While The Markets Forget Gold—Quietly Lay The Groundwork

While the precious metals and mining space posted a strong week of gains, sentiment among experts remains conflicted, with the vast majority of investors expecting further downside pain.

In weekend commentary, technical gold trader Gary Savage posted an interesting directional thesis on gold for the next few months, to be heavily influenced by the dollar and potential commentary issued by the new Yellen Fed. Minus a major repeat of market manipulation “al-la” the Goldman crash earlier this year, Gary expects gold may consolidate before breaking higher in December.

Also of interest this week, was an interesting commentary issued by Marc Faber, in which he notes that, “We have a lot of bearish sentiment, [and] a lot of bearish commentaries about gold, but the fact is that…prices are probably in the process of bottoming out here.”

Marc went on to further add that, “I think gold shares are also not terribly expensive at this point…If you buy exploration companies, you should buy the ones that have already raised capital and or that have sufficient reserves…because at this price of gold, very few projects will get done.” 

As Marc implied, companies most likely to survive and lead the next bull market will carry the attributes of high cash levels, zero debt, high-grade deposits, and the most qualified management backgrounds in terms of building wealth for shareholders.

Also observed over the last 60 days, is increasing “tensional” fear in the marketplace causing extreme sell-off “gaps” down in price in even the most qualified companies. However, as gold quietly creeps higher and the fear dissipates, these gaps will likely be remembered as the most profitable buying opportunities offered during the bear market.

Also of note if you haven’t had the chance to listen to them yet, are a few comments on gold shared by European Central Bank President Mario Draghi. These may be his only comments on gold made available to the general public, and are worth contemplating.

Here is that commentary:

YouTube>>>ECB Chief Mario Draghi Comments On Gold 

The last item of note, is that two companies contained in the Da Silva “Legendary Mine Builders” Index look to have just completed severe “fear-based” sell-offs as described above. They fit the criteria of being heavy holders of cash with very high-grade gold properties led by some of the greatest wealth builders in mining.

Once again as gold creeps higher and sectoral fear dissipates, these short-term “gap-downs” may be regarded as true opportunistic gifts offered by the bear-market.   

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