Tag: hui index

Is Major Decline in the Precious Metals Stocks Underway?

Is Major Decline in the Precious Metals Stocks Underway?

All eyes are on Greece which is heading toward national elections six weeks after the last vote. Many feel that a Greek euro exit would be a chance to cauterize a festering wound and move on. There are also those that feel that Greece could be the first of several dominoes to fall, much larger economies such as Spain, Italy, for example. Meanwhile, Spain’s 10-year borrowing costs had hit as much as 6.5 per cent on Wednesday with the risk of the country paying astronomical prices to borrow in the future. Spain has now issued more than half of its total debt needed for this year, yet concerns that Madrid […]

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Bottom in, but is it September 2008 or October 2008?

Bottom in, but is it September 2008 or October 2008?

We began the week by making a ballsy prediction about the precious metals complex. We believed a major bottom could happen this week. In the wake of the European debt crisis and potential “credit events,” the precious metals became extremely oversold based on a number of metrics. Technically, we saw that Gold and Silver were nearing the December lows which produced a good rally. The gold stocks were nearing the 50% retracement of their 2008-2011 bull move. The combination of an extreme oversold condition and technical support usually produces bottoms. It wasn’t a difficult call but putting it on paper was. With the low in, the question now becomes, is […]

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Gold continues its bounce on 18 May 2012

Gold continues its bounce on 18 May 2012

Gold continues to bounce higher in today’s session as it moves further away from the bottom of the BROAD 8 MONTH TRADING RANGE shown on the chart below. The metal actually seems to be reverting to its safe haven function as it is holding its gain in spite of continued weakness in the broader US equity markets. It does seem to have hit a band of resistance, as might be expected, near the psychological round number of $1600. For gold to get a handle of “16” in front of the price, we are going to need to see more hedge funds willing to go long this market even as their […]

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HUI Gold Stock index: chart and comments on 8 May 2012

HUI Gold Stock index: chart and comments on 8 May 2012

The HUI is reeling once again as it continues losing value against the price of an ounce of gold bullion. The index has fallen below chart support at the round number of 400 and is currently near the lows of the day as I write this. As you can see from the following chart, it is approaching what I consider to be one of the most significant levels of chart support from a technical analysis perspective, and that is the critical 50% Fibonacci retracement level. The mining shares as a whole, have now retraced exactly HALF of all their gains from the bottom that was produced back in late 2008 […]

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Keeping the Decline in Gold Stocks in Perspective

Keeping the Decline in Gold Stocks in Perspective

As the gold stocks continue to fall to new lows and struggle to find a bottom, it is important to keep things in perspective. Before we get to the visual comparison with the 1960s and 1970s, we want to touch on the reasons why the gold stocks have underperformed in recent months and years. First, the sector had a terrific run that would have to be corrected. From late 2008 until the end of 2010, GDX advanced more than 4-fold from $15 to $64. Silver stocks, juniors and mid-tiers had a larger run that lasted nearly 30 months. It takes not months but quarters to correct that type of move. […]

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Are Gold Stock Fundamentals Still Bullish?

Are Gold Stock Fundamentals Still Bullish?

In the face of a correction or poor price action, we’ll often hear analysts proclaim the bullish fundamentals of precious metals. While this is true on a structural and secular basis, it doesn’t mean the market always advances every year or two. We’ve written about the wall of worry phase and how progress in the second third of a bull market is limited. The HUI hasn’t made any net progress in the past four and a half years. It has actually made only limited progress since 2006! Furthermore, the typical corrections in this sector are wicked. Corrections of 25% are routine and happen several times per year. As we noted […]

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Failed Bottom in Gold Stocks Initiates Start of Capitulation

Failed Bottom in Gold Stocks Initiates Start of Capitulation

It was only a week ago we felt the gold stocks had a great chance of putting in a bottom. Monday supported our thesis but after Tuesday’s action and Bernanke’s jawboning it was apparent that the gold shares were in for a very difficult period. We immediately went long DUST to hedge long positions and trimmed some of our most vulnerable positions. We aren’t day traders personally or professionally (in our service) but sometimes you have to be considering the day to day volatility in this sector. Having accounted for the short-term, the next move is to gameplan for a potential major bottom in the sector. Below we show the […]

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Today’s comments 5 April 2012

Today’s comments 5 April 2012

The mining shares continue being pummelled to the point where one wonders who is left in the sector to sell them at these levels.Take a look at the following chart and marvel:How many of us who were trading the shares can forget what happened to them b…

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Gold’s Breakout or Gold Stock’s Breakdown?

Gold’s Breakout or Gold Stock’s Breakdown?

Gold appears to have broken above the declining resistance line, while at the same time gold stocks recently moved below their previous lows. What are the implications for gold investors and traders? This is what we strive to answer in today’s free com…

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HUI – deeply oversold and nearing support

HUI – deeply oversold and nearing support

The mining shares have been absolutely obliterated over the course of the last couple of months as their longsuffering owners can all too sadly attest.The carnage however has dropped the index deeply into oversold territory on the weekly price chart. I…

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Gold-Stock Panic Levels

Gold-Stock Panic Levels

The beleaguered gold stocks have spiraled lower this month, heaping misery on poor fools like me naive enough to invest in them. Dwindling interest and capital has left this realm a desolate wasteland, I’ve rarely seen anything so deeply out of favor. In fact, relative to gold the gold stocks are now back down to levels only seen briefly during 2008’s epic stock panic! Are they dying, gasping their last breath? This question has enormous implications for speculators and investors. If gold stocks are doomed to never rally again, we ought to cut our losses and move on. But if this embattled sector is likely to return to favor in […]

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Slowing Global Growth was the Theme Today

Slowing Global Growth was the Theme Today

Overnight news out of China and out of Europe detailing slower than expected growth was the catalyst that served to upset the apple cart of the equity market bulls in today’s trading session. It also led to further hedge fund selling of commodities in …

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Precious Metals are Decoupling from the Stock Market

Precious Metals are Decoupling from the Stock Market

Normally, decoupling from the stock market is a good thing. In recent turbulent times, many have wondered if emerging markets would decouple or if gold stocks would decouple. Its surprising to see gold stocks decouple from a strong stock market. Many wondered if the sector would decouple from a weak market. Yet, the decoupling now could be positive long-term provided the decoupling continues when the stock market peaks just below the 2007-2008 highs. Below we plot the S&P 500 and the HUI Gold Bugs Index. At the bottom we show the 100-day correlation between the two markets. Note that the correlation has been trending down since the end of 2010. […]

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Gold’s Wild Ride Leaves Explorers Ready to Grow

Lesser resource companies have been slowly starving to death since the capital faucet was turned off in 2008. What’s left? Some exciting, early-stage companies with management teams industrious enough to make it through with promising projects on the horizon. In this exclusive interview with The Gold Report, Tom MacNeill, CEO of 49 North Resources Inc., a Saskatchewan-focused resource investment company, discusses some names his firm is excited about, including some primed to debut on the public markets soon. COMPANIES MENTIONED: BARRICK GOLD CORP. – BATERO GOLD CORP. – DNI METALS INC. –GOLDCORP INC. – TEMBO GOLD CORP. – WESTCORE ENERGY LTD. The Gold Report: What sort of year are you expecting for gold? Tom MacNeill: The recent pullback is […]

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