The Gold Price Needs A Major Repricing
John Kaiser, Founder of Kaiser Research outlines why he thinks gold will have a major repricing in the coming years. We also get an update on the value traded on the Venture Exchange over the past month. With precious metals running, resource stocks are starting to take the lead away from cannabis stocks.
When you are doing any due diligence on a junior resource company I highly recommend John’s site. Click here to visit Kaiser Research.
My 2 cents:
Lasting changes to the price of gold are always due to changes in the value of the currency so Trump’s challengers would be at least as friendly to a higher gold price and probably more so since a higher percentage of their constituents have no problem with policies that are bad for the economy and bad for the dollar.
In the final analysis, gold’s drivers are bigger than any POTUS so it doesn’t matter much who gets in, gold is going higher.
If Bernie Sanders and the communists win in 2020 gold will go to 10K and silver to 250 or more. Guns and ammo will soar too.
I wouldn’t worry about Bernie getting in but the rest of the big D’s would be almost as bad.
Matthew do you have a .270 rifle or a Colt replica of their 1877 Bulldog Gatling gun which costs 49K new? The 5 barrel model shoots 800 rounds of .45-70 a minute, and the 10 barrel model shots 1200 rounds a minute. Gatling guns are legal to own somehow, and are not considered to be machine guns.
Not currently but I used to have a Kimber 8400 in .270 WSM: https://www.budsgunshop.com/catalog/images/411536230.jpg
I bet that Bulldog weighs a lot!
Bulldog weighs about 100 lbs. but is mounted on 2 spoked wheels 36″ high
What do you think about MO now that it has fallen from 56 in May to 43.67?
I am tempted. It goes ex on Sept 13.
I think it will test the January low before bouncing but that bounce could be a big one. Big picture, I think it’s going much lower. I don’t know if it will reach the P&F chart price objective of 21 but I could see it hitting the 50 quarter MA (32.62 and rising) or the quarterly lower Bollinger band at about 37. The last test of that MA was in 2003 while that Bollinger band was last tested in 2000.
MO has been on a quarterly MACD sell signal since April, 2018.
MO is down 50% vs gold since topping in 2017 but looks like it will drop another 50%. This is clearer to me than what it might do versus the dollar.
Thanks, Matthew. Guess I will buy more PSLV on a pullback and wait for MO to go down.
I completely disagree with John’s comment that 2016 was just a “little surprise rally.”.
1) It wasn’t a surprise at all that Gold put in its major bottom in December 2015 right after the Fed did it’s first rate hike in 8 years since the 2008 crisis started.
2) Again, $1045.40 was the Major bottom in Gold, and when the move broke up through 3 prior peaks and a key trough of $1321 (the surge down low off the 2013 crash in the metals prices) it was the bell ringing that the worm had turned.
3) In addition, Gold broke up through all the major Fibonacci Exponential Moving Averages and Simple Moving Averages, which it had not done in 3-4 years prior to that. This flipped all the short duration EMAs back on top, and all the longer duration EMAs on the bottom = very bullsh leg up.
4) When Gold signaled the bottom was in and kept charging up and up and up in 2016 in a stair-step pattern it was a new impulse leg higher.
5) 2016 was more dramatic and stronger than a number of periods from the prior bull cycle, so it wasn’t a small or little move.
For investors that saw the bottom in Gold put in place, which was not just random but actually synched with the first Fed rate cut in December of 2015, it was clearly a turn in the markets. For those investors, like many of us here that were “holding our noses and buying the miners” at the beginning of 2016 when the metals had started moving but the miners hadn’t yet, then it wasn’t a little surprise rally at all — It was clearly time for a rally and discussed here thoroughly at that time.
It was also discussed here on the KER over and over again for about 2 years before the first fed rate cut finally came in late 2015, that this would be bullish for Gold because the real rates were negative when compared to inflation metrics at that time = not a surprise.
2016 WAS the beginning of the BULL MARKET, clear as day, and yes it consolidated for 2 years after the epic and obvious first impulse leg up in this new cycle, but that was the beginning of the bull market that we are still in.
2019 was the proof in the pudding that we have still been in the bull market when it put in the 3rd wave higher taking out the 2016 high, and marking the next impulse leg up in this bull.
Anyone that couldn’t see this while it was unfolding by the summer of 2016 or when Gold was challenging the highs in 2017 and 2018 was asleep at the wheel or had a negative bias or narrative on the yellow metal when it was already up $200-$300 off the bottom and putting in a series of higher lows = bullish, not bearish.
Worse, anyone that couldn’t seem to realize that Gold was going to keep heading higher and take out the 2016 high for the next move higher…. like we just saw, was again, asleep at the wheel and shouldn’t be speculating in the Precious Metals space as they missed the next epic move up.
The worst were those still claiming Gold had stayed in a bear market, and kept proposing a final washout back down to challenge the 2015 low. Clearly Gold never even got close to that bear narrative in 2016, 2017, 2018, or this year in 2019, and those ding-dongs were #WrongoInTheCongo.
Really one of the best times to buy for those that missed the initial impulse surge up in 2016, was during tax loss selling of 2018 to prepare for this year when inevitably Gold would put in a new high.
Now Gold has been bouncing around between $1525-$1550 up at present resistance, and it has been an awesome year in most of the Gold or Silver producers, which are typically the first mining stocks to move in a move higher in metals prices.
For those that have sat on the sidelines since Gold bottomed in December of 2015 and the miners bottomed in January of 2016, to the present day pricing —- What in the world have you been waiting on?
There were plenty of rallies to have traded since the 2016 surge. For example, each tax loss selling event at the end of 2016, 2017, and 2018 offered a chance to position in the metals and miners for great gains during Jan/Feb/early March = The Q1Run. There was a fall rally in Aug/Sept of 2017 and 2018.
Now we’ve seen a rip your face off rally from May through August and yet there are still investors waiting around, scratching their behinds, waiting to see if Gold will rally. Wow!? Here’s a clue – Gold is up $500 — so when do these people think it’s a good time to get in $1600, $1800, $1900, or beyond?
Rant over, but it just drives me crazy when people that are supposedly experts in the Precious Metal sector don’t understand why Gold bottomed in 2015, still don’t seem to grasp that this market the beginning of the new bull market (confirmed by the miners after Jan 19th 2016), and don’t understand what a consolidation period is to cool of the charts, nor what the recent move up from December of 2018 to present was as the next impulse leg higher.
For those that have followed along and participated and contributed to the shared knowledge here over those years….. Cheers!!
Cheers to you too, Excelsior. Even I smelled a bottom in gold@1045 and have enjoyed the $500 rise. And I think we are just getting started and that gold could go to 5K or 8K, and silver should be better than gold. Don’t sell too soon!
Thanks Bonzo Barzini. Yes, it has been quite a run already, but there is much further still to go in this bull cycle.
We are hitting resistance here at $1550 Gold, so if we had a small pullback it wouldn’t surprise me. However, there is the other scenario where Gold just trucks it up higher into the mid $1600’s before correcting, so at this point, investors that positioned over the last few years should all be up enough to just hold through any corrective moves.
Personally I’m mostly just holding my positions at present, but each week I’m still swing-trading around partial positions in a few of the more volatile stocks with 1/4, 1/3, or 1/2 of the overall position.
It has been a blast this year Jan-March and May-August, and I’ve traded a in and out of partial positions few Silver and Gold stocks multiple times this year scalping small 15-40% moves here and there, but admittedly on very small partial positions.
If there is a small correction soon, then I’ve got a little dry powder on the side to deploy, but not much. I’m about 92% deployed and have been since the end of last year, but on the next pullback I’m moving my PM allocation to 100%. I still have positions in a number of sectors outside of Gold & Silver, but I believe the next corrective move will be the last time to position in most stocks at these levels.
Where it goes from there and how high over the next 2-3 years is anyone’s guess, but I believe we’ll still look back on current pricing as the time to have finished accumulating.
Ever Upward!
Thanks for your valuable analysis Excelsior.
As you may be aware Bob Moriarty is predicting a major markets selloff around October 2019. He believes that precious metals equities will also take a beating as major markets trend downwards. Given the awful fundamentals of the worlds financial system a major market selloff is a matter of when so it would seem he is on firm ground there.
How do you think precious metals equities are likely to behave in a major markets selloff?
Do you think they are likely to take a big hit as Bob speculates?
Or do you see precious metals prices rising rapidly in this scenario (major markets selloff) and precious metals equities following the prices of Gold and Silver?
I would be very interested to hear your thoughts on these questions.
Thanks again for all your valuable contributions.
I could have written John’s comment……..”Gold repricing in a few years.”…..like that is a no brainer……………….
Bingo OOTB. Great point. Hilarious.
John has enjoyed taking jabs at Gold investors investors that expected higher prices, (that is, when he isn’t taking swipes constantly at Americans). Now he’s thrown out a completely vague sugestion of Gold repricing in a few years (geez do ya think??), while failing to appreciate the reasons or reality behind the $500+ repricing in Gold that just played out over the last 3 years.
I like to hear his thoughts on mineralization of specific deposits, but even most of the stocks he follows are odd zombie companies or way out of the money developers. Investors have been well-served to disregard his macro or political comments though, as they are more often way off the mark.
John also likes to crap all over Silver investors all the time, just like Brent Cook and Mickey Fulp, and those Silver miners have just tore up the returns their wacky pet stocks have done, so they alienate a big piece of the audience and missed far better returns = unwise old guys. They opinions are worth hearing, but must be taken with a grain of salt like everyones.
To be clear I like John, but people give his views on various commodities way too much weighting, and there are much better voices in the space that have been far more accurate in forecasting commodities trends, in the macro economic drivers behinds metals, bonds, general equities, and have a clue of technical analysis and why price has done what it has and what it means moving forward.
So………….does it really matter what happens with the China trade, the Euro, Brexit,
over indebtedness by all governments and a multitude of other issues if eventually we lose the advantage of paying the world for it’s products with our green paper? I guess I believe we’re going to reap our due no matter what trump accomplishes. The majority of our population, who have never seen any real hard times, might not make it. JMO
Sprott Money News Weekly Wrap-up – 8.30.19
“Eric Sprott gives his latest assessment on the precious metals, where he’s particularly excited about the prospects for silver in the months ahead.”
(MAI) (MAIFF) Minera Alamos Inc. Announces Closing of Guadelupe Option Assignment and Acquisition of Common Shares of Prime Mining Corp.
August 30, 2019
“Following the Transaction, the Corporation owned or controlled 9,450,000 common shares of Prime representing approximately 16.1% of the outstanding common shares of Prime. As part of the Transaction, the Corporation acquired warrants to purchase up to 3,350,000 additional common shares of Prime at a price of $0.50 per common share.”
John what happens to gold if Trump get re-elected in 2020? Does your call for $2K-$3K gold go up or come down?