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Buy Gold Stocks Now?

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  1. 1. Welcome to Commodity Trading Research Your premier site for fundamental and technical analysis for profitable Commodity Trading. For more info on Commodity Trading Research visit our website
  2. 2. Hi, My name is Justin and Im with Commodity Trading Research, today were reviewing our recently published article
  3. 3. Buy Gold Stocks Now?
  4. 4. Dumpster Diving: Is It Time To Buy Gold Stocks?
  5. 5. Over the past year Ive heard plenty of theories from mining stock analysts as to why investors should load up on gold stocks. theyre cheap
  6. 6. the industry as a whole is under valued mining stocks are drastically oversold from a long-term technical standpoint
  7. 7. But just when you thought gold mining stocks couldnt go any lower, they did just that.
  8. 8. Over the past few weeks the mining space succumbed to a viscous downturn. In fact, the Market Vectors Gold Miners ETF$GDX, a great representation of overall gold stock performance, has declined 23% over the past month.
  9. 9. No doubt about it, gold mining stocks are getting crushed. Take a look
  10. 10. As you can see, investors have been dumping$GDX without hesitation. Once multi-month technical support in the $19 area gave way, there was no stopping the ensuing downturn.
  11. 11. But with this gold mining ETF down 30% since mid-May, is it finally time to buy gold stocks? Only if youre quick. Let me explain
  12. 12. You see, despite trading at it cheapest price in nearly 7 years, $GDXis likely heading even lower over the next few months. Why? For starters, the price of thecommodity gold miners produce is falling off a cliff.
  13. 13. With gold breaking below important long- term technical support the past few weeks, the door is now open for additional losses. In fact, I wouldnt be one bit surprised to see the yellow metal trading at $1,000 an ounce before this year is done.
  14. 14. Heres a gold chart
  15. 15. Clearly, the tide has turned sharply in favor of gold market bears in recent weeks. The metal is down 6.75% in the past month, which puts it16% lower over the past year.
  16. 16. But heres the deal I wouldnt be surprised to see a snap back rally for gold and gold miners in coming days. Since these markets are drastically oversold from a short-term technical standpoint, the odds favor some degree of relief rally.
  17. 17. How do you capitalize on this situation? If youre quick, you may be able to catch a few points on the looming upturn. You could not only buy the aforementioned $GDX, but you can also catch some upside with the ETFs listed here.
  18. 18. However,dont fall in love with your long positions Once gold and gold minerswork off their current oversold condition, bears will likely send these markets to new yearly lows.
  19. 19. Keep in mind, theres a very important Federal Reserve meeting tomorrow. The highly anticipated eventshould give investors a better idea of when interest rates will start creeping higher. As it sits now, the analyst consensus is for a September rate hike.
  20. 20. Of course, rising interest rates is bad news for gold, which offers no yield. Trade accordingly.
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