Archive for the ‘gold stocks’ Category
More hard reality is coming to the stock market and those commodities that will benefit from the headwinds coming our way. The spot price of gold has been going up on a weaker U.S. dollar, which has been going down because of worries regarding the global economy. Gold looks good here, and $2,000 an ounce by early 2013 is a real possibility.
A lot of gold stocks recently hit a wall, not just because of stalling of the spot price of gold, but because of their valuations. The perfect example of this is industry benchmark Yamana Gold Inc. (NYSE/AUY), which has followed spot gold in its turnaround since August. Since then, this well-managed gold producer is up five full points and currently boasts a price-to-earnings (P/E) ratio of approximately 40. Wall Street analysts recently increased their earnings expectations for the company in 2013, but what this stock needs now is a rising spot price in order to break out. Yamana Gold’s stock chart is featured below:
Chart courtesy of www.StockCharts.com
This is the big thing with gold stocks; no matter how good the story is or how much an earnings report beats the Street, gold stocks don’t really go up unless the spot price of gold is doing so. It’s a reality of precious metal investing; it’s a reality of most commodity-related securities.
Balanced equity portfolios should already have some exposure to gold, either through individual gold stocks, a fund, or an exchange-traded fund (ETF). No matter what happens to the U.S. economy going forward, the fundamentals for gold support a rising spot price environment. Sovereign debt, a weaker … Read More
Silver prices have had an extraordinarily strong move over the past few weeks. With the anticipation of a new monetary stimulus plan by the Federal Reserve, many investors piled into this commodity and ran up silver prices. According to the U.S. Commodity Futures Trading Commission, bets on higher silver prices jumped almost 10 times over the last couple of months.
According to Bloomberg, hedge funds are the most bullish on silver prices than at any time over the past seven months. With more money printing, the answer, it seems, is easy and many hedge funds have piled into this commodity, hoping for higher silver prices. However, in life there are no easy answers.
This idea of everyone is piling into this space and pushing up silver prices so quickly worries me. Usually when so many people are bullish or bearish, it signifies a top or bottom. Let’s see if my technical analysis of silver prices can give us a better roadmap.
Technical analysis initially tells me that, by looking at the Relative Strength Index (RSI), the move in silver prices has become quite overbought. However, this does not mean that silver prices have to go down; in fact, technical analysis is telling me that as long as the support level of approximately $32.00 holds, we should see silver prices move up. If that support were to fail, the technical analysis of silver prices would then indicate a pullback to $30.00 and, more worrisome, a broken uptrend.
Chart courtesy of www.StockCharts.com
Another worry is that small retail buyers are not accumulating this commodity. The U.S. mint has sold approximately 25 million … Read More
Gold and silver prices are going up, and it’s a great time to be back in the precious metals sector. Gold and silver stocks corrected significantly, along with spot prices this year, and a lot of value developed among the best stocks in the sector. Both gold and silver prices were due for a correction; gold more so than silver.
Gold and silver stocks corrected significantly more than the percentage change in spot prices and then, like magic, the entire sector turned around on a dime, due to the market’s hope for a third round of quantitative easing (QE3). And while the global economic reality is beginning to set into the minds of investors, the fundamentals for both gold and silver continue to be excellent.
No matter what happens to the U.S. economy in 2013, the U.S. dollar is very likely to be under continued pressure because of all the fiscal headwinds. While no policymaker will admit it, a weaker U.S. dollar is exactly what the Federal Reserve wants, in the hope of stimulating exports and keeping liquidity high. And, as we all know, a weaker U.S. dollar compared to other benchmark currencies is a boon to gold and silver prices. The U.S. dollar outlook is the biggest near-term catalyst for higher precious metal prices. There are so many other fundamental factors that favor $2,000 gold and $40.00 silver, and Wall Street is starting to jump on the bandwagon.
We just had a great new entry point for new positions in gold and silver stocks this past summer; countless good mining companies hit 52-week lows, as the entire group … Read More
Profit Confidential — IT'S FREE!
"A Golden Opportunity for Stock Market Investors"