Updates on Oil, the USD, and Precious Metals
Doc wraps up this week with some updated comments on the oil, USD, and gold charts. With oil continuing to move up and trade at highs for the year and the USD breaking down we could expect high inflation and possibly higher metals prices. Unfortunately the precious metals continue to struggle however the base metals are doing pretty well.
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Saudi needs oil.
Can Michigan beat the Buckeyes; will the Hoosiers upset Purdue? Will Auburn defeat the Crimson Tide?
BB; NAT will be a buy sometime in 2018.
Thanks Doc, I’ll keep my eye on NAT.
BB; michigan will not defeat the buckeye nut unless there is an epiphany. Purdue over Indiana since they’re the home team. Auburn in an upset over Alabama since my son is sitting in row 5 on the 50 yard line rooting for Auburn.
Doc, how did your son get such a good ticket? He could sell it to a rich alum for a bundle and invest the money in NSRPF, and watch the game on TV. But in 1970 I had a ticket on the 50 at the Arkansas-Texas game in Austin. I turned down offers from rich U.T. frat boys and went to the game and saw the Longhorns win their 30th consecutive game. Hope you are wrong about Purdue. I saw Indiana beat Purdue in Bloomington in 1971 in the snow, something like 35-34. Great game! Go Hoosiers!
I just remembered that Johnny Pont’s Hoosiers beat Purdue 38-31 in 1971. My date was a girl from Pau, France in my dorm. She had never seen American football before. Maybe LPG can find out whatever happened to her.
LPG is probably dating her.
funny.
Doc, Francoise is at least 30 years older than LPG. But then President Macron’s wife is over 20 years older than he, so maybe LPG and Francoise are dating.
Especially les cougars Francaise!
The Silver Institute: Silver Survey Update 2017
The Hedgeless Horseman
“Galina Meleger of Endeavour Silver (EXK) was kind enough to forward me the new “Silver Survey Update 2017” from The Silver Institute, that was just released last week.”
“The report is painting a positive picture regarding the potential for a higher silver price next year based on the estimated supply and demand numbers.”
Galina provided a nice summary of factors that should give hope to the silver bulls:
“The GFMS forecast average silver price for 2018 is up 10% to US$18.80 per oz. Key takeaways are that 2017 total supply is flat and mine supply is lower while jewelry and industrial demand are both up. Investment demand was up in the ETFs but down sharply for coin and bar demand, leading to a small physical surplus and flat silver price this year.”
“Given that silver is primarily a byproduct of copper, lead, zinc and gold mines, and during the recent 5 year bear market for all metals, very few new copper, lead, zinc and gold mines got built, it is clear that silver supply should fall for several years until new by-product supply comes online. Solar photovoltaic cells continue to be the fastest growing aspect of industrial demand but electric vehicles could soon overtake solar!”
“We note that Canadian mining analysts such as BMO and TD also raised their silver price forecasts to around US$19 per oz next year.”
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* Horseman’s comments:
“The positive supply/demand picture looks promising going into next year. Most of you probably know by now that silver has been in a deficit for the better part of the last decade, and it thus seems the tradition is about to pick up again in 2018. With that said, I personally prefer the miners over the actual metal at this moment since I think a lot of the miners have been punished “unfairly” hard during the last couple of months. To me it looks like the miners are pricing in a continued softness in the price of the white metal for some time to come. I have no idea if the future will actually be as bleak as the silver miners suggest, but what I do know is that when you have the chance to buy shares in companies that are trading near 5 year lows, it’s probably a good idea to start building (or re-building) your position…”
“Could they go lower? Sure. Could they go much higher? Yes, and especially because;”
> We are nearing the end of the tax loss selling season.
> The sentiment in the silver sector is atrocious.
> … Major surprises should therefore be to the upside.
http://www.thehedgelesshorseman.com/silver/silver-institute-silver-survey-update-2017/
Golden Queen has had a terrible fall from grace. I owned it back in late 2015 and earlier 2016, but moved on to greener pastures. Recently when looking over smaller producers it really jumped out as a company that got destroyed over the last year. One big reason was that John Doody had his subscribers in it but they jumped ship a back in October. Waterfall decline, duress, and selling begets selling.
They are doing a dilutive capital raise, which further spooked the markets, but considering how much upside there is here in mine life 10+ years and tons of exploration potential it just looks crazy at the current valuation. I’ve just started to nibble on this one, but just reviewed these corporate presentations from recent mining shows and was impressed with the longer term plan.
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> $GQM $GQMNF Golden Queen Mining Co. Ltd.
September 26, 2017 – The Denver Gold Forum #VIDEO
http://www.denvergoldforum.org/xpl17/company-webcast/GQM:CN/
>> Golden Queen Mining Co. – Thomas M. Clay, Chairman & CEO #CorporatePresenation #VIDEO
Precious Metals Summit Beaver Creek, Sept. 18-20, 2017
>>> Corporate Slide Deck
https://www.goldenqueen.com/assets/docs/pdf/gqm.september.2017.pdf
I looks like GQM / GQMNF was a tax loss sale but like we’ve been remarking lately, much of the “Tax Loss Selling” has already taken place. The big move was in October and it has just been pounded since then all through November. I’d like to see it get wacked down by 25-50% more and then I’ll likely get more serious about adding to it.
(LODE) Comstock Mining is another small producer that has just absolutely had it’s hind-end handed to it. It is creating quite an interesting opportunity though.
Recently they sold a great deal of their real estate holdings and water concessions when Tesla, Google, and other tech companies moved into that area. This paid off debt and allows them to focus on their producing mine and on real exploration on a move forward basis.
https://comstockmining.com/images/stories/investor-library/LODE_September_2017-09-01.compressed.pdf
For clarity Golden Queen and Comstock Mining are incredibly risky speculations, but they both have producing assets and exploration upside. In addition, now that the share price has just been slaughtered, there isn’t nearly as much downside risk as there was last year in these companies, and they are both in the process of increasing their production, improving their grades, and getting re-rated, right in time for metals prices to make some progress next year.
I’m not saying they are top shelf, but rather that they are really undervalued now, have good work going on, and have the potential to rise more on a percentage basis as their operations improve over the next 1-2 years.
if ya look at whats going on, its kinda funny oil is so cheap.
Russia, has overtaken saudi as the largest supplier of oil.
The US is sanctioning the largest supplier of oil.
Saudi is pushing for war with Iran, Yeman threatens saudi tankers.
Iran is sending warships to the gulf of Mexico.
The americans are pushing for war in a few places (lets hope Putin outsmarts the yanks again)
uk has just said they dont trust the Russians,
even as their ships break down…hilarious. they cant handle warm water.
Putin instructs all Russian manufacturing to implement everything needed to switch to military production swiftly.
These little things that we dont see on the news, make me think oil should be higher.