Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver And Miners Beginning to Outperform General Markets

Commodities / Gold and Silver 2012 Jun 01, 2012 - 04:18 PM GMT

By: Jeb_Handwerger

Commodities

Best Financial Markets Analysis ArticleRecently, the gold (GDX) and silver (SIL) miners have been outperforming the S&P 500, indicating that we may be seeing the rotation from overvalued equities into the undervalued miners. This is occurring on large volume, indicating major investors are beginning to enter the deeply undervalued sector. The gold miners appear to be reversing on high volume, indicating that we are seeing major accumulation at these price levels. A few bullish, high volume reversal days within a couple of weeks indicates that we could be very close or at the bottom of this consolidation.


GDX (Market Vectors Gold Miners) NYSE + BATS

Bankia, one of the largest Spanish Banks, is struggling. The government is stepping in to nationalize it. Fear is rising throughout Europe that Greece will exit the euro and the potential consequence that there may be some failures of major European banks, which may spread to the struggling U.S. banking sector. Investors are seeing a rapid devaluation of the euro (FXE) testing 2010 lows when the Fed came riding to the rescue and announced QE2 in June of 2010. The only way out of this debt crisis is that the ECB and the Fed will have to print money through another round of quantitative easing.

Many investors, including some major institutions such as JP Morgan (JPM) and MF Global found themselves on the wrong side of the trade by buying European debt and shorting the U.S. dollar (UUP). Now, as the euro collapsed faster than expected they have to quickly move into the U.S. dollar and may be having to cover margin calls by selling their precious GLD metals and mining stocks to record oversold levels.

Gold and silver have been forming a long base holding and bouncing off critical support levels. So an upward move is expected earlier this summer rather than later. In 2008 we saw a correction in precious metals and mining shares that was followed by a powerful rally into new highs. We expect history may not repeat, but it could certainly mimic that move.

One of our favorite miners, International Tower Hill Mines (THM), which has been on a hold recommendation for several months, is reaching a record oversold level as it goes through a management transition and several analyst downgrades. Share prices are so beaten down that one Tower Hill share can control approximately .2 ounces of Livengood gold and for the price of owning one ounce of gold bullion an investor can control over 100 ounces of Livengood gold. This provides excellent leverage for THM investors to the rising long term trend in gold. We believe that this test of three year lows should hold. We will be following the chart closely.

John Hathaway, Senior managing director of Tocqueville Asset Management in his recent interview with theaureport.com said the following, International Tower Hill Mines Ltd. (ITH:TSX; THM:NYSE.A) ... it's in Alaska. So when you read all these terrible headlines about Mali and Indonesia, Alaska sounds pretty darn good. Alaska's got infrastructure. International Tower Hill is in a mining-friendly jurisdiction, near Fairbanks. There's every reason in the world it would want to get this thing permitted and built. I think it will. We just have to figure out how to get from here to there.

International Tower Hill Mines controls one of the largest gold mines in the world and certainly in North America with over 20 million ounces of gold just outside mining friendly Fairbanks, Alaska. Recently, the CEO resigned to spend more time with his family. Some of my subscribers have been concerned about the low share price and how the company is moving forward.

Tower Hill is similar to a call option on the price of gold as it provides significant leverage to investors who believe in the long term upward trend of precious metals and the continued worldwide debasement of fiat currency.

THM is testing its three year lows and is 50% below the declining 200 day moving average. The 200 day usually acts as a magnet and we could see a snapback rally in many of the deeply oversold first tier projects. Remember that the Tocqueville, Paulson and Anglogold Group are supportive shareholders of this company recognizing that THM shares provide excellent leverage to the rising price of gold.

Subscribe to my free newsletter to get up to the minute updates on rare earths, uranium, gold and silver.

By Jeb Handwerger

http://goldstocktrades.com

© 2012 Copyright Jeb Handwerger- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in