Gold sentiment still neutral… ie explosive gains to come
Posted: Sun Jan 29, 2023 4:24 am
Really good gold mining stock article here…. Explains why Juniors like GGP lagging the majors by a few months.
https://www.mining.com/web/gold-stock-s ... t-neutral/
I like this section that clearly articulates an idea of what's about to happen here;
“Everything I’m seeing today, through the lens of decades of experience as a professional gold-stock speculator and newsletter guy, suggests sector sentiment remains neutral. The extreme bearishness of four months ago has passed, but we remain far from extreme bullishness. Fear is gradually being replaced by greed as GDX powers higher, but the pendulum’s arc is nowhere near its opposing peak-greed high yet.
That is very bullish for gold stocks, implying this upleg is heading much higher before giving up its ghost. While it would’ve been much better to buy in surrounding late-September’s deep lows while few wanted to, it isn’t too late to get deployed now. Although the unrealized gains are mounting in the fundamentally-superior mid-tier and junior gold and silver miners filling our trading books, way-bigger gains are likely coming.
I’ve written several comprehensive essays in recent weeks explaining why. Gold has yet to reflect this raging inflation, as we are suffering the first inflation super-spike since the 1970s thanks to extreme Fed money printing. During the last two inflation super-spikes in the 1970s, monthly-average gold prices nearly tripled during the first before more than quadrupling in the second! Gold ought to at least double here.
And the gold buying is only starting that fuels major gold uplegs. They advance in three stages, initially driven by gold-futures short-covering buying, then bigger gold-futures long buying, and finally massive investment buying. As of the latest data, 3/10ths of gold’s stage-one buying remains, fully 7/10ths of its 2.5x-more-important stage-two buying, and there has yet to be any significant stage-three investment demand!
So gold’s own upleg has a long ways to run yet, and GDX will amplify that by 2x to 3x ultimately besting that upper bound in peak greed. Also both gold and gold stocks just flashed major Golden Cross technical buy signals. Occurring after deep lows, these confirm big new uplegs are underway. They help attract back many more technically-oriented traders, and their buying accelerates gold and gold-stock gains.
The bottom line is gold-stock sentiment remains neutral. The extreme bearishness surrounding recent stock-panic-grade lows has vanished, but widespread greed hasn’t replaced that universal herd fear yet. Gold stocks haven’t leveraged gold enough nor grown overbought enough to reflect popular bullishness. Their upleg gains so far have concentrated in larger miners, implying individuals are skeptical of buying in.
All this and other sentimental indicators argue that this gold-stock upleg remains young. While GDX has already powered 50%+ higher, this upleg remains much smaller than the 100%+ monsters spawned out of similar conditions. Gold’s fundamentals point to much more buying to come, which will drive it higher and gold stocks will amplify its gains. So it isn’t too late yet to get deployed if you’ve been dragging your feet.”
https://www.mining.com/web/gold-stock-s ... t-neutral/
I like this section that clearly articulates an idea of what's about to happen here;
“Everything I’m seeing today, through the lens of decades of experience as a professional gold-stock speculator and newsletter guy, suggests sector sentiment remains neutral. The extreme bearishness of four months ago has passed, but we remain far from extreme bullishness. Fear is gradually being replaced by greed as GDX powers higher, but the pendulum’s arc is nowhere near its opposing peak-greed high yet.
That is very bullish for gold stocks, implying this upleg is heading much higher before giving up its ghost. While it would’ve been much better to buy in surrounding late-September’s deep lows while few wanted to, it isn’t too late to get deployed now. Although the unrealized gains are mounting in the fundamentally-superior mid-tier and junior gold and silver miners filling our trading books, way-bigger gains are likely coming.
I’ve written several comprehensive essays in recent weeks explaining why. Gold has yet to reflect this raging inflation, as we are suffering the first inflation super-spike since the 1970s thanks to extreme Fed money printing. During the last two inflation super-spikes in the 1970s, monthly-average gold prices nearly tripled during the first before more than quadrupling in the second! Gold ought to at least double here.
And the gold buying is only starting that fuels major gold uplegs. They advance in three stages, initially driven by gold-futures short-covering buying, then bigger gold-futures long buying, and finally massive investment buying. As of the latest data, 3/10ths of gold’s stage-one buying remains, fully 7/10ths of its 2.5x-more-important stage-two buying, and there has yet to be any significant stage-three investment demand!
So gold’s own upleg has a long ways to run yet, and GDX will amplify that by 2x to 3x ultimately besting that upper bound in peak greed. Also both gold and gold stocks just flashed major Golden Cross technical buy signals. Occurring after deep lows, these confirm big new uplegs are underway. They help attract back many more technically-oriented traders, and their buying accelerates gold and gold-stock gains.
The bottom line is gold-stock sentiment remains neutral. The extreme bearishness surrounding recent stock-panic-grade lows has vanished, but widespread greed hasn’t replaced that universal herd fear yet. Gold stocks haven’t leveraged gold enough nor grown overbought enough to reflect popular bullishness. Their upleg gains so far have concentrated in larger miners, implying individuals are skeptical of buying in.
All this and other sentimental indicators argue that this gold-stock upleg remains young. While GDX has already powered 50%+ higher, this upleg remains much smaller than the 100%+ monsters spawned out of similar conditions. Gold’s fundamentals point to much more buying to come, which will drive it higher and gold stocks will amplify its gains. So it isn’t too late yet to get deployed if you’ve been dragging your feet.”