Gold Stocks Coiled Spring 2

By Adam Hamilton – Re-Blogged From

The gold miners’ stocks largely ground sideways in 2017, lagging gold’s solid rally. Being trapped in this vexing consolidation has decimated sentiment, leaving a bearish wasteland bereft of hope. But contrary to perceptions, this deeply-out-of-favor sector is actually a coiled spring today. Gold stocks are ready to surge dramatically higher as psychology inevitably shifts, pointing to much higher prices coming in 2018.

The main appeal of gold-mining stocks is their underlying profits’ leverage to gold. The gold miners are much riskier than gold itself, facing many operational, geological, and geopolitical challenges that the metal doesn’t share. Thus investors and speculators alike must be compensated for these large added risks with superior returns to gold. That didn’t happen in 2017, which is why gold stocks are so widely despised.

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