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Here are some reasons why the gold stocks are not leading gold higher

Cory
February 27, 2017

Over the past couple trading days Doc and I have been chatting about how the gold price is moving up but the stocks are not sharing in these gains. Today we look at some fundamental reasons why these stocks are lagging. Recent earnings are discussed as well as what will be needed to light a fire for the stocks.

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Discussion
50 Comments
    Feb 27, 2017 27:20 AM

    Once Doc’s ideas with pm stocks comes to fruition, likely 2018 or later, what are we millionaires going to be doing………..and where are we going? Here are some thoughts about those who have already reached that status: http://www.marketwatch.com/story/this-country-is-no-1-for-millionaire-migrants-and-its-not-the-us-2017-02-27

      Feb 27, 2017 27:45 PM

      I’ll need some tax planning advise !

    Feb 27, 2017 27:44 AM

    PVG 700@ $10.22

    Feb 27, 2017 27:44 AM

    When gold is at 10k I’ll be eating Trader Joe’s coffee bean blast ice cream as I bask outside in the sun and wait for the postman to deliver my dividends from NEM, ABX, FNV, RGLD, AG, HL, EXK, CDE, PPP, SAND, SSRI, AEM, PAAS, SLW, TAHO, GG, NGD, NCMGY, NSRPF, DRGDF, OCANF, EGO, PVG, TGD, MUX, TORXF, KLGDF, XOM, SU, RDS.A&B, DVN, COP, CVX,MMM, RMCF, NESTLE, VZ, T, UNP, GSK, GORO, etc.

    Feb 27, 2017 27:54 AM

    A mid-afternoon “dump” by GDX and GDXJ

    BDC
    Feb 27, 2017 27:01 PM

    Bill says it’s also the “accumulation and distribution” cycle: http://www.stocktipster.net/index.php/2017/02/26/time-accumulate-gold/.

    Feb 27, 2017 27:17 PM

    I think it’s too soon to read much bearishness into the current action. The miners have already had a very nice move this year, even when priced in gold. GDX:GLD gained 27% before bumping into a nearly horizontal weekly Bollinger band and has now pulled back to the 20 week MA and retraced 50% of the move in the process. This is not unusual behavior.

    http://stockcharts.com/h-sc/ui?s=GDX%3AGLD&p=W&yr=3&mn=9&dy=0&id=p08089016527&a=509530900

      Feb 27, 2017 27:20 PM

      It is bullish, if anything, that my portfolio of juniors is down less than .3% today while GDXJ is down 6%.

        Feb 27, 2017 27:01 PM

        GDXJ finished the day down 9.5% while my portfolio of tiny caps lost .6%.

      Feb 27, 2017 27:19 PM

      Goldfinger had some interesting thoughts today on the selldown in Gold/Silver miners:

      ____________________________________________________________________________

      @Goldfinger – “Looking through the wreckage of the charts, a few comments:”

      1. $GDX stopped at an important spot, held above rising 50-day SMA and important support $22.50-$23.00

      2. Some talk that jump in $Fed futures March rate hike expectations triggered sell-off in miners, sure it had something to do with it (certainly not a positive) but likely many more factors at play.

      3. Heavy volume closing prints in $GDX and $GDXJ, totaling about US$1.8 billion in the final minute between the two ETFs. Some people speculating that the closing prints are a bullish indication because they occurred on an uptick, plus the heavy volume. Not necessarily bullish at all, market makers likely brought price down to those levels to get the trades done (market makers knew how much was for sale 20 minutes+ before the close).

      4. Only one explanation for today’s type of selling, hedge fund liquidation en masse (more than a couple of funds sold a lot of mining stock today).

      5. The price action is hugely disproportionate to the price moves in $gold and $silver , a long $GDX vs. short $GLD mean reversion trade is very interesting here short term. ”

      – from #index, about 3 hours ago

    Feb 27, 2017 27:18 PM

    Wow! Almost got my FACE ripped off today in miners! Sold my ASM again on Friday for some lunch money. Bought a 1/4 position in JNUG and DUST. Added to my JNUG this morning and stopped out on the new shares for $8 loss. Made up for the loss and then some with a stop out on USLV for some coffee money. Currently riding the DUST gold miner bear like a wold man!

    Feb 27, 2017 27:28 PM

    This could get pretty ugly but if patient another time to add a little to positions.

      Feb 27, 2017 27:45 PM

      Doc,
      do you envision same for Silver?

        Feb 27, 2017 27:50 PM

        Cali, I believe silver won’t be spared. Look at what is happening to HL and PAAS today. Having said that I’m not selling this move down but will add again when they bottom. As mentioned I did not chase this thing since the technicals I watch had warning signs all over the map. The stocks I’ve primarily been purchasing the last few weeks are stocks that did not share in the move up.They all are holding their own today.

          cmc
          Feb 27, 2017 27:39 PM

          Doc, you have been saying the PMs look tired and lots of folks were poo-pooing that. Great call, my friend! That’s why I am a follower of yours. I was waiting for a good time to add to my positions and this is it. Thanks, doc.

    Feb 27, 2017 27:34 PM

    WOW! Glad I sold ASM on Friday look at the daily! Going down like an airliner hit by a Russian SAM!

      Feb 27, 2017 27:17 PM

      I still held onto my ASM position….. Ouch!

      It did bounce back some in after-hours trading though.

        Feb 27, 2017 27:05 PM

        At least Santacruz Silver was on quite a tear today, and I got to trim back some profits to redeploy into some of the other silver stocks that pulled back.

        It’s like a game of wack-a-mole where one is popping up while the others are ducking down.

    CFS
    Feb 27, 2017 27:36 PM

    Integra Gold Announces Updated Preliminary Economic Assessment: Pre-Tax
    NPV of C$602 M and IRR of 55% (After-Tax NPV of C$363 M and IRR of 43%) at
    US$1,250 per Ounce of Gold

      Feb 27, 2017 27:46 PM

      What a freaking joke………

        Feb 27, 2017 27:48 PM

        Spain is sending some bankers to jail…….about time some bankers go to jail , along with some Fed people…..

    Feb 27, 2017 27:42 PM

    Gold miner bull getting butt ravaged by bear!

    Feb 27, 2017 27:58 PM

    Doc, what level do you see GDX bottoming at? Is $16.50 silver still on the table or is that possibility no longer valid?

      Feb 27, 2017 27:08 PM

      Pardu, the odds are very good for silver to see about 17.10-17.20—then I’ll feel more confident about whether I can tell if we see 16.50.

        Feb 27, 2017 27:47 PM

        Do you see a reverse head and shoulders bottom occurring now in GDX?

    Feb 27, 2017 27:58 PM

    Look at the daily candle sticks over the last year and you will see many days for any miner that look like this day over the last year of upward trend. No need to worry today.

    Feb 27, 2017 27:20 PM
    Feb 27, 2017 27:21 PM

    Wow SMASHED today…i thought things were acting weird as hell…..
    ZJG -9% Jesus

    Feb 27, 2017 27:29 PM

    Gold after the close down about 5.50. The opening tomorrow could be instructive.

      Feb 27, 2017 27:17 PM

      Doc: Have you bought any more Dennison?
      I think there is a modest chance this could be a major head fake in the miners………I notice HUI stopped at what looks like fairly good resistance. If not, easy come, easy go. Smile.

        Feb 27, 2017 27:31 PM

        Silver, I haven’t purchased more Dennison at this point—I’ve got quite a bit—I’ve been focusing on URRE right now since I love its’ technicals—not investment advice

          Feb 27, 2017 27:56 PM

          Thanks Doc. Just wondering. What happened to URRE in 2011? A massive reverse split?

          Feb 27, 2017 27:23 PM

          Yep. I’ve followed URRE for a long time, but exited in January of this year on the spike up because I don’t like that they decided to suddenly get into Lithium (right after buying an insitu mining operation “Anatolia Energy” in Turkey). They didn’t offer much clarity on what they were going to do in Turkey, which has no history of Uranium mining, and they sold off some of their NM assets to Laramide in a surprise move. Uranium Resources seems to have a real identity problem right now, and Denison is a much more solid and reliable Uranium company between the two companies, hands down….

          Now if it is just for a trade, then URRE has bigger swings to the upside and downside than Denison, so it is fun to do short duration trades with.

            Feb 27, 2017 27:33 PM

            It’ll be a trade based on some technicals I’m watching.

            Feb 27, 2017 27:40 PM

            It’s great for trading, but I have no idea what they are doing going into Lithium headlong, selling their NM assets to Laramide, and what their strategy is with the assets in Turkey. To me there are better Uranium stocks to hold for the long game, but URRE is a peppy stock and I made some cake on it earlier this year and had a few good trades in it last year as well.

            All the best Doc.

    Feb 27, 2017 27:35 PM

    Uranium stocks held their own today—getting in a nice buy range.

      Feb 27, 2017 27:30 PM

      Uranium stocks were kind of a mixed bag overall with 1/3 up, 1/3 flat, and 1/3 down.

      Here were the Uranium Miners that had a positive day today:

      Uranium Stocks – SYMBOL – % CHG

      Azincourt Uranium Inc. AAZ.V +37.50%
      Eclipse Metals Limited EPM.AX +12.50%
      Skyharbour Resources Ltd. SYH.V +11.29%
      Uranium Resources, Inc. URRE +8.25%
      ALX Uranium Corp. AL.V +8.00%
      Mega Uranium Ltd. MGA.TO +7.84%
      enCore Energy Corp. EU.V +7.41%
      Bannerman Resources Limited BMN.AX +6.78%
      UR-Energy Inc. URG +4.64%
      NexGen Energy Ltd. NXE.TO +4.13%
      Denison Mines Corp. DNN +3.74%
      Energy Resources of Australia Ltd ERA.AX +3.33%
      Cameco Corporation CCJ +3.11%
      Forsys Metals Corp. FSY.TO +3.03%
      Fission Uranium Corp. FCU.TO +2.56%
      Peninsula Energy Limited PEN.AX +2.38%
      Toro Energy Limited TOE.AX +2.13%
      Lightbridge Corporation LTBR +1.94%
      Laramide Resources Ltd. LAM.TO +1.59%
      Global X Uranium ETF URA +1.55%
      Boss Resources Limited BOE.AX +1.45%
      Uranium Energy Corp. UEC +1.25%
      VanEck Vectors Uranium+Nuclear Engy ETF NLR +0.03%

    Feb 27, 2017 27:49 PM

    For gold and silver stocks to do well you would need the kind of metal prices that would not only cover costs of production but also provide the kind of profit margins that justify the faith of investors and reward them with dividends, compensate for political risk and allow the company to expand or modernize production and find new reserves. Not sure we are even close to this yet. There is too much short selling and the financial equivalent of a drive by shooting every now and then for stocks to be a good investment. What is good is getting the remaining supplies of metal squirrelled away and forcing the market to up the bid in order to get the goods.

      Feb 27, 2017 27:13 PM

      I was here 1yr ago and 2yrs ago. Gold.stocks are shooting stars not investments.
      I recomended beddy by reits and preffered shares. Their up 30-40% and pay8ng me 7-9% while I wait. The broken clocks about the Dow collapsing yadada never happend. Bob Moriarty is one. The US market place is the safest on earth. Where the hell are people going to put their money!? Europe china lol. Even worse gold stocks that collapse10 points in a day! Thats a normal day gold pumping idiots. My buildings will still be stqnding when the dust settles.

        Feb 28, 2017 28:43 AM

        Bill, the gold miners move the way they do for valid reasons and always have. What’s the big deal?
        Btw, I don’t know if you’ve noticed, but you always seem to show up to knock the sector precisely when you should be a buyer.

          Feb 28, 2017 28:56 AM

          I should probably sell my WRI and buy PPP today!

          Feb 28, 2017 28:54 AM

          Agreed ALMOST Mathew….One can never go to sleep on these things….you’ll wake up broke. Point being their speculations not investments.
          I loaded up ZJG at $7.25 and others right at the bottom. Haven’t sold a dime.
          Ive heard a zillion times from talking heads about the safety of gold /resource stocks. NOT. Big money can’t go there….they pay you nothing to wait…There’s a time and place…
          If we can shake off this mini crash we will move higher…I hope.

    Feb 28, 2017 28:59 AM

    I did well last year and got the hell out…..I don’t have much time and get board as heck with this stuff. I just want to buy at a bottom and blow it all out after a run…..Now my preffereds have soard and pay me 9% to sleep at night…..unless Royal Bank, Transcanada and others go titters…lol

    Feb 28, 2017 28:53 AM

    I’m impressed, I have to say. Really rarely do I encounter a weblog that’s both educative and entertaining, and let me inform you, you’ve gotten hit the nail on the head.

      Feb 28, 2017 28:27 PM

      LOL nice Bong