Good News For Gold Uptrend Continue Until 2017

We have been predicting for months that the FED could increase not as aggressive asthe market was expecting. So, it has been long gold and mining stocks to believe that there is a reset in expectations for how fast the FED would raise would be bearish forthe USD and bullish for gold.

Good News For Gold Uptrend Continue Until 2017

While we are a huge step in precious metals so far in 2016 have already seen, I thinkthe gains are just getting started. The gold price has also blasted up throughresistance on both the 100-day and 200-day moving averages, a bullish sign.

RSI momentum indicator suggests that the current move higher may have recently become overheated. So, we saw a pullback towards 2016 uptrend line at some pointin the next few weeks. But I expect that the upward trend in gold to remain during the rest of 2016 and 2017.

Despite these impressive move in the gold price are mining stocks still hugelyundervalued, especially compared to the price of the underlying metals. The HUI togold ratio shows the relationship of gold mining stocks over time. Although there is a slight bounce from lows below 0.10, mining stocks near the most undervalued levelsin history. In fact, the index shows that mining stocks more undervalued now than at the beginning of the gold bull market at the end of 2000 or the depths of the financial crisis of 2008.

This suggests that there is huge upside ahead in mining stocks, even absent a huge step in the gold price. However, if the gold price above $ 1500 climbs or returns to the previous highs, I expect to see of astronomical returns by mining stocks. While manyfiles leverage 3 x to 5 x metal see the underlying move, I believe it best-in-breedmining stocks to keep in the portfolio of GSB, could see leverage in the range of 10 xto 20 x the gain in the price of gold or silver.

On the move higher in precious metals during 2016 suggests that we probably have seen the bottom of the current correction. The total debt of the USA has recentlymade a new record after topping 19 trillion and physical demand for precious metalsis very robust in the past year. So I expect the gold price higher in 2016 and mining stocks to generate significant benefits for investors who are brave enough to buywhile sentiment is still largely bearish.

The risk for gold bulls is that the stock markets strong, sign of the bounce andinflation the FED returns to an aggressive attitude towards the pace of tighteninginterest rates. This would probably re-ignite the USD rally, finally push the index above resistance at 100 and lead to funds flowing out of safe-haven assets like gold andback in stock. However, I see the chances of this scenario games in 2016 as extremely low. The USD index it has probably topped out, after not again break above resistanceat the level of 100.

In addition, gold has a history of rising along with interest, in a complicatedrelationship that few investors fully understand. Gold fell largely on the expectationsof the FED raising rates. Now that they have started and expectations of additional rate increases sharply fall, the sky is the limit for the gold price going forward and I expect that the huge amount of wealth to be generated by those positioned in the best-in-breed mining stocks.

I favor especially gold and silver companies that high grades, low cost, significant growth in the pipeline and seasoned management. Who have acquiring new projects in recent years deeply suppressed prices will be rewarded for running against the herd and skyrocket the value of their investments. Those are the companies we focus onacquiring the model portfolio Gold Stock Bull and we are confident that they are by a wide margin as the Gold bull market woke up from his sleep and will once againsurpass the cost higher.