Today 50 year market veteran James Turk told King World News that the recent surge in gold and silver has them ready to blastoff to the upside. This upside blast will include the mining shares.
A New Record High For Gold Is Near
November 27 (King World News) – James Turk: Silver has cleared an important hurdle, Eric, and so has gold by closing on Friday above $2000.
Gold in dollar terms is not yet at a new record high, which is a target already achieved by most other fiat currencies. But this past Friday is only the third time gold closed above $2000, and this achievement suggests a new record high is near. Maybe we will see gold’s first monthly close above $2000 this Thursday, November 30th, which would be another sign of underlying strength…
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Surprisingly, there is virtually no enthusiasm. The total lack of enthusiasm is understandable to a certain extent. After all, there have been so many head-fakes over the past couple of years, and trends stopped dead in their tracks, it seems reasonable to question whether this current uptrend will continue.
And so far, the mining shares remain in the doldrums, particularly the juniors, which is adding to the scepticism out there. But that is what happens in bull markets. There is always a wall of worry that needs to be climbed, and over recent months, one big worry has been the divergence between gold and the mining shares. As gold climbed higher, many mining shares have fallen in price, widening the gap between the mining stocks and gold.
What investors need to do is look beyond the worries and possible head-fakes and instead focus on value. That’s what I see in precious metals and particularly the shares of companies that mine them.
Even more undervalued are the shares of the companies with mineral resources that potentially can be developed into profitable mines. They own projects, not mines, and therefore aren’t generating cash. These shares can be risky, but with that risk comes greater rewards for those companies that develop their property into viable mining projects.
The upside potential of the shares of gold and silver mining companies is clear from this chart of the HUI Index.
HUI Gold Mining Stock Index Reverse Head & Shoulders Pattern: READY FOR LAUNCH!
The HUI is forming the huge head-and-shoulders bottom that we spoke about a week ago. The HUI was up 8% on the week and is now very close to breaking above its neckline at 230.
The probabilities are that when this 230 resistance level is hurdled, the HUI Index will look like a rocket taking off from a launch pad. The same thing goes for silver when it breaks above its neckline at $26. That level is still $1.70 (7%) away, but take a close look at its chart.
Silver Also Has A Massive Multi-Year Reverse Head & Shoulders Pattern: READY TO LAUNCH!
Not only has silver broken above its 7-month downtrend line, it has also hurdled overhead resistance at $24. That strength reflects the momentum that is building, which I think will take silver to $26 soon, possibly this week if history repeats. In the 202 weeks covered in the above chart, there were 15 weeks when silver gained 7% or more. So it could happen again this week.
The significance of $26 cannot be overstated. It marks the neckline of a huge H&S pattern formed over the last 2-1/2 years. It represents months of accumulation that has put physical silver into very strong hands of people who understand silver’s deep undervaluation. The gold/silver ratio is still extremely high above the 80/1 ratio.
The precious metals are heating up, Eric, and December is shaping up to be a bullish month for gold, silver, and the mining shares. I expect December’s momentum to carry into the new year ahead, which is looking like it will be a great one for precious metal bulls. ALSO JUST RELEASED: Greyerz Just Warned The Death Of The Global Financial System Is At Hand CLICK HERE
Just Released: Gold & Silver Breakout!
To listen to Alasdair Macleod discuss why next week may be a huge surprise gold and silver investors around the world CLICK HERE OR ON THE. IMAGE BELOW
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