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Expect a Rally in Gold Stocks

Jul 18th, 2008 | By Brian Hunt | Category: Gold Market

Brian Hunt says there’s a rally coming for gold stocks. Despite a softening in spot gold prices today, Brian says gold prices are on a upward trend. Add to this increased cash flow in gold producers and you have a great profit play setting up…

David’s argument for a rally in gold shares boils down to this: After years of digesting the costs (hiring workers, buying new equipment, and upgrading facilities) associated with getting a mothballed industry back into fighting shape, big gold producers are finally enjoying lots of cash flow.

Add the increasing price of gold, and you’ve got the ingredients for a big bull market in gold miners. It’s a solid thesis… but let’s check with old man market to see what he thinks. Have a look at Goldcorp (NYSE:GG).

Goldcorp is one of the “flagships” of the gold-mining industry. It is one of the few gold miners with a market cap over $10 billion… and widely considered one of the best-managed mining companies on the planet.

As today’s chart shows, the market likes the bull case for gold shares. Goldcorp is showing classic bull-market behavior… the tendency to make “higher highs and higher lows.” Shares reached an all-time high this week. Thesis proved.

Goldcorp, Inc.

Source: Goldcorp Weighs in: It’s a Bull Markert in a Gold Stocks

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By Brian Hunt

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Brian Hunt is managing editor of Daily Wealth.

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