The above introductory comments are edited excerpts from an article* by Mary Anne & Pamela Aden (adenforecast.com) entitled Gold, Still Looking Good.
The following article is presented courtesy of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
The Aden sisters go on to say in further edited excerpts:
The Physical Metals
All the precious metals – gold, silver, palladium, platinum and copper – rose this past month above their respective 65 week moving averages (see Chart 1 below) for the first time in 18 months, and it’s all happening during a roaring bull market in stocks and a solid rise in bonds. This is a great first step!
The junior gold mining shares….have been leading the rise...and since juniors are higher risk than seniors, it makes them a good leading indicator when they begin to outperform.
[Senior] gold shares [as represented by the HUI] have now also risen above their 65 week moving average, as you can see on Chart 2 below.
Gold shares fell to their lows last December…and that low ended up becoming the head formation of a head and shoulders bottom…With the HUI index currently above its 65 week moving average, and near the neckline of the H&S bottom, it shows that a bottom is likely in and if the HUI gold shares index can now stay above 234, it will be off and running!
Gold Shares Outperforming Physical Gold
Gold shares have been rising more than gold during the past month. When gold shares are better it’s saying, risk is worth it because they’re more speculative than gold itself.
Note on Chart 3 below how HUI is just starting to rise more than gold… and, interestingly, this ratio tends to form a major low every 5½ years, and in each case, gold shares rise more than gold for several years.
With its leading indicator (B) now breaking clearly above an over 4 year downtrend, it’s showing gold shares have the potential to rise much more than gold this year and next. This coincides with the 5½ year pattern!
[Given the above] we recommend buying and keeping the shares, (as well as the metals).
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.gold-eagle.com/article/gold-still-looking-good (Mary Anne & Pamela Aden are well known analysts and editors of The Aden Forecast, a market newsletter named 2010 Letter of the Year by MarketWatch, which provides specific forecasts and recommendations on gold, stocks, interest rates and the other major markets. For more information, go to www.adenforecast.com.)
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