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A focus on gold, gold stocks and the US dollar

July 13, 2016

Doc is with Cory to wrap up the markets for today. We stick to the US dollar and gold sectors with forecasts for each and a discussion of the main drivers. The key take home for the gold sector especially in terms of stocks is that this is just the start.

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Discussion
56 Comments
    Jul 13, 2016 13:36 PM

    Excelsior, thanks for the interview with Bebek. Do you like Auryn more than NSRPF?

      CFS
      Jul 13, 2016 13:40 PM

      You should pay attention to the theory on which Novo is trying to find an analogy to S. Africa gold in Australia. I personally find the theory to be flawed, even though this is one of Jay Taylor’s bigger holdings. That gold can be found, I do not doubt; for their theory that they can find an analogy to the reefs of S. Africa, due to very early take up of gold by microbes is, I believe, pure science fantasy.

        Jul 15, 2016 15:12 AM

        CFS:

        You don’t understand the theory. All the microbes do is produce oxygen and eventually turn to carbon. The water 2.5 billion years ago had 40 times more ability to dissolve gold so when oxygen was produced, the gold precipitated out of solution. Read up on banded iron formations, same, same.

      Jul 14, 2016 14:08 AM

      I don’t own either at present, but they both seem like unique opportunities to me.

      Auryn has less fully dilluted shares at 66,123,248 than Novo Resources with 93,189, and Auryn has $15 million in the bank versus Novo’s $4 million. As a result Auryn’s shares are priced quite a bit higher, so I haven’t really done the math there….

      The grade on Auryn at Committee Bay seems to be in the 7-8 g/t Au, where with Novo it is closer to an average grade in the 2-4 g/t Au.

      I also have been a big fan of Asanko, so I like the Auryn’s team has a track record of success with Asanko and Cayden. I’m also interested in their takeover of Homestead Resource Corp.

      Novo Resources is interesting in that it can use gravity recovery at an 85% recovery rate, and doesn’t need to drill or blast to get rid of the overburden, but can actually just use a bulldozer to remove it. That really makes things much simpler, and will result in less dilution on the strip ratio.

      Novo Resources looks like they are further along with their permitting and trial mining, so that is promising, with production forecast for next year.

      Both companies have merit, and seem to have a solid path forward.

      Cheers!

        Jul 14, 2016 14:28 AM

        Thanks, I have a lot of Novo, and may buy Auryn on a pullback.

    Jul 13, 2016 13:44 PM

    DOC….Would you hazard a guess on what the gold price will be at the end of the year…..Thanks.

    Jul 13, 2016 13:47 PM

    After the bell today:

    Jaguar Mining Intercepts High-Grade Gold Mineralization And Confirms Downward Extension at Depth at Turmalina Gold Mine

    http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20160713:nPn21Rl2Xa

      Jul 14, 2016 14:11 AM

      Splendid. Thanks for that post Matthew.

    Jul 13, 2016 13:52 PM

    It has been a tad painful watching several gold and silver miners over the past week(s) expecting them to pull back… and they have just continued to climb and climb… some are now, in percentage terms, 20 or 30 percent higher than a week or so ago.

    So I look at where they have gone… and how quick they have moved up… and I now wonder “Are these at the top?”… and so I hold back… and up they continue to go… So I wait for the correction… and I wait… and I wait… and days becomes weeks… and if any correction does finally come it probably will mean that many of these stocks will not even fall to the levels where I first started watching them…

    So be careful folks as a crash is coming – I am just going to start buying tomorrow.

      Jul 13, 2016 13:48 PM

      Probably a wise move, Bob. Even if you buy and it corrects 50%, you will still be making insane profits 2 years from now.

      CFS
      Jul 13, 2016 13:58 PM

      As Rick Rule has often said
      , “if a stock goes down 90% and then it doubles, it’s still down 80%”.
      That is where many mining stocks are now.
      We are in a bull market. No markets move smoothly straight up or down.
      If you’ve believed Doc this long, don’t totally abandon your belief right now, because we are close to a small correction, in my opinion. No one can predict the future, because it is not fully determined, but affected by happenings along the way. If history is any guide to the future, however, about now or pretty soon there should be a small correction.
      I could probably dig out statistics, which would give probabilities of a market rising every week for five weeks without a 10% correction….they’re small even in a bull market. They get smaller for rising every week for six weeks in a row. They get even smaller for rising seven weeks in a row, which my gut says is where we are about now. Conclusion, is that we are about to have a correction!

    Jul 13, 2016 13:12 PM

    Fed’s Mester Says Helicopter Money “The Next Step” In US Monetary Policy

    Jul 13, 2016 8:24 AM

    Think “helicopter money” is/will be confined only to Japan, which has been sending conflicting trial balloons about this unprecedented next step in monetary policy for the past two days (first Japan’s Senkei reported that the government will be adopting “helicopter money” followed by a government spokesman denying the report, then followed by a separate Bloomberg report about a 10T yen stimulus plan, the concluding with Abe advisor Koici Hamada saying that “boosting fiscal and monetary stimulus at the same time would be effective” in Japan)? Think again.

    Speaking overnight in Australia, the Fed’s Loretta Mester said “helicopter money” could be considered to stimulate America’s economy if conventional monetary policy fails.

    Continued @ http://www.zerohedge.com/news/2016-07-13/feds-mester- says-helicopter-money-next-step-us-monetary-policy

    B
    Jul 13, 2016 13:40 PM

    Doc, volume on the upside is good today, yesterdy we were headed to 1250?
    Whats changed?

    Jul 13, 2016 13:15 PM

    Considering the $US weekly chart, and the silver/gold ratio, we aught to be seeing a dollar decline. But the weekly chart demands that we had a rebound, if only that the technicals are positioned. There HAS been a moving average crossover, though it’s a 50/50 proposition which way it may go. CCI(8) is indicating a reversal, but it’s not very reliable.

    http://schrts.co/SLSBeo

    CFS
    Jul 13, 2016 13:07 PM

    Mcalvany of low interest rates, Japanese money:

    http://mcalvanyweeklycommentary.com/wp-content/uploads/ica2016-0713.mp3

    Jul 13, 2016 13:28 PM

    Hi Doc,
    Yesterday, you sounded confident that a correction had begun. Today, you mentioned that a correction would happen sooner or later. Did gold retaking 1340 change your view? It feels right now like the buyers of minning shares have no fear. Nobody wants to sell or has any fear that would cause them to do so. And who can blame anyone for that, really – based on the recent trend?

    Jul 13, 2016 13:39 PM

    Gold and silver are on a slightly increasing path for the summer (Gwen Preston is right).

    Jul 13, 2016 13:43 PM

    So much for that U-Shaped recovery. First Majestic has gained back almost all of it’s losses from 2008 in 6 months. That is what bull markets do. Leave most people at the station waiting for a pullback

    Jul 13, 2016 13:45 PM

    My fault…from 2011.

    CFS
    Jul 13, 2016 13:03 PM
    CFS
    Jul 13, 2016 13:30 PM

    Notwithstanding commentary above on Palisade radio, which is worth listening, I will probably start shorting the NASDAQ soon.
    I track volume of shares going down to volume of shares going down.
    Historically I have found that when this ratio rises above 1.5 for more than 3 days it is favorable to short the market.
    On 7/13 that ratio stood at 1.47, according to my data set.
    Because of QE Type banking injection, it is necessary to stay away from S&P type shares.
    Hence the NASDAQ.

    I believe Jay Taylor was shorting the market until recently, but unprofitably, because he was too early.
    (Hence my requirement of a volume based analysis, with a trend started.)

    I guess everyone else here mostly are chart followers, but there’s information in volume too!

    Jul 14, 2016 14:03 AM

    Fwiw:

    Barrick Gold Corp. (NYSE: ABX) was raised to Buy from Hold with a $26 price target (versus a $21.08 prior close) at Jefferies. It has a consensus analyst price target of $20.46 and a 52-week trading range of $5.91 to $23.47. Barrick is one of the top miners in the world for gold, with a market cap of $24.5 billion.

    Coeur Mining Inc. (NYSE: CDE) was raised to Outperform from Sector Perform with a $18 price target (versus a $13.01 close) at RBC Capital Markets. The consensus price target is $12.38, and the 52-week range is $1.62 to $13.08.

    7/13/16 – Agnico Eagle Mines upgraded by Desjardins to buy.

    Today – Dundee downgraded Agnico-Eagle Mines (AEM) to Neutral
    Previous rating: Buy

    Jul 14, 2016 14:40 AM

    July 14 (Reuters) – Scorpio Gold :
    * Produces 10,089 ounces of gold in q2 2016 at Mineral Ridge
    Operation, Nevada
    * Announces change in cash flow distributions from Mineral
    Ridge Project
    * Production at Mineral Ridge in Q2 of 2016 totalled 10,089
    ounces of gold; 4,325 ounces of silver, representing increases
    of 16% and 20%

    CFS
    Jul 14, 2016 14:55 AM

    Looks to me that the rigidity of silver prices on the SGE might be affecting the COMEX and pulling that price back up!

    CFS
    Jul 14, 2016 14:03 AM

    Palladium still very strong, up $5 since 00:00GMT

    CFS
    Jul 14, 2016 14:09 AM

    Happy Baseille Day everyone. Vive la Revolution!
    (Coming to a neighborhood near you, one of these days.)

    CFS
    Jul 14, 2016 14:10 AM

    My iPad Incorrects again Bastille.

    CFS
    Jul 14, 2016 14:28 AM

    ComerzBank comments on Silver Inflow Since March
    Thursday July 14, 2016 08:58

    Strong exchange-traded-fund inflows are occurring in silver, says Commerzbank. “The iShares Silver Trust, the world’s largest silver ETF, saw inflows of 162.6 tonnes yesterday – its most pronounced daily inflow since early March,” Commerzbank says. “Holdings in the silver ETFs tracked by Bloomberg have soared by 334.3 tonnes to a record 20,375 tonnes since the beginning of the month. The situation has been rather different for platinum recently, with ETF outflows of a good 50,000 ounces having been recorded on the last two days of trading.”

    Jul 14, 2016 14:28 AM

    I posted the following chart three months ago and the silver price has followed my expectations since then very closely (arrows):

    http://schrts.co/jqXLZw

    Another big move is coming and, once again, few will be aboard the silver express.

      CFS
      Jul 14, 2016 14:37 AM

      Yes, indeed! The volume also was shouting it out.
      My only concern is the speed…..the RSI is saying “on average slow down a bit”
      That may be a correction followed by a resuming of the up-move, or it could be just a sideways move before the upwards climb continues.

        Jul 14, 2016 14:06 AM

        Re: RSI concern

        I think we’ll get the reverse of 2013’s action (black boxes on chart). If so, then the RSI could stay overbought for four months while the MACD goes to about 2.7.

        http://schrts.co/jqXLZw

          CFS
          Jul 14, 2016 14:25 AM

          I bow to your chart expertise. I am not a chartist, and never claim to be.
          But they really are useful for timing, sometimes.

          Thanks for all your posting, Matthew.

            Jul 14, 2016 14:40 AM

            The look of daily chart does give us bulls reason for a little short term stress but it is holding up very well since that spike on the 5th.

            http://schrts.co/Df5eJd

      Jul 14, 2016 14:46 AM

      Matthew:
      Thanks for your postings on JAG, Coeur, and the silver chart. Very helpful. You may enjoy this: http://news.goldseek.com/GoldSeek/1468502631.php

        CFS
        Jul 14, 2016 14:57 AM

        Don’t forget the very long term potential cup and handle that may be created once silver doubles……..that chart would indicate three-digit silver in 3 to 5 years!

        Jul 14, 2016 14:08 AM

        Thanks Silverdollar, I’m always interested in other angles.

      Jul 14, 2016 14:47 AM

      Do you think that this move will happen soon?

        Jul 14, 2016 14:10 AM

        Yes, if you consider a month or two to be soon.

        http://schrts.co/Yp9wrA

          Jul 14, 2016 14:12 AM

          September seems most likely…

            Jul 14, 2016 14:16 AM

            Thank you Matthew always appreciate it!

    CFS
    Jul 14, 2016 14:32 AM

    TD Securities:Palladium Could Rally To $725/Oz
    Thursday July 14, 2016 08:58

    TD Securities sees “more upside still in the cards” for palladium even after it rallied some 24% from the late-May lows to where it left off in trading on Wednesday. “We would not be surprised to see palladium test the highs near $725/oz recorded back in October 2015,” TDS says. The metal rallied 2.5% on Wednesday due to increased risk appetite and speculation about more monetary stimulus in China. “Given that Chinese auto sales which drive palladium auto-catalyst demand have picked up already in recent months, it is reasonable to assume that new stimulus could accelerate this trend and tighten this market,” TDS says. As of 8:28 a.m. EDT, Nymex September palladium was up 40 cents to $644.60 an ounce.

    Jul 14, 2016 14:37 AM

    Anybody have any thoughts on sugar?

      CFS
      Jul 14, 2016 14:14 AM

      Gary Savage says the bottom is in.
      Looking at the futures market, I tend to agree.

        Jul 14, 2016 14:07 AM

        Thank You!

    Jul 14, 2016 14:42 AM

    The Loonie is looking very good/bullish here as it again refuses to go as low as some analysts expect.

    http://schrts.co/BIHT3M