Major Buy Signal Now Flashing for Gold Stocks 27 comments
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Gold Stock Buy Signal
One reliable indicator that I have followed over the years to time the purchase of gold stocks is the K-Ratio. At the present time, the K-Ratio is giving a strongly bullish signal. The K-Ratio is computed by dividing the value of Barron’s Gold Mining Index (GMI) by the Handy & Harmon gold price. Using data from the latest issue of Barron’s, the K-Ratio is now at .90 and flashing a very strong buy signal.
The last extremely bullish reading was registered in late October of last year when the K-Ratio recorded an all time low reading. Since last October gold mining stocks have advanced strongly with the XAU recording a 100% gain from the October bottom to its recent high of 140.
(click to enlarge)
Courtesy StockCharts.com
K-Ratio Forecasting Major Up Move for Gold Stocks
The K-Ratio works best at extreme readings when the GMI is below the price of gold, which is the case now. The old rule of thumb is that an extreme bullish reading occurs when the K-Ratio is at 1.20 or lower indicating that gold stocks are cheap compared to the price of gold bullion. In the past, a sub 1.20 K-Ratio has triggered gold stock advances of over 50% and bullion advances of over 25% within 6 months.
(click to enlarge)
Courtesy: Kaeppel’s Corner
Some major gold producers that usually perform well in a rising gold market are Kinross Gold (KGC), Goldcorp (GG) and Randgold Resources (GOLD). I would look for all of these issues to show major gains in line with the performance of the XAU over the next six months.
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hands down
Again, historically any number over 30 for the VIX is considered very high, not low.
On Apr 24 03:27 PM RiskReturnOptimizer wrote:
> My model tells me to buy gold stock (via GDX) when the following
> conditions are all lined up:
>
> 1. GLD trending up;
> 2. VIX high;
> 3. SPY low but trending up.
>
> Right now, GLD looks like it wants to go up, but 90 remains resistance.
> VIX is very low and going lower. SPY might reverse after getting
> to 870-900 resistance, and head towards 800. Not sure GDX will do
> well in this environment.
China never wastes an announcement like this without an embedded message.
On Apr 24 04:57 PM SW Richmond wrote:
> Where are those radical dollar bulls to tell us why the USD is the
> envy of the planet? China's revelation is well timed, right in front
> of major US Treasury supply.
>
> China never wastes an announcement like this without an embedded
> message.
>
Everybody is bullish- be careful.
I talked to my jeweler. He is not buying right now because at close to $1000 gold is too expensive.
I know Im wasting my time talking to the choir.
On Apr 25 12:32 AM chux08 wrote:
> Your jeweler is smart....and he probably buys gold like the bankers
> do. And that's when it's going down. When you go to the supermarket
> do you look for and buy the highest priced tomatoes? Of course you
> don't. Then why in Hell would you buy gold when it 's going up??
> Your jeweler was busy buying when it was down around $870 or so just
> like the bankers were busy doing. Just like I was doing doing. Today
> what was I doing?? I WAS SELLING GOLD FOR A PROFIT unlike you who
> were standing around wondering if it's time to.....jump in?? My God...WAKE
> UP!! And go ask your wife how she buys groceries and then maybe let
> her go and buy your gold....
1) What sector in the last 6 months has produced better profits than gold?
2) If you were travelling around the world, what would have universal appeal and desirability and recognition as MONEY, gold or silver coins, or pretty pieces of paper with numbers printed on them that have lost 98% of their purchasing power since 1913 when the Federal Reserve Act was established?
3) When gold is still less than HALF the price (adjusted for inflation) that it reached in the 1980-81 economic down cycle, why would you NOT buy when it has dropped (manipulated by the banksters) over $100. from its most recent high over $1000.?
4) My investment portfolio is about 75% invested in commodities, well diversified over copper, uranium, oil and precious metals dominated by silver and gold and so far this year I am UP almost the same amount, about 69% which is not too shabby.
5) Tell me WHAT fiat currency has a better track record as a store of value than gold and silver?
Can anyone tell me how buying GLD is any different than buying gold at the moment's spot price? I have found in life there are 2 prices, what I pay for something (high) and what someone else will give me for it (low).
Personally, I had about 3000 ounces of silver in my GoldMoney holding, which I had acquired last November at under $10 an ounce. Here about 10 days ago, I flipped ALL of my silver bullion while I was up and then bought gold while it was about $867 an ounce. Let's see.....I sold some last Friday, though NOT MUCH, for an almost $50 per ounce....profit. And some are still standing at the sidelines wondering what they should do regarding gold?? You keep wondering and I'll keep selling when the price is flying and buying more when the price goes down.
Just remember that....when you get so nervous about the price of gold falling and you sell your gold INTO WEAKNESS because you lost your....nerve? No...if you're selling your gold into weakness, YOU'VE LOST YOUR MIND!! And there'll be others just like me waiting to relieve you of your falling in price gold, laughing all the way to the proverbial bank. You think I'm kidding??
Try this next time....
BUY gold when it's going DOWN (What? You think it would EVER fall to zero, like your paper money in your wallet is going to do?? Until you get over that mental block, you'll NEVER do well investing in gold). When it keeps going down, buy more. The more it falls, the more you buy. And then when it turns around (which it always does) SELL some of your gold when it's appreciating and going up in value. SELL INTO STRENGTH. Again, you think I'm kidding?? How much gold did YOU sell last Friday for a profit??
If all of this sounds...interesting to you, may I invite you to have a look at a gentleman's website that has helped me IMMENSELY when it comes to my investing in gold and other commodities, UNLIKE NO OTHER?? Check out Stewart Thomson's:
gracelandupdates.com
The indian buying last fall was muted by high gold prices. Thus
the seasonal effect will also be muted on the downside this spring.
The inflation risk, Pakistan war, Iran and Israel, and world pandemic
are all pointing to higher near term prices for gold regardless of
how many marriages occur in India. Jewellry has taken a back seat to investment demand in recent precious metals trade.
On Apr 24 02:37 PM User 145097 wrote:
> What about the fact that GG, AEM, KGC and I am sure others just broke
> through their 200 MA? Are we just ignoring it? I agree that long
> term gold and gold miners are going to be way up but with Indian
> buying to end at the end of this month and this being a traditionally
> weak time for gold I am just not certain that we are going to see
> gold go up much higher. As a matter of fact I expect it to go to
> low 800s-high 700s.
think we will recover without nasties?
Capt Brian
I looked at many stocks and picked Kingsgate Consolidated. It is Australian owned and the mine is located in Thailand but has good institutional support in Europe and the USA. It is a low cost producer and has terrific potential to grow reserves both at the mine and elsewhere nearby. I am biased naturally but please have a look at their website. Good luck to all.