Mining Stocks, Chinese Demand, and a Potential Golden Surprise
Over the past couple of days, the performance of the gold and silver mining stocks deserves more attention than it is getting. As many of us argued, the collapse in mining stocks into late 2013 was nothing more than professional liquidation-- meaning players who should have known better simply giving up and moving on to some other, hotter, investment. I'm sure many of these managers talked themselves into believing that gold and silver were heading far lower than in they in fact were, and I know that other asset managers had had enough of cost overruns and waste on the part of mining CEOs. Couple this with how loathed the mining shares were among gold and silver bullion investors (and I have the emails to prove it), and I felt you had all the ingredients for a great contrarian trade.
DYI Comments: I completely agree now is the time to dollar cost average into your favorite gold mining mutual fund. Prices are way off and still have further to run on the upside despite the Dow/Gold ratio being a bit pricey at 12.30 to 1. Historically as the money printing gets into high gear to pay for Social Security and Medicare gold the mining shares will once again take off to the upside. Dollar cost average in and hang on for a wild ride.
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