Far East Capital Newsletter
Coal has replaced gold as the hottest sector
23 Oct 2016

In This Issue

Weekly Commentary

Coal has replaced gold as the hottest sector

There is no point in denying it. The easy money in gold has come and gone for 2016. The gold price is on the back foot for the time being. There are plenty of stale bulls wondering why they went into gold stocks at higher levels and these guys will be sellers on a bounce in gold stocks. There needs to be a dramatic improvement in the gold price before the enthusiasm can take control again. Maybe this will happen if Trump wins the election. Maybe there will be another driver some time in 2017. Time will tell.

In the meantime coal is a much hotter place to be. In recent weeks we have been encouraging readers to move into the sector. Those who have done so will be smiling as many of these companies have risen by 100-200%, and more, over the past few months. The best performers have been the producers and those with advanced developments. There are still a few stocks that haven't moved much though. It is only a matter of time until traders wake up to them and buy with gusto. This is all about weight of money. Coal is where money is being made so it will attract yet more money. The fine tuning and analytical consideration will be more relevant further down the cycle, once the urgency to get set abates. 

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