By: Mike Hammer
People like a winner. Have you noticed that when a sector in the market is in an uptrend, over time “everyone” becomes bullish on it? Behaviorists say there is an acceptance cycle people go through psychologically; we’ve all heard the steps, in various but related forms. In the beginning there is disbelief. Then there is curiosity. Then belief. Your Gold Enthusiast will follow the trend in gold prices and end 2017 on a high note – on a few high notes in fact.
First, despite international gold’s rise to 1350 and subsequent fallback, it’s been a good year for gold prices – starting at 1150 and ending close to 1300 for a 13% gain isn’t bad in anybody’s book. Depending on today’s close this will probably be the best year start-to-finish since 2010. It’s been a difficult trading year for many but these past few weeks have been very good for gold day traders. Here’s the yearly chart for GLD, our unleveraged gold trading ETF.
(chart here, credit Fidelity.com)
Next, the miners. Assuming things close today close to where they are now, Our proxies for the senior miners (GDX) and the junior miners (GDXJ) didn’t do as well overall, nor were their swings easier to trade. GDX (seniors) rose 11% on the year, and GDXJ (juniors) only managed 7.8%. In this chart of GDX you can see that swings were choppier than for gold itself, which caused some traders to say this was the most difficult trading year in a long time.
(GDX chart here, credit Fidelity.com)
What will 2018 bring? Your Gold Enthusiast leaves predictions to others. And, predictably, with the recent run-up some analysts are now starting to sound downright bullish on 2018. Remember the acceptance cycle we talked about before? Here it is in action! ICBC released a report yesterday saying 2018 is likely to be a good year for gold prices, with an estimated average of 1312.50. (I for one am both happy to see the extra 50 cents on the end, and astonished that any analyst thinks the cents are significant. Or that they can be that accurate…)
We here at The Gold Enthusiast would like to thank you for reading these articles. 2017 has indeed been a difficult trading year; we had a few big hits and a few small misses, but overall did pretty well. We enjoyed hearing all your feedback, and those of you who wrote in can be proud of your contribution. We want to continue to make The Gold Enthusiast a place where you can find important news distilled and good trading times unmasked. Have a Safe and Happy New Year, and we will see you in 2018!
Signed, The Gold Enthusiast
DISCLAIMER: The author is long NUGT and JNUG and may add to or sell these positions in the next 48 hours. The author has no position or intention to open a position in any other mentioned security.