BMO Junior Gold Index ETF (ZJG.TO)

Similar to GDX-N, is the Junior gold index in Canada. He does not think gold will take off in a big way until we have inflation.

Strictly a trade. The divergence has become extreme against the TSX-T. When we get these extreme oversold levels he buys it for a trade. Give it three months and get out when it starts to spin its wheels.

This is having a great year, but he would probably want to highlight something with respect to junior gold names. A lot of people didn’t realize or notice that the Supreme Court ruled on the side of First Nations regarding treaty lands in BC. Because of this, you have to be very careful of what you own in your portfolio. He does like gold. It is a “make or break” moment for the price of bullion, but we’ll see what happens going into the fall.

Seasonality until October is positive. The shorts got a big squeeze last week after an announcement. Thinks there is another dip below $1200 in gold to come at some point. This is a range trading scenario for some time to come.

Junior golds had a difficult time with financing over the last few years. Gold needs to break out. We need inflation to come back and he does not see that in the next 2-3 years. Uranium has been beaten up silly and would be a much better holding.

The Junior gold sector has just been crazy. In September half of the golds on the venture exchange had $250,000 or less on their balance sheet, which means there is going to be a lot of bankruptcies and mergers. All this depends on the price of gold. It’s a sector where somebody can make a lot of money, but you have to really choose well.

(A Top Pick March 13/13. Down 25.64%.) He was early on this. Believes the long downtrend has been violated and we are at the bottom.

Rather than big producers, he wants to have juniors. Instead of stock picking, he prefers a basket. 2012 Summer low has been violated on this, but bullion did not so he is anticipating that this will rally above the 2012 low and get going. You may want to wait until this gets above $13.

Has never been a gold bug. Thinks that if we were going to have $5000 gold, it would’ve happened years ago. If big producers are having trouble, and they are, juniors are even worse. Expect golds will come back once people are willing to take more risks than they have been to date.