Comments On Gold and Silver – Long-Term Chart Considerations
Doc is back and we are looking at the monthly charts today. We address the downtrend in gold and silver and what it means for the timing of a breakout.
Click download link to listen on this device: Download Show
Gents
I said 2 years ago green is the new gold. Hopefully some listened.
https://stockcharts.com/h-sc/ui?s=WEED.TO&p=D&yr=1&mn=1&dy=0&id=p54414635089&a=520059810&listNum=1
BTW US banks broke out and pay a DIV
GE looks bottomed and an awesome DIV
Banks suck……..GE….looks interesting……JMO
I have a hard time investing in Fraud………..
I do like a DRIP plan………long term , has done my family well……..
Just giving you a hard time…………Thanks for the thought………..OOTB
🙂
Banks? Really!!? Up 600% and with a huge DIV since 2009.
Gold up 25% since the great recession and Dow up 260%.
Since the Gold bubble GOLD DOWN 30% and DOW UP 130%
I argued with bozos here that it was time to bail on that asset class.
Bobs right there are no experts including him. My guessing is better than most of the top analyst. I called Sprott out way back and they got crushed!!!
I use to do research for Sprott…then departed as they couldn’t see the bubble.
Really….Banks profit from misery /bondage …
The stock of a bank, going up, is not a joy to all……
This is not a comment on Profit……or percentage of gain…..
But , recognizing the stupidity of contributing to a con game.
I was not trying to compare……….banks vs gold……nor did not mention anything about gold.,,,,,,,Just my dislike for banks, ….and I sure will not contribute to the TOTAL CON game of CENTRAL BANKING……
Further, comment……..I did think your mention of GE , was interesting…… 🙂
Actually most everything is a con game. The worlds awash in complete corruption so THAT my friend does not hold water.
Royal Bank here in Canada is the worst.
I would agree with your statement of con game and corruption everywhere……..
therefore, …..investing in corrupt banks….as I said is not of interest to me…….
Bill, you’re talking rearview mirror. What bank stocks have done since 2009 is nice, but are they a good place to be NOW?
Doc, what is your best estimate as to what levels gold and silver will go down to before it would be a good time to buy and how long do you think it will take to get there?
Pardu, I believe gold is a good buy anywhere between $1100 and $1200. I know I won’t hit the bottom perfectly and therefore I have started to buy a little every month. I’ve purchased some in July and now August and will wait to purchase some more in September. You might say I’m cost averaging. My sentinel asset to watch is platinum. I feel Platinum has significant lower prices looking it in the face and when platinum bottoms I believe it will signal a bottom in most commodities and the PMs. Platinum could settle down to $200-$400 per ounce.
Doc – what are your thoughts on uranium lately. UUUU has done well form me the last couple months and the spot price is rising. Fundamentals are looking better also. I need some good news somewhere!
Sam, it appears UUUU is topping out. I don’t see a sudden huge drop but a slow sideways to down consolidation period. I sold my UUUU in the past and wouldn’t mind a pullback so I could get back in it. The uranium spot price appears to me to be in a slow bottoming process.
Uranium spot double-bottomed in late 2016 and then again in late 2017 at the $17-$18 price level, and we’ll never see those prices again. That was the slow bottoming process, and spot price has been gradually creeping up since then, and has been up near $26 for the last few weeks, so the worm has already started to turn.
Many of the key Uranium stocks have quietly edged up since that late 2016 through late 2017 bottom, and we were discussing it on here for a long time (mostly falling on deaf ears, just like any other bottom I remember).
The macro fundamental picture with Cameco putting one of the largest mines on care & maintenance, the cuts in Kazakhstan production, Paladin shuttering it’s output and swirling the toilet bowl, and most other producers in Australia and the US scaling back to life support levels and buying in the spot markets are clear signals that the bottom is in. Hell, even URA the Uranium Miners ETF is just finishing rebalancing down in most of the solid miners, and has rotated into manufacturers, Gold & Lithium companies.
The bell has been ringing at the Uranium bottom for about a year now, and many of the companies have nearly doubled since then (to little fanfare from resource and energy investors).
As for UUUU and URG there were discussions over and over again on here about how the Section 232 Petition would be bullish for them, and there was plenty of time for anyone interested to get in before their recent run up.
Maybe when spot prices are up in the high 30’s and low 40’s and the stocks double or triple again, people will feel “safe” to enter the water once the easy gains are over. Gotta love it! 🙂
From listening to Doc, it sounds like everyone has finally lost some hope in this sector. Based on that I enjoy the contrarian outlook. I’m going to take the flip side of the coin and say this might be the start of the gold bull market (right now). We had a good run Friday and held nicely today. If Asia is able to make a currency recovery, we can go back to the 1300s sooner than later. Especially with political drama and mid terms coming up…
Agreed Snowy. Here was another sign of the times marking low sentiment in the Precious Metals sector. (this should have rung the bell of contrarian investors):
__________________________________________________
Scotiabank to scrap half its metals business, sources say
Reuters – Peter Hobson – June 6, 2018
The bank is limiting lending by its ScotiaMocatta metals unit as it begins a radical restructuring, sources said
Hi Doc, you said when USAS got down to 2.25 to ask you about it again. It got to 2.08. Think that was the bottom? Shall I look for you at Urethra Franklin’s funeral in Detroit on Fri? Clinton and Obongo will be speaking. I’d rather see Smokey Robinson, Diana Ross, and Dionne Warwick.
Bonzo Barzini – agreed about “Smokey Robinson, Diana Ross, and Dionne Warwick,” and the rest of the The Motown Records crew…. Marvin Gaye, the Temptations, the Jackson 5, The Miracles, Stevie Wonder, etc….
As for (USAS) Americas Silver, once their 3rd and 4th quarter numbers are posted, and investors realize that they have dropped their Silver equivalent AISC down to industry leading lows from their Zinc & Lead credits then they will become a go-to name in the sectore. Only (SVM) Silvercorp has better economics from the existing pool of producers.
Thanks Doc.
If long term time frames are the preference then surely we cannot get interested in gold until the often mentioned $1360 area breaks and holds to the upside? Who knows when that’ll be? If past action is anything to go buy then it wont happen this year.
If and when $1360 does hold, I will be interested to see what action gold takes from there because this area has acted as stiff resistance over the last few years. If it were to clear that area, one could assume there is little headwind facing gold until the previous bull-markets floor around the $1500 region. I dunno, just a theory perhaps…
$1377.50 is the line in the sand to take out (the 2016 high), and once that happens a great deal of trend investors and funds will wade in off the sidelines. Gold has taken out $1360 a few times, but hasn’t been able to take out that prior peak. The next time Gold gets close though, that level will fall and the real fun will begin.
Until then, there is plenty of money to be made by shorter duration traders between here and those levels, in the metals or more importantly in the mining stocks.
I mentioned about a dozen times here on the KER there is usually a rally from mid-August and into September. Gold got down to $1167 in mid August, and is now at $1215, and likely will still be heading higher. Most will sit on their hands and do nothing waiting for much higher levels in gold before taking action, but the smart traders were buying the last few weeks and will trim when this rally tops out and take some chips back off the table.
Ever Upward!
Ex, you seem confident that gold will hold your mentioned figure of 1377 next time it approaches. I hope your right. Going off what has happened at this level in the past, it seems as though there are algos at play here with automatic stops and sell orders being triggered once the price approaches this resistance. Maybe those new investors you mentioned can change the tide???
Yes, often when a level is approached the first or second time, the resistance is too strong, but the 3rd time can be the charm. Double-Bottoms or Double-Tops are powerful patterns, but if the level keeps getting tested for a 3rd or 4th time then it is going to be surpassed and the impenetrable becomes an afterthought.
In 2017 Gold got up above $1360 to $1362.40, and in 2018 Gold took that high out by getting up to $1369.40. It is most probable that the next attempt at $1377.50 will finally take out the 2016 high. When/if that plays through, then the money that has been in other markets or on the sidelines, will come in and propel that bull leg much higher casting aside any linger fears of sub $1000 gold once and for all.
There is no doubt it has been particularly bearish since the “Sell in May and go away” and into the Summer Doldrums. Sentiment in many miners has been abysmal, but like always, this too shall pass. What makes little sense is waiting until things have broken out so hard to the upside that it is obvious to everyone and then geting positioned, and continually missing the tradable rallies. Investors love to cry low and buy high.
Even if there are algos at play, why not ride those waves up from low troughs during oversold conditions, and then trim during overbought rallies? Anyone that didn’t see how overbought things were from late July into mid August and did nothing about it, will never understand the concept of “buying low.”
We’ve discussed ad nauseam on here that there are seasonal rallies from mid August into September, over and over and over again; so why not buy into the oversold markets and then trim when the rally peaks out? It isn’t without risk, of course, but people that want the big returns don’t pile into money markets, annuities, or utility stocks. They have to take a speculative punt, and it is far safer when a sector is bombed out, then when it is in a fever pitch.
The reality is that many will puff their chests out and buy with confidence once miners double or triple from here, because they’ll be able to see a clear trending market to the upside.
When Gold is above $1400, by God, that’s when they’ll start buying. WTF?? Why not buy during sluggish periods anticipating Gold will in fact be back above $1400 again one day in the not too distant future. It is very doable by 2019. The problem is that most won’t position when a market is oversold, or has bad sentiment, and when the reversal in trend is less obvious. Do people already have amnesia of what things were like in late 2015? People were leaving the sector never to return, and ridiculing the few of us left that were “holding our noses and buying” Jr Silver and Gold miners. Then when the first 8 months of 2016 rocketed higher, most were still getting ready to get ready, and then when things had clearly gotten ahead of themselves with many 3 -10 baggers, THEN they decided to buy due to fear of missing out. Classic action, and we’ll see the same thing again before and during the next leg higher.
This should come as no surprise, as it is like this in every market during bottoms and tops. Remember when we were discussing Oil at $26 on here and people had delusions of $10-$20 Oil? People always go to extremes when the tide is about to turn. However, once Oil got up to $65-$70 then people got interested in Oil producers and Oil Service stocks after the easy money had been made.
As mentioned above, a few of us were posting over an over again at how shocking it was when Uranium was down to $17-$18 in late 2016 and then again in late $2017. Did most buy Uranium stocks then? Nope. Then the macro fundamental drivers starting piling on one another, and the spot price starting it’s ascent, and still most wanted to “wait and see what developed”. Then when the US DOE, President, and US producers all started discussing the strategic importance of Uranium, and the Section 232 Petition, it was clear as day that just the idea being on the table would be bullish for Energy Fuels, Ur Energy, and Uranium Energy Corp, and yet most investors still wouldn’t even get a position started. Then after they doubled/tripled, all this discussion welled up about how they were looking interesting, after the easiest gains from the sector re-rating were logged and on the charts.
Some things never change.
Sound words Ex. Unfortunately human cynicism, naivety and memory loss tends to dictate mindset such as: sell low, buy high rather than vice versa. Your right, some things never change.
Purely as a physical investor, im done in acquiring PMs for the time being. It is now time to play the waiting game, as boring as that may be.
Good points on human cynicism, naivety and memory loss, as it relates to investors buying and selling at the wrong times. I’d add that the biggest hindrance is lack of emotional control in investors psyche. It is hard to buy when sentiment is low and people feel down in the dumps, and hard to sell when investors a giddy and things have gone up in a fever pitch of irrational exuberance.
It is a cognitive dissonance to acquire a sector that is being taken out to the woodshed and beaten, and it is counter-intuitive to sell a sector that is screaming higher. Instead, people go to sidelines or swear they are done with a sector at lows, and when everything is peachy, and the wind is in their sails, they pile on instead of trimming back.
Now as for investing in physical, $14-$15 Silver and $1150-$1250 Gold isn’t a bad spot to accumulate, but once people have their insurance policy in place as a chaos hedge, then it is there and there isn’t much else to do but wait. So in that sense, it is just a waiting game, but I wouldn’t post here or follow these blogs if all I was doing was buying physical metals, because that is very boring and it is playing out over large spans of time. Sure on big rallies one can lighten the load, or on steep declines one can add some back in, but that is the essence of what “re-balancing” one’s portfolio is all about.
If all I was doing was hording gold or silver, there isn’t really much to discuss – either you have it in your portfolio or you don’t, and you buy enough to get to 10% and then keep the ratio balanced in relation to your other holdings. Not much excitement there, and similar to keeping insurance in place on your car or home – not too zesty.
>> I should clarify that my comments aren’t really about “investing” in the precious metals themselves (because in my mind that is a set it and forget it behavior for longer term protection and a store of value). My comments are rather about the mining stocks or ETFs that are extracting the precious metals or other base metals out the ground as a company, and investing in the shares of those companies at opportune times in the metals cycle.
I watch the price action in Gold and Silver and Zinc and Copper and Nickel, and Cobalt and Uranium and Lithium, etc… to determine how this will effect the economics and sentiment regarding the resources stocks. With that in mind, I’m looking for actual companies to “invest” in for the medium to longer term, or some companies with a short-term catalyst to speculate on their drill results, or technical setup, or a near-term path to production, or improving quarter over quarter costs and revenues, or for a takeover speculation, etc…
Within the Resource stocks and each respective commodity, there are the sub-sectors of Producers, Developers, Explorers, Prospect Generators & Royalty companies, and Streamers. Most of my focus is looking for when each commodity or monetary metal will shine, and then which respective stocks in each sub-sector will have a catalyst to move a particular stock 3-5 times the underlying price of the assets that they extract. That is why I post all the research on here for the miners or technical analysis, and to network with folks that are investing/speculating in the mining companies, which should be traded not hoarded.
Bottom line – commodities are cyclical in nature, and thus on a more extreme levels, the mining stocks are also cyclical and should be traded, not just held for perpetuity.
Holding the mining stocks and doing nothing with them over the last 5-10 years would have been a terrible plan. There were multiple dives to accumulate in, and multiple rallies to sell into, but just sitting on miners for long periods of time is a fool’s errand.
It makes no sense to have made great returns from 2009-2011 and not taken most of the winnings off the table, or worse to have just sat on the shares from then to now and done nothing. (WTF???)
There were a number of tradable rallies from 2011 to 2015 to position in, and then trade back out of, just like there have been about 4 good rallies from 2016 to present in 2018 to do the same with. When I hear people that bought in 2011 and then just sat there doing nothing all the way through 2015, I have to wonder what in the hell is wrong with them? Why would you sit on your hands in a bear market and not take evasive action? Why wouldn’t you wait for a dip to average down, and then sell out all or most of the position on the next wave higher? Why make great returns in first quarter of 2015, 2016, 2017, or 2018 in the Q1 Run and then not sell out part of that position? Why just buy right, do nothing and watch the gains evaporate?
I believe most of this is from investors applying the wrong strategy from investing as “buy and hold” “old turkeys” from general equities to the completely different cyclical nature of commodities and the resource sector. They are 2 completely different markets. Buying and holding in resources stocks doesn’t favor the “Old Turkeys” (unless we are in the middle of a raging bullmarket, but those don’t last for long periods of time either). Instead most of those buy and hold investors become road kill.
Investing in exploration or development stocks is nothing like investing in Bluechip stocks or FAANG stocks where people can apply the Jesse Livermore “buy right and sit tight” adage. He wasn’t investing in Gold or Silver or Copper Jr miners, waiting to put out this season’s drill results……. Jesse was investing in the general equities in manufacturers, banks stocks, insurance stocks, chemical companies, service companies, etc…. This is where most people go wrong in trying to apply those strategies to a completely different market, and then wonder why buying and holding didn’t work out for them over the last decade.
They make asinine comparisons between holding gold or gold stocks to holding general equities over long periods of time, but miss the whole freakin’ point, that miners are explosive to the upside, and then dive down hard on pullbacks, so they are not buy and hold material at most points in the cycle. They are to be acquired in low points and sold during high points (which most investors wouldn’t do with Bank stocks, Tech stocks, or most of the general equities). Those same clueless souls negate the fact that often miners have gone up 3 5 7 or 10 times in a short window of a few weeks, few months, or maybe over a few quarters, and that is where the profits should be taken, but that if you average out the returns over 5-10 years, then yeah, its pretty boring. They are 2 completely different games to play.
Most of the crybaby whiners that get on here and vent about how they haven’t made many returns are the same clueless chumps that bought at the beginning of a cycle, had huge 3-10 times returns, and then did NOTHING but hold onto the stocks only to watch them make a return trip right back down or lower. We can’t cure stupid.
They didn’t take any or most of their chips off the table when time were good, and then average back in when times were bad, and there has been rally after rally, followed by pullback after pullback, and they just sat there…… doing nothing….. like a bump on a log. That works for accumulating the metals, but is suicide or if nothing else, very boring when dealing with cyclical mining stocks. They may shine for 2-3 months, and then go to crap for 3-4 months, and then rally for 6-8 months, and then dive down for 6-8 months, and so on…..
How To Generate Triple-Digit Percentage Gains In Junior Mining Stocks
by @Goldfinger on August 26, 2018
https://ceo.ca/@goldfinger/how-to-generate-triple-digit-percentage-gains-in-junior-mining-stocks
Again, sound words Ex. I agree wholeheardedly that there are better reasons to comment, listen and read on this site than brag, boast and bemoan about ones investment choices and outcomes. To gain perspective, knowledge and insights is far more valuable in my mind. If nothing else, investing in PMs has opened avenues along with my eyes to a greater insight towards the wheelings and dealings of life. “Knowledge is power” – Sir Francis Bacon.
I dont mind admitting I have taken a loss in PMs in the last few years. But it is trivial really, as Ive learnt so much and after all, a loss isnt truely confirmed until sold.
This site is always entertaining and often informative. I appreciate the input from all and sundry whilst not always in agreeance.
long ARQL and VKTX
IPT had a decent Q2 and lots of high potential exploration / discoveries coming – am surprised market paints this explorer + producer in the same brush stroke.
2016 showed this torquey little producer can run with silver (10X return vs silver doubling). Anyone else holding
I’m holding a lot of shares and it remains my favorite silver play.
I am holding IPT also. It was my largest position until my recent purchase of additional USAS shares. I plan to buy more IPT if it pulls back again, but I am not sur it will.
“no optimism”?
All Hail Spanky. lol