Is gold holding $1,200 significant?
We haven’t mentioned much about the precious metals so far this week so Doc and I take a look at the gold and GDX charts. Technically there are some positives for gold bulls, including holding above $1,200 and increased volume over the last 3 years but Doc and I are not confident that a big pop is going come in the very near term.
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Dirty Tricks by the Democrat Scum bureaucrats:
http://www.zerohedge.com/news/2017-03-14/stockman-explains-mystery-treasurys-disappearing-cash
Trump needs to Napalm the swampo:
http://www.zerohedge.com/news/2017-03-14/stockman-explains-mystery-treasurys-disappearing-cash
Hi Doc, you promised NAT would fall below 8 and it has. When are you buying?
BB, this is for you and BOB UK on NAT. I figure NAT is headed for the area of 5-6 for a double bottom. The fly in the ointment will be their next dividend announcement which should be around the end of April. I may take a position then with tight stops if the dividend is lousy. However, based on the charts I watch it’s going to take longer then that time frame to get down to the 5-6 area and so I feel the dividend announcement probably won’t stem the downturn.
As an addition, oil tanker rates probably won’t recover until 2018 so a positioning in NAT probably isn’t important until the end of 2017
Thanks Doc. Much appreciated.
BB; I mentioned yesterday you would be able to get back into more MUX since it would move down again. Well, it’s getting crushed today. You might want to wait a little though.
Thanks, Doc.
Gold is slowly weakening just like oil was doing at 53 to 54.25. It has taken too long to rally up much like oil which may mean a drop coming. Don’t know why gdxj rallied so much yesterday with no movement in gold.
Tom O’Brien mentioned something about a Rob McEwen company in this.
It’s called a sucker’s rally. And it did its job perfectly by suckering people in. Now we head to new lows.
We could easily head well below 1160 by June/July.
That seems reasonable during the summer doldrums Paul L, and while it would sting in the medium term, longer term that would not really concern me. How did you come up with that support target in Gold (fib level, moving average, prior peak/trough) ?
$USD rising into the anticipated Fed rate hike tomorrow. Precious metals moving in the opposite direction. Not too surprising.
spanky – Do you mean recent lows, or are you saying Gold is going to go down and break the $1045.40 low from Dec 2015?
Are you saying the miners are going to break their Jan 19th 2016 lows?
I could see a bit more weakness going into tomorrow with Fedbabble and the Debt Ceiling debate, but it would still be VERY surprising to see Gold and the miners break their Dec 2015/ Jan 2016 lows from over a year ago.
Just a feeling I have about the speed of the decline which stopped at 1200 and may start to resume as the slow months are coming up with low demand for gold. So another 50 to 70 decline could come to near 1130-35. It is feeling like a bear market with gold almost $200 down from the peak.
We’ll see how things go after this rate hike and debt ceiling business tomorrow, but as a reminder, the metals and in particular the miners have had 2 of their strongest rallies right after the last 2 rate hikes.
I meant recent lows. I do think $gold will bounce soon though and form a perfect head and shoulders on the daily chart. I have no clue why I am still holding my miners. EXK and AG have been absolute disasters for me. EXK peaked out 7 months ago and is still making lower lows. That doesn’t seem too bullish to me. And if it is in a new bull, there will be no rocket ride to new highs anytime soon.
Any investment thesis I had regarding QE, interest rates, inflation, commodity prices, and PMs has been dead wrong since 2011. The Fed did stop QE and they have raised interest rates. Those were two things that I didn’t think were possible.
The fact of the matter is, gold and commodities are *directionally* tied to the USDJPY cross–end of story. The Fed and the BoJ can therefore play this game for a long long time. There are no consequences other than asset price inflation.
It is due for a seasonal bounce mid March as per some charts I saw in one article.
spanky – Thanks for the clarifications on your outlook. As for miners I trade them actively, so it boggles my mind that people could hold them all the way down from 2011 highs. For example both EXK and AG have presented multiple opportunities to buy on dips on sell on rips. I bought some EXK last week trimmed it back on Monday during the trading session, sold another tranche after hours, yesterday, and sold the rest today for a nice quick profit, and rolled that into UVXY . Yes, Gold is correlated with the USD/JPY, but even if they raise rates a 1/4 of a percent tomorrow, real rates are still negative, and the precious metals do well in that environment in the big picture. It’s not like the fed can start raising rates up to 3-4%, because they couldn’t service the debt, would kill any recovery in housing and auto sales, and would tank the economy.
If Gold did bounce soon and form the right shoulder, then I’ll probably lighten up on the Gold & Silvers a bit and rotate a bigger percentage into energy and other select base metals miners or focus more on the explorers over the producers at that point.
Good interview with Bob Moriarty over at Energy and Gold Ltd. He discusses the Northern Dynasty Minerals story in addition to gold, cobalt, graphite, nickel, zinc, and the Deep State.
“We had a 5,000 year low in commodities in January 2016.”
Commodities were the worst major asset class 2011-2015, and there wasn’t even a close second. 2016 was the start of mean reversion, a process that will take some time but should reward patience.
Thanks Steele. Yes, I had posted this recently from that article with Bob M. but he said this so well it deserves repeating:
____________________________________________________________________________
* CEO Tech: – “What do you think about Northern Dynasty (NYSE: NAK, TSX:NDM) and some of the recent stuff which has been in the news involving short selling fund Kerrisdale Capital?”
** Bob Moriarty: – “Here’s the deal and I need to give your readers some background. I was the first writer to talk about Northern Dynasty back in 2003, I think the shares were $.50 or so and it was an extraordinary deal back then. Back in 2003 Pebble was a work in progress and since then there has been hundreds of millions of dollars invested in outlining the resource.”
“We didn’t know the story then but we do know the story now. There was a PEA released recently which showed that at current day’s metal prices the return on investment (ROI) would be 14% and that’s on a project which will cost US$15 billion to put into production. The length of time it will take from when it’s fully permitted to when it’s pouring gold and copper is probably 5-10 years, and that’s AFTER it’s fully permitted, which of course it is not right now. With a 14% return and given the timeline you’re going to go through an entire mining cycle. I don’t think there’s a chance in hell it will ever be put into production.”
“Everybody gets way too optimistic or way too pessimistic about that project, they either love it or they hate it and they change their point of view. Given the information that we have today and given that it is a very important watershed project in Alaska I don’t think it will ever go into production. Now it would be a different story if it had a 40% ROI, in that case it would be put into production regardless of everything else. But the money just isn’t there, there are too many other projects with 25%, 30%, 40% returns which will go into production first. Pebble is too big, and it’s the big projects that take the longest and have the most trouble moving into production. Novagold has been screwing around up in Alaska since 2001 and it’s sixteen years later and they have yet to pour an ounce of gold.”
* CEO Technician: “We have seen energy metals continue to climb higher, especially cobalt and zinc. What are your thoughts on cobalt, graphite, nickel, zinc, etc.? Are there any specific exploration plays in this sector that you would like to mention?”
** Bob Moriarty: “Cobalt, graphite, lithium, zinc are all in tremendous demand. We had a 5,000 year low in commodities in January 2016. Commodities are in the process of correcting right now and it’s not a big deal. Commodities in general are cheap, energy metals are especially cheap.”
Ex, good summary. Many folks have already given up on these sectors. Others will jump in after a big runup, then blame someone else when they lose money. Human nature never changes and markets are mostly you (not you personally) against yourself. I play golf and it’s much the same. Good breaks and bad breaks even out over time with practice and discipline.
Doc,
Did you add to IVN.TO on this pullback? or do you see a better opportunity in the spring?
Pete, I’m not adding here—it’ll take awhile but I bet you’ll be able to add to IVN at lower prices—I would be patient on this one. Keep reminding me every 2 weeks or so on IVN so I don’t lose sight of it and I’ll tell you periodically what I think of it and when I add to it.
Thanks Doc,much appreciated.
Union on strike at Escondida mine in Chile rejects BHP overture
Tue Mar 14, 2017
“The union on strike at BHP Billiton’s Escondida copper mine in Chile again rejected an invitation by the company to return to negotiations as worker demands were not adequately addressed, leaving the parties without an obvious path forward.”
http://www.reuters.com/article/us-chile-copper-escondida-idUSKBN16L1V1
All I see is red today, even my wife looks red in the face, it must be those eye drops or The Reds, Russians that is. The weather is even ugly today, tomorrow could be another cruel day with Yellen. This too shall pass. DT
Maybe tomorrow the markets will open with a full blown western style tornado whipping down Wall Street and Bay Street. Batten the hatches, KABOOM, CRASH, the house of cards is no longer. DT
LOL! maybe?
More people are seeing what I call the inevitable, if it’s forced selling things will get ugly fast. DT
Retail sales ……….ugly…………..shop till you drop is history……..
Retail shopping space is really going to ge ugly……….but, it has been for a long time…
get …….ge……..gee whiz typo
Doc, any more thoughts on NAT now that the oil price is heading down?