Mining Stocks Historically the summer months have been known as the summer doldrums when it comes to gold, silver and the markets in general. Traders and other Wall street types are off on vacation and trading volumes seem to fall into a slump. However this year there could be some issues that just might allow gold and mining shares rally a bit.
Aside from an economy that is falling apart in North America, along with twindling retail sales and lots of unemployment, the Brexit issue is something to contend with. For those who are not sure what Brexit is, well it’s like a referendum and vote to to see if Britain stays in the EU. If they vote and decide to leave the EU it could spell bad things for the Euro and Europe in general along with uncertainty in currency markets. We all know how Wall Street and bankers like uncertainty. LOL
So from what I read is that if Britian does decide to split from the EU and the currency markets roll over and everyone is running for the exits and looking for safe haven investments, then I think gold will really shine. And I’m not alone on this thought either. George Soros the billionaire is loading up on gold as well as other big fund managers. Some of the biggest hedge funds on Wall Street are buying gold so they know that there very well could be a situation where the “SHTF” and they are wanting to protect their wealth and of course increase it also by making some good profits. If all this should happen later this month and Britian decides to split, then July could very well be an excitiing month for gold and gold mining stocks in general. In fact after seeing gold sell off all last month’s gains, the $30 pop last week could very well be a sign of things to come. Getting caught short on a $30 pop is going to hurt and I think tis is a reason why gold is right back up to where is was before geting sold off last month.
Another thing to look at and concider is the new gold exchange that has opened in Shanghi China. This gold exchange is a phyisical gold exchange. Not a paper gold exchange like the Comex is. Recent articles point to the fact that the Comex has about 140 ounces of paper gold trading for every 1 ounce of physical gold in storage. If everyone who has a piece of paper stating they own X amount of gold and decide to take delivery of that gold, the Comex could very well default. That goes for the silver market as well.
Speaking of silver, there seems to be a lot of jabber on various sites about a silver short squeeze coming soon. There seems to be tons of reasons why but I heard all this before. It seems we have been reading about a triple digit silver for the last 5 years and my theory is this, let’s see if we can get silver back to $20 first before trying to explain why silver will be $100 plus. That’s my take on it. Like wise with gold, let’s see if gold can get back to the old high of $1900 before trying to reason or explain why it is going to go to $5000 or higher.
Either way, all this make for interesting reading and pondering and wishing especially if you are a gold bug. So for the first time in a long time, this could be a summer of a rally instead of the summer of doldrums. For those who follow junior mining plays this will be good to see some stocks rally too.
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