I don't know about you but I like my stocks to be moving up steadily and showing resilience , rather than a zig zag up 10% one day down 10% the next...TNY used to be that zig zag stock and now its ever steady as she goes.
Will gold stocks show that same steadiness at hand? There's a possibility especially when more people start including gold stocks as a hedge in their portfolio. There is also prospect that gold will hold steady as the equity market breaks new high - as insiders will take opportunity to include gold into their portfolio (like Mr Gandel and other high net worth individuals). As the Table below shows, gold in USD has inched up less than 1% over the last week but gold stocks have been performing a lot better - hence holding to just Gold ETFs limits your return as it has no leverage. And there are two reasons why I have included more weight in the gold producers rather than junior gold discovers- on average in the past, they have shown to perform better than juniors (thats because out of 10 juniors perhaps only 1 or 2 does exceptionally well and the rest may well fall by the wayside).
So in the interim while the markets are calm, its important that gold holds a holding pattern and I believe people including funds are using any period of weakness to get themselves more exposed to the sector.
KLA has been wonderful today and will be a difficult stock to buy cheap - any weakness will represent a good opportunity to buy into a well run well proven gold producer in one of the best mines in the world (Fosterville Victoria).
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