Volatility continues to rule the day for most of the resource stocks, and for this week the price swings were solidly to the downside. Once again the primary driving force for this move is uncertainty related to the debt crisis in Europe. Deleveraging by speculators in this atmosphere of bearishness is creating an air pocket in the commodity trading pits. Gold and silver both fell to new lows for this corrective phase during the week, and the action in the stock market reflected this bearish momentum.

Whenever there is a violent short term move in the precious metals sector, it always seems to encourage media pundits to make extreme statements. Recall how in April, when the metals were powering higher, there were numerous predictions of a dollar collapse and stratospheric heights coming for gold and silver. Fast forward to the present and the current weakness in the metals has prompted some high profile trading analysts to suggest that the bull market for gold is over. In all probability such statements will prove to be wildly exaggerating the overall magnitude and significance of this correction.

The factors that have contributed to the long term bull market in commodities remain in effect even as this latest wave of volatility rocks the markets. Gold and silver in particular are subject to extremely bullish fundamentals that are sometimes ignored in the context of short term fireworks. Whatever the final outcome may be for the overhang of debt in many nations it is unlikely that a fiscally prudent regime is going to be implemented anytime soon. And if indeed rampant money printing is chosen to mitigate the debt issues then investors need have no fears about the long term direction for gold and silver. Both metals have been monetary metals for thousands of years of human history. And as the ultimate safe haven currency, gold is going to be a beneficiary of the money printing excess that lies ahead.

Suffice to say that times of extreme sentiment are usually the point at which an inflection is at hand. Many of the mining stocks have touched lows this week not seen since the crisis of 2008. At that is perhaps a good lesson to recall because shortly thereafter the sector rebounded sharply and recovered to set new highs. This is not the environment for wild speculation, but long term investors need not be dismayed even with the steep losses of the last few months.

In Mexico, junior explorer Paramount Gold and Silver announced the latest drill assay results from its San Miguel project, located in Chihuahua. This project is situated adjacent to the Palmarejo mine development operated by Couer D’Alene. In total, seven drill cores were reported, highlighted by an interval of 5.55 meters that graded 250 g/t silver plus 4.73 g/t gold. The mineralization is hosted within a wide quartz vein structure that has been outlined across a kilometer of strike length and remains open to depth. This drilling work focused on the Don Ese North target, which is directly on trend from the resource zone that hosts the Palmarejo deposit area. The new zone represents just the latest discovery area among many other resource zones established for the San Miguel project. A multi-million ounce gold-silver resource has already been presented for this property, and Paramount is planning to update the total resource estimate later next year.

US Gold has also come out with more drill results this week, from its El Gallo project in Sinaloa. The company has already established a large gold and silver resource at El Gallo from a number of deposit areas that have been defined through extensive drilling work over the last several years. However there are numerous targets remaining that offer potential for expansion of the global resources for the project. One of these is the Mina Grande, which had been identified through previous drilling around a historical mine working. A program to investigate the potential at Mina Grande is currently underway and eight drill core assays were reported in the most recent news. Several shallow intervals of gold-silver mineralization were encountered, including one very high grade section bearing 2070 g/t silver plus 7.7 g/t gold across a meter of core. US Gold plans to commence mining in 2012 at El Gallo.

Junior explorer Rare Earth Metals announced a resource estimate for its Two Tom property in Labrador. An inferred resource of over 40 million tonnes of mineralization has been defined, bearing average grades of 1.18% total rare earth oxides. This is significant in that Neodymium represents 15.9% of that resource. Neodymium is one of the more valuable of the suite of metals commonly known as rare earth elements, and hence the enriched concentration of this metal increases the economic potential for the project. Niobium and beryllium are two other exotic metals that are also represented in enriched levels within the deposit area. The deposit remains open for potential expansion both laterally and to depth. Rare Earth Metals is well funded and plans to continue advancing work at Two Tom, along with several other projects that have leverage to rare elements and exotic metals.

Samex Mining Corp. issued an exploration update for its Los Zorros gold project in Chile this week. Multiple target areas have been designated for drilling during the current program as the company moves forward to explore this highly prospective land package of more than 100 square kilometers. It is a challenge for geologists to review all of the early stage data for a complex geological system to unlock the mystery for the most likely zones that may host a deposit, but that is also a good problem to have. High priority targets include past producing mine workings, surface showings and structural features, and results from earlier exploration programs that merit follow up activity. Samex has committed to a thorough, coordinated exploration effort to test many of these targets and will learn more about the geology of the project area as work is completed.

The company has invested in infrastructure upgrades to support this program, including expanding its mining camp to accommodate more geologists and staff, plus constructing access roads and drill pads for each of the primary target areas. Samex is well funded for a long term exploration effort, and one thing that should encourage precious metals investors is that the company has opted to hold some of its working capital in the form of gold and silver bullion. This is a logical step for a company that believes in the long term upside potential for the metals, and management communicates the sincerity of this philosophy to shareholders by taking the leadership position to physically invest in the metals it explores for.

Michael Kachanovsky