Monday, August 4, 2014

3 Bullish Facts for Precious Metals and Miners

We had to grab another round of gains in Gold & Resource Trader today. That's not what I wanted to do, but when you hit a stop, you hit a stop.

And yes, I know, I shouldn't bitch about taking gains.

In other news, the Market Vectors Junior Gold Miners closed up 2.6% in July.  That's lower than its 4.6% average over the past five years, but considering that the Dow gave back all its gains for the year in July, I'll take it.

More interesting is what happens next. You know what history tells us: August is usually a very good month for the junior gold miners. To this we can add ...

1. Gold Industry deals have hit a 3-year high. Mergers and acquisition are trending. Deals worth about $14 billion have been announced or completed so far this year, according to data compiled by Bloomberg. Good for junior miners? I think so.

2. Silver inventories at China's Shanghai Futures Exchange are plummeting. I don't work there, so I won't pretend to know exactly what this means. But it's probably bullish. Here's a chart from the SRSrocco Report.

3.  Gold loving India recently accounted for 42% of total gold and silver leaving Switzerland. That looks like a bullish trend, too. By the way, the el Nino threat to India's monsoons has been downgraded ... the monsoons are hitting hard enough to cause deadly landslides ... and India has drought-resistant rice now anyway, So, while rainfall across northern India is about 33% below the normal level for this point in the monsoon season, maybe we shouldn't measure this year by previous years. Just sayin'.

Now we just need energy stocks to start showing signs of life and I'll be happy. In fact the fact that energy continues to slump in the face of ISIL (or ISIS) taking over oil fields in Iraq is somewhat troubling, from an oil bull's perspective. We'll see.

Happy Monday, good luck, and good trades. 

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