Today is a good day to buy GRY.ASX because gold is about to reach a critical juncture; the closure of an ascending wedge, which will either see gold fall back, or mount a rally. Gold traders will be watching which way gold goes. Several times over the last month, gold has met resistance at the $1400/oz level, so traders will be looking for a sustained break and support above that level. This will of course be a compelling reason to buy gold stocks. Now, I'd buy today because if there is a $50/oz breakout, gold stocks will probably open 20% up, and they might not be sold off. If you wait for that, then you should wait for a sell off.
If I'm wrong, then you just acquire more at a later date when the stock finds a lower support. At the end of the day, we are interesting in tangible gold in the ground, massively discounted, so we are paying a patience game, waiting for the day the emerging miner will realise that revenue. We don't need to be right on the downside since the stock is already massively oversold, even if gold goes to $800/oz, the market cannot sustain prices that low, as nearly all mines would close. This is the value of mining stocks. The only risk is collectivist governments.
If I'm wrong, then you just acquire more at a later date when the stock finds a lower support. At the end of the day, we are interesting in tangible gold in the ground, massively discounted, so we are paying a patience game, waiting for the day the emerging miner will realise that revenue. We don't need to be right on the downside since the stock is already massively oversold, even if gold goes to $800/oz, the market cannot sustain prices that low, as nearly all mines would close. This is the value of mining stocks. The only risk is collectivist governments.
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