You may well turn out to be correct Knuckle, but here's another observation that could change the outcome:
Chris Puplava of Financial Sense this week raised a very interesting perspective with regard to the PM market:
Relating the market situation in PMs to the science of physics, he talks about 'stored energy' and 'kinetic energy'. Basically, he is suggesting that all of the potential energy for money velocity that we should have seen with QEs 1-4 has been 'stored', i.e., the energy from them has not yet been released. The money has not been getting out to the general economy and money velocity has been low. The banks have been reluctant to lend the money out; rather they have preferred to store it back on the balance sheet of the Fed where they very safely receive a small interest payment. So, to date there has been no 'bang-for-the-QE bucks'; therefore no increase in money velocity.
Recently, we have seen money going more and more into the more stable blue chip stocks (Johnson & Johnson and the like) and the general equities, and money has been coming out of PMs. The latter have been popular as a hedge against the expected inflation resulting from the QEs. However, the expected inflation has not arrived and so maney is transferring from the PMs. Some pundits are predicting much more to come for the DJIA, e.g.,
"Craig Johnson CMT CFA, a Principal and Senior Technical Research Analyst at Piper Jaffray. Craig sees the S&P reaching 1700 by years end, although he notes that investors are still skeptical and only reluctantly long. Craig sees the next great catalyst to launch the market higher will be the shift from bonds and bond funds into stocks, as interest rates begin to climb." http://www.financialsense.com/financial-sense-newshour
Chris Puplava (one of Jim's sons) goes on to make the point that, as the banks are encouraged by the rising economy to lend more, the 'stored energy' of all that QE money will be released and become 'kinetic energy'. Money velocity will pick up and that's when inflation really will begin.
That's when the new bull market in PMs will begin, he reckons. This observation/ argument makes a hell of a lot of sense to me.
In the meantime, I would expect that a few of the small number of gold stocks which have good hedging in place to do OK. The mere dozen or so PM stocks which currently have recently had some hedging include:
NOTE: The positions of the stocks in the above list need to be checked though in case their situation has changed or in case their hedging situation is not ideal for the current circumstances. So do your own due diligence. I am a rank amateur at this trading game, so take what I say with a grain of salt and, again I stress, do your own dilignce.
