Here’s a rough transcript (PDF format) of my video for Uncommon Wisdom today …
sean-brodrick-uwd-video-for-042809-a-better-value-than-gold
I’m getting some emails asking me if I’ve “suddenly” turned bullish on gold stocks. Well, as subscribers to Red-Hot Global Small-Caps know, there are a bunch of gold stocks I’ve recommended holding for the longer term.
The question is the short term. And the answer is, I’m bullish on gold stocks IF gold can break out to the upside.
Today we’re seeing gold pull back. Here’s an updated chart of gold … 
Gold’s sell-off today does not mean anything until we break down out of that range. Likewise, a run up does not mean anything until we break out UP from that range.
If gold breaks out, I’d play the gold stocks instead of gold itself, because the miners are showing relative strength recently.
You can see that the Gold Bugs Index (a basket of gold stocks) was really oversold compared to gold, but that ratio is starting to change in the miners’ favor.
Here’s a link so you can follow a version of that chart that updates every day.
And now here’s a chart of the SPDR Gold Trust (GLD) …
And here is a link so you can follow the chart of the GLD as it updates every day.
Related Posts
- Gold Update (07/30/09)
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- Update on Gold, Guns and Spam (03/07/09)
- 3 Charts on Gold and Oil (10/19/09)
- Charts of Gold, Gold Miners, Brazil and More (10/02/09)
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Gold goes down on concern over swine flu as investors raise cash? Gold goes down on profit taking after China announcement? The China announcement, US and other governments monetizing their debts, Middle east, Korea, production is way down, banks world wide are insolvent, everyone and his brother are investing in gold. What did I leave out? And yet gold spins it’s wheels save for one days spikes etc. very frustrating. Higher power? Does technical and fundamental analysis even matter? With all the bullish pressure, where does bearish pressure coming from. I don’t read mention of bearish pressure. Is there an explanation for this pressure that can be shared? Can the downward pressure ever be over come? What will it take? Gold should have long ago sky rocketed for more than a day or two. Signed: confounded in Texas
Based on recent articles, it looks like China is buying some gold but that they are really loading up on industrial metals like copper, iron ore, boxite, etc. This would be a pretty clever strategy given that the prices of commodity metals are depressed and likely to get quite expensive when inflation takes off. Do you think China is using a “basket of metals” approach to reserve diversification?
Yes, Mike, I’m confused, too. I’ve been working some of my frustration out here on my blog. We really need gold to break out and tell us where it wants to go. These one-day head-fakes … not only in gold, but also in the U.S. dollar and the major indices … are getting on my nerves.
Hi, Tim.
Yes, I do think China is using a “basket of commodities” approach to diversification. Along with metals, they’re also buying oil. They’re buying farmland overseas as well, though that doesn’t count as reserves. Still, they’re very shrewd, and we’ll probably see more of it.
Yes it’s true, gold bugs everywhere are getting edgy about not seeing the true free market value of gold reflected in COMEX futures market. True of the matter is, there will always be manipulation of the gold price. No offence but a truly free market without manipulation only belongs in fairy tales. Check out this 10 year crusade against gold manipulation at http://www.gata.org/
China is diversifying its country in metals, oil and food. Covering all angles to survive and reap rewards. Stimulusing their country within as a people and government.
U. S. is quarreling within its own people. The right the left like foreigners within their own flesh and blood. Who can gain the right for prosperity for cause and their own agendas. Stimulusing dishonesty taking from the people that make it what it has been, creative from all areas. (like a fox in the henhouse) Fox being politicians, bankers, Wall Street. A socialitic outcome not willing to admit and some don’t even see.
As history plays it hands, implosions happen within (fighting and self-gains and greed) Whats not seen by those in the arena of greed and control, is seen by those on the outside. The signs and displays seen by the hard working people within, without rights, other countries smiling watching it going on. Destruction comes from within first. Only peices are left for those that truly care in the end when its to late.
Our government pushing down golds monetary value til it can’t. Gold, silver, other precious metals, food production the winner in survials game in the end.
We all know price comes from supply and demand. Demand is real, whatever one will pay. Supply though is Real assets held as coin, and bullion. Some gold is claimed, and promised to be held in trust.. If this leg were in part imaginary. Woulden’t it depress the price by over estimating the supply?.
Interesting Charts and comments on Gold Stocks.
However I think there might be one Gem, selling at about a 50% or more discount to its NAV.
I would be interested to hear your comment on IVN (Ivanhoe Mines backed by Rio Tinto) which hold mining rights to the biggest gold and copper reserves in the world (25% gold, 75% copper). The shares where beaten down over the last week to $5.00 because of uncertainty of newly elected president of Mongolia’s views regarding the IA (Investment agreement with IVN/RTP). It appears likely some positive news develops in the Mongolian Parliament by July 10th 2009. Salman Partners & TD-Waterhouse just rated the target price for IVN to about $ 12.-. Anyhow I would be glad for your comment.