While routinely following the precious metals as one of many sectors in NFTRH, we have mostly left it alone with respect to public writing over the last few years. That is because it is in a bear market and since I am not a slick short-term trader, I have felt it is best to mostly just let it play out to the bear’s will without overly active involvement.
But several indicators have us on alert that 2016 is going to be the year that the bear ends in gold and gold stocks. So why not publicly discuss the shiny rock a bit more in anticipation? I am still 100% in line with the value aspect of a monetary metal that is historically sought after in times of doubt about (Central Bankers’) ability to manipulate the global macro backdrop as desired and to positive effect over the long-term.
A bear market exists to clean out the excess from a previous bull market and though some gold bugs have a hard time admitting it to this day, the sector needed to be cleaned out. It was readily obvious in 2011 when first silver and commodities blew off and blew out, and then gold got driven too high, too fast on Euro Crisis fears and masses of monetary refugees did the “Knee Jerk” into the metal that was supposedly going to save them from the evils of Central Banking gone wrong. Ref our warning:To the Newly Minted Gold Bugs…
“This article will not discuss the obvious contrarian signals that are implied by the public’s entry into the realm of gold, as the barbarous relic is now ‘channel busting’ up, but shows no signs of waning momentum. We will just warn that at some point, momentum always slows and the market in question, always corrects; at some point. For reference, see silver earlier this year.”
I did not predict a bear market. That was confirmed (and well respected) later. But in the summer of 2011, it was obvious that the gold sector was not only due for, but in need of a cleaning. Well folks, that is the good news! We gold bugs have been deep cleaned, buffed, waxed and are just about ready for prime time, hopefully much wiser and more humble than before. The bear market has been a good thing. Period.
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