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Going for the Gold

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When will gold get going?

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Is it time to go for the gold? Recently, I've received numerous requests from Minyans to take a look at the technical picture for gold and silver and related stocks. Since you asked...

(All charts courtesy of Dorsey, Wright & Associates.)

This long-term chart of gold shows why I am long-term bullish on gold, though concerned about the near-term prospects. Essentially, gold could fall to 400 and the structural uptrend would remain intact. But this consolidation could take months to unfold.



The chart of Newmont Mining (NEM) is impossible to like. The stock violated its structural trend from the 2002 lows back in April, and has since been consolidating just below that former support (now resistance). While the metal itself has been making lower highs from the December 2004 highs, NEM failed in November 2004 to reach new highs, a bearish divergence in my view.

Newmont Mining Corporation (NEM)



Two views of Pan American Silver (PAAS), below. The first is a longer-term chart showing the full context of the recent move higher. The second shows the recent short-term technical improvement, but put into a longer-term context, my enthusiasm for the stock is rather diminished.

Pan American Silver Corp (PAAS)

Pan American Silver Corp (PAAS)


Looking at other stocks in the group, BGO, GLG, PDG, most look identical to NEM, having violated the same long-term trendline from 2002 lows. The exceptions are some smaller Canadian and South African stocks, which proves the old adage that there are always stocks to sell in a bull market, and stocks to buy in a bear market. This is not advice, but my focus is on the metal itself rather than the stocks in the group.


Position in gold, silver.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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