PM Charting Updates and Paulson Closing His Gold Fund
Doc joins me today for his comments on the bounce in the metals. With GDX and GDXJ back in the middle of their range and gold trending to his recent breakdown level there is a lot happening in the sector. We also discuss the recent news on John Paulson closing his gold fund and the continued weakness in the USD.
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Doc, are you coming to San Antonio with the Wolverines?
BB; GO BLUE!!!!!! I really wish I was there. I’m a big fan of Michigan basketball and March Madness. It’s the best time of the year. It’s really the only sport I love to watch accept for occasionally watching the Lions and Michigan football decompensate. I really respect Beilein the head coach of the wolverines—probably the best pure coach in America.
Come on down, Doc. You can see the fields of Texas bluebonnets and the Alamo too. It was 80F today and sunny. I have not cared for basketball since Bobby Knight left Indiana. I never watch the Houston Rockets but love the Astros. I would like to see Michigan play Kansas in the final and do the Big 10 proud.
Ditto on …..I have not cared for basketball since Bobby Knight left Indiana
Bring Bobby Knight and Mark Spitz back to IU.
I am Michigan graduate (class of ’94). I was there for the Fab Five. Beilein deserves heaps of praise for turning the program around.
Doc, if you still watch the Lions, you are very well practiced in patience for investing in gold.
Ira’s end of day
Today’s Petro-Yuan launch was even better than it seemed. 1) Keep in mind they’re starting with September contracts (and beyond, but not before… I stress.. No April, May, June, July, or August contracts ). 2) Also, today was first day of trading and to avoid volatility from the get-go was only two and a half hours long. So as we get closer to September we’ll have more and more contracts and of course trading will go to full days. Going to be BIG when firing on all cylinders.
Hi-Ho Silver!
Peter Degraaf – Monday March 26
“If the latest COT report for silver gets any more bullish than the one released on March 23rd, commercial traders will have to go ‘net long!’ As it is, they reduced their ‘net short’ position to the lowest number in many years, down to just 4,000 contracts – barely 2% of the total open interest! This is bullish action! As recently as January 16th the number of ‘net short’ positions was 50,000, and the percentage of open interest was 26%. ”
http://www.kitco.com/commentaries/2018-03-26/Hi-Ho-Silver.html
A Curious Dynamic in Silver
by @Goldfinger on March 25, 2018
Claude Maund riffing on a similar point regarding the large specs starting to go short Silver and the Commercial traders reducing their net short position:
http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1dbfifi-F74D1E04-D373-4DB0-A18A-00DBFCF0B295.jpeg
From
As The Wall Street Journal reports, a higher gold-to-silver ratio is viewed by some investors as a negative economic indicator because money managers tend to favor gold when they think markets might turn rocky and discard silver when they are worried about slower global growth crimping consumption.
“There’s just not many people looking to buy silver at this point in time,” said Walter Pehowich, senior vice president at Dillon Gage Metals.
“There’s a lot of silver that comes out of the refineries, and they can’t find a home for it.”
The home for Silverwill be investment demand, when the next leg up in the PM bulls really gets moving.
The Gold:Silver ratio is getting stretched to an extreme level, and when Silver decides to play catch up then there will be plenty of homes for the refiners to sell it to. Not a matter of If….. just When….
Ditto………….on…..the Gold:Silver ratio is getting stretched to an extreme level,
(EXN) (EXLLF) Excellon Resources Mexico’s Highest Grade #Silver Producer
“During 2017, we achieved dry mining conditions for the first time since the earliest days of Platosa,” stated Brendan Cahill, President and Chief Executive Officer.
“The stage is now set to ramp production up to optimal levels and begin realizing Platosa’s full potential. During Q4 2017 and into Q1 2018, we resolved a few of the outstanding challenges to increased production. Most importantly, we drove the 730 and 725 ramps below Rodilla and 623 mineralization to set up more productive cut-and-fill mining of those mantos in the coming weeks.”
Q4 Financial Highlights $EXN $EXLLF
> Continued improvement in operations post-Optimization Plan, Revenue increased 112% to $7.1 million
– Production increased 55% to 475,007 AgEq ounces
– Sales increased 80% to 435,924 AgEq ounces payable
– Gross profit of $1.1 million
– Adjusted net income of $0.9 million
– Total Cash Cost per Ag oz payable reduced by 66% to $6.27
– Adjusted AISC per Ag oz payable reduced by 67% to $15.84
http://www.excellonresources.com/news/details/index.php?content_id=183
(EXK) (EDR) Endeavour Silver Updates Progress on Terronera Silver-Gold Mine Project in Jalisco, Mexico
by @nasdaq on March 27, 2018
https://ceo.ca/@nasdaq/endeavour-silver-updates-progress-on-terronera-silver-gold
Everyone is always talking about the commercials and it’s dead wrong. The commercials do not drive the commodity markets, the speculators do. When the speculators short the hell out of silver and have to buy to cover, they will and they will drive the price through the roof. Speculators move markets, not commercials.
Some of them above were noting that the speculators were shorting the market in an aggressive way, but they also noted the commercials had also reduced their shorts.
I agree that the short squeeze from speculators covering their shorts is what will give the markets a real boost.
I SPY>>>>>>>.everyone is getting in on the ACT…..
https://www.zerohedge.com/news/2018-03-26/poland-detains-official-russian-spying-allegations
I’ll bet my neighbor is a Russian spy. He just looks like one.
Ask him , if he likes vodka, and Anna Netrebko……
🙂
He could be a CIA operative working out of The Russian embassy in Buenos Aries. Oh well, I tried! DT
Ask him if he has any polonium. I have Iranians next door to me in a 20000 sq ft house.
Is polonium derived from squeezing the hype out of Bo Polony?
Excess………really do we need more planes………
https://www.zerohedge.com/news/2018-03-26/nothing-exceeds-excess-military-industrial-complex-wins
And besides, I’ve been with Tropical Stormie
OZ Minerals makes Avanco a $444m offer it can’t refuse; share price doubles Resources
6 hours ago | Angela East #Copper M&A
https://stockhead.com.au/resources/oz-minerals-makes-avanco-a-444m-offer-it-cant-refuse/
More room to grow………..House prices up……
https://www.zerohedge.com/news/2018-03-27/home-price-surge-continues-case-shiller-jumps-most-4-years-all-cities
Construction set to take off…..nobody wants to be left out in the cold…..more debt please.
Bob Moriarty: Investors Should Be Looking For A Cave To Hide In
MAR 2018 – Ceo Technician – Energy & Gold
>> Bob Moriarty: “On Friday we got a sell-signal from Richard Russell’s Dow Theory signal. When the market goes down 800 points in a day it says something. Do you know the single biggest thing that made the depression of the 1930s worse?”
> CEO Technician: “The Federal Reserve tightened monetary policy at the wrong time?”
>> Bob Moriarty: “No, that’s what got it started. What made it worse was the trade war which occurred after Congress passed a law placing tariffs on all goods shipped into America, it was called the Smoot-Hawley Act. A trade war hurts everyone. Donald Trump is negotiating by throwing hand grenades at our trading partners with the pins pulled. This is an absolute disaster and everyone who passed economics 101 understands how dangerous trade wars are. If the stock market was a balloon looking for a pin, Trump just pulled out a sword.”
“Trump’s appointment for Secretary of State, the head of the CIA and his National Security Advisor are all three extremely dangerous. They are determined to start a war with Russia and/or Iran and maybe China…”
_______________
> CEO Technician: “We are seeing a very curious situation in silver right now as managed money futures traders (CTAs and hedge funds) have moved to a net short position to the tune of more than US$1 billion net notional. I say it’s curious because silver’s price action has been lackluster and range-bound, while gold has actually carved out a small uptrend in the last week.”
>> Bob Moriarty: “This is a really unusual signal that the CoTs in silver are sending us. You would expect people to be shorting gold as well but we are not seeing that. It’s a really unusual situation and we are seeing conflicting signals from various indicators across markets; the sentiment indicator that I look at is indicating that we are actually close to a top in gold, so we have an unusual buy signal in silver at the same time we are getting close to a sell signal in gold. This is one of the more unusual situations in precious metals that i’ve ever witnessed. There are conflicting signals and I don’t think it’s a situation in which anyone can say “Hey this is what’s going to happen…”
_____________________________
>> Bob Moriarty: “‘Klepto-currencies’ were the biggest bubble scam ever in world history. These currencies have no fundamental value, they were electronic beanie-babies, magnetic Monopoly money and they are down 70% since we talked about them at the peak three months ago.”
> CEO Technician: “How does one invest against this complicated and irrational investment backdrop?”
>> Bob Moriarty: “The answer is that you can’t. Investing is putting money into rational investments. The only thing someone can do today is speculate, essentially guessing. Investors should be looking for a cave to hide in when all of these other aspects of the “everything bubble” come crashing down. My opinion is that the best cave to hide-out in is precious metals, because they are real assets and they have stood the test of time. Silver and platinum are probably the best values right now among the precious metals, but of course gold always has a place in my portfolio. Investors need to understand that they need to be trying to preserve wealth right now, it’s not a time to be thinking of how to get rich, it’s a time to be thinking of how not to become poor. Right now the preservation of wealth is far more important than trying to ‘make’ money.”
http://energyandgold.com/2018/03/27/bob-moriarty-investors-should-be-looking-for-a-cave-to-hide-in/
Investors need to understand that they need to be trying to preserve wealth right now,
DITTO ON THAT ONE>……..
Great commentary…………JMO
Yep, time to batten down the hatches….
Thanks for posting…..
Just a review……..on silver…….
https://www.youtube.com/watch?v=EObaTAKndj4
Supply…..interesting comments…..jmo
I always enjoy Bob Moriarty’s commentary. But ‘trade wars are damaging’ cannot be taken to infer ‘therefore all tariffs are bad’.
Michael Hudson brings some valuable nuance to the discussion:
https://www.paulcraigroberts.org/2018/03/20/trumps-misunderstanding-protectionism-michael-hudson/
“There are many good arguments for protectionism. These arguments are in fact much better than the free-trade patter talk used to indoctrinate college economics students. Of all the branches of today’s mainstream economics, free-trade theory is the most unrealistic. If it were realistic, Britain, the United States and Germany never would have risen to world industrial power. (I review the fallacies of free-trade theory in Trade, Development and Foreign Debt.)
Economic history provides a long and excellent successful pedigree of good arguments for protective tariffs. Britain created its empire by protectionism, stifling manufactures in the United States as long as it pursued free trade. After the Civil War ended, America built up its industry and agriculture by protectionism, as did Germany and France. (I discuss the strategy in America’s Protectionist Takeoff: 1815-1914.)
But as each of these nations became world leaders, they sought to pull up the ladder and prevent other countries from protecting their own industry and agriculture. So they changed to “free trade imperialism.” The aim of industrial leaders is to convince other countries not to regulate or plan their own markets, but to let the United States engineer an asymmetrical trade policy whose aim is to make other countries dependent on its food exports and monopoly exports, while opening their markets to U.S. companies.
Since the 1920s the protectionist economies that came to support free trade after they achieved economic primacy, have rewritten history to “white out” how they got rich. The strategy of protectionism has been forgotten. Trump’s so-called protective tariffs against steel and aluminum are the antithesis to every principle of protectionism. That is why they are so self-destructive. Trump’s approach to protectionism is to protect inputs, such as steel and aluminum, with tarrifs, thus raising their price, but not protecting the products made from steel and aluminum, such as kegs.
In order for protectionism to work, the tarrifs should be on outputs, not on inputs. A protectionist strategy is to buy raw materials cheaply, and sell finished manufactured goods at a high value-added price.
The idea of industrial protectionism, from British free trade in the 19th century to U.S. trade strategy in the 20th century, was to obtain raw materials in the cheapest places – by making other countries compete to supply them – and protect your high-technology manufactures where the major capital investment, profits and monopoly rents are.
Trump is doing the reverse: He’s increasing the cost of steel and aluminum raw materials inputs. This will squeeze the profits of industrial companies using steel and aluminum – without protecting their markets.”
What a joke. The DOW is going higher. I called this boom tears ago…..We are a ways away from a blowout. PMs suck and Bobs got nothing right for ever. Revenue producing tangibles is where you want to be. Golds been the worst investment for near a decade. Oh but when the stock market corrects its a CRASH. No PMs stocks COLLAPSED / reverse split ect ect but to Bobbo its a correction. Their ain’t a respectable manager anywhere that would invest and stay in gold…cause its a joke. Bobs selling and drinking his own cool-aide. Ive made a ton of money the last 10 years and not from PMs….Safe and secure. Bobs an idiot and I know lots who use to read him….no more…Old broken clock.
Another high point of the day….(not)
https://www.zerohedge.com/news/2018-03-27/consumer-confidence-sinks-stock-market-hope-plunges-trump-election-lows
From a cycles perspective, this action in gold has been pretty nutty. Assuming we are on day 30 of the daily cycle, one would have expected the $1303 low on March 1 to be taken out in the next couple of weeks. I was expecting a new low around the employment report. That doesn’t look very likely now (although never say never), which has most cyclists scratching their heads about the daily and intermediate cycles.
The cyclist scratching their heads may be using the wrong starting point for their cycles.
The Major Cycle low in Gold was undeniably @ $1045.40 in Dec 2015 .
The next Investor Cycle higher low was @ $1201.50 in June 2016
The next Investor Cycle higher low was @ $1124.30 in Dec 2016
The next Investor Cycle higher low was @ $1204 in July 2017
The next Investor Cycle higher low was @ $1238.30 in Dec 2017
Thus keeping that same cycle rhythm, then the next higher low will be in June/July 2018 . (right in the Summer Doldrums once again)
GOLD CMX – 40 Year Seasonal Chart > (1976-2015)
Doc seems to be sticking with his guns on gold’s direction in the near term especially. Here’s some comments from Peter Schiff that I found logical & hopeful:http://news.goldseek.com/GoldSeek/1522159200.php
AXU’s 50,2 weekly bollinger bands haven’t been this narrow since April 2012, just before it cascaded downward into an epic bear market. Does history repeat or do we go upwards instead?
long UCLE
Let’s hope IPT is leading the way for the silver miners.
Yes, $IPT can be a good bellweather to follow for the Silver stocks, since it is so highly leveraged and has one of the most pure Silver exposures.
(They are also exploring for gold this season as well, so not sure if that will change things at all as they diversify)
For those familiar with Stan Weinsteins work on the 30 week MA and stage analysis it is encouraging that the share price has risen above it in a bullish manner. Matthew made this point a week or so back and I’ve been discussing this same idea privately with other investors when we got on a “Stage Analysis kick”.
Here’s a nice little refresher on Weinsteins stage analysis from a few years back. Cheers!
Generic Stage Chart:
http://www.robertbrain.com/technicalanalysis/images/stage-analysis.jpg
Stage Analysis – Next Big Trade:
Stage analysis is very useful for getting oriented as to the state of the markets.
Likewise, one could do worse than to take up Rick Ackerman on his free promotion, if they want to learn how to separate signal from noise and keep their bearings in volatile markets.
+1
Stink bids getting filled on BALMF today
That’s because many were disappointed with the maiden resource estimate.
@CriticalInvestor – “Quite the disappointment after so many delays, Balmoral maiden resource estimate was expected in my view to be significant (2Moz or more) $BAR”
This illustrates once again the importance of fundamental news on Jr miners and how substantive breaking news can definitely move the needle on the share price in a major way that most weren’t anticipating.
Some countering opinions on Balmoral (BAR) (BALMF) are also worth considering though, that the market’s expectations weren’t in alignment with the company guidance. This contributor over a ceo.ca made some really good points today:
@Balmoral2010 – “It’s exactly in line with what was expected. This is only the initial RE at 300 meters.The only disappointment is the minds of those that don’t understand and didn’t take the time to call management.Share price may fall because retail guys who don’t understand will dump.” 1 about 5 hours ago
@Balmoral2010 – “Some guy on another board was posting figures of up to 4 million when which was crazy based on initial RE at 300 meters.They will be adding to this in the end it probably will be about 2 million at Martinere.”
@Balmoral2010 – “It may even get up to that crazy 4 million but it requires a lot more drilling at deeper levels. I just surprised at what people were expecting. Many kept asking for a resource estimate how many took the time to ask about what exactly it was going to entail?” – about 4 hours ago
@Balmoral2010 – “I also like the cut off at 2g/t.”
All things considered, (new low made on the same day the company releases the maiden resource) and knowing the market usually over-reacts and skittish investors bail at the first sign of other doing so……. BAR actually looks like an interesting value proposition here.
Both a nice Gold asset and a second Nickel asset, and a really cheap valuation at this point. I may go ahead and grab some share here…. playing for the short-term bounce and the hold a few shares back for the long haul after that. 😮
Goldman Sachs turns bullish on gold