The juniors are even cheaper than the producers. This is because, as the price of gold moves higher, value of the gold (or silver) in the ground for juniors with a resource becomes worth even more to potential acquirers, especially juniors who have projects in close proximity to mining companies with operating mines and infrastructure. At some point, larger mining companies will either have to start buying juniors or face being acquired by even bigger mining companies. Assuming the price of gold/silver continues to move higher from here, I believe we’ll start to see a lot more acquisition activity before the end of the year. Full Story
No affect in gold and silver price after the FOMC minutes. Traders are still hooked to US-China trade relations, slowdown and central banks bunking US dollar. Federal Reserve policymakers were deeply divided over whether to cut interest rates last month but were united in wanting to signal they were not on a preset path to more cuts. In my view, Trump will start a currency war by forcing Federal Reserve to cut interest rates excessively. Gold in totality has to rise. Sharp corrections chances will be high till spot gold does not break and trade over $1560. Full Story
The world is starting to have a nervous breakdown. Signs abound of an impending recession with inverted yield curves falling interest rates and President Trump raising his rhetoric against Fed Chair Jerome Powell. He is also concerned that falling markets and a possible recession will hurt his re-election chances. Markets are falling, short term trends have turned down and some such as the Dow Jones Transportations (DJT) are under their 200-day MA and the intermediate trend has turned down. But gold is shining and our "Chart of the Week" highlights the Dow/Gold ratio that shows a ratio poised to break down in favour of gold. Gold has been making new all-time highs in over 70 currencies including the Canadian dollar.
So is recession really coming? Well after 10 years one is probably due. But things never play out the way everyone expects so there will be twists and turns. September is the worst month of the year for markets and this year appears to be shaping up as no exception. But even in a down market there are some areas that shine besides gold. Full Story
However, be advised that even within primary uptrends Gold and gold stocks have often consolidated and corrected for several months.
If you missed the recent run, then it is best to be patient, buy value and wait for weakness in the high quality juniors that appear extended. The best time to buy the leaders is during a correction. New opportunities will also emerge. Full Story
So, as the bulls pat themselves on the back for holding all the way down last year for a 20% draw down so that they can “enjoy” the rally we got in 2019, I hope they don’t hurt their arms and shoulders from all their back-patting. But, they may be in for a dose of realism when they realize that the market has now been completely flat for the last twelve months. Full Story
Are rates on the Ten-Year Note finally bottoming? Quite possibly, according to technical indicators that we monitor closely. T-Notes touched a low last week of 1.47% after plummeting almost relentlessly from 3.49% last November. GDP was running at around 3% back then, and almost no one other than a few hardcore deflationists, your editor among them, saw rates on the Ten-Year falling below 2%. Now, however, given the look of the charts, it would be wise to prepare for a possible rate rebound, even if it proves to be temporary. Full Story
The talk of financial markets is about negative mortgage rates and its impact on global growth. Let’s be straight, mortgage rates are linked to bond yields. Investors have the habit of factoring excess be it growth or recession. Assets prices these days are all about AI (artificial intelligence) powered momentum. Most of us make heavy losses when the investment we made starts reversing. Full Story
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