A Nice Relief Bounce For The Metals
Doc joins me today to comment on the bounce in the metals and metals stocks. For GDX and GDXJ they both bounced off the lower part of their range that they have been in for over a year. This gives Doc confidence that they will not plummet down but he is still thinking that a breakout to the upside is months away.
Click download link to listen on this device: Download Show
Precious metals may be volatile but the dollar is in terminal decay.
As I said a few days ago…..
The key question is when.
That hangs on WHEN Central Banks lose control.
Loss of control will occur when interest payments on debt cannot be met.
It is mathematically true, however, when interest rate percentages go to zero, even infinite debt has zero cost.
Thus,Central Banks will lose control only when they cannot print enough money to keep interest rates close to or at zero.
If debt payments do not limit bank printing, what does?
Answer: Currency exchange rates.
It is clear to me that, for quite some time, Central Banks have been colluding in their printing; taking turns, so that NO currency moves dramatically.
Positive trade countries (e.g. China) have been cooperating by spending trade surpluses.
Negative trade deficit countries (e.g. USA) have been selling off assets and printing money.
The point at which US Central bank hits a wall is when we run out of assets to sell or foreign countries no longer buy US debt.
I had been worried about interest rate rises, but regardless of what the Federal Reserve says, that cannot be allowed to happen other than token increases for sentiment control.
As long as the various other central banks collude and the majority continuously expand money supply, the status quo can slowly evolve almost indefinitely. (Providing no central bank hoards cash or assets)
Yes, as the money supply increases we have inflation. (More money chasing relatively fixed goods) But the governments have been lying about the amount of inflation for years….using hedonic adjustments (replacing steak by chicken), etc.
It seems to me we only hit the wall really when a country runs out of “things” to sell, that other countries might want to buy. Then and only then do we have large currency valuation movements. That could take a fairly long time.
A pullback into Thursday or Friday would be just fine…
GDX 60 min;
http://stockcharts.com/h-sc/ui?s=GDX&p=60&yr=0&mn=2&dy=0&id=p75514834852&a=511980075
We will probably give back everything tomorrow.
Probably get a gap up and then reversal to end the day red tomorrow.
I hope so, just for your sake.
Doc, you gave me some price targets on some PM stocks last week where you think they may go down to before running up and I was wondering if the prices you gave me were in Canadian dollars or US? Auryn resources, Skeena, Novo resources and Corvus. You indicated they may dip down to $1.25, .59, $2.00-2.50, respectively (and I don’t have Corvus at hand)?
I believe I gave you levels on the Toronto and Venture exchanges. I usually use those exchanges when talking about mining companies when on more then one exchange.
So, you are saying these stocks may go down to about $1.00, .47, and 1.70-2.00 u.s. dollars respectively? Is that accurate, or is my exchange rate off?
You should be able to get AUG for between 1.00 and 1.25, SKE for sure at .60 (when it gets there ask me again to look at it to see if I think it takes that out), and NVO should head back to 3. When it gets there ask me again what I think. I didn’t say anything about corvus but that puppy is heading back to 1.30 on the toronto exchange. Again, when it gets there ask me again what I think. By the way, Pardu, if I remember back, you once asked me when everyone was hot on UEC what I thought about it and I believe I told you it wouldn’t hold and would move back to about 1.10. Well it’s on its’ way and will reach that sometime in later March or early April.
Thanks, Doc, I always appreciate your viewpoint, as I have found it to be most helpful.
Thanks Doc – appreciate the targets that you have given Pardu.
I try to buy on Toronto also as I don’t get that whammy of rising PM’s but falling USD when buying US listed PM stocks.
Doc thanks for your insights and your 2018 plan of watching out for near-term weakness and choppy markets in the PM stocks, but looking to position in May/June weakness makes sense.
I’d also point out that often there is a substantial season rally from mid to late August into the month of September (and sometimes that carries over into October as well). Sometimes I’ll add in the Summer Doldrums, but then add again in August and see if things get turbo-charged for Sept/Oct.
Good interview today Cory & Doc.
Leigh Curyer, NextGen Energy | PDAC 2018
InvestingNews – Mar 6, 2018
“Leigh Curyer of NextGen Energy discussed the rise of Uranium Prices from late 2018 to 2019 with Melissa from Investing News Network (INN) at PDAC”
https://www.youtube.com/watch?v=1M-yJG9VPhI&feature=youtu.be
What’s Up With Uranium Prices? – Amir Adnani
March 6, 2018
“Kitco News sits down with Amir Adnani, CEO of UEC, to discuss the future of uranium mining with uranium prices currently at $21 a pound.”
“I think people in the U.S., especially U.S. buyers of uranium, which represent a quarter of the market, are somewhat frozen out,” Adnani told Kitco News on the sidelines of the PDAC 2018.
https://www.youtube.com/watch?v=Rg17Nmag_kA&feature=youtu.be
Swiss regulator approves Beznau 1 restart
06 March 2018
“Swiss utility Axpo has received regulatory approval to bring unit 1 of the Beznau nuclear power plant (KKB) back into service this month after evidence it submitted last December proved aluminium oxide inclusions in the reactor pressure vessel do not affect the unit’s safety.”
http://world-nuclear-news.org/RS-Swiss-regulator-approves-Beznau-1-restart-06031802.html
@Goldfinger – “Fun fact ~~~> 3 barrels of yellowcake $uranium oxide is the energy equivalent of 200000 barrels of $oil.”
It also has the potential to wreck havoc on the environment like Fukushima and Chernoble. Let’s use natural gas.
More people die every year and have died total from the Oil or Nat Gas industry than Nuclear even comes close to (including its 3 events in 60+ years)
Those events were also much older models and were preventable if they had taken different precautions. Many would argue the earthquakes and disruption to the water supply caused by fracking is far more of a concern for the people and life on this planet.
_______________________________________________________________________
Safety of Nuclear Power Reactors(Updated May 2016)
“From the outset, there has been a strong awareness of the potential hazard of both nuclear criticality and release of radioactive materials from generating electricity with nuclear power. ”
“As in other industries, the design and operation of nuclear power plants aims to minimise the likelihood of accidents, and avoid major human consequences when they occur. ”
> “There have been three major reactor accidents in the history of civil nuclear power – Three Mile Island, Chernobyl and Fukushima. One was contained without harm to anyone, the next involved an intense fire without provision for containment, and the third severely tested the containment, allowing some release of radioactivity.”
> “These are the only major accidents to have occurred in over 17,000 cumulative reactor-years of commercial nuclear power operation in 33 countries. ”
> “The evidence over six decades shows that nuclear power is a safe means of generating electricity. The risk of accidents in nuclear power plants is low and declining. The consequences of an accident or terrorist attack are minimal compared with other commonly accepted risks. Radiological effects on people of any radioactive releases can be avoided.”
Nuclear Power Prevents More Deaths Than It Causes
By Mark Schrope
“Study estimates that nuclear energy leads to substantially fewer pollution-related deaths and greenhouse gas emissions compared with fossil-fuel sources”
“Using nuclear power in place of fossil-fuel energy sources, such as coal, has prevented some 1.8 million air pollution-related deaths globally and could save millions of more lives in coming decades, concludes a study.”
https://cen.acs.org/articles/91/web/2013/04/Nuclear-Power-Prevents-Deaths-Causes.html
Fossil Fuels are far Deadlier than Nuclear Power
By Phil McKenna – 23 March 2011
“But this reaction may be more motivated by politics than by fear of a catastrophic death toll. It may be little consolation to those living around Fukushima, but nuclear power kills far fewer people than other energy sources, according to a review by the International Energy Agency (IAE).
“There is no question,” says Joseph Romm, an energy expert at the Center for American Progress in Washington DC. “Nothing is worse than fossil fuels for killing people.”
“A 2002 review by the IAE put together existing studies to compare fatalities per unit of power produced for several leading energy sources. The agency examined the life cycle of each fuel from extraction to post-use and included deaths from accidents as well as long-term exposure to emissions or radiation. Nuclear came out best, and coal was the deadliest energy source.”
A move in GLD to about 128 will take it to the top rail of the down channel, although that number is declining by the day. Perfect spot to go short.
$silver is acting more or less exactly like it did between Oct and November ’17–basically flagged sideways for two months. Of course, we all know it fell apart in December.
If the timing were to remain intact, that would put the next low sometime around first week of April.
Sounds like that is where you’ll be adding to your “utter trash” silver positions then – right?
It actually makes sense to me as seasonally March is a downward month in the PMs. Silver will follow along with Gold.
In addition to the March selloff, also note the Q1Run in Jan/Feb, the sideways to down Summer doldrums, and the surge from August into September.
Seasonality Chart for Gold over 30 years:
http://equityclock.com/pictures/GoldFuturesGCSeasonalChart_2CFE/image_thumb.png
Those are just herd trading trends, and obviously, no 2 years are alike; but I’m not one for scoffing at 30 years of data on seasonality in the Precious Metals.
Secretly though, I’d love it if the metals surprised everyone and rallied in a huge short squeeze leaving the bears and most bulls in the dust scratching their heads. 🙂
We will likely get a nice plunge into a daily cycle low sometime in the next 5 weeks to so. Whether that is the final low remains to be seen but it is certainly possible the next daily cycle after that will make a lower low, which would put us into May/June, which jibes with Doc’s prediction.
It’s possible we go sideways for the next couple of weeks to sucker in as many longs as possible before the next rug pull in late March.
The PMs are definitely a market to monitor closely over the next few weeks.
Don’t get me wrong, I would love for the silver miners to take off here, but it’s never going to happen. After 2 years of this BS I am so conditioned for it it isn’t funny.
I must be Complicit in the Suppression of Gold and Silver
Bob Moriarty – Mar 06, 2018
“So when John Embry pronounced on King World News that, “the blatant suppression of gold and silver prices which has been ongoing for decades. . . has become so blatant in recent days that only someone who is very stupid, hopelessly naïve, or in some way complicit, would not acknowledge it.”
“Then I realized Embry was running a reverse IQ test. He wanted to see if King World News was dumb enough to ignore the fact that silver rising 1150% from 2001 until 2011 was as conclusive a proof as any court would require as beyond a reasonable doubt that silver was certainly NOT suppressed. Or if it was, it was the worst job of suppression in the history of the universe. Silver held one of the greatest rallies in the history of all commodities in that ten year period. Gold was far more “suppressed”, only rising 663% from 1999 until September of 2011.”
http://www.321gold.com/editorials/moriarty/moriarty030618.html
Joe Mazumdar “The Art of a Deal”
Metals Investor Forum #MIF March 3 2018 – #VIDEO
“Joe Mazumdar, Economic Geologist, Exploration Insights delivers a presentation at the March 3, 2018 Metals Investor Forum in Toronto.”
Eric Coffin “Tug of War”
Metals Investor Forum #MIF March 3 2018 – #VIDEO
“Eric Coffin, Publisher of HRA Advisories delivers a presentation at the March 3, 2018 Metals Investor Forum in Toronto.”
Gwen Preston “The Best Outlook In Years – And How To Play”
Metals Investor Forum #MIF March 3 2018 – #VIDEO
“Gwen Preston, Publisher, Resource Maven delivers a presentation at the March 3, 2018 Metals Investor Forum in Toronto.”
Greg McCoach “…Monies are Flowing Towards Exploration”
Metals Investor Forum #MIF March 3 2018 – #VIDEO
IPT is sandwiched between its declining 200 dma, above, and rising 50 dma, below, which are very close to crossing over now. We all know what happens next. Cue the score from “Platoon.”
Fred Davidson, $IPT $ISVLF IMPACT Silver | #PDAC 2018
InvestingNews – Mar 4, 2018 #VIDEO
“Fred Davidson of Impact Silver spoke to INN at PDAC 2018 and discussed why 2018 is going to be an exciting year for #exploration. ”
I gave up with IPT Is it a good buy or dead money?
IPT has demonstrated in the past an incredible leverage to rising Silver prices in the past and it generally outperforms most of it’s peers in the Silver producing space, so it comes down to if you believe Silver will be moving higher in the medium to longer term.
If you are looking at a near-term day-trade or swing-trade, then that may be a different scenario though.
One thing that should also be noted is their exploration potential is so enormous as there are 4500 old artisinal mines peppered around their land package, and about 70+ old historic mills and processing centers. They’ve only explored about 10% of it so far.
(Check out page 6)
Correction 42 previous processing centers.
(I remember an older presentation saying over 70 but that page 6 above shows 42)
Here is an older presentation showing the immensity of the exploration potential:
Chris Martensen discusses the Fed….
He’s been dead wrong about just about everything over the last 8 years.
WASHINGTON (AP) — The Latest on reports of White House dysfunction:
Top Trump economic adviser Gary Cohn is leaving the White House after breaking with President Donald Trump on trade policy.
Cohn, the director of the National Economic Council, has been the leading internal opponent to Trump’s planned tariffs on imports of steel and aluminum. He has tried to orchestrate an eleventh-hour effort to push Trump to reverse course. But Trump has been resistant to those efforts, and reiterated Tuesday he will be imposing the tariffs in the coming days.
In a statement, Cohn says it was his honor to serve in the administration and “enact pro-growth economic policies to benefit the American people.”
The tariffs are on a % basis really minimal and they don’t impact the Chinese that much since they apply to all exporters.
Good……..
Doc & Cory – GREAT interview, I listened 7 or 8 times so I know the game plan.
Cobalt prices close in on $40 per lb with ‘nothing to pull them down’
Alex Harrison – March 06, 2018
“Cobalt prices rose closer to $40 per lb on Friday March 2 when suppliers raised their offers again, confident that buyers will soon have to book at higher levels on bullish expectations for electric vehicle batteries and good demand from the super-alloys sector.”
4 Gold Mining Stocks Trading at a Discount to 2019 Cash Flow
March 5, 2018 – Mandalay, Rye Patch, Brio, Alacer
https://smallcappower.com/top-stories/canadian-gold-mining-companies/
Benj Gallander | PDAC 2018
InvestingNews – Mar 6, 2018
“Benj Gallander of Contra The Heard Investment Letter sat with Charlotte and discussed the future of mining space and new challenges ahead. ”
Brien Lundin, Gold Newsletter | PDAC 2018
InvestingNews – Mar 6, 2018
“Gold Newsletter Editor, Brien Lundin talks to INN at PDAC 2018 about the most interesting pitches and ideas he’s heard at the show and how we’ve seen the US dollar move in 2018 so far. ”
Paul Robinson, CRU Group | PDAC 2018
InvestingNews – Mar 6, 2018
“Paul Robinson of CRU Group spoke to INN at PDAC 2018 and shared his outlook for what’s anticipated in the coming year and what resource trends stood out in 2017.”
Brent Cook and Joe Mazumdar: Gold Deals, Stock Pick and What to Avoid in 2018
InvestingNews – Mar 6, 2018
“Brent Cook and Joe Mazumdar of Exploration Insights talk about the exploration space, gold deals and what to avoid in 2018.”
Today’s smackdown in the metals was so predictable. It was free money going short yesterday. Let’s see if the miners can recover by the close after easily filling yesterdays very large gap.
Gold has a big drop in it coming based on its CoTs and the timing of the daily and intermediate cycles. Silver, it’s still staring into the abyss. One little push and it will drop dramatically.
The fact that the HUI’s 200 WMA is still gently trending downwards means over the next 2-3 months, it could drop precipitously. Ages ago I mentioned how the correction off of the 2016 was just ugly. First, it retraced just a bit over 61.8% of the rally. But that alone is not what made the correction ugly–it was the fact that the rebound out of the December low was so weak. This was never going to play out as a “high” consolidation. Instead, I suggested that the formation was going to balance itself out by producing a big drop to mirror the 2016 overshoot. Well, it looks like we are in the process of balancing out the chart. I don’t think it will require a retest of the 2016 lows, but we could get close. I certainly do not think 140 is an unreasonable target.
Once the next major low is struck, we should see a major rally, but it will stop well short of the 2016 high and then head back down. That cycle could itself take 1.5 to 2 years to play out. I think it will be 2019 or 2020 before the miners begin their assault of the 2012 highs in ernest.
A gap down open tomorrow in the miners should get the party started nicely. We’ve potentially got 4-5 weeks before the next low is reached.
If the Dow tanks, you can bet your bottom dollar the miners will also tank, just harder.
SLV:GLD bollinger band width on the daily chart is the narrowest it’s been in years. I’m guessing we head sharply lower in the next few weeks.
Thanks Celia. Take care
There are some interesting charts in this article on silver: http://news.goldseek.com/SpeculativeInvestor/1520344261.php
Likewise, there are some good facts/charts in this article by Saville: http://news.goldseek.com/SpeculativeInvestor/1520344261.php