Gold Stocks Gather Steam

By Adam Hamilton, CPA – Re-Blogged From Gold Eagle

Gold stocks’ young upleg is gathering steam, marching steadily to higher lows and higher highs. These bullish technicals are gradually improving sentiment, fueling mounting interest in this contrarian sector. That’s helping the gold stocks regain lost ground relative to gold, the driver of their profits. Fundamentals are growing more favorable as gold itself powers higher. All this portends much-bigger gold-stock gains coming.

Despite a strong rebound upleg in recent months, the gold miners’ stocks are still flying under the radars of most speculators and investors. They aren’t aware the gold stocks are running again, and likely don’t realize how massive gold-stock uplegs can grow. That’s unfortunate, because the biggest gains are won early in young uplegs before they are universally recognized. Buying low early on is the key to multiplying wealth.

Continue reading

Advertisements

Gold-Stock Triple Breakout

By Adam Hamilton – Re-Blogged From Gold Eagle

The beleaguered gold stocks are recovering from their late-summer capitulation, enjoying a solid young upleg as investors gradually return.  Their buying has pushed the leading gold-stock ETF near a major triple breakout technically.  That event should really boost capital inflows into this sector, accelerating the rally.  A major gold and gold-stock buying catalyst is likely imminent too, a more-dovish Fed next week.

The gold miners’ stocks have always been a small contrarian sector, a little-watched corner of the stock markets.  But they’ve been even more unpopular than usual in recent months.  That pessimistic sentiment is driven by price action, which has mostly proven poor in 2018.  That’s really evident in the performance of the flagship gold-stock investment vehicle, the GDX VanEck Vectors Gold Miners ETF which is struggling.

Continue reading

Gold-Stock Summer Lows

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The gold miners’ stocks have been drifting sideways to lower like usual in their summer doldrums. They are likely near their major seasonal lows ahead of a strong autumn rally, a great buying opportunity. Gold rebounding higher will be the primary driver fueling the gold-stock advance, dispelling today’s bearish psychology. And strong Q2 production growth will likely play a sizable role in restoring favorable sentiment.

Market summers have long been gold’s weakest time of the year seasonally. Junes and early Julies in particular are simply devoid of the big recurring demand spikes seen during most of the rest of the year. With traders vacationing to take advantage of warm sunshine and kids being out of school, markets take a back seat. So there’s no outsized gold buying driven by income-cycle or cultural factors this time of year.

Continue reading

Gold Summer Doldrums 2

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

Early summer is the weakest time of the year seasonally for gold, silver, and their miners’ stocks. With traders’ attention diverted to vacations and summer fun, their precious-metals interest and investment demand wane considerably. Thus this entire sector, and often the markets in general, suffer a seasonal lull this time of year. But these summer doldrums offer the best seasonal buying opportunities of the year. Continue reading

Gold Nearing Bull Breakout

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

Gold remains largely forgotten, off the radars of most investors. But that’s likely to change soon as this leading alternative investment is nearing a major bull breakout. Once gold climbs to decisive new bull-market highs, sentiment will turn and investors’ interest will surge. Their resulting buying will rapidly drive gold higher, attracting in more capital inflows. Gold is only a couple modest up days away from that key breakout.

Universally in all markets, traders’ psychology is completely dependent on price action and levels. When prices are high and rising, speculators and investors alike eagerly buy in. They love chasing winners, so buying begets buying. This creates powerful self-reinforcing virtuous circles, with rising prices helping to entice in ever-more traders. In recent years this dynamic catapulted the market-darling FANG stocks higher.

Continue reading

Gold Miners’ Q4’17 Fundamentals

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The gold miners’ stocks remain deeply out of favor, trading at prices seen when gold was half or even a quarter of current levels. So many traders assume this small contrarian sector must be really struggling fundamentally. But nothing could be farther from the truth! The major gold miners’ recently-released Q4’17 results prove they are thriving. Their languishing stock prices are the result of irrational herd sentiment.

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports. Required by securities regulators, these quarterly results are exceedingly important for investors and speculators. They dispel all the sentimental distortions surrounding prevailing stock-price levels, revealing the underlying hard fundamental realities. They serve to re-anchor perceptions.

Continue reading

Fed Hikes, Dollar, and Gold

By Adam Hamilton – Re-Blogged From http://www.ZealLLC.com

The US dollar has fallen rather sharply over the past year or so, despite ongoing Fed rate hikes. This persistent dollar weakness has really boosted gold. There’s a fascinating interplay between these two currencies and futures speculators’ expectations for Fed rate hikes. These traders hang on every word from top Fed officials, which greatly influences their trading. So these relationships are important to understand.

In late December 2016, the venerable US Dollar Index surged to an incredible 14.0-year secular high. That was just a couple weeks after the Federal Reserve’s second interest-rate increase of this hiking cycle. Top Fed officials were forecasting three more rate hikes in 2017, fueling euphoric sentiment in this top reserve currency. Everyone believed higher prevailing interest rates would prove very bullish for the dollar.

Continue reading