The junior gold miners’ stocks have been thrashed in August, plummeting to brutal multi-year lows. Such carnage naturally left sentiment far more bearish than usual in this forsaken contrarian sector. But these extremely-battered gold-stock prices certainly aren’t justified fundamentally. Junior gold miners’ collective results from their just-completed Q2’18 earnings season prove their stock prices need to mean revert way higher. Full Story
It is my privilege now to welcome back Michael Pento, president and founder of Pento Portfolio Strategies, and author of the book The Coming Bond Market Collapse: How to Survive the Demise of the U.S. Debt Market. Michael is a well-known money manager and a fantastic market commentator, and it's always great to have him here on the Money Metals podcast. Full Story
Chris Blasi, President of Neptune Global LLC outlines his gold and Bitcoin market outlook for 2018. Precious metals investors could be rewarded this Autumn. By this September an uncertain domestic political landscape could put the US dollar under pressure to the benefit of safe haven assets. The bullish narrative for platinum and palladium is just as compelling, given supply constraints, leading to delayed delivery of physical metal in many cases. Full Story
Cumulative cash positions in the sector today total over CAD$2.2 billion. This is the most cash held in companies’ bank accounts since the end of the bull market in 2012. Taking a deeper dive into these cash balances is important to see the true health of the mining sector. Below is a chart which shows the median cash position for each year since 2004. Full Story
Hence, gold investors should not base their investment decisions based on the yield curve. Its predictive power has weakened due to the central banks’ intervention in the economy. And there is no clear relationship between the Treasury yield curve and the price of gold (see the chart above). Actually, the steepening of the yield curve could be much more problematic, as the long-term would have to be much higher – at levels the economy couldn’t handle because of its excessive indebtedness. Therefore, many gold investors are currently looking in the wrong direction. Full Story
In his latest market letter, John Hathaway of the Tocqueville Gold Fund notes what seems like the record bearishness in the monetary metals sector, what with huge short positions by speculators, a washout in metals shares, and huge long positions by speculators in the U.S. dollar. He also notes that this bearishness contradicts what seem like the fundamentals for the sector. Full Story
Bob Hoye of Institutional Advisors makes the case for gold rally following the sharp dollar selloff in the wake of the anti-rate-hike comments. Safe haven assets posted gains following comments from Washington on the negative impact on US exports due in part to the Fed rate hike cycle. The host notes that the strong dollar improves the relative appeal of dividend paying US equities, via quarterly payouts in the reserve currency. Full Story
Well, it looks as if a bit of life has come back into the silver market as U.S. Silver Eagle sales jumped in August due to lower prices. While Silver Eagle sales have fallen over the past few years, if we exclude typical high January demand, sales so far in August are the highest in a year. Full Story
In July, I promised you to review some of the books about gold which you can find in the enormous library at the Mises Institute located in Auburn, Alabama. Now, it’s time to fulfill my obligation. In the picture below, you can see part of the collection dedicated to gold. Of course, it’s not the whole set, but I didn’t manage to bring them all (too much time in the library, too little at the gym, I suppose), so I chose the most interesting ones. Full Story
Recently, I gave an inside look into the very competitive and honest market in which physical bullion dealers operate. It’s a market based on supply and demand for actual metal. However, the futures market – where global spot silver and gold prices are set – is another story. The physical supply and demand for actual bars is pretty much irrelevant when exchanging paper contracts. Full Story
Gold stocks is in a 50-year bear market when measured in gold. This (very) roughly means that on average, it has been more economical to buy gold rather than to mine it. Interestingly, South African gold mining production peaked two years after, in 1970, as if to confirm that mining was getting rather uneconomical. Full Story
As part of Merk's in-house research we regularly evaluate a consistent set of charts covering the economy, equities, fixed income, commodities and currencies. The aim is to keep our eyes open and to look through the noise of the headlines, avoiding the distractions of sensationalized click-bait. In sharing this content, we offer a cross-check to your own thinking and aim to add value to your own process. Full Story
Over the past 60 years, in 10 of the last 12 rate hike cycles gold stocks boast an average gain of 185% with a minimum gain of 54%. The advance began on average one month and a median of two months after the Fed Funds rate peaked. The precious metals sector is currently extremely oversold and a relief rally is underway. It should last at least a few more weeks and maybe a few months. However, the primary trend is down and there are downside targets that are even lower. Full Story
Gold is a crowded trade and this week futures on the yellow metal turned net short for the first time since April 2001. Frank explains why traders have turned bearish on gold and how the U.S. dollar has remained strong, even though indicators show it is overbought. Federal Reserve Chairman Jerome Powell will be speaking at Jackson Hole on Friday and Frank believes his remarks could be a market-moving catalyst. Full Story
With all the talk about Central banks going “Cashless,” someone needs to tell the Federal Reserve. Why? Because the Federal Reserve just placed another large order for newly printed 2018 Dollars. Interestingly, the U.S. Treasury will print the largest number of $100 bills since it came out with the updated anti-counterfeit $100 bill in 2013. Full Story
After writing publicly for over seven years now, the most common comment I have seen to my articles suggests that once a major news or fundamental event occurs it would completely invalidate my wave count, as the market will certainly move based upon the substance of that news or fundamental event. Full Story
Gold and silver premiums – the price dealers add to the melt value of an item to cover manufacturing and overhead – began climbing in the past two weeks. Many clients see falling gold and silver spot prices as an opportunity to buy, but some are disappointed to find the premium for the item they want is suddenly higher, negating some of the price drop. Full Story
Peter Hug, Director of the Kitco Precious Metals Division, makes his show debut. Negativity in the retail market for gold / silver has reached such epic levels that from a contrarian vantage point, a price floor could soon materialize. John Williams expects that policymakers will return to quantitative easing (QE) in an attempt to stabilize the US dollar; the move could backfire resulting in a panic to procure inflation safe haven investments, such as energy shares and PMs. Full Story
The precious metals sector is on a long-term buy signal, but that may change at month end. Short term is on sell signals. The cycle is down. COT data is at extreme levels, which suggests a recovery should start soon. We have trimmed our exposure for now and wait for more data over the next two weeks. Full Story
Can a gold investor have their cake and eat it too? Is it possible for the Western fear trade and the Eastern love trade to push the price of gold higher at the same time? I believe the awesome answer to that question is a definite, “Yes!”, and here’s why I say that: America has a president who has launched dollar-positive tariffs. It now appears that these tariffs are “here to stay”. This president has also talked about giving T-bond holders a “haircut”. Full Story
Much is being made of the current makeup of the Commitment of Traders report for Comex gold. However, similar historical irregularities are appearing in other assets, too. Thus the question, are The Banks setting the stage for a wildly volatile second half of 2018? Full Story
The dollar devalues and prices increase every year. Currency in circulation (M2) exponentially increases about 6.7% per year. Global demand for the dollar is decreasing. Faith and trust in dollars is essential but may disappear. Gold backing may become necessary to restore faith in mismanaged fiat currencies. It could back IMF issued SDRs, Russian rubles, Chinese yuan or others. Full Story
Unlike previous rallies in silver prices, which were crushed as they ran up against JP Morgan’s position, recent data reveals that for the first time ever, JP Morgan has established an unprecedented position to benefit from a long rally in silver. Widely followed and trusted silver analyst Ted Butler of ButlerResearch.com visits Reluctant Rreppers for the first time, to declare that the next inflection point in silver price momentum will be violently different from all previous silver rallies. As momentum investors pile on, this time unhindered by J.P. Morgan, silver prices will be capable of rising as never before seen in modern history. Full Story
The main theme of the latest report is the unfolding sea change in the global monetary order. The authors focus on the turning of the tide in terms of monetary policy, i.e. the fact that the Fed switches from monetary easing to monetary tightening. They point out that in addition to hiking interest rates, the U.S. central bank also started quantitative tightening, i.e. reducing the size of its massive balance sheets. Full Story
Over the last several months or so I’ve been writing about the bond market throwing us a possible curveball. Instead of continuing rising interest rate we may see falling rates. Today the $TNX, 10 year treasury yield finally broke below the neckline we’ve been following that started to developing back in January of this year. I’ve labeled the H/S top as an unbalanced H/S top as the price action formed a second right shoulder that was a small H/S top. A backtest to the neckline would now come into play around the 28.65 area. Full Story
Now, when you couple this with all the other anecdotal sentiment indications we are seeing, it would suggest that we are certainly nearing a major bottom in the complex. Most people do not develop this negative perspective for an asset unless it is either nearing a major bottoming or about to become extinct (bankruptcy). And, I don’t think the metals are filing a Chapter 7 application anytime soon. Full Story
One of Marc Lichtenfeld’s proudest moments was getting to ring announce a world title boxing fight promoted by Mr. “Only in America” himself, Don King. “He was one of my main clients for many years,” Marc tells me, adding that the boxing impresario “is always the smartest guy in the room. He’s three steps ahead of everyone else.” Full Story
I have long promulgated the idea that the junior exploration sector provides the highest risk / highest reward scenario within the broad category of natural resource stocks. However, some speculators prefer to own senior mining stocks. These people like to think of themselves as investors because mining stocks have the possibility of strong incremental returns during bull market commodity cycles and they also may offer small yield dividends typical of the sector. Full Story
The best performing metal this week was palladium, up 0.52 percent after rallying hard after a six percent drop mid-week, largely on talk of trade tensions easing. Inflation is creeping into the market, which has historically been positive for the price of gold. U.S. consumer sentiment fell to the lowest level in almost a year, according to a University of Michigan report. Bloomberg writes that this could be a possible caution signal for spending following strong gains in the second quarter. Full Story
I decided that before I sat down to write the weekly recap and outlook for the gold and silver markets that I would go to a few of the great commentary sites such as Streetwise, 321Gold, Goldseek and Gold-Eagle and read what the other "experts" are saying about the precious metals markets before I attack the keyboard. Earlier in the week, I had been working on a Western Uranium Corp. story and was astounded how stress-free it was writing about an energy deal as opposed to a sound money deal. Full Story
It is my privilege now to welcome in Dr. Lucas Engelhardt associate professor of economics at Kent State University. Dr. Engelhardt is an Austrian economist who has been a guest lecturer at the Mises Institute and in his teaching specializes in macro-economics in the examination of the business cycle, and it's certainly a real pleasure to have him on with us today. Lucas, thanks so much for taking the time and welcome. Full Story
Silver used to be a significant part of the monetary base in many countries. You could find it as part of monetary reserves together with gold, as well as coinage in circulation. Over the years that silver was demonetized (at least from the 1870s to roughly the 1960s), significant amounts of silver coins (official currency coins) were melted down and sold on the markets, together with silver bars (used as reserves). This brought us to today, where the amount of silver that is part of the monetary base is basically immaterial. Full Story
Last week, we discussed the tension between forces pushing the dollar up and down (measured in gold—you cannot measure the dollar in terms of its derivatives such as euro, pound, yen, and yuan). And we gave short shrift to the forces pushing the dollar down. We said only that to own a dollar is to be a creditor. And if the debtors seem in imminent danger of default, then creditors should want to escape this risk. Full Story
My guess is that the gold price will rebound strongly from whatever low it makes during August-September. However, unless the fundamentals make a sustainable turn in gold’s favour (right now the fundamental backdrop is unequivocally bearish for gold) it’s likely that at some future point the COT data for gold will reveal much greater negativity on the part of the speculating community than exists today. Full Story
Jim Rickards published his book, Currency Wars: The Making of the Next Global Crisis back in 2011 as the currency wars were just getting underway. His timing was prescient. Rickards has been a lawyer, counsellor, investment banker, and risk manager. He advised the U.S. Department of Defense, the U.S. intelligence community, and major hedge funds, including acting as general counsel for the ill-fated Long-Term Capital Management, the hedge fund that almost brought down the global financial system in 1998. Full Story
The Fourth Turning – the influential work by William Strauss and Neil Howe published in 1997 – uncannily predicted much of what has happened in America over the past twenty years. “The next Fourth Turning,” the authors predicted, “is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation, and empire.” Full Story
If you have tracked me at all since January, I had stated that if bitcoin (BTC-USD) is in a wave iv of the degree that I believed, support for this corrective wave, that started in January is in the $3000-$4700 zone. $4700 is an ideal landing spot for this wave iv as it is the .382 retrace of the third wave that began in July 2016. Full Story
In my business, there is a fine line between standing by your conclusions and being unwisely stubborn. But no matter what I say, people will still label me a perma-bear or perma-bull—often at the same time. It’s an occupational hazard to which I am accustomed. It’s really a lot more fair to characterize me as the “Muddle Through” guy. There are always reasons to be bullish or bearish. Admittedly, my letter tends to dwell more on the reasons to worry, but I think that’s a sign of the times. Full Story
The precious metals market has a similarly rare and portentous indicator: “net short speculators.” But today this one actually happened. In the latest commitment of traders (COT) report, both silver and gold speculators finally took on more short positions than long. This is rare because speculators are almost always net long – that is, betting that precious metals will go up rather than down. And it matters because speculators are usually wrong at big turning points. In other words, when they’re convinced they’re right, they’re usually wrong. And this week they became just about as certain as they’ve ever been that precious metals are going to tank. Full Story
Big trouble is brewing in the mighty North Dakota Bakken Oil Field. While oil production in the Bakken has reversed since it bottomed in 2016 and increased over the past few years, so has the amount of by-product wastewater. Now, it’s not an issue if water production increases along with oil. However, it’s a serious RED FLAG if by-product wastewater rises a great deal more than oil. Full Story
Nine years. Is it short or long? It depends on what we are talking about. In the geological time scale, it’s a blink of an eye. But in the business cycle time scale, nine years is a really long time. The current economic expansion has recently turned 9 years old, as the Great Recession ended in June 2009, according to the NBER. Full Story
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