There are at least a dozen reasons why both Gold and the precious metals mining companies ought to correct, as outlined in this recent blog: http://markostake.blogspot.com/2010/10/die-hard-markets.html. But, at the end of the day, only market action itself matters, not "Marko's Take". (Gulp!)
In this morning's trading, the Gold Bugs Index (HUI) appears to have decisively broken the 525 zone that we outlined as the trigger point to begin its long awaited parabolic rise. The situation reminds me of late 1999 when the Nasdaq was severely overbought and overvalued and yet doubled in a period of just a couple of months. The difference, in this case, is that the mining sector is NOT OVERVALUED!
The kind of technical indicators discussed only handicap the race. None of them is flawless. It's important, therefore, to issue a mea culpa, accept reality as it is, not as we think it should be.
Given the increasing likelihood of an imminent upside explosion, what should investors do? Fortunately, a whole slew of junior miners are still at incredibly attractive levels. Among them are some favorites that we've written about in the past, such as ECU Silver Mining (ECUXF), Explor Resources (EXS.V), Seabridge Gold (SA), Hecla Mining Company (HL) and Avalon Rare Earth Metals (AVARF). We will update research on these firms, however, their merits can be reviewed by clicking the links, below:
If you wish to do your own research, you may wish to review this piece, which outlines some of the key risk factors to consider in selecting any mining company: http://markostake.blogspot.com/2010/06/some-considerations-for-selecting.html.
In terms of resources, you may wish to review this piece, which outlines all the places that are available to access http://markostake.blogspot.com/2010/09/information-is-more-than-power-its-gold.html.
Honestly, there are times when one prefers to be wrong, and this is one of them.
Time to make a ton of money!