From King World News on October 12th:
With very little in the U.S. stock market looking like a low-risk entry, consider gold as an alternative option. Recall, the metal broke the downtrend that had been in place since 2011 back a couple of months ago, and has now pulled back to that former resistance line. It should now offer some support, and the 40-week moving average also sits around there, further adding to the importance of the zone (see bullish breakout and test of support below). (click to enlarge):
This graphic above from the KWN report is based on chart-reading analysis. I’m not a big “chartist” or “technicals” advocate, but hedge fund algos and day-traders love to chase “technicals” and price velocity – in either direction. To that extent, the completion of chart “formations” can become a self-fulling prophecy.
Having said that, the fundamental support for substantial upside adjustment to the price of gold becomes more compelling the day, not the least of which is an acceleration in the accumulation of physically delivered gold bullion by several eastern hemisphere countries.
I wanted to highlight the call by Raymond James because, interestingly, a couple different advisors from Raymond James subscribed to the Mining Stock Journal yesterday. I was wondering why until I saw the report posted on King World News. If just a small percentage of retail/high net worth investment advisors begin to allocate capitol to the mining stocks, it will trigger a massive move higher in mining stock prices. Currently, relative to the price of gold, the only time in the last 20 years that mining stocks have been more undervalued was in December 2015.
Sprott (the firm) is currently recommending that its clients invest in an emerging junior exploration gold mining company. I recommended this particular stock to Mining Stock Journal subscribers in April about 25% below its current price. I’m chatting with the CEO today and will be updating my outlook for this stock in next Thursday’s issue. I will also be featuring the stock of a mid-cap mining stock that I think has 30-50% upside by the end of the year if the price of gold continues to move higher as I believe it will.
On average and in general, since the inception of MSJ, I have been able to dig up junior mining stock investment ideas before the big firms discover, promote and channel client money into them. I am starting to feature mid-cap miners with stocks that have been unreasonably beaten down in price this year because those are “low hanging fruit” risk/return plays in which 25-50% can be made in a short period of time. I recommended call options on SA (Seabridge Gold) in the 9/21/17 issue that are up 300% since then.
You can find out more information by clicking on here: Mining Stock Journal information.