What's Next for Gold and Gold Stocks?

[portart]

We had a nice push early on in gold stocks and, to a lesser degree, the metal. We are still way behind last year's bruising in this sector. I am even making a nice investment in silver which is behind gold and will get dragged up with it if and when gold has a break out. I still feel risk/reward, this is the place to be for that VP, especially in GDX and GDXJ which have a lot clear sky ahead of them given the right circumstances. Both are resting here from earlier date data and the stock 4% give back. I have a feeling that stocks may make another run but I don't see gold getting hit like last year if it does. There is certainly doubt in market place, enough to keep us in the game. Any thoughts from you gold experts?

[Libertarian666]

We had a nice push early on in gold stocks and, to a lesser degree, the metal. We are still way behind last year's bruising in this sector. I am even making a nice investment in silver which is behind gold and will get dragged up with it if and when gold has a break out. I still feel risk/reward, this is the place to be for that VP, especially in GDX and GDXJ which have a lot clear sky ahead of them given the right circumstances. Both are resting here from earlier date data and the stock 4% give back. I have a feeling that stocks may make another run but I don't see gold getting hit like last year if it does. There is certainly doubt in market place, enough to keep us in the game. Any thoughts from you gold experts?

I don't know much about gold stocks other than their incredible volatility.
But as for gold itself, I'd be surprised if it doesn't have a pretty good year.

[Kshartle]

Economy has not recovered one bit as many of us have been saying.

The data is now coming to prove that.

The only way they can hold off the collapse is to print print print.

If/When Yellen announces a reversal of the taper you will see the gold and mining stocks explode.

Imagine when all the gold shorts have covered and momentum players are again buying on margin. It will sail past $2,000 an ounce and the 2013 sell-off will be laughed at as a major headfake.

People who piled into the miners at the lows (I've been buying the entire way down and a lot at the bottom ) will make a killing.

If this trade doesn't work out it's because the Fed does the right thing, let's the economy collapse and saves the dollar. That will force the government to reign itself in and the future will be brighter.

If you have gold and miners now I think you are in a win-win. Either you get rich in the trade or the economy will recover in the long-run. If you stick with paper you run the risk of them burning it up.


Or something else entirely will happen.

[Libertarian666]

Economy has not recovered one bit as many of us have been saying.

The data is now coming to prove that.

The only way they can hold off the collapse is to print print print.

If/When Yellen announces a reversal of the taper you will see the gold and mining stocks explode.

Imagine when all the gold shorts have covered and momentum players are again buying on margin. It will sail past $2,000 an ounce and the 2013 sell-off will be laughed at as a major headfake.

People who piled into the miners at the lows (I've been buying the entire way down and a lot at the bottom ) will make a killing.

If this trade doesn't work out it's because the Fed does the right thing, let's the economy collapse and saves the dollar. That will force the government to reign itself in and the future will be brighter.

If you have gold and miners now I think you are in a win-win. Either you get rich in the trade or the economy will recover in the long-run. If you stick with paper you run the risk of them burning it up.


Or something else entirely will happen.

You can't go wrong with that prediction! 

[Reub]

The gold volatility index as measured by GVX is back down to historical norms, which makes me think that anyone who has been waiting to get back into gold buying has waited long enough. It looks like the bear run on gold might be over. 

[Kshartle]

Or something else entirely will happen.

You can't go wrong with that prediction! 

Of course anything can happen, but what do you see as another major possibility? Do you agree with what I've said as at least the two major possbilities? Do you think it gets so bad that it doesn't matter if you make a killing in the trade it will all get stolen anyway?

[Kshartle]

Tech,

Why no gold mining stocks? Is there anything that would cause you to buy?

They were unbelievably oversold and undervalued a month ago, and still are imo.

Combine that rather obvious observation with your extreme bullishness on the real return of gold and I'd think you'd want to dip your toes in.

I have about 2x as much in the miners as I do in gold and silver with PM investments in total now making up a little over 60% of my total portfolio.

I'm really looking forward to the gold shorts covering.

[portart]

The standard belief on the street is gold is a dead asset and gold mining stocks can't make money. As I predicted, gold stocks would turn this year. All the final stocks in mining were sold at year end for tax losses and what is left are mainly new buyers. Keep praying the neg press keeps up because coming off years of losses, the worm is starting to turn.

Additionally if the economy does trip, gold and gold stocks may be the buy of all time with gold getting all its losses back and more. Gold stocks could double inside of a week with. A panic buy much higher as the stocks are priced for $600 gold.

[Libertarian666]

Tech,

Why no gold mining stocks? Is there anything that would cause you to buy?

They were unbelievably oversold and undervalued a month ago, and still are imo.

Combine that rather obvious observation with your extreme bullishness on the real return of gold and I'd think you'd want to dip your toes in.

I have about 2x as much in the miners as I do in gold and silver with PM investments in total now making up a little over 60% of my total portfolio.

I'm really looking forward to the gold shorts covering.

I don't trust governments not to confiscate mines if they become immensely profitable. There are also things such as cave-ins, strikes, cost increases and many other possibilities, most of which are negative, but those are secondary to the possibility of nationalization in exatly the case where you/they would otherwise be making tons of money.

[Kshartle]

After this run-up I'm at about 39% in goldminers, half of that being GDXJ.

Now I know QE is wrecking the economy in the long-run. I can't help but root for it at this point though.

[portart]

I have a nice 15k profit on GDX and GDXJ eft's since 1/1. I inititually took some profts and put some back in on pullbacks. Waiting for more pull backs but there is too much momentum to get a chance to get more as they are roaring up 2% to 5% a day. The scary part is we are not even at 1300 gold yet. Imagine what these etfs will gain if we march into 1500 gold or higher. Let your imagination really run with gold getting back to former highs. You could be looking incredible, really shocking gains in these guys and insane profits. They are so far down the charts, there is very little upside resistance if gold has their back. I am liking some silver here now which is lagging gold, not buying into momentum change. If we get were into a hot market in gold, the next explosion will be a snap back gain in silver etf's. Tomorrow may be interesting. It could be a rest for everything right here with Yellen priced in. I personally am not wild about the S/P coming off such an outrageous year last year. PP keeps me in them but secretly I would like to sell them all and ride the gold crest. Can't do it because the fear of loss is greater then the desire for gain so will stick the VP in GDX, GDXJ and SLV.

[Reub]

Do you think it's too late to get in?

[portart]

A lot of people are now watching this sector very closely, waiting for a pullback to get in so it depends on your horizons and what kind of player you are.

If you are a short term player, and have already bought into GDX and GDXJ early, such as I have, you can put in a tight stop or jump out and wait for the next downturn selloff to finish to get back in. The risk is that there are more people anxious on the sidelines and you might only get a stall or a small turndown and a resumption back up. Then you miss out...if that happens. If gold keeps moving up here, your not going to get a chance. It looks like gold is going up for a bit having just broke resistance so I don't see a big selloff... however,  a more pronounced drop might get the early buyers to jump out and take profit.  Risk/reward..its a little late now to go in big..you can work your way in a little at a time at any small drops or stalls.

If your thinking we have finally bottomed on the gold stocks and you are in for a longer term, you can buy half in now and half more on the next sell off and then just hold having made your chosen allocation into the sector. I have to believe as badly beaten up as this sector is after years of getting killed, one year after another, the bottom has been seen. The top end is really going to depend on if gold as well has bottomed. If gold has bottomed and it resumes higher, I think this time the gold stocks outperform the metal because the last time gold went up, the stocks actually went the other way, having been overvalued by earnings and the cost of mining. This time the stocks are dog cheap and hope alone should give way to a spectacular rise.

So this is how I view it now. Gold going much higher, the stocks will be a great place to outperform the metal. Gold staying the same, I don't see the gold stocks going back to hell again but perhaps hanging around here. Gold going back down, you don't want to be in anything in metals. Since the third scenario already happened last year, the odds are against it happening again. In investing, playing the odds are the path of least resistance. Remember, just because something should happen, doesn't mean it has to. The only guarantee as they say is death and taxes. It should be interesting, either way. Finally, its a GREAT feeling to get back some of those ugly loses from playing in and out of the mining stocks. We all knew it was going to happen eventually but most people just give up and stop watching. I got lucky and got in at the dead bottom. How often does that happen...uhhh usually never.

[portart]

Gold is having a battle royale in trying to break $1,300. It's nip and tuck all the way..

[Kshartle]

Gold is having a battle royale in trying to break $1,300. It's nip and tuck all the way..

Portart don't sell.

Buy on margin and push us through. The short squeeze hasn't happened yet.

I think the smart shorts have covered. After $1,300 some will go long I hope and squeeze the late shorts.

[Libertarian666]

Gold is having a battle royale in trying to break $1,300. It's nip and tuck all the way..

Portart don't sell.

Buy on margin and push us through. The short squeeze hasn't happened yet.

I think the smart shorts have covered. After $1,300 some will go long I hope and squeeze the late shorts.

One thing I learned many years ago: never use margin. There may be a rare exception, in a circumstance where it is absolutely impossible to get a margin call. Otherwise, don't do it.

[Kshartle]

PM looks really strong. No one is even talking about it except how it's going to fall.

Love it. Looks like the making of a huge rally. The fundamentals to me look like this needs to go way past 2k before the ride is over.

[portart]

Were sitting on about 20% YTD gain right now in these ETF's. There is more to be had but will it be straight up? We got a slim buying opportunity yesterday and we are back up today. Gold is trying to push through $1,300.  The big issue is that Yellen has been kind to the S/P and it is also strong now which I think could hamper gold in the short term pushing much higher, at least quickly. I have a sneaky feeling that there may be attempt to throw some late gold buyers off the track if we can't get through $1,300 in the next few tries and hold. In my mind it's a 50/50 proposition so you have to hold a strong position but pocket some gains so you have some cash on hand in case things don't go according to hope.

I sold some of my GDX and GDXJ and pocketed a nice profit. I still have plenty but I am not anxious to give it back with the market also pushing higher. I am NOT bearish but I have to have some cash on hand to buy more if we get a selloff of 6% to 8%. If we don't and keep going up, so much the better as I will benefit as well.

My overall account is now at an all time high. Every single time I have hit that mark invariably it drops off and before I can blink my eye I have give back 50K. Not this time senior, as I am going to buy back if the market goes on sale and I have lowered my volatility. .

[portart]

The next buy is silver which is a laggard. SLV looks like a great buy right here when gold goes into another $20.00 run. Don't count on the GDX to march in step with every gold push as they pushed early before gold moved. I just got some additional silver exposure as if gold does not follow through, the downside isn't as great.

[Reub]

The next buy is silver which is a laggard. SLV looks like a great buy right here when gold goes into another $20.00 run. Don't count on the GDX to march in step with every gold push as they pushed early before gold moved. I just got some additional silver exposure as if gold does not follow through, the downside isn't as great.

How about some SLW then?

[Kshartle]

The next buy is silver which is a laggard. SLV looks like a great buy right here when gold goes into another $20.00 run. Don't count on the GDX to march in step with every gold push as they pushed early before gold moved. I just got some additional silver exposure as if gold does not follow through, the downside isn't as great.

How about some SLW then?

Sil might be better. I prefer sectors to individual companies personally.

I bought an oil driller years ago that looked like a great value......a couple day later it plunged 20% after hours because of some three-year old tax issue that "suddenly" popped up.

ef that.

[Reub]

You convinced me. I'm in.

[portart]

Nice profit day. All green across the board including TLT which is very unusual. Great day for PP folks who also have nice little VP in the gold stock etf's. Lord knows we deserve it for sticking it out last year while the gold market beat the living hell out of us. The best part is I am sitting on some profits from cash sales because every day isn't a green day. Starting to sniff some inflation here. I am going to look at some commodity ETFs tomorrow and see if I can find who is the most beaten up. I am liking spreading the risk a little from all metals to some other laggards.  One thing for sure. Winning feels a whole lot better then losing. HB, thank you sir.

[Libertarian666]

The next buy is silver which is a laggard. SLV looks like a great buy right here when gold goes into another $20.00 run. Don't count on the GDX to march in step with every gold push as they pushed early before gold moved. I just got some additional silver exposure as if gold does not follow through, the downside isn't as great.

How about some SLW then?

Sil might be better. I prefer sectors to individual companies personally.

I bought an oil driller years ago that looked like a great value......a couple day later it plunged 20% after hours because of some three-year old tax issue that "suddenly" popped up.

ef that.

I have quite a bit of CEF, which of course got beat up last year. It's doing a lot better now!

[Kshartle]

Nice profit day. All green across the board including TLT which is very unusual. Great day for PP folks who also have nice little VP in the gold stock etf's. Lord knows we deserve it for sticking it out last year while the gold market beat the living hell out of us. The best part is I am sitting on some profits from cash sales because every day isn't a green day. Starting to sniff some inflation here. I am going to look at some commodity ETFs tomorrow and see if I can find who is the most beaten up. I am liking spreading the risk a little from all metals to some other laggards.  One thing for sure. Winning feels a whole lot better then losing. HB, thank you sir.

Have you looked at the coal mining ETF KOL?