Gold and Silver miners (Jr and Exploration)

[ThSeeker]

...All this gold-stock buying in recent weeks is just now triggering the most-important technical buy signal of all, the fabled Golden Cross! Golden Crosses are one of the most-powerful and most-widely-followed signals of new bull markets. They happen coming out of lows as a 50dma crosses back above a 200dma. As the white and black lines in this chart show, the first Golden Cross since early 2016 is triggering right now.

That last Golden Cross in February 2016 led to months on end of big capital inflows into the beaten-down gold stocks. This week’s second Golden Cross ought to lead to a similar outcome. Recent weeks’ major breakouts have just flashed an irresistible major buy signal to technically-oriented traders. Whether this is the second major upleg of last year’s bull or an entirely new bull, gold stocks are early in a major rally higher...

...strongly suspect gold stocks’ current bull will run for years, eventually pushing the HUI above its previous peak. That would take a total gold-stock bull of just 531% from gold stocks’ deep 13.5-year secular low in January 2016. That’s nothing by this sector’s standards.

During gold stocks’ last secular bull from November 2000 to September 2011, the HUI skyrocketed an epic 1664% higher! That made early contrarian investors including our subscribers rich. We only need to see a bull a third as large to propel the HUI back to new all-time record highs. And the gold miners’ fundamentals already support secular-bull-level gains, as evidenced by their latest quarterly results just reported.

Gold-mining profitability is simply the difference between prevailing gold prices and operating costs. In Q2’17, the elite gold miners of that leading GDX gold-stock ETF reported average all-in sustaining costs of just $867 per ounce. That was already $391 below Q2’s average gold price, pure profit. And at this week’s higher $1339 gold levels, those major-gold-mining profits have already ballooned to a hefty $472!

The smaller mid-tier gold miners of the related GDXJ junior-gold-stock ETF looked nearly as good in Q2, with average AISC of $879. That implies big profitability of $460 per ounce at this week’s gold prices. These fat margins coupled with the low gold-stock prices have left many gold miners trading at low price-to-earnings ratios today. This sector is wildly undervalued fundamentally, supporting a new secular bull market.

Thus odds are the major gold-stock breakouts in recent weeks are merely the beginning of a massive new gold-stock upleg. As gold stocks keep powering higher, more and more investors and speculators will want to buy in to chase those gains. Their capital inflows will push this small sector higher still, widening its circle of appeal to even more traders. Once gold stocks finally get moving, they tend to run for a long time...

full article:
http://www.marketoracle.co.uk/Article60169.html