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An outlook for gold stocks, silver, US markets and US Dollar

Cory
August 31, 2016

Cory and Al wrap up the markets for the final day on August. We take a look at the technicals for gold stocks while also considering gold and silver, then move on to the US markets and the US dollar.

Cory lays out the potential of a September that is tough for the US markets and the precious metals. If the jobs number on Friday is decent the Fed has the potential to continue to talk up a rate hike. If this happens for the first couple weeks investors will start to take positions off across the board. He is not expecting a rate hike but only the Fed continuing to talk this up.

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Discussion
70 Comments
    Aug 31, 2016 31:20 PM

    Excellent wrap, guys. ++1

      DC
      Aug 31, 2016 31:41 PM

      Absolutely agree, excellent!!!
      Thanks Big Al and Cory!

    CFS
    Aug 31, 2016 31:28 PM

    Brexit vote was June 23, if my memory is correct.

    Aug 31, 2016 31:31 PM

    Gary Savage has some nice charts that set up/support his prediction of the next leg up in gold. His thesis is it will be driven by the next down leg in the US dollar. Should be interesting.

      Aug 31, 2016 31:39 PM

      Not many looking for the next leg up. A lot of downers.

    Aug 31, 2016 31:45 PM

    I think the gold sector is getting ready to surprise a lot of smart people. Silver is getting ready to rise again versus gold.

    SLV:GLD

    http://schrts.co/PjVyZJ

      Aug 31, 2016 31:50 PM

      I posted the following chart in June or July to show why the silver-gold ratio matters.
      (My expectation that both the miners and the SG ratio were going higher was correct.)

      http://schrts.co/CkL4mf

    Aug 31, 2016 31:18 PM

    The fed has a job report on Friday which means what will happen to gold if it is a strong number. The election is getting very close I’m betting gold will take it on the chin. I am out of gold stocks for now but that will change on a surprise job move down. DT

    Aug 31, 2016 31:27 PM

    It’s Time to Turn Out the Lights in Illinois

    The roads in Illinois are in decay. This may be the first state to go bankrupt. The question is not if, but when. State unions are so greedy that they are destroying the very state. This is exactly how Rome fell — government employees against the people.

    https://www.armstrongeconomics.com/world-news/sovereign-debt-crisis/its-time-to-turn-out-the-lights-in-illinois-sell-all-government-debt-there-before-its-too-late/

      Aug 31, 2016 31:56 PM

      Zerohedge reported several weeks ago, millionaires are in exit mode.

        Aug 31, 2016 31:30 PM

        exit mode from what ? Equities?

          Aug 31, 2016 31:42 PM

          Exiting ,leaving the state,moving ,saying bye,bye

      CFS
      Aug 31, 2016 31:39 PM

      Illinois has always been the cesspool of the democrats, since the days of Al Capone.
      5 out of the last 7 or 8 governors have been found guilty of corruption type charges and most ended up in jail.
      Does not happen anymore because the Justice departments at all levels of Government are now Democrat controlled. example – Hillary, the unconvicted crook, whose crime family should have been in jail for her next 8 lives, as well as this one.

      Sep 01, 2016 01:17 AM

      Marked, if a State’s roads are a barometer for its economic well-being then here in the UK we’re in a parlous state. Everywhere you drive it seems road markings along with their accompanying potholes are deplorable. It’s as though councils across the nation have all conspired to treat our roads as a non-priority.

        Sep 01, 2016 01:56 AM

        Perilous?

    Aug 31, 2016 31:29 PM

    Zerohedge
    Global Supply Chain Paralyzed..World 7th. Largest Container Shipper Files Bankruptcy,Assets Frozen

    Aug 31, 2016 31:33 PM

    7 out of 10 Millennials are disengaged from Meaningful Employment…zerohedge

    Aug 31, 2016 31:36 PM

    Bobble head Gartman, makes DA statement on Kitco concerning Trump

    Aug 31, 2016 31:28 PM

    EU Govt. Pensions Explode to €63.8 billion

    I have said that the European crisis is all about keeping jobs in Brussels, and now the truth is beginning to surface. The long-term cost of pensions for EU officials has increased very sharply according to one new report. These people are lining their pockets like never before. From late 2014 to the end of 2015, the liabilities have grown by 8.9% and have reached €63.8 billion euros.

    Some of these parliamentary members go and swipe a card to pretend they went to work, for you see, in addition to their annual salary, they get paid €304 euros per day just to show up in addition to a monthly salary of €8.020,53 even if they do never show up to work. There are stories of ministers lining up to swipe their cards to claim the €304 euros for the day and then they leave. Why not? They can neither introduce legislation nor veto it. The whole thing is a sham to make the people think they have a right to vote when there is none.

    https://www.armstrongeconomics.com/international-news/europes-current-economy/eu-govt-pensions-explode-to-e63-8-billion/

      CFS
      Aug 31, 2016 31:32 PM

      EU bueaucrat salaries have always been crazy…….e.g. more than Cameron’s salary as Prime Minister of England.
      There was no way to control the pay inside the EU, since the bureaucrats wrote the laws….individual Members of the EU parliament were not allowed to introduce bills. All bureaucrat controlled. Total corruption and greed.

      Sep 01, 2016 01:00 AM

      Yes, Luxembourg and Brussels – Juncker is from Lux – have benefitted enormously from the EU as they have the vast majority of EU jobs which are incredibly well paid and incredibly well pensioned.

      In other EU countries the EU seems to have, allegedly, basically made some key politicians incredibly wealthy and hence they have become pro EU. It is a very lucrative gravy train for a tiny minority.

    Aug 31, 2016 31:13 PM
    CFS
    Aug 31, 2016 31:27 PM

    When you hear the jobs report on Friday you might think about:

    http://radio.goldseek.com/nuggets/roberts.08.31.16.mp3

      Aug 31, 2016 31:31 PM

      Interesting history lesson. Thanks for posting.

    CFS
    Aug 31, 2016 31:35 PM

    gold:
    Price Support Pivot Point Resistance
    1,311.38 1,299.36 1,309.93 1,320.50

    Aug 31, 2016 31:21 PM

    This was a really good article and I am a fan of many of these companies. Check it out:

    Junior snapshot: Nine companies on the move in Mexico

    AVINO SILVER & GOLD MINES
    GOLDGROUP MINING
    McEWEN MINING
    MINERA ALAMOS
    NEW GOLD
    PRIMERO MINING
    SAN MARCO RESOURCES
    SIERRA METALS
    XTIERRA

    http://www.northernminer.com/news/junior-snapshot-nine-companies-move-mexico/1003777022/

    Aug 31, 2016 31:30 PM

    BTW – Gold is back knocking on $1308 ….. Will she hold or give way to a break down to the $1290-$1280 congestion zone? Make it or break it time……

      Aug 31, 2016 31:31 PM

      I’m going to go dry the shirt I just sweated through with some Bounce dryer sheets to see if that helps…..

        Sep 01, 2016 01:01 AM

        LOL

        Sep 01, 2016 01:04 AM

        Wow – Gold has been locked between $1307-$1308 for what seems like an eternity.

        I have to get a few hours of sleep, but rest assured, I sent this link to the powers that be in Hong Kong, New York, and London to see if they would oblige:

        https://www.google.com/search?q=bounce+dryer+sheets&biw=1536&bih=888&source=lnms&tbm=isch&sa=X&sqi=2&ved=0ahUKEwjJ_Z2kye3OAhUFOiYKHRw2A-QQ_AUIBygC

          Sep 01, 2016 01:09 AM

          It went down to a 1305 handle.

          Sep 01, 2016 01:03 AM

          Thanks GUY, you’re always there for us!

        Sep 01, 2016 01:28 AM

        Excelsior –
        Enjoyed your lists that you put up….Are you or did you put up your list for near term developers or explorers yet..? Thanks

          Sep 01, 2016 01:43 PM

          No I haven’t posted that list yet. I have a whopper list, but it is tough in this area because, some explorers claim they are moving into development (but it will be multiple years or its a long shot); or some already bought or own assets with development in place, (but they’re out of money and/or waiting for higher prices); and then some companies have an advanced asset and feasibility study but they require hire metals prices and are waiting to get bought out or find a JV partner.

          My focus is to look for companies that can move into production in less than 2-3 years, and have a strategy in place, and they are making progress to that goal with their build-out, social license and activities, permitting process, exploration work to date, Feasibility Studies, and all indications lead to these companies having a high probability of making it back into production.

          I’ll probably just post the whole dang list up and let everyone figure out which ones they like. Sometimes just knowing what is on the menu is a big help though…..

    Sep 01, 2016 01:22 AM

    Deutsche Bank Refuses Delivery Of Physical Gold Upon Demand ….zerohedge

    Sep 01, 2016 01:36 AM

    ISVLF fill @ $.5296. Yes

      Sep 01, 2016 01:48 AM

      I have started wading into ISVLF this morning with my lowest fill @.5175, and I’ll continue adding throughout the day. I’ve also been adding to Avino, Americas Silver, and nibbling at a few other smaller silver, gold, and prospect generator companies…..

        Sep 01, 2016 01:01 AM

        I’ve been in trim-mode so much the last few months, that I forgot the joy of buying 🙂

          Sep 01, 2016 01:05 AM

          Let’s hope there is joy in the morning, Saturday.

            Sep 01, 2016 01:22 AM

            I’ll be happy whether there is joy in the mining space or not on Saturday morning. Looking forward to the long Holiday Weekend! We are thinking about going and touring some caves to get out of the heat.

            As for the miners, if they pull back further, then I’ll get more aggressive with lining up stink bids in about 2 dozen companies…. Some them are just getting back to levels that look attractive once again.

      Sep 01, 2016 01:18 AM

      ASM fill @ $1.93, I’m all in again.

        Sep 01, 2016 01:26 AM

        Nice work! I had a $1.96, and $2.01. Fun times!

    Sep 01, 2016 01:45 AM

    Massive collapse in comfort for black Americans last week…biggest drop since February 2001 zerohedge

    Sep 01, 2016 01:48 AM

    U.S. manufacturing crashes into contraction in August. zerohedge

    Sep 01, 2016 01:50 AM

    Column: For how long will Glencore hold its Zinc capacity cuts?
    Andy Home – Wed Aug 31, 2016

    http://www.reuters.com/article/us-glencore-zinc-ahome-idUSKCN1160Y1

    Sep 01, 2016 01:04 AM

    I have a bad feeling about this correction,but maybe thats a good thing.
    I think we are going lower,but i am buying back my trimmings as we go lower.

      Sep 01, 2016 01:45 AM

      It makes sense to be nervous Pete, as the metals could still correct quite a bit more, and the miners are quite volatile. I’ve been nibbling at some of the companies I like this morning, because the general sentiment is getting a bit too gloomy, and that is always my signal to start at least adding a bit. I took profits in the stocks I’m adding to at much higher levels, so I don’t feel bad adding some on days like this. If they go down another 15-30% then I’ll add more aggressively.

      __________________________________________________________________________

      Random thought – whenever someone says, “I got a bad feeling about this,” it always makes me think of Star Wars… in particular Han Solo.

      “I’ve got a bad feeling about this!” – Star Wars montage

      https://www.youtube.com/watch?v=9bR8uRWXKQM

        Sep 01, 2016 01:54 AM

        Ha,funny, Excelsior,
        The good thing is that i made my most profitable trades when i “had a bad feeling about this”, Thanks.

    Sep 01, 2016 01:22 AM

    Overnight Markets and News
    Sep E-mini S&Ps (ESU16 +0.15%) are up +0.16% and European stocks are up +1.00% at a 2-week high amid positive signs for global growth. Manufacturing activity in China unexpectedly expanded at the fastest pace in nearly 2 years last month and manufacturing activity in the UK expanded at the fastest pace in 10 months. Mining stocks are leading gains in the overall market with Glencore Plc and Rio Tinto up over 1% as signs of stronger global manufacturing activity boosts copper prices. Asian stocks settled mixed: Japan +0.23%, Hong Kong +0.81%, China -0.72%, Taiwan -0.75%, Australia -0.32%, Singapore -0.15%, South Korea -0.33%, India -0.10%. Despite the stronger-than-expected Chinese manufacturing data, Chinese stocks closed lower on speculation the stronger data will reduce the chances of additional government stimulus. Japan’s Nikkei Stock Index climbed to a 2-1/2 week high as exporter stocks rallied after USD/JPY rose to a 1-month high, which improves the earnings prospects of exporter companies.
    The dollar index (DXY00 -0.03%) is down -0.03%. EUR/USD (^EURUSD) is down -0.08%. USD/JPY (^USDJPY) is up +0.25% at a 1-month high.
    Dec T-note prices (ZNZ16 -0.16%) are down -8 ticks.
    The UK Aug Markit manufacturing PMI rose +5.0 to 53.3, stronger than expectations of +0.8 to 49.0 and the fastest pace of expansion in 10 months.
    The China Aug manufacturing PMI unexpectedly rose +0.5 to 50.4, stronger than expectations of -0.1 to 49.8 and the fastest pace of expansion in 1-3/4 years.
    U.S. Stock Preview
    Key U.S. news today includes: (1) Aug Challenger job cuts (Jul -57.1% y/y), (2) weekly initial unemployment claims (expected +4,000 to 265,000, previous -1,000 to 261,000) and continuing claims (expected -2,000 to 2.143 million, previous -30,000 to 2.145 million), (3) revised Q2 non-farm productivity (expected -0.6%, prelim-Q1 -0.5%) and revised Q2 unit labor costs (expected +2.0%, prelim-Q2 +2.0%), (4) final-Aug Markit U.S. manufacturing PMI (expected unch at 52.1, prelim-Aug -0.8 to 52.1), (5) Jul construction spending (expected +0.5%, Jun -0.6% m/m), (6) Aug ISM manufacturing index (expected -0.6 to 52.0, Jul -0.6 to 52.6), (7) Aug total vehicle sales (expected 17.20 million, Jul 17.77 million), and (8) USDA weekly Export Sales.

      Sep 01, 2016 01:36 AM

      Looks like unemployment numbers going higher

      Sep 01, 2016 01:42 AM

      Continued claims…should be higher with Cisco laying off workers.

    B
    Sep 01, 2016 01:54 AM

    Jobs report should be positive and the closer we get to the election the more labor will be needed.
    After the election there will probobly be a labor shortage due to the #s needed for Trumps wall.
    Unless they use Mexicans,which they could, I hear they’ll be paying for it.

      Sep 01, 2016 01:28 AM

      I thought the plan was to build a giant Jenga wall along the border?

      See at the 2 minute and 25 second mark in this landmark interview:

      https://www.youtube.com/watch?v=c2DgwPG7mAA

      Sep 01, 2016 01:56 AM

      Just have the 3.2 million prisoners ,that are working at ….. .13 cents an hour ,…raise their pay to $5 a day …Keep the work at home.

        Sep 01, 2016 01:04 AM

        Now come on Jerry – don’t the prisoners deserve $15 per hour like the potato salters at the Golden Arches?

          Sep 01, 2016 01:06 PM

          You for got the free room and board

            Sep 01, 2016 01:35 PM

            And Cable TV….