Our technical and cyclical indicators indicate that we are about to commence a major bull market in Gold and Silver mining stocks. It is frustrating and demands exceptional patience but it is coming; not just an up market which we have already seen in some gold stocks but a major bull market. Moreover, other analysts using their own often amazing proprietary indicators also project that a bull market will begin soon. This year should prove to be one of the best times ever to invest in mining stocks.
The Chinese have not overlooked this gold market; China is now the world’s largest buyer of gold bullion as well as leading the world in actual gold mine production.
Note very well that gold and silver mining stocks are now at their lowest valuation levels that we have seen over the last thirty years. The prices that many if not most are selling at are at “fire sale” prices.
We have written previously that in 2014 there was a meeting of major bankers where they decided that the price of gold bullion should not be allowed to go above $1300 and specific “steps” would be taken whenever it approached that price. Watching the specific gold sales done in the past on a commodities exchange which are really “paper sales” and not true bullion, one could surmise that this is a method to keep the price of gold down. Other sites have mentioned those activities as well.
Note well that the brokerage industry does not and cannot benefit from a bull market in gold and commodities as historically it brings with it and occurs concurrently with a bear market in the industrial stock market such as the Dow Jones Industrials and S&P 500 which is unprofitable for the brokerage industry. The brokerage industry will not acknowledge nor admit a bull market in gold is occurring.
Recently we have seen larger mining companies buying small junior mining companies or percentages of them at what we consider to be at far too low prices. In our view, the prices paid are excessively low. Some small exploration juniors’ resources were in our view being “stolen” by the acquirers. If gold were at the $1400 to $1500 U.S. level, the prices paid would be significantly higher. We expect that we soon will see higher prices for gold bullion which will require much higher bids by the buyers. Opportunities to buy the small mining companies’ assets at such low prices will soon end.
The key ingredient and the major influence in the direction of gold and gold stocks is the direction of U.S Dollar. Our analysis still suggests that the primary direction of the dollar is down which is very positive for the price of gold and silver.