Thursday 31 December 2015

A fourth year of weakness

The precious metals - along with most other commodities, saw a fourth consecutive year of broad weakness. Gold and Silver saw net yearly declines of -$123.00 (-10.4%) @ $1060.20 (intra low $1045.40), and -$1.77 (-11.3%) @ $13.83 (intra low $13.62). Near/mid term outlook remains bearish.


Gold, monthly2, fib levels



Silver, monthly2, fib levels


Summary

Suffice to add, yet another year of pain for the gold/silver bugs.

It remains the case that the miners have kept on digging, even though prices continue to fall.

Lets get this quite clear.. there is yet to be capitulation within the precious metals mining industry. Until a significant number of mines are closed... prices are going to remain broadly weak
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Implications for mining stocks

If the precious metals do indeed remain weak for another 3-6 months (which seems a very realistic minimum), then the related mining stocks will be dragged lower... regardless of however strong the main equity market might be.

If Gold falls to $1000, then most mining stocks will lose another 10/15%.

If Gold declines to $900/875, then most mining stocks would implode by 25/30%.
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*I have eyes on over a dozen individual mining companies... but for now, there seems absolutely zero reason to get involved on the long side.

yours... still patient after four years.