Seeking Alpha

Mining stock rally points to coming gains for gold prices, analysts say

  • The outperformance of gold mining stocks over gold this year points to at least some price gains ahead for the metal, analysts say.
  • "The gold stocks typically begin rising or falling in advance of the metal, thereby foreshadowing the trend," Gold Newsletter's Brien Lundin says, adding that “they move further on a percentage basis than the underlying metal, thereby offering leverage.”
  • Lundin sees prices in the $1,400-$1,500 range at the end of the year, with prices continuing to strengthen in a “slow-but-sure” climb out of last year's steep correction.
  • ETFs: GLD, GDX, NUGT, IAU, DUST, SGOL, UGL, DGP, GLDX, GLL, UGLD, DZZ, GLDI, DGL, DGZ, RING, AGOL, DGLD, OUNZ, GGGG, PSAU, TBAR, UBG, GLDE, GYEN, GLDL, GLDS, GEUR, GGBP
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Comments (16)
  • Doug Eberhardt
    , contributor
    Comments (2922) | Send Message
     
    Wait...a gold newsletter writer is bullish?

     

    I will have an article coming out very soon. I sell gold and write a blog.

     

    Will I be bullish?
    11 Jul, 10:58 AM Reply Like
  • Stock Market Mike
    , contributor
    Comments (2172) | Send Message
     
    Don't know. I saw some of your posts here - very thorough and calculated. I was impressed.

     

    But this recent rise took you by surprise, and it didn't take me by surprise, yet I don't actually know anything about gold. I think the factor missing from your analysis may have been the manipulation factor. Gold is highly manipulated, so you have to invest in it assuming someone else wants to get you to do something. Therefore, once you figure out what will happen, it will not happen, because someone is waiting to pull your pants down.

     

    And that's why I bought JNUG a few dollars over $10. Sold early though. I have trouble chasing - buying in again at a higher price - especially after seeing the March decline...

     

    Your analysis also misses the wildcard factor. If big funds have been sitting on the sidelines, and crunch the numbers and figure out the gold bear market has ended (supply vs demand, and AISC vs Gold price suggests so), there may be multiple million oz purchases of gold over the coming year, driving prices higher. That's what threw the kink in your analysis from a month or so ago? What matters more than whether 'this is the bottom' is whether someone with weight thinks 'this is close enough'.

     

    Psychology and manipulation - what an odd investment thesis.

     

    -Mike
    11 Jul, 01:02 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (1300) | Send Message
     
    stock market mike..<<<Gold is highly manipulated, so you have to invest in it assuming someone else wants to get you to do something.>>>

     

    Again, all you chaps that think gold is being manipulated are manipulating yourselves....see my article that came out two days ago....
    ast chance to buy GLD under 129......
    more later....
    11 Jul, 01:38 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2922) | Send Message
     
    Stock Market Mike, thanks for the critique. I technically was in Hawaii the last 3 months and not as "spot on" with my analysis than I could have been. My advice though never changed, which was to dollar cost average into a position/allocation.

     

    I wrote an article saying the metals were going higher, which was correct, then abnormally wrote another article about a week later reversing that call, which was correct for a bit, but then it reversed. I should have written another article when gold was $1,258 but did not. I only looked at that indicator I follow AFTER the fact, so I totally missed it and was pissed I missed it. In the radio interview I did 2 weeks ago though I said I do see a possible further move higher and have written here to the $1370 to $1420 range, but then we fall. I am still in that camp.

     

    I am back in San Diego now and have a better read on things moving forward which I will explain in my next article.

     

    As far as manipulation, it is nothing you or I can prove. One can only speculate to such. I did write only one article in 2012 on manipulation where I did prove my case that JP Morgan was more heavily involved in the derivatives game of precious metals than in the past. "Thoughts On Gold Price Manipulation" http://bit.ly/T7vth9

     

    As far as your wild card factor, sure, big money will enter the picture at some point. Outside of Soros and that other guy, hedge funds haven't done much. Some funds might have picked up some miners in December. Are they selling them soon? Who knows.

     

    But the trend in metals is still down. The $1,400 level is what I will watch to change my mind. No one will call the exact bottom, but again, my advice has been the same to dollar cost average into a position. The only one missing that advice is anyone new calling in and I have been saying to hold off and not chase right now. Some still buy as they are allocating. The one's who are waiting for my "all in" article will either be rewarded nicely or they will be paying a bit more for their gold/silver. My past articles have shown my calls aren't too bad and this next article will be a good one providing more of my indicators I watch so the investor can make a better decision as to what to do. I simply bring awareness of what "I" see.

     

    An investor in Apple stock who bought at $300 is probably about as happy as the investor in Apple stock who bought at $400 if they both sold at $600, even though after the split it's higher. The same will be true for those who buy gold and silver now or who wait for a further pullback if it comes.

     

    So I think we agree on the "is this close enough." However, my indicators are not quite up to where you may be in your thinking as if we have bottomed. The indicators have worked well for me so far, except for this last push higher that I missed one of them. I'm human. Also busy writing a book that I think will be good for not just gold investors but all investors. The timing couldn't be better.

     

    Appreciate the comment. I like to be challenged which is what is great about Seeking Alpha. Heck, I challenged the editors here on their bias against gold since before they had a "Gold and Precious Metals" category!
    11 Jul, 02:13 PM Reply Like
  • lasvegasbrad
    , contributor
    Comments (52) | Send Message
     
    Exactly Mike! Finally, someone (you) talked about the reality of the un-real PM markets.

     

    When you see just how tiny SLV is, $7B total market cap, tiny even compared to GLD at $34B; microscopic compared to say AAPL at $500B+, then you understand just how easy their manipulation can be. And when even a tiny fraction of fund manager money flows into either or both, they will move.
    11 Jul, 03:27 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (2922) | Send Message
     
    Did they manipulate the price of gold up from 2000 to 2011? Does manipulation only work one way?

     

    Everything is manipulated. They are called market makers. Look at the long term charts of AAPL, NFLX, HLF, etc. That's what they do.

     

    The Central Banks sold gold the whole entire 2000 to 2011 time-frame and the price of gold went higher.

     

    11 Jul, 04:07 PM Reply Like
  • JamzG
    , contributor
    Comments (2) | Send Message
     
    Ony gold mining stocks are poised for increased valuation and not zinc or other precious metals?
    11 Jul, 11:51 AM Reply Like
  • David at Imperial Beach
    , contributor
    Comments (4209) | Send Message
     
    All the commodities and their miners stand to rise. Gold, platinum, palladium, silver, copper, nickel, oil, aluminum, zinc, lead, cobalt, graphite. If it did not rise in 2013 along with stocks and bonds, then it has fallen behind and will eventually catch up. That's just the way markets work.
    11 Jul, 12:25 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (1300) | Send Message
     
    JmzG.... Other metals have a direct bias linked to demand from industrial use, unlike gold....
    11 Jul, 01:40 PM Reply Like
  • Doc's Trading
    , contributor
    Comments (1300) | Send Message
     
    David at Imperial beach.....<<<... the commodities and their miners stand to rise. Gold, platinum, palladium, silver, copper, nickel, oil, aluminum, zinc, lead, cobalt, graphite. If it did not rise in 2013 along with stocks and bonds, then it has fallen behind and will eventually catch up. That's just the way markets work. >>>>

     

    Not necessarily true... gold is not linked to industrial use..if you get a drop in this but inflation with it (stagflation) gold will remain firmer than the other metals.

     

    See my article that came out two days ago on "THE COMING GOLD RUSH....GOLD $3,000 IN 3 YEARS?
    11 Jul, 01:44 PM Reply Like
  • 6151621
    , contributor
    Comments (1174) | Send Message
     
    @David: This sounds more like the USD losing value more than any specific metal gaining value.
    12 Jul, 04:08 AM Reply Like
  • Doc's Trading
    , contributor
    Comments (1300) | Send Message
     
    GLD....Raise sell stop on 1/2 position recommended in GLD at 120.50 from 125.80 to 126.80...
    more later.......
    11 Jul, 01:48 PM Reply Like
  • AntonioSonoQui
    , contributor
    Comments (197) | Send Message
     
    JDST very attractive at these levels. Loading up today
    11 Jul, 05:14 PM Reply Like
  • AntonioSonoQui
    , contributor
    Comments (197) | Send Message
     
    made a ton on my JDST today :-)
    14 Jul, 04:43 PM Reply Like
  • mdsands
    , contributor
    Comments (4) | Send Message
     
    I have to admit it.....I'm a Gold lover in the physical form and started buying it a few years ago when GOOG, which I bought at 103.00 hit 1103.00 and APPLE which I picked up at 238.00 hit 688.00 and I sold both taking the profits and holding the cash in savings. I noticed that our wonderful Muslim President was out to destroy America by subsidizing all these Middle Eastern countries by printing trillions of dollars with NO reserves to back them up, and China was buying Gold in tons. So I bought bullion and certified pre-1933 PCGS St. Gaudens coins and now my little hidden hoard has doubled in value. Just wanted to thank you knowledgeable GOLD BUGS who told me to stay out of the market and buy physical gold from APMEX!
    12 Jul, 04:31 AM Reply Like
  • ybitton
    , contributor
    Comment (1) | Send Message
     
    << I noticed that our wonderful Muslim President was out to destroy America.. >> I am wondering how you do so well investing when you are totally disconnected from reality in some fantasy land... You should live in a cave with your pile of gold staying awake at night with your awesome AK-47 like guarding against the "Moslim Feds" who are coming to get you...
    Stick with investments discussion or somewhere else more appropriate to spew your bazaar wacko political views...
    12 Jul, 09:46 AM Reply Like
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