Dips in Gold Stocks are Potential Buy Opportunities


Author Larry Berman

Posted: 16 Mar 2012 reposted from etfcm

The TSX has been in a sideways chop for the past week, but under the hood, the financials led by insurance companies (they tend to do better when interest rates are expected to rise), have been very strong while the commodities and energy stocks have been very weak.

Of the large cap gold stocks, several have made new 52 week lows, which remind us that we are probably close to a buy point given the highly volatile chart patterns. The charts have been manic over the past year and despite gold bullions advance, gold stocks are getting no respect. Every dip to these prices has been a buying opportunity for gold stocks and this time should be no different.

Recall, the past two times the market was sure the Fed would need to raise rates because all was well, the equity markets tanked and gold took off. The harder part now is in the energy sector, where there is smoke there is fire. Governments once again are discussing releasing oil from the SPR. WTI plunged $2 in about 4 minutes after the announcement hit Reuters owing to the geopolitical risk premium driving the sector.

 

 

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