A focus on the rotation within the commodity sector
As much as I have been discussing the rotation within the broad averages we have also seen rotation within the commodity sector. John Kaiser, Founder of Kaiser Research joins me to discuss where we have seen money rotate into and on a longer term basis what commodity sectors could be left behind for good.
Yes, the 10 year rising has been a lot on a percentage basis, but is still quite low historically.
These rising rates started from down around 0.53% and have now climbed up to 1.53%, so more of a 3 bagger really.
These rising rates have been bad for Gold, and they first started climbing at the end of tail-end of July, and then by August were picking up speed, marking the top in Gold, and as they have risen for the last 7 months, the yellow metal has fallen.
These rising yields on the 10-year are also decimating the bond markets. Really if rates rise too much more, then they’ll begin to really pressure the general markets, which we’ve seen today. This is precisely why I took out the VXX volatility position and RWM short Russell 2000 position today, as these rising rates may be the pin to pop a few of the bubbles.
Then if there is a big market tantrum, the FED will need to spring into action and start buying treasuries to cap the rise in rates, and we’ll see the yield curve controls begin. After that yields will be kept in a narrow range, and that confinement will get old, and will be the reason many funds will rotate out of bonds and into Gold over the next few years, as outlined in that little article that got posted here 2 weeks back.
Actually. .38 was the low last year on the 10 note
I see it now, and was looking at figures on the weekly chart which is what showed the 0.53% low. If I had looked at the 1 year range I’d have seen the low (face palm), but it was actually even lower than that at 0.318%. With todays close at 1.536% then it already has made a 4.83 bagger.
The 52 wk Range on the US 10-Year Bond Yield is [0.318 – 1.614 ]
I was using MarketWatch stats/ chart for 3/09/2020. I see your point, I know it was low, and momentary, but the point remains the same . It’s frightening out there for old folk bond holders now more than any can remember.
Agreed Marty. The bond bubble popped last summer and that game is over, but it had a nice run for several decades.
I wonder which will come 1st, tar & feathers or pitchforks
They’ll likely come in tandem…
Ex, when you say that funds will rotate out of bonds and go into Gold, surely you mean that they will go into gold securities that issue a dividend. Or companies could retire their bonds and issue stock in their place. Or issue bonds and have them convertible into stocks, and maybe attach warrants. There are so many variables. DT
Yes DT. All the above… I’d mostly anticipate a sector rotation into the gold securities like GLD or other such vehicles for the “safe haven” aspect of their portfolios, as the metals will outpace bonds and inflation moving forward.
They may eventually get down into the mining ETFs like GDX, GDXJ, SIL, SILJ but those are more speculative. I could see a few of the larger dividend paying major gold producers or royalty companies like Franco-Nevada, Royal Gold, Wheaton Precious Metals, Sandstorm Gold, or Osisko Gold Royalties being an option for some of them though.
Ex, thanks for the feedback, much appreciated. DT
5x= 1.9%, 10 year note
Marty, I saw the low in the 10 year as being 0.53%. So a 5X would be 2.65% and I see that as very unlikely or it will start crashing the general markets, and the FED would step in long before that level and buy treasuries to cap the rise in rates. I’m thinking by 1.8%-2% the FED will be forced to control the yields.
I noted the correction up above, but we’ve already seen a 4.83 bagger as of today, as the low in the 10 year was 0.318%
Trading halt on Silver Viper VIPRF
Doc, have you bought any IRVRF today? Today I topped off my holdings of IRVRF and LOMLF. yesterday I topped off my ESKYF and Mon I loaded up on my NFGFF. I am now ready for 8K Au and $200 Ag. So let it be written; so let it be done.
Houston, we have a problem!
And then again, Faith is the substance of THINGS hoped for, the evidence of things not seen.
John has been listening to Clif High, Clif has a number of magnet ,( soon to be) patents.
(AR) (ARNGF) Argonaut Gold Announces Record Quarterly and Annual Revenue and Cash Flow from Operating Activities; Provides Fourth Quarter and Full Year Financial and Operating Results
Thu February 25, 2021
Pete Dougherty, President and CEO stated: “During 2020, we put the Company in a fantastic position to execute on our transition strategy from a short mine life, high-cost junior producer to a long mine life, lower cost intermediate producer through the permitting and financing achievements for the Magino project in Ontario, Canada, leading to a construction decision, and the acquisition of the Florida Canyon mine in Nevada, USA. As we look to 2021, we are focused on continuing to execute on this strategy now that the pieces are in place to do so, as well as the exploration upside at the Magino and the Florida Canyon districts.”
(ANX) (ANXGF) Anaconda Mining Announces Q4 and Full Year 2020 Financial Results; Generates Record Cash Flow From Operating Activities of $14.1 Million in 2020
Thu February 25, 2021
“We are pleased to announce a successful year of production and financial results, with Anaconda generating record cash flow from operations of $14.1 million from the sale of 17,918 ounces of gold. We ended 2020 with a treasury balance of $14.6 million and continue to generate free cash flow at the Point Rousse operation, which allows us to aggressively pursue our growth strategy. We are particularly excited with the advancement of the Goldboro Gold Project, where we recently announced an expanded Mineral Resource including 1,946,100 ounces of gold in Measured and Indicated Resources and 798,100 ounces in Inferred Resources. Anaconda Mining continues to offer investors unique exposure to production and free cash flow, growth from development, and discovery upside, all in top tier mining jurisdictions.”
~Kevin Bullock, President and Chief Executive Officer, Anaconda Mining Inc.
Friday may be quite interesting.
Removed “?” from “New Low/High” etc.
Steve Hanke – Why Bitcoin will ‘death spiral’ to $0 and Fed Chair Powell is ‘delusional’
Kitco News – Feb 24, 2021
0:00 – Bitcoin’s fundamental value
10:22 – The “ideal” cryptocurrency
14:02 – Federal Reserve’s inflation outlook
19:51 – Canadian CPI revision
Bitcoin has been continuing to sell off hard, down another 9% to a measly $46,009.
Trading Gold & Gold Stocks in 2021 with Sector Expert John Feneck
MiningStockEducation – Feb 25, 2021
4:53 Profiting from a boom or recession
6:20 Gold and gold investor sentiment
10:10 Smaller cap gold stocks
15:12 Energy sector and stocks
17:47 Feneck Consulting info
I really like John Feneck’s approach to investing in multiple commodities and how he approaches speculating in the mining stocks.
Danielle DiMartino Booth – Will yield surge get out of control? This is Fed’s next move
Kitco News – Feb 25, 2021
The U.S. 10-year Treasury yield briefly surged above 1.6% on Thursday. Until the Federal Reserve declares an intervention to bring down the long-end of the curve, equities markets could see continued “nervousness” said Danielle DiMartino Booth, CEO of Quill Intelligence.
0:00 – Federal Reserve and inflation
4:37- Bond yield rise
6:15 – Fed reaction to yield rise
8:46 – Stock market reaction
This video with Danielle DiMartino Booth is a MUST WATCH for those interested in inflation, changes to money supply and velocity of money, FED interpretations, and Bond market reactions.
Well, Gold price is back down in overseas trading to $1761, after having dipped to $1755, so it looks like Friday’s close (both a weekly and monthly close) is going to be fugly.
At this point it looks like having a double-bottom off the November lows is being negated, and we’ll see the consensus view of lower prices in the yellow metal in the near term. I’m glad I sold some miners for profits this week, and started the JDST position, as mentioned on the other blog. Dry powder has been raised, and prepared to fire off at any deals in the miners that show up on the clearance rack.
Hahaha…..fugly…..that brought back memories…..had a childhood friend who’s nickname was fug….
Good move on JDST. Interesting action overnight in TLT: a possible higher high – higher low forming (after huge volume). If, a big IF, the week ends on a clear up-note for Gold, it could be a very significant turnaround.
That would be a big IF indeed, as it looks like gold is ending the week and month significantly down, so even if gold rallied a bit (which it sure doesn’t look like at present), the over larger trend would still be down, with Gold making a new lower low.
Yes, I’m glad to have the hedges in place to start this crazy Friday. JDST for short miners, RWM short Russell2000,and VXX for exposure to volatility.
The hedges were all up nicely yesterday, and I’m glad to have them in place for today, but if they really pop then I’ll sell them later today, and rotate those funds into buying the stock weakness.
GOLD Wedge: https://ibb.co/GFytD1b
Nice pop coming, or broken down trend?
Well, maybe we get the selling out of the way today, and then pop off that trend line next week.
TLT above Wednesday (pre-market).
How far up the Shooting Star,
before the Gaps begin to fill ?
BackBox272 Bogey: 1711.61
The next “Crowline” possibility.
I’m not sure if this was posted yet. Huge bought deal for nexgen
The 10 year note does a 4 bagger of last years low, will we see 5x before or after DOW 20000?