The PDAC & Gold Comments for the week. Gold, where are we going?

The Prospectors and Developers Association of Canada (PDAC) convention was held last week in Toronto. Our comments from last week still stand and we still believe that we are soon commencing a positive cycle in gold and mining stocks. Our technical, cyclical and fundamental analyses suggest now is the “time” to be accumulating the gold stocks. Price weakness can be frustrating but what few consider is that it is an opportunity to invest when the mining stocks are “on sale.”

1-Cycles….The cycles for gold are turning positive this year. But cycles are NOT are a panacea, some gold mining stocks have already completed their bottom. When they enter a bull phase, they all will not rise at the same time; and some mining stocks will not rise at all.

2-Brokerage industry advice for gold?…..Do not expect the US brokerage industry to forecast a bull market in gold or gold mining stocks. They cannot! If you look at the relationship of the industrial stock market to the gold market, you will find that a bull market in gold generally indicates a concurrent bear market in the industrial stock market such as the Dow Industrials and S&P 500. Brokerage profitability would probably plunge with a bull market in gold mining stocks. A bull market in gold and gold stocks is something they do not want to see.

Highly respected technical analyst and author John Murphy and I were at a restaurant in Oradell, New Jersey discussing the gold market in late 2004, gold was selling in the $400 an ounce range. We agreed that we were starting a bull market in gold. I asked John when the brokerage industry would begin strongly recommending gold mining stocks. John’s answer came as no surprise, he said that “no matter where gold moved the brokerage industry would not recommend gold or gold stocks in general.”

I asked John if gold moved up to $600, “no!” he said. But $800 John? “No!” $900 John? “No! They will not recommend gold at all. At those gold prices, they will say that it has moved up too far and is overbought or some other excuse.” John was right and that is exactly what happened. So investors must look to other sources for research and analysis of gold and mining stocks.

3-Long term charts are giving a hint. If you study the charts of for example Newmont Mining, in our interpretation, we are seeing a major bottom being made. The large mining stocks would be the visible leaders that would be a larger market confirmation. While some of the small cap junior mining stocks have already commenced excellent moves up on a percentage basis, a clear confirmation will come from the majors commencing strong moves up. Our analysis suggests that it is coming soon….in 2015.

4-Many Gold stocks are undervalued and in our view are “on sale.” Do your due diligence and take advantage