Gold Stocks soar in Crashes – HM up 600% in the 30’s – NEM up 350% in 87 – wonderful charts prove it…
homestake1 Everyone knows that “buy and hold” works great during boom times. Boats in a rising tide, etc.
But during the last two great market crashes, buy and hold was absolutely disastrous. In 1929, investors lost two-thirds of their net worth…
But the gold mining company Homestake Gold (HM) skyrocketed over 600% during the height of the Great Depression…
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Then during the downturn between 1973 and 1974, buy and hold advocates saw their Dow and S&P 500 stakes lose almost half their value.
But gold mining companies like ASA blew up…
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ASA wasn’t the only one…
Gold mining giant Newmont Mining (NEM) made 350% returns in the midst of the crash of 1987…
Past performance is great, but how do gold stocks measure up in today’s climate?
Even though we’re a good 15 months into this crisis and a lot of people saw their 401(k) fall nearly by half, the answer is: gold stocks are still dirt cheap — and that’s not an exaggeration.
The largest and best indicator of gold miner stocks is the Gold Miner Index (GDM on the American Stock Exchange).
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GDM Point and Figure Double Top Breakout yesterday!
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Precious Metals report May 23rd
Gold had a boring, if mildly positive, day on Friday, as many traders left their desks to get a jump on the Memorial Day weekend, locking the metal up in a tight range between $950 and $960, leading to a finish at $956.50/oz., up $2.60. For the week, gold added 2.8%.
Platinum fell off in the far East, rebounded to the New York open, then traded choppily through the rest of the day, to little ultimate effect as it ended at $1153, up $4. For the week, platinum was up 4.7%.
Silver was also off in Hong Kong, but rose sharply in Europe, peaking at $14.81, then traded inside a 20-cent range for the rest of the day, closing in the middle at $14.69, up 14 cents. For the week, silver gained a robust 5.3%. (Click here for charts)
The precious metals did well, holding onto their gains for the week in light trading ahead of the holiday weekend. The usual suspects did their part to provide support, with oil rising and the dollar falling again.
Of the two, “The gold price is predominantly driven by the dollar weakness at the moment,” said analysts at CommerzBank. “As long as the dollar remains on the back foot, gold should continue to rise.”
As has been the case for the past seven sessions, with gold pushing higher, holdings in the Gold SPDR Trust, the largest metal-backed ETF, haven’t budged. That has some wondering why, but in the end GLD is still a stock, not physical metal.
Looking ahead, Julian Phillips, of Goldforecaster.com, is highly bullish, writing that, “Gold has broken out of its long consolidation and looks set to take on $1,000 again.”
Phillips takes on the historical question, saying that, “This time of the year the gold market moved into the ‘summer Doldrums,’ but the last two years has seen this seasonality fade as investment demand knocked away this seasonality. With Indian buyers virtually absent from the international gold market since October 2008 until April this year we could have expected ‘Doldrums’ during that time. Now their absence is unnoticed as investment demand took the reins of the gold market and looks like holding them. So expect those Trade Winds to blow during summer and make the gold market an exciting place to be.” Imo! Ex....
Kirkland gold output up 50% in first half - Kirkland Lake Gold has reported a “solid” second quarter of production.
The June quarter saw production of 329,770 ounces of gold, up 54% year-on-year and in line with the previous quarter.
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