I've been watching gold markets closely for a while now...
I think it will be useful to include the occasional discussion of gold prices and gold market concerns in relation to the "big picture" in the banter here...
There's an active debate occurring now, about where the lows in the gold pull back will be... with a lot of the seasoned talking heads having decided that 1200ish is "about right"... with some of the younger guys wanting to one up them with picks down around 1000 or 800... An aggregation of supports around 1200 and the issues on the calendar might mean the old guys are right...
My own focus has been more technical with a focus on analysis and comparison of charts in the aggregate than it has been focused on trying to apply some other form of wizardry or mechanics in prediction... and, what I'm seeing is chart dynamics that are pointing to a low target in a range down around 1050 to 1150. The predictors I'm using aren't always perfect... but, they're second derivatives of sets of indicators that often do appear to be useful in revealing the targets being set by the "Masters of the Universe" who actually do the grunt work in manipulation of markets... so, take that for what it's worth...
The second issue is QEIII... and the timing of it... or, at least, the timing on which the discussion of it will be allowed to become the market focus... My read on that is two fold, with side issues... They've already started it up, in fact, with the deployment Fed $ become IMF $ to shore up the ECB... through a 10:1 leverage scheme intended to shore up the Eurozone's liquidity. Side issues are... that basically has Europe and the Euro now being defacto subsidiaries of the US and the dollar... as the Fed has essentially taken over setting interest rates and monetary policy for Europe... with far reaching consequences that no one is talking about. The rest... and all of this was already made public back in Sept/Oct... is that the domestic segment of QEIIII would be started up in January, maybe as late as early February... only after the European stimulus had a bit of time to kick in and smooth things out a bit, so that Europe wouldn't be a wet sock and weigh down the impact... Of course, when the QE gets the printing presses rolling... the market concern about inflation will be expected to drive gold higher again... and, with 2012 being an election year... there won't be much of a throttling back until the votes are decided... so, probably not until Sept/Oct.
Other technical guru's are saying that the next leg in the gold market should be "the big one" that carries gold up to $4500 or so, with only two 13% pullbacks on the way... <shrugs>... I don't have a reason to quibble with that.
Third issue is that there is already some "divergence" occurring in gold markets, and vastly more in silver... as a function of the FACT that the markets are failing, and faster now, with erosion in confidence following the maneuvers around the MF Global failure. The decline in metals prices, for now, is easing some of the pressures on the markets... (convenient... isn't it... but, surely not manipulation ?) but, a reversal in the direction of the trade is going to bring those pressures back... and there may be surprises that result. By "divergence" what I mean is that the "market" price of the metals is no longer an accurate reflection of the real price of metals, but is more a reflection of the price of paper that represents metal, not metal. Real metal costs more, now, than the paper proxies that are traded... whether that is seen in delays in delivery, or other factors... it is true that market participants don't value paper as much as the real thing. That trend is amplified in silver, where some producers are already starting to bypass markets to sell product direct to customers without using market facilities... and they are charging higher than "market" prices for actual physical deliveries of real metal. That trend is likely to accelerate, at some point... either causing a recognition event in the metals markets, or as a result of a market failure, when it is proven that the mass of paper in the market simply cannot actually be converted into physical.
All of that above is necessary to explain that mining stocks, and junior producers (explorers too, but not so much) in particular, are going to rally BEFORE the metals themselves turn the corner and move decisively higher... The reasons for that include the awareness above re the market issues... but also relate to the fact that the miners have underperformed the metals thus far in the bull market, and many are still significantly undervalued now relative to the value of their production at current prices... Proofs the market price for metal has bottomed should provide them additional fuel...
For Shining Tree Gold Camp companies ? There have been some SIGNIFICANT declines in prices... and a couple of the stocks are pretty significantly oversold now... well worth a close look as the new year quickly approaches... with another calamitous year on tap...
I'll try to study the cast over the weekend... and provide a rank order of those I think are ready to bounce hard when mining becomes interesting, again. My focus at this point is technical... I'll be comparing the charts, not completing DD on all these companies over the weekend...
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