Ground Vibrations In The Gold & Silver Market

This is a guest post by Tekoa Da Silva from Bull Market Thinking. The website provides commentary from top global decision makers and an inside glance at a variety of mining and junior resource stories. In his latest article, Tekoa Da Silva shares interesting “inside” information.

Two important things occurred in the gold and silver market over last handful of trading days. Firstly, the CME lowered gold margins by nearly 10%. This was released on Dec. 28th, which by today’s standards of online publishing is already Medieval History.

The second important event, is happening right now. The HUI is breaking out of it’s downtrend (hat-tip to Gary Savage’s Smart Money Tracker), and appears to be continuing it’s breakout today as shown below:

Now, as I published on Dec. 27th, I had a fascinating conversation with a major silver producer, who indicated the company has been seeing strong volumes of telephone calls from mutual funds, pension funds, hedge funds, and value/growth funds, due to the low multiples of mining equities.

When we contrast these pieces of market evidence against the backdrop of incredibly poor market sentiment, exhausting December tax-loss/capitulation selling, and a brutal, painful, and persistent bear market in resource shares since August 2011…I think it’s safe to say we’re setting up for one hell of a move higher in mining shares.

The match to get the fire started is the drop in gold futures margins, and 2012 tax-loss sellers rolling positions back into the market.

Additionally, I’ve compiled a list of companies which I think will outperform in the months ahead, which I’ve called, Tek’s Favorite Mining Stocks List“. It has outperformed the GDX by almost 18% during this bear market, and I have a gut feeling the stocks I’ve identified on the list are about to rocket higher. 

The majority of them are 40% or more owned by institutions and insiders, some as high as 85%-90% owned by insiders and institutions . I’m not the sharpest knife in the drawer, but when the funds, billionaires, and successful resource executives I watch and interview become majority shareholders of companies…lets just say my “spidey-stock-sense” tingles.

Written by Tekoa Da Silva  |  Original post

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