HomePublicGold Price Action and what it means

Gold hit a 52 week high in trading yesterday, marking the first time since 2011 (5 long years ago). So what does this mean. For the gold miners…everything. They have reduced their cost bases down over the last few years, the cost of material and energy is cheaper, and gold is higher, and appears to have bottomed last December. That means gold miners profits go up, and therefore their share prices.

Note in the chart below in the top section the out performance of GLD vs SPX equities. Also note the SCTR reading of 98.5. This means as an asset class, its outperforming 98.5% of other assets and sectors, at this point in time. Note the price sitting just above support today. This is a very bullish chart folks.


Here is a concern of a new member, which I also want to address:

“Owned Golden Phoenix a few times myself. LOl. I have a question and I’m unsure how to ask Spock without putting him on the spot. Was curious if you guys had discussed the idea of the massive waterfall drops we saw in the miners several years ago. It was those treacherous drops that seemed to come out of nowhere to destroy my earnings. Do you know if his system will give us any warning? I can be tried but can’t afford to start over again. Maybe you can see if he could give us a little insight into how his system will respond. I am so tired of being tried and riding out these corrections. I have high hopes for our miners. I completely believe they will be the right place to be at some point. Just hard to give so much back.”

First of all, I would never recommend anybody to buy a company like Golden Phoenix. Only the best of the best gold and silver miners are used for trading, based on fundamental criteria including balance sheet strength, consistent earnings, strong management and good projects. Before considering a company, I speak with management, in order to help validate the company and its upside potential.

Secondly, I am professional market trader, and mining analyst, who has been trading the global financial markets across all asset classes for over 30 years. The focus is on the gold and silver mining sector, where extreme value propositions are now being identified, after a five year grinding bear market in the sector. It was the second worst bear market in the sector since 1869, 150 years. So we are buying near the lows here, not the highs where the herd get in.

Thirdly, I use an extra-day trading system which generates trading signals, either long, short or flat, after the market close each day. The trading signals are generated from a proprietary matrix of indicators over several time frames, which have been extensively back tested and validated in real trading over the last 12 months, to generate consistent profits. If a strong exit signal is generated in a company, it gets sold. If the sector in general is on a sell signal, I hedge.

In short, by following the Spock Miners Matrix you will be invested in only the crème de la crème of PM Miners. Some will be buy and hold. Some will be traded based on constantly changing matrix signals . A Hedging Strategy using HGD or DUST, both gold miner bear ETFs, may be employed periodically to protect the core positions, subject to the matrix trade signals. Capital preservation is the prime focus. Profits are the cream on the cake.

I trust this puts some minds at ease.

Trade well and prosper. Spock

About Spock

Passive aggressive market trader and mining analyst, with 30 plus years experience in the global markets, across all sectors, with a focus on mining and precious metals resource stocks.


Gold Price Action and what it means — 9 Comments

  1. Thanks Spock

    I am in the same boat as this member

    had 50 miners in the go go years..some great but some pump and dump stinkers

    Then all of a sudden..husha husha they all fall down !

    This is a concern of all members here I am sure .

    Thanks for addressing this.

    • we WILL be tested. the right of passage has to be earned!

      having said that, the continuous gold spot futures contract does not have those big gaps. this is one of the issues with the GLD ETF, as gold trades overnight and moves up, so GLD gaps up at the NY open. i would not think all the GLD gaps get filled.

      A lot of other ETFs are like that. For example, EEM, unfilled gaps everywhere.

      • I tend to agree, I don’t put much weight in gaps with ETFs. In fact they are meaningless, however a lot of the stocks have gaps way down there. My guess is they get filled in about 6-7 weeks from now

    • Never owned it. Never will own it, or any companies like that. There are plenty around, that’s why due diligence first is done, before any of them get a foot in my door. I have seen every scam in the game. Rubicon was a good example. I saw that one coming months before they caved in.

  2. Spock, your statement from above “The focus is on the gold and silver mining sector, where extreme value propositions are now being identified, after a five year grinding bear market in the sector.” Also from above “In short, by following the Spock Miners Matrix you will be invested in only the crème de la crème of PM Miners.”

    Excellent, and this is what I expected when I signed on. Thanks

  3. The internal fear factor for individuals works at both extremes, nearing the bottom of the market and also nearing the top.
    Being scared of dipping one’s toes in initially because maybe its not the bottom?
    Being scared of selling and missing out on further gains towards the top.
    But building core positions in solid companies and being prepared to hedge to the downside if necessary should see little or no risk to your speculation on miners.
    This may/or may not be the final bottom in the actual gold price, but it already has been for many miners imo (ie. My ASX.MLX average in price is A$ 0.2369, my last purchase was 1st week May 2014 at A$ 0.205). I very much doubt they will retreat to that. Its currently at A$ 1.065.
    Personally, its not downside risk I’m worried about, for me its getting out near the top & taking the profits that will come.
    Hope I’m smart enough to pull the pin when the time arrives? Lol, only time will tell !

    • Lol, the Wife read my post and promptly reminded me of the 1:4 stock change in MLX that I had forgotten about? So forget the above.
      She kept harping on about how forgetfull I am at times, only then did it click its also Valentine’s Day here tomorrow.
      Anyway,instead of being away with the boys this weekend (fell sick) I’m off to the shop’s instead.

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