Doc Weighs In On The Recent Moves In Gold – With Charts!

June 12, 2019

Doc is with us today to look at the longer term charts of gold and the Dow:Gold ratio. After this recent bounce Doc is as encouraged as ever and thinks a breakout could be coming by the end of the year.

Click the charts below for a larger view.

Gold Monthly
Dow:Gold Monthly
    Jun 12, 2019 12:21 PM

    Doc when and if we get a pullback in gold this summer where do you see GDX price? Also what do you consider the summer low, july, august time frame? Thanks

      Jun 12, 2019 12:57 PM

      Paul, if we are indeed at the beginning of a left translated intermediate cycle, the low could go as long as November-December if this year. Since the last intermediate cycle appears to have been extended, this one we’re in could be shorter and extend only into October. We’ll have to wait to see which time frame takes place. If we continue in that little lower trading range that I’ve talked about in the past, it looks like the low should be no lower then the 18s and the highs should be around 25. If we’re on the brink of gold break out in the future, GDX may hang higher then 18 heading into the fall.

    Jun 12, 2019 12:24 PM

    Doc can you share your top 3 stock holdings for long term 2-3 year hold?

      Jun 12, 2019 12:05 PM

      Paul, that’s tough—I’ve spread my risk among a large number of stocks.As far as minimal washout for a couple of stocks, I will be purchasing more Yamana and Hecla in the future. If you look at Hecla’s history over the last 50 -60 years, it rarely sees the price it currently has—$1.54. If you had taken positions in this stock every time it dropped below $2.00 and then been patient and waited for a double, you would have done very well over time.

        Jun 12, 2019 12:38 PM

        Kaplan Fox Files Class Action to Recover Losses for Investors Who Purchased Hecla Mining Company Common Stock (NYSE: HL)
        PR Newswire – May 24, 2019

          Jun 12, 2019 12:40 PM

          (HL) Hecla Cuts Nevada Spending, Trims Gold-Output Guidance

          Allen Sykora – Thursday June 06, 2019

          “Hecla Mining Co. (NYSE: HL) is reducing spending and laying off personnel at its Nevada operations in order to improve cash flow, the company said Thursday.”

          “Officials also revised down the gold-production outlook for Hecla’s Nevada mines. When issuing its first-quarter earnings report in May, Hecla had suspended its 2019 guidance and said it was reviewing its Nevada operations.”

          “Hecla said Thursday that the company has significantly curtailed planned development investment in Nevada while production continues. Officials trimmed expectations for company-wide capital spending by $12 million, with exploration reduced by $9 million, and general and administrative/other costs cut by $4 million. ”

            Jun 12, 2019 12:44 PM

            Personally, I’m glad I hit the eject seat on Hecla right after getting the premium for their takeover of Klondex which I had gotten a small position in just a few weeks before the merger and came out with a win.

            Looks like Klondex wasn’t the only company that struggled with those Nevada assets, and now Hecla is shoring things up as it didn’t go quite as they planned.

            HL has been around 125 years, so they’ll get it figured out, but there are plenty of both Gold and Silver companies that have much better torque to a rise in metals prices IMO.

      Jun 12, 2019 12:13 PM

      “The best trade is going to be gold. If I have to pick my favorite for the next 12-24 months it probably would be gold. I think gold goes beyond $1,400… it goes to $1,700 rather quickly. It has everything going for it in a world where rates are conceivably going to zero in the United States.”

        Jun 12, 2019 12:15 PM

        “Remember we’ve had 75 years of expanding globalization and trade, and we built the machine around the believe that’s the way the world’s going to be. Now all of a sudden it’s stopped, and we are reversing that. When you break something like that, the consequences won’t be seen at first, it might be seen one year, two years, three years later. That would make one think that it’s possible that we go into a recession. That would make one think that rates in the US go back toward the zero bound and in the course of that situation, gold is going to scream. “

      Jun 12, 2019 12:50 PM

      Gold Is Paul Tudor Jones’s Favorite Trade for Next 12-24 Months

      (here is the #VIDEO clip)

        Jun 12, 2019 12:57 PM

        Ah… I just realized the video clip was embedded at the bottom of that Zero Hedge article OOTB posted above. Oh well, for anyone else that just wants to jump straight to the video…. whoomp…. there it is…..

    Jun 12, 2019 12:31 PM

    Rhodium………. $3000……..

    Jun 12, 2019 12:25 PM

    Tour of China Shows a Nation Girding for Protracted Trade War

    By Shawn Donnan – June 11, 2019

    “Even as Trump threatens to raise import duties to painful levels, 10 days of meetings with Chinese officials, academics, entrepreneurs and venture capitalists revealed a nation rewriting its relationship with the U.S. and preparing to ride out a trade war.”

    Jun 12, 2019 12:38 PM
    Jun 13, 2019 13:53 AM

    Frank Holmes – Keynote – New Technologies will Disrupt Mining, Investing, and how to Spot Opportunities

    by @PalisadeRadio on 13 Jun 2019

    Jun 13, 2019 13:45 AM

    SIL is above its 200 day MA for the first time in 2 months…

    Jun 13, 2019 13:34 AM

    Jag needs a higher gold price more than most. It is not one to buy unless you think gold will break out soon. (I do own it.)

      Jun 13, 2019 13:47 AM

      I own JAG as well, but do expect a higher gold price, and was encouraged by their recent drill results and plan to double production over the next five years.

      For a small producer it’s really been kicked in the teeth and it may surprise some to the upside over the next 12-18 months.

        Jun 13, 2019 13:05 AM

        I think it mostly deserved the kick in the teeth based on its AISC and debt but I also think it will surprise to the upside well within the next 12 months. Once it was clear that the gold breakout would be delayed, it took its last plunge and I can see why.
        However, when gold does break out, I believe that it will triple or better before many peers double.

          Jun 13, 2019 13:46 PM

          Agreed. JAG has had financial issues for years, but I’ve been following them since 2010, and have been swing-trading them since they came out of their bankruptcy restructuring a few years back.

          The operation improvements and investments they’ve made at their 2 active mining complexes last year and this year were long overdue, and will really help them ramp up production moving forward.

          In addition, they’ve done far better than they’ve been getting credit for in their share-price with their last 2 years of exploration campaigns on replacing and now expanding reserves.

          There were 2 times last year where it seemed the fishing line down was not justified, as 2 funds liquidated their holdings, but the stock never recovered back to where it was trading before those institutions hit sell at any price. There have not been buyers that have come back to support it, because smaller producers have largely been ignored across the sector, just like stagnant developers, so the only life has been in discovery exploration narratives.

          When the gold pricing improves, and large funds start combing through the survivors ball, there are many unloved and forgotten smaller explorers.

          I consider small gold producers like Jaguar, Alio, Mandalay, Troy, Comstock, etc…. to be “optionality plays” but unlike really out of the money developers or explorers, these smaller producers will be able to quickly monetize jumps in the metals prices and it will have a huge impact on their margins.

          For now I’m just holding JAG, and averaged down last year and earlier this year, but I have been concerned that they may get too deep into financial trouble if the metals prices don’t bail them out soon. If Gold gets back up over $1400 they should be solid though, and can produce roughly 90K-100K ounces per year.

          They also have that 3rd mining complex on care & maintenance that can be dusted off and come back into production in less than a year, should metals prices go into the mid $1400s. That is another layer of optionality that they are getting 0 credit for. It is tough to build a mine and permit it, and all the heavy lifting is already done for their 3rd mining complex.

          It’s only a little over 2% of my trading portfolio, so not a huge position, but big enough that I keep tabs on JAG, and think it could easily triple or more when the sector wakes back up.

            Jun 13, 2019 13:15 PM

            My first purchase was in 2016 using some silver stock winnings and that was a good move.
            I think the coming run will easily take gold above $1,500. $1,450 has been my minimum but I just don’t see such a breakout leading to such a puny rise. So $1,520 to $1,560 seem probable and conservative to me.
            Whatever happens, sentiment rules so I’m betting that Jag will be flying by the time gold crosses $1,400.
            I’ll hang onto a few hundred thousand shares since I believe it will be in much better shape financially in several months.