Looking To Buy Gold Mining Stocks? Check These Out…

| April 23, 2015 | 0 Comments

mine helmetsGold Is Subdued, But Gold Mining Stocks Are A Different Story…

Gold has been a real snoozer the past few weeks…

The yellow metal is stuck in a relatively tight trading range around $1,200 an ounce.

Of course, this tight price action comes after gold made some big swings earlier in the year.

Take a look…

Gold mining stocks, a chart of gold

While it was certainty a roller coaster ride in the first quarter, the yellow metal is settling near the same price as it started the year… $1,200.

When will bulls return to the gold market? 

Don’t hold your breath.

While it’s likely the yellow metal trades out of this tiny multi-week range soon, there’s no reason to believe a large bullish move is upon us.  In other words, you can likely expect more of the same choppy, directionless price action in the near future.

Quite simply, there are few fundamental reasons for investors to get excited about precious metals right now.  The US Dollar is still in a strong uptrend, inflation is contained, and most economic data points suggest the US economy is holding strong.

With that said, it’s important to note the outperformance of select gold mining stocks in recent trading…

Gold Mining Stocks Worth Watching!

First of all, the Market Vectors Gold Miners ETF $GDX is up 3.3% in the past month while the price of gold has essentially flat lined.  Clearly, investors are adding mining stocks to their portfolios despite gold’s lackluster performance.

And when you dig down into individual mining names, the performance results become even more inspiring.

For example, large cap gold miner Barrick Gold $ABX is up 15% in the past month while Anglogold Ashanti $AU is up 17%.

Not to be outdone, penny stock miners AuRico Gold $AUQ and Comstock Mining $LODE are logging 21% and 31% monthly gains respectively.

But the biggest gold miner gain from the past month goes to Entrée Gold $EGI with a stunning 155% rally.

As you can see, there’s some interesting bullish action in gold mining stocks in recent weeks.

And a year-to-date performance check reveals even more compelling information…

Of the 47 gold-focused mining stocks I screened, 58% are in positive territory since the start of the year.  What’s more, 23% of gold-focused miners are sitting on solid gains of 20% or more.

Meanwhile, previously mentioned Entrée Gold is up a whopping 137% year-to-date.

Here’s what’s really catching my attention…

These solid performance figures are coming in despite the fact gold is flat on the year!

What Does Strong Gold Mining Stock Performance Tell Us?

While there’s no question it’s still a stock pickers market, there’s clearly some considerable bullish opportunity in the gold mining industry.  It’s abundantly clear investors are buying into the producers with the most potential should gold steer to higher ground later this year.

Now remember, this industry was taken to the woodshed in 2013 and 2014.

A large swath of the gold mining industry lost at least 50% of their market cap as the price of gold plummeted from $1,600 to $1,200.

Not surprisingly, exploration projects that were deemed economical a few years ago were quickly mothballed or sold at fire sale prices.

Could the worst finally be over for gold mining stocks?

The strong year-to-date performance for over half of the industry is certainly a step in the right direction.

While I’m not bullish on the entire industry just yet, I’m watching select gold stocks very closely for further upside as 2015 progresses.

Stay tuned to Commodity Trading Research to find out which ones they are!

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

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Category: Natural Resource Stocks

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.