Gold stock bears

kaka1000

In early November we turned bearish on the precious metals with the expectation that the sector was about to begin a final plunge that would lead to a V shaped bottom. In our last editorial, we asserted that the bear market was in its final throes. Interestingly, the plunge in precious metals stocks may have ended in early December. Over the past several weeks the gold and silver stocks failed to break lower despite the negative sentiment and the prevalence of tax loss selling. While we aren’t sure if Gold has bottomed, we think odds are strong that the stocks have bottomed.

Our strongest argument is our bread and butter chart which displays all of the worst bear market in gold stocks. The current bear market is already the fourth longest and deep enough (64%) to be over. As we’ve previously noted, the three bears that lasted longer were only mildly oversold at this point in time.

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金宝