Market Vectors Gold Miners (GDX)

[kennynah]

sometimes, "implied" demand is to give the impression that one is buying.... when in actual fact, selling is the intention... think of it...when you want to sell something, the last thing to do is to appear so... instead, you would want to generate a façade of demand and if you are convincing and big enough, you will attract genuine buyers who drive up the prices...by which time, you do what you really want to...sell....

[winston]

Yes, just like a couple of articles generated by this guys that says that everyone in China is lining outside the banks to gold coins.

They even have the nerve to say that the Chinese government is encouraging people to buy gold coins.

[winston]

IT'S TIME TO BUY GOLD STOCKS!

Traders take a note from Jeff Clark: Gold stocks are ready for a quick bounce.

In his morning e-mail for traders , our colleague noted how the recent market decline has punished gold stocks far worse than your typical sector... producing a trading opportunity.

You see, a market moves in waves. While these waves are impossible to accurately predict, they do have a tendency to stage "rubber band" snapbacks after big moves. As you can see from today's chart, the big gold stock fund (GDX) just suffered a big move. It's down 16% from its January high.

( So it's down 16% since they asked you to buy ? )

Now look at the "pane" at the bottom of the chart. This displays an indicator called RSI. This indicator simply measures how "stretched" an asset is to the upside or downside. Note how gold stocks rally each time the RSI dips into "oversold" territory (red arrows). Now note that gold stocks are as oversold and abandoned as they have been in a year. Expect a rally soon.

Source: Daily Wealth

[winston]

STAY LONG GOLD STOCKS

You could call today's chart "great news for owners of gold stocks."

Last month's market decline smashed nearly every kind of resource stock you can think of… oil stocks, copper stocks, iron ore stocks, coal stocks, and agriculture stocks all sold off heavily. Gold stocks, however, have held steady.

Today's chart shows the past two years in the big gold stock fund, GDX. It's one of the largest and most diversified ways to take a position in gold stocks. Big miners Goldcorp, Newmont, Barrick, and AngloGold Ashanti are major holdings in the fund.

This fund suffered a huge decline during the 2008 credit crisis. Then, as predicted in our December 2009 "rebound trade" series , GDX staged a huge rally.

And in the upper right of the chart, you'll notice GDX barely budged last month as stocks of all stripes were taken to the woodshed. When an asset as volatile as a gold stock holds steady in the face of widespread selling, it's a bullish sign for the future. Stay long gold stocks.


www.dailywealth.com

[kennynah]

my take is....why even bother to buy these funds when one can buy spot and future gold directly???

[winston]

my take is....why even bother to buy these funds when one can buy spot and future gold directly???

I'm not vested in this fund. However, I think these funds own gold miners which can move more than spot and future gold.

[kennynah]

there has been many funds in the past that touted that they owned gold mines ...capable of producing mega tons of this precious element... and some turned out to be hoaxes....and have collapsed subsequently...


buying from some of these companies ...is like buying a piece of land from those land banking companies... you have to "believe" them ... you have to place "trust" in them....and you have to have "faith" in them not to close shop during the tenure of investments...

i cant do any of these...so, i skip their propositions...

[winston]

I dont know what's inside this fund.

I would think they they have a basket of proven gold companies eg. American Barrick, Franco Nevada etc.

I dont follow the gold companies anymore.

[winston]

GOLD STOCKS JUST HIT ANOTHER NEW HIGH

After the market's horrendous performance in May, it's tough to find an asset sitting at a yearly high right now. One of these investment rarities is an asset we've told you about repeatedly in DailyWealth: Gold stocks.

During the market panic of late 2008, we called gold stocks one of the great "rebound trades" you could make to play a market rally. We've also written (here and here) on how gold stocks spent much of 2009 in "cheap mode."

On Friday, the big gold stock fund (GDX) confirmed our bullish thesis by striking a new 2010 high of $54.06 per share… And it's just pennies away from its December 2009 high of $54.78.

As noted in this Growth Stock Wire essay, the gold stock sector is a relatively tiny one… so it doesn't take much interest from big mutual and hedge-fund managers to push the sector to new highs. With gold over $1,200 an ounce now, people are paying even more attention to the precious metal… Expect GDX to continue higher and higher.

Source: www.dailywealth.com

[winston]

CHART OF THE WEEK: THE GOLD STOCK DIVERGENCE CONTINUES…

This week's chart shows the continuation of a trend we highlighted early this month… the outperformance of gold stocks versus the general stock market.

Up until late April, shares of gold mining companies registered the same year-to-date gains as the benchmark S&P 500 index. But at the beginning of May – when the general market started to crack – gold stocks began diverging in performance from the market. It was an incredible display of strength for gold stocks to hold steady while folks sold stocks of all stripes to raise cash.

As you can see from this week's "performance chart," the big gold stock fund (GDX) is up 20% in the past three months (the black line). The general market, on the other hand, is down 7.5% during the same time (the blue line).

As gold miners enjoy the robust economics of selling gold for over $1,100 per ounce, expect this trend of gold stock outperformance to continue.


Source: www.dailywealth.com