Is it time to buy gold yet? A lot of people are asking the question. Here’s what we know.

In last night’s US Daily Color Guard Report (Monday, Nov 17), Steve Chappell astutely pointed out that the HUI Gold Bugs Index had reached a 6-year bottom. He cautioned the gold “bears” that it might be time to protect profits. He didn’t say it, but logically, it follows that it might also be time to consider cautiously stepping back into gold stocks. At least have your WatchList ready and keep an eye on it. Remember, the HUI rose 200% or 72% annualized from that bottom around November 10, 2008 to the top around August 29, 2011.

HUI Weekly Graph

In Canada, TTGD, the S&P/TSX global gold index, is just starting to rise off of a six-year low. The index includes 31 Canadian stocks and 9 international stocks selected by the TMX Group as a benchmark for quality gold miners. You’ll find TTGD in the Market Index Viewer. Number 1 Then you’ll find the 31 Toronto exchange stocks in the WatchList folder labelled, TSX – subfolder S&P/TSX Global Gold Index. Number 2 Note: The stocks for most other Indices are found in the WatchList folder labelled TSX Capped Indices.Number 3

Market Index Viewer and WatchLists

TTGD Gold Index Graph

As a VectorVest subscriber, we also have the advantage of being able to graph the gold/silver industry group. VectorVest takes the average price and average values of all of our indicators, and allows us to plot them on a regular graph. Talk about being able to spot and participate in a trend! What I like to see is the RT rising and the average price crossing above the 40-SMA. That’s exactly where we are as of today! From there, I cherry pick from the Gold Digger UniSearch (Special Searches Folder).  Just look at the results from the last two “trend up” signals.

Mining Gold Silver Graph

Will it always work out this way? There’s no guarantee. But look at a longer graph and identify previous opportunities. Run your own Quicktests starting with one week, then two, then three and so on as your end dates. Most often when the industry price trend is rising above the 40-SMA, you have at least a one or two week window to make significant gains.

YOUR COMMENTS PLEASE: Are you buying gold yet? What stocks are in your WatchList?

Stan Heller
Consultant, VectorVest Canada
Nov 18, 2014