XAU Gold Stock Index

[GoldNugget]

This chart of the XAU Gold Stock Index tends to suggests that now might be a good time to buy gold stocks. I prefer gold coins myself but its interesting to have an idea of when the XAU Gold Stock Index might have bottomed in order to time the purchase of gold coins.

Embrace the Gold Stock Panic and Buy!
by Michael Swanson posted at safehaven.com

The XAU gold stock index appears to be starting the process of creating a new cycle bottom. The XAU now has resistance at 149, which would be a 1/3 retracement of the correction, and then at 153. I expect it to rally to one of these two levels and then dip back down near support, probably to the 140-143 level. It should then bounce, beginning another leg up to its 52-week high.


My goal is to have a large position in gold stocks by the start of their next leg up. I'm going to buy enough gold shares to have 1/2 of this position today. I then plan on doubling my position once gold stocks consolidate and turn up.


Why half now? It is possible that after a bounce gold may fall through 650 into the 615-630 area. That would cause the XAU to either hold support at 133 or briefly dip below 130. I don't think this will happen, but I want to give myself room in case it does. Buying at this level will help me keep my average gold stock entry point low and leave some buying power for later.

Michael Swanson shares the view with several other gold commentators I have read recently that expect that gold and silver may bounce from the low of around $636 and $12 but return to these levels and possibly slightly lower one last time before moving up. See Clive Maund 's article, I Believe the Correction in Mining Stocks is Over - At Least for Now

Chart 2 SILVER