Goldminers at generational lows GDX, GDXJ

B

blowingup2012

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Gold is at highs never seen before, but as the chart indicates, miners are just above the highs of the 80s/90s. Production levels are also hitting new highs and revenue has never been better at the miners. What gives? I think the miners are just unloved.

When traders put down their Apple, then they will move into another set of stocks. Sector rotation is just a matter of when not if...
 
Its going to be right until its wrong. Like in 2000, PGR and the rest of the insurers made lows despite having great fundamentals. Those who switched from tech to value in March of 2000 were handsomely rewarded.
 
This is puzzling and has caught out some smart money. I don't know much about the miners, but they have to be coining money now.

I have to say though, usually you are better off following the adage that "price is truth." These stocks are unloved for a reason. I just don't know what it is or how valid it is.
 
Miners precede the metal. Always. The trade is to put on a long term short on gold and, if you can find a way, a long term buy on the dollar; also a long term short on bonds.
Sooner or later it's going to crater, and when it does it will be either because of or at the same time as interest rates and the dollar go up.
 
GDX is in downtrend and I prefer to trade it down - i.e. I plan to short it as there is more way to go down. It can make some bounce from current levels but GDX and GDXJ are weak sectors in strong bull stock market situation. So only way to trade GDX is to short it or do not trade it.

Richard
 
People want the end product not the producer. Taxes, hedging, local rules and laws, pollution standards, currency risk and the possibility of nationalization are keeping the game as such.
 
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