Weekend Show – Isolating The Sectors To Be Invested In To Start 2022
So the start of 2022 has been volatile! We are seeing some new trends established (the rotation out of value toward growth) but as Dana Lyons states big swings are common in the first couple weeks every year.
Please keep in touch by emailing us at Fleck@kereport.com and Shad@kereport.com. My email is back up and working, sorry for any issues over the past couple weeks with emails bouncing back.
- Segment 1 and 2 – Mike Larson, Editor of The Safe Money Report kicks off the show by sharing his thoughts on a wide range of sectors. We start with the rotation into value stocks for US markets, the energy sector and gold market. Click here to keep learn more about the Safe Money Report.
- Segment 3 – Dana Lyons, Fund Manager compares the start of this year to years past in terms of volatility and money rotation. We then have Dana outline his favorite and least favorite sectors for early in 2022. Click here to follow along with Dana’s latest trading strategies.
- Segment 4 – Brian Leni, Founder and Editor of The Junior Stock Review shares a recent recommendation, G Mining Ventures (TSX.V:GMIN). We spend the full segment diving into the Company and it’s key milestones to watch. Click here to learn more about Brian’s Junior Stock Review investment letter.
Exclusive Company Interviews This Week
- Astra Exploration – Introducing This Pre-Listing Gold and Silver Explorer At The Pampa Paciencia Project in Chile
- Mako Mining – The 2022 Exploration, Development, and Production Growth Strategy
- Millennial Precious Metals – Focused in Nevada with 7 Projects, 2 Development Stage and 5 Exploration Assets
- Libero Copper – Drill Results From the Big Bulk Property and An Outline Of The 2022 Plans At The Mocoa and Esperanza Projects
- Kuya Silver – Recapping The Initial Resource Estimate at the Bethania Silver Project and 2022 Exploration and Production Goals
Thanks to all the KER guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Mike, Dana, Brian.
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Also thanks to all the listeners of the podcast, and those members of the KER crew that post and participate here on the blog, sharing insights with our community. Ever Upward!
10 Reasons to Be Bullish the Gold Complex in 2022
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David Erfle – Friday January 7th, 2022
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“The gold price has entered the new year by continuing to whipsaw investors on both sides of the trade. The first week of 2022 began with volatile trading on either side of the key $1800 level until the Federal Reserve minutes from December, released on Wednesday, pulled the rug out from under the bulls.”
“The gold price was sold down along with the stock market immediately after the minutes revealed that policymakers agreed to hasten the end of their pandemic-era program of bond purchases, and issued forecasts anticipating three quarter-percentage-point rate increases during 2022.”
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https://mailchi.mp/af9bbf9ad337/david-erfle-weekly-gold-miner-sector-op-ed-1600450
Uranium stocks go radioactive as Russia sends troops into Kazakhstan
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By: Yoel Minkoff – Jan. 06, 2022
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“Kazakhstan has the largest proven oil reserves in the Caspian Sea region and is a big crude exporter, but perhaps more important than global energy markets, the country accounts for around 40% of global uranium production.”
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“Stocks linked to the radioactive metal are climbing on the news as the situation goes from bad to worse. Shares of Cameco (NYSE:CCJ) is up 17% since the protests began, and is up another 4% premarket, while volumes of Sprott Physical Uranium Trust (OTCPK:SRUUF) has already eclipsed prior record highs.”
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https://seekingalpha.com/news/3785711-uranium-stocks-go-radioactive-as-russia-sends-troops-into-kazakhstan
Uranium Market Minute – Episode 59: Kazakhstan Unrest Intensifies
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Uranium Insider w/ Justin Huhn – Jan 7, 2022
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https://youtu.be/RNsDqJfR9-k
Unrest in foreign countries. Although this appears to be a political problem on the surface we see how it can quickly become a much more economic one. Politics and economics are strange bedfellows. As the economic troubles in America and elsewhere deepen, the threat of revolution in a country like Kazakhstan can have repercussions all over The World. Revolutions and the threat of revolutions (like those being stoked by the media at home) add to the general uncertainty and fear that can jeopardize all investments abroad and at home, with serious consequences. The chickens are coming home to roost. Remember The first World War was started by the assassination of Archduke Ferdinand in Sarajevo. DT
Geopolitical tensions that are building heading into 2022 have the potential to be a destabilizing force on economic stage as you pointed out. It will likely be a turbulent year in those regards.
Lobo Tiggre: Gold Catalyst to Watch, Why Uranium Could be 2022’s Star
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Investing News Network – Jan 6, 2022
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Lobo Tiggre, founder and CEO of IndependentSpeculator.com, explained how he expects the US Federal Reserve’s plans to play out, and how that could impact the metal’s path.
Tiggre also spoke about the uranium market, saying that if the situation plays out as he anticipates, the commodity could be the star of 2022.
#Investing #Gold #Uranium
0:00 – Intro
0:20 – Takeaways from the Fed’s latest minutes
5:47 – Gold, inflation and the path forward
12:33 – Potential headwinds for gold in 2022
16:19 – Gold stocks and Lobo’s shopping list
21:18 – Will Kazakhstan protests impact uranium?
25:38 – Utilities contracting in the uranium market
31:50 – Ongoing opacity in the uranium space
36:05 – ESG a key trend to take seriously
43:48 – Outro
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https://youtu.be/v_cdV3Kc8Iw
Precious Metals & Energy – Weekly Review and Outlook
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By Barani Krishnan – January 8, 2022
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“An inflection point is defined as a point of a curve at which a change in the direction of curvature occurs. In trading perspective, it’s the point at which your position could go in a way that lets you raise a glass in celebration – or groan at how you’ve dismally misread the market once again.”
“Gold is at such a point after settling Friday at just under the crucial $1,800 an ounce level, helped by a modest bounce on the day despite a near 2% drop on the week for its biggest weekly decline since November.”
“Yet, gold showed resilience in its latest session, indicating that it could be running on the steam of U.S. inflation, which was chugging at its fastest pace in 40 years. That not only makes the yellow metal an interesting trade but also one that’s getting harder to read.”
“Gold had a bad week, but it could have been much worse when you consider the 10-year Treasury yield went from 1.53% to 1.75%,” Ed Moya, analyst at online trading platform OANDA, said in a post on Friday just before the benchmark yield rate went to January 2020 highs of 1.79%.
“While gold labored below the $1,800 level and the 50- and 200-day Simple Moving Averages, “a continued selloff seems less likely”, Moya, said. But he conceded that “if bearishness resumes next week, buyers could emerge at the $1,770 area.”
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https://finance.yahoo.com/news/precious-metals-energy-weekly-review-074837965.html
Mike Rowe on record 4.5M quitting their jobs: This will impact ‘every single American’
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Jan 5th, 2022
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‘How America Works’ narrator Mike Rowe says blue-collar industries are struggling with how to make a more persuasive case on available opportunities.”
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https://youtu.be/iix6tWuJkxo?t=1
Most comments are likely by those who still have jobs or are retired. Just a few bring up a primary factor: jab mandates.
I always liked Mike Rowe’s program called “Dirty Jobs’. Most jobs these days are white collar. Gone are the days of dirty jobs since China took over most of the manufacturing jobs in the west. In my country they no longer offer technical trades to high school students. They believe that the past doesn’t have any relevance to the prosperity we enjoy today. China has destroyed our ability to refine rare earths, they are so critical to the new technology but we in the West refuse to see the importance of maintaining our advanced systems by producing the very products that make them work. Industrial production will continue to decline until we realize that we gave away the keys to our kingdom. Without manufacturing you will see bread lines forming down the streets. DT
Future archaeologists studying the extinction of homo westernus will scratch their heads wondering how we could have failed.
Otto (IKN) on Excellon
Ex, are you still invested? How do you see the situation?
Hi Thomas – No I’m out of Excellon, having sold most of it for a tax loss sale in July & August, and the tiny remaining portion in October (also at for a tax loss in 2021).
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I’d invited Brendan on the show to discuss their exploration results, strategy, and plans moving forward about a half dozen times and he declined the offer each time. I was looking at how oversold EXN was and read that same news release, and noticed some of the same going concerns at Platosa that Mark highlighted from that news as well. I know they were rebranding into more of an exploration focused company, but I was hoping they were going to find more ore at Platosa to really beef up production as well, and kept waiting to see if they’d kick on Evolucion as a second production center for the company (they had done some toll milling there previously), but it was ensnared in the legal challenges from the former company that held it and they apparently lost that legal case. I’m still constructive on Kilgore, but wasn’t aware of the permitting pushback that Mark highlighted, and would want more clarity on that from the company. The Silver City project still looks very interesting and prospective, but I was expecting a bit more news from all their exploration projects than what they put out in 2021. Some of that is likely not the company’s fault though, as assay labs are terribly behind almost everywhere.
EXN only $25 million market cap now
priced like an explorer
That is essentially the business model they are going after – more an exploration focus. I’d love to get an update on what they are going to do in 2022, and will keep trying to get them on the show for an update.
Some analysis of the Sandstorm Mercedes deal
https://seekingalpha.com/article/4478311-sandstorm-gold-buys-a-mercedes
As Equinox shareholder I agree that Mercedes was not a core asset. The deal probably was good at least for Equinox
Yes, as an EQX shareholder I liked it, but as a Nomad Royalty shareholder, I’m more concerned now about it transferring from a solid operator to an untested operator like Bear Creek, and now that Sandstorm (who I’m also a shareholder of) has their fingers in the royalty pie as well now, I worry that there may be too many royalties on Mercedes for Bear Creek to keep it going well. I was happier about Mercedes when Equinox was the operator, and Nomad had the only royalty.
I think Nomad would only hurt this and next year, if Bear Creek fails (see table below). For Sandstorm it looks different. Hope that Bear Creek keeps the current production. Nomad would be fine then. As Equinox took over Mercedes there was the potential of 80.000 oz/y. This probably requires a large drill campaign and Bear Creek doesn’t have enough money for this.
Year Revenue SAND NOMAD Equinox Elemental
2022 104 8 10.3 2.1 0.7
2023 118 10.7 8.4 2.4 1.2
2024 105 10.7 3.9 2.1 1.1
2025 69 8 2.0 1.4 0.7
Had a look on the Nomad stream. More than half of the cash flow comes from the gold stream that ends mid of next year.
2024 ($4 million) and 2025 ($2 million) are from the 100% silver stream only
If Bear Creeks exploration strategy works out, Nomad will be the big winner, because Mercedes has a large silver part and this goes 100% to Nomad until 3.75 million ounces (30% afterwards).
I like the deal, also as Nomad shareholder -:)
Yeah I’ve always liked the stream that Nomad had on it for just those reasons (especially the silver stream component), but my concern now is with Sandstorm having an additional stream on it (nibbling away at margins), that it may tax the project too much as far as profitability for the primary unproven operator Bear Creek. As you mentioned Elemental Royalties (potentially being taken over by Gold Royalty Corp?), also has a 1% NSR royalty on the Mercedes gold-silver mine, payable from the earlier of either a 450,000 ounces of gold production hurdle or July 28, 2022. I guess that means that one could lift off in the summer of this year, but again, it is just another mouth to feed taking money off the top of the project for Bear Creek, who is not nearly as well funded or insulated as a company as Equinox was.
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Those plans and projections for future years are just that, projections….and there are no shortages of issues and challenges that can befall operations as we all know. There are plenty of times we’ve seen a company lay out their projected production targets for future years, and then when we get there, they are way below that for a myriad of reason.
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Thus, my point being, Bear Creek producing from Mercedes may not work out quite so hot as anticipated in a few years if costs keep going up from inflation and rising labor cost, or if metals prices revert back down some in 2024 & 2025, crimping margins further with the royalties taking money out off the top. There are just a lot of NSRs on Mercedes now, and it was more reasonable for Nomad before Sandstorm was in the mix, and it was a better experienced and more well-funded operator with Equinox.
I agree that the chances that Bear Creek fails are higher than they succeed
But Bear Creek depends on it and has to spend more money than Equinox. If it works out, Nomad will have a nice silver stream. If not, in 2024 Nomad will have three Tier 1 projects coming online and Mercedes wouldn’t matter that much anyway.
Agreed that Nomad will be fine either way, and has enough other key royalties held by top notch operators, and even on Mercedes, that silver stream, in addition to the component on gold, should still be a nice kicker.
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My concern was simply that Bear Creek would have it’s work cut out for it as a development company taking on production for the first time, like we’ve seen over the last few years with other companies that made a similar transition from developers to producers – like Pure Gold, Novo Resources, Harte Gold, Alexco, and Northern Vertex.
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Having all the extra royalties in the mix only reduce the margins further, which isn’t as big of a deal for a diversified mining company like Equinox, but more material for a 1 project producer like Bear Creek will be. I still believe Bear Creek can be successful, maybe even wildly successful if the metals prices move higher expanding their margins, and because Mercedes was already in production and humming right along. In that sense they are hitting the ground running, and it will be interesting to see if they can keep that sprint maintained or even supercharge it.
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However, it’s important to also consider the potential future risks, and with a 1 mine producer, that hasn’t been producing, then the risks are already higher. I’m wishing (BCM) Bear Creek Mining all the best though, and maybe we should reach out and have them on the show to unpack their business plan for 2022.
Thomas – I was just clearing out emails and saw one on Seeking Alpha from Itinerant regarding Sandstorm’s royalty on Mercedes to help finance the deal for Bear Creek, and was going to post it and then realized it was the same one you had already posted. Just right out of the gates in the summary portion he states this:
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“The package consists of a gold stream and debt, and it creates one of the most encumbered mines we are aware of.”
“This is a high-risk deal, and we fail to see the potential for high rewards.”
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> Yep.
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https://seekingalpha.com/article/4478311-sandstorm-gold-buys-a-mercedes
Nolan must see some potential – otherwise he wouldn’t have done this deal
There isn’t a question about whether the deal was good for Sandstorm (it is). I’m a huge fan of Nolan Watson, and a shareholder of SAND Sandstorm (it’s been one of my top 3 heaviest weighted positions all year long even when trading around the core position). Having said that, Nolan and the team at Sandstorm have not been immune of executing bad deals for shareholders in past years, so they are not batting 1000 or even close to it.
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The issue is whether all these net smelter royalties from Nomad, Elemental, and Sandstorm, in addition to the debt load, may be incumbrances on Mercedes profitability for Bear Creek, and thus a going concern as to whether it will perform as advertised in the years to come. Maybe it will blow everyone away with how amazingly it performs, and hopefully for all parties that is the case, but to not acknowledge the risks to Mercedes now, with yet another royalty on top of production, would be near-sighted.
As always another great week of info gentlemen….tough keeping up with things as there’s so much good stuff….along with Doc Jones I’ve also come across another gentleman who’s track record seems solid, Michael Gentile….I’m sure some here are already aware of him but for those who aren’t here’s a recent interview with him…sorry about the host on the interview.
https://m.youtube.com/watch?v=dNhwy3AGjKI
Thanks Wolster – we appreciate getting comments like that from the KER crew. Yes, Doc Jones is a sharp guy and friend of the show. As for Michael Gentile, yes, he is a prolific resource investors, and similar to Dave Lotan that we have on the show from time to time. Both guys are a wealth of information. Maybe we can work on getting Michael on the show, and get an update from Dave soon as well. Cheers!
Dollar Week : Uncertain Direction : Gap Will Fill
https://saturationtiming.blogspot.com/2022/01/dollar-week.html
The dollar has been one of the more difficult assets classes and currencies to call for a number of years now. There has been no shortage of raging dollar bulls expecting 110+ and also dollar bears expecting the low 80s, but it’s just channeled mostly in a range between 89 and 98 for a long time (barring that weird pop during the pandemic flash crash in 2020).
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The issue is that the dollar index is weighted against a bunch of other even more worthless fiat currencies, in a race to the bottom, so the greenback stays elevated in comparison to the Euro or Yen or Canadian Dollar etc…
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Thanks for the chart though BDC. Much appreciated!
I agree, the direction is uncertain, at least short term. It looks due for a multi month correction or consolidation but I wonder if it can pop to 97-ish first.
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=5&mn=5&dy=0&id=p50620578325&a=932696065
Thanks for that dollar chart Matthew.
Ditto. The key thing to understand about the global reserve currency (as long as it remains so) is that all significant gaps are filled, short term or long term. This knowledge is especially helpful for swing trading.
Good point BDC. Most gaps do tend to get filled (but not always), but it is very help for anticipating how to swing-trade the markets. I don’t normally swing trade currencies, and don’t do much with Forex trading, but still, I’ve watched both bears and bulls get bulldozed in the US Dollar over the last 5-6 years, and it has been a very difficult market to call, because it isn’t like a free-trading company or even ETF, and as mentioned, one has to factor in how the other fiat currencies are reacting in a tug-o-war counterbalanced against the Dollar in the USDX. It has mostly whipsawed in a range, except for the pandemic crash pop it got in the spring of 2020.
Ex, I don’t trade the Dollar either, but always monitor its moves because, all other things being even, other asset classes will move inversely to it. This is natural, and has little or nothing to do with their true quality.
Absolutely BDC. We follow the dollar closely on the show as well, simply because, so many assets and even globally traded assets are priced nominally in Dollars, so it is very germane as to how the dollar is trending as to whether other asset classes have headwinds or tailwinds.
Worth Mentioning:
I was listening to an interview of Doc Jones this week concerning his core investments and how he approaches investing.
He was asked a question as to whether he seeks out other sources of information and he specifically mentioned (paraphrasing) The Korelin Report with Cory and Shad. He said he checked it everyday and tried to read/listen to as much of the content as possible. He highlighted the content and quality of the material provided.
Doc is very thorough and factual in everything he does and has moved up in popularity on the Ceo.Ca Community list because of his contributions.
His compliments of Cory and Shad are strong endorsements and views shared by most everyone that has the opportunity to visit the site.
Wolf,
I’ve listened to Michael before thanks for this. Ive listened to this video previously and funny enough I really enjoy Peter Grandich he is as honest as they come imo and I don’t know him personally but he strikes me as such. I tend to lean towards the more senior callers as that wealth of knowledge is second to none.
Peter grosskopf is probably now one of my go to guys and a must listen. Well rounded and in tune with todays markets and developing world yet has been around for a very long time and puts things well into perspective.
Hey Glen. First off…appreciate and do see and read your posts and comments..don’t usually respond as I see them days later(usually weekends) and know you won’t see them by then…
Yes I give Grandich credit for being humble. He mentions losing a lot in the past cuz he had too much faith in management that didn’t have great past success. Donner Metals is one and I lost a lot on that one too..yes everyone has to start somewhere but one thing I think most of us here have learned is that our investment odds improve when going with an established successful management.Same goes for any investment advisor/stock picker. Hard to argue with the past 2 years of someone like Doc Jones. Will definitely have a listen to Peter Grosskopf despite my knowing German and what his last name means in English……big head. 😉
Haha,
Yes I understand plenty amigo I never take offence if not responding but I know you read as I do 🙂
No doubt doc is a smart lad as are many in here as well.. I listen to him from time to time so im not discounting him 🤠.
Yes in this business you lose some and win some and ultimately I always point the finger at myself for either having listened for to long lol or not doing my homework. Sometimes unforeseen events happen that don’t allow you significant time to cut losses.
To funny on the big head lol…
Cheers amigo
Thanks Lakedweller2 for that report back on the Doc Jones interview. I hadn’t heard that interview you mentioned yet, but that was a very nice comment he made, and we also appreciate him spending time with us and the audience here at the KE Report. Most of his picks for 2021 outperformed the rest of the sector, and his due diligence is hearty and deep, and he’s a very sharp guy that I learn from all the time. I love it when folks work together to share insights and ideas and we are all more well-informed as a result. Ever Upward!
Lakedweller, good mention of the ceo community list. I’ve had success over the years using it as an indicator. In less than a year Doc Jones has moved up to 3rd most followed.
People are followed for a reason…just as Excelsior is followed here.
More good news on the way for Emerita.
Much appreciated blazesb. Yes, I also use that community list over at ceo.ca to search for interesting posters and go down new rabbit holes of thought and which companies they are following. Some of the users are more geared around cryptos, or tech companies, or cannabis/psychedelic therapies, or other biotech, etc… Yes, Doc Jones has risen on that list, and we are blessed to have him visit the show from time to time. Also Goldfinger (Robert S) is the #1 most followed at ceo.ca, and very nice to have him spend time with us fairly regularly, along with LucTenHave and HHorseman (Erik W.). There are a few other solid contributors there that I’m researching to see about getting them on the show down the road as well.
Thanks for the show and lately all the uranium, and energy talk. Also Dan mentioned battery or lithium to be more precise and shared a company. Thanks for that as well! I think most commodities will do well however then if ones that we know of are due for there moment and I think time favors the miners..
I remain bullish and the possible one or two rate hikes the fed may do has already been factored in the charts imo. We wait and see
Best of luck to all!
Glen
Thanks Glenfidish, and yes, Uranium and the Energy space in general has been more fun over the last year than the PMs, but hopefully gold and silver have a better 2022. Some of the standout sectors for me in 2020/2021 were with the Energy Metals like Uranium, Lithium, Nickel/PGMs, Copper, and a limited Oil/Nat Gas focus. I enjoyed the Sean Brodrick segment this week, where he covered where solar is positioned, and I’ll likely be adding back to my renewable energy positions in 2022. Cheers!
40 years of quarterly gold vs Dow:
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24INDU&p=Q&yr=40&mn=11&dy=0&id=t0455022061c&a=733535018&r=1641675282918&cmd=print
I’m anticipating that Gold will start to gain on the DOW over the next 5-10 years, and appreciate you doing the print screen version of those quarterly charts Matthew.
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I thought Steve Penny’s Gold:Dow and Silver:Dow charts on his editorial earlier in the week, along with his comments in those regards were solid, and really resonated with his general longer term thesis.
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http://www.kereport.com/2022/01/05/steve-penny-provides-technical-analysis-and-charts-on-platinum-gold-silver-the-dow-and-copper/
I hope that print feature keeps working. I’ve had it work and then not work in the past.
The silver-gold ratio topped at an interesting level this month and looks like it will go lower for awhile. That’s not ideal for the whole sector but both metals could easily rise versus the dollar as silver struggles versus gold.
Monthly Silver:Gold
https://stockcharts.com/h-sc/ui?s=%24SILVER%3A%24GOLD&p=M&yr=20&mn=5&dy=0&id=t9396082634c&a=1085283842&r=1641692452743&cmd=print
I wondered why I could all the sudden view your quarterly charts. Now I know!! Agree with Ex., thanks for the extra effort! 🤩
I’m glad they’re still working but I see that they have already changed in appearance/format since I first posted them.
As a test, here’s a quarterly USD chart:
https://stockcharts.com/h-sc/ui?s=%24USD&p=Q&yr=50&mn=0&dy=0&id=t5231978694c&a=1094350606&r=1641774416070&cmd=print
The 196 quarter moving average that you see in the upper left corner of the chart is so newly defined that it didn’t exist last quarter and is still invisible on the chart itself. (Change the 6 to a 5 and you’ll see the longest visible quarterly MA, but just barely.) The MA’s appearance on the scene just days ago is interesting because it equals 49 years which is the Jubilee cycle.
The monthly Canadian dollar chart looks good:
https://stockcharts.com/h-sc/ui?s=%24CDW&p=M&yr=16&mn=0&dy=22&id=t8468456982c&a=387462925&r=1641776263407&cmd=print
I’m sorry Matthew, I don’t see what I am supposed to change from 6 to 5?
Charles, it’s not important but I was referring to the 6 in the 196 MA. Only “Pro” level stockcharts subs can make the change.
The extremely bullish potential of gold’s huge cup with handle pattern is perfectly intact. Here’s a 25 year quarterly look:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=Q&yr=25&mn=0&dy=0&id=p73003728483&a=906048672&r=1641675689682&cmd=print
Looks like they took a shot at taking it down a few days ago at the big red candle and cross-over. But it looks done and ready…if nothing else interferes.
If you are referring to the chart directly above, remember that it is a quarterly chart. Each price candle (except the current one, of course) represents a whole quarter/3 months.
Here’s a daily chart. Notice the lower Bollinger band support essentially at Larry’s 1770 level…
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=0&dy=0&id=p10085360662&a=537266072
I was looking at it as a daily chart. It is better as a quarterly. Thanks for getting me straightened out. And thanks for all the individual charts below.
With my ‘Crow Line’ method the uptrend line is dropped slightly to the 2018 low because of the break. Breaks behind are allowed, but not ahead (exponential charts cannot show this): https://saturationtiming.blogspot.com/2021/10/the-crow-line-gold-must-hold.html
The 2008 C point based Crow Line held precisely in 2018. CL(1999-2018) must hold!
Up or down, the biggest and most protracted moves happen when the biggest charts are technically supportive of the move. For example, even the monthly sell signal of 2012 and monthly buy signal of 2016 led to modest moves when compared to the quarterly sell signal of 2013 and quarterly buy signal of 2019.
Today, the quarterly chart remains on a buy signal despite the monthly sell signal of a year ago. If gold can get its next monthly buy while the quarterly is still a buy, we could easily get a multi quarter move to the $3,000+ target of the cup with handle pattern. The yearly chart is perfectly supportive of such a move but the sooner it begins the better (from a monthly/quarterly perspective; it doesn’t have to start next week). The cup with handle pattern will not benefit from more downside or time but if it does lose its integrity, I still see $2700-ish as the minimum upside for the next move.
Monthly:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=M&yr=15&mn=0&dy=0&id=t1483403639c&a=1093801989&r=1641679571562&cmd=print
Nice chart Matthew. How about a review of your favor junior silver miner charts plus an update on Group Ten. Thanks!
Charles, I think Group Ten has probably seen its low along with SILJ, GDX, etc.
https://stockcharts.com/h-sc/ui?s=PGE.V&p=D&yr=1&mn=1&dy=0&id=p69066008044&a=1057182296
I’m less sure about Impact but it is probably within a cent of a low.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=0&dy=0&id=p20068644721&a=1069198996
Okay, maybe a cent and a half…
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&b=5&g=0&id=p18849717685&a=1045124498
Matthew – Thanks for those charts on PGE and IPT. I’m looking for both to break out to the upside this year, and they are both more heavily weighted positions in my portfolio.
Thanks Matthew. How about AXU and KTN?
AXU looks good. Watch 1.80 as it will really move once above it.
https://stockcharts.com/h-sc/ui?s=AXU&p=D&yr=1&mn=3&dy=0&id=p87846602081&a=709369195
Kootenay’s negative action of the last two weeks happened on such low volume that I wouldn’t read too much into the resulting bearish oscillators. I believe it will act just fine when silver gives it a reason to rise.
https://stockcharts.com/h-sc/ui?s=KTN.V&p=W&yr=6&mn=2&dy=0&id=p02009661205&a=1021253247
Still, it will probably drop at least another cent…
https://stockcharts.com/h-sc/ui?s=KTN.V&p=D&yr=0&mn=9&dy=0&id=p52385365193&a=1057222783
Impact (ISVLF this time) just looks weird and mixed. Being the bellwether that it often is, perhaps that weirdness is a sign of uncertainty across the whole sector.
https://stockcharts.com/h-sc/ui?s=ISVLF&p=D&yr=1&mn=2&dy=0&id=p84774280721&a=649382878
I really like this long term Impact versus gold (GLD) chart…
Monthly
https://stockcharts.com/h-sc/ui?s=IPT.V%3AGLD&p=M&yr=17&mn=0&dy=0&id=t8722257294c&a=622553436&r=1641693029218&cmd=print
IPT vs Newmont is also an interesting indicator…
https://stockcharts.com/h-sc/ui?s=IPT.V%3ANEM&p=D&yr=1&mn=9&dy=0&id=p30720575260&a=1052961838
I’m also watching to see if AXU will end up putting in a large W-shaped double-bottom pattern (if it were to pull back down just a bit further), and the rally strongly from there (likely surprising many to the upside). Overall, I’ve very constructive on Alexco as a position-trade from current levels to higher levels over the next 12-18 months, and have added some to my position a few times over the last few months during the corrective move, so I’ll have more room to trim back in tranches on the way up over the next year and a half.
.22 is an important level for Brixton…
https://stockcharts.com/h-sc/ui?s=BBB.V&p=D&yr=1&mn=5&dy=15&id=p69348031494&a=875260720
Thanks. Forgot about Brixton!
Thanks for all the charts Matthew…covered all the usual suspects
Yes, thanks for the charts Matthew!
Matthew, the Gold chart shows much more bullishness than a ‘Cup & Handle’ pattern, which it is not (the 2020 ATH is significantly above 2011): https://www.investopedia.com/terms/c/cupandhandle.asp
I know that the prevailing definitions of the pattern exclude the pattern in question but those definitions are wrong in my book since they are arbitrarily selected and ignore nature, specifically, the fact that our universe is infinitely fractal. So when investopedia claims that the pattern is between 7 and 65 weeks or stockcharts claims the pattern is between 5 and 29 weeks, I know that both claims can be completely ignored. What matters is the shape, duration and depth of the handle relative to the cup and volume should increase substantially on the breakout above the handle’s resistance.
However, I agree that the setup is very bullish even if we ignore the pattern’s existence altogether.
I forgot to address the asymmetry caused by the right side being higher than the left. In my view, it’s close enough and probably even adds to the bullishness just as a H&S bottom that slants upward to the right is more bullish.
Stockcharts says: The perfect pattern would have equal highs on both sides of the cup, but this is not always the case.
Based on weekly closes, the 2020 high was about 7.5% above the 2011 high and based on quarterly closes, the difference was less than 7%.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=11&mn=0&dy=0&id=p94546471133&a=1094399582&r=1641780119773&cmd=print
If the next major high for gold is well below 2800 (say 2600?), then I would say that the pattern wasn’t the real deal. By “major high” I mean a high that lasts for well over a year and probably more like several years. So if gold were to hit 2500-2600 and then take a multi-week to multi-month break and then go on to a new high, the new high would be the major high I’m talking about, not 2500-2600.
That makes sense to me regarding the upward slope of the cup and handle and massive volume on the breakout being the tell. Hopefully not too much longer, but I will keep playing swings until then.
A bullish ‘swoop and go’ pattern has formed on the three decade silver chart, beginning in the 1980’s.
Heard that wrong, it’s actually swoon and go. She also mentioned if the pattern turns down then the Turtle Soup Strategy could be used.
‘Inflation Is Not A Bug; It’s A Feature’
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Jessie Felder – The Felder Report (01/08/2022)
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https://mailchi.mp/felder/inflation-is-not-a-bug
Don’t Expect ‘Old School’ Inflation Anytime Soon: DoubleLine’s Jeff Sherman
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Brian Sozzi·Anchor, Editor-at-Large – Tue, January 4, 2022
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“The days of sub 2% inflation — as measured by the Consumer Price Index (CPI) — look over for quite some time, thinks DoubleLine’s co-chief investment officer Jeff Sherman.”
“Sherman assigns the blame to the ongoing COVID-19 pandemic, and in part the extremely easy monetary policy employed by the Federal Reserve to gin up the economy throughout the health crisis.”
“I don’t think we are going back to the old school one and a half to 2% inflation because it’s permeated the psyche for a period of time. And so I think we are going to have to deal with higher levels of inflation, and the front end of the bond curve is telling you that if you look at breakeven spreads. Long-term still, you look at 10-year breakevens they are at 2.5%. It has priced in an elevated level of inflation for the next couple of years,” Sherman told Yahoo Finance in an interview.
“DoubleLine’s founder and CEO Jeffrey Gundlach told Yahoo Finance he is concerned about what the bond market is saying in front of rate liftoff.”
“We have the highest two-year yield of the past year. We have the highest three-year yield. We have basically a high on the five-year yield. And so what’s happening is the yield curve is sending a bonafide recessionary signal. You have interest rates going up at the short end and going down at the long end,” said Gundlach.
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https://www.yahoo.com/finance/news/dont-expect-old-school-inflation-anytime-soon-double-lines-jeff-sherman-171245919.html
I think the next big investing opportunity will not be so much in resource based stocks but in companies that can produce food and ship it out to consumers at a reasonable price. DT
DT – I’ve started nibbling at the company Organto that we’ve brought on the show a few times now, for those same reasons.
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http://www.kereport.com/2021/10/07/organto-foods-a-focus-on-the-high-margin-company-brands-relaunch-and-acquisitions/
Hi Ex, I know you are busy but if you have a chance check out KOMO Plant Based Foods, SYL YUM-CSE, https://money.tmx.com/en/quote/YUM:CNX/news/6314285887405408/Komo_PlantBased_Foods_Announces_Record_Revenues_in_December_with_35_Profit_Margin_Reported_Last_Quarter
Interesting DT. I’ve never heard of KOMO but it looks like they are generating good revenues based on that article you linked. Thanks for the heads up sir. My thesis on food companies is “People gotta eat!” 🙂
my conoco stock after three years is finnally showin g some profit . my food stocks are up some. rsh
Fund Manager Dave Kranzler’s 2022 Junior Gold Stock Picks
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Mining Stock Education – Jan 4, 2022
“Dave Kranzler is the editor of the Mining Stock Journal and returns to the program to share his 2022 junior gold stock picks. He also discusses his 2021 biggest junior gold stock winner and loser. Dave holds an MBA from the University of Chicago with a concentration in accounting and finance. Over the years he has worked in various analytic and trading jobs on Wall Street. For nine years of those years he traded junk bonds for a large bank. For the past 16 years, Dave has been an avid student of the precious metals markets and steadfast proponent of holding physical gold and silver in one’s portfolio. Currently, he co-manages a precious metals and mining stock investment fund in Denver. Dave’s stated goal is to help people understand and analyze what is really going on in our financial system and economy.
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0:00 Introduction
1:05 Dave’s 2021 biggest winner
3:37 Dave’s 2021 biggest loser
5:30 Mining stocks historically cheap relative to gold price
9:00 Mining stock pick #1
13:53 Mining stock pick #2
19:16 Mining stock pick #3
23:00 Are you hedging at all going into 2022?
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https://youtu.be/5X3968Nketk
Resource Sector Expert Jamie Keech Shares Where He Is Investing in 2022
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Mining Stock Education – Jan 6, 2022
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“In this interview, Jamie Keech shares where he and the Resource Insider group of accredited investors are investing in 2022. He also discusses his 2021 performance and shares his biggest mistake in the past 18 months. Jamie is a Vancouver-based financier with a background in mining engineering. Having worked on mining projects across the world, he is focused on providing catalytic capital to high quality teams in the mining and natural resources sector.”
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0:00 Introduction
0:57 Recapping Jamie’s 2021 performance
5:35 Biggest mistake in past 18mos?
10:26 Did you participate in 2021 uranium run-up?
11:11 Where Jamie is investing in 2022
17:10 Potential weaknesses/threats to your investment thesis?
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https://youtu.be/sRllRATZyfs
Mining Stock Investing: Hold Lots Of Cash
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Morris Hubbartt – Jan 7, 2022 – Super Force #PreciousMetals #TechnicalAnalysis #Video
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http://www.321gold.com/editorials/sfs/hubbartt010722.html
Ira Epstein’s Metals #Video (01/06/2022)
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Technical Analysis, Gold, Silver, Copper, Platinum
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https://youtu.be/LIjWu_F7xH8
It is worth notinig that Bitcoin is down over 39% in just 2 months, after dropping from the Nov 9th high of $69,000 to the price as of this posting around $41,902 on Jan 8th.
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We heard for most of 2021 that Bitcoin was the superior inflation hedge, that it was Gold 2.0, and that it would be 6 digits $200k-$300k by the end of 2021. While there are people quite disappointed with the performance of Gold 1.0 in 2021 (especially with the macro backdrop), it was still only down about 5% for the same period. In contrast to Bitcoin, there were not nearly so many calls for gold to go up 5-8 fold by the end of last year. Also, most currencies don’t drop 39% in value in just 2 months, so it’s pretty clear that Bitcoin, is still just a speculative trading vehicle… at least at this point.
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It is also interesting how bearish the gold sentiment has been and still is in the sector on a 5% move down in a year, compared to the forever euphoric hopium and uber-bullish sentiment in the cryptos, even despite a 39% crash from the all time high in from early November to early January. Human psychology… You gotta love it!
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https://www.coinbase.com/price/bitcoin
Hey Matthew thanks for all those charts as well! There very helpful personally in comparing what i have and getting your values perspective.
Those quarterly charts are very telling and I’m glad you posted them. Being a stockcharts member like yourself I’m more use to the background and visuals and it’s more appealing to my eyes then some of the other pundits charts. Not that there work is not valuable it’s just preference.
With all that being said I echo wolf in regards to touching base with most of the talked about miners. Could you when you get a chance give us a fork on long term Scorpio and short term view. I think Dt spoke about the current weakness and a bit baffled why stuck at this region
Thanks
Scorpio looks fine. The recent swing to the downside is consistent with the current sentiment throughout the sector. It will probably get moving with a close at .12 and a monthly close at .17 should really unleash it.
https://stockcharts.com/h-sc/ui?s=SGN.V&p=M&yr=12&mn=0&dy=0&id=t5257056021c&a=1094381726&r=1641777200442&cmd=print
Unleash it! Lots of rabid mining stocks running loose on Bay and Howe Street.
Ominous? https://postimg.cc/K4k6yXMG
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Friday’s MaxSat(7) is augmented by full saturation in both Weekly and Monthly time frames (not normally included in STATS analysis). Also reached was a Chapman Wave F level, which often will conclude a trend. Note the (often finalizing) 27.2% line above the current ‘box’ (hash blue).
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As explained by Tom O’Brien (TFNN), the 3 Gap Play, where 3 significant gaps have occurred in a short period, can be followed by a rapid closing of them all in one move. If so here, TNX would fall to around the 15.00 range.
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What could cause this?
Doc’s been pretty quiet lately….Doc, Jordan’s thoughts is that we might see a bottom for Gold in March/April of $1650 or so. That would potentially be where the 40 week moving average would meet a Fed rate hike….thoughts?
Nawanda, I believe Jordan’s thought patterns recently are the odds on favorite. Whether we reach $1650 or another lower price number in the grand scheme of things is unimportant since the general trend for gold is still lower from here. I mentioned on my last commentary 2 nuggets: 1. The monthly BBs are now narrowed enough that in the first quarter we should see a fairly significant break of gold either way with probabilities favoring a move down. 2. I’ve rarely ever seen a long term move down of any asset class on the monthly chart where pricing doesn’t ultimately challenge the lower BBs and/or the 50 month MAs. We haven’t seen that yet. That should give you a hint on what my thoughts are for the next 2-3 months.
NatGas may have a blow-off top tomorrow into Tuesday.
Deja Vu algos. Perception is everything.
Gotta love these tailor-made tales for sheeple.
Fed Unites Left and Right in Warning It’s Behind Inflation Curve
https://finance.yahoo.com/news/fed-unites-left-warning-behind-140000058.html
“Powell, a Republican, won favor from Biden and some other Democrats for his emphasis on the importance of the Fed achieving maximum employment that is broad-based and inclusive.”
🤪😂🤣
I’ve got a larger portfolio of stocks in my trading account (note: not my retirement account), and decided this evening to take inventory of where everything was allocated on a percentage basis. This is the most overweight I’ve been in PMs in years… far too overweight in gold stocks in particular…
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It would be interesting if anyone else wanted to share how their portfolio was allocated on a percentage basis.
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____________________________________________________________________________________________________
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Gold stocks – 42% (24% producers, 14% developers, 4% explorers)
Silver stocks – 28% (18% producers, 6% developers, 4% explorers)
Base Metals – 11% (Copper 5%, PGMs 3.5%, Zinc 1.5%, Nickel 1%)
Royalty companies – 10%
Uranium stocks – 7%
Misc (Cannabis, Rare Earths, Food, etc..) – 2%
I guess in looking at this data, over time I’ll likely reduce down a great deal the gold allocation, (ideally closer to 25% of the portfolio), and I’ll likely increase other sectors like renewable energy, oil/nat gas, larger cannabis exposure, larger uranium exposure, larger base metals exposure (mostly in copper & PGMs), possibly get back some lithium exposure, add back some crypto exposure, and maybe even some fertilizers.
I’m equal weight gold, silver, uranium, all being producers, but I keep about 65% cash give or take. This cash is usually committed in writing cash secured puts which is a part of my income.
Terry – Thanks for sharing your portfolio breakdown. That is a healthy cash position, and interesting strategy on writing the puts.
Hey Ex….mine was similar to yours until recently adding adding oyl and gasx from Doc Jones list which got my pm exposure down a bit. Also my pm exposure is more 50/50 between gold and silver
Interesting Wolfster. Yeah, I had some GASX and some ITE a few months back but already traded out of them. I need to earmark some funds for Oil/Nat Gas/Oil Services in the portfolio again, and maybe get a 5% weighting in it, as well as a 5% waiting in renewables, 5% in Lithium again, and then take Uranium from 7% back up to 10% again. That would give me about a 25% weighting to the overall Energy sector, so that is my goal over time to get it around that.
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I’d like to get my gold/silver more 50/50 like you mentioned as well. (ideally 20% of the portfolio each, and then maintain the 10% position in PM royalty companies).
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So 50% PMs, 25% Energy, 15% Base Metals, 5% Crypto, 5% Cannabis & Misc sounds like a better ratio.
Bitcoin doesn’t look good but is oversold so maybe the bulls can get a bounce going…
https://stockcharts.com/h-sc/ui?s=%24BTCUSD&p=D&yr=1&mn=0&dy=14&id=p40902141731&a=1013900351
BC probably won’t be getting any help from the stock market since both are suffering from risk aversion at the moment.
https://stockcharts.com/h-sc/ui?s=%24COMPQ&p=W&yr=3&mn=11&dy=0&id=p46015754040&a=942652907
Ex
Wondering the following. Not sure if this is your wheelhouse.
1. EV Ni supposedly has a premium to regular pig nickel. Any idea how much if any
2. Nickel inv are just about at a level using 5 numbers instead of 6. Any idea what % that the 2 nickels take up and the breakdown.
3. Apparently pig has technology now to turn into EV. Any idea of the cost of that change
4. A few years back nickel was goig to become a bigger player % wise in the battery composition. Is that still happening.
I appreciate any answers you might have to the questions in advance and enjoy your posts
mb
Hi Monty. I’m not a nickel expert, and don’t know what premium battery grade nickel sulphate fetches over nickel briquette, but there is a spread there for sure (often about 1/4 less for the pig nickel). Yes, there are several Chinese firms that claim they can upgrade pig nickel to battery grade nickel fairly cheaply, and for a while a year or so ago, people thought that was going to be big disruptive technology, but I’ve not read or heard any updates on it taking the industry by storm at this point.
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When we have Martin Turenne on from FPX Nickel, I’ll ask him those questions of yours (he has covered the topic some last year in prior interviews, but more around available supply and demand, nickel sulfide vs nickel laterite deposits, and like all commodities the pricing is always in flux — so I don’t know what it is in Jan of 2022). I saw some Chinese data that quotes of battery-grade nickel sulphate stood at 40,000- 41,500 yuan/mt 2 weeks ago, and that the average weekly premium of battery-grade nickel sulphate over nickel briquette was 9,000 yuan/mt last week.
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As for it’s use in batteries, it depends on which ones you mean, and for what applications as there are a number of different types and applications. Suffice to say there are still many batteries in use and not likely to replaced anytime soon with healthy amounts of Nickel… much more than the Lithium or Cobalt needed, and that seems likely to be the case for a number of battery applications. Battery tech and energy storage will be an interesting to follow the market continues to evolve with new innovations or adoption.
Here’s some interesting data from the Nickel Institute:
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“Nickel (Ni) has long been widely used in batteries, most commonly in nickel cadmium (NiCd) and in the longer-lasting nickel metal hydride (NiMH) rechargeable batteries, which came to the fore in the 1980s. Their adoption in power tools and early digital cameras revealed the potential for portable devices, changing expectations of how we work and live. The mid-1990s saw the first significant use of NiMH batteries in vehicles in the Toyota Prius. Around the same time, the first commercial applications for Li-ion batteries emerged, initially in camcorders and eventually finding their way into smartphones, laptops and the numerous other portable devices we now take for granted.”
“The major advantage of using nickel in batteries is that it helps deliver higher energy density and greater storage capacity at a lower cost. Further advances in nickel-containing battery technology mean it is set for an increasing role in energy storage systems, helping make the cost of each kWh of battery storage more competitive. It is making energy production from intermittent renewable energy sources such as wind and solar replace fossil fuels more viable.”
“In tandem with this increasing market share, battery technology is also advancing, another reason why the proportion of nickel-containing Li-ion batteries in use is set to grow. Two of the most commonly-used types of batteries, Nickel Cobalt Aluminium (NCA) and Nickel Manganese Cobalt (NMC) use 80% and 33% nickel respectively; newer formulations of NMC are also approaching 80% nickel. Most Li-ion batteries now rely on nickel.”
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https://nickelinstitute.org/about-nickel-and-its-applications/nickel-in-batteries/
Thanks Ex.
Some up..some down. Same programs, same algos…same corruption.
KTN and IPT both fell further by the amounts that I guessed they would and now I’m guessing that both have bottomed since the odds are very good that the larger gold and silver miners have bottomed.
SILJ turning up from two fork supports…
https://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=0&mn=9&dy=0&id=p26187802771&a=1094836777
The party will really begin after GDX/GDM have risen another 30% from here.
Monthly:
https://stockcharts.com/h-sc/ui?s=%24GDM&p=M&yr=18&mn=0&dy=0&id=t6528445926c&a=521133986&r=1641849778510&cmd=print
The silver breakout of a lifetime is also no more than about 30% above and quite possibly more like 15%.
Monthly:
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=M&yr=50&mn=9&dy=0&id=p51898111861&a=1094869800&r=1641850693224&cmd=print
The situation is similar for silver priced in gold.
https://stockcharts.com/h-sc/ui?s=%24SILVER%3A%24GOLD&p=M&yr=50&mn=9&dy=0&id=p67895671104&a=731268300&r=1641850428069&cmd=print
IPT has now filled its large 3% gap versus SILJ from January 4th so don’t be surprised if it suddenly goes back to outperforming that ETF very soon.
https://stockcharts.com/h-sc/ui?s=IPT.V%3ASILJ&p=D&yr=1&mn=1&dy=13&id=p51255667453&a=1094888246
The final half-hour of the day delivered a 30 minute MACD buy signal for IPT.
Let’s see if this 30 minute chart works:
https://stockcharts.com/h-sc/ui?s=IPT.V&p=30&yr=0&mn=0&dy=18&id=t3750568943c&r=1641853265333&cmd=print
Oh well, it looks like that did not work. Most of you will see a very short daily chart intead.
This chart stuff is lost on me so I just follow what you say and rely on the expertise. I watch IPT closely and it seems the lights went on there recently.
IPT is one heckuva bargain here unless silver is about to have a huge plunge. Few juniors have a more appealing risk-reward profile.
Thank you for the show!
Re: Dana Lyons, it’s important to often ask yourself the simple question “What if I’m wrong?” (while completely alone) — from your mind’s inner sanctum to its mental mirror.