Mining Sector Ideas

[gfp927z]

Another question concerns the metals. When do they start moving like disaster hedges again?

Analysts point out that when the Iran war hit and stock markets began to crumble, the big institutional players had to close out margin positions and raise liquidity. The metals were up so huge over the past year, that was a logical place to take profits and get the needed liquidity, The process fed on itself, and gave the metals bigger losses that they would otherwise have had.

The question now is at what level does the 'disaster hedge' aspect return to dominate? Fwiw, I figure the bullion ETFs need to at least reach their 200 MAs. That is what the institutional players are likely watching. The miner ETFs (GDX, SIL) have gotten close to their 200 MAs, but the bullion ETFs (GLD, SLV) still aren't that close. But the metals had such a massive runup, it's hard to pick an ultimate bottom based on charts. That said, reaching the 200 MA would be a good place to start at least. Fwiw, I decided to forget about trading the metals ETFs, and will just continue to hold the core LT allocation (28%).



---