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Gold Market Decline – Look To Emerging Markets

Cory
August 22, 2018
Below is the recent report from Dan Oliver at Myrmikan Capital. Dan always has some insightful comments on the PM markets while incorporating historical references that are worth your time.
Here are his initial comment followed by a PDF link at the bottom.
Gold has been declining for seven months. The attached report argues that the culprit is emerging market turmoil that will quickly spread to senior markets unless the Fed acts. If it does, gold will rebound strongly and swiftly. If it does not, gold’s weakness may persist for a time, but inaction introduces the prospect of a complete liquidation of the financial system, including the Fed itself.
Thank you for your interest in Myrmikan Capital.
Click here to read over the full report.
Discussion
42 Comments
    Aug 22, 2018 22:52 PM

    To reply comment to a few made on the weekend.
    For one discrediting Armstrong is hilarious. He gets ALOT right and make you guys that bash him look like idiots.
    Speaking of idiots…calling for a markets to meltdown for like 5 yrs when I argued that it was a joke and said its going way higher. So did Armstrong. I also said i highly doubted a gold boom and Bob had gold dust for brains…go back and look turkeys. https://ilovemyfreedom.org/wednesdays-stock-market-reaction-to-cohen-manafort-tells-you-everything-you-need-to-know/?utm_source=newsletter&utm_medium=postup

      Aug 22, 2018 22:39 PM

      Bill, you don’t know anything for yourself so you latch onto those you perceive to be credible.
      It doesn’t matter how many market calls Socrates has gotten right, Martin says some unequivocally stupid things about gold and even central banking. In fact, some claims have been so dumb that I’ve wondered if they were meant to be disclosures to his thinking readers that he is compromised. Of course, I’m probably giving him too much credit and his genius is reserved for computer programming.

      b
      Aug 23, 2018 23:44 AM

      There were others saying they figured the markets were going alot higher.

      Im almost ready to concede my historical aug move up in gold is pathetic.
      We missed a july bounce so maybe its no surprise.

      Maybe gold is simply getting off to a slow start but it looks like 1200 is significant resistance.

      We always have next year.

      Aug 23, 2018 23:59 AM

      Bill:

      You are like a broken record mated to a stupid pit bull. You say the same wrong thing again and again. You can’t give up that bone made up of stupid.

      Here is a world class stupid comment from your latest GURU.

      Martin Armstrong Dec 2011

      This is a global MELTDOWN in sovereign debt and public debt at the municipal, state, and federal levels. UNDER NO CIRCUMSTANCES BUY LONG-TERM DEBT FROM ANY OF THESE PUBLIC LEVLES OF GOVERNMENT! You WILL lose everything you invest PERIOD.

      There are those still putting out the nonsense that gold will collapse because the economy will turn-around…

      Gold should back off and retest the support… We should see gold at $5,000 by the end of 2015.

      Bill:

      Why don’t you go back to my Jan 26 article where I predicted turns in 12 commodities and throw rocks at that for a change? How many people have you ever heard predict 12 commodities and get it dead right and to the day?

      No one get everything right. Not me, not Martin Armstrong. Frankly you simply lack the ability to think for yourself so what you say is more babble than anything else.

      b
      Aug 22, 2018 22:56 PM

      right on the beach @ kits.
      popular beach.
      An excellent legion close to there. (or was) small,10 tables?, thick wooden tables high grade leather chairs, ww 1 prop on the wall.
      4 mil doesnt surprise me.

      Aug 22, 2018 22:27 PM

      might be a pyramid scheme….. 🙂

    Aug 22, 2018 22:04 PM

    Good evening,

    Who was it a while back that said real state in toronto or Canadá topped in 4th quarter 2016 or first quarter 2017? All I could recall was mob moriarty or maybe Tracy. Nevertheless does anyone still believe we hit the top?

      Aug 23, 2018 23:05 AM

      Well there was definitely a correction. Just ask all the people who are scrambling to come up with the extra down payment needed for new homes that have seen there value drop by over $100,000 in many cases. A lot of these people bought new homes that were closing in 2017-18 and thought they would be getting more for their present homes that also dropped in value. Huge double whammy. Only started to see recovery in prices this summer and it’s been mostly contained to Toronto itself and not the GTA

    Aug 22, 2018 22:50 PM

    Thanks jerry

      Aug 22, 2018 22:56 PM

      Hope you read the next one……… You are welcome……. 🙂
      It will cheer you up….I hope……..

      Aug 22, 2018 22:00 PM

      n total, three Canadian and three Australian cities made the top-10 list.

      Aug 23, 2018 23:01 AM
        Aug 23, 2018 23:06 AM

        Pay is not matching the increase in prices……..the new colleges grads….are not in the market to buy new homes…..this new class of debtor (college debt slave)..will play a big part in housing going forward.
        Plus if , you take a Million grads, who have avoided paying student debt /loans,… you have one million less buyers….or maybe , now they can qualify for no doc loans….. LOL

    Aug 22, 2018 22:03 PM

    Going to the Dogs……..or this is a bunch of crap………
    https://www.zerohedge.com/news/2018-08-22/san-francisco-poop-patrollers-make-185000

      Aug 22, 2018 22:04 PM

      Making all that money and still has to commute……..

    Aug 22, 2018 22:41 PM

    China wants cheap gold

    Aug 23, 2018 23:29 AM
      Aug 23, 2018 23:30 AM

      Greece was lent more money to pay interest to Greece’s creditors, so that they would not have to lose one cent. The additonal lending, called a “bailout” by the presstitute financial media, was not a bailout of Greece. It was a bailout of Greece’s creditors.

      The Obama regime encouraged this bailout, because the American banks, expecting a bailout, had sold credit default swaps on Greek debt. Without a bailout the US banks would have lost their bet and paid default insurance on Greek Bonds.

        Aug 23, 2018 23:32 AM

        If memory serves, China bought the Greek seaports. Germay bought the airport. Various German and European entities bought the Greek municipal water companies. Real estate speculators bought protected Greek Islands for real estate development.

          Aug 23, 2018 23:33 AM

          The little people always get the short end of the stick

        Aug 23, 2018 23:16 PM

        Interesting theory Jerry, and I believe you to be 100% correct on this matter. The whole CDS way of gambling on various markets is just unbelievable. It is so self-destructive and all in the name of extra dollars.
        One only needs to re-call that this is what happened in the GFC where many banks took insurance out on sh*tty loans and CDOs to the point where some soon realised that the very company aiding and abetting in those insurance deals (AIG) would potentially become stressed if things went south. In turn these people took insurance out on AIG, knowing they would not be able to back all their insurance deals from the inevitable failure of those loans.
        It is such a crook, corrupt system where this sort of behaviour is not only accepted, but allowed to continue all the while knowing the snowball, calamitous results that can and will follow. All in the name of the almighty dollar ehh???

          Aug 24, 2018 24:42 PM

          thanks for the reply………

    Aug 23, 2018 23:25 AM

    (IO) (INCAF) Inca One Gold Produces 1,291 Ounces Gold in July 2018

    by @newswire on August 16, 2018

    “We continue to see operations at Chala One maintaining 96% to 100% of its permitted capacity during the past several months. Though our grade was below previous averages, it is encouraging to see positive year-over-year results as our team efficiently executes our goal,” said Edward Kelly, President and CEO of Inca One. “It is also pleasing to see a significant bump up in deliveries, reaffirming our well-known belief of ample supply of quality material for processing. Looking forward, our goal is to maintain our current output which will allow us to hit our production targets again for this quarter, while seeking higher grade material. Additionally, we will work to close the Koricancha transaction, bringing it online to achieve the synergies and operating efficiencies that will fuel growth as we scale the business in the second half of this calendar year.”

    https://ceo.ca/@newswire/inca-one-gold-produces-1291-ounces-gold-in-july-2018

      Aug 23, 2018 23:51 PM

      (EQX) Equinox Gold Completes Sale of its Koricancha Mill

      Aug. 21, 2018 (GLOBE NEWSWIRE) —

      “Equinox Gold Corp. (EQX) (EQXFF) is pleased to announce that the Company has completed the sale of its interest in the Koricancha Mill in Peru to Inca One Gold Corp. (IO) (INCAF) as previously announced on July 17, 2018. ”

      https://ceo.ca/@nasdaq/equinox-gold-completes-sale-of-its-koricancha-mill

    Aug 23, 2018 23:34 AM

    The miners are following the arrows I drew the other day:
    http://schrts.co/vLSMDK

    Aug 23, 2018 23:43 AM

    I have now increased my Jag position by 56%…
    http://schrts.co/x6jSeH

      Aug 23, 2018 23:29 PM

      I’ve been adding to my Jaguar Mining position as well because longer term this one is solid mid-tier producer with great exploration upside, trading like a penny stock explorer. I see no fundamental reason for the fishing line selloff other than a larger fund or investor exiting all at once. That kind an exit provides a great opportunity to accumulate.

      I sold a crappy position in a different explorer today, and moved those funds on top of the JAG position I have. The explorer was going nowhere fast, where Jaguar Mining will be producing Gold for years to come. It was a very easy swap to make.

    Aug 23, 2018 23:24 AM

    Hi Matthew,

    I don’t own any Jag, but I have it on my watchlist primarily do to the comments you and Ex have made about the company. I know Jag is a junior gold producer. I believe it has a big deposit and exploration upside and is one of your favorites. Are you investing more in the gold miners or are you also still investing in the silver miners too at this point in the cycle? I don’t know if I want to add another gold miner or just add to some of the others I own to average down my cost.

      Aug 23, 2018 23:47 AM

      Hi Charles,

      I still like the silver miners and believe that they will generally outperform the gold miners.
      Jag appeals to me for reasons that might make it unappealing to others. I like the leverage (risk) provided by the relatively high all-in sustaining costs (AISC) because I think gold will do a little better than many expect. I also like betting on the exploration potential and gaining some political diversification — Brazil is safer than some think and getting better.
      As we saw in 2016, Jag is capable of moving like a silver stock and last week’s plunge to .5x book and a PE of 12 will help it to repeat that performance. BUT, you should probably avoid it or not hold it for long if you doubt that gold will move significantly above 1300 and stay there. Of course, the same can be said of many junior miners.

        Aug 23, 2018 23:54 AM

        For what it’s worth and generally speaking, a PE of 12 is much lower for a gold miner than it is for a “conventional” stock. Since miners usually have significant assets in the ground, PEs tend to be much higher.

          Aug 23, 2018 23:35 PM

          Solid points on the risk/reward ratio for JAG, but as you mentioned, I don’t doubt gold will get back up above $1300 and this company has a great deal of torque to the upside when it decides to move on the optionality of its production metrics improving on a percentage basis for a relatively small move higher in metals prices (as compared to other lower cost producers that won’t realize quite as much bang for the buck on a percentage basis).

    Aug 23, 2018 23:05 PM

    Got it. I think I will watch this one from the sidelines. I don’t disagree with your thesis, but I’m not looking to add risk right now. I was looking at Kootenay Silver today as it is getting a pop today. I was looking at the monthly chart. The downside looks fairly low provided it doesn’t go to zero! That is some base it is building. Just doing a lot of watching right now. Tomorrow should be interesting with Fed speech out of Jackson Hole.

      Aug 23, 2018 23:13 PM

      I agree about Kootenay and now have quite few shares.
      Correction: Jag’s PE would be more like 7 following the big haircut last week IF this dip in gold doesn’t last long.

      Aug 23, 2018 23:37 PM

      Charles I like and own Kootenay Silver as well. Fantastic JV partners, it has the goods, and will either go into production in the next 2-3 years or they’ll get bought out by one of their partners (the takeover is more likely in my opinion).