1-Shareholders of gold mining stocks must keep in mind that we do not have the requisite start of a bull market in gold bullion yet. It is coming and we think that it will begin soon, but note that last summer of 2013, we suggested that many gold stocks were in the process of making their bottoms which they have now completed.

Some are up a large percentage since then; others such as most junior explorations have not commenced bull phases. I want to emphasize that all of the mining stocks will not move at the same time. Or “all the horses will not leave the corral at the same time.”

2- Last March, I wrote on the Canadianmineanalysis.com that at the $1385 level, gold had to retrace about half of that move up from the $1200 level. Several people disagreed with me on that rather unpleasantly. I used a method in technical analysis that I find helpful. It proved to be accurate although nothing can be depended upon particularly in this manipulated market. Review what I wrote last March based upon technical analysis.

Correction in Gold’s price is normal, our analysis….

3. We remain in a bull market in the Industrial stocks such as the Dow Jones and S&P 500. Generally speaking, we believe that we need a bear market or marginally a 15% to 20% move down in the industrial stocks to commence another bull market in gold mining stocks and gold exploration stocks.

4. Manipulation is ongoing in gold bullion to keep the price of gold down. Just review some of the sales that occurred. The trading on the Comex in New York in mid-July 2014 in our opinion was quite suspicious. We will review that on this site soon. Keep in mind that most central bankers want to keep gold’s price down.

5. The Chinese Central Bank, India and Russia are buying the large percentages of the gold bullion and look upon the price weakness as a tremendous buying opportunity. They shrewdly are taking advantage of the price declines and weakness to steadily buy the bullion that comes to the market for sale.

6. Peak Gold! The easy to find and extract gold has already been discovered. Eight years ago, the average cost to extract an ounce of gold was approximately $400 per ounce; today the cost is approximately $800 per ounce. We are referring to only the extraction and not the “all in cost” which includes all costs and is currently approximately $1255 per ounce. Keep that in mind please.

7. The world is still printing money at an incredible rate and debt is growing at an alarming rate. It will end disastrously.

8. The US Brokerage Industry does not want nor can it tolerate a bull market in gold. The brokerage industry will contest a bull market in gold since it generally occurs concurrently with a bear market in industrial stocks. The brokerage industry’s profits decline during bear markets and the profit potential for the industry during bull markets in gold and gold stocks is limited.

9. The majority of producing gold mining companies are selling their gold production at below their “all in cost” per ounce. Until we see the $1400 to $1450 level and more, the cost pressure will continue and profitability for most will remain elusive.

10. Cycles in gold? Keep in mind that no cycle must occur, nor must a cycle be on an exact schedule. Moreover, they should be studied with cycles and events that are occurring in other markets. Remember, in one way or another, all of the markets are related and can exert a tremendous influence on other markets. Technician John Murphy’s book “Intermarket Analysis” focused on the inter-relationships of the markets; it provides an excellent study in technical analysis.

One cycle that we study suggests that a major upmove in gold should begin soon. Another cycle suggests that a major move up will commence in 2015.  

                                                                              Thank you, K.C.