Ed Moya – Market Weakness To Start May – Gold, US Markets and Fed Policy
Ed Moya, Senior Market Analyst at OANDA joins us to cover the the weakness in markets starting with precious metals continuing to sell off. Ed points tot he Fed as a key driver as now any war premium in gold has evaporated. We also discuss the general weakness in US markets where the S&P closed last week at a 52 week low and the NASDAQ is the whole way below 2021 trading levels. We wrap up with the rebound in the oil and energy sector, bifurcating from the rest of the commodity sector in the midst of strong US dollar.
Click here to visit the OANDA website to follow along with Ed’s daily market note.
It very obvious we are at an important “ Major” inflection point for the noverall bull marketing gold and silver, the quarterly and the monthly.
1825-1850 would be the ideal zone if we have not bottomed yet breakout resistance level. Nothing many of us don’t know already. From a negative and contrarian point of view, I’d say this is as bad as it gets or very close to within another day possibly end of week scenario.
I maintain we are still in a gold and silver bull market uptrend disregarding the miners activity. Some will double bottom others may not and others may make one more lower low no surprise here. But make it clear as I’ve said the first out of the gates this time around will be your specs, explorers, developers and small producers they will outperform the bigs in this move. I still believe $2000 is broken this year have not changed my view and we run till November/December before a stop.. and pause.
Don’t give in Or throw in the towel as disgusting and ugly as it looks this is yet another buying opportunity of a lifetime in my opinion I know I sound like a broken record but I stand strong on that good luck to all
Glen
buying opportunity keeps improving as time goes on for quite a while now, best to keep uncommitted dry powder until some real signs of a turn expecially for the marginal players. Those bottom fishers with little or no remaining cash will remain under water with your promose of hitting 2000 gold this year. Which is highly likely.
Good thoughts Glenfidish, and agreed that the larger bull market is stilll intact, and that this corrective move is going to be the last good spot for folks to pick up junior mining stocks on the cheap, before the next move higher in the bull blasts many of them to much higher levels. At this point there is no rush, but later this year and a year out, investors are going to be looking back at these prices in so many mining stocks and wishing they had accumulated more during this sector pullback.
Sandstorm is buying Nomad
https://www.sandstormgold.com/_resources/news/2022/2022-05-02.pdf
As Nomad shareholder I am not so happy with the deal. NSR was lagging compared to SSL during the last weeks, despite a great portfolio of tier 1 projects and a strong growth perspective.
Also NSR is paying more than double as dividend – will miss the dividend
I wrote this in response to Badgergal bringing up the Sandstorm / Nomad merger news on the weekend show blog, but will just repost it here since it is topical and big merger news of the day.
It was a little startling to see the news on Sandstorm taking over Nomad, but not surprising, as we’ve been discussing on here for 2-3 years that we needed to see some consolidation in the royalty space, and we absolutely have seen just that over the last year or so.
First up we had Gold Royalty Corp taking over Ely Gold, and then they took over Abitibi Royalty and Golden Valley Mines, and now GROY is still in the extended period to take over Elemental Royalties, but it looks like it is going to fail to get enough support, because the deal is not that accretive for current shareholder.
I had mentioned here and over at ceo.ca that if the larger royalty companies didn’t wake up and pay attention that GROY was going to accumulate the whole sector, and mentioned the 2 best prizes were Nomad and Maverix, and then after that there was Metalla, Vox, Elemental, EMX, Altius, Anglo Pacific, Star Royalties, Empress, Orogen, etc…
Looks like Sandstorm is scooping up Nomad for a 34% premium, and Nomad holders will own 28% of Sandstorm…. which is fine with as they are my 2 heaviest weighted royalty companies in my portfolio already. Having said that it is a little bittersweet because Nomad had the most room to be rerated higher based on their cashflowing royalties alone, not to mention their development assets, and this deal nips that off at the bud. In that sense, I wish they had been given more time to spread their wings, but Sandstorm is still also pretty beatdown as well, so at least it wasn’t one of the bloated behemoths like Franco, Royal Gold, Wheaton, or Osisko that bought Nomad. At least with Sandstorm some of that same re-rating trajectory higher remains
Once they are combined I believe Sandstorm with have one of the most enviable royalty portfolios for growth around in the sector. Just to keep it confusing, as part of the Sandstorm / Nomad merger deal, Sandtorm is simultaneously picking up 9 royalties and a metals stream from a different company Basecore Metals (a subsidiary of Glencore), adding even more to the Sandstorm portfolio.
“At the closing of the transaction, Sandstorm’s resulting portfolio will total 260 streams and royalties, of which 39 are cash flowing with no asset contributing more than 15% to Sandstorm’s net asset value…”
Maverix has a fantastic growth profile though, so I’ve often thought, whichever company picks them up is going to have an amazing portfolio. At this point, I’d love to see Maverix and Metalla do a merger of equals before the big boy royalty corps scoop them up in separate vehicles. Then there is the new on the scene larger mid-tier Triple Flag Precious Metals. It could easily gain on Wheaton or Osisko by buying out Maverix or Metalla or maybe Vox, but I feel like Osisko has the most in common with EMX Royalty and would like to see them tie the knot if everything is going to be accumulated soon.
As usual you’ve shared heaps of good info here, in an area I haven’t looked at much.
Thanks Terry. I have kept a reasonable weighting to my portfolio to the royalty and streaming companies for the last few years and follow the space pretty closely. We also interview or speak to a lot of the companies and management teams to keep a pulse of what is going on in this subsector.
Again my two heaviest weighted portfolio companies, with regards to royalty/streamers in 2022 have been both Sandstorm and Nomad, so seeing them combine into a larger entity with more scale will help them appeal to a larger investing audience.
Thank you for your thoughts on merger. Hope it helps sandstorm eventually. I have held on longer than I care to admit!
BKRRF — 1st time tranche @ $.68
Ended -14.18%
Silver down 10 days in a row. 5 more red days will tie 2015.
Yeah, Silver has had it’s tail-end kicked lately, but I’m surprised we hadn’t already seen this move earlier in the year or even last year when Gold was under more pressure. Silver usually overdoes it with outsized moves to the upside and to the downside.
As mentioned last week I’d prefer not to see Silver break below that intraday low tagged a few times last year at $21.41. It took so many painfully stagnant years for silver to finally break up above the $20 level decisively, that I really don’t want to see it go back down and flirt with that area again. Many of the silver mining stocks are trading down like silver is already at that $19-$20 level again though, so sentiment and interest in the silver mining stocks is pretty bad right now… making them an interesting contrarian trade at present.
Like Craig Hemke joked in our interview last Thursday, if we see 18 down days in a row with Silver and an RSI of 18 again… (like we did in late 2015 going into early 2016) then that would be the spot to load the boat.
Silver intraday hit the $22.00-$22.50 area I mentioned a few days ago. I have a feeling the PMs may now (for awhile) track the ups and downs of the conventional markets where the pressure will be to the downside for some time—it appears a lot of the PM stocks that have traded in a range on their weekly charts will now attempt to make one final move down to their lows—then (as mentioned in the past) the odds are for a few weeks of scraping their bottoms. This time frame will be the ultimate period to accumulate a lot of stocks which will be completely ignored.
hey Doc, very good observation. However I’ve done my accumulation a couple days back with a third of my powder after cashing out. As to buying more with an upcoming final down to lower lows, not so sure the current dregs will be the ones first out of the gate.
Jonsyl, you’re in good shape since we’re not far off the bottom for most of these stocks. Whether you buy now or later the only problem you’ll have is the fact we’ll have to wait and be patient until the next big run comes.
Hammer time
The Canadian dollar hit its 600 day MA (to the penny) today for the first time in 18 months.
https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=1&mn=6&dy=0&id=p89979310466&a=1065600101
The gold miners fell a lot less than gold today.
GDM:Gold
https://stockcharts.com/h-sc/ui?s=%24GDM%3A%24GOLD&p=D&yr=2&mn=0&dy=0&id=p54833796099&a=982099007
NEM went up 67% in 4.5 months and is still up 40% since December.
https://stockcharts.com/h-sc/ui?s=NEM&p=D&yr=1&mn=3&dy=0&id=p07019164782&a=1153792732
It’s been the obvious play for the last few years. Too bad I don’t own it.
Nice chart. Like that big volume spike. Could be capitulation. Time will tell.
Michael Boutros : Gold @ 19.19
https://www.youtube.com/watch?v=RJD5BMRieE4
Account 60% down from January. Buying more Emerita as it continues to drop and be attacked for no reason other than managed money finds it difficult to survive in a fair and honest market.