I have been doing lots of research into the current gold market recently, particularly focused on the Mining Cycle Clock in relation to gold explorers/developers. Based on comments from many experienced gold investors, it is crucial to understand the cycle when investing.
Anyway, from a K I T C O presentation on their site today, I watched the video "The Juniors are Still not getting any love" with Nicole Adshead-Bell (after attending and presenting at the 2 big gold conferences during the last couple of weeks).
Summary comments:
- Gold is having a staller year, hitting several all-time highs, but equity performance has not matched expectations, particularly among juniors and developers. A select number of companies are doing well. Bell anticipates increased merger and acquisition (M&A) activity as companies seek growth opportunities, which would further investor interest in the resource sector.
- I think there's some bifurcation. I heard a very good description at the [Precious Metals Summit Beaver Creek] conference last week, which was 'we're in a stealth bull market.'" said Adshead-Bell. "We have gold at near record highs, and yet there's not the equity performance that one would expect when we've seen this very nice performance in the underlying gold price. We haven't got the marginal investor here, but for the first time I'm seeing generalists at this conference, and I'm getting incoming calls from generalists who are starting to look at the sector.
- Bell emphasized that commodity markets, especially gold, are cyclical, and understanding the phase of the cycle is key to making informed investment decisions.
I am observing the clock and what is happening in the gold equity market, and can see fundamental changes afoot, with M&A activities are significantly increasing. Major producers are on the hunt for gold resource (NXM has). It's looking very promising for explorers as the big boys are hungry to top-up their resources to ensure long term growth. I suggest "Watch This Space".
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