Our research suggests that we will soon see a bull market in mining stocks. But in particular, junior exploration and low capitalization mining stocks managements and shareholders must recognize some significant factors that will have an enormous influence on their success.

First of all, are the mining stocks making bottoms?
Many mining stocks have already made or are completing their price bottoms at what we consider to be exceptionally undervalued levels; some should prove to be exceptional bargains. However, for the present, small cap juniors need a $1300 to $1400 US gold price to regenerate investors’ interest. But above all, for now many are “on sale.” Few investors ever take advantage of the cheap prices that occur during bear markets but that is and will always be human nature.

What is a major challenge to the mining stocks?
There is very limited comprehensive research on many mining stocks so few will gain attention and the vital investment dollars. The brokerage industry has always fought acknowledging bull markets in gold as that would indicate a bear market in industrial stocks. Large brokerages generally become unprofitable during bear markets. Bottom line: The brokerage industry cannot be profitable during a bear market in industrial stocks which generally occurs during a bull market in gold and commodities.

And other challenges to gold and mining stocks?
The disappearance of market makers (also referred to as specialists) which we wrote of in the past has created more downside in stocks as there are few and weak bids when investors wish to sell. We see it all the time in today’s markets. The previous profitability of the market makers is long gone so hiring analysts to cover the stocks and in a sense create investor interest in research covered stocks that was done in the past unfortunately will not happen.

What would happen if deliveries of gold bullion were demanded, such as when Germany asked the U.S Central Bank for theirs held in New York for safekeeping? Safekeeping?????
We can merely estimate (guess) that it would minimally be at $1500 to $1800, perhaps much higher, a successful gentleman from Germany suggested that it would be minimally $3000 US.

What about the manipulation in gold?
Without manipulation, we must guess again, it might be selling at $1700 or more. Let’s not forget the “midnight sales” where gold bullion contracts on the futures exchange (not bullion) are dumped to create an image of gold weakness. You have to be blind not to see it.

Should we wait to later “load up” when it makes its final decline?

If you believe that you will load up as gold makes its final bottom and get all you want, you may be dreaming. It is never that easy. We recommend “dollar cost averaging” as we think that many gold stocks have already made their price bottoms.

http://www.canadianmineanalysis.com/2014/05/21/dollar-cost-averaging-worth-consideration-2/


What else?
It is important to mention that out of let’s say 800 mining exploration stocks, maybe fifteen percent will attract minimally thorough research coverage. We cannot do anything about that.