In a recent Penny Stock Detectives article, editor Sasha Cekerevac states his belief that the data will continue to be weak, and we will see additional monetary policy stimulus from several of the world’s central banks, which should drive gold bullion prices higher near the end of the year. Cekerevac notes Brigus Gold is one of several interesting mining stocks that gold bullion investors might want to consider for their portfolio.
“This is a firm that is trading just below book value with a profit margin of over 20%. With both revenue and earnings growth continuing,” says Cekerevac, “…investors will soon start to realize there is value in this stock.”
When it comes to mining stocks, a lot can be learned from looking at the technical analysis of the charts, claims Cekerevac. In technical analysis, when a stock breaks a trend, it’s a very important moment, he notes, explaining that this could indicate a change in direction and momentum for the share price.
As many mining stocks in the gold bullion sector sold off this year, so did Brigus, Cekerevac reports. In early April, this stock broke its downtrend and resulted in a sideways, range-bound market, he observes. Mining stocks that have consistent buyers will see higher lows over time. This is exactly what has been seen since the lows in April, claims Cekerevac, as each new low is higher than the previous one. He reasons that this is a sign that Brigus, along with other gold mining stocks, is being accumulated.
In Cekerevac’s opinion, if gold bullion prices move significantly higher, mining stocks will follow.
The Penny Stock Detectives editor reports, “The recent Federal Reserve policy meeting ended in a somewhat flat outcome for investors interested in gold bullion. This is because some gold bullion investors had hoped for additional monetary policy stimulus to be enacted.”
However, knowing that there is an important conference by central bankers at the end of August, followed with a Federal Reserve meeting in September, Cekerevac observes that there are expectations that further monetary stimulus will be enacted during this timeline. If that were to occur, Cekerevac believes investors should see a significant move in both gold bullion and associated mining stocks.
“Obviously, since the stock has not yet broken its trading range, it’s impossible to know which side the next leg in the markets will be,” notes Cekerevac, suggesting investors be patient and wait on the sidelines for a breakout. Considering how gold bullion has been holding up lately, Cekerevac leans towards the possibility that a break is soon to come.
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