The Patience Of Gold Bugs
Gold and silver have been quite active these past few months with gold hitting prices around $1800 USD. With the pandemic, the money printing, talk of recession/depression etc. there has been a renewed optimism in the precious metals and we are now seeing the results in share prices of the mining companies, especially the juniors that have good quality projects on the go.
The saying, "patience is a virtue" comes from the poem called Piers Plowman, created sometime between 1360 - 1387. The original author of the quote is William Langland. For all of us old gold bugs who have been long on mining stocks and metals since the 2011 highs we know and understand patience and now these last few months are kind of like glory days, whereas we are finally being rewarded for our patience.
As you can see from the chart above the GDXJ - junior miners index is now at YTD weekly highs for this year and believe it or not, we've got some analysts out there who are saying these mining stocks are topping out. Taking a look back 10 years and you can see this market has another 200-300% to run before it gets back to it's old 2011 high and besides, who says it can't break out past that old high as you can see by the chart below that goes back to 2010.
The junior market is just getting noticed in reality. The market is starting to see interest from various funds and investment houses as well as mergers and buyouts taking place. Major miners with lower cost gold production are seeing better cash flow and are ready to to add more reserves to their holdings and are on the hunt for those juniors with good numbers in the ground. Going by the above chart, the junior mining market is just getting started the way I see it. 2020 and beyond should be good years for all us old gold bugs. Yes .... patience is a virtue! There's really nowhere to go from here, but up.
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