Davis Research: Gold, gold miners contrarian buys


"For contrarians, the [gold] outlook appears brighter," write the Ned Davis commodity team of John LaForge and Warren Pies, acknowledging the curiosity of the metal's slump despite central banks printing away and unprecedented physical demand from China.

The metal is oversold on multiple levels they say, and has good long-term support in the mid-1,100s range. If gold rallies, they continue, then so will the miners.

Timing is a tough issue, but their best guess is sometime around the end of this quarter, triggered by a mid-year stock market correction. Look for the metal and miners to move first, and the equity downdraft to follow.

Gold (GLD -0.9%) is off marginally today to $1,249 per ounce, but the broad mining sector (GDX -0.9%) isn't showing any benefit from a $7.50 per share cash offer for Allied Nevada by China Stone Mining Development.

From yesterday: Goldcorp offers $2.6B for Osisko.

Related ETFs: GLD, GDX, GDXJ, NUGT, IAU, PHYS, DUST, SGOL, UGL, DGP, GLL, GLDX, DZZ, UGLD, DGL, DGZ, AGOL, GLDI, DGLD, RING, GGGG, JNUG, PSAU, TBAR, JDST, UBG

From other sites
Comments (12)
  • Doug Eberhardt
    , contributor
    Comments (4768) | Send Message
     
    Gold up in January was an easy call. Where will gold go next?

     

    My latest article that was rejected by SA editors because of silly reasons. I'm tired of fighting their editors for every article I write, which has been the case since I first fought with them prior to them having a "Gold and Precious Metals" category.

     

    If you want to keep up with my thoughts on the gold market, sign up for my newsletter on my site. I am done writing for Seeking Alpha but will make a few more comments before I leave for good (or they kick me off).

     

    Will Gold Fall Below the 1980 Peak of $850?

     

    http://bit.ly/1hTzfIt
    14 Jan 2014, 11:34 AM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    Doug, you have my sympathies.
    I gather you must have read this, concerning the artificially kept low gold price:
    http://bit.ly/1m0tpVQ
    14 Jan 2014, 11:59 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4768) | Send Message
     
    Thanks filipo,

     

    I will still lurk here for info from guys like you. I'm just fed up with working so hard on an article and then having to battle for it each and every time with the editors.

     

    I'll be off to greener pastures where what I write is appreciated.

     

    Take care...
    14 Jan 2014, 12:03 PM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    Doug,
    "I'll be off to greener pastures where what I write is appreciated."
    Can't blame you therefore.
    This is what people like gata.org probably must have experienced over the years. Fighting a never ending battle indeed must be tiring and frustrating.
    You are too modest when stating that it's guys like me who can inform you. You yourself seem one of the best informed gold bugs on this forum to me.
    Still, I hope you'll stay around. The community counts on you, your insights are too valuable to be lost.
    Take care you too.
    14 Jan 2014, 02:08 PM Reply Like
  • John Leszar
    , contributor
    Comments (278) | Send Message
     
    I agree with filipo. Doug is a great resource and I value his comments. You don't do such a bad job yourself, filipo!

     

    John
    14 Jan 2014, 06:08 PM Reply Like
  • filipo
    , contributor
    Comments (4649) | Send Message
     
    John,
    Thanks for the compliments.
    I wish my comments would at least have the merit of sending the gold price to a more justifiable level though, but they don't.
    So, apart from an academic value, they don't offer much to rely on, I'm afraid.
    Still, it's great fun to get informed, must more or less be as enjoyable as playing golf whit a high handicap, I guess.
    15 Jan 2014, 03:39 AM Reply Like
  • Ray_Rich
    , contributor
    Comments (55) | Send Message
     
    Read your article Doug, I loved it but I can see why S.A. didn't approve it... they hate that kind of conspiracy stuff...

     

    Anyways, best of luck with your writing....
    15 Jan 2014, 10:51 AM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4768) | Send Message
     
    Hi Ray, thanks...

     

    Market Makers are conspiracy? haha...

     

    In my almost 30 years of being in the investment field, I would like to think I know what Market Makers do. They are in it to make a profit the same as we all are. They control flow. We don't. Knowing this I think makes one a better trader/investor.

     

    Take care...
    15 Jan 2014, 11:25 AM Reply Like
  • hummerh25
    , contributor
    Comments (99) | Send Message
     
    $850. Could be the floor ? Everything is wonderful,
    Just ask Obama.
    14 Jan 2014, 12:05 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4768) | Send Message
     
    Exactly hummer...

     

    Funny how Obama said that he would cut deficit spending in half in 2009 isn't it? For the children of course.

     

    Most don't know but the bipartisan budget deficit just passed increases spending by over $80 billion the next two years and a promise to cut $23 billion within 10 years. What a joke.
    14 Jan 2014, 12:13 PM Reply Like
  • bberuch
    , contributor
    Comments (314) | Send Message
     
    to Doug
    My discontinuation with Seeking Alpha was also with their editing.
    Their automated software rejected names of new pharmaceutical products, and was inconsistent with regard to corporate trade mnemonics.

     

    14 Jan 2014, 12:06 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4768) | Send Message
     
    Thanks for the comment bberuch...
    14 Jan 2014, 12:15 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs