gold and gold miners are retracing recent gains on light volume and I believe there is a bull market in gold that will last for the rest of the year at a minimum. I am looking for the XAU to get down to around 65 on this downswing and then bounce hard. Anybody agree? Disagree ?
that is pretty much my analysis as well however I was flipping through some weekly charts tonight instead of the dailys and some have really ripped more than I had appreciated. For example RGLD was around 3 bucks in 2001, 25 bucks today. GG also about 3 bucks then close to 12 today, etc, etc. Those are some serious precentage gains vs. the spot price. I don't pretend to know exactly how each stock moves with the spot price but I had read previously that the gold index tended to move about 3 times whatever the spot price does. Eitherway the thing that is always in the back of my head is that statistic about every stock in the HUI (Gold index) combined would still have a market cap less than say JNJ. :eek: Should (or when) gold returns to being appreciated as a currency or well atleast a reserve currency...limit up baby!
i think there is a good chance the XAU and many of the stocks that haven't already gone to the moon are headed for their 1996 levels. That would put XAU around 140. Some of the smaller unhedged companies still have tremendous percentage gain potential. BGO is 1.17 but its 1996 high is around $7 ! This could be like the internet bubble except a whole lot more logical.
Percent return on each stock can't be directly compared to the spot gold return because all the companies have different fixed costs and hedge their production differently. The fixed cost of production and the spread between forward sales and spot prices is different for each of them.
Mondo, I don't know what will happen next week but I know two things: 1] gold/gold stocks haven't finished their recent correction 2] XAU is not a good way to play this (it contains hedgers and non-gold stocks -- better go with $HUI or some specific equities)
Someone pm'ed me a while back and asked me about gold, I said that I would reply when I thought it was the right time. Unfortunately I erased their pm and forgot their handle. So this is for you and everyone else interested. I think the gold equities have finished their recent correction and will be heading up very soon (within 7-10 days). The k ratio fell to a shockingly low 1.17 on Mar 11 2003 (but it has since recovered slightly). I would be looking for good looking charts in unhedged gold shares. And stay away from RGLD that puppy has skeletons in the closet and short sellers gunning for it. Some good ones are: GG GLG GFI DROOY HMY ASL ASA ASL LIHRY GOLD RANGY etc. This is NOT (repeat NOT) for those who have a shorter time horizon than a week. Do you own DD (obviously!)
The gold stocks bottom seems to be well on its way. The formation looks like a double bottom. Again, I repeat, this is for non-hedged gold stocks and for a medium term time horizon (swing trading) and NOT for short term traders. All Aboard !!