From Palisade Research: In this interview, Jordan Roy-Byrne discusses the latest in the gold market and how it has been quite subdued. He is not predicting an imminent breakout although one should be looking to take advantage of the value out there.
Juniors are unlikely to get much cheaper than where they are now, so there is minimal downside risk. The market will improve it’s just a matter of timing. There is still a bit of time before we make the run up to $1375. Now is the time to do your research and find the best companies.
The price of gold has been driven by the weak dollar, and the market is anticipating higher interest rates on the long end. Long-term bond yields breaking out will cause a lot of issues with the economy, the government, and corporations. This increase will be bad for the stock market and will likely cause a move from cash into gold. Two or three quarters is still needed for things to get set up for gold, we are not there yet both fundamentally and technically.
The mining sector has endured the worst bear market in ninety years, and some mining equities are an incredible opportunity. The quantitative easing policies of the Federal Reserve has incentivized companies to borrow at very low rates when rates rise we will find that real capitalism has been lacking.
He compares recent market patterns to several similar market corrections and why this indicates a more extended consolidation period. There isn’t much downside in price. You should look to accumulate now and take advantage of values now, don’t wait for the breakout. You will be happy you bought early.
The SPDR Gold Trust ETF (GLD) closed at $125.79 on Thursday, up $0.06 (+0.05%). Year-to-date, GLD has gained 1.73%, versus a -1.39% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Palisade Research.