When conventional investments perform poorly, it facilitates growing interest in alternatives like gold. This is why the two markets are often negatively correlated. History shows that declines in gold often end when the stock market peaks.
Most chartists use daily or weekly charts. Few look at monthly charts. I don’t know of anyone (myself included) who pays any attention to quarterly charts. We decided to take a look at the quarterly chart of the HUI gold bugs index.
After seven straight weeks of price declines, the gold stocks rebounded last week and are off to a good start this week. We can’t be sure if a double-bottom or some complex head and shoulders pattern is developing.
Congrats to the gold bears and stock bulls! After being slaughtered for the majority of the last decade and more, they finally won a victory. Golf clap for you gentlemen. Now you can have your day in the sun once again.
It’s no secret that mergers and acquisitions (M&A) activity in the mining sector is in the dumps. According to PWC, deal volume in the first half of 2013 declined 31% as compared to the same period last year. Deal value declined 74%.
The latest warning sign on U.S. equities came from the recent issue of Barron’s. A recent survey of big money managers showed extreme bullish sentiment. 86% polled were bullish on stocks over the next six to 12 months while only 7% were pessimistic.
For months we’ve been writing about the major bottom to come in precious metals. It appeared we finally saw it in late June as the metals and the stocks surged during the summer. Yet, these markets trailed off in August and it continued into October.
After Tuesday’s reversal, we see plenty of evidence that augurs for a strong recovery in gold stocks in May. They remain extremely oversold and by several metrics are more oversold now than at the 2008 low.
The gold bug conspiracy-loving charlatans have made a complete mockery of precious metals and the gold community. As the bear market has persisted these folks have shown no humility and become more fanatical in their already outlandish and ridiculous views.