At the Got Gold Report, Gene Arensberg
has posted in the clear his new analysis of junior gold and silver mining
stocks, which have been nearly destroyed over the last couple of years but
which, Arensberg finds, are showing signs of life.
The divergence between the price of gold and the price of the juniors is now
so great, Arensberg says, that contrarians should
be springing into action. Arensberg writes of the
chart of the Canadian Venture Exchange, home of many juniors:
"The chart just above is the kind of chart that
makes a contrarian salivate with great anticipation.
Consider that prior to the Lehman collapse the CDNX traded at a multiple of
the price of gold -- up to five times the gold price. Today it has fallen all
the way to less than .75 times the price of gold. Simply amazing volatility
on display in the chart above. And contrarians know that volatility works in
both directions. The market first creates, or rather, is driven into huge
divergences and gargantuan imbalances -- which it abhors -- and then gets
busy correcting them, given enough time and patience. For many gamers it is
the pace or frequency and the amplitude (size) of the giant moves that are
out of phase with their own tolerances and psychology/comfort levels -- so
they end up missing them completely."
Arensberg's commentary is headlined "Vulture Bargain Update Notes for
August-September 2012 -- Seller Exhaustion" and it's posted at the Got
Gold Report here: