From Stock Research Portal Blog:

An article today titled ‘Junior Gold Stocks: Bent, Not Broken’ by Scott Wright of Zeal Speculation summarizes his views on Junior Golds – where they have been and why, and where they are going. In summary, Wright says:

• in the past several months even though gold has been strong, the risk capital that usually finds its way into junior gold explorers has ‘all but left the scene’;

• junior gold stocks typically lag gold and even the larger gold stocks over the course of an upleg since institutional investors usually can’t buy them. Accordingly, rallies in these juniors are ignited when the enthusiasm of individual traders takes hold in the latter halves of uplegs;

• measured by the S&P/TSX Venture Composite Index (CDNX), the gold juniors have fallen by 80% from its 2007 high before finally appearing to have hit bottom this past December – and this in a period when the gold price has been strong;

• decimated stock prices and fleeting investor interest is a bad combination that does not bode well for the futures of many of these juniors. Ultimately they rely on bullish sentiment to survive, and (in Wright’s view) many will now be strained to stay their course.

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