Doc comments on gold, silver, and uranium
Doc joins me today to share his thoughts on gold, silver, and uranium. We start by looking at the longer term charts for each gold and silver and the key factors in each. We then address a lot of the main catalysts being touted in the metals community, including real interest rates, the USD, and US markets. To wrap up the call we look at the uranium sector, where Doc sees opportunity.
Yep, bought some into weakness on closing bell
Likely a good entry point Buzz. I had a great run in Pure Gold trimming a big chunk on Dec 11th of last year, but was a bit hasty buying a big chunk on April 19th, and in spite of the downward pressure liquidated it on July 20th for tax loss purposes, and just bought back the Pure Gold position on in August 23rd & 26th.
The stock took it on the chin for having some initial start up challenges and many had also walked away at production after a nice “golden runway” higher to chase other advanced exploration and development assets. Still the selling got pretty extreme over the last few months, and I was happy to pick it back up at a much better cost basis and to see their production has ramped up to record levels recently.
In addition, I’m still very encouraged by the high-grade drill hits in that new “8 Zone” and their fast-tracking of drilling and development there at depth. In the Red Lake Mine, currently operated by Evolution, (and previously by Goldcorp), it was the high grade at depth that really lit a fire under the investor interest and the valuation higher. The potential is definitely there for Pure Gold to surprise the market with more high grade economic grades in and around their 8 Zone, and that could be a kicker beyond the increasing production, or the optionality from any increases in the gold price down the road.
(PGM) (LRTNF) Pure Gold Mining on Being Canada’s Newest Gold Producer in Red Lake and Next Phase of Ramp Up
SNN Network – Sept 2, 2021
Brilliant announcement by Pure Gold this AM
You must mean the $20 Million bought deal announcement? It looks like they sold off on the financing news, and needed more cash to develop that 8 zone area further. It would have been more brilliant to have financed at a higher price than during this low point in the sector, so not the best timing on this raise.
“The gross proceeds raised from the Offering will be used by the Company to fund the continued ramp up of operations at its 100%-owned PureGold Mine Project located in Red Lake, Ontario, underground drilling and development of the high-grade 8 zone, and for general corporate purposes.”
https://ceo.ca/@nasdaq/pure-gold-mining-inc-enters-into-a-bought-deal-agreement-0b3b6
Real rates, tapering, economic numbers bla bla bla.. Richard always seem to find reasons as to why the gold price goes down but always fails to mention the real and ONLY reasons why gold goes down: price rigging and manipulation.
He never mentions that the banks smash the price when it’s as most illiquid and triggers all stops and short the miners. A real seller would NEVER EVER sell at any price. That seller would either be a moron or trying to move the price down. Without these last dirty obvious attacks we would have the gold price at +2.500. TA means exactly zero in these manipulated markets.
Agree 100%
All the Aussie mid tiers -4% at lunch Wednesday
Doc had mentioned the move recently in Uranium miners, and no doubt that they’ve had a continuation of a stellar run that started last year. The U stocks had pulled back some over the last few months, but then took off again like a scalded cat, and they’ve been a bright spot in my portfolio over the last few weeks, especially last week and continuing into today. I may trim them back a bit more soon though, as these moves have gotten pretty extended once again.
Got Uranium stocks?
Actually I like this one better swapping out URA for the better U mining ETF URNM.
Here’s a dirty dozen U miners on the Candle Glance #Chart:
$URNM $CCJ $UUUU $URG $UEC $DNN $NXE $AZZ $EU $UEX $ISO $GLO
The ‘X factor’ Lifting Uranium Stocks
Michael McCrae – Friday September 03, 2021
“Bellwether Cameco is up 18% for the week to $21.39 a share.”
“Juniors and developers are up sharply, too. In the past five days Denison Mines is up 21%, Uranium Energy gained 22% and NexGen Energy has grown 27%.”
“Renewed financial interest to invest in physical uranium, aided by the Sprott uranium trust, has recently pushed spot prices higher and is an X factor in our price forecast,” wrote analysts from RBC, who published their note yesterday.
https://www.kitco.com/news/2021-09-03/The-X-factor-lifting-uranium-stocks.html?sitetype=fullsite
The U-Boat Is Setting Sail for Profits
by Sean Brodrick – September 4, 2021
“It may not look like a lot compared to previous peaks, but uranium closed at $35.65 on Wednesday. That’s the highest level since November of 2015.”
“Sure, it’s nowhere near the January 2011 peak of $67. What you can’t see on this chart is an even earlier peak of $137 in 2007!”
• The point is, uranium just made a six-year high, but it can go a lot, LOT higher.
“So, what’s driving this?”
“The most immediate force seems to be funds that hold physical uranium. They are buying like mad.”
https://wealth-wave.com/wealth-wave/u-boat-setting-sail-profits/
My U stocks are up very very nicely. My positions are moderate and mostly in the same stocks + a few more than Ex listed. (BTW, moderate positions are hardly ‘trimmable’.)
I have still yet to correctly trim profits in PM or U stocks. Is there a general rule once one has ran 20 to even 50% in a few days to a week’s time? I’m not asking for exact trading advice, just how do others “time” trimming?
In addition to my above inquiry… I am in my positions long term. Trading and/or trimming may not be necessary in my smaller positions. (?)
Hi aghead. As for trimming a position, it’s up to each individual investor on what their goals are for a trade, what their time horizon is, what the tax implications are for short-term versus longer-term holds, and whether the gains balance that out.
Most investors are simply buy and hold investors and won’t sell anything to get past the 1 or 2 year holding period (depending their country) for the better tax treatment.
For the shorter term traders, they trim or add to core positions or sell or buy entire positions to capture the out-sized market swings, and can make money even in a sideways market. Again that will vary depending the investor and the goals of the specific positions.
For example, there are times I just sell the whole position if it is a tinier position, but much more often I scale into and out of a position in 3rds or 4ths. Buy a position in 3-4 tranches, and scale out in 3-4 tranches. Sometimes it is more of dollar cost average things with a similar allocation of what to spend on each tranche, and other times it is buying more aggressively and larger the further it pulls down to build the position. It is the same way when scaling out… ie.. sometimes I sell 25% or 33% or 15% of a position, then do it again, and again, before I buy back or sell out of it completely.
When stocks are really volatile and whipsawing back and forth then I may buy one day, sell 2 days later, buy it back the following week, etc… scalping gains of 20%-80% here and there, all while keeping the core position in place. Overall, I make much more money doing this in my basket of stocks on the more liquid and volatile names, than just buying and sitting in a stock in a sideways to down market.
There are some exploration positions that I buy and hold awaiting the drill assays and market reaction to come in without trading around that position.
If they hit it big, then I may sell some and hold the rest, and conversely if they disappoint I may sell 1/2 if I still believe they hit down the road, or sell the whole thing if it looks dead for the season.
On royalty positions I pretty much just accumulate them with other trading profits in good times, or store money in them for more of a margin of safety during turbulent times, but then will trim them back to free up funds when I see other opportunistic setups in individual miners. As a result the core position increases or decreases based on sector trends, or the need for funds.
I’m not sure if this is answering your question at all, but I guess bottom line, it is different for everyone.
I first got into the Newfoundland, Labrador area plays after I read an article saying Eric Sprott was buying up everything he could in the Province and has since escalated that strategy. I speculated if NFG, LAB and NFLD. NFG turned into a liquidity event and I sold the last of it in excess of $13. Since it has pulled back between $8 and sub $10 I have been adding back and now look at the play as up to 20% of my core PM holdings. I see the bottleneck of assay results due to too many drills running and labs working around the clock as a period to accumulate selectively. When that bottleneck eases I think there are going to be some amazing results released. Would Doc or Ex care to comment? I really respect your opinions as well as other contributors. Great investing to all!
Hi FIH. Yes, we hearing every day that the assay labs are backed up everywhere, and it is an issue with almost any company sending in their drill core with 6-12 weeks of waiting in many areas.
The companies that come in with results that exceed expectations should be well received, but status quo results that are just good or OK have been selling events for many press releases over the last year. With many companies, NFG included, the expectations have also been raised pretty high by investors, as have the company’s accompanying market caps.
Many explorers, without economic studies or even resource estimates, have rocketed up to valuations much higher that the developers & producers with proven ounces in the ground. It’s been a pretty wild environment for the last 2 years with the runs many explorers have gone on, and the recent area play in Newfoundland has been notable. It’s particularly odd when one looks at the market caps of many explorers in contrast to the gold or silver producers, with all the sunk costs and past energy expelled of permitting, funding, constructing, and optimizing their mines.
During this recent weakness in the PM sector, many companies are now getting back down to more attractive buy points, but at this point I see more potential value in the beat up producers and developers. That doesn’t mean that explorers can’t just keep rocketing higher on great results, but personally I like the margin of safety of companies with known resources in the ground and the known infrastructure in place. With certain companies, like New Found Gold or Labrador Gold there just aren’t resource estimates or economic studies in place yet, so it’s much harder to assess whether the current valuations are in alignment with what they’ve proved up at this point. Once those resource estimates and economic studies come out, then it will be easier to see how things all match up on the valuations. Cheers!
Another M&A deal in the resource sector. We already discussed on other blogs the takeover of Golden Valley and Abitibi Royalties by Gold Royalty Corp, and the takeover of Azarga Uranium by enCore Energy, and now here’s a 3rd takeover deal, this time in the Lithium space.
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Ganfeng Lithium Co., Ltd. to Acquire Millennial Lithium Corp. in an All-Cash Offer for $353 Million
September 8, 2021
Which company will be next in this wave of Mergers and Acquisitions?
Has Kereport reviewed Orezone (TSX.V: ORE, OTCQX: ORZCF)? (My search turned up stones.)
I like Orezone, have a position in Orezone, but we’ve not been able to get them on the show yet. I’ll try again.
Thanks! In & Out of Jaguar today. May have bottomed, at least short term, but Dollar began to strengthen toward day end. Hoping to build a position in it.
Yeah, I’ve beefed up my Jaguar position a lot recently, but may still add a bit more at these depressed levels, for the next ride higher, and they pay a nice dividend while waiting.
Daily intervention continues….
Sept is one of the best months for PMs, and it struggles at best.
What will the worst months be like?
Gold headed higher to star off the month, and has only corrected for 2 days so far this week. The month is far from over, so let’s give it some time to develop. While September is one of the seasonally strong months for gold going back a few decades, it doesn’t guarantee it will be positive this year, and is more of a supporting tailwind in sentiment. However, the sentiment is still pretty bad in the sector, so we’ll see how the next few weeks go. We’ve also had 2 bullish weekly candles in a row, so a bearish weekly here would make sense to consolidate the move.
This is day 2 after Labor Day. With respect to gold’s seasonal patterns, this month hasn’t even begun.
In addition to this September looking perfect for gold, the last 4 Septembers (’17, ’18, ’19, ’20) saw gold finish lower while ’16 was barely positive and ’13, ’14, and ’15 were also down. That’s 7 out of 8 years down.
It is during big uptrends that September’s favorability is obvious. For example, gold did well and finished higher for 5 Septembers straight from 2001 to 2005. It then did well in 2007, 2008, 2009, 2010 and 2012. That’s 10 out of 12 years higher during a bull market.
Yeah, I agree that the month is still young.
There are often big moves out of July and August into September where things peak and in many of the years you mentioned above that was the case.
There were a few articles out recently stating that since 1973 that September was one of the most bullish seasonal months for Gold, and a bunch of chatter about it, so maybe that’s were the comments are coming from.
Here’s a seasonality chart compiling a few decades of info:
http://equityclock.com/pictures/GoldFuturesGCSeasonalChart_2CFE/image.png
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%.”
In ’04, ’05, ’07 and ’10, September marked the beginning of big moves higher and I am betting it will be the same this time.
The seasonality charts I find most useful are the ones that distinguish between bull and bear markets such as Adam Hamilton puts together for “apples to apples” historical comparisons.
The quarterly and yearly silver:gold charts unequivocally favor silver over gold in the years ahead while XAU:Gold has been on a quarterly MACD buy signal for 5 years and is probably going to get a yearly MACD buy signal this year. We haven’t seen anything yet. The naysayers are in for a big surprise.
Yes, good points on looking at seasonality in bull market cycles versus bear market cycles, as I’m sure that affects the patterns.
That is encouraging on the potential outperformance of silver over gold on the quarterly and annual charts, as is the buy signal on the XAU gold miners to gold ratio. Things really get moving in a PM bull market when Silver and the miners outperform hard money (gold).
There is plenty bearishness going around rightfully so! For the ones who care and remember my last call, I mentioned we would undercut the monthly august close in the hui slightly and we have done that. As of today my ducks and my charts are telling me the odds favor going against docs call and I appreciate docs advice as I appreciate everyone’s but I’m just giving you my scenario. I don’t think we have much drop left in fact maybe a bit more but it looks good ot me from a weekly/ monthly fantastic that we head up and from a daily not so bad 🙂
Folks if we go up here this can end up surprising Many!
I’m down to 4% left.. purchased some iamgold and mostly another stock I believe is a gem..
Cheers to all
Good to hear from you….GLENFIDISH…..
I know it is the bottom or close to it, because I was about to throw in the towel… but,
I am always wrong, so,…… go long… lol…..
PGM down over 10% on much touted news. worth watching for end of day result.
It’s financing news, so that was hardly “much touted” and nobody knew it was coming until they announced it. Most companies sell off after announcing a financing, as it is dilutive, so that is hardly anything unique to PGM, and is par for the course.
Bitcoin Is Definitely Chipping Away at Gold’s Market Cap Says Wells Fargo Exec
pgm trading below announced share issue, now that’s confidence and comes of the heels of yesterday’s operations success. Typical of gold producers to concentrate on financial engineering rather than mining for increased share value.
See ‘Related’ : https://tinyurl.com/2vc9pznu
Palladium continues downward saturation.
Uranium may form a bearish engulfment, saturation decrease this morning.
Silver outperforming on the downside to gold. That’s not suppose to happen.
And the beat goes on, again as is generally the case, let’s see what happens with gold mid morning lows and then flounder for rest of day. Perhaps today will be different.
Rockie & Bullwinkle: “Watch the Dollar!” – https://www.youtube.com/watch?v=u2c9-LDP0t0
Galleon Gold (GGO), I think this is good news but stock is down, showing me that there is very little interest in this sector. Donno if Doc is right but this evidence supports him.
I was waiting for gold to close above $1815 and silver above $24 on the same day for a couple days in a row… didn’t happen.
I was hoping for the same outcome. The smackdown really hurt. Sentiment among many analysts is terrible. G. Savage recommends one not even try trading pm stocks. Ira Epstein’s comment: “Gold was a massive failure.” If it’s that easy for the other side to keep gold in check, why should one ever believe things might change?
My post at 7:55 below was meant to be a reply to this message.
I have written it many times here before. The price of PMs and PM stocks WILL ALWAYS be where the evil cabal running the financial markets and the whole world want it to be. No matter what the so called “technical analysis” and “analysts” say
Corrections always bring out such claims but an quick glance at the past 50 years of price action proves there’s nothing to them. Why was gold allowed to rise 5,900 percent since 1970 or even 100 percent between 2016 and 2020?
Gold is going vastly higher and there’s absolutely nothing that anyone can do about it other than hit the price along the way to scare people out. The charts make that fact perfectly clear just as common sense should if one understands the fundamentals that drive a gold bull market.
I believe it will change and go up but from what point? This is a falling knife for now and the whole market is an easy target. I my opinion it is all to do with the all powerfull merican buck fer now and the taper non taper bull sh!1 from the fed… they can’t taper unless they can pay their bills with good money instead of pretend money.
They are in a war of the worlds with the megalomaniac Xi Jinping.
hmy 4 month ago was trading at 5.50 and now 3.20 . very good correction.
The bogus game continues. It could all be fixed with a few indictments, but it looks like we have to start with regulators…before we can get to the thieves.
You know it’s hopeless when even most Republicans are stupid enough to defend our “need” for a (communist) central bank which steals trillions upon trillions from the blissful sheeple.
SLV fell precisely to Thursday’s closing price to fill Friday’s huge gap…
https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=0&dy=0&id=p86605448983
Emerita’s good drill results was met with EOD blowing stops, shorts probably covering and some nice person buying almost what was left. So much for my good day. Tomorrow will be a good day…maybe. So far Vizsla hasn’t recovered from its good drill results. It also needs a good day. Great Bear showed a sign of life but probably because there was no news.
Uranium, what is it good for? You can’t eat it or wipe your ass with it. Don’t tell me it’s cost efficient for producing carbon free energy. It is good for blowing things up and killing people, which is why the US military wants it and supports it.
Silly comments considering nuclear energy is 20% of the energy mix in the US and about 15% globally, and yes, it is is the only carbon free energy capable of 24/7 baseload power, unlike solar or wind, and the energy source that is the least deadly and taken the least amount of lives of people or animals compared to coal, oil & gas, hydro electric, solar, or wind.
Just from pure supply/demand basic economics 101 level, the fundamentals are simply fantastic for Uranium. The only people spouting off nonsense like the above comment are people that have no grasp at all on nuclear energy or the Uranium market fundamentals.
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As for the only good for blowing things up and killing people comment, its an absurd presupposition. Here is a documentary that is a few years old now, and while it is unlikely you will watch it all or give the matter any critical thought, I’ll post a link to it anyway.
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Pandora’s Promise
“In his controversial new film, Stone tells the intensely personal stories of environmentalists and energy experts who have undergone a radical conversion from being fiercely anti to strongly pro-nuclear energy, risking their careers and reputations in the process.”
“Undaunted and fearlessly independent, PANDORA’S PROMISE is a landmark work that is forever changing the conversation about the myths and science behind this deeply emotional and polarizing issue.”
If you are even legitimately interested in understanding the Uranium market dynamics, (which I seriously doubt and you are likely just trolling again), then here is a good market update on the Uranium sector from Justin Huhn, which I posted on the weekend show.
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Uranium Market Insights with Justin Huhn of Uranium Insider
Mining Stock Education – Aug 31, 2021
0:00 Introduction
0:30 Uranium investor sentiment
2:50 Sprott physical uranium trust price action
8:06 Any political movement have you concerned as a Uranium investor?
10:04 Disconnect between EVs and nuclear energy generation
12:00 What nations are promoting nuclear energy the most?
14:13 What to look at for a rising uranium price
17:59 What is your exit strategy?
21:52 UraniumInsider.com
As for the investing angle in the Uranium mining stocks further up at the top of this thread there area few articles posted highlighting the potential other analysts see in the space, and there is little doubt they’ve been on a tear lately. Resource investors that snubbed their nose at U stocks lost out on an epic run over the last year in almost the entire sector, and some of the easiest money made from mid 2020 – mid 2021.
What is it good for….
https://www.youtube.com/watch?v=ztZI2aLQ9Sw
Haha! Good one OOTB. 🙂
🙂
John Quakes @quakes99 4:37 PM · Sep 8, 2021·Twitter Web App
Shaw and Partners: “we upgrade our long-term #uranium price deck to US$60/lb (from US$52/lb).. we assume a multi-year price spike at US$85/lb, before settling to our long-term #U3O8 realised price assumption of US$60/lb (2021 Real) in 2028.”
Understand it but not interested in it.
No, you clearly don’t understand it, or you wouldn’t have made such ridiculous comments up above. What you aren’t interested in is learning anything.
i Agree Doc !
(PGM) (LRTNF) PureGold Mining Completes Mill Upgrades and Achieves 1,000 tpd Milestone
Sept 7, 2021
– New single day record of 1,037 dry tonnes of ore processed
– New single day record of 2,050 tonnes of ore brought to surface from underground
– On track to step-up ore production rates to 1,000 tpd in Q4 2021
https://tinyurl.com/vnjuufn7