The Movements In Large Cap vs Small Cap Resource Stocks
Craig Hemke joins me today for a look into precious metals stocks and how the large cap are reacting to the rising metals prices vs the small cap stocks. There are a couple major reasons that the larger cap stocks move first but overall it is a very good sign to see some money flowing into the stocks.
Click here to visit Craig’s site for more metals commentary.
Audio does not work
Yep I tried on my computer and phone – but no audio available…
Audio working. It’s Alive!……
Thanks Excelsior
It’s Different This Time
by @Goldfinger on 13 Jun 2019
“Up until two weeks ago I was fairly neutral on gold in the short term, figuring that we were still in a tough seasonal period (until mid-July) without a clear bullish catalyst on the immediate horizon. That all changed on Thursday May 30th when I wrote a morning email to Trading Lab subscribers explaining that now was the time to get bullish on gold. ”
“Since May 30th gold has rallied roughly $70 and despite this large move my opinion hasn’t changed. In fact, i’m more bullish than ever on gold. This is literally a golden perfect storm that just keeps getting more bullish:”
“Fed funds futures are now pricing in a greater than 70% chance of at least two Fed rate cuts by the September FOMC meeting, and a nearly 20% chance of 3 rate cuts!”
“The Trump Administration is increasingly isolating the U.S. from the rest of the world, which is in turn motivating foreign powers such as China and Russia to continue to stockpile gold and create additional avenues in which to settle trade without using the US dollar.”
“Global debt and the U.S. budget deficits have never been larger and there is no sign of this global debt explosion slowing down anytime soon. ”
“Developed economies are finding themselves in deflationary quicksand as evidenced by the following chart of German, Japanese, and U.S. 10-year yields”
“I could go on and build a laundry list of bullish macro factors that support higher gold prices (eurozone, BREXIT, etc.) but you get the picture. A perfect storm is forming and gold is set to be a big beneficiary of falling real interest rates in developed economies and overall global instability.”
“The strongest trade setups occur when the macro-fundamentals align nicely with chart technicals. This is one of those times.”
“We are seeing persistent and powerful accumulation in gold mining shares:”
CEO.ca Weekly Wrap – A Fast Track To Production, A Behind The Curve Fed, And Multi-Year Resistance In Gold
by @Goldfinger on 9 Jun 2019
@Goldfinger – “Remarkable strength in gold miners as $GDX makes new highs for this move:”
“Now into the really tall grass but every little dip is being bought. Usually a very good sign when the miners are displaying relative strength to #gold itself. ”
“It’s still early but the signs are there and I think it would be foolish to ignore them.”
I agree with that Goldfinger 👌
With regards to the larger Majors and Mid-Tier producers getting a bid:
We often see that at the beginning of a move in the miners, and as Cory & Craig mentioned in this interview that is when the larger institutional funds are getting positioned and bigger money is starting to position in the large-cap and more liquid stocks. This is constructive then that GDX is responding so well lately.
That sentiment gets me more interested, because they are the ones with the most clear short-medium term optionality when the worm turns in the metals prices (unlike pie-in-the-sky optionality claims from explorers or developers that need $1500-$1700 Gold).
When a sector gets going it is often the BullWhip process, where the larger market cap #Producers move first, then the advanced #Developers near #production ratchet higher, and then the #Explorers that hit pay-dirt explode higher leaving the rest in the dust at the tip of the whip.
Cory & Craig – to one of the points that was discussed in the interview above:
I believe the point that many make isn’t the the miners lead the metals or are predictive of the move in the metals, but simply that when investors see the miners outperforming on a percentage basis to the metals, that this confirms a bull leg up is in high gear.
Here is a chart that serves as a nice reminder of how much torque that the $Gold and $Silver miners can have in regards to outperformance of their underlying metal assets.
The move off the bottom in Jan 2016 showed what can happen at the end of a sentiment washout, when money comes into the sector. #mbgtrends $GDX $SIL
http://cdn.ceo.ca/1eg6i86-GDX-SIL-Miners%20Outperform-Gold-Silver.JPG
Gold up to $1359.90 at present, the highest point in 2019 thus far.
http://cdn.ceo.ca/1eg6kda-Gold-1359.90-highest%20level%20in%202019%20so%20far.JPG
> At least Gold is gearing up to have an interesting weekly close for this Friday.
ditto………I guess we will go back and test $1307…. 🙂
Possibly, as that was a strong level of both resistance and now support. Gold is getting a bit overbought, and may need to pull back some and consolidate before stretching its legs again, but it may have a bit more juice left.
Right now even after selling off some of the overnight gains (that got up to $1360) at the open, Gold is still hanging around $1350, which would have it closing the week with a bullish candle.
If next week opens with a bang, (and not a whimper), then there is a legitimate chance of taking out the 2017, 2018, and most importantly the 2016 highs and reaching to a new high in this bullish cycle.
I’d prefer to see Gold close over the $1377.50 high from 2016 to put that topic to rest and prove the new bull market started in late 2015 after the Major low at $1045.40. It would be nice to count this run as a new impulse leg up, and for that to happen a new high must be reached, and a close above that 2016 is the line in the sand.
I was think the same, when I posted……..””Possibly, as that was a strong level of both resistance and now support””. 🙂
I would have to agree, …that “overbought”……but,
I think this time is a little different….why, three examples.
a. Tudor comment
b. Increase in gold price , in other currencies.
c. politically, Iran poking
But, who knows. JMO
Always good thoughts on the chart…..btw…..
Good thoughts on Tudor’s widely covered interview and good comments on Gold, the geo-political events like Iran, and I’d add the anticipation of upcoming Fed rate cuts.
As for Gold surging in other currencies, it hit a new all time high in the Aussie dollar terms today, so that is very telling.
bullionstar…..did a nice chart on the currencies….see article below…..all the currencies/gold charts… have better looking charts , than the dollar/gold chart.
Feds gone wild: DOJ’s stunning inability to prosecute its own bad actors
DOJ told to not prosecute by elected and appointed leadership. The Deep State is the Oligarchs and Central Bankers. Stay focused. This is about theft of the Treasury and Fascist corruption. Din’t fall for diversions.
SPot on David…….the sheeple do not get it…….
Barr and Starr………are and were part of a JOKE
The ridiculous thing about the sheeple is that many think socialism is materially different than fascism, when, in fact, it is identical in principle. Both are based on an almighty centralized government in which the law does not apply equally to all and individual rights/freedoms are given only lip-service. The individual is routinely sacrificed for the (completely bullshit) “greater good” (as if there’s a greater good than liberty for all).
Leftists want to take society from the frying pan into the fire but you can’t tell them that because the little tyrant in each of them won’t listen to reason.
“The goal of socialism is communism.” — Vladimir Lenin
The sheeple…..can not tell you what socialism nor fascism nor republic nor democracy is….
Like clinton said….depends on what you mean by is…..lol
Which is why they don’t know how they should feel about anything until a leader tells them how they should feel. A prominent but controlled opposition is obviously very valuable as it keeps the sheep distracted from what matters while crowding out legitimate opposition. Ever wonder why even FOX and FOX Business won’t explain the Marxist Federal Reserve to its viewers?
U.S. politics, media, education, etc, etc, were captured long ago and the millennials and most of their parents have a favorable view of socialism/communism as a result.
Ditto…….on the education…
DoubleLine’s Jeffrey Gundlach puts chance of recession at up to 65%
Julia La Roche•June 13, 2019
“Prominent bond investor Jeffrey Gundlach, the CEO of $130 billion DoubleLine Capital, sees the increasing likelihood of a recession within the next six to twelve months.”
https://finance.yahoo.com/news/jeffrey-gundlach-warns-on-recession-225648921.html
https://www.bullionstar.com/blogs/ronan-manly/lbma-clearing-vaulting-data-reveal-absurdity-london-gold-market/
On a monthly basis, the equivalent of 130 times more gold is being traded than is available as physical gold in the London vaults to underpin trading. And a whopping 1470 times more ‘gold’ is being traded each year in the London Gold Market than is available in physical form in the LBMA vaults in London to underpin trading.
But importantly, the London Gold Market, along with COMEX are the two most influential trading venues for gold price discovery and for establishing the international gold price, even though the trading in both venues is far removed from trading physical gold.
So next time you see the LBMA release clearing data and vault holdings data, as it does at the beginning of every month, its worth picturing these two sets of data, not as two distinct datasets, but as two interrelated sets of data where a tiny amount of physical gold in London vaults, ‘underpins’ vast amounts of trading in fictional ‘gold’, and where mainstream financial journalists fear to tread or ask questions as to how this Ponzi scheme came into existence and has been allowed to go on for so long.
So what is going on? Enormous ‘gold’ trading volumes yet tiny vaulting volumes of real gold. How can that be? The answer is that in percentage terms, the London Gold Market does not trade very much real physical gold, or said another way, nearly all of the gold trading that goes on in London OTC gold market only has a tenuous connection to real gold.
https://www.bullionstar.com/blogs/ronan-manly/gold-price-breakout-in-multiple-currencies/
But for investors with a base currency / home currency that is not US dollars, or whose wealth is denominated in currencies other than the US dollar, the US dollar gold price may not be the best price quote to keep an eye on, since these investors originally purchased their gold not with US dollars but with their home fiat currencies, which could be Pounds sterling, Euros, Singapore dollars, Australian dollars, Indian rupees, Brazilian reals etc.
And so, for those investors, the gold price movement over various time horizons such as year-to-date, 1 year, 3 year, 5 year etc, is best measured in those investors’ home currencies, or the currencies in which these investors and savers in gold generate their income and denominate their wealth.
a lot of the movement that is witnessed is really the weakening of that specific fiat currency vis-a-vis the US dollar. In other words, over any period of time, if another fiat currency has weakened against the US dollar while the US dollar gold price has stayed static, then the gold price in that currency, other things being equal, will be higher by the same amount as that currency weakened against the US dollar. This was the case for many emerging market currencies last year.
However, it is when the gold price in all currencies rise at the same time that things get interesting, since in that case all fiat currencies are weakening against gold. T
Measured in euros, the gold price is currently (at the time of writing) trading at 1190, which is over a two year high.
Against the backdrop of never ending Brexit shenanigans, gold in British pounds sterling (GBP) is currently in the 1060 range. This, as you can see from the chart below, puts sterling gold at over a 6 year high.
One of the more notable breakouts in the gold price is currently taking place in the currency of one of the world’s top gold producer’s Australia. In Aussie dollar terms, the gold price is now at an all time high, something that seems not to have gotten the media exposure globally that it arguable deserves.
There is no other way of putting it, the Aussie dollar gold price is currently up, up and way, having broken out to an all time high during January.
With gold in euro, pounds, Aussie dollar, Singapore dollar, Canadian dollar, and Swedish krona all in their own way making new multi-year or all time highs, all eyes are now on US dollar gold to lead by example.
Hello………Wake up …..and check the other CURRENCIES………GOLD UP…..
TUDOR sees it…I Bet……LOL…
Glad to see this news out today, as I’ve taken out a speculative punt on Golden Ridge for this year’s exploration program.
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(GLDN) (GORIF) Golden Ridge Resources Begins Drill Program at Hank
by @thenewswire on 14 Jun 2019
Mike Blady, C.E.O, president, and Director of Golden Ridge, commented: “We are very excited to be commencing our field season nearly a month earlier than last year. A low snowpack and early spring will allow us to aggressively test and build out on our two new drilling discoveries from last year. 2019 will be a defining year for our Company as we continue to unlock the potential of the Hank project.”
https://ceo.ca/@thenewswire/golden-ridge-resources-begins-drill-program-at-hank
And Bob Moriarty states the price of gold is not manipulated…..look at:
No, he states that all markets are manipulated but that it doesn’t matter (when it comes to making money) and he’s right.
Bingo!
That was in reference to Matthews point that Bob M. made that all markets are manipulated by larger buyers/sellers, but that price action still is on the charts, and it is usually temporary, and has nothing to do with msking real money or investing in the long-term.
Where’s good ol’ BM….PMs being BM’ed…eh Bob!
https://www.zerohedge.com/news/2019-06-14/putin-xi-take-swipe-trump-during-russia-meeting-boast-about-new-era-cooperationRussia and CHina….make new friends………
Trading friends……Well ,the Population of Russia is 143 Million….and the US is 325Million……..Looks like China can not do math., not good to cut yourself short on able body consumers.
Pd up 4 times Au at the moment today! Pd up $37