Something Is Percolating In The Gold Market

Investment Research Dynamics

A longtime friend/colleague of mine sent me a note tonight in which he said he thought something significant might be coming to light about gold in the next week or two.  There’s certainly some unusual behavior on the Comex, with Goldman taking delivery of 98,300 ounces last week (2.8 tonnes), the amount of gold cleared on the LBMA at the a.m. fix spiked up from an average of about 100,000 ozs per day to over 150,000 ounces, the Shanghai Gold Exchange saw the 4th largest withdrawal of gold in its history and the premiums on both physical gold and silver rose considerably.

It’s anyone’s guess what might be going on, but China is certainly accumulating an increasing amount of the Wall Street Journal’s “Pet Rock.”  And the Chinese seem to be unloading a massive amount of dollars/Treasuries.

If you think gold is getting ready for a big move, you should take some capital and buy some high quality junior mining stocks.  I only evaluate and invest in juniors that have several characteristics:  1) a 43-101 resource report demonstrating a significant deposit of gold/silver (or at least a lot of drill holes with “strikes” on a property that is situated in area with surrounding mines;  2) plenty of liquidity; 3) low-risk jurisdiction; 4) management owns a decent amount of stock; 5) ideally, but not a definitive requirement, the stock has a large cap miner with a significant amount of equity or a JV partner.

This stock has all five objectives plus it has significantly outperformed the GDXJ since Jan 1 – click to enlarge:

A major gold mining company recently bought 50% of stock this Company issued to raise capital in order to advance its projects.  I recently updated my research report on this company, which you can access here:

DE-RISKED JUNIOR MINER

I’ve added a technical analysis supplement to the report on this stock, which was provided to me courtesy the DenaliGuide’s Summit blog, which accompanies access to a mining stock and stock market technical analysis subscription service. I highly recommend both.

The report on the stock above is available individually for $30 or packaged together with another one of my favorite, highly undervalued junior mining stocks for $45 (for two reports):    TWO REPORT SPECIAL  – Click on the image: