The gold stocks have frustrated investors for several reasons.
All bull markets have to endure a plethora of corrections and all bull markets have to endure a handful of major corrections. The gold stocks are no different.
Gold is in a bull market and so are the gold stocks despite their struggle as a group to outperform Gold.
Now that we are past the Fed circus we can get back to reality. But what is reality? Is it inflation? Deflation? A repeat of 2008? What matters is the message of the markets and […]
The collapse of 2008 remains fresh in mind. And yes, while collapse is the most overused word in the financial markets (next to bubble), 2008 was indeed a collapse for everything.
A cup and handle pattern is a bullish continuation pattern that represents a period of consolidation followed by an eventual breakout, which is the continuation of the previous trend. Typically these patterns last months and not weeks or days.
The gold and silver business is one that naturally involves much consolidation. The industry product is the same and the business is such that mergers and acquisitions are commonplace. As many readers know, the secular bear market of the 1980s and 1990s had an obvious impact on the exploration side of the business.
Gold equities have not only bucked the downtrend in the equity markets but in relative terms are breaking to new highs against equity indices.
An important shift in global markets is taking place and it bears introspection. Gold has broken to a new high while Silver has established a bottom. Precious metals stocks have rebounded significantly from support
Nothing is certain but we want to see strong evidence before forecasting a turn in the market. In regards to silver, we see strong evidence that a bottom is in place and the market will move higher in both the short and intermediate term.
In a word, no. We divide our rationale into three parts: macro, sentiment, and profit margins. Back in 2008, a recession was beginning, the private sector was in intense deleveraging mode and the credit markets foreshadowed what was to come in the equity and commodity markets. Today we are seeing growing credit stress on the sovereign side and not in the private sector as we had in 2008.
Gold and silver equities have led the markets lower and have underperformed the metals significantly this year. For the past month or so gold has firmed and Bonds have moved higher as most asset classes have declined. Unfortunately mining equities have been among the worst performers. However, our work leads us to believe that an important bottom should be in place very soon.
Most mainstream pundits and reporters have assumed that it was speculative buying that caused silver to go parabolic. After all, it's always the dumb money or the public that gets in at the very end. However, in futures markets, parabolic moves are often the result of short squeezes. This is exactly what happened in silver.
Over the past few weeks Gold has traded at or near record highs. It has yet to embark on a sustained breakout but that is not because Gold is a crowded trade.
We obviously have been too cautious on Silver. The metal has been on a tear and has shown no weakness in the past few weeks.
In this missive we reply to the supposed reasons against investing in Gold.
Many analysts focus on the seasonality of Gold and Silver. Why? It plays out most of the time.
Relative Gold is also known as the real price of Gold. Its essentially a comparison of Gold against various asset classes.
Silver has been red hot lately and the silver shares have joined in the fun. Yet, we haven’t seen a corresponding breakout in Gold or in the gold shares (as evidenced by GDXJ and GDX).
With the bull market in precious metals likely to accelerate in the coming years, folks should turn a great of their attention towards finding the growth stocks of the bull market. We are talking about your Ciscos and Microsofts.
The S&P 500 has rebounded about 100% in 100 weeks.
Silver is outperforming Gold as a risk asset. It is not outperforming for monetary reasons.
The mainstream press loves to talk about emerging market demand as a cause of inflation, rising prices and the bull market in commodities.
In covering the gold sector for my premium subscribers, I have noticed something lately. The large-caps really suck! Ok, that is harsh but it is the truth.