Follow the money. My friend and colleague, Nick of DenaliGuide’s Summit blog has done a short video to explain why the current trading action in gold and silver – although seems quite bearish – is really a non-event. The goal is to help ease everyone of the oppressive negative sentiment the has engulfed the precious metals investing community.
Some Nick’s “hidden” talking points include the fact that:
1) gold and silver bottomed in last June 2013
2) June 1st this year: gold is up almost 3%, silver is up just over 3%; GDX is up almost 20%
Sure doesn’t feel like the precious metals sector has had positive returns this year, does it?
Please take 2 minutes to watch Nick’s informative video: Market Sentiment Belies The Numbers. (Samples of Nick’s T/A research, which I use, are linked at the top of the blog)
Perhaps what’s most interesting can be seen in this graph from Nick (click to enlarge):
This shows the GDX index since mid-June. As we know, gold and silver rallied along with the GDX into mid-July and have largely retraced nearly back to their June 1 starting prices. BUT, the mining stocks have been marking time in a sideways pattern. The black line on the graph shows the amount of “stealth” accumulation that is occurring on every down-tick in the mining shares. I have noticed this as I watch the tape every day, but this graph illustrates it. The message: SMART MONEY IS ACCUMULATING MINING SHARES.
I have several mining stock ideas here: IRD Research Reports
My “Huge Upside” idea has pulled back on zero news. I added some to the fund I manage today. My “Short Term Trade/Long Term Investment” idea is back above my recommendation level. I expect it to outperform going forward, assuming the precious metals sector starts trending higher.