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TFC Commodity Trading Forum

Re: Gold Stocks/Haligonian/Trades *PIC*
In Response To: Gold Stocks/Haligonian *PIC* ()

I hear ya on the Gold stocks. The picture in the precious metal complex is quite 'messy' and conflicted currently to be sure, but what is clear is the significant underperformance of the stocks versus the metal over a very long stretch of time. At some point that will change, and perhaps we are nearing that time now given the extreme negative sentiment in the group. At least the contrarian in me suspects that is the case, thus why I'm maintaining a small initial position in HGU established near the late December lows when the Gold Miners Bullish Percent Index hit extremes that typically coincide with the start of significant rallies. We've seen a little uptick from there, but the precious metal stocks remain an underowned and still largely unloved group. Certainly no froth in this sector these days..in fact, we have a very healthy wall-of-worry in place..thus it seems that the risk to the upside is greater than the downside to me going forward, especially considering the low valuation of these stocks on a fundamental basis..in that regard they are very cheap, which isn't to say they can't get cheaper yet, lol...

Anyway, I won't press to the upside until we have further evidence that a real turn is in. Glad you pulled a few sheckles out of ABX at least. Can also appreciate your lack of enthusiasm for the sector here...not much to get excited about yet to be sure!