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Signs emerge that prices may have bottomed in precious metals

A $200 plunge in the price of gold over two days in April heightened fears that more miners will be forced to write down the value of their reserves.


Evidence is growing that the recent downturn in the Canadian materials sector - especially precious metals - has reached its conclusion, points out Dave Harder, analyst with the technical analysis firm Phases & Cycles.

A "double-bottom" - where prices fall, then rise only to dip for a second time - may have formed in gold, silver and precious metals stocks. That tends to foreshadow a more stable recovery where selling has been exhausted.

And there was another recent clear signal that the bear market for gold and precious metal stocks may have ended: the share prices of Silver Wheaton Corp. and Barrick Gold Corp saw little selling pressure on recent bearish news of a major mine suspension.

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Mr. Harder details all this, along with some charts, in this PDF report that Phases & Cycles has given us permission to re-publish in its entirety.

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