Bird’s Eye View of the Gold Stocks

(Kitco Commentary) – Since last summer, investing in the mining sector has been akin to riding a mini roller coaster. Nevertheless, the weakness of the metals won out and are dictating the terms. A look at the bear market analog chart (see below) as well as a very long-term chart of GDM illustrates the coming risks and opportunities.

If you believe the gold stocks have not bottomed then this is the second worst bear in terms of time. A 65% loss at the December 2013 low could become 67% or 68% but probably not anything worse.

Hence, there is a growing risk of the miners falling to their December lows. Therein lies the opportunity. Only time will tell but that point could immediately mark a shift from risk to amazing opportunity.