but it was good to see it rally by $82 to hit an intraday high of $1,322 at the end of last week. (16th June 2014)
That was pretty impressive and the gold miners are up almost 20% and the junior producers (as measured by the Market Vectors Junior Gold Miners index) and the explorers (the Solactive Global Gold Explorers index) are up over 30% – it’s beginning to feel like the good old days.
Many gold inventors enjoyed two monster periods in gold and gold shares – 2005 to early 2008 and then late 2008 to mid-2011, but they have also experienced two horror shows – 2008 and 2011 and until now what we’ve learned is that gold and gold speculators are verging on the bi-polar. It’s all or nothing.
But mistakes get made when you get carried away by the hysteria. All of a sudden Gold Dealers have started to see plenty of ‘buy’ orders, which is odd because were these these people at the beginning of the month when gold was $80 cheaper?
Gold is speculative and so when gold goes vertical, it rarely ends well as avalanche trends tends to follow rocket launches!
So the advice right now is to be cautious and if you don’t have a position in gold, be patient. Even though it’s not great to watch gold companies rocket when you’re on the sidelines, relax or take the longterm approach with Karatbars.
The long-term outlook remains promising
We think we’re in the early stages of another bull market that’ll take us a bit higher later this year, and a lot higher in a couple of years time. The averages are all lining up but gold supply won’t be great in the coming years (not enough new finds) and for now there is plenty of money elsewhere to come back into the sector.
$1,475 this year? Might be too ambitious, but certainly a high $1,300s or even low $1,400s does looks possible. The encouraging news is that there is still an interest in gold and when money moves in, things can happen very quickly and on a relative basis, gold and silver are both starting to look very attractive and the moves were both anticipated and confirmed by the gold miners. If a bull market is to happen in gold, you want the miners leading and people buying into miners because they believe higher gold prices are ahead.