After a well-deserved correction of nearly 3 months, the gold stock sector is still flashing positive signs beneath the surface, as the correction matures.
The correction that began in August amid the ‘Buffett Buys a Gold Stock!‘ tout has now ground on for nearly 3 months. As noted in the NFTRH 626 Opening Notes segment:
“Thus far the correction in gold, silver and the miners is perfect, where perfection means long, drawn out and maddeningly frustrating to bulls (and bears thus far). That’s what corrections are, remedies to excitement, confidence and of course, greed.”
We are managing the technical details (and associated strategies) of the correction in HUI and individual gold stocks each week in NFTRH, but as a gold stock investor, it has not been a time for making money since August. As a trader, it has been a difficult time for making money as well, because of the lack of a definitive drop that the sector’s corrections are known for. It has been a grind, and in that annoying, time-consuming process, it has been perfect.
Below are some pictures that we have maintained front and center during the correction in order to disqualify or more likely, confirm the macro bull view for gold and the miners. This was so that subscribers could sell, buy or hold as they see fit, but more importantly so that we could know the status of the backdrop all along the way to make better-informed decisions.
Meanwhile, the perfection has been in the cleaning of the investor base, a large portion of which thinks that inflation is good for gold miners. Often it is for the stock prices, but rarely is it good for the bedrock sector fundamentals. One of the best measures of the real price of gold is the Gold/CRB ratio, which is in part of the measure of the gold mining product vs. gold mining costs, especially energy costs. Continue reading "Gold Miners: Beautiful Pictures"