Jeb Handwerger

A potential bull market in commodities, precious metals and miners could accelerate higher if Congress gives Obama the approval to attack Syria based on the use of chemical weapons of mass destruction against innocent civilians. Commodities, energy, gold and silver are safe havens that usually rise in value during international conflicts and war.

There is no doubt about it. Precious Metal mining companies are going through a time of testing.

I wrote nearly a month ago that “The Worse Things Were For The Mining Sector, The Better They Will Get”.

When it looks as though things couldn’t get worse for precious metal mining equities (GDX), that may be just the time to buy for contrarians.

A week ago I wrote about a potential rebound after capitulation and panic selling in precious metals and the miners.

“The main purpose of the stock market is to make fools of as many men as possible.”
Bernard Baruch

One of the ways to look for a bear market low is to look for panic selling and capitulation after an extended downtrend.

“If you can keep your head when all about you
Are losing theirs and blaming it on you…And—you’ll be a Man, my son! ”
If by Rudyard Kipling

Despite current weakness in gold (GLD) around the $1650 area we expect a turnaround in gold with a new leg up to $1800 area and eventual breakout at $2000 in 2013.

We are still climbing the wall of worry as wealth in the ground metals becomes increasingly cheaper in a world that is threatened with the ghosts of depressions and deflations past.

We are approaching the end of the year where investors are facing a confluence of mixed signals such as tax loss selling, fiscal cliff discussions, the Greek bailout, future Fed actions and Middle Eastern geopolitical turmoil.

We are experiencing a pullback in precious metals and mining stocks as investors react momentarily to a purported better than expected jobs report.