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We've Kept You One Step Ahead of Gold… and Others Are Starting to Notice
Longtime Private Briefing subscribers know that one of my favorite adages about investing is “Take the road less traveled…”
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If you're not investing in gold-mining stocks now, you should be.
Analysts at TIS Group reminded me last week that not only are gold-mining stocks very cheap now versus gold bullion, but this also happens to be the best time of the year to buy the stocks.
The gold miners' cycle usually bottoms in August and peaks in March, putting us just a bit after the start of the strong period.
That makes it buying season for gold-mining stocks.
The rise in gold miners during last year's buying season was fairly dramatic.
From Aug. 31 last year through the following 14 weeks, the Market Vectors ETF Trust(NYSE: GDX), which is comprised of the larger miners, was up 28%, while Market Vectors Junior Gold Miners(NYSE: GDXJ), comprised of smaller producers, was up 48%.
Members of my service captured a bunch of those gains. That was at a time when gold itself was up only 20%, but looking back that was when gold started its trajectory from $1,300 in November to almost $1,900 now.
Gold-mining stocks then went sideways in anticipation of the end of the U.S. Federal Reserve's second round of quantitative easing (QE2) at the end of June, but have now broken out again, as the accompanying chart shows.
Why would the miners improve?
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