I make the point in the title because the real fundamentals that matter for the gold stock sector must be in line at the beginning of a real bull phase or bull market for the sector. I make that point with the example of Q1 2016, when a very powerful gold stock “launch” erupted but in Q2 of that year we (NFTRH) were already advising a degrading of those fundamentals. A public article I wrote referenced this on May 30, 2016.
What had happened in 2016 was that gold bottomed first, followed by the miners and silver. But then the whole raft of cyclical assets (commodities, stocks, etc.) bottomed and turned up. A cyclical party soon regenerated and the counter-cyclical gold stock sector was sent back to the hell it came from.
So again let’s take a look at our visual that roughly represents the correct macro backdrop for a bullish fundamental view on gold stocks. The larger the planet, the more important the fundamental aspect. Gold/Commodities should be a somewhat larger planet but work with me here. 🙂
Add in the important component of the Fed and its increasing odds of 2019 rate cuts and well, you’ve got the right backdrop for an undervalued sector (as we’ve been noting for months in NFTRH using unique comparisons of the gold/commodities and gold/oil ratios to the HUI index) to finally gain traction in the eyes of the wider investment community.
Hence we noted the launch in this NFTRH subscriber update (now public) on June 3rd. Check out the entire post, but below is an excerpted bit. Continue reading "Gold Stock "Launch" Is In Line With Fundamentals"