Larry Berman CFA, CMT, CTA
BMO Junior Gold Index ETF
ZJG-T
WEAK BUY
Apr 03, 2017
Junior gold miners. It is not linked to gold. They go up and down relative to the price of gold, but many don’t have production. He thinks gold is going to break out and will pop to $1350. It should retest last year’s highs. Junior gold stocks should test highs also. He does not like the speculative names.
When gold was testing $1050 he would say yes, but we have had the strongest rally in gold in several years. He thinks we will peak out at $1300 this cycle.
Juniors are pricing in gold at $1500. They have had a tremendous run already. They may lose momentum for a week or two, relative to the price of gold, and when that happens you should tighten up your stop.
More volatile than standard gold indexes. Done well on the year. Opportunity to sell. He has a negative bias toward gold in general, even in good markets, based on his past experiences. There's been some technical selling. Big resistance at $54. Be very cautious.
Not too thrilled with the sector as long as the USD is strong. July through October, gold usually strengthens. Could do a sector play. Pretty high risk play and wouldn't personally do it.
Everyone talks about gold as being a hedge against inflation, but it's not, and hasn't been for quite some time. He doesn't own any gold. Doesn't earn interest. Performance has been lacklustre. Most gold bugs tend to be in the hysterical conspiracy realm. Not an investible asset.
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Junior gold miners. It is not linked to gold. They go up and down relative to the price of gold, but many don’t have production. He thinks gold is going to break out and will pop to $1350. It should retest last year’s highs. Junior gold stocks should test highs also. He does not like the speculative names.