Sunday , 19 May 2024

It’s Time To Buy Gold & Silver Stocks – Here’s Why

The bear market for gold is long in the tooth…and gold stocks are the most undervalued they have been in decades.

The above comments, and those below, have been edited by Lorimer Wilson, editor of (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – register here) for the sake of clarity ([ ]) and brevity (…) to provide a fast and easy read. The contents of this post have been excerpted from an article* from originally entitled It’s Time to Pile Back Into Gold Stocks ‏ and which can be read in its unabridged format  HERE. (This paragraph must be included in any article re-posting to avoid copyright infringement.)

Below are five charts from Palisade Capital that support said contention:

1. The divergence between the S&P 500 and Bloomberg Commodity Index is at an all-time high.

Bloomberg Commodities Index vs. S&P 500

2. The bear market in the TSX Venture now stands at 1,090+ days.

TSX Venture Bear Market
3. Gold stocks have never been this cheap relative to the price of gold.

HUI to gold price chart

The Gold BUGS Index (HUI), which tracks the world’s largest gold miners, was last this low when gold was only $250/oz.

4. The gold bear market is closing in on being the longest in BGMI history.

Gold bear markets

Using the Barron’s Gold Mining Index (BGMI), this is already the worst bear market for gold miners. However, in just a couple of months, it will also surpass the 1996-2000 bear market as the longest.

5. The ratio between the gold/silver sector to the S&P 500 is unprecedented.

S&P 500 to Gold/Silver market ratio

When pricing the S&P 500 in terms of the Gold/Silver Sector Index (XAU), it has never been this expensive.

Put another way: gold and silver has never been this cheap.


Related Articles from the munKNEE Vault:

1. It’s Time To Start Thinking About Buying Gold Mining Stocks – Here’s Why

Is this the time to be buying gold mining stocks? Maybe, maybe not, but if you don’t own any at all, this is a good time to start thinking about them. Here’s why.

2. How to Play the Beaten Down Precious Metals Sector With Less Risk

Investors are faced with a serious challenge: how exactly to play the beaten down precious metals sector? If anything, investors must avoid too much risk when putting capital at work so here are 4 rules on how to go about doing so in…a disciplined way.

3. 3 Signs That Gold, Silver & PM Stocks Have Finally Bottomed

Gold, silver and precious metals mining stocks are still nowhere near long-term or secular bottoms but I believe they could be approaching short-term tradable bottoms in the coming days or weeks based on the following 3 signals:


One comment

  1. As The Lone Ranger used to say, “Hi-Oh Silver and Away”.

    All of us that have been watching the paper shorting of PM’s wonder when the “Worst Financial Joke of the Century” will become common knowledge, because until then the trading prices listed for PM’s will continue to decline verses paper money.

    Until then, all those that can afford to either hold on to their PM’s and/or better yet acquire more will continue to watch the “gamed” values of PM be discussed as if they were accurately based upon existing “physical” PM trades.

    What is needed is for someone, or some group of traders to start posting the values of PM that reflect only physical PM trades without any of the paper shorting that have made a bad joke out of the PM charts that are published daily.

    In the US, everyone knows that last years cost of living adjustment (COLA) was far greater than the Government’s 1.3% value which then was used to increase everyones Social Security benefits; similarly the value of PM’s is far higher than what is posted in current charts because Governments are now in the business of printing paper money and they do not want its value to look anything but great.

    Since Governments continue to purchase physical PM’s, it is easy to see that they are hedging their bets, so that if the value of paper money does drop, they will have plenty of physical PM’s to fall back on. I wonder how many reader are in that position?