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Gold And Silver Miners On Upward Move

 November 08, 2011 03:29 PM


Investors in mining equities are finally being rewarded for their patience and fortitude.  The Gold Miners (GDX) ETF is making a challenge to all time highs at the $64 area after basing for close to a year between the $52.50 low and $64 high.  What is the cause of this impressive move in gold, silver and the miners?

The unemployment numbers continue to show that the economy has produced not that many jobs.  The Fed will be forced to implement accommodative measures through the reinstitution of quantitative easing.  Investors are now factoring in a QE3 by whatever guise necessary.

The unemployment rate is already high.  Elections are looming.  The politicians in Washington will do whatever they must if they want to have a chance at being reelected.  Bernanke in his statements assured us that he has a number of arrows in his quiver.

[Related -Initial Jobless Claims Rose Unexpectedly]

Another Ben with the name Franklin famously wrote, "The only thing that is certain is death and taxes."  Bringing this aphorism up to date one could add economic stimulation and inflation to his observation.

Gold Stock Trades continually annunciates the mission statement of our service.  Stocks are very carefully selected as candidates that may experience major gains which far exceed the negative interest rates given by your friendly neighborhood bank.  The miners (GDX) have vindicated our motus operandi.  They are on the move…upward and onward!  Excelsior!

[Related -All Quiet on the Record High Front]

Wealth in the earth assets are similar in ways to other crops.

As Solomon advised, "There is a time to sow and there is a time to reap."  Recent developments may serve as our vindication.  Despite the cavils of the naysayers in early October who recommended cash and treasuries GST repeatedly counseled, "Stay the course and hold fast to the wheel in precious metals and natural resources!"  In fact on 9-27-11 our gold timing indicator went from a hold to an aggressive buy.

When gold and silver declined, we bought and advised patience and fortitude despite the large presence of naysayers calling for a major deflation bringing down precious metals and commodities.  We are well aware that the natural resource arena that we have entered is capable both of astonishing rewards and gut wrenching descents.  One must take the opportunity to fight the herd at those extreme levels of emotion.

Many investors misconstrue the very nature of The Bourses.  The casino must do whatever it can to send most people home as losers.  There can only be a minority of winners in order for The House to make a profit.


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