Gold has had very long periods of boom and bust. Was last year’s 28% tumble the end of boom and beginning of bust?
In contrast, gold perma-bulls see higher bullion prices this year, just as they wrongly predicted last year. Who’s right?
Market prices always tell us who’s right and who’s wrong. And so far, gold is ahead around 4%, and gold mining stocks are up almost 15% year-to-date.
What Your Peers Are Reading
The Direxion Shares Daily Gold Miners Bear 3x Shares (DUST), which aims for triple daily opposite performance to mining stocks, skyrocketed 179% last year and was a star performer.
After such a significant decline for both GDX and GDXJ, a significant bounce was almost inevitable.
Understanding market psychology and being able to profit from it is important, especially in a disorderly and mood-driven market like precious metals.
Before the surge in gold miner ETFs began in late December, overly bearish sentiment signaled a clear profit opportunity in this beaten down sector. Were you ready?