Monday, 20 January 2014

Miners reviving

Broad stock markets are hesitating after the December rally. Over the week Nasdaq holds on to a tiny gain but the S&P couldn't keep up. Precious metals seem to be floating with the tide: both gold and silver were retreating, but rally back on Friday to end the week up marginally. Gold ends at $1254, (+0.44% over the week) while silver closes at $20.32, (up 0.74%).

Over most of 2013, poor precious metal gains and broad stock markets hesitating, would have sent miners sliding. However a different mantra seems to have taken the lead. The HUI index added 3.47% over the week, making HUI/Gold appreciate to 0.173. Whereas this is hardly something to be proud on (comparing where we started 2013), it's definitely up since the December 2013 low. It's not that most miners suddenly have turned highly profitable, but rather that investors simply are fed up with the doom scenario.
For now, miners are leading the recovery of precious metals. With the HUI miners index up 12.5% year to date, the absolute dog over 2013 must be one of the best asset classes these first few weeks of 2014. You find fresh graphs on the usual GoldMinerPulse page.

Selecting Explorers and Junior Miners
The  “contributor driven explorer and junior miner spreadsheet” was first introduced over two years ago, in October 2011. Provided with a benchmark section and a track record of a few months, it was time for an opening post on that list, titled: Selecting explorers and junior miners.

The HUI index has left the dreadful 2013 plunge behind and seems on its way to recovery. For the first time since quite a while, HUI also advances meaningfully relative to gold. So where does that lead our “contributor driven explorer and junior miner spreadsheet”?

Not too bad: we're even beating the HUI in its recovery. Last week we book an aggregate gain of 10% and cap weighed that adds up to 12%. We cut the loss to 32.63% and cap weighed that translates to 30.72%. Last week 17 list components are up against 5 down, with Miranda Gold unchanged. Over the long haul, only three components are up.

Yet many of our miners and explorers significantly cut their losses. The best pupils in the class rally well over 20% last week: Almaden Minerals, Continental Gold, Sandstorm Gold, Timmin's Gold and Tanzania Royalty Expl. were last week's top picks.

Sentiment turning
Am I the only ram boldly running ahead of the pack?  Apparently not, yet I felt the need to check who's on my side.  It turns out I am in rather good company, with men wiser and more experienced than I am. That includes quite a few investing professionals (and geologists) with a proven track record.  Just posting a few links should be enough to make my point:
  1. On junior market bottoms (from VRIC 2014)
  2. Rules of Thumb for Junior Mining Speculators:  A Light at the End of the Tunnel

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