I'm also highly bullish on gold. Along with silver and platinum, it looks and feels like the early stages of most major multi-year bull markets I've seen. A lot of people are focusing on $400 in Gold, but although that is clear resistance, if you look at the long-term chart then the key level appears to be the decade high of $418 in early 1996. I would say that a move above $420 would set up a classic breakout and confirm the bull market. Currently we are just retracing the grinding bear market from 1996-99. But once we get a sustained break above $420, we are in new territory. The only real resistance above there is around $500 (the high of 87/88), and then it's all the way up to the previous highs. As has been mentioned by others, the fundamentals are favourable, with dollar troubles, easy monetary policy, and the commodity boom, all contributing to inflation fears. The price action is bullish, and sentiment sceptical. Technically the picture is good, with multiple major support levels at $298, $319, $340 and more recently $366. It is a good setup IMO. If my thesis of a multi-year secular bull market is correct, then gold will go at least to the old highs ($850+) and most likely beyond. In that case I would assume that stocks like NEM would go up 4 or 5 fold if not more, and junior exploration stocks would go through the roof. However, I have no experience in mining stocks so am reluctant to commit much capital until I have completed my ongoing research into the sector. Any tips would be much appreciated! Finally, there is a great article I read recently about playing long-term bull markets. It is written about gold but is applicable to all secular uptrends. The key is that holding is better than trading, since you eliminate the major bull-market risk - exiting a winning position too early on a short-term shakeout, and then failing to get back in. http://www.kitco.com/ind/Appel/oct222003.html
Thanks for your input .Praetorian2,We finished down on the day but NXG and WHT still did well.BGO,EGO,and CDE had a rough day ,but its only to be expected since they've had such a good run.It feels like NXG and WHT might be getting ready to make another nice percentage move ,breaking the trend today.Keep your eyes open. Cutten ,at$400 an ounce,gold mining is a great buisness to be in .At $300 an ounce ,its a rough buisness to be in.But at $400 an ounce , most if not all, mine profitably.Its always been my understanding that a sustained price over $400 will really pull in the institutional investors for the simple reason that earnings flourish at approximately that price .Another thing to keep in mind, is that from here,any further appreciation in the gold price is 100% profit for any company thats production cost are at the industry average , which I believe is in the $325-$350 range. I like the junior golds because of the potential price appreciation. The miners listed above are actually a good place to start , if you like juniors.CDE however,is the worlds #1 silver producer. In my case ,I have traded out of a couple of great positions and lost them,(since last June)I've made this mistake twice.June was the breakout month for the sector , before that the article wasn't accurate. Gold stocks were rangebound prior to June and I had multiple trades on a handful of stocks .
Seems the juniors had a decent day, especially CAU. Was there news on this stock. Was up over 20% today. I had this one pegged for a nice move but not this much.
Yeah, nice move. Too bad I only have 15,000 of that one. I think that good indications of the strength in this market are that NEM priced 20% more shares than originally indicated. The market ate all 24m and it is not trading at a premium to the offering. Even more shocking is that tiny NXG had half it's outstanding shares sold in a block and the stock barely budged, down 10% only. I was not expecting this NXG sale. I think I may buy a few more of that if it can continue to chew this supply.