Wednesday, March 8, 2017

Gold Pulls Back -- Grow Some Cajones!

So I want to know the name of the supervillain, the evil mastermind, who has invented an amnesia ray. No doubt as part of a plot to conquer the world. Bwa-ha-ha-ha!

The fools! He'll show them all!

There must be an amnesia ray. Because every danged year, precious metals investors lose their minds -- or at least their memories -- about this time.

Sure, last year was a little different in the miners. But we were coming out of a 4 1/2-year bear market in gold. Of course things are going to be a bit screwy.

And as the old saying goes: History doesn't repeat, but it often rhymes. Right now, the market is dropping a beat set to the squealing of panicked investors in precious metals.

Never mind that gold does this every year. And gold miners do it nearly every year.

Here are two charts to show you what I mean. First, gold ...
(Updated chart)

Using closing prices, we can see that gold rallied starting at the end of 2015. It rallied on into the end of February. It then took a break in March, to the tune of a 3.65% drawdown. Then it jumped again in April, slumped into May-June, then bolted higher into July before slip-sliding lower again.

Then, this year, gold started rallying in December. That lasted until early February. Then the correction started. We've seen a 3.85% drawdown so far.

Boy, does that look familiar.

No, I'm not calling a bottom in gold. But we're a lot closer to the bottom than the top.

Now, let's look at gold miners.


(Updated chart)

Last year was weird. Gold miners didn't slump along with the metal in March. They only paused for a 1-week, sharp correction. Then they blazed their own path higher into May. That's when the big correction came. Then gold miners resumed their sprint until July. 

Does anyone remember any of this? The market sure acts like it doesn't. Buddy, that is one heck of a super-villain amnesia ray at work. We'll be receiving the super-villain's demands any minute. Let's hope we remember to pay the ransom.

The point is, we are closer to a bottom than the top. And I would prefer to buy things on sale, thank you very much, rather than pay top dollar.

So to all the nervous Nellies out there -- man up! Grow some cajones. Precious metals are not for whiny cry-babies. There's a reason for that: the rewards can be downright extraordinary. 

And now, now you get to buy the best miners, explorers and developers on sale. If we're really lucky, the sales prices will get marked down even more. 

The best is yet to come. Be ready for it.

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