Tuesday, February 3, 2015

Gold PDAC Charts -- Rally Into the Conference

Do you own gold stocks? The reason I ask is because the Prospectors & Dealer's Association of Canada (PDAC), the world's biggest mining convention, is only a month away. Usually, gold ramps up into that conference.

I'm not going to PDAC this year. But I thought I would post some charts of previous years' price action in gold around the PDAC to give you some context.

Let's start with the last GREAT year -- 2011.

You can see that gold ramped up into the conference. Boy, were miners excited. And after a brief rest after the conference, the yellow metal took off again. That brief pullbck in June was pretty much your last chance to buy before gold ramped up into the end of the year.

Pullbacks turned out to be No Big Deal, or NBD. They were buying opportunities. We all felt invulnerable.

Now, let's look at 2012.

Gold had taken a huge dump of nearly $100 right at the end of February, so everyone was nervous going into PDAC. But we'd seen bigger pullbacks, right?

And sure enough, as you can see on the chart, gold recovered nicely as the PDAC progressed. Hey, maybe this WAS the bottom!

 Little did we know that a slow parade of pain awaited us after that March peak. Gold basically peaked after the PDAC and never looked back. The big sell-off came in late-April/early May. It was a "holy $#@@!" moment.

Gold recovered into the end of the year. Still, it was a wiser and more wary crowd that went to PDAC 2013. 

Again with the February sell-off. But again, there was a nice ramp-up into the PDAC. So, things didn't look too bad. They actually looked pretty good ... until later in March, when gold took a massive dump. And then it did it again in June.

By the time 2014 rolled around, we were all building up plenty of scar tissue. Still, there was hope ...
Look at that ramp-up in early 2014, right into the PDAC and beyond. Then it kept rallying. Was this finally the bottom? I remember miners telling me that they were confident, super-confident, that this was the bottom.

But the post-PDAC peak turned out to be a Waterloo. More selling. More bloodshed. More pain.

That brings us to this year. You saw my charts yesterday. Gold is actually breaking a downtrend. I think gold is looking better than it has in years. The fundamentals are lining up, too. So, yeah, I've made bets on gold. But I'm not betting the farm on it, that's for sure.

And if you're going to the PDAC, give them my regards.

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