Here is one of the most interesting things about the gold sector right now.
August 21 (King World News) – Alasdair Macleod: “The thing that’s interesting, and I observe as an ex-stockbroker, is what’s going on in the mining shares. Anyone who is buying physical bullion is basically swapping fiat money for proper (real) money, and that’s a very different consideration than building a portfolio of stocks, which will presumably include some mining stocks. We have a very interesting situation because with this sort of standoff that’s going on in bullion we have a market of mining shares which is just drifting lower and lower and lower.
And when I look at the HUI (Gold Mining Index), from last March when everything took off, the 16th of March was the bottom at 143. The HUI ran up to 374 and it’s now come all the way back to 240. What is interesting is a retracement of 61.8% is what you would expect on a major correction of a very good impulse move, and that level is only 7 points below the current level of the HUI. That tells me that if this is going to turn soon then that’s the sort of level it’s likely to turn at. This retracement is enough to support a really good run in the mining shares. So that’s the background.
As to the current sentiment, obviously as you get to the end of a consolidation phase, sentiment amongst particularly smaller investors just gets worse and worse and worse. And I think that’s what we are seeing. The institutions are…this is an outstanding audio interview for anyone that is discouraged about the action in the precious metals space. To continue listening to Alasdair Macleod CLICK HERE OR ON THE IMAGE BELOW.
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