New Bull Market For Mining Stocks?

Concerning gold and noting that this is Friday, “they”…and we’ve no idea who “they” are, but we do indeed know that “they” exist… are out there again making mischief as they have tried to do so many times in the past. Fridays “They” wage war on gold.  – Dennis Gartman from his Jan 29 “Gartman Letter”

With the entire precious metals community is still discussing the fraudulent LBMA a.m. silver fix, I happened to notice that the HUI gold mining stock index quietly is up 20% since January 19.

UntitledWhat I find interesting about this is that if this were a stock like AAPL or AMZN, for instance, CNBC/Bloomberg News/Fox Biz would be falling all over themselves with the declaration of a new bull market in those stocks.  Instead with regard to mining stocks – crickets.

Perhaps even more interesting is this graph to the left, which shows the performance of the HUI from the inception of the Untitled1precious metals bull market vs. the S&P 500 over the same time period.  This is yet another example of information that will never be presented on the adult cartoon channels also known as financial news programming.  Since the end of November 2000, the S&P 500 has traveled from 1314 to its current 1919, or 46%. But the HUI mining stock index has moved from 42 to its current 120, or 285%.  That fact would probably surprise a lot of people.

Turning to the quote at the top of the blog, you’ll note that until very recently Dennis Gartman habitually used to lift his leg and urinate on the investment community, which he referenced simply as “bugs” (as in “goldbugs”).  He used to veto with an iron fist any notion that the precious metals market is manipulated.  Wonder what all off a sudden gave him religion?

Here’s another fact that might surprise a lot of people:  It’s now being estimated that India imported at least 110 tonnes of gold in December.  In addition, Swiss and Hong Kong gold exports to China reached a record in December.  It’s estimated that China and India combined imported 300 tonnes of gold just in December.  That goes a long way toward explaining why the amount of gold made available for delivery on the Comex has reached a low level not seen in decades and the paper to gold ratio has reached a level that is mindblowing.

The point here is that, just like the true underlying fundamentals of Amazon.com’s business model and financials do not fit the market valuation given to its stock, the underlying fundamentals of the physical gold do not fit the price as reflected in the fraudulent paper markets controlled by the LBMA and the Comex.   If anything, yesterday’s LBMA silver fix reflects the endemic corruption in the paper gold/silver market.  It also reflects the extreme degree of desperation to control the precious metals markets by the western bullion banks.  The bottom line is that they are running out of physical metal with which to perpetuate their fraud.

Thus I’m not surprised that the mining stocks, as represented by the HUI index, are up 20% in a short period of time.  The mining stocks are at their most oversold and undervalued in U.S. stock market history, especially when evaluated in relation to the price of gold and silver.   But don’t wait around for Maria Bartiromo or Joe Kernan to start promoting the mining stock sector – that will never happen.   As Dennis Gartman has noted, it’s a war on gold.  But my best guess is that the key battles are now being won by the “bugs.”

10 thoughts on “New Bull Market For Mining Stocks?

  1. Dave … something that seems to have gone unnoticed by most is; every time rumors circulate in China of further Yuan devaluations; a bigger line up of people form at the Bullion shops in China ….. all this talk of Yuan devaluation is very bullish for physical Gold demand coming out of China.

      1. Here’s a little insight into whats happening in the physical Chinese Gold market right now; I’m personally involved in Placer Gold mining in Canada … and as you probably know; Vancouver has alot of Chinese people living there …. some of my contacts in Vancouver have offices in Hong Kong …. I’ve had multiple emails in the past couple months from Hong Kong contacts who are trying to lock-up the last bits of Gold dust and nuggets from the Mom & Pop Canadian Placer Gold operations ……. what that means is; the Chinese are scrapping the bottom of the barrel for physical right now.

        1. I can also add; They are also currently trying to purchase the best claims (the cream of the crop) … and they aren’t looking for huge capital intensive projects …. they are looking for the large low cap. ex. and low cost per ounce properties that can go into production very quickly.

  2. The bottom line is that they are running out of physical metal with which to perpetuate their fraud.

    I beg to differ: they are running out of paper to print gold certificates and options. 😉

  3. I’m always concerned when Gartman starts to talk his book.
    If you look at his track record, it sucks. I do think that the U.S.
    must be looking at countries that have any type of gold holdings.
    Those countries should prepare to be invaded. The U.S. is the best
    in the world at starting wars and stealing resources.

    1. Gartman isn’t talking his book here, per se. I’m not sure what his current gold position is. I get his daily newsletter but I rarely read it. Also, he doesn’t want to look like an idiot given that it’s now obvious that the metals are manipulated.

  4. This comment is from “Sam” who was having trouble posting a comment. Note: if the website seems to be malfunctiong, try clearing your browser cache or trying a different browser. My web guy looked at it this week and could not see any problems on this end.

    From Sam:
    Dave,
    I enjoy reading your daily reports and admire your research. In a way, I’m disappointed about the AMZN ponzi scheme because, from a customer perspective, it seems to do everything right. Their front-line staff are helpful and friendly when I have a problem – which they always ensure is resolved. Purchases couldn’t be easier (1-click ordering) and I am constantly updated with shipping and delivery information. I even get a text when the item has been delivered to my mail box. No other company that I have dealt with across the decades makes the buying experience so smooth as I’ve had with AMZN. I know I sound like a shill, but I’m simply a happy customer. When I read your reports about what is going on behind the scenes, it’s quite a disconnect for this old (72) geezer.


    Sam….
    “To determine the true rulers of any society, all you must do is ask yourself this question: Who is it that I am not permitted to criticize?”

  5. Now that AMZN has been (partially) busted… I saw a cnbc front page article after the report where an analyst said something like “At this point I think AMZN is out of the FANG… ” We’ve been de-FANGed !! Notice how the gap down was conveniently after-hours so the public could reap the gap.

    Jeez, the “pump ‘n dump for a living” artists crying their crocodile tears is just so … amusing. But, then again he could simply be a deluded simpleton.

    Reminds me of the movie “Little Big Man” and poor Jack. I feel like Jack. So whipsawed that now it’s time to finally head for the hills with … nothing but the truth with which to harvest the volatility as this devil drowns in his own oil. Gurrrrrggggglllll

  6. A CBC production (Canada). — VERY — interesting history, up through 2013 or so. Includes earlier history. Not boring. Including “mining” by Odyssey Marine of Spanish galleons and WWII silver transport from U.K sunk by U101 @ 10:56. Odyssey must be saying “Thanks, U101!!”.

    The recent factual “fun” begins at 22:44. HSBC, JPM, MS bullion banks; Central Banks leasing to them; Venezuela & Germany; Andrew MacGuire whistleblower & the CFTC “ongoing investigation” @ 26:00; Mr. Sprott.

    Gang’s all here !!!

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