Again we will say that Napoleon Bonaparte once advised to “never interfere with an enemy when he is making a mistake.” Some gold companies’ shareholders may now be making serious mistakes by selling shares in stocks that they have lost patience with yet that is normal in a bear market. They should ask themselves “who is buying?” as there is a strong possibility that they are literally giving away deeply undervalued stocks at very low prices. Selling may prove to be a mistake as incredible bargains in gold stocks occur during bear markets. Today investors can find companies that are extremely undervalued on the basis of various valuation gauges but it does require thorough analysis.

We are about to commence further price moves up in Gold, Silver, mining and exploration stocks. Many of them should move up to price levels that will amaze investors. Because there is so little comprehensive research coverage for most metals companies, many remain undervalued. The coming price moves up in the precious metals stocks’ prices should far exceed investors’ expectations.   

Our analysis indicates that a long-term bull market for gold began in 2015. While the majority of gold stocks have languished, some have performed exceptionally well. While some analyst clowns suggest that investing in gold and mining stocks is for fools, we had some here that moved up 500% to 1400%. Three were takeovers.

Key: The very best time to accumulate gold mining and exploration stock is during a bear market; that is when the stocks are incredibly cheap. Look at the charts for mining stocks and note the huge price ranges from low to high. You can see gold companies go from 5 cents or 10 cents to $4.00 and more.

Major point: There is still very little research coverage and support for mining stocks during bear markets or for that matter at any time. Therefore, the stocks drop to even lower in prices than they did in the past during bear market periods. Few investors ever take advantage but that is just human nature.

The American brokerage industry will never acknowledge a bull market in gold (gold and silver stocks) as that indicates that there is an ongoing or oncoming bear market in the industrial stock markets. During bear markets, the brokerage houses often suffer enormous losses. They cannot tolerate bull markets in gold and most commodities.

  When a frustrated selling shareholder says “just get me out of this stock” a value investor may say “what a great opportunity the seller and the weak metals market have given me.”  Price weakness offers value investors opportunities to invest in mining shares while they are literally “on sale” as well as being exceptionally cheap.  Someone’s mistake in selling is often another investor’s opportunity.

It is late in the precious metals bear market but investors can still find undervalued and overlooked stocks at low prices and can “double up” (dollar cost average) on companies that they own if the fundamentals are positive. Experienced value investors have been accumulating many exploration and mining shares during the last five years that are exceptionally undervalued. Lower prices? They often buy more. For this we often check the purchases and sales of the companies’ officers.

                                                                                                                                                                                                                                                                                The managements, who include both the officers and directors of gold and exploration companies are buying their own companies’ shares! They have been large and consistent buyers throughout the bear market with little selling. Note that today there is little insider selling in the precious metals at all. Their insider activity suggests to us that they expect strong gold prices and superior performance in metals stocks.

Again! Our analysis and that of others still projects a move very soon to the $1400 to $1500 (US Dollars) which should bring enormous moves up in many gold, silver and exploration stocks. Our overall analysis has never been this positive. The central and commercial banksters may continue their manipulation of gold bullion but that ruse should end soon.

What else does the gold and precious metals market need? They still need a bear market in the industrial stock markets which we almost require to have a bull market in gold and mining stocks. We expect that.

What is the most important ingredient for a bull market in gold? We have said it time and again; we need a lower value in the US Dollar for a bull market in gold. According to an IMF report of summer 2017, the dollar still needs a decline of about another 8%.

Are the gold and silver mining stocks undervalued? Yes, based on the value of resources per share as well as exploration potential, many legitimate mining and exploration stocks are now carrying their lowest valuation levels ever. Furthermore, today the gold and mining sector is carrying one of the lowest valuations of all investment sectors. Yet, we recognize again that many of the gold type companies will fail. Successful exploration is expensive and difficult, thus many companies do fail.

Why are they carrying such low valuation levels? The brokerage industry suffers during bull markets in gold and hard assets as it usually occurs concurrently with a bear market in industrial stocks. That brings the brokerage industry large drops in profitability. Any increase in trading volume and activity in mining stocks is insufficient to make up for the losses. Thus, brokerage houses oppose bull markets in gold and discredit indicators that suggest a bull market in gold and commodities. Their accuracy and timing in that advice is as pathetic as it is in most other sectors they cover.

 “Is there still manipulation in the price of gold bullion?”  The manipulation has been so obvious in the futures contracts which are paper not the gold bullion. One recent afternoon’s volume (paper contracts) would be equal to seven months of total world gold production. A true gold bullion sale of that size would be physically impossible. However, the futures markets paper sales create the appearance of weak gold prices. It’s not gold bullion they are selling-it is paper! We would like to see the true gold delivered. Recall when the Germans asked for their gold bullion held in safekeeping in New York four years ago? It took over three years to get it delivered. And they call it “Safekeeping.” Yeah sure!

Little research is being done by brokerages for most precious metals stocks….  Some claim that it is too expensive to have research coverage on smaller stocks despite the fact that many are undervalued and offer investors opportunities for exceptional capital gains. Many if not the majority of brokerage houses do not permit their brokers to buy most mining stocks despite the extreme undervaluation of the shares. We will explain that in a forthcoming article.

Disappearance of the brokerages’  “Market Makers”  For decades, market makers (specialists) helped bring balance in the sales and buys of stocks, offering buying support when needed and offering shares when necessary. They would hold large positions in the stocks that they made markets in. At the same time, the market makers’ research departments would provide research to create investor interest in the stocks.  As the “spreads” between the bids and offers have narrowed to such small levels, they cannot provide adequate profitability to support the research departments. Most brokerage research has disappeared and investors must look for other sources for research.

        Last but not least the Cycles…Maybe the most important ingredient of all

Cycles can be very useful when trying to make timing decisions. It is important for investors to recognize that several important cycles are saying that Gold should soon have a large move up….very large. At the same time, several cycles forecast bad times for the industrial stock market. ……very bearish times for a long time.