By Jeb
Please see one of my premium updates from last week. Gold is breaking above the 200 DMA which is very positive for the junior mining sector as huge capitals of inflow occur usually from generalist investors on this technical move. The last time gold broke above the 200 DMA to the upside was in early 2016 and led to a powerful five month upward leg higher.
(Originally Published 4-6-17)
The time for my readers to benefit from precious metals and junior miners could be right around the corner for those who waited for years for the sector to base and reverse off those lows. The US dollar could be on the verge of a devaluation under Trump as he knows the Chinese have been manipulating their currency lower to take away our manufacturing and mining.
That is why Trump is meeting with the Chinese Premier right now in what may be the new cold war which could send the US dollar lower and precious metals and commodities soaring. Gold and silver are basing and prepping for a breakout above 200 DMA. The S&P500 and Dow is way overbought with record amount of margin debt. This leads to painful corrections which may not be good for overbought stocks but great for cheap gold miners and explorers.
You see during a bull market in stocks its hard for precious metals to gain momentum. During previous market routs investors flocked to gold and silver sending precious metal valuations through the roof. I expect that could happen possibly within the next 3-5 years if not sooner. As the bubble in real estate ends throughout the world on easy credit I expect another rally in precious metals and real assets that will make the 2011 rally look small in comparison.
The miners are set up for a major reversal as they are sitting on huge cash positions. Look at the recent Goldcorp deal with Exeter to partner with Barrick or their recent moves into the Yukon with Kaminak. These producers have been reducing debt, cutting fat and beginning to once again generate free cash flow which could bring back a lot of investors seeking capital preservation during a volatile risky geopolitical time. Even some big miners are increasing dividends.
They need growth and the mining sector needs new high grade discoveries. I expect as the gold price continues its uptrend which began in early 2016 after a 5 year bear market that a lot of marginal mines could get back in the money. Be careful with producers who are having difficulty with cost overruns or permitting.
Its been a very exciting time for this gold explorer in Burkina Faso which may be onto an exciting new high grade gold discovery. The success in Burkina Faso and the institutional interest has been great over the past few years with the success of producers True Gold, RoxGold and Endeavor Mining.
This little junior has RoxGold’s exploration manager working full time on what could be his next big discovery in the country. There was a quartz …read more
Source:: Gold Stock Trades.com
The post #Gold Breaks Above #200DayMovingAverage For First Time Since Beginning of 2016 appeared first on Junior Mining Analyst.