Weekend Show – Adrian Day and Peter Boockvar – Inflation, the Fed, Markets and Metals
On this Weekend’s Show we spend a couple extended segments with each Adrian Day and Peter Boockvar. We focus markets and metals in the context of the Fed tightening and other important market moves.
Please go back through the week of Editorials and Company Updates. We love hearing all your thoughts on the companies we bring on the show and topics you would like more commentary on. Our email addresses are Fleck@kereport.com and Shad@kereport.com
- Segment 1 and 2 – Adrian Day, President of Adrian Day Asset Management kicks off the show with a focus on precious metals and base metals now that the Fed has begun its tapper process. We discuss the underlying PM stocks and the continued disconnect between between the metals price and stock valuations. We also have Adrian comment on the recent breakout in Uranium stocks as well.
- Segment 3 and 4 – Peter Boockvar, Chief Investment Officer at Bleakly Advisory Group is up next with an extended segment discussing inflation data and projects as well as commodities and markets. Peter outlines why he sees inflation remaining elevated well into next year but also why investors seem to be ignoring this trend. Click here to visit Peter’s site – The Boock Report.
Exclusive Company Interviews This Week
- Signature Resources – Updates on the 10,000 meter drill program at the Lingman Lake Project, a balance of resource expansion and new targets
- GR Silver Mining – Exploration Update, 6 Drills Turning And The Zones Being Explored
- NG Energy – Introducing this near term natural gas producer with 3 assets in Colombia
- Aurion Resources – New Discovery Drill Holes Along The Kutuvuoma-Ikkari Corridor In The JV With B2Gold
- Goldshore Resources – Initial Holes of the 100,000 meter Program hits Widespread Gold Mineralization at Moss Lake Gold Project
Pezim was definitely a hall of fame promoter……keep those overnight updates on the uranium stocks in Australia coming. Love seeing them when I wake up. 👍
Too many little mining companies chasing too few investment dollars. Need a guy like The Pez to come in and clean things up. Package up all these little companies into tranches like the bankers did with mortgage backed securities (MBS), call them gold backed securities (GBS) and flog them off to middle east guys looking to take a flyer in the gold market.
Good show. Thanks Cory and Shad. Sounds like it could be a few more weeks months of boring sideways action in the precious metals.
Thanks Charles. Yes, there may be more sideways slog to work through, but overall the vast majority of the guests that we’ve brought on the show recently have been constructive on 2022 as being a much better year for the precious metals sector.
As mentioned in the Adrian Day interview, we don’t know what the effect will be 3-4 months into this “dovish tapering” experiment, when there aren’t as many people there to buy those bonds that the Fed was purchasing. More importantly, there will be a moment of truth and market realization next year, that the Fed can’t hike interest rates up high enough to be more than the rate of inflation without imploding the whole system with their massive balance sheet of unpayable debt.
Just the interest on that massive debt at 4% or 5% (or where CPI inflation is slated to come in next week at 6%) would be untenable and crush the whole system. So that is a complete no-go. That is the point where the markets will have an “ah-ha moment” and realize the Fed has been a paper dragon all along, and that emperor is wearing no clothes. This revelation should be quite bullish for Gold as a hedge against financial malfeasance in the eyes of more investors in mid 2022.
I vastly disagree Charles.. The charts could not look any better from a daily, weekly and monthly perspective.
We have breakouts and confirmed weekly breakouts from 8 month highs.
Take for example Scorpio gold which I told Ann almost precisely at the low that we were going higher. Scorpio just had its highest weekly close in over 8 months.. That is a game changer
Iamgold on fire
Impact silver on fire
Bear creek on fire
USA on fire
It looks very clear to me that the miners are already outperforming and the ones that are not will play catch up very soon.
You heard it here first.. Scorpio gold target for end of month is signalling 21 give or take..
Hi Glen.. I sure do remember.. and Thx.I believe Matt was also big time bullish on Scorpio.. or am I incorrect?
Your absolutely 100% correct.. I’m not sure what his weighting is in it but he believes.
Matthew introduced me to many of the miners. And I bet when he reads this he will be a scholar and show us his fork and picture to see what he sees with possible targets for Scorpio.
Glen.. forgot to ask.. are you still liking KS? I had bids in most of all last week at .06.Nope.. no fills lol.
Yes absolutely went in pretty strong with Klondike and it has taken me into the green big time. When I get a chance I will post a fork on the chart that I have been using for the monthly. The ship is tight and the wall support seems to be that .6-.65
Good luck 🤞 I will add more of it dips. My cost
average is .4-.45
SGN is up about 58% in three weeks on good volume and the weekly RSI hit its highest level in over a year.
Weekly volume was the best since August…
First weekly close above 50 week MA since March:
I agree Glen. A lot of my stocks look to be finishing head and shoulder bottoms so I am encouraged, but a little wary too!
Charles caution is always ok and we all worry to an extent. What I really like is the divergence on the miners with rsi something Matt spoke about. Doc also mentioned if we can finish string this month into that liquidity I keep speaking about then we will really start to move.
Cheers Charles 🙂
Loved the close on gold yesterday; almost at the high of the day which steadily kept climbing. Been while since we saw that action. But, if past is prologue, then we’ll be below $1800 by Tuesday morning. JMO
Absolutely Sillerdollar. That was a much more encouraging close on Friday to end up the week than many were expecting, with Gold December Futures closing at $1,819.95 up +$26.45 on the day for a gain of (+1.47%).
It takes the wind out of the sails of the negative nancies narrative about gold being unable to close above $1800, and puts that notion to bed. Not only was it a daily close decisively above $1800, but it was also a weekly close above $1800 at the high for the week. Nice to see!
I vote for a good finish to this year. The Fed and statistics people (labor dept) have done about as much damage as they can. It is time for them to sit back and hang with whoever they hang with for the holiday season and let the serfs play.
I second that vote Lakedweller2, but don’t know if the markets or the Fed cares about our votes. Haha!
Regardless, the rally in the miners since the September low in the miners has been refreshing, and my portfolio has clawed it’s way back up higher again, up double digits, along with many of the miners. It has been very nice to see some green on the screen…
My portfolio is at all time high but can’t claim much personally other than followed Doc Jones analysis on Emerita. I think there is a lot more room in that one.
Here is the point: for once I am not starting into a move in the miners from a low point. However, I also have had some luck in Vizsla (again), Blackrock Silver, Nobel and recently Great Bear. Looking forward to being able to do some buying and selling on a daily basis as we start getting some tradable movement.
Nicely done Lakedweller2. Yeah, I’ve said it before, but you and Doc Jones killed it on that Emerita trade this year. I saw someone posting it was up about 1500% on the year… crazy!!
Yeah, of the ones you mentioned I hold both Vizsla and Great Bear and have been enjoying that trading action as well. Both companies have been putting out best-in-class drill results repeatedly and over time where they actually earned their higher valuations through solid work and execution.
That move recently in Great Bear raised a number of eyebrows, because some of it was in sympathy with Barrick stating it wanted more focus in Canada, and then they took strategic positions in smaller companies in the Red Lake area (right next to Great Bear). There is investor chatter on the message boards that since Barrick missed the window to pick up Kirkland Lake (with Agnico Eagle swooping in for the win), that their next best bet in Canada may be to takeover Great Bear. However, they didn’t take the position in Great Bear, but instead they took it with their neighbors. Some people, trying to play 4D chess, see this as a move to consolidate the surround land first, and not tip their hand about wanting to go after Great Bear, and have the adjoining land as well. Regardless, that was all the markets needed hear to bid up Great Bear recently. I’ve enjoyed the ride higher in GBR for sure. 😉
No 1500% but my 1100% went to the house paint and roof in Texas. I have 100-800% left for 300+ average. Started building in April. A lot of fun so far. Hoping for a pop for the official Administrative Court Order on Aznalcollar any day now and multi drill results to expand the known resource over the coming year.
What are the tax rates on profits in Texas?
Seems that Elon Musk moved to Texas because of the low tax rates.
Don’t fight the trend and the trend says we are going higher to get that liquidity at $1832-$1840
The market structure is changing and most will be in denial.
Remember not one called the top in August 2020 and only 2-3 have called this bottom wall of worry.
We are headed higher I have no doubt
In mid-late July of 2020 I actually pointed out on this blog several times that the BPGDM Bullish Miners Percentage Index was flashing 100 for several weeks, and that this was the most overbought that indicator got, and that I would be trimming back my miners over the next few weeks from late July into August as it looked like a top. Many doubted that and thought the bull would keep raging on, but that was the bell ringing right there, as noted.
As for the bottom this year, several of us noted that the March double-bottom at $1673 and $1677 looked like it would hold, and so far that has held as the bottom. $1673 was the low for Gold for the year it was 7 1/2 months ago now, so it looks like that March double bottom was the low of this year indeed. Many came out and doubted that double-bottom would hold, but it absolutely was the bottom in gold for this year.
As for the mining stocks, they pulled back longer than Gold has, and have been marching to the beat of their own drum this year. However, Dave Erfle came on the show right after the September month and quarter close and pointed out that that dip down in GDX to $28.83 earlier that month may have been the low in the miners, and that the blip below $30 could have been a bear trap. So far that has held as the low for the miners, and things have rebounded nicely from there.
> Here’s a chart showing that low in GDX at $28.83 that Dave Erfle had pointed out to our audience:
Here is that interview with Dave Erfle where he noted the low in GDX for anyone that missed it:
David Erfle – Gold In Search Of A Turn Higher, And The Valuation Gap In GDX
Korelin Economics Report – October 5, 2021
“David Erfle, Founder and Editor of Junior Mining Junky, joins us to discuss the precious metals and the mining stocks. We review a few potential areas that could indicate a turn higher in the sector is possible, starting with the way the last day of the quarter traded above key gold price support. Next Dave highlights the low valuation of the GDX in relation to the current gold price, compared to where the gold price was when GDX was last at current price levels. We move on to the recent divergence in the gold equities and gold to the downward pressure in the general stock markets. We wrap up with what stage of miner Dave feels investors may rotate into first, once capital flows back into this small sector.”
No one is Disputing your calls for trimming is one thing and selling out at the top completely is another two totally different ball games. There were many people calling the top in the famous Bpgdm bob, yourself I’m sure I made a mention of it somewhere. But the clear facts are no one said I’m out 100% and if they did show me the money with all due respect. Coincidently I was one of the leaders on this board calling the low in the miners not the metal itself. Yes perhaps the double bottom came in as you mention but stocks were ripped apart and some still recovering after that double bottom. I changed tune precisely at the low of bogdm and made mention of it how important it was I in regards to previous long term monthly lows for an all time buy. Between 15-20 you responded to it in regards to a discussion with another poster. Glad I made that call because things have looked good since then.
And now as we continue to have wall of worry which I welcome I’m saying the overall picture could not look any better.
Correct, I didn’t sell out 100%, as I always keep positions in place for swing trading, but I trimmed positions very near the top. I also repeatedly mentioned on this blog in July of 2020 that gold and the miners were setting up for an intermediate top, and that’s what happened. Here’s what I did say for clarity’s sake:
> On July 10, 2020 at 10:09 pm,
“While I don’t believe the set up in PMs or the macro economic backdrop now is anything like what it was in 2016, that Gold Miners Bullish Percentage Index (BPGDM) hitting 100 is cause for concern that an intermediate top in the miners could have just formed.”
“I may get a bit more aggressive in trimming the winnings next week, and take on an even more defensive strategy, as the miners and metals have had one hell of a run higher the last few months coming out of the mid-March sector lows. Getting a corrective move soon would be healthy and normal.”
> On July 11, 2020 at 8:32 am,
“The biggest warning sign is that BPGDM Bullish Miners Percentage index going up to 100 recently. That last happened July 2nd, 2016 and serves a warning bell near an intermediate top.”
> On July 11, 2020 at 11:19 am,
“5 year Chart showing (BPGDM) Gold Miners Bullish Percentage Index moving to 100 in July 2016 and just moved back to 100 in July 2020.”
> On July 11, 2020 at 2:03 pm,
“As mentioned above “BPGDM may be be able to stay elevated at 100 for bit longer” however it rarely gets to a reading like that and the last time it did was 4 years ago in July of 2016 right before the miners topped.”
“It’s a tool we’ve discussed on here a number of times as confirming breath (and also sentiment) indicator at both tops and bottoms.”
> On July 12, 2020 at 12:51 pm,
“My only point was a simple one. With the BPGDM flashing 100 last week, it is a warning bell when 100% of gold stocks are a buy, to start paying attention to the overly bullish and frothy sentiment. I’m not saying sell everything tomorrow, or that the miners can’t go even higher for a few weeks. I’m saying I’m trimming back some of the bigger winners as paying attention to this indicator has served me well a number of times at critical turns in the past. I’ll be looking for more bullish strength to sell into over the next few weeks and believe there were be a better buying opportunity again in many names after things cool off a little bit.”
> On July 12, 2020 at 10:03 pm,
“All over the stock forums there are people celebrating and giving themselves high fives on the massive runs most mining stock have been on over at ceo, at stockhouse, on hotcopper, in the comments at Seeking Alpha, and it is definitely starting to get more euphoric in the sentiment. When that is confirmed by chart indicators like the BPGDM hitting 100 (which is extremely rare in it’s 20 year existance), or RSI and Slow Stochastics buried in the 80-100 range, then it seems quite unwise to dismiss those and go along just to get along with the herd, because it is a bull market. I’m sure there is some action left in this particular leg higher in the metals and the miners, and I’ll do my best to wring as much out of the next few weeks as possible, and I don’t expect a terrible correction, because I expect the dip to be bought and for Gold to make a move at the all time high of $1923 this year. After that, then sure, a more meaningful correction may play through for a while.”
> On July 22, 2020 at 5:02 am,
“I also mentioned that the BPGDM flashing 100 back in 2016 took a few weeks at lofty levels, before the markets actually topped, and that this time it would take a few weeks this time for the markets to top. That comment was only 2 weeks ago when gold was around $1820, and the miners and gold cooled off a bit, and now gold has risen another $20 (nothing earth shattering) and the indicators are starting to heating back up so let’s look at things in another week or 2 and see if they aren’t in fact getting toppy.”
> On July 23, 2020 at 7:31 pm,
“If there is a correction that is starting, signaled by this under-performance in the miners, then it would not be a surprise. I had mentioned about 2 weeks back that the indicators, like BPGDM, RSI, Slow Stochastics, CCI, etc… were getting overbought, and we are way above most moving averages at this point. As has been repeatedly noted, I’m quite aware that these indicators can stay overbought for longer than folks expect, but eventually the overbought conditions will correct in either price or time.”
EXCELSIOR- I trust you will keep us update regarding that $BPGDM…glta
Will do Larry. Both myself and Glenfidish had mentioned that a reading down near 20 or below was a good spot for miners to bottom historically, and there were some folks that came on the blog and disagreed with us that it needed a reading of 5 which was disputed with charts and facts by both Matthew and myself several times to dispel the notion it needed to get down to that low of a reading for miners to bottom.
>> Also, if anyone listens (or listened) to the interview I linked up above with Dave Erfle, from Oct 5th, I noted in one of the questions to him that the BPGDM index had dipped below a reading of 20, and that this further enforced the point he made that the dip below 30 in GDX, down to $28.83 may have been a bottom and a bear trap. So far, it looks like that was the case, but we’ll see how things develop from here. If nothing else, it marked a point for a tradable rally.
Thank you Sir🔊🔆
Ditto………. GLEN……… few were able to call the bottom…. 🙂
‘Most Money Managers Have Never Experienced Inflation Before’
Jesse Felder – The Felder Report – (11/06/2021)
During that big inflation we took a year off and went to Australia, living off the interest from a term deposit. Inflation was good for us!
The Macro Case For Precious Metals
Crescat Capital – Oct 26, 2021
“There is no shortage of questions on why gold has significantly underperformed during such an ideal macro setting. Let’s start by looking at the usual fundamental trends of this industry as part of prior historical cycles.”
“Gold and silver stocks have never peaked at historically undervalued levels. Miners are now trading at the cheapest fundamental multiples we have ever seen.”
“Assuming the current 2022 free-cash-flow estimate relative to the current enterprise value, the median company among the 50 largest miners in the US and Canada exchange now trades at an unprecedented 7% yield…”
Precious Metals Royalty And Streaming Companies: The October Report
Nov. 03, 2021 – Peter Arendas
Thanks for the summary regarding your previous post. As I have mentioned before you are an asset to the let and we are lucky to have you and Matthew here as well as many more and some who sometimes don’t get much mention. I’m not referencing myself lol.
Yes I’m glad you pointed out readings can get overbought but the miners I’m falling from a daily and weekly perspective still have plenty room to run this month.
Thanks Glenfidish, and right back at ya buddy. Yes, I agree that there are MANY good contributors here on the KER, both the guests we bring onto the show, and the fantastic contributors, like yourself, that we have here on the blog, day in and day out.
We were both on the same page with the BPGDM a few months back as well amigo, pointing out that the reading down near 20 (and when it briefly dipped below it) was a very reasonable place for the miners to bottom, and so far so good. If nothing else it was definitely a spot for a tradable rally higher in the miners, and many of the stocks have gone up double digits since then, so great call buddy!
I really hope you are right about the miners continuing to run higher from here as I’m quite loaded up with about 70 Gold & Silver miners. If they put on their track shoes and run higher, then I’ll laugh all the way to the bank. Haha!
Personally, I think we’re going to need to see higher metals prices to bring in more investors, so I’d like to see Gold break through that $1832-$1840 resistance most technicians have noted (including yourself), but more importantly, I want to see $1900 and $1921 eclipsed on a closing basis to really get some momentum going in this sector.
As Jordan Roy-Bryne has noted $1900 is quite significant on the monthly and quarterly charts as resistance, and $1921 was obviously that old 2011 peak (that still has a lot of trading memory around it). Once those get taken out on the charts, then $1962-$1966 is resistance, and then from there the all time high of $2089 goes in the cross hairs. Still lots of work for Gold to do to get some real momentum going, but the last month or so has been encouraging in the mining stocks. It may very well be that they are leading the charge higher. Ever Upward!
I think that the illusion of prosperity was dashed on Wednesday’s FOMC meeting which turned to be nothing but nervous prostration. The problems in The World economy are organic and deep-seated. They, The Fed cannot change the prescription to cure the American economy, without being totally embarrassed. The grim farce continues because Washington and The Fed refuse to face the grim reality. Their only recourse is to try and avoid the limelight while the patient lies prostate. Hypnotism will soon no longer work on The American public. To take a statement out of the 1930’s, “IS THAT A BREAD LINE OR A BANK LINE”.
I’m all in on junior gold explorers with great drilling results, and a couple of silver producers and explorers. I don’t see Gold going below $1800 again, and if it does it will only be briefly. I also have an equal amount of dry powder if we see a crash. DT
Good to hear those words from you and that your all in! Music to my ears. Your a sharp guy and seem to know your companies. I just need doc all in soon. Gary is going to have to do a 180 from his last video.
Well said regarding your positions and man I don’t know how you and Matthew juggle that many miners Impressive. I said long ago I can’t handle that many maybe I’m just not good at multi tasking. I’m actually way over my head currently 11 miners 3 more then my usual comfort spot.: but I just found them to be stupidly cheap and these moments folks don’t always come around for sometime 🙂
Yeah, it’s a bit of work to manage this many positions… “it’s like herding cats…”. Haha!
I just consider them a personal gold and silver ETF, and mostly focus on filtering the portfolios each day to look at the biggest gainers and biggest losers, doing double-digit moves or high single-digit moves, and then see what is driving those companies at that time. If I think I need to add to or reduce down positions, based on the fundamental or technical drivers, or that it may be more appropriate to move funds into other smaller positions that haven’t moved as much, then I rebalance the portfolio accordingly.
A Delayed Reaction To The Statements Of The Federal Reserve, the European Central Bank and the BOE
The Gold Forecast w/ Gary Wagner – Nov 5, 2021 #TechnicalAnalysis #Charts
“The bullish market sentiment for gold due to the high inflation levels had a much more pronounced effect than the strong jobs report which resulted in gold opening at $1792 and closing at $1820. The exceedingly strong jobs report and the dramatic rise in gold pricing over the last two days indicates that traders and investors are much more focused upon the current level of inflation then on additional jobs being added in the United States.”
GDX vs GLD finished the week 6% off of its intraweek low…
Looks like a very important low for GDX vs QQQ…
Gold now looks fantastic even in the very short term thanks to Friday’s action. On the following GLD chart, notice that all those moving averages spanned about 33% of the price while today they span about 3.3%, the narrowest in 2.5 years.
Those moving averages really have all narrowed substantially and converged into a much tighter range.
Anglogold Ashanti moved up 35% since bottoming at this fork support…
Some resistance to clear in the days ahead:
Finish next week at 33.90 and GDX will be clear of this Fibonacci fan resistance:
The 20 day exponential MA has crossed above the 100 day simple MA. The last such cross happened in May.
Bellwether IPT delivered that cross almost 2 weeks ago and warned of more downside when it didn’t come close to crossing in May. It had no bullish fake-outs since crossing bearishly in January.
IPT did move up first as a nice early indication of what was to come, and that cross up of the shorter duration MA through the longer duration MA was bullish.
Also as noted, the bearish cross lower earlier in the year was a good omen of what was to come in mining stock weakness in much of 2021, and it didn’t get broken in a bullish sense until just recently. With no false signals all year, it’s not had a bullish cross in quite a while, so that is encouraging.
IPT also bottomed in August and didn’t come close to making a new low even though the rest of the sector made new lows by a wide margin. (For example, AXU went 10.5% lower; PAAS went 6% lower; SVM went 7% lower; SILJ went 6% lower. Meanwhile IPT’s “new” low was 7% HIGHER.)
The last bullish crossing of those MAs for IPT happened in May 2020. Then it tripled in price.
Matthew – Thanks for pointing out the last time IPT had a bullish cross in May 2020 that it tripled. While history doesn’t have to repeat, I sure hope it at least rhymes. 🤑
It will rhyme alright but IPT will likely far more than triple this time (from its low .42 low).
Matthew, I’ve had some doubles but never a triple so would be happy to see IPT do that.
I’ve been in IPT trading it since 2016 and it’s gone up far more than 3x (it was up about 10x in the 2016 surge for example), and I held it last year where it moved up, but there were so many stocks moving up last year and in 2019 that they all ran together for me in that big sector move. I just didn’t realize the stats on the 3 bagger from the last bullish cross that Matthew had noted above, which is good since we just saw another bullish cross.
The biggest multi-bagger I ever had was in MXSG Mexus Gold, from $.0035 to $.20 (about a 57 bagger), but I had sold in tranches all the way up, so I only had a very tiny position left that made it all the way up that high, selling a lot at $.01, $.02, $.03, $.04, $.11, and $.16 on the way up to $.20. I got into MXSG 2 times since then, and lost money one time, and then scalped a double another time, but have never seen a run like that in any of my other miners since then. There have been a number of 3x-8x, and few 9x and 10x, but very rare that I can hold on that long when they start running.
However, we’ve seen plenty of runs like that in the cannabis stocks, cryptocurrencies, and even in some of the tiniest uranium stocks over the last few years. I still believe some of the gold and silver stocks can be 5x-10x baggers in the run we have in front of us over the next 2+ years in the PM sector.
Hope Springs Eternal…. 🙂
I prefer when profits spring eternal. 💰💲💵
Dollar Week : https://tinyurl.com/4sbsabua
FOMC and NFP beget a Higher Stall.
The ‘Staggering’ Numbers Needed For Metal Production To Meet Coming EV Demand
Michael McCrae – November 03, 2021
“To meet anticipated battery material demand, Sean Thijsse at Pallinghurst Group has seen multiples as high as 20-times current demand for graphite, nickel and cobalt; and lithium with multiples as high as 40-times current demand.”
“Thijsse is Group Head of Corporate Finance at Pallinghurst Group. He spoke to Kitco on Monday. Pallinghurst Group invests in metals and mining with a focus on battery materials.”
Morning Ex. I take it that Pallinghurst Group is not a publicity traded company? And congrats on those multi baggers!!!
Hi Ann. I don’t know much about the Pallinghurst Group, but their Head of Corporate Finance was being interviewed on Kitco since they invest in metals and mining stocks. Some of his demand estimates for the Battery Metals like Nickel, Cobalt, and Lithium are quite stunning.
As for the multibaggers, there haven’t been many like those in the Gold / Silver miners this year, with the exception if a few exploration stocks that have run on drill news, but there were a number of 3x -10x opportunities for investors from the middle of 2020 in to the first half of 2021 in Lithium, Palladium/Nickel, Copper, and Uranium miners. Then over the last few months, Uranium stocks had another rally on their next leg higher giving investors another round (or further) multibagger returns.
This is why it pays to be diversified across different commodity sectors. Personally I had a basket of a half dozen mining stocks in each of those different Energy Metals sectors from 2020 moving into 2021, and this allowed multibagger profits to be harvested and rotated into the more beaten down PM stocks.
Unfortunately the PM stocks were mostly good for selling as tax losses in July/August to wash out the capital gains from the other sectors, although there were a few short periods of good swing trades in the PMs like from March to June, or the more recent rally from late Sept through present. As noted there were a few good drill plays that hit paydirt this year, and some of them have run nicely for investors. In addition, I had four PM stocks taken over for a premium win (Roxgold, Premier, Ely Gold, and Golden Valley), so that was another bright spot for the PMs.
In addition, there is an ongoing takeover of my Azarga Uranium by enCore, which I initially sold out of into the U stock surge a few months back, but had bought back into during their pullback for the Arbitrage opportunity and then the U-stocks just rallied again recently over the last 2-3 weeks. Another M&A deal in my portfolio was the combination of Orocobre and Galaxy Resources, 2 of the better Lithium companies I’ve been discussing on this blog for years now, but that was more a merger of equals to form a larger leading Lithium company (5th largest in the world and on track to leapfrog Livent to the 4th largest in the next year or two).
Overall since the March 2020 pandemic crash that tanked almost all markets, it’s still been a pretty good environment in many commodity sectors, and while I missed the gains in the Oil & Nat Gas sector and Agricultural commodities there were plenty of gains to be had there as well for resource investors that positioned into weakness and sold into strength. The only ones belly-aching on many of the various chat forums are the ones that only focused on the gold/silver companies, at the exclusion of the rest of the commodity sector. Within the PM investing space there of course were those herd investors that came in buying too late into the 2020 summer surge as bagholders, or got all jacked up at the last moment on the SilverSqueeze fizzle, or that bought for Basel III which has been a nothing burger so far. I don’t get the impression that many investors here at the KER fell for those narratives, but on other boards at ceo.ca, stockhouse, Twitter, Reddit, etc… there were plenty of novice investors that got duped by narratives that never played out.
The other big problem we see repeatedly is that despite the constantly cyclical nature of commodities, paired with the extreme volatility in the mining stocks, many investors simply didn’t trade the multiple dips and rallies as they showed up over the last 2 years, and just sat there like bumps on the log as “buy and hold” old turkey investors watching stocks rally and then sell back off erasing those gains… making them just whining turkeys. People claim they want to “buy low and sell high” but most just “cry low and buy high.”
People claim they are contrarian investors, but very few really are…. they are herd animals. Very few took the opportunity to “buy low” in March or April of 2020, during the pandemic crash, or March of 2021 when gold was putting in that double bottom for the year at $1673 and $1677, or more recently in August & September of this year when some PM miners dove down ever further making new lows. However, when the stocks run up 50%, 100%, 200%, then they’ll start looking at them again, and if they run up 300%+ then they’ll get bullish once they see that “confirmation”, but will have missed the easiest gains.
Look how many investors just got excited about Silver and silver miners at the end of that Silver squeeze up near $30 silver, when they could have been fascinated by Silver plunging down to $12 less than a year earlier. Look how many people waited until Copper broke above $4.50 to finally take notice, when they could have gotten interested with Copper at $2.50 as the supply/demand growth narrative for the use case was well telegraphed.
Look how many people waited until just recently to finally notice Uranium, once the spot market got up into the high $40s to over $50 at one point; when it had clearly bottomed at $17-$18 in 2016 and double-bottomed there again in late 2017 (ridiculous levels and the right places to start building positions. It was evident to anyone that did more than 5 minutes of research that this rise in Uranium prices and stocks was inevitable, and yet many waited for “proof first” and watched the stocks go up 3x – 50x from the sidelines. Oil prices actually went negative in 2020 (something that clearly would not last), and now Oil is up over $80 and now the street is interested in energy stocks. Look how many people waited for the insane breakout in Tesla and EVs this year, and finally realized Lithium prices were continuing to hit nosebleed levels, when that supply/demand situation was telegraphed and reported on for years, and the Lithium stocks have had multiple rallies for years. It’s pretty ridiculous when one thinks about it. Haha!
>> Some things never change with investor psychology, and that’s what makes a market.
Speaking of the Uranium sector, we had a great interview this week with Justin Huhn of Uranium Insider, and I’ll repost that here for anyone that missed it, as he covered a number of great fundamental drivers for the Nuclear energy and U308 sector.
Uranium Market Update – A Look At The Major Players On The Buy Side
Korelin Economics Report – November 3, 2021
Justin Huhn, Founder and Publisher of the Uranium Insider joins us to share his insights on the recent pop in Uranium stocks. We focus on the major players, on the buy side, which include the Sprott Physical Uranium Trust, Yellowcake, and the newly announced Kazakhstan physical vehicle. We also address the disconnect between the stocks and lagging Uranium price, as well as the recent investor inflows into the uranium mining ETFs (URA) and (URNM).
(DNN) (DML) Denison Reports Results from Q3 2021
– November 04, 2021
Thank you Ex. An awesome reply ..BTW.. your typing skills are incredible
Thanks Ann. It started off just as a short reply, but then it kept going from there into a bit of a rant. 🙂
The Dow’s latest all-time high came at fork resistance…
Commodities are going to come down hard versus gold as well as dollars now that the complex has finally had its own 2016. The huge move that is now ending will bring a correction that will buy the central bankers time along with the appearance that their efforts to manage inflation have been successful. Of course, it will also provide cover for more inflationary actions.
Copper is set for a long fall versus silver.
Good Copper:Silver chart Matthew. Yeah, Copper has already had a big run, and while it may get a $5 handle by next year, I’d anticipate that Silver has a lot of catchup still relative to many commodities, and 2022 and 2023 should be silver’s time to shine.
Personally, I’ve rotated out of some of my Copper stocks throughout the course of this year to put more emphasis moving forward on Silver, but retained a few copper explorers and developers that still may have further to run based on the unique company fundamentals. I’m looking forward to seeing what could happen in the Silver stocks on the next impulse leg higher that breaks the $30 ceiling, and blasts up into the mid $30s. With about 2 dozen silver stocks in the portfolio, I feel well-positioned for 2022 if Silver gets a bid.
That’s very interesting..Matt and your views on copper vs. Silver. My husband loves silver.. His buddy JP Hulstein loves silver. I was thinking copper …with all the EV and the “new green era “ talk
Ann, your husband is obviously very wise. 🧐
Copper is probably going to be fine, it just needs a break — but a significant one.
Ex, silver, along with gold, is actually the leader of the pack. Copper and commodities in general are the ones that played catchup. The monetary metals are the first movers “canaries in the coal mine” because monetary shenanigans drive inflation.
Silver and copper bottomed during the same week in mid March, 2020 and both went on to similar gains (160% for silver and 148% for copper). The difference is that copper took exactly three times as long to deliver its gain(!), 60 weeks vs 20 weeks. The monetary metals blasted off and then the whole commodities complex enjoyed the rotation away from the first movers.
Copper has a lot of downside so I doubt it will see $5 next year. If doesn’t fall as much as I think it will, it will probably take longer to bottom. The weekly chart is extremely unappealing for buying OR holding…
Sounds good Matthew. Thanks for sharing that Copper chart and your perspectives, and I’m looking forward to Silver leading the pack higher.
Lior Gantz: Silver’s Time for a Substantial Rally has Come
Palisade Radio – Nov 5, 2021
Time Stamp References:
0:00 – Intro
0:29 – Gold & Higher Rates
8:16 – Silver Drivers
15:17 – Fed & Inflation
25:28 – Dual Inflation Concept
29:32 – Blow-Off Top?
33:50 – Comparing Crashes
39:18 – 2nd Term For Powell?
42:44 – Wrap Up
Glenn Jessome (CEO of Silver Tiger) sat down with Rob Kientz and Dave Kranzler of Investment Research Dynamics to discuss: “The Case For Triple Digit Silver”
Shites! Thanks Matthew
It’s an honest chart and that’s one nasty fall coming… I do have two copper plays that have done me well. I may sell I to this very soon.
I’m a different note folks. Gold is going up to capture that liquidity I spoke of and it’s like a magnet. I like what in seeing with gold and more specifically the miners.
Mon. am Aussie U miners mostly down 1-3% except for BOE up 3%.
Phosphate miner AEV down -8%
Gold miner EVN starting to move +5%
Can’t always be up but appreciate the updates as I get my morning started……I see the infrastructure bill passing has had a nice effect on the charging station stocks…..you are the king of technicals here Matthew so I won’t disagree with you on the copper call but I will say that fundamentally the argument is there for +$5 copper between EV and infrastructure for EV….. it astounds me how many people think charging stations will not be profitable as these people all feel that all the charging will be done at home….eventually people are going to be traveling across the country in EV’s so charging stations are a must.
Agreed and good thoughts Wolfster.
Wolfster, copper will go way beyond $5, it just looks like it needs a break first. It has already corrected 19% since making a new all-time high in May and it looks like it has more to go. BUT, if this is a repeat of 2004 (when it hit 1.40 and pulled back 20% to 1.12), it COULD rise 250% from here without going lower first. That just doesn’t look likely on the current chart, at least for now. When I say it looks extremely unappealing, that’s simply a risk-reward assessment, not a declaration that it can’t shoot higher. This is an odds game across timeframes and copper does not look enticing now, especially with the silver-gold market shaping up as it is. Gold is 15 months past its new all-time high and I doubt that anyone thinks it is not going much higher. It’s the same for copper. It will go much higher when ready. The quarterly and yearly charts are in harmony with your bullish fundamental outlook. Just keep in mind that very unpleasant corrections can happen without threatening those very long term perspectives. In fact, corrections usually make them better. Gold’s quarterly chart looks better now than it did 15 months ago. It’s had a sort of reset but without suffering net damage. Smart money can buy now with confidence but would have avoided it at the same price in October 2020.
Thanks for the clarity Matthew. As I said I’m never debating you when it comes to technicals. Yes I can see and agree with the breather and do agree that right now the gold/silver plays have a far better risk/reward ratio than copper.
Apparently the US and Canadian Uranium miners are doing much better today than the Aussie Uranium miners, as most of them are up 2-4% today.
Nice to see more green on the screen for the U stocks.
(DNN) Denison is up 4%
(UUUU) Energy Fuels is up 2.6%
(URG) Ur-Energy is up 2.6%
(UEC) Uranium Energy Corp is up 3.5%
(NXE) Nexgen is up 1.6%
(PTU) Purepoint Uranium is up 7%
(CCJ) Cameco is up 1.3%
(EU) enCore is up 1.5%
(UEX) UEX Corp is up 1.9%
Now NXE NexGen is up 5%
URG Ur-Energy is up over 9%
UEC Uranium Energy Corp is up 8%
UUUU Energy Fuels is up 3.8%
Gotta love these U-stocks continuing to climb higher… 🤑
Big weekly bull hammer for silver:
Eric Sprott Announces Holdings in Kootenay Resources Inc.
SVM -6% premarket. What’s that about?
I show SVM up + 1% in the premarket Terry.
(SVM) Silvercorp Declares Semi-Annual Dividend of US$0.0125 Per Share
– Nov 8, 2021
In the normal markets now SVM is up 2%. I guess “what it’s all about” for Silvercorp is recognition of another solid quarterly operations report being digested by investors, after it was released late Thursday last week into a 6% gain on Friday. 😉
(SVM) Silvercorp Reports Adjusted Net Income of $13.6 Million, $0.08 Per Share, and Cash Flow From Operations of $30.9 Million for Q2 Fiscal 2022
– 4 Nov 2021
Started Monday with running the same old algos. Half up, half down. However, all futures positive so I am going to continue to ignore the criminals.
Looks like the set up from Friday, so maybe they will run the right day in a few minutes.
Remember when every time the infrastructure bill failed in the past and they took down the miners. What’s the deal today. Somebody forget to pick up their laundry and had to wear a plaid shirt with a tie
to work and got ridiculed? Some things never change.
So far… it’s been a positive day in the commodities sector. The greenback being under pressure is likely a tailwind.
Platinum up 2.58%
Aluminum up 1.35%
Copper up 1.26%
Silver up 1.16%
Nickel up .95%
Tin up 0.82%
Oil up 0.79%
Zinc up 0.73%
Palladium up 0.59%
Gold up 0.36%
Platinum…..vs…..Palladium… switched at birth…. lol
Haha! Good one OOTB! Let’s go Platinum!
We may start seeing a substitution of Palladium by Platinum if the arbitrage stays this extreme.
Mini intermission gold update!
Did not have time but good possibility of being capped for today around this region of $1826-$1828 and closing around $1822 but if not today tomorrow we will blast through to $1832-$1838 and really start cementing that idea in the worried investors that the market conditions have changed. I do believe however starting Wednesday possibly till next Tuesday we will have a mini good correction and the later half of next week which I mentioned last week “ third week of October will see a blast to the higher highs and really give us good good confirmation about we’re we are headed. Exciting times ahead
Anyone bought any NFGC today? A falling knife but may be near a bottom.
The market cap of New Found Gold was way up in the stratosphere, especially without having a resource estimate or any economic studies out yet, so it is more that realization settling in with overly enthusiastic speculators, and gravity to a more Earth-based valuation asserting itself.
Well NFGC was 12 last May and after falling to 5 is now 6. And Eric Sprott bought another 48 million bucks worth before the recent tumble. I am in at 2.70 but am tempted to buy a little more.
Whether it has a lot more downside or just a little, it looks like it needs more time before it will launch a new uptrend.
Thanks, Matthew. I already loaded up the truck with NFG last firstname.lastname@example.org, so I should probably wait to buy more, but this reminds me of PVG’s collapse several years ago when their assays were questioned. It was great time to buy.
Bonzo, that’s a great price!
My miners not part of the current universe. Someone is trying to get shares for covering themselves.
Thanks Matthew. Great chart.
Here’s another breakout:
Next week marks the passing of Murray(The Pez) Pezim, hall of fame miner and stock promoter. During his heyday his name appeared nightly on the business pages of the Vancouver Sun and more than 25% of all trades on Vancouver stock exchange were in shares of his companies.