http://www.321gold.com/editorials/hamilton/hamilton072613.html

Gold stocks are actually enjoying a great month, a stark contrast to this year's brutal death spiral lower. But after catapulting up by more than a quarter in less than a month, investors are wondering what to do next. Is it time to cut losses before the catastrophic plunge resumes, or double down on the birth of a major new upleg? With this sector still wildly oversold and absurdly undervalued, I'm betting on the latter.

Traders viscerally despise precious-metals miners and explorers these days, for good reason. Year-to-date as of late June, the flagship HUI gold-stock index had plunged an astounding 53.4%! This was against a backdrop of stellar general-stock performance, where the benchmark S&P 500 surged 12.4%. Even gold's rotten year to that point, -26.7%, was great compared to the excruciating gold-stock carnage.

With a horrendous track record like that, many investors wonder why anyone would even risk a penny in this sector. The answer is simple,past performance. Over a 10.8-year span ending in September 2011, the HUI skyrocketed an astonishing 1664.4% higher! Vast fortunes were won in the last decade'sgreatest bull run, during a secular bear in general stocks no less. Over that span the S&P 500 actually fell 14.2%............... Cont'd