Posts Tagged ‘silver stocks’
Some of the economic news coming out of the eurozone lately has been better than expected, but the numbers are still showing contraction in the economy and unemployment is at a record high. The stock market might still be in an upward trend, but I’m not bullish going into 2013. Here’s the thing about the current state of the economy—the Federal Reserve is very much onside in terms of policy and practicality; you never want to fight the Fed if you are a stock market investor.
This is why the main stock market indices could rally right into the first quarter of 2013. And share prices aren’t expensive, even with so many blue chips trading right at their highs. So, while the global economic reality continues to be weak, the stock market is likely to keep appreciating over the near term. (See “Why Are So Many Stocks Hitting New Highs in the Face of Very Big Risk?”)
For speculative investors, I continue to like a portfolio with gold and silver stocks and with some exposure to the biotechnology sector in terms of a general strategy. Gold and silver stocks are highly cyclical, while biotechnology stocks are not. But the best stories in this kind of market continue to be about large-cap dividend paying stocks. And even if earnings growth is mediocre, we’re still going to get a lot of companies raising their dividends and increasing share buybacks to keep investors happy. The giant cash hoard that a corporation has doesn’t help the employment situation, but it serves investors who are seeking dividends extremely well. Below is a stock … 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
In 2011, the world’s central banks accumulated the most gold in four years. The active buying was largely driven by the weaker greenback along with the perceived higher risk in holding U.S. dollars. The Federal Reserve’s worries and its subsequent decision to implement QE3 (a third round of quantitative easing) indicates America has some rough economic times ahead. (Read “Why We Might Not Want to Fight the Fiscal Cliff.”) The same goes for Japan and China, where we are also seeing quantitative easing. All of the easy money is expected to drive spending, and the result will likely be inflationary pressure, against which gold is purchased as a hedge.
And then there is the European debt crisis and the reality that the entire eurozone appears to be heading towards another recession, including the region’s two biggest countries, Germany and France.
On the political front, there is turmoil in the Middle East, and there’s a chance, albeit low, that Iran will be targeted by the United States and the United Nations.
For December, the chart for gold showed a bullish “cup and handle” formation. Gold is bullish at $1,770, well above its 50-day moving average (MA) of $1,648 and 200-day MA of $1,654 on strong relative strength. The moving average convergence-divergence (MACD) is also on the rise and displaying a buy signal. I am concerned by the technically overbought condition and the fact that at the current … Read More
Gold and silver prices are rising, and this is exactly what mining stocks need. After a well-deserved correction in gold prices, gold stocks were hit pretty hard as institutional investors abandoned the sector. Just like the spot price, speculating in gold stocks isn’t for the weak-stomached; volatility is standard in precious metals. But with volatility comes the opportunity for greater returns—if you buy the right companies at the right time.
Silver prices are currently moving nicely high—much stronger than gold. Silver prices have lagged spot gold for quite a while now, and some of the best values that recently developed on the stock market are silver stocks. Everyone says silver prices have more room for advancement, but I’d still own both.
Gold and silver prices are going up in anticipation of a third round of quantitative easing (QE3), or some form of monetary policy, by the Federal Reserve. Most Wall Street investment banks are now predicting that spot gold will be well over $1,800 an ounce by the end of the year. With all the turmoil we’re going to have to deal with next year, owning some gold and silver will likely be a good bet. What’s required for gold and silver stocks to really advance is the return of institutional investors to the sector, which will happen if gold and silver prices keep ticking higher.
I want to repeat my view that there are actually very few attractive gold and silver mining companies on the stock market at this time. Costs have been rising substantially at many precious metals companies, and profitability at a lot of companies has been … Read More
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