Weekend Show – Jesse Felder, Dana Lyons and Mike Larson – Money Flows, Commodity Trends, Key Moves In Gold, and Overall Sentiment
Welcome to the KE Report Weekend Show! It was another good week for gold and value stocks as the rotation continues out of growth and tech. The Fed meeting minutes told us nothing we didn’t already know about the upcoming rate hikes. Geopolitical news on Russia and Ukraine flared up a bit more but could settle if a war does not materialize. This is a wildcard right now.
We focus this Weekend’s Show on high level money flows and general sentiment. US markets, commodities, including gold and oil, as well as interest rates are all establishing some new trends this year.
Please keep in touch by emailing us at Fleck@kereport.com and Shad@kereport.com. We love hearing from all of you!
- Segment 1 and 2 – Jesse Felder, Founder and Editor of The Felder Report kicks off the show with a discussion on Fed policy. We get into the possibility of yield curve control which seems to have been forgotten by analysts. We then discuss sentiment and the gap between current market levels and where they might correct to now that the easy money policies are being pulled away. Click here to learn more about The Felder Report.
- Segment 3 – Dana Lyons, Fund Manager and Editor of The Lyons Share joins us discuss the move in gold to $1,900 this week. As a generalist I always find it important to check in with Dana’s outlook for the PMs. We also chat oil and US markets. Click here to visit The Lyons Share website to take advantage of Dana’s special discount offer.
- Segment 4 – Mike Larson, Editor of The Safe Money Report joins us to recap the recent market moves that continue to favor safer investments and sell growth and tech stocks. He points to a couple key divergences within the markets that further show money flows are very different this year. We also ask just how long some investors can hang on to the losing growth trade. Click here to learn more about Mike’s Safe Money Report.
Exclusive Company Interviews This Week
- Thor Explorations – Production And Exploration Growth At Segilola And 30,000 meter Drill Program and PFS On Tap At Douta
- Canstar Resources – High-Grade Gold Results From the Kendall Prospect and The Acquisition Of The Hermitage Property, Newfoundland
- Goldshore Resources – Recapping The Initial 2021 Exploration Results And 2022 Business Strategy With The Ongoing 100,000 Meter Drill Program
- Benchmark Metals – Continued Impressive Drill Results, A Look Ahead To The Updates Resource and Other Catalysts
- Newcore Gold – Drill Results From The Sewum Extension and Eradi Gold Target Plus a New Zone With High-Grade At Surface
- GMG – Q&A with Craig Nicol – Addressing Your Questions On The Battery, Thermal-XR, and Lubricant Divisions
- Kenorland Minerals – Asset Updates From The Frotet, Healey, and Hunter Projects As Well As Management Team Growth
- Silver X Mining – An Introduction To This Silver Production And Exploration Story In Central Peru
- Radisson Mining – Exploration Update From O’Brien West And Trend 0, Plus 35,000 Meters To Be Assayed Or Completed By Q2 2022
- Tier One Silver – Recapping The 2021 Drill Program In Peru At Curibaya And The Key Targets To Be Followed Up On
Is It ‘Monetization’ Yet, Dr. Bernanke?
Jesse Felder – The Felder Report – February 16, 2022
Eleven years ago, shortly after the onset of QE 2, Ben Bernanke gave us his definition for “monetization” of the debt, telling Congress (hat tip, Grant’s):
Monetization would require a permanent increase in the money supply to pay the government’s bills through money creation. What we’re doing here is a temporary measure which will be reversed, so that at the end of this process, the money supply will be normalized, the Fed’s balance sheet will be normalized and there will be no permanent increase, either in money outstanding or in the Fed’s balance sheet.
At the time, The Fed’s balance sheet was approaching $2.5 trillion. Today, it stands at nearly $9 trillion, more than triple the figure from a decade ago.
https://thefelderreport.com/2022/02/16/is-it-monetization-yet-dr-bernanke/
Can The Fed Afford To Tighten Into An Economic Slowdown?
Jesse Felder – The Felder Report – February 9, 2022
https://thefelderreport.com/2022/02/09/can-the-fed-afford-to-tighten-into-an-economic-slowdown/
‘The Most Negative Earnings Guidance Since 2009’
Jesse Felder – The Felder Report – 02/12/2022
‘Inflation Is The Way Democracies Die’
Jesse Felder – The Felder Report (02/19/2022)
https://mailchi.mp/felder/inflation-is-the-way-democracies-die
Gold: Break-Out or Fake-Out?
Michael Ballanger – Streetwise Reports (2/15/22)
“As the chart at the start of this missive reveals, gold prices have punched out through no few than five major downtrend lines since the beginning of 2020 only to have four of them turn out to be fake-outs, with prices reversing back down and hitting new lows well below the break-out levels shortly thereafter. The fifth such break-out happened on Friday and while the jury is out, the reason for the sudden panic into oil and gold was all “event-driven” and in my forty-five-odd years of trading, the vast majority of event-driven moves turn out to be failures.”
The Twitterverse must have had no fewer than fifty tweets light up with a near-ecclesiastic chorus of celebration highlighting this wondrous event and given that I am seriously long gold and copper with a certain Canadian gold developer as my largest holding, one might suppose that I would join the Kumbaya-line and pay homage to the precious metals gods that have finally seen the light. However, that would not be the case because the gray hairs predominating my chin are growing with annoying frequency each and every time the ”breakout buyers” get summarily pummelled. Ergo, I absolutely refuse to a) buy the breakout nor b) respond to anything “event-driven.”
“Could the move in gold and oil have been the machinations of a large group of traders looking for an excuse to have commodities grab the mantle of popularity from the tech and meme names? Could it have been the beginning of the Millennial and GenXer migration away from crypto and tech and into commodities? The answer is “YES” to both with the word ‘possibly’ added for caveat-emptor flavoring.”
https://www.streetwisereports.com/article/2022/02/15/gold-break-out-or-fake-out.htm
Gold was already advancing out of the end of year draw down in December, and already set up technically for the Q1 Run in January and February, and there are plenty of macroeconomic drivers putting wind in Gold’s sails from the Fed policy (finishing up removing accommodative bond purchases this month by wrapping up “tapering,” getting ready to start rate hiking cycle in March, and announcing they want to remove more liquidity by reducing their balance sheet and letting assets rolling over expire), and the reality that Fed can only get so far with all this before needing to reverse course again.
In addition we are seeing 40 year record high levels of inflation with CPI at 7.5% and PPI over 9%, and more generalists are waking up to the reality that negative real rates will continue to be in place for some time, it makes no sense to hold 10 year treasuries in the face of such high levels of inflation so there will be a rotation out of bonds and we’ve been seeing that, and the weakness seen in the general equities over the last few months is a further boon for the PMs.
The whole Ukraine/Russia geopolitical theater has been given more importance as the driver of Gold price than warranted, and is simply a convenient cover story at the moment. Again, as Craig, Brien, and Mike mentioned in their editorials the last few days, it played a part in boosting the precious metal as a safe haven, but maybe only by $50 which is miniscule in the overall big picture. If the war drums are muted, then sure Gold may take a $50 hit, but it will be as temporary and fleeting as geopolitical news always is. The main drivers for the yellow metal remain the place it has against financial malfeasance and monetary chaos, and that hasn’t changed and is still very much in gold’s favor.
Jordan Roy-Byrne has pointed out on the show a number of times that he’d like to see a sustained move above $1900 and a close there hold on a monthly and quarterly basis to confirm a “breakout” based on his definition. His concern, voiced earlier in this week’s editorial was that $1900 may reject price back down initially. That’s a fair concern and we’ll all know soon enough (likely this next week) if that is the case.
Gold closed the week at $1899.80 (so pretty darn close to $1900), and it made a new impulsive high above the recent one at $1879.50. Also as pointed out for years now…. Gold has continued to put in a series of “higher lows” underpinning the upward march in pricing since the Major bottom at $1045.40 back in December 2015. While many traders get wrong-footed only looking at the recent pattern of lower highs, they often the negate the foundation of higher lows, which clearly demonstrate the bull market has been and is alive an well in Gold.
As had been mentioned a lot for the last year, the line in the sand to watch in Gold for a sustained close above it is the $1920-$1921 level. $1920 (well, technically $1919.20) was the peak from last year, and $1921 has a lot of technical memory at the prior all-time high from 2011, so that area of resistance once cleared will be a very bullish signal. I’ve mentioned those levels as key to clear for a while now and have just been waiting on the yellow metal to approach them again for the test of that resistance zone.
If $1900 doesn’t reject pricing in the next few weeks to close up February, then that’s the level I’ll be watching to confirm a breakout. However, as Doc, Jordan, David Brady, and even Steve Penny mentioned in his interview yesterday, we could see a corrective move first for a few weeks in late February or March, before resuming the climb higher.
After that $1919-$1921 resistance is cleared definitively on a weekly basis, then the $1962-$1966 congestion zone of prior horizontal peaks and troughs is a key level of overhead resistance to signal an impulsive move higher, and then after that the all-time high from 2 years back at $2089 comes into focus as the last stop before breaking out to a new high.
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> Here’s a Gold Chart that highlights those key troughs and peaks:
Inflation can be ‘the way democracies die’: Charlie Munger
Ben Werschkul · Yahoo Finance – Wed, February 16, 2022
“In an exclusive interview Wednesday with Yahoo Finance Editor-in-Chief Andy Serwer, legendary investor Charlie Munger weighed in on the high stakes of soaring inflation in the United States.”
Citing examples from the Roman Republic to Adolf Hitler to Latin America, Munger said, “Inflation is a very serious subject, you could argue it is the way democracies die.”
He notes that it was after of years of inflation when “eventually the whole damn Roman Empire collapsed, so [the current situation] is the biggest long-range danger we have, apart from nuclear war.”
“The recent Consumer Price Index (CPI) data from the Bureau of Labor Statistics found U.S. inflation accelerating in January at its highest rate in 40 years, with prices rising across a wide range of goods and services. The 7.5% annual gain in January — driven by high demand and lingering shortages from supply chain disruptions — was a jump from the 7.0% year-over-year increase seen in December’s number.”
Acclaimed Expert says Probability High for US Market Crash & Economic Depression
by Paul Lengemann – BullsnBears Economist – Feb 11, 2022
Since December 2021, market crash expert Michael Markowski has been burning the midnight oil to conduct empirical (1871-2022) research on the following below. Based on the findings and his prior research of secular bull and bear markets from 1802 to 2009, he is predicting that the S&P 500’s all-time high (4818.62) reached on 1/4/22 will prove to be the high for the index’s secular bull (2009-2022) market.
– S&P 500 PE ratios
– S&P 500 dividend yields
– Inflation
– 10-year US Treasury bond yields
Why Inflation Is Baked In The Cake And Gold Is Moving Up
Ahead Of The Herd – February 18, 2022
“In the current under-supplied environment, high oil and natural gas prices will be with us for the foreseeable future, with a knock-on effect on inflation, more ‘sticky’/ long-lasting than transitory.”
“The latest inflation statistics show the US Consumer Price Index (CPI) up 7.5% in January — a 40-year high. Canada’s inflation rate hit 5.1% last month, the most since 1991.”
“To understand the current inflationary cycle, where prices are rising everywhere and in everything, including energy (home heating), transportation (gasoline), food, housing, wages, metals, and other raw-material inputs of manufactured goods, we need to talk about the oil market.”
“Energy remains the biggest contributor to CPI inflation, in January representing 27% compared to 29.3% in December. Oil and inflation are linked because oil is such a major input of the global economy. Despite billions being spent on new solar and wind farms, the world still largely runs on fossil fuels.”
https://aheadoftheherd.com/why-inflation-is-baked-in-the-cake-and-gold-is-moving-up/
Looking for the Miners to Confirm Gold Breakout
David Erfle – Friday February 18th, 2022
“In a flight to safety, as continued signs of escalation in the Ukraine-Russia conflict and some less-than-stellar economic data ushered in risk-off sentiment, the gold price reached strong overhead resistance at $1900 on Thursday. With 100% certainty of the Federal Reserve monetary punchbowl about to be emptied, the scary geopolitical headlines, widespread inflation, and deteriorating economic data has gold prices on the cusp of a major upside breakout.”
“In last week’s missive, I noted the likelihood of a bullish breakout of the gold price from an 18-month bullish symmetrical triangle awaiting a strong catalyst to break in either direction soon. With investors recognizing the 13-year party on Wall Street might be coming to an end, along with the realization of cryptocurrencies not being a hedge against inflation, the addition of geopolitical tensions is fueling an upside breakout in the safe-haven metal.”
“Technically, if April Gold Futures close above $1900 on a weekly basis later today, the odds increase of the breakout continuing towards the $1920 level next week. Further out, we need to see a monthly close above $1900 for technical confirmation of a bullish breakout in gold.”
https://mailchi.mp/32f7fe9a4d5d/david-erfle-weekly-gold-miner-sector-op-ed-1600598
Gold Thrives in Rate-Hike Cycles
Adam Hamilton – Feb 18, 2022
“Gold-futures speculators’ most-feared hobgoblin is Fed-rate-hike cycles. These super-leveraged traders wielding outsized influence on gold prices flee in terror when rate hikes loom. The resulting heavy selling hammers gold sharply lower, damaging sentiment. But these myopic speculators apparently have no history books, as gold actually thrives during Fed-rate-hike cycles! They’ve proven very bullish for this asset.”
http://www.321gold.com/editorials/hamilton/hamilton021822.html
Mark O’Byrne: Interest Rate Tightening Cycles are Great for Gold
Palisades Gold Radio – Feb 17, 2022
Tom welcomes Mark O’Byrne back to the show. Mark is the Founder of Health Wealth Gold.
Mark discusses gold’s lack of reaction to current global risks. The metals should have moved higher in response to inflation. Supposedly, they are anticipating rate hikes but a large move seems unlikely as that would crash the markets. Inflation is not transitory and we’re just seeing the start of it.
He expects weakness in the short term for gold as Fed takes some sort of action. Generally, within a short period afterward, we will see gold break to the upside.
Ira Epstein’s Metals Video (02/18/2022)
Technical Analysis, Gold, Silver, Copper, Platinum
Gold’s Rally Pauses As Investors Await Talks Next Week Between U.S. and Russia
Gary Wagner – The Gold Forecast – Feb 18, 2022 #TechnicalAnalysis #Chart
“Market participants witnessed the continuation of a strong rally this week, taking gold substantially higher over the last three weeks. As this week comes to a close, gold futures have had substantial gains of approximately $38 or 2.04%. Gold opened at approximately $1862 on Monday, and as of 5:52 PM, EST is currently fixed at $1900.20.”
“Gold prices moved higher during three of the five trading days incurring a moderate price decline only on Tuesday, February 15. The largest advance this week occurred yesterday when gold gained almost $30 and broke above the key psychological level of $1900 per ounce for the first time since June 1. As traders await more news in regards to the Russia Ukraine tensions, today’s price action reflects that they are waiting to see if talks to be held next week will result in a de-escalation of the geopolitical tension in Russia and Ukraine. This has created uncertainty.”
Gold Stocks Surge As War Concerns Rise
Morris Hubbartt – Feb 18, 2022 – Super Force #PreciousMetals #TechnicalAnalysis #Video
Thanks for the great show KER!
Much appreciated Charles.
Hey Ex, this one is for you, could Artificial Intelligence wipe out humanity. I would bet on the machines hands down. Humans are just a sub species like Dinosaurs. We are living on borrowed time. Just like The Fed who got us into this financial mess, we have created a master race that will replace us. LOL! DT
https://www.the-sun.com/tech/4718282/artificial-intelligence-wipe-out-humanity/
DT – Out of what I’ve seen out of humanity the last 2 years, I’d bet on the machines as well. Haha!
I’m betting on the truckers.
Bonzo – trucks are going to robot controlled soon as well. There won’t be human truckers for that much longer…
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10 Top Self-Driving Truck Companies 2022
January 18, 2022
https://www.ai4beginners.com/top-self-driving-truck-companies/
At the plants where self driving trucks are produced they won’t need humans to work on the assembly lines. When completed the trucks will drive themselves to a location where a computer will send them off for export or domestic use. DT
Hi Ex, like we used to say in the late Sixties, Right On Groooooooooooove! DT
Ex: It just ain’t trucking – I recently had a chat with someone into optics and AI and he was suggesting that lots of mining was headed the same way.
Good point Mike, yea there are a lot of advanced mechanized mining methods being explored where AI is being integrated and used in tandem with autonomous truck fleets. The robots can work 24/7, and don’t complain, skip work, get injured, or have labor union bs.
PM Royalty Conference (Bloor Street Capital)
3 hours with the top royalty plays – Franco, Maverix, Nomad, Sandstorm, Triple Flag, Wheaton
Yep, that’s a good royalty conference Thomas, and had also posted it last week. They really are some of the best business models in tbe resource sector.
Did you see the news out from Sandstorm this week about selling Hod Madden for a $200 million gold stream?
No, haven’t seen it
But it is good move
makes Sandstorm to a pure royalty play (one point that Sandstorm was criticized for in the past)
Yep, many investors will be much happier that Sandstorm is back to being mostly focused on PM royalty and streams and their plan was always to get a stream on Hod Maden, but then they spent the last few years priming the market on their decision to have ownership of the project and the explosive upside once they go into production, but now that will go to the new company taking on the project (which apparently Nolan is key stakeholder of as well, and has been criticized to a degree). Still, I like them making money on flipping the project and having the gold stream, and reducing down some their operational risk in a challenging jurisdiction and passing that along to another company.
The 50/60% spot price is higher than normal royalty deals?
What impact will this have on the profit margin?
Pentagon to unveil plan to boost rare earths and lithium stockpiles
Reuters – Feb. 18, 2022
Just like the movies machines don’t have a soul or heart and only take orders. Much easier society to handle them with humans. They know this with many police and generals stepping down from service with convoy.
The sheep are so dump and in such denial that they are focused on the free convoy people and families with children recreating many as terrorist or an associate group lol.
In less then 3-5 years Canada has moved extremely fast at total control/socialist agenda
I give it 2 years max before they possibly close the boarders and don’t allow you out. Trudeau is becoming the younger hitler or at least showing many signs. Scary times
More like a communist Fidel Castro, who may be his natural father.
My first question is “ will robot truckers become as rude as current truckers have become”? I grew up in the day when truckers were the most courteous and safe drivers on the road. If someone had a car problem, they were the first to stop and give aid. I think I still believed in Santa Claus back then.
Second question: At what point will the commodities act on ongoing issues like runaway inflation, out of control debt, corrupted transfer of wealth, declining unbacked currency and intervened markets …rather than social injustice, pandemics or War (will Putin kill off the population of Ukraine) in order to continue the coverup of The Feds and Wall Street’s corrupted (world wide) transfer of wealth.
It appears that we set up “self fulfilling prophecies” to contain the precious metals prices and commodities as to allow them to run would undermine the value of currencies and/or add a bigger expense to corporate balance sheets for materials which hinders profits and price levels forcing smaller bonuses but higher employee salaries to achieve poverty level for workers.
As a result if covid expands, gold drops. If war expands, gold drops. If social unrest occurs, gold drops. If the debt increases, gold drops. If inflation increases, gold drops. If negative rates increase, gold drops.
Since most of those theories are counter intuitive, it means intervention to make gold drop. If there is intervention in price technically, then it requires a “rhetoric of the day” to rationalize price manipulation. Often times the rhetoric gets stale and other false flags must be “created” like possibly killing off Ukrainians.
All for what: All for hiding the massive thefts by Central Banking and Oligharcial forms of government. Think about what institutional portions of Governments are not audited and have been granted a scape goat “criminal”, the “corporate person”. Think about the the popular current rhetoric that War is only a temporary booster of Precious Metals prices. Ask yourself what happens when a country participates in war. Money printing. They are not in the budget and particularly for the US, which already has massive unpayable debt, is rationally gold positive. Money printing is inflationary, which is gold positive. On and on with every action a government chooses to do to cover the ever increasing fraud and lies, becomes more and more gold positive…
The argument is always. “the game is over when the Public looses confidence in The Fed”.
Maybe the real issue is “The Game Is over when the Public realizes that The Fed and their operatives, Wall Street, are Criminal Enterprises, which and Who, have been transferring the Wealth of the people they were supposed to be serving.”
If we start from that Major Premise, maybe we can stop drawing “faulty conclusions” about the future price of precious metals.
Everyone was more courteous when you grew up because authoritarians/collectivists/leftists hadn’t completely taken over yet and their central bank’s thieving ways were still limited to some degree by the dollar’s peg to gold. The welfare state has turned everything to sh*t because it promotes and rewards unsound, dishonest and destructive behavior from top to bottom.
It wasn’t long ago that the average lefty was FOR free speech and was skeptical when governments, big business, bankers and billionaires colluded to further shared agendas. Oh yeah, and they also didn’t like war until Obama came in and dropped more bombs than Bush while also using drones to wipe out innocent people. There wasn’t even a peep from Obama’s fans when he signed the indefinite detention bill into law. No charges or trial necessary to arbitrarily hold someone forever yet the braindead sheep could sense no problem.
We are now in year 42 of the right wing tyranny Ronald Reagan introduced as a corrective to the so-called social upheavals of the 60s and 70s. There has been no coherent response to this because the left has been co-opted out of existence by the right. Nothing sells like rebellion.
As any general could tell you Obama was a neo-con right wing warmonger and of course a right wing capitalist stooge as any banker could tell you. Willful blindness to these facts is now endemic.
In your case Mathew denial of this reality clearly correlates with an increase both in the frequency of your rants and in their incoherence..
Obama was a puppet extension of the bush era. Not only did he increase the debt like never before in history, he was all about war not peace. At least trump avoided it for that matter but was given the wrench.
It never amazes me how simple life is when you look at it yet so many can’t see it for the life of me.
The left is very creative and convincing but very evil. So easy to spot. It’s a culture which I call cancel culture and not about love peace and harmony
Glen
KISS………….. Glen………. I think you have it………. 🙂
Blaze, why don’t you just once try to explain what you think the left is instead of being a flippant, glib snarky asshole of a lefty?
Reagan was 100% LEFT when it comes to every policy that DESTROYS a nation. He also voted for FDR 4 times.
You, like so many blue haired teenagers, apparently think that there’s no left because we haven’t seen the results that you’ve hoped for. FYI, it’s the driving principles that identify any ideology, not the outcomes. 🤪
You’re so packed with propaganda you must be constipated. OF COURSE the truth looks incoherent to you! 🤪🤪🤪🤪🤪🤪🤪
Oh the torment you must feel Matthew. Things will be ok, I promise.
There have been end of the world advocates, some with precise dates of human extinction. And here we are.
I will be fine, you and blaze, maybe not. It must suck to be as average as you two troglodytes.
You have a way of putting into context what I was thinking but much better lol. I’m sure many know this and you have a wealth of knowledge that is very much appreciated by myself and others. Thank you and I’ve always said learning from others who hold such history but understand it more importantly is a huge asset to myself.
Sometimes I say to myself we should be more appreciative of what is here today and we are very lucky to have you here Matthew!
Glen
Matthew, the simple fact is that there has been and always will be the struggle between the haves and have nots. We can have that struggle with a disfunctional democacy, as it will never be made perfect, or with an autocracy where the order is set without debate or disent.
As bad as it is, you do have the freedom and opportunity to express your fear mongering porn concerning the forces out there, the cabal, the leftists, the satanists etc out there controling the unaware sheeple. Must be tough to live with this torment.
Personally, I guess I’m one of the lucky ones, obliviously content.
As for Obama, he had the opportunity to bury the banksters, and reset the order when first elected. For his own political survival he did the opposite and made his first order of business, a process to bail them out and make them whole at the expense of those who believed his mantra for change.
Yes, you’re obviously content and lucky. Your incessant whining about the market is proof.
As for your claim that Obama “had the opportunity to bury the banksters, and reset the order when first elected” it’s evidence that your understanding of such matters is on par with that of a 7 year-old. Obama could never have buried the banksters nor would he have ever had any desire to try. Such talk is idiotic coming from an adult. No wonder you interpret simple observable facts as fear mongering. Your ignorance leaves you little choice.
Jonsly. You nailed it. Obama failed in the most fundamental of American ways…to recognize opportunity.
He could have told the banks, insurers, big auto and all the rest ‘Gee, you guys put yourselves out of business. Tough’.
He could have offered the country a new ‘New Deal’…for American workers and yes, capitalism. A necessary cleansing but he just wasn’t up to it.
What an opportunity lost.
You’re trapped in a ridiculous, idiotic, propaganda-created fantasyland. There is zero chance that Obama could have done squat to the bankers. They installed him in office for crying out loud just like Floyd Odlum put that dirtball Eisenhower in office. And that pos FDR did everything he could to make an economic downturn as bad as possible. Hoover started the bad policies and FDR doubled down on them to create “the great depression” and help Wall Street and the bankers immensely. Keep sucking up every lie you’re fed because you clearly couldn’t handle the truth even if you were capable of understanding it.
We need a decent close for the end of February for gold and then follow through in March; otherwise this is another fake out move for gold and we’ll be in for more weeks of grind back down. I sold my position in SLV on Friday and began to take a short position in silver. If certain technicals send out warnings for gold in the last week of February I’ll add to my short position. March may be a difficult month for the general markets. The FED is so screwed now not only because of the financial environment but also because of the political upheaval we’re starting to see. We live in historical times. I went over the peasant revolts of the 1300’s in England and it should remind people that governments can only be so abusive before the people take back their country.
Peasants’ Revolt : https://www.youtube.com/watch?v=4kq9sbtFCR8
Part 2 (note 8:00) : https://www.youtube.com/watch?v=mNu7YWay4E4
Doc,
Thank you for sharing your status with us! I’m personally appreciative of it and as I always said you are an asset here as well as many others. I respect you plenty and more because you make the calls before hand and that my friend is 💪. Now I would be lying if I told you that sounds great. I’m personally rooting to go higher possibly a correction first but the low is in no further huge down moves. I think this time around the intermediate has broken and that is very telling to me. Best of luck amigo and inknow regardless your stop loss is in on your short as you are a very Sharp man.
Agreed Glenfidish – I also greatly appreciate Doc Postma’s thoughts and technical outlook and for him sharing them here with us at the KE Report. Always good to get his medium term outlook using the monthly charts.
It does seem most reasonable to get some kind of pullback over the next month, maybe even back down to $1800 as Steve Penny laid out on Friday’s technical editorial, and then we see the PMs start ratcheting higher as the Fed rate hiking cycle unfolds and gets into the eventual hot water when it gets to the “checkmate moment” and they can’t really hike much more due to the massive amount of $9 Trillion in debt on their balance sheet. At that point, where the Fed has to abandon their “normalization” period and go back to cutting rates again to quell the markets, the PMs will launch much higher.
Regardless, in the short-term, even it Gold does correct here for a bit going into late Feb and March, it would be doing so by starting from a higher level than most of the bears have been calling for. Remember a few months ago when so many were convinced the first few months of 2022 were going to be bad news for Gold and were saying the $1673 low in gold (which was back from the double-bottom in March 2021 that has absolutely held strong) was going to break down in the low $1600s or even the high $1500s?
Yeah, where are all those guys with their bearish calls to new lows now? 😉
Obviously, none of that garbage played out, and that March 2021 double bottom low in Gold at in $1673 was not ever broken again for the last year, even on that August flash crash down to $1675 that was quickly reversed back up into the low $1700s for the weekly close. Really $1721 has also held from 2021 as the next higher low, and $1750-$1760 has been pretty good support the last few times that area was tested.
So sure, it isn’t that wild of an idea to see a correction from the current $1900 level down to the low $1800s, which Jordan Roy-Byrne had also pointed out as a potential in his interview with us last week. The point it the corrective move would be happening from a recent higher point, and is nowhere close to the $1600’s or $1500’s or even breaking $1675 at this point, so I can’t imagine the PMs just completely falling out of bed like they did back in 2020 during the pandemic crash…. unless all the markets have a historic crash in sympathy.
The key takeaway is to ask how many technicians in the Twitterverse or on various blog forums, not just our tiny world of the KE Report, were actually expecting Gold at $1900 in February? (clue: very very few).
When I posted on ceo.ca or even her on the KE Report that we’d likely see our seasonal rally in the PMs in Jan and Feb for the Q1 Run, hardly anyone felt that was possible or reasonable because sentiment was in the gutters and many were throwing up their hands in despair in December (like people usually do in tax loss selling weakness) and saying “screw this sector.” Some longer time investors even packed up and left the end of last year, at exactly the wrong time.
We had mentioned with Craig Hemke, Dave Erfle, and Erik Wetterling a few times in their segments that December 2021 reminded us a lot of December 2015, where the sentiment was so bad, right before a Fed rate hiking cycle kicked off. Hardly anyone was constructive moving into 2022, and gold then got up to $1854 in January, pulled back and has now moved up to $1899.80 to close the week, so essentially at $1900. Silver is not down at $18 or $19 either like so many were convinced was “in the cards” and is still hanging out in the mid $20’s and has thus far held above key support at $21.41, closing the week at $23.99 (so essentially $24).
We are now a month away from the Fed rate hikes kicking off, where the stock markets have been under pressure all year long (and even starting the end of last year), and we are seeing outperformance by the PMs relative to the general equities. So even if we see a corrective move over the next few weeks, it won’t be the end of the world, and most of the really tough times in the PMs were priced in by the Fall of last year. If we get a nice rout in the PM miners over the next few weeks, I look forward to being on the bid with the remaining dry powder I’ve got left.
Doc:
I really understand where you are coming from here. We have seen so many failed breakouts that it is hard to believe anything is real. As I watched price action last Friday gold was essentially flat and the miners, even the good ones, were down a bit. I ended up buying a bit more Minera Alamos but mostly watched the market move up and down. It is interesting to note that while my miners were down I sold the last bit of Great Bear at a good price.
Knock on wood but personally I believe this move is real. I will be happy if gold wanders for the next few months just below 1900 and crosses over that line multiple times and makes that price range the new normal. As I watch my crypto I’m seeing more and more of them drop below the lowest purchase price I have paid for that holding. I’m thinking the concept that crypto as the new gold took a fairly heavy hit this week and lots of other crypto owners have to be seeing the same thing. As they say there is no gold besides gold and that dirty little fact has to be coming home to thoughtful investors everywhere.
Hi Mike – While there are some aspects of Bitcoin in particular that are similar to Gold, (like scarcity, divisibility, decentralized with no 3rd party counterparty risk) it is still not Gold 2.0 or the “new gold.”
The rest of the cryptocurrencies don’t have the same characteristics as Bitcoin, so they are definitely not the new gold, and they are more based on any value they can muster as a use case for Decentralized Finance, smart contracts, transactions, speed in payment systems, gaming platforms, social media platforms etc…. We discussed that in our Ed Moya interview earlier this week.
Now Bitcoin was bandied about as the superior “inflation hedge” and “store of value” currency outside of fiat and superior to Gold in both respects. That was however up until November where Bitcoin topped out at $69,000 and then started falling from November into December into January getting chopped in half down to $34,000 right as the highest inflation readings in 40 years were being reported. Clearly Bitcoin was not the superior inflation hedge, nor was it an inflation hedge at all, and it crashed right along with the highly touted tech growth stocks in Cathy Woods Ark Innovations ETF did. As for a competing “currency” that is a “store of value”, it doesn’t appear that something that can have it’s value chopped in half in just 2 months qualifies.
Bitcoin has currently pulled back down again to $38,313 as of this moment on Sunday, so not only has it not been a good inflation hedge, or store of value the last few months, but it really seems to continue to trade just like a tech growth stock.
Charlie Munger – Warren Buffet’s #2 and business partner at Berkshire Hathaway is less kind towards the cryptos.
________________________________________________________________________________________________________
Berkshire Hathaway’s Charlie Munger Says Government Should Ban Bitcoin — Calls Crypto ‘Venereal Disease’
by Kevin Helms – 23 hours ago
The Slippery Slope of Canada’s Currency Censorship – Mike Maloney
https://www.youtube.com/watch?v=Vyh8Ro0cvlE&t=295s
Whether they realize it or not (and most do not), the masses are witnessing what has always been the truth about democracy. Those who’ve believed that “the people” are the government have been dead wrong since the beginning. The illusion lasted so long only because of ignorance and, more importantly, economic prosperity. It is now no longer convenient or cost-effective for the planners/masters to maintain the charade.
“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.” — Frank Zappa
Ditto………… Those who’ve believed that “the people” are the government have been dead wrong since the beginning.
Silver hit fork support in September and again in December (along with speed line support). Those lows were the same to the penny and were the time to buy.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=5&dy=0&id=p31735773267&a=937970450
SILJ will be catching up to GDX soon.
https://stockcharts.com/h-sc/ui?s=SILJ&p=W&yr=3&mn=11&dy=0&id=p35512232133&a=1105560657
The adx line is very telling Matthew if it goes the way I think it’s going to go look out!
IPT will be breaking out versus First Majestic soon.
https://stockcharts.com/h-sc/ui?s=IPT.V%3AFR.TO&p=D&yr=1&mn=9&dy=0&id=p37819331699&a=450748116
Gold could pull back sharply without causing any problem at all but you can bet that certain bears would be quickly emboldened by such action.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=0&dy=0&id=p92262263649&a=1115368377
IPT has 5 closes above an important pivot point as well as a 50% Fibonacci fan line…
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=0&mn=7&dy=0&id=p35837591925&a=1115377165
Doc
Are you expecting the Gold silver ratio to turn up past 80? If so how high?
Steve
Taylor Dart is negativ on Coeur Mining
He thinks Nomad is a better play with similar P/NAV – I agree
He likes Karora more as double digit growth story than Coeur – Anybody looked into Karora?
https://seekingalpha.com/article/4488463-coeur-mining-potential-equity-raise-dampens-outlook
Thomas:
Thanks for pointing this out –
Dart also says: “After a more than 60% decline in Coeur’s share price, it may be tempting to bottom-fish. Still, I prefer to avoid producers with a track record of share dilution, especially when additional dilution is likely coming down the pike. This strategy has allowed me to avoid sector laggards like Pure Gold Mining (OTCPK:LRTNF) and Americas Gold and Silver (USAS), two serial diluters that can’t seem to meet estimates.”
Yikes but sadly true.
When Couer moves, it moves big and I’ve made far more money swing trding CDE over the years, and other less than stellar producers than many resource investors do hanging out in most Juniors for the big multi-year rally that never comes. Couer had tons of upside torque in 2016, Q1 run rallies in 2017, 2018, 2019, and then mid 2019 – early 2020, and then coming out of the March 2020 pandemic crash to the SilverSqueeze in Feb of 2021. I have little doubt that it will move well once again as Silver and Gold prices break out latter in 2022.
Yeah, we had discussed this Coeur news and Taylor’s opinion on it, on Mike Larson’s editorial on Friday already.
Some investors are concerned that for Coeur to finish their Rochester Expansion development, that they may need to raise via their At The Market financcing tool, which would dilute shareholders, and that was what caused the big negative reaction from the earnings call announcement and another reason beyond beyond the earnings miss, and lower projected gold production for this year that caused CDE to sell off so hard on Thursday and Friday.
However, a few things to consider. As Taylor noted in his piece:
“Once the Rochester Expansion is complete, production will ramp up to ~8 million ounces of silver per annum and ~77,000 ounces of gold at lower costs, with an average annual free cash flow figure of ~$90 million FY2024 to FY2034. This is based on estimates of a full year of commercial production in FY2024, and it will certainly help Coeur not only to pay down its debt but enjoy a major increase in consolidated free cash flow. However, while this growth is impressive and will drive meaningful earnings growth, the elephant in the room is the weak balance sheet.”
However, I’d disagree with Taylor assigning so little value to Silvertip or to Sterling, as is typically does when a project is not in production, but they are both solid development projects that should absolutely be factored into the valuation of Coeur when assessing if it is fairly valued at present.
Look, Silvertip was already in production up until 2 years ago, but Coeur took it off-line to explore, expand, and optimize costs for the future development and production of that project and it will be a key contributor to the company again. Taylor usually errs on the conservative side of estimates, but has a bad habit of assigning large scale development projects little to no value, which is not real life or wise. In the case of Silvertip he wants to wait to for the updated economic study first, but I don’t need to wait to realize the project obviously has big value and it will be in projection again. It’s not anything like a company trying to bring on development project with all the start up hiccup, and instead is a prior-producing mine simply getting a reboot and it’s a significant player on the company’s roster of assets that is just getting a facelift. It deserves more value than he’s giving in his recent editorial.
You can see the hesitancy here from T.D.:
“Obviously, one could assign value to Silvertip and the Rochester Expansion, which is not entirely captured in FY2023 earnings estimates (only partial growth at Rochester). However, the wild card is if there will be additional share dilution which could offset some of this earnings growth. Given the uncertainty and the fact that a new study will need to be completed on Silvertip to have confidence in a start, I think it’s still too early in my view to assign much value to the British Columbia asset.”
Again, I’d disagree and say it is not too early to assign more value to Silvertip, but to each their own. I’m sure he’ll update his outlook once the updated economic study comes out for the restart, but at that point the value arbitrage will be more obvious to most investors and analysts, and right now the market isn’t giving them much value for Silvertip at all, and and is punishing the company for the funds needed for the Rochester Expansion, but not giving them value for how significant that will be for costs, margins, and future revenues and free cash flows in 2024.
For people that want to capture gains in mispriced asset, the time to bottom fish is before it’s glaringly obvious to all the analysts following the story, not afterwards. Once the new economic study comes out it will likely help with the rerating, but the time to buy these PM producers is during periods of distress, if one believes they will claw their way out of it in a reasonable period of time (1-2 year turnarounds are the norm).
Also, everyone is so confident in the future massive dilution for the Rochester Expansion that they are completely overlooking the big ace in the hole that Coeur has in Sterling, that I don’t see being discussed anywhere. The company’s Sterling development project in Nevada was picked up when they acquired Northern Empire [which I was in when taken over by CDE], (next to the old Corvus Gold projects that Anglogold Ashanti which I was also in when AU acquired them last year, and is also adjacent to Anglogold Ashanti’s own Silicon deposit).
Well that Sterling project has increased in intrinsic value in an underappreciated way, now that Anglogold Ashanti is getting very serious about developing Silicon/Merlin assets in tandem with their newly acquired Corvus assets (like North Bullfrog, East Bullfrog, and Mother Lode projects, and that tiny yet very important Lynnda Strip Discovery). AngloGold Ashanti has announced they see this as being a Tier 1 asset in Tier 1 jurisdiction, and guess who is right next door to Corvus – Coeur’s Sterling deposit.
Even though AU has been very tight-lipped about Silicon/Merlin and their plans with the Corvus acquisition, clearly they see a major project there in Nevada along the Walker Lane trend. At one point I thought Coeur may go after Corvus to acquire them and to bolt on their Sterling project, but now it is increasingly more likely that Coeur will offload Sterling to Anglogold Ashanti. It makes no logical sense to have 2 open pits side by side, leaving all the mineralization in the gap between the 2 pits unmined, and far more sense to combine Sterling with the other assets AU has into one larger superpit.
Sterling was taken over by Coeur from Northern Empire for about $90 million back in 2018, and considering all the continued discoveries from around that area from Corvus and Anglogold Ashanti it likely would have a premium to that now. I could see Coeur selling Sterling for $100 million to Anglogold Ashanti and that would help some with the funding of the Rochester Expansion and rebooting of Silvertip, without being as dilutive as many are projecting. It makes sense now for Sterling to come into the Anglogold Ashanti’s umbrella and that would be an accretive divestment for Coeur.
Just some food for thought, as Taylor gave $0 value to Sterling in his analysis, and clearly it worth quite a bit more than that, just like Silvertip is worth even more than Sterling but was essentially shrugged off in his opinion.
https://www.coeur.com/operations/project/sterling-gold-nevada/
Here’s a different take on Coeur that lays out a more attractive valuation at present for accumulation, and has a more glass is half full outlook, compared to Taylor’s typical glass is half empty opinion.
_________________________________________________________________________________________________________
(CDE) Coeur Mining: Turning Attractive
Feb. 20, 2022 – Fun Trading
“Coeur Mining’s quarterly revenue was $207.8 million, representing a decrease of 9% year-over-year. Net loss was $10.7 million or $0.04 per diluted share compared to an income of $11.88 million or $0.05 per share last year. It was a slight miss but nothing that could justify the selloff on Friday.”
“The only issue that could have triggered this selloff is the elevated capital expenditure program during 4Q21 which reduced immediate cash flow and increased the loss. However, this investment in the future should be the priority for the company, and I see no problem with that.”
“By the way, Coeur generated $832.8 million in revenue during 2021, representing a 6% increase year-over-year and its highest annual revenue in nearly ten years. Full-year gold and silver production totaled 348,529 and 10.1 million ounces, respectively, compared to 355,678 ounces of gold and 9.7 million ounces of silver in 2020.”
“Coeur Mining is still primarily a gold miner, with about 70.5% of its revenues coming from gold production. Still, its silver production is significant and could be predominant when the Silvertip mine resumes output next year.”
https://seekingalpha.com/article/4488662-coeur-mining-stock-turning-attractive
He made another report about USAS
https://seekingalpha.com/article/4488535-americas-gold-and-silver-cheap-for-a-reason
Yeah, Taylor has the hate on full force for (USAS) Americas Gold and Silver, and I don’t disagree that they completely botched Relief Canyon or shouldn’t have off-loaded 40% of Galena to Sprott, but Cosala is picking up, and for him to keep saying in article after article that they are completely uninvestable is poppycock.
Personally, I’ve traded USAS several times recently for a green profit, along with MUX (which he also trashed in that article and they’ve admittedly had a series of challenges and I’ve been less than impressed many times as well). Both companies, Americas Gold & Silver and McEwen Mining are turnaround stories, and things often look darkest before the dawn, and I’m happy to keep a core position in both and watch them get rerated higher in the next big upleg in sector (likely outperforming some of his pet projects strictly because they have been so ugly and despised by investors for so long and will be a dark horse coming from the back of the pack and outperforming).
Taylor is big on Karora Resources over the last year, which I am as well and have stated so repeatedly for some time, but he didn’t like them until they had already turned it around. He waits for the turnaround to be more obvious before he likes a company, and I’d rather get positioned when the turn is happening but they haven’t finished righting the ship yet and when everyone is still wailing about going concerns with their negative filtered recency bias (like where things are currently with Superior Gold and Galiano Gold at present for 2 other turn around examples).
Once it is obvious the turn-around has happened, then the easiest rerating gains have been made, and it can still trend higher, but at that point it would make more sense to stick with the truly quality names. The value arbitrage in turn-around stories, is buying them when everyone hates it and believes it is heading for $0, not when everyone is giving them glowing reviews. Once a company is getting gold star reviews, then it is likely fairly priced at that point and won’t have nearly as much torque to the upside when it “surprises” markets and outperforms.
I had made this same point about (SCZ) Santacruz Silver a few times back in 2019 and 2020 when they were paying down their debt, had sold off non-core assets, and were optimizing their mines and working to acquire the new mine. People just hated Santacruz Silver and asked me privately what I could possibly like about (with their preference being more aligned with Taylors outlook of only sticking with the best companies). As we know, SCZ destroyed all other silver producers to the upside in 2020 (including the best run Pan American, or Fresnillo, or SSR, or whatever…. ) simply because it was so doubted, unloved, “uninvestable” and because it had the most room to improve, so the rising metals prices did the most to improve it’s margins. (IPT) Impact Silver is very much in that same boat right now, and I expect it to rip to the upside much harder than most silver companies when we see Silver get back in the high $20s or maybe even the low $30s over the next 12 months.
Another one I was banging the drum on back in late 2019 and early 2020 was (EXK) Endeavour Silver as they had been sold down to the point of lunacy, and yes, had higher costs and had 2 years of mine optimization that they were wrapping up, but everyone hated them… even the silver investors. I kept suggesting that their turnaround story would yield a hefty rerating, and then in 2020, they smoked many other companies for the big move out of the pandemic crash and up to the Feb 2021 silver squeeze. That move in EXK left a lot of people scratching their hind ends on where that strength came from, even though we discussed that it is often the higher costs companies that move the most on big uplegs in the metals as they have the most improvement to their margins. Then at the peak suddenly everyone liked Endeavour Silver again… Haha! Classic investor sentiment shifts that miss the moves in these miners over and over again.
People claim they want to “buy low and sell high” but most are too timid and lack the conviction to actually do that preferring to stick with “safe” names and then wait for confirmation of moves higher.
In reality, as we’ve pointed out on here for years they like to “cry low and buy high.” It will be the same thing with most of the hated stories at present currently like USAS, MUX, GAU, SGI, IPT, etc… They will go from hated zeros to performance heroes, over time just like SCZ and EXK did in from late 2019 to late 2020.
Is IPT a hated story? If so, it shouldn’t be. It is down because the sector has been in a correction for 18 months. It has none of the problems that USAS has and shouldn’t be mentioned in the same sentence.
There are plenty of investors that have ripped on IPT over the years for having some of the highest costs (along with Santacruz Silver abd Endeavour Silver that were also mentioned above), as well as not having NI 43-101 resources, and for being what many have lumped in with sub-par silver producers.
Of course, this is also why during rallies it outperforms most silver producers as it’s margins improve more than most, just like Santacruz Silver and Endeavour Silver, compared to other Silver producers.
I’ve picked IPT for the ceo.ca stock picking contest and received a number of private messages asking why I’d be so bullish on a meh little producer. When we talk to some analysts and newsletter writers and swap ideas on companies and I bring up Impact it is usually met with similar comments about being a small higher cost producer that has flatlined for near a decade in growth. IPT outside of the KER is not well-loved by any stretch and it was fine to include in the above conversation.
In addition to the torque during improving metals prices because of margin expansion, I also really like the substantial leverage to exploration discoveries on a tinier micro cap company.
Companies like IPT are of course not for everyone but if those ripping on it want to own tiny cap silver plays and single out IPT as problematic, they either don’t understand it, or more importantly, they don’t understand the sector. The company has been around a long time yet has not had its share structure ruined like so many of its peers. Some have wanted management to be more aggressive with development but I have never agreed because the company might not be fit for my ownership right now had they attempted to do what so many others tried. There’s never been a share consolidation (or a need for one) or debt problem and the company always retains its great leverage to silver even though the company does little promotion. It’s as if it’s been managed for the day when silver breaks out and finally leaves its 1970s pricing behind for good. The company is “in the money” profit wise at the current silver price and its balance sheet is in fantastic shape but I wouldn’t buy based on that side of things alone.
I don’t want juniors whose management thinks linearly in such a perfectly cyclical sector. That’s how so many companies get into big trouble. Every time silver has a big move, too many act as if the higher price is here to stay but not Fred Davidson and company. He knows the sector well and acts accordingly, even routinely raising money on better terms than most peers. It is simply unlikely that I would still own it had development over the last 5-10 years been much more aggressive. However, I think we will see a very different company in the years ahead since the silver price will finally warrant a different approach and is likely to receive a lot of interest from much bigger companies.
USAS could do very well from here now that it’s priced-in its issues but I’m sure glad I sold out when I did and wasn’t tempted to play with it as it fell. Unless I’ve missed a recent cash raise, USAS has around $2M and $22M in debt while IPT has about 10 times the cash and no debt. So it’s no wonder that IPT’s current ratio is 13 while USAS’s is just 0.7 (which is not great at all).
https://corporatefinanceinstitute.com/resources/knowledge/finance/current-ratio-formula/
Agreed on all points as to the allure of Impact’s conservative business model, as a slow and steady wins the race kind of approach, with no debt, and playing for the transformative higher silver prices. Granted, I do want to see them make a bunch of money with higher metals prices to really get more aggressive with drilling. I was joking with Fred off-mic before one of our last interviews and said, “Fred, I want to see you guys bank it and get 7-10 drill rigs going on that massive property as there is so much to explore.” He laughed and said he’d love that too when the market environment and cash reserves provided that kind opportunity.
As for USAS Americas Gold and Silver, I’ve done well trading the stock for many years, but have been in an out of it during difference periods of it’s journey, including back when it was Scorpio Mining before merging with US Silver and Gold to form Americas Silver. Most recently I decided to sell out last year in May, due to all the problems stacking up. However during the course of the year I ended up buying back in during late August, Sept, and decided to sell that position completely as well for a tax loss in October.
However, since they got Cosala back up and running again and most of the bad news at Relief Canyon operationally and the writedowns were mostly priced in by the end of last year, then I started building my recent position in late November, and early December of last year, and it is still in the green by close to 6%. I think at this point the odds are more likely that it claws it’s way higher on the wall of worry during the course of 2022, especially if silver, gold, zinc, and lead prices stay around current levels, or even move higher. I’ve noticed it didn’t get wacked as bad as other stocks over the last few months, likely because most of the damage to the share price was already done in the middle of last year. It’s a fixer upper, like McEwen or Superior Gold, but I like the risk/reward setup at current levels, and think it may surprise people by the end of 2022, and think 2023 will be much better than this year of ramping things back up at Cosala, getting more intense at Galena, and figuring out how to get Relief Canyon up off the mat.
I’ll never forget buying way too much USA.to in 2015-16 for as low as well under 10 cents before it went 8 or 9 bagger in 6 or 7 months. I was in it again after that but it’s been quite awhile and my son sold the rest of his over a year ago.
Rising gold and silver prices this year should help it a lot.
It looks like it can double quickly and will be in good shape to get moving if it clears 1.09 this week.
https://stockcharts.com/h-sc/ui?s=USAS&p=W&yr=4&mn=2&dy=0&id=p04678397849&a=969292295
Yes, it was one of my larger positions in late 2015 and early 2016 and it had quite a big move. I think I ended up personally having a 7-8 bagger on a partial position that summer (around 1/3 of it) but held onto the 2/3 core position and watched that portion pull back down in later 2016, and then swing-traded around the core position since then.
It’s been a good trading stock for years and at one point in 2019 it became a much larger position in my portfolio, and it had a nice weighting in 2020, but last year shook my confidence in it and by May I exited. However, I admittedly screwed up getting back in last Aug/Sept and got spanked on that trade. I’m back in again now though and in the green, so I’m optimistic most of the carnage is behind it at this point.
Americas Gold & Silver just needs to rebuild confidence with investors and analysts over the course of 2022, and set things up to shine again in a bigger way in 2023 once Relief Canyon, Galena, and Cosala get to better parts of their mine stope sequencing, and should have better economics with more throughput. USAS is not a major position for me but one I feel may do better than most are expecting over the next 2 years, so I don’t mind having a fishing pole in this pond. Out of USAS, MUX, GAU, and SGI for turnaround stories, I feel SGI may have the best growth prospects over the next 2 years, but I believe all have been hammered down enough and are disliked enough, that they are at compelling accumulation spots here.
After someone posted once again about potash stocks I decided to do a little research into the jrs……first off I will point out that all the jrs I used to follow years ago have all gone bye bye and not because they got bought out…..I will also point out I’ve only done a cursory review of them so far and don’t own any as of yet
I will say I never knew that Belarus was the third largest producer of potash so the sanctions against them has also been a factor in the price rise and needs to be factored into anyone’s investment thesis going forwards.
What I also found of interest was the push for more environmentally friendly mining of potash. Western resources and Gensource Potash both are claiming they will be the first company to produce no salt tailings and use 75% less water in the potash production.Verde Agritech is the big missed the boat play. It ran from $1 to over $6 since October.
Karnalyte Resources (TSX:KRN) is an advanced development-stage company focused on its construction-ready Wynyard potash project in Central Saskatchewan. The project also hosts mineable magnesium resources.
The company has completed feasibility studies and has obtained environmental approval for the project. Phase 1 production is targeted at 625,000 tonnes per year of high-grade granular potash and two subsequent phases of 750,000 tonnes per year each will eventually culminate in production of up to 2.125 million tonnes annually.
Karnalyte is also exploring the development of a small-scale nitrogen fertilizer plant, the Proteos nitrogen project, for which it recently completed a feasibility study. Its strategic partner and largest investor is Gujarat State Fertilizers and Chemicals, India’s premier fertilizer and chemical manufacturing company.
Western Resources (TSX:WRX) and the company’s wholly owned subsidiary Western Potash are working to build an environmentally friendly and capital-efficient potash solution mine at the Milestone project in Saskatchewan.
Milestone is close to Mosaic’s (NYSE:MOS) Belle Plaine mine, which is one of the largest-producing potash solution mines in the world. Phase 1 development at Milestone is nearing completion, and in November 2020, the company announced an updated NI 43-101 report on the project that extends the mine life from 12 years to 40 years.
Gensource Potash’s (TSXV:GSP) Vanguard area and Lazlo area projects are located in Saskatchewan. The company’s main asset, the Tugaske project in the Vanguard area, is its central focus. Once in operation, it will create no salt tailings and will require no brine ponds. The environmentally friendly project is expected to produce 250,000 tonnes per year of final product at very competitive capital and operating costs.
“Gensource’s business plan was created six years ago to specifically become a new and independent potash producer that approaches potash production in a different way,” said Gensource Potash CEO Mike Ferguson in early 2020. “We’re essentially turning every component of conventional potash production upside down. Our business plan has two pillars. The first is to be small and efficient. The second is to be vertically integrated.”
Gensource announced in September 2021 that agricultural chemical company HELM, the offtaker for Tugaske, has committed C$50 million in project equity.
Verde AgriTech (TSX:NPK,OTCQB:AMHPF) bills itself as an agri-tech company focused on developing innovative products that promote sustainable agriculture. Its main asset is its Cerrado Verde project, which holds a potassium-rich deposit and is located in the heart of Brazil’s largest agricultural market.
Production began at Cerrado Verde in May 2017, and the company later exported its first shipment of Super Greensand, a fertilizer and soil conditioner, to US cannabis and organic markets. As a fertilizer it provides potassium, magnesium, silicon, iron and manganese, and as a soil conditioner it increases the capacity of soil to retain water and nutrients. The company also launched a new product in 2018 called Super Greensand Granular.
After announcing a 169 percent increase in revenue for the the third quarter of 2021, Verde AgriTech revised its annual revenue target up by 120 percent.
thanks for the effort and info on fertilizers wolf. A sector having an ever growing significance and very much worth tracking.
Wolfster:
Thanks for this – during the next year I’d like to add more of these companies to my holdings. Just wanted to add three more to your list:
Intrepid Potash, Inc. (IPI) – I own it and it is up on the year but ……….
The Mosaic Company (MOS) – up over 50% during 2021, pays a very small dividend and a long term holding of mine. I’ll buy more on weakness and it just keeps chugging along.
Nutrien Ltd. (NTR) – again up over 50% during 2021, pays a small dividend and another long term holding of mine. Like MOS I’ll buy more on weakness. What can you say?
Wolfster – Thanks for the heads up on the Fertilizer companies and all that DD. Much appreciated amigo!
indoctrination….first it only occurs if you believe in the rockefeller medical fraud and its allies…..there is no reason to believe…there is ample reason to believe it has fleeced the world out of a natural mans health into a chronic dependent altered non-human….to be continually preyed upon as an annuity stream…that may constitute an evil by most…..
Some great comments above…………… HOPE EX and CORY………. do not remove….. 🙂
Gold vs the 30 year UST hit resistance last week but I won’t be surprised if it powers higher even in the short term despite the steepness of the move so far. Either way, it is going much higher weeks, months, years out. If the ratio doesn’t fall more than about 1.5% by month end, it will have the best monthly close in 10 years. On the quarterly chart, it is overbought for the first time in 10 years and above the upper Bollinger band. If it finishes the quarter at the current level, it will be a quarterly breakout going back to the all-time high quarterly close of 1981.
Weekly:
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24USB&p=W&yr=6&mn=3&dy=0&id=p19339745876&a=711000952&r=1644228712249&cmd=print
The above ratio broke out of a 41 year Schiff fork last quarter and is way above it now while it works on activating a 41 year-old cup and handle pattern. I see the new overbought RSI reading of almost 72 as a buy signal (buy for gold/sell for 30 year UST bond). Of course, being a quarterly chart, such signals can and should be refined using smaller charts.
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24USB&p=Q&yr=45&mn=0&dy=0&id=t5741396892c&a=1115705021&r=1645391292921&cmd=print
3 weeks ago…
RICHARD/DOC
Jan 29, 2022 29:30 PM
I believe the stock to watch is NEM. It should be the sentinel stock indicating the end to this bear
market for PM stocks. NEM appears to be topping and forming a head/shoulder pattern on the
monthly chart. When this stock falls more and bottoms, then you know the end of the bear market is
in view.
Excelsior
Jan 29, 2022 29:04 PM
Agreed Doc. NEM Newmont is the largest gold Major and a good bellwether in the sense that
when generalist investors do wade into the PM space, that is likely one of the key names they’ll
gravitate to.
The corrective pattern of the last 7 months is bullish and was bullish 3 weeks ago. The question then was how much longer it might be before NEM would do what it has now done.
It has finished the last two sessions above its Bollinger bands and has moved up 15%+ in 3 weeks so a decent pullback is likely coming soon. [And it will be interesting to see how it affects the jonsyls of the world. Waaah! 😭 lol]
https://stockcharts.com/h-sc/ui?s=NEM&p=D&yr=1&mn=11&dy=0&id=p60996214316&a=906910084
NEM had a “golden cross” (50 MA over 200 MA) on Feb. 11 and is up 30% since the lows of September and December (when no one wanted to buy and were even urged not to).
https://stockcharts.com/h-sc/ui?s=NEM&p=D&yr=1&mn=7&dy=0&id=p10446110749&a=932625989
Agreed that Golden Cross is another bullish factor showing the strength in the breakout of NEM.
Good chart Matthew.
NEM has bullishly smoked gold as well, moving up 23% versus it in 15 weeks.
https://stockcharts.com/h-sc/ui?s=NEM%3A%24GOLD&p=W&yr=4&mn=0&dy=0&id=p61199833420&a=932139424
Yep, Newmont has been doing very well and continuing to break higher recently, so the sentinel is showing a quite constructive picture thus far. Just look at the move in NEM from early December to present. As the largest mining stock, Newmont is showing new capital inflows, likely from a few generalists looking to get new positions in the PM sector for the turbulent year to come and fleeing corrective moves in the general equities since the end of last year.
Cory & I had discussed this influx of investors into NEM with Dave Erfle in a few different interviews over the last 2 months. Dave feels the strength and break higher in Newmont is quite constructive for the whole PM sector, and I’d agree with that point. As we know, new inflows of capital show up in the Major most well know producers first (like Newmont) and then flow into ETFs like GDX/GDXJ/SIL/SILJ next, along with the mid-tier and smaller producers. Then if momentum can sustain, the capital branches out down the food chain into the developers, advanced explorers, and finally down to the grassroots explorers.
PayPal is down almost 70% versus GDX since… wait for it… the end of September, when no one thought the miners were done falling.
https://stockcharts.com/h-sc/ui?s=PYPL%3AGDX&p=W&yr=4&mn=0&dy=0&id=p44451468320
If you understand the charts, you know that all stock market strength versus gold after the May low was an opportunity to sell stocks and buy gold or gold related assets. Look at that MACD and RSI while the new price highs kept coming…
https://stockcharts.com/h-sc/ui?s=SPY%3AGLD&p=W&yr=6&mn=5&dy=0&id=p74730059411&a=1015547995
I don’t what a lot of the other contributors here are doing but I have been buying junior gold mining stocks over the last two weeks at a pace for me that makes me think I must be the mad hatter! LOL!
Me too DT, although I have been selling a few rips too and averaging down in some of my more beaten down names. It has been quite fun and rewarding. Looking to lighten up into month end a bit.
Gold just took off like a rocket…. up nine……… just excitement on the border…… rockets red glare, lol..
SPQ : https://tinyurl.com/2vc9pznu
NatGas Resumes Uptrend
Added BOIL and KOLD
Thanks for the heads up on BOIL BDC. I have been meaning to buy some.
Sure thing. Note the legend (Precious Metals page). Also:
https://www.tradingview.com/symbols/NYMEX-NG1%21/
Cause? Ukraine/NordStream2/LNG (note comments).
https://www.rt.com/business/550110-lng-new-global-leader/
Hi BDC – Thanks for the heads up on BOIL. I have been meaning to buy some shares.
I predict that while everyone is obsessed with Ukraine, Putin is really planning to invade Canada where he will be welcomed as a liberator from the tyrant Trudeau.
Justin Huhn: Big Bets Being Placed in the Uranium Market
Palisades Gold Radio – Feb 15, 2022
Justin discusss Cameco’s recent conference call where they announced the restart of the MacArthur River Mine. Cameco stated that they have signed supply contracts for 70 million pounds of uranium. Overall this should be a postive sign for the market and may indicate a major change in contract demand. It will take Cameco up to two years to once again reach full production.
Sprott’s entrance to the market last year with SPUT had a tremendous impact on the spot market. Current long-term prices are around $43 a pound but little insight can be garnered from contracts as they are shrouded in NDA’s. All the different parts of the fuel cycle appear to be in a bull trend. Sprott intends to maintain the stockpile of uranium as a way to give investors expose to the uranium market.
Sprott is also working to takeover the (URNM) ETF in an upcoming vote. This will allow Sprott to have a large influence in the uranium markets.
Gold at $1907… too bad that both the US and Canada exchanges are closed today.
Useful PM spot chart: https://www.bullionvault.com/chart-popup.do
Not much to celebrate when a Ben Franklin can hardly buy a George Washington nowadays.
Do we get a crash this week?
Situation in the Ukraine escalates further
Who knows? Putin this week. Fidel Trudeau last week.
Nasdaq vs Gold broke no fewer than 4 supports on Friday and is now perfectly set up for a crash.
https://stockcharts.com/h-sc/ui?s=%24COMPQ%3A%24GOLD&p=W&yr=5&mn=11&dy=0&id=p03282740166&a=942653924
It looks terrible versus dollars, too.
https://stockcharts.com/h-sc/ui?s=%24COMPQ&p=D&yr=1&mn=3&dy=18&id=p93719726804&a=954015424
The Dow (DIA) has been on a weekly chart sell signal since last June (since May if priced in real money) because the end of the line for the bull market has been reached. Those who think this roll over has anything to do with Russia-Ukraine don’t understand economics or markets. Record long bull markets that are in valuation bubbles do not dig high inflation, rising rates and authoritarian governments that arbitrarily, illegally, and immorally lock down and shut down businesses while showing increasingly little respect for private property and no respect for natural rights. This geopolitical theater is nothing but cover for those who caused this global situation and the masses buy into it as usual as they stupidly buy the dip as usual. Of course, every short term bounce will make them feel smart before the rug is pulled out from under them again.
https://stockcharts.com/h-sc/ui?s=DIA&p=W&yr=3&mn=0&dy=0&id=p40672883857&a=976602824
Putin has declared for Donetsk and Lugansk.
How will the markets react tomorrow?
DOW -10%?
Gold New All Time High (1920)?
Well, gold is up in afterhours trading to $1912-$1913, and so a move tomorrow to $1920-$1921 resistance seems reasonable. That would not be an all time high though… there is resistance after $1920-$1921 up at the $1962-$1966 congestion zone, and then after that is taken out an closed above on a weekly basis, then Gold can look at making a new all-time high above the 2020 high of $2089. One step at a time though…
Or we could wake up to gold being below $1900 again…..😞
Yep…. I just did…. back to $1896….
Oh well…. It isn’t like we are at $1100 or $1200 Gold. The high $1800s are still a good gold price, but to get some momentum going in the sector we really need to blast up into the mid $1900s.
Across the board, Bubba understands…
https://www.youtube.com/watch?v=QWq4mguZNes
You are right – I forgot the high in 2020
1920 was the high in 2011
Yep. $1921 was the 2011 all time high with a lot of technical memory, and $1919.60 (roughly $1920) was a peak high last year year where that level came back into play. Last night Gold actually made it up as high as $1918.30 before retreating back down again.
That’s why that area of resistance will be significant to clear on a closing basis, to get momentum going up to the $1962-$1966 congestion zone of prior peaks and troughs.
Open:
Some up …some down. + $168
Best stock at open: Oil
Worst stock at open: Oil
15 mins into open: -$3000
There are no news events or fundamentals affecting market action in my account…so far.
Thanks to all the KER guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Jesse, Dana, and Mike.
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Also thanks to all the listeners of the podcast, and those members of the KER crew that post and participate here on the blog, sharing insights with our community. Ever Upward!