Precious metals investors have endured much hardship during the recent bear market but David H. Smith, senior analyst with David Morgan’s The Morgan Report, believes that another secular bull market in precious metals is already underway. In this interview with The Gold Report, Smith says that platinum group metals will lead the resurgence and have a favorable long-term risk/reward ratio.
He outlines some PGM, gold and silver companies that can grab the bull by its horns. [Read more...]
The landslide win of Narendra Modi just days ago is viewed by Indian economists as the catalyst that will raise Indian GDP growth to 8%. The bottom line is that India’s gargantuan population is young, vibrant, and hungry for gold!
The only way for Indians to get the enormous amount of gold they will demand as their economy grows, is to buy it from mines owned by Western gold community investors. [Read more...]
Technical analysts assume past prices are a valid basis for predicting what investors will pay tomorrow.
The Warren Buffetts of this world act differently: they care not what others think and use their own judgement of value. This means that value investors often buy when the trend is down and sell when the trend is up, the opposite of technically-driven decisions. A bear market ends when value investors overcome the trend.
Technical analysis is a tool for idle investors unwilling or unable to understand true value. It dominates price formation in western markets and distorts investor behavior by exaggerating any natural bias towards trends. It is this band-wagon effect that is the root of trend-following’s success, but also its ultimate weakness.
A better strategy is to make the effort to value gold properly and then act accordingly.
The Indian nation election is arguably the most bullish event for gold of the past 100 years.
That election began yesterday. It’s the world’s largest national election, so it’s a long process. The results should be released around May 16.
Other than a bullet or vote counting fraud, I don’t think anything can stop Narendra Modi from winning this election. He is strongly endorsed by all of India’s major bullion and jewellery associations.
These “titans of ton” are ready to move massive amounts of gold from the Western gold community’s mines, to eager Indian citizen buyers.
The latest polls suggest major gold proponent Narendra Modi is just five weeks away from becoming the prime minister of the world’s most powerful gold buying community.
As recently as a few weeks ago the GOFO rates were easily accessible on the LBMA website. This site, however, recently suffered a makeover.
The GOFO rates are now extremely inaccessible, and unable to be downloaded in any form. Upon my inquiry to the LBMA, this was their response:
The LBMA do not own the gold and silver prices, we publish the prices on our website under an agreement with the London Gold and Silver Fixing companies, who own the data and who are responsible for setting the gold and silver prices on a daily basis. When we launched the new website, this was on condition that we prevented the data from being downloaded or scraped from the site. If you would like to be able to download the data you will require a licence from the Gold and Silver Fixing Companies.
Nice, no more GOFO data for the average Joe (or PM community) to analyze.
It appears the LBMA & cohorts are attempting to obscure the implications of the data that the GOFO rate implies.
Well guess what…GOFO is back negative again and the west to east gold exodus is long from over!
The bottom line is the hated gold stocks remain an extraordinary contrarian buying opportunity today. They’ve almost never been cheaper relative to gold, which drives their profits and hence ultimately stock prices. After the last episode of similar extreme undervaluation during the stock panic, the leading gold-stock index more than quadrupled over the subsequent years. Mean reversions always follow extremes.
So another epic mean reversion higher in gold stocks is all but certain in the coming years. This sector that has fallen out of favor for so long will gradually return to favor, as markets are forever cyclical. This will largely be driven by gold’s own mean-reversion recovery upleg out of last year’s extreme lows, which will lead to gold-stock buying. As gold stocks start outperforming, capital will flock to chase their big gains.
The gold-mining sector is on the verge of flashing the fabled Golden Cross buy signal. This is one of the most powerful and revered indicators in all of technical analysis. When it arrives after the right conditions, it flags the critical transition from bear to bull markets. And today’s gold-stock environment is perfect to spawn such a pivotal Golden Cross. Seeing this milestone will accelerate capital flows back into gold stocks. [Read more...]
Rick Rule: “Every Billionaire I Know Took Bets Contrary To Conventional Wisdom At The Time That Were Highly Risky”
Eric Sprott is making a bet that we’ve reached the capitulation point in precious metals and that the precious metals will pivot sharply higher in the next 12 to 18 months. He rightly points out that by putting sort of $50 million into this bet…he might lose 50% of $50 million or $25 million…or if he is right about the timing of the move in precious metals and the quantum of the move of precious metals, he could easily turn that $50 million into $500 million. A bet where you have one chance of losing half your money and another chance of making 10 times your money to the extent that you can afford to make that bet—that’s how you build businesses like Sprott.
I’ve had the good fortune in my life to know 12, 15, 20 self-made billionaires and what segregates the billionaires, what segregates the people who get that last digit—is guts. You have to take risks…Every billionaire I know has been willing to take bets that were contrary to conventional wisdom at the time that were highly risky. You have to see a situation that you think has outsized possibility of reward and you have to really, really, really swing for the fence.” [Read more...]
The move in gold can be very quick. I’ll give an example; We hit lows in July of this year and then in the month of August, metal prices turned around. The price of gold was going up but the mining stocks just took off. There were gains of 25%, 75%, 100% in the sector in the space of less than 20 days.
It illustrates how we can move from a market that’s operating basically on a no-bid basis where no one wants to buy, to suddenly getting into a space where no one is offering any stock and prices are forced up as a result of that. I’m quite convinced we’re going to see that again in the not too distant future, and that’s what makes it exciting in this space.” [Read more...]