Today’s private-sector ADP Payrolls Report said 215,000 jobs were added in the US last month, against consensus forecasts of 173,000. Rising ahead of that number, used by some as an advance guide to Friday’s official US non-farm payrolls figures, gold had then fallen $5 per ounce before jumping 0.9% in volatile trade. Gold “[had] hit a fresh 5-month low in every session this week,” says the Reuters newswire.
Tag: gold silver stocks
Doug Casey: “I think mining stocks have also bottomed at this point, and there are several great speculations available today. All the so-called quantitative easing—money printing—by governments around the world has created a glut of freshly printed money. This glut has yet to work its way through the global economic system. As it does, it will create a bubble in gold and a super-bubble in gold stocks. This remains in the future; what we’ve seen so far is just foreshadowing.”
It is our view that at current prices gold mining stocks offer a bargain opportunity. On one hand gold mining equities are extremely cheap and discount a gold price of approx. $1,000 per ounce. By owning gold equities an investor is capitalizing on gold, but at a great discount. On the other hand, at current valuations, “in-situ” ounces in the ground are historically cheap and some companies do not get any value for their gold in the ground at all because the investor community is pricing gold equities based on free cash flow only, the rest does not count at the moment.
Given the negative sentiment, Marc Faber likes investing in gold. Why? Because it is a buy RELATIVE TO other assets. Investors should not look at it necessarily in absolute terms, but in comparison to paintings, colletibles, the Dow Jones, S&P 500, the Russell 2000, ea. He adds to it that the S&P 500 was trading at 1554 in March 2000 which is only 10% higher today. Gold has been an ecellent investment because it is 5 times higher right now. The investment has worked on a long term basis, not for investors who joined the hype in 2011.
I think our current correction more closely resembles what occurred in 1974-1976 than any of the dips so far this cycle. Gold nearly doubled in the two years from its ’76 low to its ’78 return to former highs. The message here is obvious: add to your inventory at depressed levels. And don’t worry about missing the bottom; investors who waited to buy until gold had retraced 30% of its decline still netted about a 70% gain once it returned to prior highs.
The extreme contrarian appeal of gold stocks today is readily evident both technically and fundamentally. Gold stocks as a sector have only been this oversold one other time in their decade-plus secular bull, and that was during 2008’s crazy stock panic. When prices move too far too fast in either direction, sentiment gets unsustainably excessive. And then a mean reversion soon reverses the trend.
The Casey Research Metals and Mining team has received a number of worried emails about gold’s recent rollercoaster ride. I’d like to respond to them. This predicament isn’t fun, and there are a limited number of options. However, instead of responding emotionally, let’s look at some facts and consider their implications. The bottom line is that you’ve got to hang in there and let the big-picture forces guide your gold investing.
The markets are tyrannically cyclical, every sector out of favor eventually returns to favor again and vice versa. That law of sentiment is as immutable as stock prices ultimately reflecting underlying corporate earnings. Based on today’s still-battered gold prices, a 0.511x HGR would put the HUI at 731. This is 157% higher than it was in the middle of this week even after recovering 3/7ths of its gold-panic losses!
Nobody can make money by listening to noise. People should learn where to get the real signals. If you look at the XAU over gold chart it is lower now that in 2008, but the fundamentals of gold and silver are much better; people can buy gold shares as if gold stood at 600 dollar and silver at 18 dollars an ounce.
The Sound Money Campaign website (an excellent initiative by the way) just released an interview with Jay Taylor. It is a “must listen” interview as interesting insights are revealed. Triggered by the seeming propaganda against the metals in the past two weeks, Jay Taylor shares his take on the metals, our money and gold miners.
During a recent presentation at the World Money Show, Frank Holmes gave the presentation “Goldwatcher – More Sunshine, Less Stormy Weather.” Frank Holmes runs several funds including a precious metals, natural resources and emerging markets funds. This articles shows a selection of interesting insights from the presentation.
Rick Rule explains that the junior and exploration mining sector looks not very promising. His research framework reveals how to pick the winners. For investors, this all boils down to risk management, as only ten to twenty percent of the companies will do well.
The move on January 2nd and 3rd may have been intended to drop the gold price below $1600–that did not happen. In my view going forward this is positive for gold, however, Saturn is moving slow and will retrograde in February which could continue to hinder the metal. Gold may have a more bullish move setting up toward the end of March. Pluto at 10 degrees Capricorn is positive for mining, so even if gold may seem stuck the miners may start to look bullish. This is an exclusive excerpt from the latest Astrology Traders newsletter.