Gold Stocks Set for Explosive Breakout: Analyst

It has been a good year for precious metals but not a great one as the leveraged side has underperformed.With the stock market still in a secular bull market, there is not enough capital or interest in precious metals outside of Gold.The gold stocks are sporting very bullish bases at a time when they are extremely underowned.The current market share of gold miner ETFs is very close to a 17-year low.

It is down roughly 80% from the end of 2011 peak and even down over 50% from the August 2020 peak. For more capital to move into precious metals and spill over to the gold stocks, the economy must roll over into a recession, forcing the Fed to resume its easing.The vertical lines in the chart mark the start of Fed rate cut cycles. The steepening of the Yield Curve is needed for Gold to outperform the stock market and capital to shift away from conventional assets. The setup in the gold stocks is very bullish. They are trading within big bullish bases at a time when they are incredibly underowned. Once the macro picture aligns, and that entails an economic downturn with accelerated Fed easing, the gold stocks will explode out of their bases. It is best to position in the quality companies that will lead the move to a breakout. You can buy some of them 20% to 30% cheaper than just a few months ago.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risk

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