Robert Sinn, AKA Goldfinger – As The Market Focuses On Rate Hikes How Much Lower Could Gold and Silver Go?
Robert Sinn, AKA Goldfinger joins us to share his outlook for gold, silver, base metals and US markets. As investors have clearly switched focus away from the war in Ukraine and towards rate hikes, pretty much everything except for the US Dollar has been selling off. Gold sold off over $100 in 6 trading days and the stocks were hit even harder. As many recession and market collapse forecasts we here it might take a while for these to play out.
I had a pretty active day selling 4 positions, and adding to 6 positions, and starting 2 new positions.
Hi Ex, I like to see what others are buying and selling, could you reveal what you were trading today and why? That may sound like a tall order for some but I don’t think it would be for you. DT! 😎
Sure DT. Always happy to discuss trading mining stocks.
I sold my position in Galiano Gold (GAU) as a dog for tax loss purposes. I kept thinking it may be a takeover candidate for a larger producer to scoop up and put them out of their misery, but they’ve been missing guidance, and performing terribly. Considering much better run companies are selling off the last week or so, it seemed time to cut bait on that one.
I sold my position in Galane Gold (GG) which was up nicely in the green, and since I had a nice trade in it, I’m using those funds to fuel other trades I think may perform better.
I sold my position in Liberty Gold (LGD) because it has performed terribly, especially lately. The Black Pine deposit is very well endowed, and at one point I had very nice gains in it, but they have not building shareholder value for a while now. My expectation was that a mid-tier producer would buy out this project over a year ago, but it has remained on the shelf. I still think it may get taken over, but this was a bad trade for me, and I’m taking the tax loss now, and may buy back in after the 30 day wash period is over.
I sold my tiny tracking position in Empress Royalty (EMPR) because I’d rather fortify my Maverix (MMX) and Nomad (NSR) positions instead. Also I picked up Star Royalties (STRR) last month as a newer royalty position, because they are branching out into carbon credits, and I feel have a stronger more experienced team than Empress.
I started a new position in Aris Gold (ARIS) with an initial tranche, after having been out of it for about a year, because I like some of the acquisitions they’ve been doing as of late, and feel with their board of directors that there is more to come on that front.
I started a new position in Atico Mining (ATY) today, after having sold it back in early 2021 at a much higher level. It’s really been beat up, and they had some challenges over the last 2 quarters with operations, but in reading their press releases, most of that is behind them, and the unusual rain challenges for 2 quarters is unlikely to hamper them moving forward, and they’ve fixed some operation issues. They are a small copper & gold producer, and I wanted another smaller copper producer in the mix and they’ve been beaten up enough to make them rather attractive for a turnaround play IMO.
I added to my positions in Alexco Resource (AXU), Silver Tiger (SLVR), McEwen Mining (MUX), Emerita Resources (EMO), Wallbridge Mining (WM), and Coeur Mining (CDE) today. In addition, I added another tranche to the Global X Cannabis ETF (POTX).
So… That’s what moves I made today.
Relating to the Fortuna(FSM) article by Taylor Dart, he stresses the advantage of low cost producers in current environment and larger companies that can spread costs around their larger operations. So Doc said that he was into SVM, the low cost producer.
Yes, that is Taylor’s typical disposition, and it is a more defensive or conservative strategy, but by that rationale everyone would be piled in only the lowest cost biggest producers. The problem is that they are typically not the one’s the run the most, with the rare exception of Newmont and Barrick taking off recently when most companies didn’t.
In most bull runs it is actually the small producers and sub-par producers that have the biggest moves (like the Santacruz Silvers and Impact Silvers of the world, and not the Fesnillo’s or Pan American Silvers). This is because in a rising price environment their margins increase in a greater percentage basis than the lower cost producers do. Also the best majors and mid-tiers have far more analysts following them and are typically more fairly valued than the less-than-stellar producers, and are more tied to the earnings estimates hits or misses than the smaller or subpar producers.
There’s nothing wrong with being in the best in class though, and I’m in Silvercorp (SVM) as well because they are dramatically lower in costs than the rest of producers, but that isn’t the only reason why I’m in them. I like their exposure to zinc & lead in a commodities run like we’ve seen recently, and I like the 4 strategic stakes they hold in juniors and that they are likely to make an acquisition in the not so distant future and already tried with Guyana Goldfields where they made million of dollars in the break fee by getting out bid (also brilliant). I also like that they picked up two properties and one mine that can be in production in short order from a Chinese auction for pennies on the dollar.
Hi Again Ex, when you talk about buying or selling a tranche in a company is that usually a set amount of shares, a percentage, or does that always vary. Just wondering about your trading habits. DT
Thanks for the feedback Ex, much appreciated. I’m hoping we have almost turned the corner on this recent downtrend. Happy Trading! DT
Hi DT. When I talk about buying an initial tranche it is not a set amount and differs for each stock, but in my overall portfolio, it is typically around a 0.25%-0.5% position relative to my overall portfolio. Over time I’ll build that up to a 1%-2% and then if they grow to 3% – 5% over time I’ll trim them back down to 1%-2% positions. With exploration stocks they are kept smaller than my producers, royalty companies, or larger developers, and the explorers are typically only 0.3%-0.75% positions. Sometimes they’ll grow to 1%-2% positions though, and then I’ll scale them back down to like a 0.5% or 0.75% position.
The largest positions are in producers and royalty companies, or sometimes a niche commodity like a uranium or copper or palladium stock, then the medium-sized positions are also in producers or developers and misc positions like cryptos or cannabis, and the smaller positions are in exploration stocks.
Keep in mind I typically have 80-90 stocks in my portfolio at any given time and am a very active swing-trader, with occasional longer term hold only positions, and sometimes very short-term day-trades.
My strategy works for me and there is a systematic approach to it, but I’m not in love with any of the companies I trade, and once I’ve established I like the fundamental story, I don’t need to follow every single news blip, and just focus on trading it after that. People often ask how I can follow that many companies, but it isn’t as hard as it seems. I’m not writing up 10 page deals on each company, and many companies I’ve been following for years, so it only involves occasionally checking in to see if anything radically has changed on projects, team, approach.
In my opinion, most investors spend waaaaaaaaaaay too much time obsessing over a small basket of stocks and trying to know everything about them, and that is unnecessary for swing trading or trading around a core position. For example there are people that camped out in the Garibaldi or Novo or whatever hot stock rooms for hours every day, psycho-analyzing every statement in news releases, hypothesizing what it could mean, coming up with multiple theories or even conspiracy theories about management, photos of drill core, or what someone said in passing in an interview, and then spend hours debating that with other investors. I don’t have time for any of that. I look into the company, evaluate it on a few criteria I find important, look at the chart, look at the macro backdrop, make a decision, and keep moving. If I think it’s undervalued I buy more. If I think it’s getting frothy I trim. If something bothers me too much I sell it. Nothing too fancy.
I sort my portfolio each day by biggest gainers/losers that particular day to see why the moves are so extreme, and if there is something substantial that has happened, then I reevaluate my stance on it. Then several times a week I sort my portfolio by market size position and overall gainers/loser cumulatively to see what my largest and smallest positions are, and what my more profitable or biggest loss positions are to see if I still want that same weighting. At that point I decide if I’m comfortable with the batting order or want to harvest gains, or cut losses. It would be quite similar to sorting a spreadsheet based on a few different points of criteria and then acting accordingly.
Each night before I go to bed I write down notes on companies I want to add to, acquire, trim back or sell. Sometimes there is no action to take. Sometimes there are lot of trades in one day if the market is really volatile. Most times I only do 2 or 3 trades in a day. Lots of days 0 trades. Some days 10-12 trades aren’t out of the question… like today.
Also Ex, I’m glad you are back in the saddle again. DT
Thanks DT. It is nice to be back riding this bucking bronco of a market again. Haha!
Hey Ex, you should really consider buying an RV with a big antenna so when you go off grid and beyond the reach of WI-FI, we can still contact you! LOL! DT
It’s funny you mention that DT, as my wife and I had that very discussion along with another couple that joined us for the recent trip. When we were all out of phone range for a few days, my one buddy was losing his mind and started talking about the Starlink system that provides remote satellite wifi, and then we started talking about bringing that into a RV and using it to work extremely remotely.
My wife turned to me at one point and said at one point, at least for a year or 2, we should sell everything, or put all physical stuff in storage, and then hit the road adventuring and just work from an RV wherever we travel. I replied that as long as I could get a good phone/wifi signal to conduct business that it may be a possibility.
Jonsyl, I resisted buying at the candy store today since my blood sugar was a little high. As we move lower on some of these stocks I don’t see any major moves higher for awhile. Unlike the slump in March 2020 where the move was a sudden dump this one appears to be moving slowly down for a lot of these stocks. When they hit bottom unlike 2020 I believe we may get a little bump but all in all most of the stocks will scrape bottom for awhile giving those with cash a chance to really raise their sugar levels. I believe next week will be a prime time to pick up some real bargains.
Can someone please explain to me why silver is now cheaper compared to the unweighted commodity index (GCC) and the CRB than at the absolute bottom of the Covid crash? The ratio chart is literally a straight line down over the last 2 years, without even a single bounce lasting more than a few weeks.
Is it actually still a monetary metal (yes, I know it was officially demonetized by the US some time after the Civil War iirc)? Because it certainly isn’t acting like it–at all.
We are literally getting the worst of both worlds–it’s terrible compared to gold as a monetary metal, and it is one of the worst performing industrial metals too.
Yes, maybe we are close to a significant low in silver, but why has it even had to come to this?
These are all rhetorical questions by the way. Silver is objectively miserable.
Green, silver has often been labeled the poor man’s gold. Likely another historical fable, but nevertheless, it was to pacify and fool the masses with an alternative to the real thing, gold, as payment for goods and services.
The use of silver for industrial purposes, like solar panels etc, I also think is overstated by the kitco type promoters to pump and dump their holdings.
But it has had its moments, most notable, Bunker cornering the market price rise and subsequent collapse, which gold/silver die hards believe will have a second coming by eclipsing all past highs.
Unless this is a repeat of 2012-2013 (to be fair, the current formation looks eerily similar to the top in 2012-2013), silver will be fine. I am just a bit frustrated. I should just turn off the computer and come back in 2024.
As long as there is war in Ukraine there is 0% chance that the TPTB will allow gold/silver to rise. TPTB do NOT want the PMs to be perceived as a safe heaven as it challenges the USD aka their hegemony. The price of PMs will ALWAYS be controlled. There is 0% chance that the PMs will have a second coming like in the 70s. The miners, in particular, will continue to undeperform. The TPTB will continue to keep this game running for a long time in the future.
There’s 0% chance that you are correct. Sorry.
Well, that remains to be seen. USD (or the coming digital dollar) will never lose It’s reserve currency status. And that alone does not bode well for the PMs.
The dollar price of gold went up 100 fold (!!!) while the dollar was the senior reserve currency. Aside from that, you don’t understand gold at all if you think anyone can stop the gold price from reflecting any fiat currency’s loss of purchasing power. The dollar will keep losing value regardless of its reserve status because it has to. It will lose a lot more value over the next 20 years than in the last 20 years regardless of how it performs relative to the euro or any other currency.
The banksters can and often do influence short term action but even that is not quite what it seems since holding gold down also holds the dollar up. In other words, they can’t weaken the dollar as they wish without gold going up and they hate that fact immensely. Why do you think scummy dictators of the past (including America’s own FDR) banned their people from owning it? Those miscreants want the unobstructed ability to drain the value of society’s savings arbitrarily whenever they please. Gold stands in the way of those who want to make you completely dependent on the government.
The dollar index closed the day at 102.32 while gold closed at 1,888.70. On July 9th 1998, it closed at a nearly identical 102.33 while gold closed at 292.50. So, according to the dollar index, the dollar has lost no value in 24 years yet according to the gold price (reality), the dollar has lost a massive 84.5% of its value in 24 years. Stated another way, gold went up 6.5 fold versus the dollar in 24 years while M2 money supply grew 5.2 fold. By that and most other metrics, gold has accounted for inflation extremely well. With the exception of silver, no other commodity comes close to accounting for inflation as accurately over the long term. [Silver is up 4.38 fold since July 9th, 1998 but was up over 9 fold in 2011.]
It is strange that so many dollar bulls don’t understand what a useless measure of value the dollar index is.
Matthew, I’m with you man, you understand the gold market along with a few others, but your analysis is spot on. DT! 😊
Great points Matthew. The dollar index level is only it’s relation to other equally worthless fiat currencies, and is not a reflection of the purchasing power of the dollar which has only decreased over time in real value = in comparison to gold.
Gold is a stumbling block to politicians that want to drain the wealth of their citizens as you described, and it is telling what the nominal dollar amount of gold is now compared to a few decades ago, as to what a dollar will actually purchase now versus then. All fiat currencies get eroded over time due to inflation and terrible fiscal policy and monetary policy.
Every Harvard Hooligan and Yale Yuppie in the Central Banking Realm should post this on their wall and read your post every morning, Matthew, spot on. Even Carney is now saying that bank money should go to oil companies as not all money is to be used to increase oil infrastructure or production, Duh!;-)
This is a novel thought: https://marketsanity.com/frank-giustra-someone-is-deliberately-suppressing-the-gold-price/
Frank was retweeting info from our buddy Craig Hemke in that tweet. It was very unusual trading to witness in gold for “investors” to want to spike it down to those levels in off-peak times.
Ex, this “unusual” trading that you speak of has happened hundreds of times in the past two decades and is guaranteed to happen many times in the future.
Btw, it was Frank Giustra, who two years ago, “forecasted” that gold was to rise to $20.000. Well, he is an insider, he should know.
Well, so far gold has barely been able to make it $2000 and hasn’t been able to hold onto that the last 3 times, so we’ll see if gold can go up 10x from here. It’s possible, but then the question arises, what kind of a world will we all be living in if gold was to make it to $20,000 in the near-term?
I’m not convinced that $20,000 gold is in the cards anywhere in the foreseeable future, and am definitely not investing in companies with that thesis in the slightest.
We’ve seen plenty enough global chaos the last 2 years (financially, socially, geopolitically, etc…) to justify a move in Gold up to the mid $2,000’s and possibly up to the $3000’s over the next year or two, and that is plenty of reason to be getting positioned in mining stocks in front of that move higher in this bull market.
FWIW, AXU put in what could be an inverted hammer bottom today. It’s now been down 9 days in a row and it’s literally down 50% in 5 weeks. What the hell naturally trades like that? I don’t imagine even Enron ever closed red 9 days in a row. It’s gotta at least bounce here right? lol. For a day?
Well, I added more AXU today looking at things in a similar way, and Alexco sure isn’t pricey here as Canada’s only silver producer, and with some of the higher grade reserves in the ground compared to many other silver companies. If people believe that eventually Silver will break through $30, then AXU looks like pretty good value down here.
Ex, sold my AXU position long ago near the top and have patiently waited for it to come back. Took an initial position last week and plan to continue to add over time. Silver miners will get really cheap and purchasing now and going foreward will reward investors eventually.
Nicely done Doc.
Personally, I’ve been trading around a core position in AXU since early 2016 and increase or decrease it based on the price action, but have been trapped underwater in it since the middle of last year on the most recent trades and decided to average down in it to lower my cost basis. I have little doubt it will be a multi-bagger from present levels as the bull unfolds, like it has been in the past, and I anticipate making a very nice return on my AXU position in due time.
My parents lived in Whitehorse, Yukon from 1975-80 and I spent a lot of holiday time up there…incredible salmon fishing trips.
Keno Hill was a big operation back then as they pulled 8 million kg of silver from it. There’s gotta be lots more where that came from.
We just interviewed Scott from Metallic Minerals that owns the other half of Keno Hill adjacent to Alexco, and he mentioned that if their new copper equivalent resource at La Plata in Colorado was converted to silver it would be close to 200 million ounces — the same amount extracted from Keno Hill in the past mining. He also mentioned it was about the resources that Alexco currently had at Keno Hill. MMG is also working on defining their ounces in the ground at their Keno Silver project, and while they won’t have that many ounces there yet, like Alexco has after many more years of exploring their property, they’ve still found both the high-grade narrow veins like their neighbors, and a new zone of bulk tonnage lower-grade silver that could also still be quite economic. MMG will be coming out with their initial resource estimate there later this year or early next year, so they’ll at least be able to provide a snapshot in time of where they are at in growing those resources.
So yeah…. there is a lot more Silver/Zinc/Lead to be extracted from Keno Hill in the Yukon.
Yet again, the silver continuous contract ($silver) daily chart looks more promising than SLV and seems to be closing higher than what spot price would suggest.
FWIW (probably not much), inverted hammers in the HUI and XAU daily charts. Also in AXU (which has now been down 9 days in a row).
Dollar Index : April : Next Fibo Hit : ABCD(1:1.272)
High today (103.28). Rick Ackerman’s target was (103.25).
https://saturationtiming.blogspot.com/2022/04/dollar-index-april.html
The Ruble hit 72.02 today, strongest since December, and closed at 73.75.
GazPromBank will be the clearing agent for Russian NatGas sales to neocon Europe, as things are currently unfolding. Conversion of the Euro (Pound etc.) through financial alchemy into Gold backed Rubles could make the GPB a serious BIS competitor, particularly considering infrastructure build-outs for the Belt & Road project.
“Interesting times!”
Yes, quite interesting times indeed BDC. I had been reading about that GazProm Bank intermediary funny business for Russia supplying Europe with nat gas and oil, and Josef Schachter mentioned that also today in his interview.
Interesting details here, Ex: https://www.youtube.com/watch?v=QQegGVWtiBo
Vsla is starting to break down and will head to a buck.
Doc – VSLA or VZLA? Expiring minds want to know –;-}
Expiring minds or Inquiring minds want to know? 🙂
I think Doc probably meant VZLA is heading to a buck, based on his technical outlook, since Vizsla is currently trading at $1.69.
Vizsla is in my portfolio, and I sure hope it doesn’t pull back down that far, but if it does, I’ll add more to my position in it, and I did trim some back from the position at $2.33 on Oct 25th and then trimmed more back at $2.72 on Nov 17th. Honestly if it gets down in the $1.30s I’d probably add another tranche to replace what I trimmed at much higher levels the end of last year.
Doc, didn’t see you at the candy store this morning, anyway decided to buy in with a one third position for a combination of dregs, dsv, vzla, ngd, oh yes ipt, and cde. Also got some long dated calls on aem and ntr. Thinking of adding some uranium with next time.
Don’t expect a moonshot in here, at least not till post fed meeting.