Marshall Berol comments on gold.
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Thanks, Marc!
As mentioned before, the conventional market will outperform the PMs until the end of the year. The conventional markets will trend up and the PMs will trend down. Once the TAs are satisfied on the charts, the reverse will happen—-if the conventional markets continue to trend up in the new year (lots of luck), the PMs will outperform and if the conventional markets head back down, the PMs will comparatively not do as bad. It appears that the PM stocks are searching for a bottom at the present time.
Thanks Doc!
Whats interesting richard is if gold gets a $70 drop that R.A. and you have called for and a sub $30 silver it will have nothing to do with the charts as they do not suggest those targets….it will be FMOC event driven….on the flip side if gold gets a $70 pop to the upside and silver closes above $34 it has nothing to do with the chart suggesting those targets, it will be event driven….and I won’t be saying I told you so because either move is not driven by technicals but by an event…BIG difference!….I live and die by the charts for 30 years, but along the way to Sinclair’s $3500 gold big swings either way will be event and manipulation driven putting less and less reliability on chart technicals, agree???
JJ, if the Dow moves up to about 13,500 we necessarily won’t see a big move down for gold but just a general drift down. My $70.00 gold drop is worse case scenario not a given. Ultimately I don’t believe the PMs move up will be stopped by any events since I believe the die is already cast—-we could have a short term drop driven by what appears to be a fiscal responsible move to the “fiscal cliff” but it won’t deter our march upward and onward.
Completely agree, Doc!
the only thing sure about charts….is past history….anything else is a guess….may be an educated guess……ootb..
Remember that between late 2000 and 2002, the HUI tripled while the S&P 500 lost nearly 50%. I believe that the two will decouple again -and more forcefully. 2013 could very well be the year when people recognize the risks in stocks, bonds, and the dollar.
Since 2008, I have noticed that a lot more people have become much more receptive to some unsettling realities that they previously would have scornfully dismissed. Granted, “a lot more” than 1% isn’t many, but the herd never acts until after something has happened to them. And I believe that plenty will “happen” to them soon.
I also agree and have the feeling that 2013 has the potential to be particularly positive for the PM stocks over the bullion for the first time in awhile. I like what I’m seeing a lot on the PM stock charts right now.
ditto…..professor matthew….ditto doc richard……
We all seem to have similar thoughts about the resource stock markets for next year.
So far apparently so good, Doc!
Longer term Longer term…when is the longer term?. This type of comment has been going on for over 5 years and Mining stocks have gone nowhere while silver is back to where it was 2 years ago. Again I’ll say it..all these analysts and Gold bugs have NO IDEA IF OR WHEN..the Precious metals will have a big run.
“Reos” were everywhere when gold crashed over 20% in 2006. They were everywhere in 2008. They were everywhere in 2009 -the Soros/Roubini “top.” Nothing has changed. Relative to the actions of most governments, gold is cheaper than ever. The gold price has also risen far more than mining costs have over the last 4 years. Profitability going forward is going to be tremendous. As is always the case, bottoms present absurdly undervalued opportunities -just as tops present absurdly overvalued “opportunities.”
Sounds like you’ve been buying the wrong miners.
Professor (Matthew)
Any thoughts on Alexco? It is a hold for me and I know you still like them too, no? They have not escaped the slaughter per se.
I still hold Alexco. I had lightened up between $6.75 and $10 (bought between $2.75 and $3.25 in Aug. 2010) and then I “doubled-down” when it went below $3.50 and then sold 45% on its approach to $4.75 in September. I’m still very happy to own it but have to say that a good portion of its slaughter was of its own making. There’s been quite a bit of disappointment in the last few quarters. Luckily, it is still (just barely) in the fine tuning stage of early production AND many holders are more interested in its exploration upside. I think the selloff would’ve been much worse if more people held it in the “safe” part of their producing miners portfolio. Further selling pressure came recently because it is no longer marginable at some brokers.
Despite the hiccups, AXU has huge upside. Actually, the upside has grown tremendously due to its 2012 performance. I’d rather buy it for less than $4 than $10+. I won’t hesitate to buy more if it dips to the $3.50 area one more time. If I didn’t own it, I would be a buyer under $5. The market way overreacted in my opinion. Whatever your cost basis, I would definitely HOLD or BUY.*
*My opinion is for entertainment only. Do Your Own Due Diligence Dudes and Dudettes
Matthew,
Thank you and all the best!
We will get some comments on this for the Weekend Show.
Good comment, Matthew.
I have to repeat and this is not a rationalization, “most of my precious metals stocks are doing fine.”
Sure there are some real stinkers at this time, but there are 50% that are performing well with appreciation since purchase date of 300% in some cases.
Remember also, there are similar meaning losses!
I read an article discussing the cost of mining gold, it said alot of people dont take into account what a company does for a comunity for example, long story short the writer figured the cost to mine an oz of gold was about 1300 and if oil increased the costs go up. What does anyoe think of 400 an oz profit? it sounds ok to me but not really spectacular.
I believe there’s a hidden story in the cost of mining—–a large amount of that cost are energy costs. A lot of analysts believe that with the growth of India and China, there’ll be increasing pressure on oil prices. With the discovery in natural gas and oil in areas never imagined, I believe it’s a good possibility that we may be surprised about the future cost of energy—-and that would be positive for miners.
Good point, Doc.
That actually works for me, benb.
I understand reo frustration, for about the last 1 1/2 year not much has happened with PMs or the shares, actually I think the s&p outperformed, but “long term” 5 years ago, gold was about 900, silver 15 i believe, thats not a bad return other than ya dont make anything on physical gold. You could argue that I suppose but its better than loseing to devaluation of the currency. But after the 08 crash shares were huge profits, maybe we need another crash.
I am counting on it.
Don’t forget guys the pm’s stock sector is a different animal today compared to when the HUI ran for 7 years 2001-2008, the 2008 credit meltdown is preventing alot of jr’s to raise the needed cash to keep their story going and “ETF’s” were not even available, why have money tied up in miners who underperform and underdeliver production when an investor can own a physical bullion ETF, how much money is in the GLD, SLV… ETF that years ago would be in individual stocks?????
All boats will rise (jr pm’s stocks) when gold and silver trade much higher from todays levels but for my liking its physical bullion IN HAND and trade the silver, gold miners that this past year have delivered % gains….the market is telling you were the momentum is.
All good points, JJ!
Going cold turkey on the digital world is more difficult than I first thought.
As I was transferring an enchilada casserole to finish in the oven I heard the retired minister of miss-information tell Maria Bartaroma the following:
“Housing is the only area of the economy that is moving up on its own.”
Housing moving up ‘on its own’? How could someone with so much purported knowledge miss the 45 Billion/month targeted Federal Reserve monetary mayhem support for residential housing? Not to mention how historic low interest rate are a blessing to the debt supported sector.
I can only conclude he has re-engaged the outright deception that arrived us here.
Do not look behind the curtain because over here I will pull a rabbit out of a hat.
In fairness he did point out that % gains need to be tempered as when something falls from 100 to 2 ….when it gains a point to move back to 3 you could rightly say the later move was a 50% gain.
Beyond Greenspan’s point…… in addition to the flawed % gain illusion of a correcting market one needs to account for the debasement of the measuring unit of the transaction.
So the move from 2 to 3 is not viewed correctly as a 1% retracement of the original position only in nominal terms. In real terms the % gain/loss of a move can only be economically quantified with due consideration given to the monetary mayhem which occurred during the transaction period.
Rick Ackerman has some very interesting things to say about the housing market, as do I, on the upcoming Weekend Show. Essentially, we both agree completely with you.
I wouldn’t be surprised if 2013 is a positioning year for the PMs and PM stocks. There’s a good chance we’ll see another interim low in the PMs toward the end of December or early January. There’s a good chance then that we’ll take a slow move up over the year (with backing and filling) to position ourselves for a positive move higher with the accumulation season in the fall. It could be a year of “steady and easy” and another frustrating year of “slow as it goes.” Notoriously, the first year of the new administration is not a good year for the conventional markets and 2013 may not be an exception to that dictum.
Richard,
This is the fifth year of this administration.
The fifth year of the Bush Jr. Administration treated Gold and Silver well.
Silver went from about $4.75 to $6 in Clinton’s 5th year 1997 the same year being the last year you would have been street wise to have not been long gold.
Interesting observations, Dennis M.
Thanks
I don’t see how the first part of 2013 could possibly be a good year for the conventional markets, fundamentally speaking. I have bee wrong before (as most of us have at one time or another) so who knows.
The paper gold and silver markets are TOTALLY MANIPULATED by the federal reserve. They short as much as possible to keep the price down as much as possible. To keep the Dollar as the WORLD RESERVE CURRENCY so they print to their hearts content..meaning endlessly… It doesn’t matter how many billions or trillions they lose…they don’t EVER have to cover the shorts…they can’t print to infinity to pay any loses. Until everyone only buys physical and takes delivery ..gold and silver are controlled. They do the same with the mining stocks. HUGE PROFITS MATHEW in mining.. so why is Barrick and other big miners CHEAPER TODAY then when gold was $800 in 2007. It’s called manipulation. It’s done to keep the US DOLLAR as the reserve currency…KILL THE DOLLAR by not using it,,,is the only way gold and silver and miners will REALLY MOVE. And not just a few % a year.
Yes indeed, HUGE PROFITS. I’m sure I’ll forget a few, but here are some of my “wins” with my % gains (gains listed are ballpark as this is off the top of my head and sales were at multiple price points).
Alexco – 100-200%
Almaden – 200-500%
Animas – 100%
Andover – 150+%
Argentex – 100%
Brett – 300+%
Endeavor – 100+%
Fronteer – 800+%
GORO – 2,000%
IMPACT – 200-300%
Kaminak – 400%
Mirasol – 700%
Riverstone – 300%
Yamana 300-500% (sold this one at $10 in ’08 and bought it back in ’08 in the $2-$4 range)
I’ll stop there. I also left off many, many lesser gainers relating to trading the likes of Goldcorp, Silverwheaton, GDX, GDXJ, NUGT and many others.
In 2012, my best gainer was Primero. I accumulated the warrants in the .20s. Just months later, I sold for as high as $1.93 -which just goes to show how DUMB market participants can be. Why would ANYONE sell so many warrants in such a cash-cow of a company so cheap? And they had over 3 years left on them at the time!
Everyone should focus on WHAT they own, not on how dumb, short-sited participants are pricing things.
What they own and what they are thinking about buying to add to their holdings!
No, not just a few percent a year!
Gold should be able to get to the 1760 area at least for this month and tackle 1800 in January. Just my opinion.
With the news that came out today, you very possibly could be a bit low!
Big Al,
Make sure you watch the Poinsettia bowl; SDSU VS. ARE ARCH RIVAL OF YESTERYEAR -BYU.
BYU has a top rated defense vs. the Aztec balanced attack with a ground and pound slant. Should be fun… A lot of fun. Wash did not play SDSU in BB this year, just to answer a question you posed to me a few days ago……nothing happening on the PM front. I did CONSOLIDATE some holdings and I purchased more Timmons Gold, Sandstorm Gold and bought shares in Corvus Gold…I am basically hanging out here in SD. It has been really, really beautiful down here and all the college kids have cleared out of PB.
All the best,
Marc