Gold Stocks Look Set for Bullish Movement For a
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Posted On: 06/26/2024 5:18:24 PM
Gold Stocks Look Set for Bullish Movement
For a month now, gold miners’ stocks have been falling, chipping away at traders’ enthusiasm. This is usual for the metal around this period before it surges even higher, which means traders have the opportunity to add undervalued gold stocks to their portfolios before the metal’s price increases.
Up until mid-May, VanEck Gold Miners ETF performed strongly, increasing in price by more then 44% in under three months. Other stocks performed just as strongly, which increased overbuying. When the month ended, however, VanEck’s ETF fell from its 200-day moving average of 1.25x to 1.09x. This means that overbuying has reduced, and sentiment now has shifted to apathy.
The issue with gold rallying too quickly is that it attracts too many short-term buyers in a short period. This is normal, as traders often rush to chase gains when the prices increase significantly. The rush also exhausts capital firepower for purchasing stocks just as quickly though, leaving sellers in charge. This power afforded to sellers then allows them to force prices lower without counteracting buying. To prolong the longevity of the metal’s up-leg, slow and steady buying is preferred.
While gold has been overbought as the market headed into summer, the metal’s stocks have ground lower, with this month’s action being in the lower half. Latest figures show that VanEck’s ETF was down about 6% last week.
Analysts posit that how VanEck’s ETF performs over the next few weeks will reflect what the precious metal does. Historically, gold often bottoms in the final week of June as we move into July. They argue that the buying opportunity presented to investors now to purchase undervalue stocks may not last long because there are many bullish factors indicating that the metal’s demand may soon resume and at significant levels.
It is also expected that professional fund investors will see great performances in their Q2 results, which may attract new capital. Investors who are yet to add gold stocks to their portfolios may benefit from doing that right now before the metal’s autumn rally officially begins.
American stock investors may have not yet jumped on the bandwagon, but central bankers and investors in China have already began purchasing these stocks and are far from done. Some expect that once the stock bubble on artificial intelligence companies stalls then bursts, investors will shift demand to the precious metal. Those who have diversified their tech-heavy portfolios to include gold may gain even more.
The anticipated seasonal surge could favor those that have invested in gold stocks such as Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) and other major extraction companies in the industry.
NOTE TO INVESTORS: The latest news and updates relating to Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) are available in the company’s newsroom at https://ibn.fm/RGDFF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
For a month now, gold miners’ stocks have been falling, chipping away at traders’ enthusiasm. This is usual for the metal around this period before it surges even higher, which means traders have the opportunity to add undervalued gold stocks to their portfolios before the metal’s price increases.
Up until mid-May, VanEck Gold Miners ETF performed strongly, increasing in price by more then 44% in under three months. Other stocks performed just as strongly, which increased overbuying. When the month ended, however, VanEck’s ETF fell from its 200-day moving average of 1.25x to 1.09x. This means that overbuying has reduced, and sentiment now has shifted to apathy.
The issue with gold rallying too quickly is that it attracts too many short-term buyers in a short period. This is normal, as traders often rush to chase gains when the prices increase significantly. The rush also exhausts capital firepower for purchasing stocks just as quickly though, leaving sellers in charge. This power afforded to sellers then allows them to force prices lower without counteracting buying. To prolong the longevity of the metal’s up-leg, slow and steady buying is preferred.
While gold has been overbought as the market headed into summer, the metal’s stocks have ground lower, with this month’s action being in the lower half. Latest figures show that VanEck’s ETF was down about 6% last week.
Analysts posit that how VanEck’s ETF performs over the next few weeks will reflect what the precious metal does. Historically, gold often bottoms in the final week of June as we move into July. They argue that the buying opportunity presented to investors now to purchase undervalue stocks may not last long because there are many bullish factors indicating that the metal’s demand may soon resume and at significant levels.
It is also expected that professional fund investors will see great performances in their Q2 results, which may attract new capital. Investors who are yet to add gold stocks to their portfolios may benefit from doing that right now before the metal’s autumn rally officially begins.
American stock investors may have not yet jumped on the bandwagon, but central bankers and investors in China have already began purchasing these stocks and are far from done. Some expect that once the stock bubble on artificial intelligence companies stalls then bursts, investors will shift demand to the precious metal. Those who have diversified their tech-heavy portfolios to include gold may gain even more.
The anticipated seasonal surge could favor those that have invested in gold stocks such as Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) and other major extraction companies in the industry.
NOTE TO INVESTORS: The latest news and updates relating to Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) are available in the company’s newsroom at https://ibn.fm/RGDFF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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