The disconnect between gold and gold stocks – Here are the stocks Jayant likes
Jayant Bhandari joins us to share his thoughts on the continued disconnect between gold and gold stocks. We’ve talked about this topic a lot over the past year but never directly with Jayant. We also have Jayant share a couple stocks he likes, which includes Newcore Gold and Signature Resources.
Gold Stocks: The Greatest Rally Begins Now?
Stewart Thomson – Aug 31, 2021
“Why is Jay Powell so adamant that inflation is temporary?”
“If the Fed acknowledges that higher inflation is ingrained, it must raise rates and kill its QE welfare programs for stock, bond, and real estate investors. That’s the last thing the Fed wants to do….”
“Given the immense H&S action on my weekly gold bullion chart, investors should prepare themselves for a scenario where gold and silver mining stocks may be poised to begin not just any rally but…The greatest rally in the history of the miners.”
http://www.321gold.com/editorials/thomson_s/thomson_s_083121.html
Why Some Lucky Investors Are Likely To Be As Good As Gold In September
Aug. 31, 2021 – Mark Hulbert – Market Watch
“September is shaping up to be a good month for gold. That’s because there’s an additional factor in bullion’s favor in September: seasonality. Since 1973, when gold began trading freely, September has been the best month of the year, on average, for the yellow metal.”
“The chart below plots the data. Gold’s average September return has been 1.8%, more than double its all-month average of 0.8%.”
Copper Royalty Bill Clears Another Hurdle In Chile
Bloomberg News | August 31, 2021 #JurisdictionRisk
“A bill that would create the heaviest tax burden among major copper-producing nations was approved by a Chilean senate mining committee on Tuesday. ”
“Chile, like other host nations, is looking for a bigger share of mining profits to help resolve inequalities exacerbated by the pandemic.”
“The mining industry has warned that the bill as it stands — with sales tax brackets according to the price of copper — would derail investments and undermine competitiveness in a nation that accounts for more than a quarter of global copper. ”
https://www.mining.com/web/copper-royalty-bill-clears-another-hurdle-in-chile/
(ITR) (ITRG) Integra Intersects High-Grade Gold-Silver in Ten Additional Drill Holes at Florida Mountain: 12.50 G/T Gold and 156.92 g/t Silver (14.52 g/t AuEq) Over 9.39 m, Including 73.25 g/t Au and 427.00 g/t Ag (78.75 g/t AuEq) Over 1.52 m
31 Aug 2021
(SCZ) (SZSMF) Santacruz Silver Reports Second Quarter 2021 Financial Results
August 31, 2021
– Revenues increased by 131 per cent to $13.7 million during Q2 2021 ($5.9 million in Q2 2020);
– Gross profit improved by $3.0 million to $3.8 million during Q2 2021 (Q2 2020 – $0.8 million);
– Subsequent to Q2 2021 the Company completed a shares-for-debt settlement in the amount of $3.1 million.
Carlos Silva, CEO of Santacruz, stated; “The second quarter of 2021 has confirmed our positive trend towards strong cash flow generation at Zimapan where, as expected, increased production tonnage arising from the continued development of the Lomo del Toro zone has resulted not only in an increased total amount of material processed through the mill but importantly has also resulted in a higher average silver head grade.” Mr. Silva continued; “Development work at Lomo del Toro continues to yield positive results and management anticipates an increase in production from the current rate of 15,000 tonnes/month to 20,000 tonnes/month by the end of Q3 with a concurrent increase of 5,000 tonnes/month in overall production tonnage aiming to reach 70,000 tonnes/month by the end of Q4 suggesting a continued positive trend of cash flows through the rest of the year.”
https://www.santacruzsilver.com/news/santacruz-silver-reports-second-quarter-2021-financial-results/
Ira Epstein’s Metals Video (8/30/2021)
Technical Analysis, Gold, Silver, Copper, Platinum
This Is Why Gold Is So ‘Cheap’ Now; Tavi Costa Explains Biggest Macro Drivers Holding It Back
Aug 31, 2021 – Guest(s): Tavi Costa Portfolio Manager, Crescat Capital
Tavi Costa, portfolio manager at Crescat Capital, discusses with David Lin, anchor for Kitco News, the most important macro drivers behind gold’s underperformance, and the next catalysts for a renewed bull run.
Tavi is a sharp guy and makes a number of great points in this interview with David.
Buy When The Big Boys Buy, And It Seems Some Of The Big Boys Are Buying Gold
Gary Wagner – Tuesday August 31, 2021
“The most recent Commitment of Traders (COT), which is published every Friday and lags one week behind real-time data, indicated that there has recently been a shift in market sentiment amongst money managers. The shift I am referring to is that the most recent report derived from data collected for the week of August 24 clearly showed that money managers have been positioning themselves based on the assumption that gold is moving higher. Currently, the collective positions of money managers are holding 126,636 net long contracts. Concurrently the number of short positions has been diminishing. The recent increase of net long positions in gold resulted in an increase in their holdings by almost 30%.”
In the discussion from today’s editorial with Jayant Bhandari we discussed that in general there has been a disconnect from the current relatively strong Gold & Silver prices and where the mining stocks have been trading; with much of the sector correcting down 30-60% since last summer of 2020.
Having said that, there still have been some quality companies that have held their own over the last year or so, and are essentially flat (maybe a bit lower or higher) from where they were trading a year ago, and some that went on big rallies over the last year, but then corrected back down to where they were a year ago, but that haven’t washed out to the downside like much of the sector.
A few companies that come to mind are some of the best-in-class like Franco Nevada, Maverix, Argonaut Gold, Wesdome, Anaconda, Skeena, New Found Gold, Endeavour Silver, Vizsla Silver, Silver Tiger, Defiance Silver, etc….
There are plenty more, but the point being that for those investors that picked some of the quality names in the space, even if they bought into the higher levels a year ago (which most didn’t and bought much lower than that), then they still didn’t lose the farm over the last year, and actually had a some interesting tradable rallies that could have been capitalized on.
At this point in the cycle, where many other miners have cratered over the last year by 30%-60%, I see more upside potential in the beat down names that could rally more on a percentage basis from their lower levels.
It just seemed worthwhile to point out that there still were some good quality companies to camp out in or even trade for larger gains over the last year.
(FNV) Franco Nevada was around $148 a year ago, and is around $146 today, a year into this corrective move down in many miners. It’s obviously the gold standard of the gold & silver royalty space, and offered up a good buying opportunity at one point a few months back, but it’s right back to where was the beginning of last September.
(MMX) Maverix Metals is another solid gold & silver focused royalty company that has a number of partner mining projects in production or advancing development.
A year ago in early September it was around $4.20 and had some nice moved higher over the last year up above $6 a few different times, and despite the recent corrective move, it is still around $4.60 today, a bit higher than where it was a year ago.
(AR) Argonaut Gold is a solid gold producer with 2 larger development projects (one of which, Magino, is currently in construction), and it was trading around $2.60 a year ago, it had a few ups and downs over the last year, but is up at $3.15 now up from where it was a year ago, despite a correction in the PM miners generally.
(WDO) Wesdome was up around $14.50 a year ago in early September, but then had corrected down to about $11.73 and was in the $12’s and $13s for a period of time in Sep/Oct/Nov. It had a big buying opportunity on the spring correction, but closed today at $12.41, essentially in the same range where it was last Fall.
(ANX) Anaconda Mining was trading a year ago around $.62-$.63 in early September, and now a year later, after having a nice rally from this last spring to this summer, it closed yesterday at $.76; still higher than it was a year ago.
(SKE) Skeena Resources, one of the better undeveloped gold deposits held by a junior, was trading in the $10-$11 range a year ago, had a few nice bounces even higher up to high $14s, $15s, and even $16s a few times, and closed yesterday at $14.48, up nicely from where it was a year ago.
(NFG) New Found Gold was likely the biggest gold exploration stock bid up to a $2 Billion valuation at one point on their continued drilling success, and sparking a true area play in Newfoundland over the last year. At the beginning of last September the stock was trading in the $1.80-$2.50 range, and closed yesterday up bigly at 8.65, (after peaking as high as $13.50 a few months back). It just goes to show the strength in performance in a solid discovery in the sector.
(EXK) Endeavour Silver, a solid mid-tier Silver producer, was trading around $4.20 a year ago, and after having some nice pops up to the high $6s and mid $7s a few different times over the last year, it closed yesterday at $4.71, up a bit from where it was a year ago.
(VZLA) Vizsla Silver has continued to hit high-grade silver paydirt in drill result after drill result over the last year, and as a result, bucked the trend of the slide many other silver stocks went on from last summer. A year ago VZLA was trading in a range of $1.50-$2, and after a nice move higher, has held onto it’s gains over the last few months in the mid to high $2’s, closing yesterday at $2.48.
(SLVR) Silver Tiger, another solid silver explorer and developer that has continued to hit high-grade silver intercepts over and over again, was around $.55 a year ago, and trading in a range between $.49 – $.62 last Sep & Oct, closed yesterday at $.55 essentially flat on the 1 year chart, after having a nice spike up twice to the $.78 and $.79 peak this late spring.
(DEF) Defiance Silver was in a range between $.48 – $.56 a year ago in early September, and after a few nice peaks into the $.90s and even over $1 on 3 moves, it has corrected back down and closed at $.58 yesterday, but is still essentially flat over the last year.
Michael Boutros Weekly : https://www.youtube.com/watch?v=0kgvrEMb-a4
Matthew must be on holiday…. Gone trout fishing, or bear hunting… 🙂
OOTB: I don’t know about Matthew. He seemed a little tired of arguing with people after he spent all his time developing outstanding charts for us. He might be out bear hunting but with his bare hands. 🙂
I would not blame him one bit, …. taking a little time off,…..he deserves it…
Lot’s of people on holiday this week going into the long Labor Day weekend. For many, this coming weekend signals the end of summer mentally, and is the last hoorah before kids are back in school and activities get busier heading into the Fall.
Next week we also typically see more volume and traders in the markets again.
It will likely be quiet for the balance of the week in the markets and here. Many of the company rooms at ceo.ca and stockhouse are dead right now, newsletter writer’s subscriptions are down with the sector having struggled overall, and the comments & views on youtube or Twitter are down on resource stocks.
When the sector starts to run higher and post Labor Day when more traders are focused on the markets again, and not oiut traveling or camping or playing on the water, then we’ll see the activity pick up again.
🙂
One minute into Septemberr and nothing has changed. I will give it a few more minutes.
Holiday coming up…. next plan… before the next….
SILVER IS IN SHORTAGE…… according to the street….
Next run is $50… 🙂
Kabal fell….. Cabal might fail…. lol… what a world…
Gold Up At Midday In Choppy, Two-sided Summertime Trading
Jim Wyckoff – Tuesday August 31, 2021
“Both metals have seen their near-term chart postures improved recently and that’s inviting the technical-based speculators to the long side of the futures markets. It’s been and likely will continue to be a quieter trading week on this unofficial last week of summer for Americans, ahead of the three-day Labor Day holiday weekend. October gold futures were last up $2.20 at $1,812.00. September Comex silver was last down $0.12 at $23.84 an ounce.”
“Technically, gold bulls have the overall near-term technical advantage. A price uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the August high of $1,833.40. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,750.00. First resistance is seen at today’s high of $1,819.50 and then at this week’s high of $1,823.60. First support is seen at $1,800.00 and then at $1,779.20.”
https://www.kitco.com/news/2021-08-31/Gold-up-at-midday-in-choppy-two-sided-summertime-trading.html