DENVER, CO -- We are now entering the mid-point of the current correction in both the spot metals prices and mining shares.

Gold and XAU have both corrected severely since early May, down about 20% (Gold $720 to $570) and 25% (XAU 170 to 132) from their 2006 peaks.

As you can see in the chart above, gold broke out of a 2-decade-long $500 resistance emphatically Q1 2006, racing to $720 before retesting the $500 level.

And, as you can see in the link below, the XAU looks like it is about to break out of its 20+ year consolidation.

This past week has seen some recovery but I expect things will track sideways for awhile. In my opinion, the next 2 to 6 weeks will offer some of the best price points to pick up some incredible bargains.

While I have been surprised that gold crossed below the $600 level, I think the correction low has already been hit and we will chop sideways in our current range until the market heats up again later in the summer (late August early September). I maintain my stance that gold will be well above the $800 level before the end of the year.

This is presenting investors with an incredible opportunity to pick up great value for literally cents on the dollar.

Some people are fearful that the market won't come back. All I can say to that is to ask the question, "What has changed in the big picture?" Has anything fundamentally changed? Has the U.S. government suddenly received a dose of reality and put themselves back on the track of financial responsibility?

Give me a break! Do you see any potential for the dollar to remain strong in the face of such unsustainable and rapidly growing debt? I certainly don't!

There was a time when foreigners wanted to hold U.S. dollars. That day is no longer. With such enormous debt loads in the U.S. and foreigners no longer willing to purchase treasury bills and dollars as they once did, the outlook for the precious metals and their mining shares simply could not be any brighter.

An associate of mine who I recently saw at the June Vancouver conference had an ominous story to tell. He recently returned from a trip to China where he told me the following. They were doing some shopping and had purchased some things from a local street vendor. As he was paying for his purchase, he realized he was short on Chinese yuan, but had some U.S. dollars. He offered a U.S. ten dollar bill to complete the purchase but the vendor wanted nothing to do with the U.S. money.

Not very long ago that was not the case in China. Well the story got more interesting as another street vendor saw the situation and took the deal with the ten dollar bill. Continuing their street shopping about 30 minutes later, while making another purchase with another street vendor about two blocks away from the earlier transaction, my friend was getting change and received this same ten dollar bill back.

To his amazement it was the exact ten dollar bill he had just used in the earlier purchase. This U.S. bill was quickly offloaded to who knows how many others in just a very short period of time.

The lesson: Foreigners are starting to say "NO" to dollars. This is a major shift in what has been a long and joyous ride for the U.S. dollar.

You need not look much farther to understand where the dollar is headed in the near future. Again, gold, silver and their mining shares will perform very well in the longer term perspective.

Don't fret about these short-term corrections. Yes, it can be frustrating to watch your portfolio value shift in such dramatic fashion when the corrections come, but don't panic.

Hang in there, bide your time, take a vacation and be patient. Look for the great values that are being presented to us now and in the next few weeks. This is ultimately a gift for those of us who know how to play these markets.

A few companies that have had severe corrections and present great value in my opinion are the following:

PolyMet Mining TSX-V: POM has corrected quite a bit from its recent high and represents great value to me since they have recently received approval for their AMEX listing. The stock should commence trading on the AMEX on June 26, 2006. The companies NorthMet deposit represents over 35 billion of in-situ metal value and is slated to begin production in 2008 at very profitable levels.

Silvercorp TSX-V: SVM has retraced almost C$7 during the correction after hitting its high of C$20. At its current level Silvercorp is a BUY over the next several weeks. This project represents one of the highest grade silver situations I have ever seen and will literally be mined for decades. The should not only recover to its 2006 high earlier in the year but will push much higher in the months and years to come.

VanGold Resouces TSX-V: VAN has been trading in the 40 to 50 cent level and also represents great value since they have over $500,000 a month coming into the treasury from some successful oil and gas investments. This company is basically becoming self-financing with this ever growing oil and gas revenue. It is just a matter of time before they have some good news on one of their many gold and base metal properties located through out the world.

These are just a few names of many that I could list that represent great value at this point. Look at where some of these mining stocks were just two months ago and compare with where they are now. The deeper the correction the more interesting they are especially if nothing fundamentally has changed with the story.

This is the time to be patient and look for value. I will have more ideas for you in the next few weeks. Right now I am getting ready to go look at some new situations in China where I will be writing from next week. Till then, keep your powder dry and your nose to the wind for value.

- Greg McCoach