Exclusive Insights on the Gold Market – Thu 13 Dec, 2018

Ned Schmidt – PMs are simply an alternative investment

Ned Schmidt, founder of The Value View Gold Report joins me to share his thoughts on the idea that PMs are a safe haven investment. He says gold and silver are simply alternative investments to the equity markets and recently they have been outperforming those markets.

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Ned SchmidtCory Fleck
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  1. On December 13, 2018 at 11:37 am,
    Snowy says:
    • On December 14, 2018 at 1:54 am,
      Excelsior says:


      2018-12-12 – Kevin Muir – the MacroTourist

      “The world’s financial landscape inspires little confidence. Brexit, French riots, slumping German banks, Chinese slowdown, emerging market carnage – none of these things scream it’s time to venture out the risk curve.”

      “When I tell people I am bearish on US dollars, after they stop laughing, they often ask me – against what? When I tell them against everything, they proceed to lecture me on why those countries are awful places to invest. Yeah, they are probably correct. Europe is a disaster. Japan seems intent on printing their currency into oblivion. Britain can’t seem to do anything right these days. It’s difficult to put your foot down and say, “you should sell US dollar against XYZ currency.” But that’s precisely why everyone is stuffed full of US assets.”

      “If I am correct, then we don’t need these other countries to be terrific investments. All we need is asset allocators to return closer to their benchmark weighting and the US dollar will decline. And in fact, if all this move ends up being is a return from overweight to benchmark, then the currencies that were hated the most – the ones that investors were most eager to sell in exchange for dollars – will be the ones that rise the most.”

      “Raising rates from this point will not cause a positive feedback loop, but rather only exacerbate the problems. Capital no longer rushes in to America chasing stocks because everyone is already long.”

      “And the real problem is that these flows over the past year have caused the Federal Reserve to be tighter than would otherwise be the case. Don’t forget that the real reason Powell was so hawkish in that October 3rd speech was because markets were loosening financial conditions regardless of the Fed’s actions.”

      “Well, what if the economy proves more resilient to the recent rate hikes? Then Powell might indeed raise rates and cause the US dollar to rally. This argument I will accept, but let me ask you something – what do you think that a stronger economy (with corresponding tighter monetary policy) does to both the yield curve and stocks? My guess is that the yield curve inverts, stocks sag, and sure, the US dollar rises, but it’s no longer a virtuous rise.”

      “Here is my prediction; US stocks might rise, but only if the greenback falls. The US dollar might rally, but it will snuff out the stock market rally. The days of them both going up together are over. The milkshake glass is empty.”


  2. On December 13, 2018 at 12:28 pm,
    Markedtofuture says:

    Christmas Giveaway. One Full 5 oz Coin!!! – Just leave a comment…random selection


  3. On December 13, 2018 at 12:53 pm,
    spanky says:

    GDX keeps powering higher…

  4. On December 13, 2018 at 12:57 pm,
    spanky says:

    FWIW, SLV:GLD ratio is going to close over the 50 dma for the first since July. Praise the lord!

  5. On December 13, 2018 at 1:13 pm,
    spanky says:

    ABX looks exactly like it did in late 2015 early 2016. It bottomed ahead of everything else and was more or less immune to that epic shakeout the first couple of weeks in January 2016.

    It’s up 50% since September, while many silver miners are down 30-40% during that time. It’s back over its 200 WMA now. Wow.

  6. On December 13, 2018 at 1:15 pm,
    Charles says:

    Hi-Ho Silver!

  7. On December 13, 2018 at 1:17 pm,
    Charles says:

    Hi Cory – Thanks for have Ned on. It would be great if you could have him back to talk about the Agg commodities.

    • On December 14, 2018 at 1:35 am,
      Skeeta says:

      Agree with Charles!!

  8. On December 13, 2018 at 2:37 pm,
    spanky says:

    Silver miners (SIL) have been the wrong place to be since 2015.

    GDXJ has been making higher highs and higher lows against it ever since then, and it looks like it has put in long term base against the silver miners TBH (the 200 WMA above a nicely rounded 300 WMA). Lets not even compare SIL against some of the stronger big cap gold miners like NEM.

    GDXJ is also outperforming SILJ, and the 200 WMA looks like it is going to cross up over a flat 300 WMA soon on the ratio chart.

    Basically, gold miners look like they are far better bet for the foreseeable future, and they still have a lot of ground to make up. Obviously you can get periods where silver miners outperform, but it looks like those periods will be the exception and not the rule.

    • On December 13, 2018 at 2:55 pm,
      spanky says:

      I guess the lesson is to have both gold and silver miners.

      • On December 14, 2018 at 3:01 am,
        Excelsior says:

        Gold typically turns first (like the Major bottom in December 2015) and then Silver and the miners will play catch up and eventually outperform the yellow metal.

        Yes it makes sense to have both Gold and Silver miners, with more a gold producer focus at the turns, and then a shift more over to Silver miners & Jr Gold miners when the turn in the PMs is confirmed.

        Keep in mind the inverse it true, if Gold starts to roll over and head into a corrective downtrend, then it drags Silver and the miners down with it (like what we’ve seen over the last 2 years) and so yes Silver or the miners will plunge down more.

        People shouldn’t be buying and holding miners for long periods of time anyway, with the exception being in a raging bull market uptrend like what we saw the first 8 months of 2016, or from 2009 to 2011. Resource stocks are to be traded and incredibly cyclical.

        As for those that buy and hold Gold or Silver, they’ll be fine over long periods of time as is evidenced by how Gold has done for thousands of years in retaining purchasing power, or since the 1971 unpegging from the dollar. It isn’t meant to be an awesome speculative investment vehicle though….. that is for the miners, or biotech, or the crypto kitties…..

        Gold is the currency of last resort and Silver is it’s amped up little bother and “poor man’s gold” and really it’s an alternative currency and option to other world currencies. They are money not a speculative punt.

        Old Turkeys that simply held onto their miners without taking evasive action when the market topped in 2011 and held all the way down into the end of the bear market in 2015 need to have their heads examined.

        “Investors” that didn’t start getting positioned at the end of 2015 or early 2016 in the mining stocks and missed that epic run, were not paying attention. Some had held onto their positions for years and watched them go up from 2009 to 2011 without scalping off any profits, watched them get pummeled from 2011 to 2015 and took no action to reduce or sell them, then watched them rocket launch up in 2016 without adding, and then held on from the summer of 2016 to present whining and complaining all the way.

        Traders made money, buying the turns, and riding them up, or trimming back turns at peaks to get out of the way of correcting moves, then bought back when chart indicators were oversold, to ride the next rally higher, then sold at the next topping process when charts were overbought. Rinse and repeat.

        Saying that Silver miners are the wrong place to be since 2015 is a bogus comment.

        They were absolutely the right place to get involved with in late 2015 through Jan/Feb 2016 (and we were very vocal about holding our noses and buying them at that time when most people scoffed or were waiting for a washout to $900 $600 $400 Gold nonsense).

        In July and August after the rally had surpassed most investors (including ardent bulls) expectations, I got crap from a number of folks for suggesting trimming the tree and taking some chips off the table. It was the right call, even though I didn’t expect the miners to start a corrective consolidation phases for as long as it’s drawn out.

        Still, in Dec of 2016 a number of us recommended buying during tax loss selling for the Q1 run, and it absolutely came in early 2017 for easy gains — not just in Gold/Silver but Uranium & Lithium & Zinc and many commodities.

        I mentioned getting out of the way of the March PDAC curse in 2017, traded the “Spring Fling”, got out during the Summer Doldrums, and talked repeatedly about positioning again at the end of summer between mid-July and mid-August, and there absolutely was another Aug/Sept rally.

        Then last year, once again, like the last 5 years, a number of us mentioned buying during Tax-Loss selling in December up until the FOMC rate hikes, and I mentioned the whole 2 weeks leading up to the rate hike I was adding a dozens of names, and then bam! right on the day of the hike on Dec 13th, the miners jolted higher and many went on a runs of 30%-100%+ higher over the new few months for the Q1 Run into 2018.

        Then the same message this year of getting out of the way of the March pullback, and Summer Doldrums, and the time to look for Gold to bottom would be late summer between mid-July and mid-August.

        Gold did bottom at the later end of that spectrum in mid-August, and the stocks bottomed a little later (like they always do) in September and started to play catch up.

        Honestly Gold has been boring as hell, but since it is weak Silver has outperformed to the downside. I don’t know many on here that make their good returns buying Gold or Silver anyway. They are insurance, money, and a store of value, not something one gets in for massive gains.

        Miners are meant to be traded, adding at lows, and trimming at highs – not held for huge periods of times like a bump on a log.

        If investors just sat in miners all this time for the last decade or even the last few years without taking action, then they shouldn’t be managing their own money, and should turn things over to financial firm, and not be investing in resource stocks.

        Oil stocks or Copper stocks or Zinc stocks or Uranium stocks or Lithium stocks, are no different than Gold or Silver stocks. They are cyclical, have wild swings up and down, and are to be traded not held onto, especially in a trendless market. If we start seeing a raging commodities bull then it’s fine to hold on for a few years and be a bit of an old turkey, but that isn’t the environment we’ve had since 2001-20017 or 2009-2011. Even then, I’d rather buy the dips and sell the rips to capitalize on the wave after wave of trading action.

        Saying resource stocks have been the wrong place to be since (pick your arbitrary date) is just silly. There have been half a dozen inflection points where it made sense to add, and half a dozen points where it made sense to trim. Nobody is going to catch every single one perfectly, but there have been PLENTY of seasonal rallies to capitalize on that allowed one to outperform the general equities with 30-100%+ gains, and plenty of Jr Exploration companies that surged 200%-1000%+ for those that follow the news flows, and dozens of takeover opportunities and value arbitrages for 40-60% acquisition premiums, for anyone researching companies and putting in the homework.

        • On December 14, 2018 at 2:50 pm,
          Marty says:

          Nice piece, my friend.

          • On December 14, 2018 at 3:27 pm,
            Excelsior says:

            Thanks Marty. Cheers!

    • On December 13, 2018 at 2:59 pm,
      spanky says:

      And of course in the short run its possible silver miners outperform, since it looks like the SLV:GLD ratio has room to rally.

  9. On December 13, 2018 at 3:52 pm,
    OOTB Jerry says:

    I do not agree with this ……….Trump needs to think twice……

  10. On December 13, 2018 at 4:37 pm,
    spanky says:

    Wow, another new low for $CDNX. This has been an epic collapse. After hitting a similar level in 2016, it drifted lower for another 6 months. While it may not take the gold miners with it, I don’t think the silver miners will be spared. If you are long miners you should pray that it puts in a LT bottom soon. It’s only about 80 pts away from the 2016 low and the selling has been relentless. If it closes red this week that will be 5 weekly closes under the bollinger band. That is 2008 style selling.