A NOTE ON GOLD, SILVER, AND GOLD AND SILVER MINING COMPANY STOCKS
Since we are actively trading gold and silver right now, I would like to point out that in the TRADING BLOG when I discuss gold and silver I am referring to the metals themselves and the trading of the metals through commodity exchanges, ETFs, or even the buying and selling of gold and silver bullion (coins and bars). The trading strategy will sometimes but not always apply to gold and silver mining company stocks.
The value of stock in precious metal mining companies will often move hand in hand with the price of the precious metals since this is the commodity they are mining, but mining companies may have internal problems, be poorly managed, or have operational problems due to political or social unrest in the country in which they operate. These factors could cause a company's stock to lose value even during a strong rally in gold and silver. Also, one should always remember that even though a mining company stock has value based on the metal it mines, it is still a stock, and during a broad stock market crash all stocks tend to go down together. Precious metals (especially gold) are traditionally (and correctly) thought to be a good hedge against hard economic times, and therefore one would expect gold and silver mining company stock to rise in value during a general economic collapse. Unfortunately, we probably can't count on that happening. It could happen, and it should happen, but recent history (i.e. the plunge of gold and silver values - raw metal and mining company stocks - during the 2008-2009 stock market crash) has demonstrated that investors can lose their common sense during the panic of a crash and sell everything. (I might add here that should this scenario unfold again, investors would probably come to their senses after the dust of the crash clears, and gold and silver as well as the companies that mine these metals would likely be excellent investments at that time).
I will sometimes comment on gold and silver mining companies in the TRADING BLOG (usually when they are in sync with the metals themselves), but mostly my trade strategies in gold and silver will refer to directly trading these metals as commodities.
***BRIEF GOLD AND SILVER MARKET UPDATE:*** :
Gold and silver continued to move down today and we are watching carefully for the bottom of this correction and a change in momentum that would indicate a good point to take profits in our short positions and go long in both metals. This may happen tomorrow, so we should be alert and ready to trade. I will try to post any trade decision by 3:00 pm EST.
Since we are actively trading gold and silver right now, I would like to point out that in the TRADING BLOG when I discuss gold and silver I am referring to the metals themselves and the trading of the metals through commodity exchanges, ETFs, or even the buying and selling of gold and silver bullion (coins and bars). The trading strategy will sometimes but not always apply to gold and silver mining company stocks.
The value of stock in precious metal mining companies will often move hand in hand with the price of the precious metals since this is the commodity they are mining, but mining companies may have internal problems, be poorly managed, or have operational problems due to political or social unrest in the country in which they operate. These factors could cause a company's stock to lose value even during a strong rally in gold and silver. Also, one should always remember that even though a mining company stock has value based on the metal it mines, it is still a stock, and during a broad stock market crash all stocks tend to go down together. Precious metals (especially gold) are traditionally (and correctly) thought to be a good hedge against hard economic times, and therefore one would expect gold and silver mining company stock to rise in value during a general economic collapse. Unfortunately, we probably can't count on that happening. It could happen, and it should happen, but recent history (i.e. the plunge of gold and silver values - raw metal and mining company stocks - during the 2008-2009 stock market crash) has demonstrated that investors can lose their common sense during the panic of a crash and sell everything. (I might add here that should this scenario unfold again, investors would probably come to their senses after the dust of the crash clears, and gold and silver as well as the companies that mine these metals would likely be excellent investments at that time).
I will sometimes comment on gold and silver mining companies in the TRADING BLOG (usually when they are in sync with the metals themselves), but mostly my trade strategies in gold and silver will refer to directly trading these metals as commodities.
***BRIEF GOLD AND SILVER MARKET UPDATE:*** :
Gold and silver continued to move down today and we are watching carefully for the bottom of this correction and a change in momentum that would indicate a good point to take profits in our short positions and go long in both metals. This may happen tomorrow, so we should be alert and ready to trade. I will try to post any trade decision by 3:00 pm EST.
RSS Feed