By various gauges of value, the gold and gold mining sector is the most undervalued of all the investment sectors; that should change shortly. if we judge by the lack of research coverage of gold companies we might conclude that there is little interest, but don’t be fooled. Our analysis suggests that we are seeing  one of the best opportunities  ever for profits in mining stocks. The most astute and successful investors and central banks are buying gold and gold mining stocks.

 Napoleon Bonaparte once advised to “never interfere with an enemy when he is making a mistake.” His advice would suggest that if you find a shareholder(s)is making a mistake by selling a stock that you find undervalued and bottoming, say nothing, don’t share your view and quietly accumulate the shares that based upon sound analysis merit investment.

Before we list our ideas on the gold market, we want to emphasize that several “cycles” are now projecting that a huge move up in gold bullion should commence soon; and it will carry the gold stocks up as well.  Cycles can be off schedule but often return with a vengeance. 

                                                                                                                           

  Keep in mind that there no longer are the same  “market makers” (specialists)who in the past brought support to the market. Therefore many stocks often drop to prices  lower than they previously did. However, that offers investors opportunities to invest in stocks at even lower prices than in the past when market makers were major participants and would bring in buying during price declines.

 The technical analysis of the gold market and the mining stocks has been confusing for several years; it has suggested that some stocks were in basing formations and should be accumulated. Recently some mining stocks performed superbly and were taken over at huge premiums eight to ten times what they were at while they were “bottoming.” It happened with Richmont and Claude Resources among several acquisitions.  Yet many gold companies’ charts indicate consistent accumulation.

Insider Analysis-Early detective work!  It is not a perfect method of analysis, but we monitor the officers’ and directors’ buys and sells of their own companies’ stock. It is easy to do; it is often the only available research for many small companies and particularly junior mining companies.  Buys and sells by officers and directors in Canada must be reported within five business days. A large purchase by an insider when a stock is selling at or near a multi-year can be a major alert. 

Manipulation  If one will merely look at trading volume and the transactions themselves on a major commodities exchange, one has seen obvious  “manipulation” engineered to keep gold’s price down. About a year ago on a major commodities exchange, Gold futures’ contracts with an approximate dollar value of $1,200,000,000 were sold ( it was more than 10,000 December gold futures contracts, each representing 100 ounces). It caused the gold price to plunge and it was all done within two minutes!

  In our opinion, the “dump sale” was designed to create an image of weakness in gold. Note that they were “paper sales” and not true gold bullion. The volume of the transactions was approximately 30 times the 100-day volume average for that time of day. Again our view, it was done to create an image of price weakness. It is an ongoing ruse in our view.

Four years ago, there was a confidential meeting of major bankers in a large east coast city who decided that the price of gold bullion had to be kept below the $1300 range as a rise above that could have disastrous effects on the stock market and the bond market. Thus the ongoing manipulations in the gold bullion. Watch the trading closely to see if the banksters are up  to their old manipulative tricks again.

“When prices are high, they run to buy, when prices are low, they let them go.”   Some frustrated gold and mining stocks’ investors have lost patience and have been selling their shares near their multi-year price lows. This is a normal occurrence. When a stock is selling at or near its yearly or multi-year price low very often the frustrated shareholders are getting out……but other investors who have done their research are  saying “what a great opportunity this is” and buy those shareholders’ stocks.

The U.S Dollar is the “Key to the Kingdom”…It is probably the most important influence in the price of gold and the interest in gold stocks! So here are the numbers:

   In 2011 the U.S. Dollar contract was at about $74, Gold was selling at approximately  $1800

   In 2015 the U.S. Dollar contract had risen to  the $100 range, Gold was selling at $1100

  Today the U.S. Dollar contract is selling at 96.9…its chart may indicate that it is finishing making a top…

Junior Mining stocks may need gold bullion at the $1400 to $1500 an ounce level to generate strong investor interest in the Juniors. While the investing public is paying little attention to the gold market, Central banks are taking advantage of the price weakness and accumulating gold bullion.

WHILE WE BELIEVE THAT A POSITIVE GOLD MARKET BEGAN FOR SOME GOLD STOCKS IN 2015, A MORE POWERFUL AND MORE INCLUSIVE BULL MARKET IS JUST COMMENCING…..WE ARE MONITORING IT CLOSELY.…AND WE HAVE A LOT MORE RESEARCH AND ANALYSIS COMING ON THIS SITE AND ON THE MONTREALANALYST.COM SITE.