Hour 1 – Featuring Axel Merk, Mike Larson, and an update from Auryn Resources
It was another volatile week for US stocks but the real standout was the continued fall in yields and a quick inversion of the 10year/2year yield curve. Recession fears are on the minds of traders which is helping the safe assets garner a buy. We focus a lot on yields in this hour and also get an update from Auryn Resources.
Please keep in touch by emailing me at Fleck@kereport.com.
- Segment 1 and 2 – Axel Merk, President and CIO of Merk Investments kicks off the show with a comprehensive look at the markets. Take note of what Axel says regarding money flows into risk off assets being more a hedge right now.
- Segment 3 – Mike Larson, Editor of The Safe Money Report focuses on the falling yields in the US. We discuss what this means for the Fed and why he continues to like defensive stocks.
- Segment 4 – Ivan Bebek, Executive Chairman of Auryn Resources provides a full update and answers your questions on the status of the properties in Peru. We also discuss the work just completed at Committee Bay and the possibility of an asset.
Exclusive Company Interviews This Week
- Comments on the Uranium sector from the Sprott Conference . – UEC
- Novo Resources – A Closer Look At The First Egina Trench Results
Very helpful update on Auryn – thank you Cory.
I don’t understand Mr. Merk’s apparent belief that U.S. – China trade should not change, as optimum policy.
Does Mr. Merk not care that if it continues “as is” the U.S. is destroyed, by loss of money and by loss of intellectual property and manufacturing expertise ?
If China is allowed to acquire all American knowledge, without having to do the research or pay for the use of American knowledge, then the U.S. will just spiral downwards.
The U.S. will certainly spiral downwards if it relies on intellectual property monopoly powers rather than new innovation, take Apple as a prime example
Thanks for the chat with Ivan B. Maybe AUG should merge with Miramont in a stock swap.
In this equity market I will attempt to short again if another swing high, bullish reversal candle occurs on the 30,120 ,300 minute chart….But on daily we currently have a bottom signal with RSI divergence plus a morning star pattern …lighter than normal summer volume so far…..Vix had rate of change greater than minus 10% so this could be another initiation move…Fall credit crisis?
Three resistance levels came together to stop gold this week:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=7&mn=7&dy=0&id=p39481345615&a=638471359
Peter Hug is right that 18.50-19.00 silver is possible in the short term and I agree with his view that the Fed will do whatever it takes to prevent another 2008 style collapse. That means the dollar will to plunge versus gold.
https://stockcharts.com/h-sc/ui?s=%24USD%3A%24GOLD&p=W&yr=5&mn=0&dy=0&id=p10810487520&a=682947454
…But will probably bounce vs gold in the short term:
https://stockcharts.com/h-sc/ui?s=%24USD%3A%24GOLD&p=D&yr=1&mn=11&dy=0&id=p22076443481&a=682948171
Peter Hug:
https://www.youtube.com/watch?v=Xl3M1hf-FcU
Rick Rule filled in for Eric Sprott today, on Sprott Money News Weekly Wrap-Up.
(Rick starts at 6:38 min mark) $Gold $Silver #AudioInterview
Are Bonds So Expensive That You Buy Gold? Hedge Funds Think So
By Ruth Carson and Adam Haigh – August 15, 2019
Chantelle Schieven – We Have a Long Way To Go in this Gold Bull Market
@PalisadeRadio – 15 Aug 2019
https://ceo.ca/@palisaderadio/chantelle-schieven-we-have-a-long-way-to-go-in-this-gold-bull-market
DoubleLine CEO Jeffrey Gundlach warns Fed rate cuts will not stop U.S. recession
Reuters By Jennifer Ablan – 14 hours ago
Gold and Silver Recover Ground Amid Recession Fears
Mauricio Carrillo – (08/14/2019)
“fears of a recession have sparked after the 2-10 year bond yields inverted earlier in the day as the 10-Y Treasury note fell to 1.623%, below the 2-year at 1.634.”
“According to experts who watch this event as an indicator, a recession happens, on average, 22 months following the inversion. So, fears about a recession jumped, and risk aversion flooded markets.”
https://www.fxempire.com/news/article/gold-and-silver-recover-ground-amid-recession-fears-593213
Gold Rallies as US Yield Curve Inverts
David Becker – (08/14/2019)
Gold prices close at fresh 2-year highs
Marin Katusa – US Dollar to Remain Strong, as Gold Continues to Surprise
by @PalisadeRadio on 19 Aug 2019
https://ceo.ca/@palisaderadio/marin-katusa-us-dollar-to-remain-strong-as-gold-continues-to-surprise
Marin sure tries to play up his “strong dollar/strong gold” call as something shocking and hard for gold bugs to understand but then shows his own lack of understanding with the claim that the dollar is strong along with gold when, in fact, it is really weak along with all of the other major fiat currencies, albeit the least weak among them.
The USD is a money substitute and it is falling versus real money. That’s all you (and, apparently, the big money) needs to know.
Each of the last two weeks showed greater volume than was seen in 2016 or even 2011:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=9&mn=11&dy=0&id=p60594685936
Agreed that the only reason the Dollar looks strong or has been rising is in relation to other fiat currencies in the dollar index (like the Euro or Pound or Loonie) that have been falling worse.
Gold (real money), has been gaining on almost every fiat currency on the planet, and that is the real measuring stick that matters.
How The Finance Prof Who Discovered The ‘Inverted Yield Curve’ Explains It To Grandma
Carmine Gallo – August 18,2019
Gold’s $1650 Upside Price Target
Robert McHugh, Ph.D. – August 11, 2019
“Gold popped out of an Ascending Bullish Wedge. What is nice about this pattern is that it gives us an upside price target, in this case 1,650ish. We also annotated the current Elliott Wave mapping for Gold overlapping this pattern. Gold is now inside wave 3-up. However, in precious metals, the most dramatic moves are wave 5’s now 3’s like we see for stocks. This means Gold will be headed far above 1650 after it pauses around that level.”
“In previous posts we showed Gold finishing a Bullish Cup and Handle pattern that also gave us an independent third pattern with the same 1650 upside price target. Things are shaping up nicely for Gold Bugs.”
https://www.gold-eagle.com/article/gold’s-1650-upside-price-target
Gold Price’s Next Target Could Be $1,600 Says Peter Hug
Kitco News – Friday August 16, 2019
https://www.kitco.com/news/2019-08-16/Gold-Price-s-Next-Target-Could-Be-1-600-Says-Peter-Hug.html
Whoops. I see Matthew has already posted a link to this video above.
Sorry for the duplicate link…. but here’s a second opportunity for someone to watch the video. 😉
Why This Is The Go-To Asset When ‘Monetary Policy Lunacy’ Starts Hitting Markets
Aug 16, 2019
“Some investors do seem to be playing it safer lately, which brings us to our call of the day from Otavio Costa, global macro analyst at hedge fund Crescat Capital, who is advising they buy gold. “We are entering a period of monetary policy lunacy, and in our view, there has never been a better time to own gold,” said Costa, in emailed comments.
Central bank easing and perception that interest rates will keep falling, along with jitters over the global economy and trade, have driven gold up nearly 20% this year. “Precious metals are “one of the few pockets of this market offering tremendous value to hedge against extreme monetary policies, bursting asset bubbles, and record global leverage,” says Costa.
Can A New Stimulus Plan Revive The Eurozone Economy?
By Daniel Lacalle – Tuesday, July 30, 2019
Interestng perspective on the big money starting to position in Gold as a hedge and how those inflows of capital could affect pricing:
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@HRA-Coffin – “When it comes to the $gold market and the “new” macro attention its getting, it’s all about scale. There are some fairly scary things going on out there, offshore and in credit markets mainly, that a lot of smart large-scale traders are getting quite worried about. Gold is one of two or three potential trades to hedge or offset some of those risks. That’s led to the recent entry into the market by some very, very large money pools that are just starting to scale into the gold market. The gold market isn’t tiny, but we’re talking about accounts now that move tens of billions around. I’m NOT a gold bug in the traditional sense, but I recognize the size discrepancy here. If these new accounts scale up to 5 or 10 percent holdings, they will move the market further than anyone expects. They know the scale they are working at, which is why some of these guys are throwing around gold price guesses like $3000 or $5000/oz. It’s not because they are gold bugs, they’re just looking at the scale of the potential money inflow in relation to the market size.”
that was Eric Coffin. ^^
A good response back from Bryan Slusarchuk – Co-founder, former President and Director of K92 Mining Inc
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@bslusarchuk – “Coffin, my sense of the gold space (for gold equities) is that the precious metals funds are finally starting to see very modest inflows and are deploying that capital into names they have already done the work on. And the generalists in the US (and Canada to a smaller degree) are looking to go to equal weight from underweight on golds but havent done the modeling work yet so are relying on sell side for advice. Financings are hard to keep a lid on right now as demand far outstrips supply (the K92 $20M deal went through the book and greenshoe overnight in a matter of minutes and the Turmalima which is a private deal opened and closed a $7m book with $30m+ in interest, …….anecdotal evidence of how hot the space is as to financing). Good deals are attracting capital but we still havent seen PM funds get big inflows and the generalists are still flat footed bit and scrambling for dea/idea flow…….”
A Monumental Paradigm Shift Is Underway In Global Financial Markets
by @Goldfinger on 18 Aug 2019
https://ceo.ca/@goldfinger/a-monumental-paradigm-shift-is-underway-in-global-financial-markets
The Dow peaked at 23 ounces of gold last October and now trades at 17 for a 24% decline:
https://stockcharts.com/h-sc/ui?s=%24INDU%3A%24GOLD&p=W&yr=3&mn=11&dy=0&id=p87374881004&a=607342818
Yes, it looks like the trend of Gold gaining on the DOW is in order.
That’s one of the reasons I believe that Gold may eventually prosper more as the general equities continue to pull back lower later in the year and moving into 2020.
I used to like reading Hindenburg Bob & his charts a number of years back. I guess thats when I read everything on gold-eagle.com
(PGM) (LRTNF) Pure Gold Reports Second Quarter Financial Results
@nasdaq on 14 Aug 2019
“The US$90 million in proceeds from the Financing fully funds the initial capital costs to develop a mine at Madsen Red Lake based on the February 2019 Feasibility Study. Combined with the Company’s existing cash resources, the Financing insures against cost overruns and provides flexibility to continue exploration and advance our new discoveries forward. The callable stream provides immediate cash to the Company allowing development activities to commence while we finalize our permit amendments and can be repurchased once the mine is in production and generating cash flow.”
(PGM) (LRTNF) Pure Gold Intersects Bonanza Grade Gold Including 108.5 G/t Gold Over 1.0 Metre At Madsen Red Lake
July 30, 2019
(KNT) (KNTNF)K92 Mining Inc. Releases 2019 Q2 Financial Results, Increases 2019 Production Guidance and Decreases 2019 Cost Guidance
@nasdaq on 15 Aug 2019
https://ceo.ca/@nasdaq/k92-mining-inc-releases-2019-q2-financial-results
(KNT) (KNTNF) K92 Mining – Corporate Presentation – August 2019
Kainantu Gold Mine – Growing Production & Transformative Discoveries
https://www.k92mining.com/wp-content/uploads/2019/08/k92-august-2019.pdf
Wow – after all the good work that K92 had been doing and the people and government of Papua New Guinea officially trashed their jurisdiction today.
I had to bail on KNT after just adding to the position a few days back. It has been quite a run, but I don’t like what is unfolding regarding nationalization at all and they are just shooting themselves in the foot regarding foreign investment for years to come. Very sad to see such a dumb decision by the 18th largest gold producing nation on the planet.
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PNG aims to retain 30% of exported Gold, may change currency pegs
Jonathan Barrett – 2 MIN READ
Landowners Want 100 Per Cent Ownership of Porgera Mine
“Majority landowner representatives are calling on Prime Minister James Marape to extend his ‘Take Back PNG’ campaign by taking back the Porgera gold mine from operator Barrick Niugini Limited (BNL).”
“Acting through the Justice Foundation of Porgera, 18 out of 24 landowner agents who signed the MOA in 1969, are urging the PM to act on his word by taking back Porgera gold mine from Barrick.”
“In a recent press conference in Port Moresby, chairman of Justice Foundation for Porgera Mr Jonathan Paraia, claiming to speak for the 18 landowner agents, declared their intention to take 100 per cent ownership.”
https://ramumine.wordpress.com/2019/08/06/landowners-want-100-per-cent-ownership-of-porgera-mine/
I don’t see much downside for gold just yet.
GLD:
https://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=1&mn=1&dy=0&id=p87022656809&a=683082522
It is extremely overbought but not a sell in my book:
https://stockcharts.com/h-sc/ui?s=GLD&p=W&yr=3&mn=11&dy=0&id=p19949902550&a=683083655
I updated the following chart in February and you can see by my red arrow that I wasn’t bearish enough the 10 year yield:
https://stockcharts.com/h-sc/ui?s=%24TNX&p=W&yr=7&mn=3&dy=0&id=p0316499141c&a=595476952
Silver pulled back after precisely touching a fork resistance last week but I am confident that it will soon be heading for $21+…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=3&mn=11&dy=0&id=p65696159193&a=501194637
SRSrocco Report on silver:
https://www.youtube.com/watch?v=uN1VFE2yeRg
SLV was capped by Fibonacci fan resistance:
https://stockcharts.com/h-sc/ui?s=SLV&p=W&yr=3&mn=6&dy=0&id=p75501162485&a=637586147
Matthew, if you are comfortable with it, drop me an email. I have a couple of news letters you might enjoy……..or disregard.
chriswenson@gmail.com
Macro overview on speculative sectors for 2019:
Thanks guys for all the focused updates.
Apparently, he forgot about SILVER in Exter’s pyramid on that coffee cup. Thanks , Chris Duane
Agreed. Hi ho Silver!
Thanks guys for another great weekend show from the KE Report. Ever Upward!