The monetary “gods” at the Federal Reserve have created the perfect monetary policy recipe to fuel gold, silver and mining stocks to new all-time highs and beyond. While the bubbleheads in the financial media have been garishly cheerleading the general stock market as it heads to an extreme overvaluation that will not end well, the mining stocks have outperformed the big three stock indices by a considerable margin. As an example, since the March bottom, GDX is up over 100%, while the Nasdaq Composite is up 51.6% and the SPX is up 40%. And the mining stocks are just getting warmed up.
Relative to the prices of gold and silver, the mining stocks are still extraordinarily undervalued. In 2011 when gold peaked at $1900, the HUI index was trading over 600. It just recently crossed over 300.
Bill Powers of Mining Stock Education and I discuss the bullish set-up for the precious metals sector, including the gold/silver ratio, specific junior mining stocks and a couple other timely topics:
You can learn more about the Mining Stock Journal by following this link: MSJ Subscription Info. In the next issue released July 9th I discuss several of the stocks I follow, recommend and in which I invest, capital management strategies and I present a junior exploration “venture capital” idea that has the potential to be a 5-bagger from its current level.