Gold Glitches: Investors Profit From Market Inconsistencies
Written By: Jason Simpkins
Posted: Feb 28, 2017
Have you ever seen a gold mining stock go up, even as gold prices themselves fell?
That’s a “Gold Glitch.”
It’s the term professionials are now applying to such market inconsistenies. It doesn’t just happen in the gold market, of course. A similar glitch might occur when an oil company, like Exxon, moves in the opposite direction of oil prices. Or when a tech or telecom company shoots higher, despite a broader sector move downward.
Here’s a more specific example…
On the whole, gold prices plummeted 13% in 2015. But on January 9, a glitch, or “gold glitch” appeared in a company called Claude Resources.
The stock jumped 138% in just four months, boldly defying gold’s bear market.
Back in 2014, gold prices remained relatively muted, losing 2% for the year.
Yet, a tiny exploration company called Nevada Sunrise exploded for an 832% gain.
Now, gold glitches, or other types of glitches, don’t often occur. They’re certainly not a regular or predictible. That’s why they’re called glitches.
They’re inconsistent and hard to anticipate… but not impossible. To the contrary, there are many instances of investors cashing in for a quick profit.
I can think of at least five off the top of my head – just from my own experience. And resource investing expert Gerardo Del Real has found about a dozen that he shared with me.
The size of these companies runs the gambit. They range from small, unheralded explorers to more established miners. And again, they pop up across various segments of the commodities and resource sector.
Gerardo’s list, for instance, included Cameco, one of the world’s leading uranium miners. The stock jumped 70% at a time when uranium prices were in freefall.
Once more, to be clear, we’re not talking about shorting stocks here. It’s got nothing to do with options or futures.
We’re simply talking about companies that made ginormous strides in the face of market adversity, if only for a short time.
And getting in is easier than you think. In most every case, gold glitches, and market glitches are telegraphed by a looming event or approaching deadline. It could be something as simple as an earnings release, regulatory approval, or a change in government policy.
In those cases simply reading the paper is enough to catch on. That situational awareness and the confidence to act are all you need.
So keep any eye out. And naturally, we'll report back on any suspected gold glitches that we find.
Jason Simpkins is a seven-year veteran of the financial publishing industry, where he's served as a reporter, analyst, investment strategist and prognosticator. He's written more than 1,000 articles pertaining to personal finance and macroeconomics. Simpkins also served as the chief investment analyst for a trading service that focused exclusively on high-flying energy stocks. For more on Jason, check out his editor's page.