Gold stocks breakout, gold to follow
A move in gold to $1,400 per ounce would fall in line with history. In the chart below we compare the current rebound in Gold to its rebounds following major lows in 1976 and 2008. If gold rallies to $1400/oz in the next few months then its recovery would be in line with those previous two recoveries.
After consolidating in bullish fashion for a good five weeks the miners appear to be starting their next leg higher and this should eventually propel gold higher. The toughest time to buy is after a market has already had a strong rebound, following a nasty bear market. Investors and pundits alike subconsciously refuse to believe a major change has taken place. Gold stocks endured the worst bear market in 90 years. Of course, there will be fear that it could reassert itself at any time.
However, the action of the market is clear. Gold stocks are breaking out and could be headed much higher in the near term. Consider learning more about our premium service including our favorite junior miners which we expect to outperform in 2016.