Category Archives: Gold

IKN Does Lakeshore Gold/Tahoe Resources, Biiwii Does IKN

By Biiwii

Seriously, I do not even have the time today to read these posts, but since they revolve around one of my miners (Lakeshore Gold: LSG, LSG.TO) and the posts are by Otto @ Inca Kola News, well, that means I trust them to be good content.

Tahoe in talks to buy Lakeshore Gold

Three more things about IKN’s Tahoe/Lakeshore deal exclusive

All I know is that I had held LSG off and on for a couple of years as a favored junior gold miner, but when Otto gave it the seal of fundamental approval I became a better holder.  I have also noted him talking on and on about this company being acquired.  So, there ya go.  Anyway, here’s LSG’s chart liking the news.

lsg, lakeshore gold

 

 

Hulbert Does Harvey & Erb, Who Did the CPI Adjusted Gold Price

By Biiwii

Much more than CPI inflation needs to be considered with respect to the gold price

Yes folks, it’s the return of the two egg heads (Campbell Harvey and Claude Erb) who first put the scare into gold bugs back in 2013 with the research paper The Golden Dilemma (PDF), which found that as adjusted for CPI, gold was very over valued.  Enter Mark Hulbert with the updated warning for inflation-centric gold bugs.  Gold has no business being this expensive.

market hulbert, gold price vs. CPI

I have never understood who would want to be one of these “gold traders” (other than the miners with a need to hedge and bullion banks with a need to hedge and manipulate, ha ha ha).  Why would you be a trader in an element that is a measure or barometer of other items and conditions?  It don’t get it.  I guess slick traders speculate with insurance policies, so why not gold too?  Everything’s a play after all, in the casino.

To answer Hulbert’s points, beginning with the above…

Continue reading Hulbert Does Harvey & Erb, Who Did the CPI Adjusted Gold Price

US Stock Market and the Gold Sector

By Biiwii

As posted at NFTRH.com

To review our stance, which is years along now, the gold sector is not going anywhere until it becomes widely accepted that developed stock markets, including and especially those in the US, are in bear cycles. We have also drawn analogies to the Q4 2008 event that took place in what felt like a nanosecond compared to today’s long, drawn out process. For this reason, a better ‘comp’ has been the 1999 to 2001 time frame. That was a process as well.

Regardless, gold boosters viewing inflation as the reason to buy the sector are still out there pitching, but even they have retooled their pitches for a deflationary world. It is now and always has been a global economic contraction environment (assuming it eventually coerces policy makers into inflationary actions) that would be the primary driver of the next gold bull market. Say, whatever happened to all the stories about China demand, a China/India love trade, supply/demand capers on the COMEX and ‘US jobs to spur inflation driving big, smart institutional money into gold’ anyway?

Continue reading US Stock Market and the Gold Sector

Otto Does Brent Cook…

By Biiwii

Otto Rock does Brent Cook doing BNN

I have the advantage of being a round the world, macro market manager with the ability to avoid terribly bearish sectors until the time is right.  Two of the best people in the [mining] sector (IMO) are Otto and Brent (with a side Mickey Fulp and Eric Coffin).

Otto’s post caught my eye because of its list of ‘bear market low’-ish sounding things…

“I’ve never seen it this bad”
“Majors have really cut back”
“…only ten percent (of juniors) have the cash to do something”
“…geologists saying there’s no point in exploring any longer”
“…I think it’s gotten so bad…that we’ve seen the worst”

You can get the Brent Cook interview linked at Otto’s post.  I always find him to be a good listen:  Brent Cook Does BNN

NFTRH 376 added a gold mining specific chart list, which is comprised of many of the smaller miners, developers and explorers (including LSG as discussed by Brent and Otto) that I think will out perform in the early stages of a bull market.  Indeed, several of them bottomed in 2013 even as HUI has descended to new ignominy (and its long-term H&S target of 100 I might add).

I think there is good bounce potential for the sector but it as a whole is in a technical bear market.  Period.  Yet there are certain indicators popping up (hello gold-oil and gold-commodities ratios) and bleak sentiment stuff like the above quotes that argue for a greatly improved risk vs. reward proposition for patient investors.

One thing I can tell you is to watch the 100 level on HUI.  That is a technical ‘stop loss’ to a bounce scenario and a doorway to an express elevator to the 70’s if it is lost.  There is no support from 100 to 75 or so.

[edit]  ha ha ha… Otto does Gary doing Otto doing Brent Cook doing BNN.  Jeez, I feel like I need a shower now.

NGD: Do You See This Stock?

By Biiwii

Do you see this stock?  It is one I have traded and/or had on radar since it absorbed Metallica Resources, which I held many years ago.  Do you see the chart?  It is semi-hysterical and I took profits at the SMA 200 while it was still green this morning.  Do you know what I would have been doing if not for sound guidance on LatAm and Mexico based miners?  I’d have been looking in from the outside.

ngd, new gold

The sound guidance came courtesy of Otto at IKN.  He is 100% responsible for my having bought this thing at much lower levels when he saw value in it.  It’s a sector populated by a lot of people who think they can analyze gold stocks and a very few of them who actually can analyze gold stocks.  He’s not always right (who among us is?), but I always have a level of trust with him that he has done the work required to give me a leg up on what to consider in this volatile space populated by a lot of scams and a few real gems.

Having IKN on my side is an invaluable asset for NFTRH, when this sector is in season.  Otto has no idea I am making this post.  But it is the least I can do when I owe somebody a debt of gratitude for a trade well done.

Today’s Top Headline!

By Biiwii

Newsflash!!… → → →

Hillary Clinton Drops ‘Pricing’ Bomb on Biotech Sector With Nulcear Tweet, Gold Stocks Drop More Than 3% in Response

Ha ha ha… you have to be a long-time aficionado of this sector to get the humor.

Gold vs…

By Biiwii

Note:  Hey, go check out the new NFTRH.com.  I think it’s pretty cool.

An update on Gold vs. stock markets, as at yesterday’s close.  These charts have improved today, but there is still no conclusive change in trend in gold vs. stock markets.  There could be some short-term chop if for example, SPX decides to rise again (I am not necessarily buying – or should I say selling? – today’s post-FOMC drop, though I have started to position that way, while holding a few longs that are doing just fine today) to the upside target of 2040 +/-.

[confusing language alert:  the above attempts to say that I still hold a few longs but started shorting the market on yesterday’s post-FOMC hysterics]

Gold vs. S&P 500

gold vs. spx

Gold vs. Euro 50…

gold vs. euro stoxx 50

Gold vs. Toronto…

gold vs. tsx

Make no mistake, gold sector fundamentals are looking good and the macro fundamentals are slowly creeping along.  But nothing worth its while happens in a flash.  This is a long grind (boy don’t I know it) to a new macro picture.  Meanwhile, the “community” has burped up the likes of this…

jim sinclair

and this…

Plunge Protection Team Losing Control of Markets -Jim Sinclair

Per this, lately…

Man, That’s Cheesy

And now today the “community” is glad handing itself in similar, but far less egregious fashion as it did in 2013 immediately after the Fed rolled over and punted on withdrawing QE 3.

Scary Gold Bug Article, on Cue

Hey look, just because I am getting more bullish on gold’s fundamental picture it does not mean I am going to try to make nicey nice with people (i.e. the “community”) who have guided to ruin the average gold bug looking for supposed expertise, for years now.  Besides, the sector is still nowhere, technically.

Let me see Gold vs. SPX blast upward and Treasury yield dynamics change trend and then we’ll bring out our own pom poms, though they’ll never be as brightly colored as the perma-poms.

[edit]  Well, it just got a little more egregious.  Here is a screenshot of a comment below the ‘glad handing’ article linked above, from the Gold Report.  These guys just can’t seem to help themselves.  Here is what I need to tell you; all through the bear market when certain gold bugs chest thump or try to get you to buy their view, things have not gone so well for those who took the hook.  Maybe it’ll be different this time.  Cue the stopped clock…

comment

[edit 2]  Oh wait, isn’t the commenter a principal at The Gold Report?  Isn’t Streetwise affiliated with tGR?  Wow, an inside scoop on what Jeb Handwerger thinks.  Wow, I stand corrected for my wise assed skepticism.  I can speak like this because I’d never get put on the Gold Report, anyway.  That was after all, the entity that headlined an unfortunate article associated with Eric Sprott last year…

An Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices: Eric Sprott

I can’t stand this and am now getting in a bad mood over it.  So in service to mental health, I leave the subject.

Gold Mining Fundamentals

By Biiwii

In the previous post Steve Saville talks about the “true” fundamentals of gold, i.e. the ones that actually matter as opposed to the ones that make a good story.  In this post, let’s review something that is related but different; gold mining fundamentals.

While we (NFTRH) have been noting gold’s negative fundamentals for years (especially the status of the yield curve and a thus far ironclad confidence in the Federal Reserve and indeed, relative confidence in global central banks), gold mining sector fundamentals have been on an up-swing.  Gold’s fundamentals are generally what we have been calling macro fundamentals and the things that matter to mining operations are sector fundamentals.

Interlude

In a comment included with Saville’s post linked above, we noted that acting upon manipulation ghost stories is not good for a gold bug’s financial health.  However, this is not to say that manipulation does not occur.  As we noted at the time and still fully believe, the macro backdrop was actually manipulated into being in 2011 as Operation Twist was set loose upon the financial markets with the express goal of “sanitizing” (the Fed’s own word) inflation signals out of the picture.

Op/Twist involved official selling of short-term Treasury securities and buying long-term securities.  This kick started a now years-long downtrend in the 10yr-2yr yield curve, which has been bearish for gold the whole while.  Manipulation or not, it is bearish and our advice has been that you do not stand on ideology (or worse, someone else’s ideology) with money you do not want to lose.  You hold your ideals, but play the game.

Gold Mining Fundamentals

Back on message, several of gold’s fundamental aspects also apply to the gold stock sector, but there are some wrinkles in this relationship.  For instance, a gold mining operation, unlike the metal itself, is a moving target with many inputs to its final investment case.  Unlike gold, which when tuning out the easy to comprehend promo’s about India/China demand, evil banking conspiracies and even inflation, boils down to confidence or lack thereof in centrally planned policy, gold mining is a business.  Period.  Gold itself is a refined rock.

So for instance, the strong US dollar, a negative gold fundamental as noted by Saville, is not necessarily so for gold mining.  That is because the strong dollar also affects other assets, including global (local to gold mining operations) currencies and cost-input commodities and resources that go into the mining process.

In other words and for example, a gold price rising in terms of Crude Oil is a bullish sector fundamental along with being, to a lesser degree, a macro fundamental indicator.  Here is a chart we are interpreting in NFTRH in coordination with macro events to project a future bull case on the sector.  Please don’t get over-excited; future means future.  We do not promote here.

gold-oil ratio, gold mining fundamentals

Another sector fundamental is gold’s relationship to major stock markets.  In that mainstream stock investors perceive little reason to speculate in the gold stock sector when gold is under performing stock markets, this is fundamental to the gold stock case, both in sentiment/psychology and in a practical sense.  Here is gold vs. the S&P 500, Toronto Stock Exchange and the Euro STOXX 50.  So far, it’s not very impressive.  Despite the big upset over the last month in financial markets, gold has only bumped up a little in relation to these three markets.

gold vs. S&P 500, gold mining fundamentals

au.tsx, gold mining fundamentals

gold vs. euro stoxx 50, gold mining fundamentals

And that is not even to mention the nominal technicals for gold, silver and the gold stock sector, which are and have been bearish.  That is a subject for a future article and weekly NFTRH reports.  Also, there are other macro and sector fundamental considerations beyond the scope of this article.

I just wanted to add some color to Steve Saville’s piece and also belabor the point once again that the easy to comprehend analysis you read on the gold sector is easy for a reason.  Promotions don’t work if they make you think too hard and man, in actuality it is not that easy.  It is complex and those not willing to do the work have been routinely ground up over the last several years of a negative fundamental (and technical) backdrop.  Do the work and tune out the cartoons.

Rubicon’s Pouring Gold!

By Biiwii

In reviewing Rubicon Minerals’ website (a stock I do not own, yet anyway), I came across this video of RBY’s first gold pour and just found myself laughing.  I am not sure why it struck me as funny, but it had something to do with the guy trying to lug the first gold bar across the floor over to the something-or-other-ator with a large set of tongs.

Ah gold miners, waddling along lugging a heavy rock.  No, this is surely not Google… or Alphabet or whatever.

Rubicon Minerals First Gold Pour: June 2015 from Rubicon Minerals on Vimeo.