Since the start of June, typically the worst month for precious metals when looking at seasonal charts, gold is up $75 or 6% and silver is up over $2 or 11% while many of the mining stocks that we track are up 30% or more in the past 3 weeks. Prices normally start to gain momentum after June and close the year very strongly so, while a pullback tomorrow would not be surprising, I believe the trend will be towards higher prices for the remainder of the year.
The above comments are edited excerpts from an article* by Jason Hamlin (goldstockbull.com) entitled Gold And Silver Explode Higher! Is it Finally Time to Buy?
The following article is presented courtesy of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (sample here) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Hamlin goes on to say in further edited excerpts:
Why Is This Upsurge In PMs Happening Now?
1. The increasing instability in Iraq, as the Sunni Jihadist group, ISIS, has taken over much of Western and Northern Iraq, plus a large portion of Eastern Syria.
2. The Federal Reserve recently said that they are committed to accommodative measures and low interest rates well into the future. These comments have driven the dollar down and boosted demand for precious metals. With China, Russia, India, Brazil and countries around the world abandoning the dollar in international trade, dollar weakness is likely here to stay…
3. Adding fuel to the fire, many technical traders and gold shorts were forced to cover positions this week on the advance in precious metals. These large and leveraged paper positions tend to exacerbate the price movements in both directions. If we are indeed finally witnessing the end of the 2-year correction in precious metals, the upside potential is absolutely staggering.
The past two advances more than doubled in their magnitude, as did the past two declines. If the is trend holds true this time around, we are looking at an advance of at least $2,400 from the cycle low of $1,200, which gives us the minimum price target of $3,600 for gold! These cycles last 24 to 36 months, so we can expect this price target at some point around the start of 2017. Applying this analysis for silver forecasts a minimum price target of $100 in the same time frame.
If this price target comes to fruition, anyone picking up precious metals at current prices is going to become very wealthy and, while we advocate holding physical bullion in your possession, we expect quality mining stocks to offer leverage of 2X to 4X the advance in the underlying metal. As such, if gold triples over the next few years from $1,200 to $3,600, a solid mining company should see their share price go up 6X to 12X and, if you are able to pick successful junior mining stocks before the market piles on board, the gains will be orders of magnitude higher![The above being said,] as bullish as I am on precious metals going forward, it is important to realize that manipulation is still occurring and there are banks with access to nearly unlimited funds and extreme leverage via futures markets that can slam the price down at will. They are finally being exposed and even fined for the manipulation, putting an end the cries of “conspiracy theory” but I am not convinced that they are out of the market quite yet. [As such,]…I think it is wise to scale into positions slowly at this juncture and keep some cash on the sidelines. Going forward, I believe that the all-in cost of production for gold and silver will continue to act as support on any take down attempt and the downside risk of such a drop is minuscule compared to the upside potential detailed above.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.goldstockbull.com/articles/gold-silver-explode-higher-finally-time-buy/(Copyright © 2014 Gold Stock Bull – All Rights Reserved. If you are seeking the type of leverage that mining stocks offer, you can opt for one of the mining stock ETFs or attempt to wade through the myriad of mining stocks on your own. If you don’t have the time or inclination to do this, you can benefit from the hours of research that I put into picking winning mining stocks by becoming a premium member. You will get our top-rated contrarian newsletter, access to the Gold Stock Bull portfolio, our entire trade history, trade alerts whenever we are buying or selling and much more. At just $99 for a 3-month trial or $299 for a full year, it could be one of the best investments that you ever make. Our research needs to only make a small improvement to your portfolio to be worth the price. However, we believe it will pay for itself many times over! Click Here for Instant Access to the Newsletter and Portfolio
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