Several very respected analysts have suggested that we are now in a period that will prove to be the “best time” ever to invest in gold stocks. We agree but want to add one point that few recognize or understand; there is no “best time” to invest for all gold amd silver stocks. Over the last three years we have recommended Canadian gold mining stocks that were literally being given away at distressed prices-actually “thrown away” by their frustrated shareholders.
Yet since then, some of our favorite recommendations had moves up of near 900% (Richmont, Niogold (taken over) Claude Resources (taken over). It certainly was the “best time” to invest in those specific companies right in the middle of a harsh bear market in gold. We find that the most favorable time to invest in gold stocks (after doing the necessary fundamental research) is when they are selling at major bottoms during brutal bear markets.
Flagrant manipulation occurs regularly in the price of gold bullion which is then reflected in weak prices of mining shares. The manipulation scheme was fashioned by Central Banksters and major brokers in 2013-2014 to keep gold bullion under $1300 in U.S. dollars. It is advantageous for the Chinese as it permits an image of gold bullion weakness keep the price down while they accumulate gold at low prices.
The manipulated trades are “paper” trades on the commodities exchange and not true bullion. Often the one day “paper trades” can represent equal to six months of total world gold production which in reality is totally preposterous. It’s a “put up job” as they say-a ruse and a deception. But it fools the fools…..or many of them.
Gold’s supply demand statistics, cycles, strong fundamentals and the insider buying of the mining shares are exceptionally positive. However the technical analysis which can be and has been highly effective is distorted by the banksters’ intervention and blatant manipulation.
NOTE WELL: Major brokerage houses will not issue strong recommendations for gold mining stocks outside of their corporate finance clients. They rarely have ever recommended gold stocks in a timely fashion nor are they capable of it. If they do recommend gold mining stocks, they are acknowledging that the industrial stock market faces a bear market which they cannot tolerate. Brokerage houses’ profits drop dramatically during bear markets and a bull market in mining stocks cannot make up the difference in the lost profits.
THE U.S. DOLLAR: Key to the gold kingdom!!! The most, yes the most important ingredient for a bull market in gold is weakness in the American dollar. Yes, a weak dollar is by far the greatest influence in gold’s price. I repeat, weakness in the US dollar has been the major influence in the price of gold.
For example, in 2011 when the US dollar index was selling at 74, the price of gold bullion was above the $1800 level……in 2015, when the US dollar index was selling at approximately the 100 level, the price of gold bullion was at the $1100 level. Yes, the direction of the U.S. dollar has an enormous effect on gold and most commodities.
STOCK MARKET: The Industrial stock market: Along with a weak U.S. Dollar, a bull market in gold almost requires a bear market in the industrial stock market such as the Dow Jones Industrials and the S&P 500.
On a value basis, the gold and silver stocks are close to the cheapest level that we have ever seen. Companies should be careful and demand adequate value for their properties and shares. Recently, we have seen small companies accepting low bids from acquiring companies.
Our analysis indicates that we are now in one of the best times in history to be invested in gold and silver stocks. Insist on value, be patient and you may be quite surprised with the results. A key indicator remains the same-we need to see a bear market in the industrial stock market to have a bull market in the gold market and mining stocks.