This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

After a 12-Year Low, What's Going on with Gold?

On Jan. 17, the Shanghai Daily reported that information obtained from Jeffrey Nichols, managing director of American Precious Metals Advisors, suggests that the Chinese government may soon announce that it has more than doubled its gold reserves from 1,054 tons to 2,710 tons. Since 2009, the People's Bank of China has not reported an increase in its gold holdings. The Shanghai Daily article quoted the opinion of one expert who explained that if the Chinese central bank admits that it has made such an increase in its gold reserves, it would "drag up" the gold market.

After cutting back their expenses during 2013, the larger gold miners are beginning to spend money again, especially in the area of acquisitions. With gold mining stocks still at depressed levels, some of the larger miners see the present moment as the opportune time to buy smaller, struggling operations. Goldcorp (GG) launched a bid to buy out Osisko Mining (Toronto:OSK), and on Tuesday Osisko rejected the bid. Primero Mining (PPP) purchased Brigus Gold (BRD) in December.

Technical factors also support the bullish case for gold with a recently formed "double bottom" and a positive shift in relative strength and momentum. Gold prices will have to demonstrate some follow-through before anyone gets too excited, but this could be the moment which gold investors have been hoping for since New Year's Eve.

The only sure thing about gold is that the "barbarous relic" will continue its volatile ways as it usually has over its long and alluring history. Nevertheless, fundamental and technical factors support the notion that gold could go higher over the days, weeks and months ahead.

At the time of publication, the author's comopany, Wall Street Sector Selector, held shares of iShares Gold Trust (IAU), but held no positions in any of the other stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $123.38 0.50%
FB $95.29 1.19%
GOOG $628.00 0.12%
TSLA $264.82 4.67%
YHOO $37.72 -0.30%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs