Big News in Metals, Buyouts, and Big Buyers of Gold

Lots of news out this Friday morning, and after a tough week for miners with the FOMC talking asset prices lower, we finally see a huge rebound attributed to several things. First, Yamana Gold received another surprise buyout offer from both Pan-American Silver (PAAS) and Agnico-Eagle (AEM), pushing AUY stock up over 20% on the day. This has investors wondering which miners might be next to get scooped up, because both big money and mining executives are buying now, while much of the retail investor class is shunning gold and miners. Another big new event is central banks have done the biggest gold buying last quarter that we have seen in 55 years, so they also think gold is a good place to be going forward. Lastly, somebody stepped in to clean up this 300 tonnes of gold, we always hear about all the sellers, but how about the guy that can write a check for 300 tonnes of gold? I assume he is sharper than the average Robinhood trader.

Yesterday was brutal for the group, as the biggest names NEM and GOLD (Barrack Gold) got hammered to new 52 weeks lows. But just like that they have made all that back and more today, adn I’ve included a daily chart of Newmont Mining (NEM), and a weekly chart of Barrack Gold (GOLD) with some horizontal trend lines that show here is another good area to make a stand, and maybe reverse the trend back to higher. While I am aware that the FOMC will continue to raise rates, at least that is what they say they will do, I would not wait until they stop raising or reverse course and start cutting rates before getting invested. Across the board today, most of our miners are up 10% or more. An investor can’t miss too many of these type days without seriously denting their performance, we need to be in them ahead of time.

On both of these charts, we see oversold technicals that look ready to turn and make a trip higher. Time will tell, its been a tough trade but that is always the case with miners, and any group that moves as much as they do. We want to be around for move up, because bull markets in metals and miners are equally spectacular on the upside.