For those investors lamenting gold stocks for their being stuck in the mud for several months, it should come as a relief that we are now moving into the most bullish seasonal time of the year for gold. This 40-year seasonal gold chart shows that gold often sees final weakness just before August begins and then begins a torrid run of 8 to 10 weeks into October.
In a previous blog, we suggested we'd see a rally for miners into the end of September. Mining stocks did rise about 10% from the end of August until about Sept 22nd. Unfortunately for the bulls, heavily piled up short positions as evidenced through commitments of traders reports took their toll on gold, and the miners themselves were pulled under their support, toppling 18% to their recent lows.
In my Jan 27th technical review on silver and Silver Standard (SSO), I stated I was very bullish on silver and silver equities in part due to the strong relative strength of silver during the steep January stock market correction. Since that post, Silver Standard has risen about 50% and the price of silver has risen as much as 10%. Indeed, both gold and silver stocks alike have performed very well. Another junior miner Claude Resources (CRJ) which we covered in a Dec 11th technical review has also gained 50% since our review highlighting its relative strength.
