Weekly Part 1: Is It Too Late to Buy Metals & Miners?
In reply to the question: Is it too late to buy metals now? The answer is time frame dependent.
Short-Term Trade (under 90 days)- Depends on you
Intermediate “Macro” Trade (3 months to 1 year)- Yes
Long (structural/secular) Term 5-10 years- No
We explain our rationale. Includes very recent analysis from Jefferies picks, JPM on miners, and Goldman on Glencore
Intro
Of particular importance to GoldFix readers is the mining sector. These days it is so small in market cap, that any money flowing into it will create outsized returns and exit risk. And the money is now flowing. The sector has shrunk so much it is relegated to the “Other” category on many stock platforms. But things are changing this year.
“Jefferies Loves Miners” was our story on that last week, and it has proven true. The link to that report is here. We reattached it at bottom as well.
So far being long metals and mining stocks has been a stellar trade from Thanksgiving on. We say “trade” because that is what it is.
BUY SEASON SO FAR
The time between Thanksgiving US and January 6th is Buy Season, and we are in it right now for Gold, Silver, and other metals. What is different so far this year, is the marked moves higher in mining stocks. Why are they moving now? The answer is grass-roots investor demand, the best kind there is.
That is in part a direct comment on bank analysts suggesting that clients put some money to work in those companies. This buy season, investors are replying with a resounding “Yes, buy some!” for a change.
MINERS LEADS METALS
In bigger picture investment cycles, miners will actually lead the physical commodity higher for all the right reasons. Silver futures leads speculative rallies. But Gold miners lead long-lasting runs.