While Wall Street stocks are priced for well beyond perfection, and gold has had a strong past year, the gold stocks are still priced as if investors lack conviction the gold bull is alive.
Whenever the valuations on Wall Street get so stretched considering earnings per share and earnings growth, a big correction follows. All the King’s horses and all the King’s men, or Fed priming the pump, can change that reality.
Meanwhile gold has been performing like a rock star over the past year and based on fundamentals has much higher to go. Supply and demand is stacked toward a higher price of gold, as are the other factors like a broken chart on the USD index, prolonged near zero interest rates that aren’t stimulating growth and out of control debt growth.
As all this is transpiring, the price of many gold stocks have got stronger, but, are still very cheaply priced. You can look at our index and reports to find a great shopping list. I would add, I don’t think these bargain prices for good gold stocks is going to be around for much longer.
All the best,