All eyes on the jobs data for tomorrow – Here’s what matters for metals investors
Craig Hemke, Founder of the TF Metals Report website joins me to look ahead to the jobs data that is coming out tomorrow. We focus on how the precious metals sector is performing heading into this report and what market factors actually matter for the metals.
Click here to visit Craig’s site for more PM focused commentary.
So if Craig is right that pms will get hit hard at 08:30 Friday morning, are they running it up today so it will be more hurtful to new buyers? Or easier to make a large smackdown seem more significant? Hopefully, long term holders are simply gun-shy at this point.
However, we are at the vanguard of horrendous price inflation.
Are there significant hedges against inflation ?
We have not yet witnessed food shortages on the scale that seems ahead.
Last time I put gasoline in the car, it was $2.649/gal. Today it’s $2.999. It’s all about oil, all the way back to Pearl Harbor.
ditto on ……. oil comment…and before…….. Standard Oil…..1919….
We could have been running our cars on ethanol (corn, or sugar products)
and electric, way back…in time
Yes…….. I think I remember reading this same article……..I do remember the picture of Simon and wife….
Same old game………..
In 1919 Howard Hughes’ father started selling the rotary drill bit which gave a huge boost to the oil industry and put a lot of the roar in the Roaring ’20’s. Peak reserve discovery occurred in 1930. By 1940-41the U.S. was selling surplus oil production to overseas markets to generate revenue to fight the Great Depression. Japan was getting 80% of its oil from the U.S. for the tanks, trucks and planes it was using to beat up on China. Oil shipments to Japan were cut off in the summer of 1941 as a diplomatic protest for the atrocities Japan was committing in China, then Indo-China. That’s when the Japanese navy got the green light to build up for the attack on December 7.
It’s really not all about oil. It’s about the currency, too. The “oil crisis” of the 1970s was really a dollar crisis but the masses still haven’t figured that out. “Peak oil” was/is also a cover for price rises caused by USD instability.
Priced in real money, there’s been little drama in the price of oil over the last century.
The following chart will show today’s action this evening and I believe it depicts a low for gold versus oil. Gold has corrected from the 100 year high versus oil that was reached one year ago and if there is any downside left, it isn’t much.
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24WTIC&p=W&yr=8&mn=0&dy=0&id=p74649213347&a=723858345
(KOR) Corvus Gold Secures USD $20M Loan from AngloGold Ashanti North America Inc. to Fund North Bullfrog Permitting and Pre-Development Work
6 May 2021
https://ceo.ca/@nasdaq/corvus-gold-secures-usd-20m-loan-from-anglogold-ashanti
I’ve been waiting to see if would be AngloGold Ashanti or Coeur that started to make their move on Corvus, as they are all exploring there together in Nevada and all 3 companies seem to have some stunning results going on.
I bet Corvus will get taken over before the end of the year, and it is looking like AngloGold Ashanti just stepped up their game…
From todays Corvus news release linked above:
“AngloGold is granted an exclusivity period of 90 days where Corvus will abstain from all discussions or actions related to material transactions involving Company assets or change in share structure.”
Boom!! It’s looking like AngloGold Ashanti is moving in the direction of bringing KOR into their Nevada fold….. I guess I may beef up my position for the likely 40%-60% takeover premium, and then rotate that into a different Nevada play.
I really thought Coeur may make the move, since they acquired Northern Empire’s Sterling Project next door and have been doing good work there, but it looks like AngloGold Ashanti boxed them out with that clause.
Nice news on a cloudy Friday!!!
Agreed. I got positioned relatively recently in Corvus figuring the bidding war between AngloGold Ashanti and Coeur would start soon, but thought it would be about 6 months to a year out. Now it looks like 89 days or less.
long KIRK
Those who look at charts but aren’t bullish the miners should throw their charts away and do something else.
For those who missed my GDX:QQQ chart yesterday, we have a major low for the miners versus the stock market…
https://stockcharts.com/h-sc/ui?s=GDX%3AQQQ&p=W&yr=3&mn=7&dy=0&id=p96771084254&a=948507271
And, yes, such lows line up with and confirm the miners’ lows versus the dollar.
I’m certainly bullish but is it just my imagination or are most of the jr PM plays trading at lower levels than where they were last year with gold and silver at these levels
I don’t think so but will have to take a look. IPT, for example, is roughly double where it traded during the first week of May last year:
https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=5&mn=11&dy=0&id=p25719356325&a=786411872
GDXJ (not really juniors by my standards) is up almost 20%
SILJ is up about 70%
KTN is up 50%
BBB is up more than 20%
GGO is up about 100%
AXU is up around 70%
Yep. Those are the trends I’m seeing as well in many Gold and Silver stocks.
My portfolio hit another all time high again today, and the PMs did well. By reading over most of the message boards on multiple sites you’d think people went out and shot the family dog or something.
I may have worded it badly…..I look at KTN last July early August when silver got up to $27 range for the first time in years KTN was mid .40’s and now we are at those levels on silver again and KTN is .30….BBB was mid .30’s then and now it’s .22
Wolfster, such action is typical of corrections and it represents opportunity. Once the market is satisfied that silver has bottomed, those miners will probably snap back quickly. OR I’m wrong and the action in the miners is sending the message that silver will head lower before it goes higher. Such divergences should always be considered from both sides and the whole picture tells me the miners are wrong, not the metal.
Speaking of Kootenay Silver…
(KTN) (KOOYF) Kootenay Hits Several High-Grade Intercepts in the Hanging Wall and F Vein at Columba Project, Mexico
6 May 2021
https://ceo.ca/@newswire/kootenay-hits-several-high-grade-intercepts-in-the
Agreed Matthew. Many of the gold and silver stocks I’m following are still up nicely, but it is a case by case like any sector. I’m still puzzled by how negative the sentiment is even after Gold double-bottomed in March and has headed $100 higher since then, and even Silver is at the higher part of it’s trading range now. The producers are making good money at these levels, and development projects are looking more attractive.
I’m guessing that many people are over-exposed to only grass roots discovery drill plays, that may or may not have hit it big, or may be waiting on drilling assays, so they are letting that lack of movement overshadow what most of the sector is doing. Who knows?
I think the current sentiment is simply inversely proportional to the excesses reached last August and thank goodness for it. The coming rise is going to be huge and will last for many more months than the last move. The miners will trounce the metals this time and a much bigger part of the masses will finally begin to recognize the new bull market.
One glance at the following simple chart should tell the bearish bulls that we are not in for a 2017-18 repeat of sideways action. And if that chart doesn’t do it, countless other technical factors should.
https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=5&mn=6&dy=0&id=p90811289559
I posted just above as you were posting Matthew. I agree going forwards and see you mentioned the August excess and guess the issue is that’s what I what I was comparing it too
Well stated Matthew, and yes, I guess it’s a good sign that sentiment got as washed out as it has been, as it allows for much longer climb up the “wall of worry” to the upside. I concur that this time the miners are going to trounce the metals, and we should finally start to see the outperformance in the miners in a health bull market.
This chart goes with my chart above at 1:00 pm. GDX makes major lows versus stocks and dollars at the same time:
https://stockcharts.com/h-sc/ui?s=GDX%3ASPY&p=W&yr=3&mn=7&dy=0&id=p17769997889
Big Money In The Market Rotating Out Of Equities Into Gold Bonds And Utilities
May 6, 2021 – Chris Vermeulen – The Technical Traders
Big money rotation out of stocks and into the gold miners has been clear for many weeks on the GDX:QQQ chart I posted but is obviously impossible to miss now, or should be.
Yep, we’ve commented for over a month that the larger producers and the major royalty companied bottomed first and have had new inflows of investor capital for about the last 4-5 weeks, so that’s a good sign.
As I mentioned back then, I blew out most of my dry powder allocated for the PM sector in late Feb and March, and most of those buys are nicely in the money now, so that works for me. I’d just like to see the trend continue and get moving in a more substantive way.
As for QQQ I’ve had a short position on it for the last 2 weeks with SQQQ, just as a hedge against a potential correction in the tech stocks. I’ve also put on an inverse position against the Russell 2000 with RWM, as the small caps have really ripped higher this year, and look a bit top heavy to me. I’m prepared to pull them back off if the general equities rally into the Jobs number tomorrow, but lately things have just been grinding sideways in the general equities.
I’ve said it before more than once, silver has never held up so well relative to gold during such a protracted intermediate term correction but it makes perfect sense that it has considering where we’re at in the big picture.
I’m sure a lot of bearish bulls still expect it to plunge to at least 18.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=0&dy=0&id=p70648017355&a=949570731
Jobs # less than expected…possibly a good miner day….
10 yr down…dollar down….gold up
They are trying to smash the metals anyway.
(BRC) (BKRRF) Blackrock Drills 3,322 g/t Silver Eq. over 1.5m Within 4.5m of 1,399 g/t Silver Eq. in Step-Out Drilling and Reports Discovery of New Vein at Tonopah West
@newsfile on 5 May 2021
https://ceo.ca/@newsfile/blackrock-drills-3322-gt-silver-eq-over-15m-within
First, I am heavily invested in commodities (low entry points). Second, I am raising as much cash as possible for additional building of positions or positions I missed and did not want to chase.
I do not know what the future holds, but homestead mining went down initially with the crash of 1929, but took off afterwards. I do not want to time getting out of commodities and then trying to get back in. Stock evaluations are all time highs on many levels, but this is another good case of be careful and buying opportunities may be great in the near future.
We really never know how high bubble evaluations will go. You are an idiot, until you are not.
When the MS index is low (Equity Q Ratio) , the subsequent average stock return should be high; when the MS index is high, the subsequent average return should be low.
Any thoughts to share?
Growing Trees, I agree with you that it is time to be much more cautious the general stock markets than the commodities sector, despite the recent mild weakness in the general markets and recent strength in the commodities sector. On a historic level the commodities are still extremely undervalued relative to the general markets, and the major indexes and many of the general stocks are up at nosebleed valuations (if there even is such a thing anymore).
It also seems like the speculative froth has reached levels that are truly mind-boggling, with cryptos, SPACS, NFT Art, collectibles, tech stocks, biotech vaccine stocks, semiconductors, small cap stocks, large cap stocks, FANNG Stocks, Tesla, Meme Stocks (like Hertz, Gamestop, AMC, etc…), and the rise of hundreds of thousands of new retail trading accounts over the last year+ during lockdowns especially on the Robinhood, Stash, and Webull accounts. If this isn’t the late stage blow off of the longest and highest bull market bubble in history, then I don’t know what is.
CNBC blowing off employment #s. I think the message is “bad news only counts against safe assets”.
Yellen is making a speech that says the economy sucks and they are hitting gold. What a circus.
SILJ is ready for its next advance:
https://stockcharts.com/h-sc/ui?s=SILJ&p=W&yr=3&mn=11&dy=0&id=p57207433397&a=822791467
Hecla is about to put in its best weekly close in 10 years and is currently 12% above its best weekly close of the last several years.
https://stockcharts.com/h-sc/ui?s=HL&p=W&yr=2&mn=9&dy=0&id=p86180378126&a=856744223
Off Topic
I saw this report and thought it too important to bury in politics:
https://freedomfirstnetwork.com/2021/05/worlds-most-vaccinated-nation-locks-down-as-covid-cases-spike
(and my first thought when I saw this report resembles Craig’s Nome de Plume premier.)