Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Edge Lower
By: Chris Mullen, Gold Seeker Report

Trade Wars, Tariffs and The Peg
By: Craig Hemke

Trump’s Backdoor Power Play to Rein In the Fed
By: Stefan Gleason

The beginning of the end of the dollar
By: Richard (Rick) Mills

Gold: A New Trade War Weapon?
By: Stewart Thomson

Lehman - Ten Years Later
By: Andy Sutton and Graham Mehl

There will be warnings!
By: Steven Saville

Is This Just the Calm Before the Storm?
By: Frank Holmes

Gold Bulls Have to Wait
By: Arkadiusz Sieron

Gold Resource Corporation’s Alta Gracia Project Returns 10.30 Meters Grading 1,052 g/t Silver
By: Gold Resource Corporation

 
Search

GoldSeek Web

 
The Upside Potential in Junior Gold Stocks


 -- Published: Friday, 15 July 2016 | Print  | Disqus 

By Jordan Roy-Byrne, CMT, MFTA

Our research continues to argue that the current, record rebound in gold stocks will continue. Every time we’ve predicted a correction, the weakness in the sector has been only a fraction of what we expected in both price and time. New bull markets that follow epic bear markets typically show exceptional strength in their first year. This bull has been no different. Thus, we expect the strong performance to continue. Today, we share a few reasons why the junior sector is poised to outperform in nominal and real terms.

Juniors typically outperform once the new bull is established and metals prices are trending higher. The large cap miners perform best at the very beginning of the new bull. Later on, their performance in relative terms (against metals and juniors) weakens. Naturally, once the trend is established and sentiment improves, investors take on more risk. That benefits the junior sector. Moreover, that point time is when larger companies have the financial strength and optimism to acquire the smaller or junior companies. That is another positive for juniors.  

The current rebound in juniors as compared to the past still has plenty of upside potential. Take a look at the bull analog chart below. My junior gold index currently contains 18 companies and has a median market capitalization of ~$350 Million. It has been reconstructed several times dating back to 2000. While the index has already gained 200% in the past six months, if it follows the previous two bull cycles it could potentially double in the next seven months and then double again after that!

July152016JrGoldBulls

Junior Gold Stocks Bull Analog

The junior sector should see an increased benefit if $1300-$1400 Gold becomes a floor and Gold continues to rise. The weekly Gold bull analog below shows that Gold’s recovery has been following the weaker of the two analogs. If that continues, Gold could retest its all time high by the end of next year!

July152016GoldBullswk

Gold Bull Analog

Be advised that no one can predict the future and these are projections based on a limited history. That being said, we believe the fundamentals for the junior sector have never been better and there is a strong precedent for the sector to go gangbusters in the years ahead. We did not even mention the full blown mania of the late 1970s and the mini-mania that occurred from 1993 to 1996. In short, we believe the precious metals sector continues to offer upside potential but that the junior space both in real and nominal terms offers the best risk/reward potential. For professional guidance in riding the uptrend in Gold, consider learning more about our premium service including our favorite junior miners which we expect to outperform in the second half of 2016. 

Jordan Roy-Byrne, CMT, MFTA

Jordan@TheDailyGold.com


| Digg This Article
 -- Published: Friday, 15 July 2016 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2018



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.