The junior gold miners’ stocks suffered a serious thrashing between mid-April and early May.
The recent major selloff was totally unjustified.
That makes this battered sector a screaming buy right now fundamentally.

Gold has had a wild ride since Trump’s surprise election win in early November.  This metal first plunged then surged, ultimately making little headway.  It wasn’t until mid-April that gold regained its pre-election levels.  This overall lackluster gold action was confounding given all the mounting uncertainties.  But it once again highlights that gold investment demand is often hostage to the US stock markets’ fortunes.

Time to batten down the hatches, mateys.
This chain of developments has the potential to devastate the junior miners in the short run, coming on top of the effects of the GDXJ rebalancing.

What did they know, And WHEN Did They Know It?

The junior gold stocks corrected hard in recent weeks, setting them up to blast higher on Wednesday’s less-hawkish-than-expected Fed.  That started to dispel some of the serious bearish sentiment that has been mounting in this sector.  The junior gold miners’ fundamentals justify much-higher stock prices, as evidenced in their recently-reported fourth-quarter operating and financial results.  They remain very bullish.

The gold miners’ stocks have corrected hard in recent weeks, hammered by a gold pullback driven by soaring Fed-rate-hike odds.  Like any considerable selloff, this has spawned serious bearish sentiment.  But the gold miners’ underlying operating fundamentals remain quite strong, proving the recent selling was purely psychological.
This sector’s just-reported fourth-quarter results are Impressive, VERY Bullish:

The gold stocks enjoyed a strong surge early this year, fully reversing their sharp post-election losses.  While they spent much of February consolidating before sliding, this sector’s seasonals will soon turn very favorable again in mid-March.  The gold miners have long enjoyed strong spring rallies in bull-market years.  Early March’s seasonal lull is a great opportunity to deploy aggressively ahead of this big spring buying.

The gold miners’ stocks have blasted higher in this young new year, far outpacing the broader markets.  But surprisingly gold stocks’ trading volume has diverged from their powerful rally.  Volume has actually been waning on balance since gold stocks’ newest upleg was born in mid-December.  While volume is a complex nuanced indicator, this bullishly suggests that major gold-stock buying hasn’t even started yet.

screaming-buyGold has hit the ground running in this young new year, a stark contrast to its brutal post-election selloff.  Rather remarkably, these strong recent gains accrued despite literally zero buying from one of gold’s most-important constituencies.  The American stock investors who almost single-handedly fueled gold’s strong bull market last year are still missing in action since the election. 
That means big gold buying is still coming:

boxing-smash-on-ropesGold has suffered brutal, withering selling pressure in the month following the US presidential election.  The stock markets’ surprise surge after Trump’s surprise win has led speculators and investors alike to rush for the gold exits.  As usual the former group’s extreme selling came largely through gold futures.  But this gold-futures dumping has been so severe that it is rapidly exhausting itself, a bullish omen for gold:

silver-mineThe junior gold miners’ and explorers’ stocks have been crushed in recent months, collateral damage from enormous gold-futures selling.
That’s naturally left investors and speculators extremely bearish on gold juniors.  But lost in all this technical and sentimental tumult are important fundamentals from the juniors’ recently-reported third-quarter financial and operational results, which proved quite strong and bullish:

silver moon rocketMost investors and speculators today aren’t paying attention to the gold miners’ strong fundamentals.  Instead they are all wrapped up in the fearful prevailing sentiment.  That’s a big mistake as always.  While gold-mining operating profitability will decrease in Q4 if gold prices remain low, gold’s young bull is far from over. 
When it starts powering higher again on weaker stock markets, gold stocks will soar…

hyperinflationDonald Trump’s epic underdog victory climaxing the US presidential race was radically unexpected by the great majority of the world.  Equally if not more surprising was the subsequent days’ market reaction.  Stock markets, gold, and gold-mining stocks did exactly the opposite of what was universally forecast for a Trump win.
This has left contrarian traders wondering how gold and gold stocks will likely fare under Trump:

gold-silver-mineMurray Nye, CEO of Winston Gold Corp, joins us for an insider’s view of the gold mining industry, and where major trends are taking us next. We dig into the paradox of suppressed prices despite record investor demand for physical gold, and the extreme challenge this pricing pressure imposes when designing a profitable gold mining operation.

silver-mineHas the world passed “Peak Gold?”
What if we could revolutionize the gold industry by radically re-inventing our ability to discover brand new, massive & rich gold deposits, and thus re-create the gold boom over and over?
Wade Hodges, serial discoverer of over 30 Million ounces of gold and CEO of Nevada Exploration, joins us to blow away the conventional limits…

imageThe gold miners’ stocks have skyrocketed this year as investors started returning to this long-abandoned sector.
Many have doubled since January, with plenty tripling or even quadrupling.
Naturally such fast gains raise concerns about whether they are actually fundamentally justified or merely the product of fleeting sentiment that could reverse.
Gold miners’ latest quarterly results offer great fundamental insights.

Zeal041516BGold-mining stocks surged higher this past week after breaking free from their high consolidation.  This newest upleg catapulted gold stocks to a doubling in less than 3 months, a remarkable world-leading performance.  But despite its quick doubling, this red-hot sector still has another easy doubling left to come from here.  Gold-mining stocks still remain greatly undervalued relative to prevailing gold prices.