Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Gold miners and the spot price have recently diverged with mining stocks beginning to lead. Jordan is bullish on miners as GDX/GDXJ have recently broken above their twenty-month moving averages. He is monitoring the recent move and wants to see the trend continue. There is a complex technical bottom that has formed in the gold spot price, and there may be further testing of lows. Multi-year resistance exists at $1375. Once broken the upside should be to $1600. He expects a massive breakout around the end of 2017.
Collin and Jordan discuss optionality plays and how they can be profitable when underlying metal prices rise. Jordan thinks there will be opportunities for this once gold has bottomed perhaps toward the end of the year.
He likes what is occurring in uranium stocks and is seeing a very strong double bottom. He says that’s a bullish indicator, as it looks like there is a good breakout from the second bottom. Uranium stocks are likely to continue higher before any major correction, so if you’re on the sidelines consider waiting for the small dips and then buy in.
Silver looks like it may make a double bottom soon, as it should start to lead gold. He says both the SIL/SILJ have been strong performers recently. There is major resistance for silver around $21, perhaps it can break through that sometime next year. Like gold, silver stocks are diverging from the spot price.
Talking Points From This Week’s Episode:
• Gold and silver stocks have diverged higher from the underlying spot price.
• Optionality plays in gold stocks look promising once precious metal bottom.
• Uranium stocks should continue to move higher, wait for dips to buy in.
• Gold and silver are still testing their lows.
Jordan Roy-Byrne, CMT, MFTA is a Chartered Market Technician and Master of Financial Technical Analysis who is a member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection for precious metals investors. He is also the author of the 2015 book, The Coming Renewal of Gold’s Secular Bull Market which is available for free.
