Gold Miners’ Q1’17 Fundamentals

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

The gold miners’ stocks have been slammed by a sharp gold pullback in recent weeks, spawning today’s bearish sentiment.  Traders often get caught up in the emotional swings generated by this volatile sector.  But once a quarter earnings season arrives, revealing gold mining’s hard fundamental realities which dispel the obscuring sentiment fogs.  The major gold miners’ profitability actually just exploded higher in Q1!

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports.  Companies trading in the States are required to file 10-Qs with the US Securities and Exchange Commission by 45 calendar days after quarter-ends.  Canadian companies have similar requirements.  Some companies in other countries with half-year reporting instead of quarterly even follow suit.

So the world’s major gold miners are just wrapping up their first-quarter earnings season.  After spending decades intensely studying and actively trading this contrarian sector, there’s no gold-stock data I look forward to more than the miners’ quarterly financial and operational reports.  They offer a true and clear snapshot of what’s really going on, shattering the misconceptions bred by the ever-shifting winds of sentiment.

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Gold-Stock Breakouts Near

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

The gold-mining stocks’ usual volatility has proven outsized so far this year, spooking investors.  A fast initial surge in a new upleg was soon fully reversed by a sharp major correction, which spawned much bearish sentiment.  That combined with the great distraction from the Trumphoria stock-market rally has left gold stocks unloved and overlooked.  But their outlook is very bullish, and major upside breakouts near.

It’s hard to find bargains in today’s extreme stock markets.  They’ve been radically distorted by the post-election euphoria centered on universal hopes for big tax cuts soon.  Nearly every sector has been bid up to dizzying valuations.  Except gold stocks, which everyone still hates.  They may very well be the last remaining contrarian sector in these crazy markets, and thus a great buying opportunity for smart traders.

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Gold Juniors’ Q4’16 Fundamentals

By Adam Hamilton – Re-Blogged From Zeal

The junior gold stocks corrected hard in recent weeks, setting them up to blast higher on Wednesday’s less-hawkish-than-expected Fed.  That started to dispel some of the serious bearish sentiment that has been mounting in this sector.  The junior gold miners’ fundamentals justify much-higher stock prices, as evidenced in their recently-reported fourth-quarter operating and financial results.  They remain very bullish.

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 banish all the sentimental distortions surrounding prevailing stock-price levels, revealing the underlying hard fundamental realities.  This greatly helps in re-anchoring perceptions.

After spending decades intensely studying and actively trading this contrarian sector, there is no gold-stock data I look forward to more than their quarterly reports.  These offer a true and clear snapshot of what’s really going on, overcoming all the misconceptions bred by the ever-shifting winds of sentiment.  If you have capital deployed in this sector but don’t watch the quarterlies, you’re shooting yourself in the foot.

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Gold Stocks Shine in 2017

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

The gold miners’ stocks are rocketing higher again after suffering a rough few months.  Following sharp selloffs on gold-futures stops being run, the Trumphoria stock-market surge, and a more-hawkish-than-expected Fed, this battered sector had largely been left for dead.  But gold stocks’ strong fundamentals finally overcame the dismal herd sentiment last week, paving the way for this sector to shine again in 2017.

This “shine again” assertion likely seems dubious to casual observers, since the gold miners’ stocks suffered a miserable Q4’16.  The leading HUI NYSE Arca Gold BUGS Index plunged 21.1% in a quarter where the benchmark S&P 500 broad-market stock index surged 3.3%.  Naturally gold miners’ profits are fully dependent on gold prices, and this metal fell 12.7% in Q4 which proved one of its worst quarters ever.

Thus no sector has been more out of favor in recent months than precious metals.  Gold and therefore gold-stock bearishness abounded, with bullish outlooks dwindling near nonexistent.  But viewing gold stocks solely through the extremely-distorted post-election lens is a serious mistake.  Despite their sharp Q4 selloffs, this sector as measured by the HUI led the markets by still soaring 64.0% higher in full-year 2016!

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Gold Stocks Screaming Buy

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

The gold miners’ stocks are suffering from universal and overwhelming bearishness today, with nearly everyone expecting further selling.  That’s the natural reaction following this sector’s recent massive correction, which climaxed in one of its biggest daily plummets ever witnessed.  But within bull markets, there’s no better time to buy aggressively than deep in a major selloff that’s riddled with great doubt and fear.

The core mission of speculation and investment is so simple even children can easily grasp it, buy low sell high.  The great challenges arise not from understanding, but execution.  Actually buying low then selling high in real markets is exceedingly unnatural and uncomfortable.  It requires traders to overcome their own greed and fear to do the exact opposite of everything their own instincts are screaming to do.

The only times speculators and investors want to buy aggressively is when it feels great to do so.  That only happens late in powerful rallies, when everyone can clearly see how strong a sector’s performance has been.  Traders then commit one of trading’s cardinal sins, extrapolating recent performance out into the indefinite future.  They assume a red-hot sector will keep on rising, and eagerly rush to buy high after a rally.

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Gold Stocks’ Autumn Rally

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

The gold miners’ stocks have already enjoyed a phenomenal year, blasting higher with gold’s new bull market.  This sector’s market-dominating performance has been amazing.  Yet incredibly, the gold stocks are only now entering their strongest time of the year seasonally.  Historically during bull-market years the gold stocks have enjoyed massive autumn rallies on average, starting right about now which is very bullish.

Gold-stock performance is highly seasonal, which certainly sounds odd.  The gold miners produce and sell their metal at relatively-constant rates year-round, so the temporal journey through calendar months should be irrelevant.  Based on these miners’ revenues, there’s no reason investors should favor them more at certain times of the year than others.  Yet history proves that’s exactly what happens in this sector.

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Gold Stocks’ Spring Rally

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

The red-hot gold stocks have spent most of March in consolidation mode, grinding sideways near their 2016 highs.  Interestingly this month’s rally pause is par for the course seasonally in gold-stock bull markets.  Like gold itself, this sector tends to slump to a seasonal low in mid-March before embarking on a strong spring rally in April and May.  With gold stocks back in a bull, their seasonality warrants consideration.

Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year.  While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals.  We humans are creatures of habit and herd, which naturally colors our trading decisions.  The calendar year’s passage affects the timing and intensity of buying and selling.

Gold exhibits high seasonality, which seems counterintuitive.  Unlike grown commodities like crops, the mined supply of gold is constant year-round.  But supply is only half of the fundamental supply-demand equation that drives pricing.  Gold’s investment demand happens to be highly seasonal, and that’s what sets gold prices at the margin.  Investors favor gold buying far more at some parts of the year than others.

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