Points to consider in a looming positive gold market
Technical analysis (charts) suggests that a retracement back to $1380- $1400 would be completely normal and would still lead to our expectation of significantly higher prices. Such a decline creates opportunities for value oriented gold investors in many but not all precious metals stocks.
The US brokerage industry does not want a bull market in gold to occur as it indicates a major bear market for the large industrial stock market such as the Dow Industrials. A bear market brings with it huge losses of brokerage industry profitability and large declines for most stocks.
The price of Gold bullion has been regularly and visibly manipulated for several years. We have seen sales of paper gold and not true gold bullion sold during periods of low volume activity to create the illusion of gold being "dumped" and offering very little potential for capital gains. Simply stated, it is a ruse and a deception-nothing less.
During declines today gold stocks suffer much larger declines that they did in the past. Yes, and much more harsh! We no longer see the market makers, also known as specialists, holding large inventories in their stocks during declines to the same extent that they did in the past.
Psychologically, most investors cannot tolerate the enormous percentage declines gold stocks and particularly Juniors suffer during declines and bear markets. The most successful investors in precious metal stocks take advantage and dollar cost average during declines. The vast majority of investors cannot bring themselves to do that and that is why so few see substantial capital gains in gold stocks. They cannot and will not invest at price bottoms. Human nature does not change!
Finally, when and if an investor discovers an exceptionally undervalued precious metals and/or commodities stock, THAT INVESTOR SHOULD NOT SHARE IT WITH OTHER INVESTORS. TODAY'S MARKET DOES NOT OFFER ADEQUATE LIQUIDITY AND ONE DOES NOT NEED COMPETITION WHILE BUYING OR SELLING .......