For weeks I have been telling subscribers that I have been waiting for a bullish reversal on volume to enter the precious metals market. That time may have come on March 18th when I sent out a report to my premium subscribers that gold turned bullish as The Fed was much more cautious about raising interest rates than the market expected due to the weakening of the overall global economy. This is the chart I sent them indicating gold was due for a major bounce and strong follow through accumulation.
Gold bounced off November lows on good volume on March 18th. Since then we have witnessed strong accumulation days signaling follow through. The US Dollar may have recently topped with heavy duty selling.
This may have been a classic double bottom in gold as investors realize that the Fed may not move quickly to raise rates as the overall economy is weak and unemployment remains high.
Oil is in a downtrend crashing to the low 40's and copper prices are near multiyear lows but that may change soon as well. I expect a major relief rally in commodities as the majority of investors who went to cash expecting a commodity crash on higher interest rates will have to panic back in as they realize that the exact opposite may occur.
Precious metals and commodities could be forming a major bottom as the Central Banks will be forced to keep the printing press churning devaluing the US dollar to keep pace with the moribund Euro and Yen. The global economy is under pressure according to these metals and most fiat currencies will continue to decline.
A highly valued US dollar and stock market is not a reflection of the underlying fundamentals and an economic recovery. Large cap S&P500 companies are soaring to new highs on the back of higher profit margins due to cutbacks and layoffs. The Fed continues to point to weaker economic data most notably from the shell shocked energy sector which has been a big driver of the recovery up until this point. This is suggesting that rate increases may be much farther off than most expected.
Gold is in the midst of a major rally, which may turn into a major trend change where capital flows from overvalued US stocks, dollars and bonds into commodities, precious metals and energy. Now it is time to look at the high quality junior gold miners. I like to see serious up-trends trading above its 50 and 200 day moving average.
These are some of my junior gold stocks that I own and investors are taking seriously right now as they could outperform the Junior Gold Miner ETF (GDXJ) in the 2nd Qtr . They are also sponsors on my website.
1)Many junior miners are trading with no cash and for literally pennies of a penny on the dollar. This junior in Nevada is cash rich with 3 open pit mines and a state of the art, fully permitted and constructed heap leach processing facility with a huge capacity. The plant could process ore from new high grade discoveries which the company is currently finding. They have been hitting some exciting drill results recently. The recent permitting, drill results and potential uplisting to a larger exchange could be a major catalyst for this company in 2015. I first highlighted this company when it was trading at all time lows, however, now it is trading above the 50 day moving average which has already crossed the 200 day moving average. Its a very bullish chart.
2)One junior gold miner that I have been very bullish on for many months is outperforming the GDXJ benchmark by a wide margin and is demonstrating incredible relative strength. It may confirm my prediction that this is one of the premier junior gold mining companies with takeout target potential. They just announced an updated resource which showed a major increase in the indicated category. The stock is trading above its 50 and 200 day which has already made a golden crossover. A breakout could be imminent as they are aggressively exploring one of the premier Quebec gold properties.
3)Production could begin in 2016 for this permitted junior gold miner in Colombia and dividends could come quickly as cash costs lead the industry below $600 an ounce with a high IRR of 52%. They just finished the debt financing and a $65 million construction financing. As soon as the equity capital is raised and as gold turns higher this junior could lead the pack higher. It already has been one of the top performers making the exclusive TSX Venture 50. Don't let Colombia scare you! It is the longest democracy in South America, the closest ally of the US in South America, has an established rule of law and have never expropriated mines before in its histroy. In addition, the Antioquia District would love to see the economic benefits which a mine brings including high paying jobs and increased taxes.
4)This junior just put out a maiden 43-101 gold resource in Nevada which was mostly ignored by the market and unfortunately the stock is lagging. I am not giving up and either is one of the insiders Mike Stark who continues to be buying the stock in the open market. Management is encouraged and believes they are at least on par with higher valued peers in the neighborhood. The company is finding about 1,000 ounces of gold per hole drilled. In addition, the mineralization is open in all directions at three separate resource areas.
5)This junior gold miner has been busy exploring its Nevada Project for a few years now. They have been targeting the high grade Yellowjacket Zone. They have attracted some of the smartest gold funds to invest in this project such as Tocqueville and Van Eck Funds. They recently raised money at higher prices. Its a great opportunity when one can buy at a discount to some of the top US gold funds such as Toqueville who have the top technical teams in the business. This junior gold miner has made new high grade discoveries which is currently being incorporated into an update resource estimate which could be exciting.
6)Although this stock is lagging due to the correction in gold it deserves to be mentioned to the investors looking for leverage as they own one of the largest gold resources in the world right in mining friendly Alaska. The asset needs higher gold prices however in a recent interview, Toqueville Gold Management, one of the most respected precious metals funds in the world identified this company as a real contrarian play and stated, "When people talk about five-or tenbaggers, this is a name that should come to mind. But it takes time."
Disclosure: I own all the companies mentioned and they are all website sponsors. This is not a recommendation to buy or sell securities. I am not a registered financial adviser. Conflicts of interest apply as I would benefit if these stocks move higher. Please do your own due diligence.
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