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Precious Metals

Daybreak in the Land of Precious Metals

Michael Ballanger dissects last week’s price gains in gold and silver…

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This article was originally published by The Gold Report

Source: Michael Ballanger for Streetwise Reports   11/17/2021

Michael Ballanger dissects last week’s price gains in gold and silver.

“Out of the shadows of night, the world rolls into light; It is daybreak everywhere.” – Henry Wadsworth Longfellow

There have been many times in my sexagenarian journey through four and a half decades of inflationary, disinflationary, and deflationary cycles when the spinning plates above my head suspended upon poles of flawed data and errant central bank policy appear on the verge of a massive chaotic accident. There are, however, other times when all is right with the world in which the precious metals investor resides and this past week was just one of those.

From a technical perspective, I could not ask for a more enviable confluence of conditions and events. Firstly, the precious metals bucked the trend of yielding to U.S. dollar strength so to the degree that this decoupling marks a new paradigm of gold and silver drivers, it was a watershed week. Secondly, as you all have been reading for as long as I have been allowed to perch upon the soapbox of blogosphere scrutiny, that repetitive drone resembling the bespectacled high school English teacher blathering on about conjugations with fifteen minutes left in an early summer school day, it was that silver outperformed gold and that the HUI outperformed both metals while the mightily gilded TSX Venture Exchange surpassed 1,000, symbolizing the return of “animal spirits” to the world of precious metals.

To coin the Longfellowian phrase, it was as if the world of the hard asset disciple rolled into light; it was daybreak everywhere, and it was long overdue.

gold chartI have been arguing the bullish case for gold and silver since the middle of August, having stepped away from the senior and junior miner ETFs back in August of 2020, when suddenly every blogger on the planet was reciting quotes from the “Gold Bug’s Almanac” while quoting Von Mises and Keynes and Peter Schiff chapter and verse in their rebirth into gold and silver idolatry.

Flash forward to late September 2021 when I seized upon silver’s phony false breakdown below $22/ounce (so obviously orchestrated by the bullion bank silver shorts) and designed to spook speculative longs into a final cathartic capitulation. I contend that the late September reversal was the precise moment that the precious metals gods finally held up both hands and pronounced “Enough!,” putting an end to the ever-ignored shenanigans that have plagued the paper markets for what seems like an eternity.

The star performer was gold for much the early move but now it appears that the freckle-faced, red-haired hellion – silver – has put a clamp on the leadership torch wrenching it away from gold and about to pass it over happily to the mining shares, where the GDX and GDXJ have been absolute beasts since the late September reversal.

Outside of the RSI levels for the HUI, GDX, and GDXJ all closing out the week solidly above 70 (overbought), history has proven that they can stay overbought for weeks and especially when gold has moved away from “correction” mode and into “resumed uptrend” mode in which I believe we are now immersed and in a highly-convincing manner.

Performance since Sept. 29 lowsThis chart marks the performance of the three precious metal classes and it is textbook. Shares are outperforming metal and silver is outperforming gold; this is a classic trademark of a confirmed bull market and while it will most certainly not be a straight line to all-time highs, my only conundrum is whether gold gets there by New Year’s Day.

We all read the same commentators and listen to all the same podcasts but to whom I pay particular attention are those highly successful investors that have rarely, if ever, owned precious metals that are now on the record as owning gold and looking for significantly higher prices.

A few weeks ago, I listened to an interview with Sam Zell, one of the greatest horse-traders in the history of modern finance, in which he basically called out the policymakers for trashing the American balance sheet while citing gold as an appropriate place to park one’s wealth. It is those massive pools of capital that are now sloshing around the bond and equity arenas that are going to be eventually forced to assets that have no counterparty risk and when that occurs, it will be elephantine demand meeting rodent-ine supply resulting in an unfathomable price reaction in everything vaguely even associated with gold or silver.

I have told this story before but it bears repeating. In the late 1970s while working as a clueless trainee for a large Canadian brokerage firm, one of the senior salesmen (not “wealth advisor”) told me about a junior gold explorer called “Mattachewan Consolidated Mines” at about CA$0.08 per shares so, having never bought a stock before in my life, I took my life savings at the time and bought 20,000 shares worth CA$1,600 and then promptly forgot about it. A few months later, I was handing out the bond quote sheets (there were no quote terminals for bonds back then) when I ran into the senior salesman who asked while sporting a broad smile how I liked the move in Mattachewan. I asked him what it was doing, sluffing off my ignorance due to being “too busy” counting Canada Savings Bonds and licking stamps.

“Why,” he said “it just traded at $1.80 and it’s going to $3!”

Having earlier learned my “times tables,” I quickly did the math and realized (while hyperventilating madly) that I had just won a lottery with my $1,600 now worth $36k and possibly on its way to $60k! “Well,” I said puffing out my chest and trying to look scholarly, “I need to do some research on this. Can you tell me where they have their gold and how much of it they own?” The senior salesman began laughing hysterically after which he responded while wiping tears from his ruddy cheeks, “Son, this is a gold bull market and there is no bull market like a gold bull market. The only gold Mattachewan has is the letters G-O-L-D in their name.” He then embarked on another howling round of laughter and I skulked off to the cloakroom.”

TSX Venture ExchangeThe point I make is that the vast majority of Millennials and Genexers have never seen a) a bear market or b) a bull market in precious metals miners. They know crypto and they know technology but their eyes glaze over when you describe the move in Consolidated Stikine in 1989 or Diamondfields in 1996. Just as fortunes have been made in this cycle in worthless EV companies or counterfeiting schemes like certain crypto deal, fortunes are about to made in the junior developers and explorers. The TSX Venture Exchange is the Canadian version of the junior NASDAQ so like its U.S. counterpart, it is a great barometer for speculative sentiment. While the tech-laden COMPQ hit record highs last week, it is important to remember that the high for the TSXV was in May 2007 when it traded over 3,350; it has been that long since the junior mining markets have received anything resembling “love” on a par with technology or crypto.

The bottom line is that like silver, which has yet to see record highs, the junior resource sector has a great deal of upside if we are to believe that the Great Currency Debasement exercise around the world is going to reprice all assets to new highs.

We have seen it everywhere in the industrial and soft commodities and should expect to see it in uranium, silver, and the TSXV before the cycle gets terminated by either policy errors or global war, both of which are possible but impossible to either time or predict.

Silver chartI went long December Silver in late September the day the bullion bank monkeys tried to smash it below $22 but just as the Twitterverse had concluded that it was $18 bound, the mysterious forces of short-covering evil stepped into the panic and before you could say “JP Morgan,” silver went on an eleven-day recovery to $23 and has not looked back. I see some resistance around $27–28 after which 2021 highs are likely above the $30 “#silversqueeze” spike level that created the underperformance that has persisted since February. This week it appears to have broken the shackles of its lead-filled sneakers once and for all, so since we own the SLV:US from $22.10 (now $23.42) and the January $20 calls from $2.10 (now $3.56), I see no reason to rush to ring the register unless RSI spikes into the high 70s (or until I see all of the usual silver bugs taking victory laps around the Twitter Track).

Gold and silver investors have had to endure a very long and very cold night since the sun went down in August 2020. As I pointed out last week, the gold and silver mining shares represented by the GDM are absurdly undervalued despite a superb advance this past week but what are even more undervalued are those junior developers with large and rapidly growing resources, like Getchell Gold Corp. (GTCH:CSE; GGLDF:OTCQB), whose share prices are wallowing in sentiment purgatory despite impressive 2021 results.

As I constantly harp on every time an unattended pair of ears or eyes can be found, it is the junior developers that will have the biggest lift in 2022 along with selected exploration issues (available to all subscribers).

Enjoy the warmth of the daylight sun and remember the lesson behind Mattachewan Consolidated Mines because that is where we are headed…

Originally published Nov. 12, 2021.

Follow Michael Ballanger on Twitter @MiningJunkie. He is the Editor and Publisher of The GGM Advisory Service and can be contacted at [email protected] for subscription information.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance.

With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector.

Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosures:
1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Getchell Gold. My company has a financial relationship with the following companies referred to in this article: Getchell Gold. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Getchell Gold, a company mentioned in this article.

Michael Ballanger Disclaimer

This article makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. 

Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: GTCH:CSE; GGLDF:OTCQB, )

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Precious Metals

Gold Springs Discovers New Gold System – Shares Jump 20%

Gold Springs [GRC-TSX; GRCAF-OTCQB] reported assay results from hole J-21-015 with an average…

Gold Springs Resource Corp. [GRC-TSX; GRCAF-OTCQB] reported assay results from hole J-21-015 with an average of 1.0 g/t gold equivalent over more than 163 metres located 180 metres south of the discovery hole J-21-006 at the 100%-owned Gold Springs property located on the border of Nevada and Utah.

The results confirm the existence of a new gold-mineralizing system called intrusive-related gold system (IRGS) on a new target that the company has named Tremor. This new gold system is situated along the northern extension of the Jumbo trend of the large Gold Springs project of 8,000 hectares.

J-21-015 highlights include 1.0 g/t gold equivalent over 163.1 metres: 1.42 g/t gold equivalent over 33.5 metres within the vein, which includes 3.26 g/t gold equivalent over 10.7 metres within the vein; and 0.94 g/t gold equivalent over 123.5 metres within the intrusive and contact zone.

Randall Moore, executive vice-president of exploration, stated: “We have been anxiously awaiting these results, which now confirm what we believe to be a major new discovery. The existence of an IRGS at Gold Springs opens a potentially large area to develop a new gold resource. Hole J-21-015 extended both the high-grade vein system and the gold mineralization associated with the intrusive first seen in hole J-21-006. We would also like to highlight that both holes ended in gold mineralization. We are now awaiting assays from another 15 holes at Tremor that are currently in the laboratory for testing. Drilling has extended this northern vein for over 200 metres and the Tremor intrusive zone for 600 metres along strike as seen in the drill cuttings. The thickest intercept within the intrusive thus far has been 280 metres.”

The company is waiting to receive assays from 24 holes on two targets; 15 from Tremor and nine from White Point, in the coming weeks.

Gold Springs Resource is confident of the presence of an intrusive-related gold system within the Tremor target situated along the north extension of the Jumbo trend in Utah where a strong CSAMT (controlled source audio magnetotelluric) high resistivity anomaly extends for 1,200 metres.

The company completed 18 holes at Tremor designed to test the extent of the intrusive-hosted gold system. These holes demonstrate the intrusive extends for 600 metres and is open to the north, south and at depth. In addition, the vein system in hole J-21-006 has been traced for 200 metres. For details on hole J-21-006, which returned 6.87 g/t gold equivalent over 24.4 metres, included grades of 30.9 g/t gold equivalent over 4.6 metres.

The drill has moved to Charlie Ross where eight additional holes are planned to follow up that new discovery.

Author: Staff Writer

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Precious Metals

Sprott Physical Gold and Silver Trust (CEF): A Brand-New Prospect for Investors

Sprott Physical Gold and Silver Trust (CEF) is currently valued at $17.10. When the trading was stopped…

For the readers interested in the stock health of Sprott Physical Gold and Silver Trust (CEF). It is currently valued at $17.10. When the trading was stopped its value was $17.21.Recently in News on April 13, 2021, Sprott Physical Gold and Silver Trust Updates Its “At-The-Market” Equity Program. Sprott Asset Management LP (“Sprott Asset Management”), a subsidiary of Sprott Inc., on behalf of the Sprott Physical Gold and Silver Trust (NYSE: CEF) (TSX: CEF) (TSX: CEF.U) (the “Trust”), a closed-ended mutual fund trust created to invest and hold substantially all of its assets in physical gold and silver bullion, today announced that it has updated its at-the-market equity program to issue up to US$1 billion of units of the Trust (“Units”) in the United States and Canada. You can read further details here

Sprott Physical Gold and Silver Trust had a pretty Dodgy run when it comes to the market performance. The 1-year high price for the company’s stock is recorded $20.38 on 06/01/21, with the lowest value was $16.75 for the same time period, recorded on 09/29/21.

Sprott Physical Gold and Silver Trust (CEF) full year performance was -5.37%

Price records that include history of low and high prices in the period of 52 weeks can tell a lot about the stock’s existing status and the future performance. Presently, Sprott Physical Gold and Silver Trust shares are logging -16.09% during the 52-week period from high price, and 2.09% higher than the lowest price point for the same timeframe. The stock’s price range for the 52-week period managed to maintain the performance between $16.75 and $20.38.

The company’s shares, operating in the sector of Financial managed to top a trading volume set approximately around 2939308 for the day, which was evidently higher, when compared to the average daily volumes of the shares.

When it comes to the year-to-date metrics, the Sprott Physical Gold and Silver Trust (CEF) recorded performance in the market was -11.63%, having the revenues showcasing -4.09% on a quarterly basis in comparison with the same period year before.

Specialists analysis on Sprott Physical Gold and Silver Trust (CEF)

According to the data provided on Barchart.com, the moving average of the company in the 100-day period was set at 17.91, with a change in the price was noted -1.84. In a similar fashion, Sprott Physical Gold and Silver Trust posted a movement of -9.71% for the period of last 100 days, recording 489,960 in trading volumes.

>> 7 Top Picks for the Post-Pandemic Economy << 

Trends and Technical analysis: Sprott Physical Gold and Silver Trust (CEF)

Raw Stochastic average of Sprott Physical Gold and Silver Trust in the period of last 50 days is set at 16.43%. The result represents improvement in oppose to Raw Stochastic average for the period of the last 20 days, recording 6.72%. In the last 20 days, the company’s Stochastic %K was 2.89% and its Stochastic %D was recorded 4.11%.

Now, considering the stocks previous presentation, multiple moving trends are noted. Year-to-date Price performance of the company’s stock appears to be encouraging, given the fact the metric is recording -11.63%. Additionally, trading for the stock in the period of the last six months notably deteriorated by -14.50%, alongside a downfall of -5.37% for the period of the last 12 months. The shares -3.66% in the 7-day charts and went up by -4.26% in the period of the last 30 days. Common stock shares were lifted by -4.09% during last recorded quarter.

Author: Sarah Baker

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Precious Metals

It’s The Taper, Stupid!

It’s The Taper, Stupid!

Submitted by QTR’s Fringe Finance

It is astounding to me how much market commentary I have seen over the last 48…

It’s The Taper, Stupid!

Submitted by QTR’s Fringe Finance

It is astounding to me how much market commentary I have seen over the last 48 hours placing blame for the market “volatility” (read: 2% off all time highs) on the Omicron variant.

The extent of our recent “volatility”.

While there are definitely still some uncertainties about the new variant, early indications make it look as though it is not going to be meaningfully deadlier than other variants and that, one way or the other, we will be able to deal with Omicron and see our way through it – just as we did with the Delta variant. That is, unless the government implements more of what one trader calls a “criminal” response to Covid and issues more lockdowns and mandates.

While Omicron uncertainty has likely contributed slightly to market volatility, I don’t think it is the driving force behind it. Rather, I believe that current volatility is a result of Jerome Powell’s surprising, and so far unrelenting, hawkish stance that a taper and rate hikes look to be necessary.

In fact, several Fed governors have commented over the last 48 hours about potentially accelerating both rate hikes and tapering. This language, as I noted days ago, is an admission that the Fed has lost control of inflation.

In fact, it looks as though inflation has gotten so bad that the Fed is going to have to try and attempt to “stick the landing” of presenting hurried tapering and rate hike plans to the market. Of course, the Fed won’t really be able to stick the landing on either because politicians on the left and castrated on-air finance personalities will cry foul as soon as the market has a 10% pullback as a result of higher rates (just as they did on the Covid crash).

But for now, the company line is that we are going ahead with rate hikes and looking to accelerate the taper. This – not the Omicron variant – is what is moving markets.

I said just days ago that Powell doesn’t even need to say anything for the market to continue to stay volatile at this point because his standing position on the matter is very hawkish. Yet, instead of saying nothing, he went as far as to reaffirm his hawkish stance on Wednesday of this week. From my piece earlier this week:

If the Fed does look to accelerate the taper and toss around the idea of rate hikes in order to try and rope inflation in, as indicated, I think we can expect further downside in equity markets in December, as I predicted about a week ago. In fact, Powell doesn’t even have to re-acknowledge what he said yesterday, he simply has to say nothing until the Fed’s next official nod to the markets.

As I said during my interview yesterday with Jack Boroudjian, tapers cause markets to crash: it is that simple. Just take a look at what happened in December 2018. This time is not going to be different. If the Fed goes ahead and decides to taper, you can expect risk assets to get smacked.

Small caps and technology have gotten the “worst of it” during this volatility and I continue to believe that that will be the trend.

The Russell 2000 and NASDAQ are just so chock-full of overvalued, cash burning companies that the world would actually be better without – malinvestment that should’ve been corrected years ago – that I believe those indexes will move disproportionately lower.

I also continue to be profoundly negative on ARKK, an actively managed fund whose flagship component and largest weighting is up 90.6% in the last twelve months, yet has still somehow managed to plunge -11.9% over the same time period.

That takes some very special “active management”.

Source: Ycharts

In fact, just yesterday after hours, another Cathie Wood holding, Docusign, took a 25% haircut.

Wood contends that the growth from her companies will eventually make up for this volatility in the very long term, but I think her portfolio of egregiously overvalued names represents the first head on the chopping block if market volatility continues. And, as I noted days ago, if Tesla ever starts to sell off, ARKK holders should look out below.

As I’ve said before, I also think there will be somewhat of a rotation trade back into cash generating blue chip names, consumer staples and the few companies that still pay a dividend and have modest price to earnings ratios – one of which I profiled as my favorite just weeks ago.

Some of my other favorite names that I am looking to buy if they continue to sell off are well-known blue chip staples that have seen their stocks trade sideways or disproportionately lower over the last couple of months, despite growth-style P/E’s for some. I’d argue names like Disney (DIS) and Walmart (WMT) offer GARP (“growth at a reasonable price”) should they keep selling off. I also love Johnson & Johnson (JNJ)(my largest holding in my all-dividend portfolio which I add to almost daily) and Intel (INTC), which I believe will undergo a renaissance and eventually retake its throne as king of chips – if it isn’t bought out first at these levels.

Gold has continued to selloff on the expectation that a taper is actually coming.

Source: Ycharts

The selloff could easily continue for the short- to mid-term, at least until we get to the point that gold needs to be bought as a volatility hedge due to a taper, or the point where the Fed finally caves and stops its plans for tapering or raising rates. It will be interesting to see how inflation may drive the Fed’s decision making going forward.

Heading into the weekend and into the back end of this month, traders would do well to focus their energies more on Fed commentary than on developments with the Omicron variant, barring any massive change with what we know regarding the new strain. Obviously, if Omicron turns out to be a flesh eating variant of the virus that kills people instantly, that is going to have a profound effect on equity markets (Neel Kashkari heard shouting it the background: “Not if I can help it!”).

But for the time being, thank God that doesn’t seem to be the case. Heading into 2022, I still think the markets could be in for a collapse, as I wrote here, as it appears that this is the only man that can move markets in this day and age:

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DISCLAIMER: 

I own JNJ, WMT, DIS and INTC. I own ARKK, IWM, SPY puts. I own puts and calls in GLD and own a host of gold-related and precious metals related names. None of this is a solicitation to buy or sell securities. Positions can always change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot. 

Tyler Durden
Fri, 12/03/2021 – 10:25






Author: Tyler Durden

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