Interest Rates and VIX Rising… Also Come Visit With Us In New Orleans This Week
Chris Temple and I are in New Orleans this week for the investment conference put on by our friend Brien Lundin. Please reach out if you are in the area.
Today Chris and I discuss the rise in interest rates and the VIX. It’s a bit contradictory to see both of these moving up at the same time but Chris has some opinions as to why this is occurring. We also comment on the CRB index reaching a 6 month high yesterday and how this could also be showing investors spreading their money.
Click download link to listen on this device: Download Show
Short squeeze
THis happened first………….fat finger…….
http://www.zerohedge.com/news/2017-10-25/someone-just-panic-bid-over-2-billion-notional-gold-futures
Thanks guys for the update……………….
Update …….off topic……..Vegas shooter…..
http://www.zerohedge.com/news/2017-10-25/brother-las-vegas-gunman-arrested-child-pornography-charges
I think the EV competition is great for all involved.
ditto……..I agree
Elon Musk Was Wrong About Self-Driving Teslas
By Tom Randall – October 25, 2017
“Heโs charging $8,000 for a feature that doesnโt exist yet while owners bemoan a current version thatโs flawed. This is the story of how we got here.’
https://www.bloomberg.com/news/articles/2017-10-25/can-tesla-make-up-for-autopilot-s-lost-year
@Goldfinger – “Cool long term U.S. yield curve chart:”
@Goldfinger – “Steadily rising European inflation expectations:”
@Goldfinger – “NewOrleansInvestmentConference2017 kicking off with $GDXJ less than 10% away from lows for the year, $gold miners basically straight down for the last two weeks.”
“It will be interesting to gauge the sentiment at this conference. Price action says it shouldn’t be too optimistic… ”
The Next Buy Signal in Precious Metals & Mining Shares
by @Goldfinger on October 25, 2017
“While I was listening to Gwen Preston of Resource Maven speak at the New Orleans Investment Conference this afternoon it struck me how precious metals and gold mining shares have become a ping-pong ball tossed around by day-to-day movements in Treasury yields”
“Gwen focused much of her presentation around expectations for Fed rate hikes and real interest rates, at one point stating “Gold will slide over the next 6-7 weeks due to expected Fed rate hike. But then gold will rally because gold overprices in the event (the rate hike).”
“As sad as it is, she isn’t far off with the above assertion and the chart above illustrates how strong the negative correlation has become between the 10-year UST yield and gold miners (GDX). ”
“I will assert that the next real BUY signal for precious metals and precious metals mining shares will occur when this negative correlation between Treasury yields and the precious metals sector is broken decisively (and becomes a zero or even a positive correlation). What proves to be the catalyst to shift the current inter-market dynamic is anyone’s guess, but a continued decline of the US dollar as the global reserve currency can’t be far away from the top of the list.”
Oops. Here is the link to the Goldfinger editorial above with the charts embedded:
https://ceo.ca/@goldfinger/the-next-buy-signal-in-precious-metals-mining-shares
This seems all too familiar from what has taken place at the end of the last 2 years now: Interest rate hike rhetoric increases, gold dives, rates are actually hiked, gold dives further but goes too far and stages an almost V shape sudden recovery.
Unfortunately it is very much 2 steps forward, 1-2 steps back type progress. I look forward to seeing how the negative correlation between treasury yields and GDX plays out in the coming weeks.
(Y).
“Y”
“(Y).”
“(Y)”
:-bd
:-b
“^”
b^
:-b^
:+1:
:thumbsup:
U+1F929
๐ U+1F601
๐
:grinning:
:yes:
:nice:
:Y:
:b
(Y)
:^:
๐ ==$0
Defiance’s Phase 1 Drilling Significantly Expands High Grade Mineralized Envelope at San Acacio
@newsfile on October 25, 2017
https://ceo.ca/@newsfile/defiances-phase-1-drilling-significantly-expands-high
Chart of the Day: GDXJ
The Hedgeless Horseman – October 25, 2017
First price chart trend line broken.
MACD has broken first trend line.
RSI has broken two trend lines.
Hopefully this turns out like the scenario I described a few months ago:
“Blood bath phase breaking all technical supports exactly like before the huge Q1 rally 2016, which would make sentiment extremely bearish before reversing and leaving most investors at the station.”
http://www.thehedgelesshorseman.com/gold-silver-stocks/chart-day-gdxj-2/
The miners are not looking so hot in the short term, but I’m fighting the urge to deploy more capital since so many investors, blogs, articles, and portals feel that tax loss selling will now be worse than originally expected. Jordan brushed off the idea and stated there wouldn’t be much tax loss selling in a recent interview, but most everyone else I’ve been reading is legitimately concerned that in some names the selling may accelerate into year end.
If there is the dip in December due to tax loss selling and before the FOMC then I plan on doing my last tranche in most of these struggling miners at that time, but on days like this, it is very difficult to sit on my hands and not buy more of the companies that are set up for a good 2018.
Good luck to all in their investments.
Mining Stocks โ Some Stories Are Working (Many Are Not)
by FI FIGHTER on OCTOBER 23, 2017
Sandstorm Gold Announces Agreement to Sell US$18 Million in Securities of Trek Mining as Part of Announced Business Combination
Oct. 25, 2017 /CNW/ –
“Sandstorm Gold Ltd. (SAND) (SSL) has entered into an agreement to sell US$18.2 million in debt and equity securities of Trek Mining Inc. to Ross Beaty conditional upon the closing of the announced business combination between Trek Mining, NewCastle Gold Ltd. and Anfield Gold Corp. . The combined entity intends to operate under the name Equinox Gold Corp. and will be led by Ross Beaty as Chairman and Christian Milau as CEO.”
https://ceo.ca/@newswire/sandstorm-gold-announces-agreement-to-sell-us18-million
Now THAT is a crazy business combination.
Trek already combined Luna Gold w/ JDL Gold earlier this year. For those that weren’t up to speed on JDL Gold prior to that merger, they were a result of 3 way merger last year:
_______________________________________________________
Lowell Copper, Gold Mountain Mining and Anthem United Announce Completion of Business Combination to Create JDL Gold Corp.
October 06, 2016
________________________________________________________________
So now after combining JDL Gold (3 companies in one) with a 4th company Luna Gold to form Trek Mining, they are now merging with Newcastle Gold and Anfield Gold. What a mish-mash….
Since last year that will be 6 different companies combined into one. What a mish-mash….
Yes What a soup !
Agreed. It is like a mining soup. (funny James/Franky).
A little bit off topic, Ex I recall reading your comments on auto mechanics recently and I must say I concur, there are a lot of shady people in this business and when you can’t see what they are doing it allows the sludge of society to prosper at our expense and safety. I have also experienced similar problems. There is very little you can do to protect yourself unless you are an able mechanic yourself, or you have your car checked by an investigation company and documented before it is repaired, and then gone over afterwards by the same documentation agency. These days both of those options don’t exist as cars are not like the models they produced in the 1950’s where almost anyone could do their own repairs. DT
Yeah, I just saw your comment that day about “Trust your Government to watch over your pensions and savings” and it jarred my memory to an old punk rock song I used to like from 1982 called “Trust Your Mechanic”.
It’s seemed like a similar spirit of sarcasm under the surface, where clearly there isn’t trust.
“Trust your mechanic to mend your car
Bring it in to his garage
He tightens and loosens a few spare parts
One thing’s fixed, another falls apart
And the rich eat you…”
DT – I do agree with you that there is little one can do to protect oneself, but by networking with others for recommendations, combined with sheer trial & error it is possible to find a few good experts in any area of life. I feel the same way about Geologists ๐
Last thing I ever expected to see on this site was a reference to a Dead Kennedys song!!!๐ฎ
Except maybe California uber alles!!!๐๐๐
+1 – Jello was quite a character and pretty sharp on politics and economic theory.
Punk Rock reminded me to be a contrarian and question the official narrative. That still helps me out when investing in the unloved mining sector (lol)
When I’m driving by myself I still crank up some old punk thanks to Sirius……a little ‘anarchy’ never hurt anyone
Zinc’s bull narrative blurred by fog of LME spreads war
Andy Home – October 19, 2017
Goldman Sachs’ Jeff Currie: Cryptocurrencies Not A Risk to Gold
4 Hours Ago
“Jeff Currie, Goldman Sachs head of commodity research, discusses the case for precious metals and whether cryptocurrencies like bitcoin are a risk to metal commodities like gold.”
Currie is correct, no doubt about it. Gold and cryptos occupy opposite ends of the risk spectrum.
Jekyll Island Series โ Matt Geiger: Why I Hate Gold, But Still Like Gold Stocks
BY COLLIN KETTELL ON OCTOBER 25, 2017
Per Wimmer: Risk Taking Entrepreneur Feels Gold Is A Good Hedge and Investment
BY COLLIN KETTELL ON OCTOBER 22, 2017
The whole point to low interest rates from my point of view is to make it easier for government to clean up its fiscal act and pay down debt otherwise it is a useless waste of creditor generosity. Up here in Canada before the return of the Conservatives we actually manged to make serious reductions in our Federal debt. We went from 570b to roughly 430 b C$ in debt. I was actually starting to admire the government just a bit for this example of fiscal rectitude. Tragically it was short lived.
If we see anything equal to or greater than interest rate normalization super debtors are going to get hurt because there is in fact a tomorrow and it doesn’t have to be like today. It can be far worse. In higher interest rate environment will cryptocurrencies pay interest if lent?
Thats an interesting question Steven. Without being controlled by a single entity such as a central bank I would imagine it being difficult to apply an interest rate to bitcoin but who knows.
We here in Australia are facing similar issues regarding rate rises. Whilst many countries are gradually lifting their rates, our central bank has kept them on hold for the last 15 months. Before that, the last increase was around the GFC period. Unfortunately if rates were to increase even moderately, it would place great strain on our housong market which is now the main pillar supporting our overall economy.
With the mining boom well and truly gone, our rate of return on natural resources such as iron ore, gas, coal, gold etc etc is subdued. We are no longer a limitless seller to China for these resources. Hence housing has become the go to sector. With average housing prices over a million dollars in our two biggest cities (Melbourne and Sydney), mortgage stress would be truly tested if rates were to rise even a half to 1 percent.
Without decent incomes for labour I would think the support for house prices would be limited. In my case I may have more gold than the bank of Canada and yet I live in my car due to extreme and genocidal real estate prices, suppressed gold and silver prices and variable hours and low pay rates. It is a very strange and screwed up world that needs to be straightened out.
Couldnt agree more Steven. Ditto for Australia. Our wage growth is moving at the slowest pace in decades, even below inflation. Essentially many people are losing money year on year. Plus under-employment is elevated. Luckily for us there are a couple of regions in the country that have become depressed housing markets. Unfortunately that is because of the softening labour force in those particular areas.
Capitalism allows for multi-national companies to fleece the countrys residents. Big business and corporations pull the strings of our puppet “leaders”. Power and acquisition is the name of the game.
Not to mention our own fiscal policy being a shambles with debt figures continually being revised upwards as major projects and trade deals not being deemed enough to cover government spending.
Jason………….he is on…………. ๐