Richard Postma - The Doctor Is In – Mon 11 Jan, 2021

Where and when will the next bounce come for gold and silver stocks?

Doc is with us to share the levels he thinks we will see in gold and silver moving through the next few months. We discuss the general timing of the moves and the key factors that will drive these moves.

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Comments:
  1. On January 11, 2021 at 12:06 pm,
    cfs says:

    New Found drills 15.9 m of 31.4 g/t Au at Queensway
    2021-01-11 08:23 ET – News Release
    Mr. Craig Roberts reports
    50 METRE STEP-OUT HOLE AT KEATS INTERCEPTS BROAD, SHALLOW, HIGH-GRADE INTERVALS: 22.5 G/T AU OVER 10.4M AND 31.4 G/T AU OVER 15.9M

  2. On January 11, 2021 at 1:23 pm,
    Excelsior says:

    Another mildly down day in the Gold & Silver mining stocks, but not as brutal as Friday. I did a little nibbling in a few miners, but am waiting to see how things develop before deploying any more funds raised, and did trim back gains in a copper stock and pgm stock, just in case the base metals keep getting pressured.

    • On January 11, 2021 at 1:44 pm,
      Dick Tracy says:

      Hi Ex, Have you read what Moriarty said today about the precious metal market, what are your thoughts on his article that came out this morning. I have been watching things closely but I believe Bob’s thoughts are worth considering. I would appreciate your feedback. DT

      http://www.321gold.com/editorials/moriarty/moriarty011121.html

      http://www.321gold.com/editorials/moriarty/moriarty011121.html

    • On January 11, 2021 at 2:14 pm,
      Excelsior says:

      I also added to a PGM stock today as well though (Group Ten) as it’s recent selling has been more extreme, and I had trimmed it back at higher levels in mid December, and was considering adding more anyway, because I like their fundamentals and exploration potential at Stillwater (as well as their other PGM/Nickel properties, and gold property).

    • On January 11, 2021 at 5:13 pm,
      David says:

      Not sure about mild losses but almost 6 figures in two days. Never recovered from the July to Jan take down. I invest in gold and silver miners.

      • On January 11, 2021 at 5:21 pm,
        David says:

        I vote for market intervention. I am not going to read much more than that into criminal behavior.

        • On January 11, 2021 at 5:44 pm,
          David says:

          The “uptick rule” would have slowed the paper dump. Self-fulfilling prophesy from here.

      • On January 11, 2021 at 7:17 pm,
        Excelsior says:

        I’m sorry to hear about your personal drawdowns the last 2 trading sessions David, but yes, it is a volatile market and it may swing things back up the other direction in a different 2 day window.

        Yes, last year was much tougher after things peaked in the sector in the summer July/August, but there were still plenty of good swing trade setups, and I had my best year ever trading the markets, and continued to gain traction even in the second half of the year. As mentioned previously, my trading portfolio also benefited from the diversification into PGM, Base Metals, Uranium, and Lithium stocks that all had stealth bull markets in the latter part of 2020.

        Hang in there, and by this time next year, you should have made a little cheddar. We may have some crazy sell-offs to content with, but I feel like that happens to us every year in resource stocks. It’s only in the general markets where investors are conditioned to only have gains year after year, and so far every pullback they’ve experienced was a chance to buy the dip and magnify returns. The only constant is change, so the general markets may have a more challenging path moving forwards in the medium to longer term, and the precious metals and energy metals may get a chance to really shine. Most general businesses do not have the potential for revenues growth that most of the Gold & Silver producers have son the road to come.

        Wishing you good trading and better gains the next 2 days.

        • On January 11, 2021 at 11:55 pm,
          Excelsior says:

          content = contend
          son = on

  3. On January 11, 2021 at 1:49 pm,
    Dick Tracy says:

    Hi Ex, have you read this article that came out this morning on 321 gold by Bob. DT
    http://www.321gold.com/editorials/moriarty/moriarty011121.html

    • On January 11, 2021 at 1:50 pm,
      Dick Tracy says:

      I am referring to the state of the precious metal market. Thanks DT

      • On January 11, 2021 at 2:00 pm,
        Excelsior says:

        DT – Thanks for sharing that Bob M piece, and I just went and checked it out.

        As it relates to the PMs these to passages he wrote stuck out:

        “But in the last week the DSI went up a lot for the metals. The DSI hit 9 for the dollar on the 17th of December and the dollar is almost certainly going to continue higher.”

        “Bitcon is in the clouds and there will be a mighty crash. As will the general markets that might well include gold and silver and resource stocks. The world isn’t ending but it is beyond stupid.”

        ____________________________________

        I’d agree with Bob M. that if the US Dollar keeps running higher that it would be a headwind for Gold/Silver (but they aren’t always inversely correlated). A rising Dollar would likely hurt Silver and the industrial base metals more.

        As for the mighty crash in Bitcoin, the general markets, and Gold & Silver, I’m not ruling out that possibility, but was expecting it to come later in the year, and not in the Q1 Run, where we seasonally see some of the strongest buying in the PMs to kick off the year.

        I also agree with Bob’s point that the world isn’t ending…. but it is beyond stupid right now. 🙂

        • On January 11, 2021 at 2:01 pm,
          Excelsior says:

          to = two

          • On January 11, 2021 at 2:18 pm,
            Dick Tracy says:

            Hi Ex, I fear it is the unknown that has me feeling unsettled at this moment, the sudden decline of gold’s value on Friday really spun me out, Thanks for the reply. DT

          • On January 11, 2021 at 2:27 pm,
            Excelsior says:

            Yes, understandably DT. Every day in the markets we face the fear of the unknown, but from a bigger picture standpoint, the bull market is still intact, governments around the world are spending obscene amounts of money on stimulation and to try and reflate their economies, central banks around the world are still intervening by buying up treasuries and even corporate bonds (with some CBs even buying up stock in the open markets), and even though wallstreet pundits are celebrating the move higher in yields (they are puny from a historical perspective, and 1-2% rates are nothing to get very excited about). Real rates are still negative and that is very good for the PMs in the medium to longer term.

            In a bull market, corrective legs are the time to accumulate positions that offer clearance sales, and those moments are always more volatile and uncertain.
            The herd always gets too emotional during pullbacks in a bull market, which is why the herd starts selling at those moments of extreme weakness at exactly the wrong time, (just like they did last year in the March crash, or in the April/May weakness of 2019, or the corrective leg down in the fall of 2018). A true contrarian investor takes full advantage of buying when the herd is selling, and then on the next leg higher when everyone gets smug and thinks the sky is the limit, a contrarian trims off gains and sells to the greater fools. That’s what makes a market. 😉

          • On January 11, 2021 at 2:30 pm,
            Canuckski says:

            Just as a note to all my family here. I spoke with one of my best friends who manages $15B and he’s saying that cash isn’t a bad thing right now. The convo was much longer than a minute, but overall… right now, 50% equity market exposure. Never PMs. 🙂 I hear it, but I’m not there yet myself.

          • On January 11, 2021 at 3:48 pm,
            Excelsior says:

            Agreed Canuckski. Sometimes the best plan is to sell and raise cash for sure. I just sold my home, liquidated part of my retirement funds under the Cares Act, and have been saving for a rainy day the last 2 years, so currently have my largest cash position ever.

            I still kept 40% of my retirement fund in place, which is mostly in US mutual funds, bonds, and a bit of emerging markets. My trading account is the speculative one I normally discuss here, and even inside of that I have the most funds set to the side that I’ve ever had, waiting for more market weakness to buy.

            My point up above was that is generally best to raise trading funds during the most bullish parts of uptrends, and not after things are already crashing. So those selling last March during the crash were completely wrong-footed and they should have been buying with both hands, just like the spring of 2019, or the fall of 2018. Last summer I mentioned starting to pull profits when the BPGDM Gold miners bullish percentage index was registering 100 (it’s highest level) in late July and early August.

            If one is discussing a sector like the PMs, which are in a larger bull market, then extreme rallies should be sold, and outsized pullbacks should be bought. With something like Bitcoin, it clear has been on a parabolic tear, and the forecasts and frothiness have been rising and rising, and my investing objectives were met, so I finished selling and pulling profits last week.

            Sometimes the hardest thing to do is to sit on ones hands with some funds, but conversely, there is always an interesting set up showing up in the markets, day in and day out to utilize that cash.

            Wishing everyone here at the KER good trading in these turbulent times.

          • On January 11, 2021 at 5:31 pm,
            Canuckski says:

            Hey Ex, just to note, I’d still encourage you to work with Cory and deliver a show on Ker. Try a pilot episode. I’m not kidding.
            I could give some ideas of topics if that would help.
            I think many here would like to see that.
            You demonstrate a real passion for the subject.

          • On January 11, 2021 at 6:19 pm,
            Excelsior says:

            Thanks for the encouraging words Canuckski.

            I’d be interested in any topics you feel are interesting to discuss here in the blog, and you never know… one day I may pop on for a pilot show… (ha!)

          • On January 11, 2021 at 7:39 pm,
            Thomas says:

            Ex, interesting info that you have 60% cash now
            Always thought that you are full invested, because of the many positions you have 😀

            Was also thinking to sell an apartment last year. Kept it at the end. House and apartment prices went up during the pandemic even more than before.

            Expected a second more severe crash in the general market last year that didn’t came.

            Very difficult to predict how things develop at the moment.

            I think that this develops like the end of the pandemic 2018/19 where we had a 10 year boom before the real crash came and a reset afterwards.

            Biden probably will have to do the largest investment program in US history. If this comes, base metals and especially battery metals and it’s miners should go up a lot higher

          • On January 11, 2021 at 7:40 pm,
            Thomas says:

            I meant the pandemic 1918/19

          • On January 11, 2021 at 8:05 pm,
            Thomas says:

            Israel plans to reach herd immunity through vaccination by end of March

            https://www.timesofisrael.com/5-2-million-israelis-to-be-fully-vaccinated-by-late-march-health-ministry-plan/

          • On January 11, 2021 at 11:32 pm,
            Excelsior says:

            Hey Thomas – I think you misunderstood my post. I have 2 buckets in paper assets:

            1) Retirement account (full of boring mutual funds & bonds)
            &
            2) Trading account (filled with the mining stocks that I discuss here on the KER).

            __________________

            1) In May my position at work was eliminated along with 1000 others due to a Covid-19 reduction in force, and because it was pandemic-related, it allowed me to take out roughly 60% of my 401K plan out into cash, without the tax penalty, due to the Cares Act that was passed earlier last year. 40% was left in those funds and is still in the market. So from that standpoint, my retirement funds are currently 60:40.

            2) My Trading Account has been fully allocated or pretty close to it since late 2018, and often leveraged with margin. In December, I finally blew out any remaining old gold/silver/zinc/specialty metals dogs for tax loss selling, to offset some of the trading gains, but I also started trimming back some of the gains in the PM miners, Uranium, Lithium, and PGM miners in late December into the beginning of last week because the account had grown in value beyond my expectations and it was making me a bit uneasy. As a result I have about 12% of funds available compared to what is invested in my trading account so 12:88 ratio of cash to stocks in there. It was about 18% earlier in the week, but I deployed 6% of those funds into the selloff in the later part of this week.

            >> As for the home…. We had been waiting for a good moment in life to move across the country, and as a result, I had been saving a big chunk of my income for 2 years in cash, leading up to last year. When my position was eliminated, I had a severance package that we lived on the balance of last year, and then we sold our home for more than we felt it was really worth, and more than other comparable homes around us. It even surprised our agent. Recently it has definitely been a sellers market, and that was good because it gave us a little more buffer to get moved across country and get the next chapter of life set up. So it was a series of unique events and decisions made last year and this year, but I feel overly cashed up at present (from a big picture point of view), but a bit tentative on when and where to deploy some of the funds.

            For example, I decided to take 2% of the cash reserves and throw them into GBTC Grayscale Bitcoin Trust, but got nearly a triple out of it, got concerned it had run too far too fast, and sold out of it in a series of tranches, finishing up last week, and now it’s back to cash. (haha!).

            But yeah, to reiterate, in my trading account, with all the mining stocks, there is roughly 12% of funds still available to deploy when I spot opportunities in existing or new positions. If things do get crazy in the general markets or the resource markets, then I have some dry powder to fire off into any oversold conditions. If things get really really crazy, then I have deep savings to deploy that are not currently allocated to the trading account.

            Ever Upward!

          • On January 11, 2021 at 11:40 pm,
            Excelsior says:

            The thought has occurred to me to do what David Erfle or Brian Leni did and take the home sale proceeds and some of the savings and go all in to the markets as a full time investor. The only downside would be that my lady would likely strangle me. Haha!

          • On January 12, 2021 at 9:31 am,
            Thomas says:

            Ok, yes I misunderstood your post

            12% sounds more like ex -:)

          • On January 12, 2021 at 12:33 pm,
            Thomas says:

            12% cash is low. If you expect a crash you should have more cash?

            On the other side Bob was wrong concerning Bitcoin -:)
            This time he might be also wrong with a crash in the general market

          • On January 12, 2021 at 3:07 pm,
            Excelsior says:

            Thomas, I’d agree that with conventional thinking, 12% cash is low, but I had 18% cash and just deployed 6% of it on the pullback. Also that is just in my Trading account, and as mentioned, I have 60% of my retirement account cash in deep savings, and moved to the sidelines in the general markets after them having a stellar run from 2009 to present, and did keep 40% still invested in case there is not a large market crash. In addition I have the cash that I was saving from 2 years prior to the position being eliminated, and the cash from the equity in the sale of the house. If anything my cash percentage outside my trading account is far too high, and was a result of a defensive strategy in turbulent times. In a year or so, we’ll likely purchase a new house, so most if it is earmarked for that, and I’ll have a big ole tax bill to pay for last year, so some of it is earmarked for that.

            If the cryptos do crash further, then I may put a bit to work there, but more than likely, I’m going to look for any big market dislocations in the general markets over the next year or two, and if there is the “Big Crash” that Bob M is calling for, then I plan on going shopping when there is blood in the streets, and then beefing up my retirement fund again, and possibly max out a new Roth IRA for myself and my lady.

            There are so many plates spinning right now geopolitically and economically, and my life was going to have an upheaval period, that I wanted to be very cashed up during that process, and as I looked for new employment and planned for the next chapter of life. We’ll see how it goes…

          • On January 12, 2021 at 11:59 pm,
            Thomas says:

            Ex, that sounds better. Not easy at the moment. To much money might be also a bad decision, because all the money printing will inflate at away.

            Good luck with your plans.

          • On January 13, 2021 at 2:13 am,
            Excelsior says:

            Thanks Thomas.

        • On January 11, 2021 at 8:21 pm,
          Thomas says:

          Found an interesting page

          https://ourworldindata.org/covid-vaccinations

          Israel is already at 21% of the population got the first dosis
          UK is at 4%
          US is at 3%

          • On January 12, 2021 at 1:49 pm,
            blazesb says:

            Ex, you have the talent Whether or no you go full-time investor is a personal decision. Every post here you make is a gift and much appreciated.

          • On January 13, 2021 at 2:12 am,
            Excelsior says:

            Thanks blazesb.

    • On January 11, 2021 at 7:02 pm,
      Excelsior says:

      Financial Freedom via Mining Stock Investing with Brian Leni

      MiningStockEducation – Jan 11, 2021

      “Brian Leni is the founder of JuniorStockReview.com which exists to offer information, ideas, and strategies for managing speculation in the junior resource sector. Brian first discovered mining stocks about 13 years ago and was immediately intrigued. In 2014/2015, Brian anticipated that the resource sector was closing in on a bottom, and he wanted to access more capital for the expected up-cycle. So he sold his home and then invested 2/3 of the home sale proceeds into resource stocks. By August 2016, he saw his invested funds triple in value. Due to his large gains, Brian quit his professional job as an engineer and now devotes his time to researching and investing in mining stocks. In this interview, Brian shares not only his success story, but also insights on how he approaches mining stock investing.”

      https://youtu.be/DXJKsX95OGs

  4. On January 11, 2021 at 1:53 pm,
    Excelsior says:

    Interesting comments today Doc. Personally, I don’t want to see Gold head down to those $1760-$1770 levels again, that you mentioned; preferring to see it hang above the low $1800’s, or worst case maybe that $1780-$1790 congestion zone, but appreciate the words of caution and for you sharing your analysis with us here at the KER.

    As for the theme of rising rates, I’m less concerned in the medium to longer term, as they can’t go that high without the FED intervening, and controlling the yields. After bottom dwelling most of last year, they’ve now perked up a little (with the 10 year up to 1.13%) but they can only rise so much (maybe 2%) before they become problematic again. Granted if the rates do keep rising in the short term, along with the US Dollar, then those could both be headwinds for the Precious Metals as you mentioned, and pressure them further to the downside.

    For now I’m just holding onto the mining positions I have, but am sure glad I sold the remaining dogs in my portfolio in mid December for tax loss selling, and also trimmed some gains back from stocks that had really run hard the last week of Dec and first week of Jan to raise funds. Last late Feb – March, when the markets got blind-sided by the pandemic crash, I didn’t have the cash position I would have preferred to buy as much as I wanted to, but fired off everything I could into that weakness. This year, it feels much better knowing my trading account has a pool of funds on standby, to pounce on any further weakness we see play out in the weeks to come.

    While I’d much rather see a bounce from here in resource stocks, and more green on the screen…. I’m ultimately OK if the PMs keeps trending lower. If we do actually get down into the high $1700’s again, then it will be a great chance to top up the tank on mining vehicles that will have good torque when the next up-leg gets underway. Cheers!

    • On January 11, 2021 at 2:07 pm,
      Excelsior says:

      A more bullish scenario overall would be if Gold can muddle around in the low to mid $1800’s and if silver can muddle around in the $24-$25’s for a while, base for a while in a sideways consolidation, and then move higher from there. That would be a nice path forward, Mr Market can be cruel at times… (lol).

  5. On January 11, 2021 at 2:34 pm,
    Matthew says:

    I sold HL today at 6.09 and 6.10 about 100 minutes before the bell and then bought it back at 5.81 and 5.82 then sold it on the gap-fill and bought it again afterwards as the intraday stuff I look at developed a picture I could use. I’m glad it finished just under 6 rather than just over it (way over it would have been fine, of course).
    Looks like a nice cup-and-handle in the works:
    https://stockcharts.com/h-sc/ui?s=HL&p=D&yr=0&mn=10&dy=11&id=p34165021362&a=871262235

    • On January 11, 2021 at 5:15 pm,
      OOTB Jerry says:

      Nice…….is all I can say…… You need to open a trading room on zoom for real time action, I would subscribe…….. 🙂

    • On January 11, 2021 at 5:24 pm,
      Canuckski says:

      That’s some mighty good day trading Matthew! I’m impressed. I coulda maybe done that once well, but to successfully go two rounds all in 1-2 hours before the bell demonstrates true Jedi-level power. Good job!

      • On January 11, 2021 at 6:20 pm,
        Matthew says:

        Canuckski, I was unclear. Only the sales at 6.09 and 6.10 were before the bell. The rest was an all-day affair. No Jedi here! 🤷‍♂️😒

        • On January 11, 2021 at 6:23 pm,
          Excelsior says:

          It still sounds like a good day of trading Matthew. Well done sir.

          • On January 11, 2021 at 7:13 pm,
            Matthew says:

            Thanks Ex, it was a better day than I was expecting.

          • On January 11, 2021 at 7:22 pm,
            Excelsior says:

            I still haven’t rotated funds out of my Coeur position and into Hecla yet, but have been following your charts with interest, and felt you laid out a good case for HL’s eventual out-performance over CDE, when discussing the MACD on the monthly and quarterly charts. I’ve owned HL before a few times, and plan on starting to accumulate once we see where things bottom in this leg of the PM journey.

          • On January 11, 2021 at 7:30 pm,
            Matthew says:

            We have a potential bullish H&S pattern in the euro versus gold setting up. I do not want to it see activated, especially now since the euro would rise versus gold at a time when the dollar is rising versus the euro. That would obviously not be great for gold and our CDE and HL might not like it either, to say the least.
            https://stockcharts.com/h-sc/ui?s=%24XEU%3A%24GOLD&p=D&yr=1&mn=5&dy=0&id=p02530269328&a=871426208

          • On January 11, 2021 at 7:34 pm,
            Matthew says:

            UUP/USDX does look like it’s probably going higher but you never know what a bunch destabilizing political buffoons might do to change that. Here’s some interesting UUP action around the 600 day EMA and its 5 SD envelopes:
            https://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=1&mn=5&dy=0&id=p41982824114

        • On January 11, 2021 at 7:06 pm,
          Canuckski says:

          Matthew, no worries whatsoever. I appreciate your sharing and luved the cup n handle chart.

          • On January 11, 2021 at 7:15 pm,
            Matthew says:

            Thanks Canuckski. Now let’s see if that pattern falls apart. I think the sector could surprise us all in either direction from here very soon.

          • On January 11, 2021 at 7:30 pm,
            Glenfidish says:

            It sure looks like that right shoulder is forming. Could it be? Should it be? Must be? Lol soon enough we will know the answer. I’m sticking to me guns 💪 I better be silent the cabal might be watching and send it down 😬..

            Jerry through me a life jacket trying to hold this semi weekly green candle above water…

            Glen

          • On January 11, 2021 at 7:37 pm,
            Matthew says:

            Watch out, Jerry might reach for one of his 1,000 ounce platinum bars to throw to you after the way platinum’s lagged palladium. 😲

          • On January 12, 2021 at 4:54 am,
            Glenfidish says:

            Haha good one Matt 🤭😀

          • On January 12, 2021 at 11:53 am,
            OOTB Jerry says:

            It is sink or swim around here…. 🙂

  6. On January 11, 2021 at 9:31 pm,
    Matthew says:

    For the first time since late November, silver tested the 30 week MA again bottoming today at 2 cents above it:
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=5&mn=0&dy=0&id=p32441207326

    • On January 12, 2021 at 4:55 am,
      Glenfidish says:

      That’s what I wanna hear Matt…silver going to outperform biggg time!

  7. On January 12, 2021 at 2:18 am,
    Excelsior says:

    (USAS) (USA) Americas Gold and Silver begins commercial production at Relief Canyon

    Jan. 11, 2021 – Carl Surran

    “Americas Gold and Silver (NYSEMKT:USAS) declares the start of commercial production at its Relief Canyon mine in Nevada, with full ramp-up for the operation targeted for May.”

    “The company says the operation has consistently met the required stacking rates since the return of the mine’s large radial stacker in December, which was the final item required to declare commercial production.”

    https://seekingalpha.com/news/3650517-americas-gold-and-silver-begins-commercial-production-relief-canyon?mail_subject=usas-americas-gold-and-silver-begins-commercial-production-at-relief-canyon&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha

  8. On January 12, 2021 at 3:13 am,
    Excelsior says:

    Riding the Gold Bull in an Algo-driven Market Tsunami

    Jonathan M. Mergott – January 9, 2021

    “The one common theme in all bull markets in gold is a loss of confidence. In the depression, a loss of confidence in the economic system. In the 70s it was a loss of confidence in currency after ending Bretton Woods and seeing relentless inflation and dollar devaluation. In 2001-2011 it was a loss of confidence that we will ever pay back our debt. It was also the repeated bubbles and crashes that made many lose faith in the economy and the markets. A bull market in gold is a sign of a loss in confidence in the economic system, markets, currency and the ability of government to fix it. A loss of confidence in government itself.”

    “This is our fundamental case for higher gold and silver prices. ”

    https://alchemyfinancials.blogspot.com/2021/01/riding-gold-bull-in-algo-driven-market.html

    • On January 12, 2021 at 4:59 am,
      Glenfidish says:

      Went over the weekly and more precisely the monthly look in the miners/gold/xau/hui
      And I couldn’t be more sure that we have bottomed and this mini correction if you wanna call it that is for buying or just waiting it out. It’s nothing more then back filling here and once it’s ready she will launch and the move is going to be spectacular for who had patience.

      Glen

  9. On January 12, 2021 at 7:43 am,
    BDC says:
  10. On January 12, 2021 at 8:03 am,
    BDC says:

    Top FX technician: https://www.youtube.com/watch?v=RXmY0xIVn18
    (Unfortunate sound problems.)

    • On January 12, 2021 at 8:32 am,
      BDC says:

      Dollar early. Gold at 20 minutes.