy Company’s coal mines in the Eastern U.S.
China has signed another long-term supply agreement, this time with Kazakhstan, according to a number of press articles. Kazakhstan will reportedly supply China Guangdong Nuclear Power Company with a total of about 63 million pounds of triuranium octoxide until 2020. There are no details on pricing, but this contract is slightly larger than the AREVA deal announced last week.

China sold almost all the zinc on offer from state reserves at below-market prices in the latest auctions held in an attempt to curb price gains. The government sold 49,992.97 metric tons of the 50,000 tons on offer through auctions on November 9 at an average price of 19,511 yuan ($2,946) a ton, said the State Bureau of Material Reserve.
China’s central bank raised lenders’ reserve requirements as cash from October’s larger-than-forecast $27.1 billion trade surplus threatened to add to the risk of asset bubbles and accelerating inflation. Reserve requirements will increase 0.5 percentage points from November 16, the People’s Bank of China said in a statement.

Page Not Found background-repeat: repeat-y;”>
November 12, 2010

Three Asian Markets We Are Positive On

November 9, 2010

Record Gold Prices and the Festival of Lights

November 8, 2010

Diwali, Dollars and Gold

China Region Opportunity Fund – USCOX • Eastern European Fund – EUROX

Global Emerging Markets Fund – GEMFX

Emerging Markets


China’s passenger car sales rose 27 percent year-over-year to 1.2 million units in October, the fastest pace in six months, driven by end-of-year government purchases as well as speculation that car-buying incentives may be reduced or eliminated next year.
Moody’s raised China’s debt rating to Aa3, its fourth-highest ranking, from A1, citing the country’s resilient economic growth and likely containment and effective management of losses from record lending in 2009 to combat the global financial crisis. Hong Kong’s rating was also raised to Aa1 from Aa2.
Hong Kong’s GDP expanded by a faster-than-estimated 6.8 percent year-over-year in the third quarter, accelerating from the second quarter’s 6.5 percent, thanks to robust service exports and household consumption.
LAN, the Chilean air carrier, announced strong traffic data for October with passenger traffic rising by 15.9 percent year-over-year and cargo volume rising by 18.5 percent year-over-year.
Various emerging market companies continue to expand beyond their borders – most recently Bimbo of Mexico announced an acquisition of Sara Lee’s North American bakery business for $959 million. Investors seemed to approve of this move with Bimbo’s shares up 5 percent on the news.
Walmex’s same-store-sales (SSS) in October increased by 4.2 percent year-over-year with a 2.6 percent higher average ticket size.
Higher sugar prices, up 42 percent during the third quarter, are benefiting some Brazilian sugar/ethanol producers. Cosan this week announced strong third quarter results with EBITDA coming in 30 percent above expectations.
Hungary’s economic growth accelerated in the third quarter as rising domestic consumption and increasing export demand in Western Europe is helping the country recover from its worst recession in 18 years. GDP grew an annual 1.6 percent after expanding 1 percent in the second quarter, according to Bloomberg.

China raised required reserve ratios for all banks by 50 basis points and an extra 50 basis points for six large banks in an effort to drain excess liquidity in the banking system and better manage inflation expectations.
China’s Consumer Price Index (CPI) rose by a higher-than-expected 4.4 percent in October from a year earlier and by 0.7 percent from September, attributable to a 10.1 percent year-over-year increase in food prices, the first double-digit gain since August 2008.
Thailand’s consumer confidence dropped to 71.6 in October from 73.5 in September, the first decline in six months, as the local currency strengthened to a 13-year high against the U.S. dollar and the worst floods in five decades impacted the agricultural sector.
We are watching for rising inflationary expectations around the world—Brazil’s October CPI came in at 5.2 percent compared with 4.7 percent in September, with higher food prices the main contributor.
The Hungarian government’s budget plan includes revenue projections for a special tax on selected industries to last through 2014, instead of ending a temporary levy after 2012 as previously announced.

Incipient fears over government policy tightening in China may trigger sector rotation into more defensive industries such as healthcare. With the Chinese government-spending on healthcare reaching RMB 297.8 billion in October, representing an accelerated growth rate of 63 percent versus last year, local medical equipment makers should benefit the most due to a government policy focus on expanding hospitals across the country.
A study by the Chilean Copper Commission estimates that by 2020, India will become the world’s second-largest copper consumer, versus its current position in sixth place behind China, the U.S., Germany, South Korea and Japan. The expectations are that the current annual consumption by India of around 610,000 tones will rise to 2.4-3.6 million tones. By comparison, China currently consumes around 6 million tones of copper annually.
While Zimbabwe has remained a non-entry place for many investors, there are more and more indications that the country is warming up to the entry of international companies. In the latest move, Essar Group of India is reportedly paying around $500 million for a 54 percent stake in Zisco, the local steel manufacturer, which has the capacity to produce 1 million tones of steel.
According to the Mexican press, there are three private equity groups interested in resurrecting Mexicana, the bankrupt airline. Any deal will have to be approved by the unions representing pilots, ground service and air hostesses; we understand that there are some labor liabilities that may pose a stumbling block.
Hungary, which escaped having it debt rating cut to junk by Standard & Poor’s last week, is underappreciated by investors given its fiscal performance, Royal Bank of Canada said. The chart below shows that Hungary will be the only country in Eastern Europe to run a budget surplus this year and next.


The prospect of China’s headline inflation to remain above 4 percent in the near future makes the specter of government price controls loom large, given China’s track record of pricing intervention when inflation of consumer items exceeded 4 percent on a year-over-year basis as recently as in 2004, 2007 and 2008. If price controls are brought to bear again, investor sentiment might turn negative towards producers of such consumer necessities as food, fuel and electricity.

The Central Bank of Turkey raised the reserve requirement ratio on lira deposits to 6 percent, which should drain market liquidity by 2.1 billion, according to J.P. Morgan. The monetary policy committee voiced its concern over fast loan growth and worsening external balances, in a clear signal of an imminent hike in interest rates.

Leaders and Laggards

The tables show the performance of major equity and commodity market benchmarks of our family of funds.

Weekly PerformanceIndexCloseWeekly


Change(%)S&P Basic Materials219.85-4.96-2.21%S&P Energy469.56+4.44+0.95%Hang Seng Composite Index3,402.65-94.82-2.71%Gold Futures1,367.80-29.90-2.14%XAU216.10+1.19+0.55%Russell 2000719.28-17.31-2.35%S&P BARRA Value558.44-12.69-2.22%S&P 5001,199.21-26.64-2.17%DJIA11,192.58-251.50-2.20%Oil Futures84.57-2.28-2.63%S&P BARRA Growth633.21-13.76-2.13%Nasdaq2,518.21-60.77-2.36%Korean KOSPI Index1,913.12-25.84-1.33%S&P/TSX Canadian Gold Index416.02+2.09+0.50%Natural Gas Futures3.83-0.11-2.82%10-Yr Treasury Bond2.78+0.25+9.87%

Monthly PerformanceIndexCloseMonthly


Change(%)Oil Futures84.57+1.56+1.88%XAU216.10+6.46+3.08%Russell 2000719.28+12.81+1.81%S&P Energy469.56+28.04+6.35%Nasdaq2,518.21+76.98+3.15%Gold Futures1,367.80-2.70-0.20%S&P Basic Materials219.85+4.80+2.23%S&P BARRA Growth633.21+17.48+2.84%Korean KOSPI Index1,913.12+36.97+1.97%S&P 5001,199.21+21.11+1.79%DJIA11,192.58+96.50+0.87%S&P BARRA Value558.44+4.07+0.73%S&P/TSX Canadian Gold Index416.02+7.09+1.73%Natural Gas Futures3.83+0.13+3.52%10-Yr Treasury Bond2.78+0.36+14.77%Hang Seng Composite Index3,402.65-332.01-14.83%

Quarterly PerformanceIndexCloseQuarterly


Change(%)XAU216.10+41.96+24.10%S&P Basic Materials219.85+29.73+15.64%Hang Seng Composite Index3,402.65+453.20+15.37%S&P/TSX Canadian Gold Index416.02+47.19+12.79%Gold Futures1,367.80+151.10+12.42%Russell 2000719.28+102.30+16.58%Korean KOSPI Index1,913.12+191.37+11.11%S&P Energy469.56+68.74+17.15%Nasdaq2,518.21+327.94+14.97%Oil Futures84.57+8.83+11.66%S&P BARRA Growth633.21+73.41+13.11%S&P 5001,199.21+115.60+10.67%DJIA11,192.58+872.63+8.46%S&P BARRA Value558.44+42.58+8.25%Natural Gas Futures3.83-0.47-10.94%10-Yr Treasury Bond2.78+0.04+1.27%

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting Home – U.S. Global Investors or by calling 1-800-US-FUNDS begin_of_the_skype_highlighting 1-800-US-FUNDS end_of_the_skype_highlighting (1-800-873-8637 begin_of_the_skype_highlighting 1-800-873-8637 end_of_the_skype_highlighting). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio.

The Eastern European Fund invests more than 25 percent of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.

Because the Global Resources Fund concentrates its investments in a specific industry, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

Gold, precious metals, and precious minerals funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The prices of gold, precious metals, and precious minerals are subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5 percent to 10 percent of your portfolio in these sectors. Investing in real estate securities involves risks including the potential loss of principal resulting from changes in property value, interest rates, taxes and changes in regulatory requirements.

Tax-exempt income is federal income tax free. A portion of this income may be subject to state and local income taxes, and if applicable, may subject certain investors to the Alternative Minimum Tax as well. Each tax free fund may invest up to 20 percent of its assets in securities that pay taxable interest. Income or fund distributions attributable to capital gains are usually subject to both state and federal income taxes. Bond funds are subject to interest-rate risk; their value declines as interest rates rise. The tax free funds may be exposed to risks related to a concentration of investments in a particular state or geographic area. These investments present risks resulting from changes in economic conditions of the region or issuer.

Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility.

Past performance does not guarantee future results.

These market comments were compiled using Bloomberg and Reuters financial news.

Holdings as a percentage of net assets as of 9/30/10:

Halliburton: 0.0%

Consol Energy: 0.0%

Range Resources: 0.0%

Cabot Oil & Gas: 0.0%

Chevron: All American Equity Fund: 0.97%

Atlas Energy: World Precious Minerals Fund: 1.19%; Global Resources Fund: 1.86% 0.0%

Dean Foods: 0.0%

Cisco Systems: 0.0%

Boeing: 0.0%

Alcoa: 0.0%

Coal India: 0.0%

Massey Energy Company: 0.0%

China Guangdong Nuclear Power Company:

LAN: 0.0%

Bimbo: 0.0%

Sara Lee’s: 0.0%

Walmex: 0.0%

Cosan: Global Emerging Markets Fund: 1.10%

Essar Gropu: 0.0%

Zisco: 0.0%

*The above-mentioned indices are not total returns. These returns reflect simple appreciation only and do not reflect dividend reinvestment.

The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.

The Nasdaq Composite Index is a capitalization-weighted index of all Nasdaq National Market and SmallCap stocks.

The S&P BARRA Growth Index is a capitalization-weighted index of all stocks in the S&P 500 that have high price-to-book ratios.

The S&P BARRA Value Index is a capitalization-weighted index of all stocks in the S&P 500 that have low price-to-book ratios.

The Russell 2000 Index® is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000®, a widely recognized small-cap index.

The Hang Seng Composite Index is a market capitalization-weighted index that comprises the top 200 companies listed on Stock Exchange of Hong Kong, based on average market cap for the 12 months.

The Taiwan Stock Exchange Index is a capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.

The Korea Stock Price Index is a capitalization-weighted index of all common shares and preferred shares on the Korean Stock Exchanges.

The Philadelphia Stock Exchange Gold and Silver Index (XAU) is a capitalization-weighted index that includes the leading companies involved in the mining of gold and silver.

The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar.

The MSCI Russia Index is a free-float weighted equity index developed in 1994 to track major equities traded in the Russian market.

The S&P/TSX Canadian Gold Capped Sector Index is a modified capitalization-weighted index, whose equity weights are capped 25 percent and index constituents are derived from a subset stock pool of S&P/TSX Composite Index stocks.

The S&P 500 Energy Index is a capitalization-weighted index that tracks the companies in the energy sector as a subset of the S&P 500.

The S&P 500 Materials Index is a capitalization-weighted index that tracks the companies in the material sector as a subset of the S&P 500.

The S&P 500 Financials Index is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period.

The S&P 500 Industrials Index is a Materials Index is a capitalization-weighted index that tracks the companies in the industrial sector as a subset of the S&P 500.

The S&P 500 Consumer Discretionary Index is a capitalization-weighted index that tracks the companies in the consumer discretionary sector as a subset of the S&P 500.

The S&P 500 Information Technology Index is a capitalization-weighted index that tracks the companies in the information technology sector as a subset of the S&P 500.

The S&P 500 Consumer Staples Index is a Materials Index is a capitalization-weighted index that tracks the companies in the consumer staples sector as a subset of the S&P 500.

The S&P 500 Utilities Index is a capitalization-weighted index that tracks the companies in the utilities sector as a subset of the S&P 500.

The S&P 500 Healthcare Index is a capitalization-weighted index that tracks the companies in the healthcare sector as a subset of the S&P 500.

The S&P 500 Telecom Index is a Materials Index is a capitalization-weighted index that tracks the companies in the telecom sector as a subset of the S&P 500.

The NYSE Arca Gold BUGS (Basket of Unhedged Gold Stocks) Index (HUI) is a modified equal dollar weighted index of companies involved in gold mining. The HUI Index was designed to provide significant exposure to near term movements in gold prices by including companies that do not hedge their gold production beyond 1.5 years.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

The University of Michigan Confidence Index is a survey of consumer confidence conducted by the University of Michigan. The report, released on the tenth of each month, gives a snapshot of whether or not consumers are willing to spend money.

The Consumer Price Index (CPI) is one of the most widely recognized price measures for tracking the price of a market basket of goods and services purchased by individuals. The weights of components are based on consumer spending patterns.

Gold’s 7 Parabolic C Waves – Projection $1600

I believe that gold has traded in a repetitive ABCD pattern since the inception of its secular bull market in late 2001. The C wave of the pattern has characteristically concluded with a parabolic, near vertical ascent of price. We are currently in a C wave and I expect that our immediate future will witness a truly exciting and hair raising parabolic advance that will likely take gold to $1,600.
This study will show you each of the C waves since 2001, and conclude with our current situation.
One of the fascinating aspects of gold’s progress from $260 in December 2001 to today’s near $1,400 level is not only this repetitive ABCD pattern (7 times so far), but also the use of the 50% Fibonacci measurement to define the half way point of each parabolic C wave.

The earliest ABCD patterns were relatively small, both in terms of time frame and size, and relatively simple. They were essentially straight line ‘near vertical’ moves. As the pattern has evolved, the C wave morphed into larger and more complicated structures while maintaining its fundamental and well defined mold. Following the near vertical straight line, C waves introduced a double top structure, followed by the use of bull flags and then the consolidation pennant. The present C wave appears to have morphed into a gigantic 3 phase super structure, surpassing all previous C waves in complexity and size.

So let’s begin our study with a look at the first C wave – in 2002.
Right from the very first ABCD pattern, gold uses the A wave to announce the significance of the 50% Fibonacci level. The top of this first C wave defined the 100% Fibonacci level and the midpoint consolidation of this first C wave occurs at the 50% level, as well.

The second C wave peaked in early February 2003. As with the first C wave, this was very close to a straight continuous shot from bottom to top. The 50% Fibonacci level indeed divided the wave in two equal halves, with the suggestion of a consolidation as several weeks traded above and below that level.

The third C wave peaked in early 2004 and introduced an advanced structure – the double top. This C wave found its beginning following a perfect 38.2% retracement of the A wave and generally consolidated around the 50% Fibonacci level, though not as cleanly as either preceding C wave midpoint consolidations, nor ones to come.

The fourth C wave topped later in that same year, 2004. A relatively brief consolidation preceded this C wave and therefore was not a skyscraper event. In fact, this C wave regressed to the simpler structure of a straight line, characteristic of the first two C waves. The 50% level again saw price weave above and below for a few weeks. Following this consolidation the wave concluded its final leg to the top.

The fifth C wave became the largest C wave to date as it did not top until May 2006, some 30 months after the preceding C wave peak of late 2004. This time, the 50% level acted as a resistance level. Gold created a 2 month long bull flag consolidation just below this level before breaking out and completing a spectacular parabolic rise that reached $729. Interestingly, bull flag continuation pattern was initially introduced into this C wave from a lower level.

The sixth C wave cleverly uses a new trick in its evolution – the pennant – as a midpoint continuation identifier just at/below the 50% level. Notice how the 2nd and concluding half of the C wave is no longer simply a string of green candles. The bull, as he has aged, has learned to buck. And buck he does! However, the 50% level continued to foretell the ultimate peak at $1,029.
In the introductory paragraphs of this article I mentioned that the current C wave appears to be a gigantic structure that may ultimately be comprised of three phases. Let’s now look at the first phase that concluded this past December 2009, then look at the second phase that is still in progress.

This 7th ABCD structure began in October of 2008 with the A wave at $680. As we have seen once earlier, the A wave makes a near perfect 38.2% retracement to get the C wave started at $865. Through a series of ledges this first phase of the 7th C wave rests and consolidates at each Fibonacci level (23.6% and 38.2%) until reaching the 50% level. After spending 4 weeks there, gold makes it parabolic move to reach $1,227 in a little over 4 weeks.

Now let’s look at the currently ongoing second phase of this massive C wave and see if we can make a reasonable guesstimate of when and where it will top.
We know that gold’s C waves have extensively employed the 50% Fibonacci level. So I am going to guess that it will be no different now, than before. That is, the $1,227 price reached in Phase 1 will be identified as the midpoint, or 50% level, of the current second phase.
It turns out that gold is then projected to reach $1,600 during the early/mid part of December.

Out of curiosity, I wondered how the current weekly cycle, which began on July 28, 2010, would fare under the 50% concept. It seems that gold’s consolidation of the past month recent could be thought of as a 50% level, a midpoint consolidation. But where would that project price?
The chart says it all. Same place. $1,600.
I guess at this point I should warn every reader that they have read a convincing argument for $1,600 gold, but that anything is possible.
OK. Consider yourself warned.
In the mean time, I am going to invest in gold and related products as though it is going to $1,600 next month.

Best wishes for your trading and investment success!

John Townsend

The TSI Trader is a website dedicated to the deployment of the True Strength Index (TSI) indicator for buy and sell signals related to gold’s secular bull market. The TSI indicator is freely available at FreeStockCharts.

Euro Zone Will Join Fed In QE

View the original post at…
November 04, 2010 12:48 PM

My Dear Friends,

Mark my words, the euro zone will join the US Fed in quantitative easing before this chapter of the darkest days of finance in human history draws to a close.

The US Fed actually snagged the euro zone in what the Chairman sees as necessary. The FOMC vote was almost unanimous for QE. That alone carries a significant message.

The austerity measures in the euro zone are, without any doubt, going to come back and bite them hard in the rear. Did you notice the condemnation of QE quieted today with only China standing tall?

QE is wrong, but there is no other alternative to the powers that be. It is the lesser of immediate economic evils as compared to the austerity of balance sheets thanks to the FASB.

It is the lesser of immediate economic evils as the cause of the entire problem, OTC derivatives, not only have not been addressed, but the damn things have actually gotten larger. This exact technical formation you see today took place just before the geometric rise to $887.50 in gold�s price from mid 1979 to1980.

The gold market has the power here to run to $1444 and even $1650.


European Central Bank Keeps Rates at Record Lows
Published: November 4, 2010

LONDON � The Bank of England and the European Central Bank left their key interest rates at record lows Thursday after recent data showed that the economic recovery was showing some resilience.

A day after the U.S. Federal Reserve moved to pump another $600 billion into the banking system to strengthen the U.S. economy, the Bank of England decided against any new stimulus measures for Britain, leaving its bond purchasing program at �200 billion, or $322 billion. The main interest rate remains at 0.5 percent.

At its meeting, the European Central Bank left its benchmark interest rate at 1 percent. Investor attention was focused instead on anything that E.C.B. President Jean-Claude Trichet might say later in the day about the bank�s plans to tighten monetary policy � even as the Fed moves in the other direction.

The Bank of England had considered expanding purchases of government debt, so-called quantitative easing, last month, but positive economic data released since then alleviated pressure for it to act.

The services sector, including banks and airlines, and manufacturing reported an unexpected growth in October and growth of Britain�s gross domestic product beat economists� forecasts in the third quarter.

The Bank of England would find it �hard to justify further purchases without some evidence,� Jens Larsen, chief European economist at RBC Capital Markets in London and a former Bank of England official, said. �The rebound has been pretty robust and inflation has surprised us on the upside. At the same time there are clearly some big risks facing the economy. Quantitative easing is not off the table.�