Gold & Silver Mining Stocks Have Bottomed!

It's been a wild ride for investors in Gold and Silver mining shares this year. The benchmark Philadelphia Gold/Silver Mining Shares Index (symbol XAU) carved out a roller-coaster path that probably thwarted bulls and bears alike.

Here are the XAU intra-day highs and lows over the last 52 weeks and the % changes from the previous turn:

1. Low on December 19, 2013 at 79.73

2. High on March 14, 2014 at 107.39 (+34.69%)

3. Low on May 28, 2014 at 83.27 (-22.46%)

4. High on July 10, 2014 at 106.01 (+27.31%)

5. Low on November 5, 2014 at 61.39 (-42.09%)

Unlike the S&P 500 Index, which never corrected a full 10% the entire year so far in 2014, the two-way swings in Gold/Silver mining shares were massive.

Is another major swing in Gold/Silver mining shares now underway?

A weekly chart buy signal was triggered by my computer trading system in the XAU as of Friday's close, December 19th. It was last year around this time that Gold/Silver mining shares also bottomed (after tax selling season was basically done) and then rallied 34.69% over the next 3 months!

Weekly chart buy signals were also triggered at Friday's close in the following Gold/Silver mining shares and related ETF's:

Agnico Eagle Mines (symbol AEM)

Anglogold Ltd (symbol AU)

Endeavour Silver (symbol EXK)

Gold Junior Mining Shares ETF (symbol GDXJ)

Philadelphia Gold/Silver Mining Shares Index (symbol XAU)

Silver Junior Mining Shares ETF (symbol SILJ)

Silver Mining Shares ETF (symbol SIL)

Yamaha Gold (symbol AUY)

Rumors that Russia has been selling its gold reserves recently, in an attempt to halt the slide in the Russian Ruble on foreign exchange markets, are spurious and without merit. In fact, according to latest report from the Russian Central Bank, Russia actually bought 600,000 ounces of gold in November. While we won't know for sure whether Russia bought or sold gold in December, I have no doubt that when the next report is delivered in January it will show that Russia bought gold again in December to add to the 150 tonnes of gold that it has already purchased so far this year in 2014! I now believe that Russia will be the first of many countries to announce an official gold backing to its currency, and I would not be at all surprised if China then quickly followed Russia with its own gold backing for its currency.

Here are two weekly charts worth reviewing in any decision to commit long-side capital to Gold/Silver mining shares over the very near term. In the interest of full disclosure, I have already allocated 30% of my assets under management to Gold/Silver mining shares.

Philadelphia Gold/Silver Mining Shares Index (XAU) with 200-Week Moving Average Line & Computer Signals

Silver Mining Shares ETF (SIL) with 200-Week Moving Average Line & Computer-generated Buy & Sell Signals