With the recent move up in the prices of the precious metals, it looks like Big Money may be moving into the mining shares. In just the last few weeks many of the gold and silver stocks are up 20-40%.
According to Gene Arensberg at GotGoldReport.com:
In case one might have wondered if we can point to evidence of strong positive money flow into the miners, well, take a look below. We just don’t see this kind of powerful chart action all that often. It most definitely suggests a flood of funds into the miners which itself suggests that Big Money suspects a bottom has been made. We’ll see soon enough.
I have to say, sentiment in the mining shares is at an all-time low. While I realize Jim Willie and many other analysts such as Andy Hoffman do not like the mining shares (for justifiable reasons), I believe we will still see huge gains in some of these mining companies in the future.
When the revaluation of the precious metals finally arrives and the prices of gold and silver shoot up higher, the public will finally wake up. Unfortunately, physical metal will be hard to come by. Thus, the mining shares will be the next best thing.
That being said, the mining shares are not for gambling, but rather a place to invest “Surplus Capital” after an individual has a nest egg of physical bullion as well as emergency preparations to be sustainable in case of a disruption in the supply chain system.
It is hard to know how things unfold in the future. Many think BAU- Business As Usual will continue for quite some time, however I believe the U.S. Dollar and broader stock markets will run into trouble sooner than later.
You should only invest in mining shares with surplus capital that you can stand to lose. I know some individuals who are heavily invested in the mining shares with very little held in physical metals or bulk stock supplies. This is not a wise investment strategy.
Lastly, while peak oil will put a cap on global GDP growth, I believe the primary gold and silver miners will prosper for quite some time. I will be writing more on this issues in upcoming articles and Reports.
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