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On Monday, I pointed out that gold is in store for some short-term pain. A temporary period of weakness for the yellow metal lies dead-ahead.
Now, I realize the most-zealous gold bulls don’t want to hear this. In fact, I’ve gotten plenty of “hate mail” as a result of that article. But facts are facts. You can ignore them if you wish. But you only do so at the peril of your investment portfolio.
Pragmatic gold investors will want to exercise some caution and stay alert for volatile swings in the yellow metal — both up and down. However, there’s a definite downside bias over the next few months.
That’s the bad news. But here’s the good news …
The near-term correction in gold, although frustrating to many readers, is setting up the market for a sizeable year-end rally. One that our E-Wave cycle model expects to continue straight into early 2018.
This rally will provide patient gold investors with a lucrative buying opportunity soon enough!
Here’s some even-better news …
Over the past few weeks, I’ve been seeing bullish relative strength in precious metals mining stocks, compared to the price of gold itself.
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That’s where the real buying opportunity can be found nearer-term.
The junior mining shares, in particular, likely bottomed early last month. Since then, the VanEck Vectors Junior Gold Miners ETF (GDXJ) has been carving out a bullish uptrend (see chart below) — even as gold remains under pressure.
Granted, our cycle forecast does call for another short-term decline for GDXJ; perhaps it already started this week. And the pullback could persist into mid-July.
But then, I expect another move higher for mining stocks going into the late July/early August time frame, as you can see above.
And to support our E-Wave cycle analysis, there’s a very good fundamental reason why the junior mining stocks should outperform gold …
Last month, I wrote about the rebalancing of the GDXJ ETF portfolio. And how it was putting the entire junior mining sector under added selling pressure.
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Well, the best news of all for fans of junior-mining stocks is that the GDXJ rebalancing was completed last week. This means the stocks that make up this index are no longer under indiscriminant selling pressure from Wall Street fund managers.
This should provide welcome relief to GDXJ, and boost its share price.
In fact, the last time GDXJ did a major portfolio overhaul like this,
the ETF soared 25% higher just one month later!
The GDXJ rebalancing act has created a wonderful buying opportunity in select junior-mining shares with rock-solid fundamentals that just went on sale. And I’m looking to take full advantage of this anomaly for readers of my Real Wealth Report with timely, new buy recommendations.
Good investing,
Mike Burnick
Mike Burnick, with 30 years of professional investment experience, is the Executive Director for The Edelson Institute, where he is the editor of Real Wealth Report, Gold Mining Millionaire, and E-Wave Trader. Mike has been a Registered Investment Adviser and portfolio manager responsible for the day-to-day operations of a mutual fund. He also served as Director of Research for Weiss Capital Management, where he assisted with trading and asset-allocation responsibilities for a $5 million ETF portfolio.
{ 26 comments }
I am a Real Wealth Report Reader Mr. Burnick. Now that juniors and companies within the
GDXJ portfolio have bottomed, you are telling us it is a good time to buy in select Junior Mining Shares. I am a subscriber.to RWR. WHAT SELECT JUNIOR MINORS SHOULD WE BUY NOW ONT HE CHEAP?
Many Thanks.
Steve Ettinger- New York.
Your chart looks like a decline from mid July to late August instead of a bounce???
What gives with all over the chart info???
Mike,
You’re hedging current remarks from previous forecasts. You need to address position
sizing, portioning, as well as timing and buying periods. If a member buys 3% of a miner at x date and it drops, how in the hell can one recover after fully investing? A great time to buy on the lows if you have cash.
So far, Gold Millionaire has been another disappointment. Larry told it like it is and provided more buying advice. I feel as if my lifetime purchase from you guys will be a big waste. You have advised not selling previous miners in the portfolio, and in the meantime, some are being crushed. Not convinced you really know how to play the gold market. It’s likelier we’ll see a miner drop and never recover. And in the meantime, your paid life members are getting screwed. You need to have a dynamic investing strategy!!!!!!
Thanks Mike sounds spot on!
Mike, just keep calling them the way you see them. This is what we need. Too many people telling folks what they want to hear while they are trying to sell them something. I respect your judgement. You inherited Larry’s banner, keep it flying.
My timing models suggest something completely different ! I think your model has timing issues …
her is my view::
gld turn (next 2 trading days) at 118 and going to 125 in 3 weeks.
Nugt bottomed at 29.50 will go up to 48 in 3 weeks.
jnug bottomed at 17 and will go up to 28 in 3 weeks
so lets compare notes in 3 weeks.
You should consider me for a “technical job”
if I am right.
I am convinced I am.
My timing models on non leveraged mining:
GDX bottom 21.50 during next 2 days.
during the next 3 weeks going up to 23.80
Wish I could believe all this technical analysis,but seen it go bad so many times.Agree that gold will appreciate in the future and that things are cyclical,but don’t know when or how much gold or miners will rise.I do know that ALL fiat currencies,in the history of the world decline and fall to zero,eventually.Just hope my life is long enough to see that happen with the U.S. Dollar.
Time to get rid of Larry’s bad habit and start putting vertical scales on the graphs you show.
Bob
Hi Mike,
Great article. Crude oil looks in a bad shape. How low do you think crude oil will go?
Do you have the name of the company in Texas that has a patent on a vaccine for cancer that I hear has already completely cured two people who had terminal cancer?
John Gronning.
MaryJane
I believe it was Bellicum BLCM and it was a bust. The announcement was already widely distributed and it went down the day of the announcement. Another pump and dump. Still it is a good sector and there are several companies competing for the most effective CD19 vaccine. JUNO/KITE/INCY/BMY/BLUE/NOVN/PFE/JNJ/GSK/CELG/ADAP ETC
Thanks for your help . . .We can use any professional help we can get . . .
Ken
After the US shot down a Syrian plane bombing targets considered our friends, Russia cut cooperative ties and says coalition aircraft west of a certain point will be considered targets. This increased threat of war should drive up the price of gold, etc. Especially if Russia carries through the threat. And there is always the Korean threat.
Mike,
When you say “a few months” and then a year end rally; specifically how many months is a few? There are only a few months left in this year
When does the euro stop getting stronger?
Thank you mike.
Gold will go up when China and the powers that be say it should go up. All these short-term forecasts and chart analysis work are really a waste of time. Chart analysis and short-term forecasts imply that there is no manipulation; but there is. Yes, gold will skyrocket but thinking that the market is a free market following trends is wishful thinking. Just know that gold will go up eventually.
gold is toast. the bubble popped at the end of 2011. gold will go all the way to a bottom. when nobody wants gold, that will be the bottom.
gold responds favorably to easing by the fed, but the fed has done the opposite and begun its tightening cycle. thus, the dollar will get stronger and gold will get weaker. the dollar bull continues, and the gold bear also continues.
The facts are the facts. Do you think there is manipulation? I Do. Do you think metals will go up? I don’t? If metals were going up it would have already! So, just hI think it is just a game, not a market. A cheating Shell Game, with the small investor sucked in to what used to be, that vanished, with manipulation, it is called, free markets.
Give Up and Go Home. The game is over in our life time. .
Gold and so-called precious metals represent a truly terrible investment. Its one step forward and then two steps back. People should realise that the world is in a continuous economic boom-cycle which renders gold totally obsolete.
Gold crashed in September 2011 when the clever people realised that all the brain-washing about how perilous the world economy was in was a mirage; gold has been rubbish ever since and will not move up in price because this is a continuous boom time for the world economy.
Mike,
You improved the chart for printing…Thanks!
Click the ENLARGE target then “right click” outside the chart display then “click” Print Preview then “click” Landscape icon then “click” Print….nice full page chart printed.
However, with out vertical scales on the sides…..the chart becomes worthless!!
Is that your intention??
Absolutely, there is manipulation. Metals will go where the Federal Reserve wants them to go. Higher metal prices would reflect the true levels of debt, unemployment, budget deficits, currency value, racketeering/corruption, global conflicts, etc.
I will not buy any more Gold/silver, just hold what I’ve got, unless the heads of the bullion banks manipulators are in jail and fined billions. The odds of that are zero as racketeers stick together.
The Fed owns our politicians who rely on free printed or taxpayer money to maintain their racketeering syndicate. Giving away hundreds of billions to special interest for .05 cents on the dollar from lobbyist bribes results in 20 trillion of debt and explains the income disparity of the elitist vs middle class America.
COMEX/SEC regulators sit on their hands as thousands of complaints of metals rigging go ignored. I would gladly trade my gold/silver holdings for Term Limits and a reclamation of our Constitutional Republic
Gold will have its day, its inevitable given the state of the world. Its a matter of being patient.