Saturday, February 04, 2017 8:02:18 AM
Friday February 03, 2017 09:58
http://www.kitco.com/commentaries/2017-02-03/Gold-Miner-Investing-for-Dummies.html
“A lot of the companies have moved out, they don’t make the drugs in our country anymore. A lot of it has to do with regulation, a lot of it has to do with other countries taking advantage of us with their money and their money supply and devaluation. Our country has been run so badly, we know nothing about devaluation; every other country lives on devaluation. You look at what China’s doing, you look at what Japan has done over the years, they played the money market, they played the devaluation market and we sit there like a bunch of dummies, so you have to get your companies back here.”
– President Donald Trump, January 31, 2017
If you were on the fence about whether to invest in the precious metal miner sector, or add to your miner position, just cut this quote out and tape it to your computer monitor.
Gold made a monthly close above $1200 per oz. soon after this statement. I believe this level will hold on a monthly basis going forward as this new gold bull could heat up with the Trump Era currency war just beginning.
While the above quote is directed at the Yen and the Yuan, the Trump administration is also going after Germany, as Trump trade adviser Peter Navarro this week stated the "grossly undervalued" euro served as a currency for Germany alone, allowing the country to "exploit" the United States and others.
After just two weeks in office, Donald Trump has already shaken up the global landscape with an Executive Order on Interior Immigration Enforcement. While the liberal US media continues to stir the pot of dissention among the American citizenry, we even have former President Obama effectively setting up a shadow government declaring he now supports all the protests against Trump.
As the political landscape becomes more uncertain, the safe haven trade should continue to benefit the precious metals sector while the ongoing currency wars will likely add more fuel to the new precious metal bull market.
While the “US Dollar is too strong” rhetoric continues from the new US Administration, the record long hedge fund position from last month in the US Dollar continues to unwind. This is bringing more longs into bullion as the very important 100 level on the USD Cash Settle Index has now been broken, even before a dovish Fed voted 10-0 to leave rates un-changed this week. Uptrend line support is at 97 on the index and could possibly get there on this move down, which began on the very first trading day of the year.
I am now looking for gold to hit the $1250-$1270 area on this move with the GDX possibly hitting 28-30 before a correction of 15-20% in the index takes place. Sentiment in the sector has remained weak as the miners continue to climb a wall of worry, while leading the gold price higher. Many of the quality miners have been breaking out of individual consolidation patterns as well during this rebound off of strong support in the GDX at $22.50. As mentioned a few weeks ago in this column, I believe $1225 gold should get the GDX to the $25 region. A weekly close above the $25-$26 level in the GDX and $1225 in gold will further solidify the case for a major bottom being in place for the sector.
By the time this missive is posted, we will have the results of the first Non-Farms Payroll Report (NFP) of the year, published at 8:30am EST, an hour before the market opens on February 3rd. The NFP often has an oversized impact on the precious metals as traders try to price in the timing of the next Fed rate hike based on the information from the jobs created in January. The ADP number, released on Feb. 1, was very strong so chances are we could get an equally strong NFP as well. If so, after the dust settles from the computer algorithm based trades, I believe weakness should be bought in your favorite precious metal miners. The Chinese market also comes back over the weekend after being closed this week for the Chinese New Year festivities.
If you concentrate on investing in the quality miners which own or control large deposits with district scale land packages and are economic at $1200 gold, you should do very well going forward into the next decade.
By David Erfle Contributor to Kitco News
newsfeedback@kitco.com
Recent GOLD News
- Barrick Announces Extensive Exploration Partnership with Geophysx Jamaica • GlobeNewswire Inc. • 05/01/2024 10:15:00 AM
- Barrick to Ramp Up Production As It Remains On Track to Achieve 2024 Targets • GlobeNewswire Inc. • 05/01/2024 10:00:00 AM
- Barrick Declares Q1 Dividend • GlobeNewswire Inc. • 05/01/2024 09:59:00 AM
- Barrick Announces Election of Directors • GlobeNewswire Inc. • 04/30/2024 08:15:55 PM
- Barrick On Track to Achieve 2024 Targets • GlobeNewswire Inc. • 04/16/2024 11:00:00 AM
- Notice of Release of Barrick’s First Quarter 2024 Results • GlobeNewswire Inc. • 04/09/2024 11:00:00 AM
- Strategy-Driven Barrick Builds on Value Foundation • GlobeNewswire Inc. • 03/28/2024 09:20:38 PM
- Barrick Hunts New Gold and Copper Prospects in DRC From Kibali Base • GlobeNewswire Inc. • 03/20/2024 02:00:00 PM
- Barrick Opens Academy at Closed Buzwagi Mine • GlobeNewswire Inc. • 03/18/2024 08:00:00 AM
- Barrick to Grow Production and Value on Global Asset Foundation • GlobeNewswire Inc. • 03/15/2024 11:53:01 AM
- Loulo-Gounkoto Delivers Another Value-Creating Performance • GlobeNewswire Inc. • 03/10/2024 10:00:00 AM
- Passing of the Right Honorable Brian Mulroney • GlobeNewswire Inc. • 03/02/2024 01:17:35 AM
- Kibali and DRC Partner to Promote Local Content • GlobeNewswire Inc. • 03/01/2024 02:22:43 PM
- Tanzanian Parliamentary Committee Lauds Barrick’s Work at North Mara • GlobeNewswire Inc. • 02/23/2024 12:00:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/14/2024 10:28:08 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/14/2024 08:05:25 PM
- Clear Strategies and Strong Partnerships Set Barrick Up to Outperform, Says Bristow • GlobeNewswire Inc. • 02/14/2024 11:00:00 AM
- Barrick Announces New Share Buyback Program • GlobeNewswire Inc. • 02/14/2024 10:59:00 AM
- Barrick Declares Q4 Dividend • GlobeNewswire Inc. • 02/14/2024 10:58:00 AM
- NGM Strongly Positioned for Growth • GlobeNewswire Inc. • 02/10/2024 01:00:16 AM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/08/2024 03:03:08 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/08/2024 12:46:55 PM
- Geologically Driven Asset Management Delivers Barrick’s Third Successive Year of Reserve Growth at Sustained Quality, While Unlocking Embedded Growth Portfolio • GlobeNewswire Inc. • 02/08/2024 12:00:00 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/01/2024 06:04:56 PM
- Africa’s Largest Gold Mine Now Also One of Its Greenest • GlobeNewswire Inc. • 01/29/2024 04:00:00 PM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM
Moon Equity Holdings, Corp. Announces Acquisition of Wikolo, Inc. • MONI • May 7, 2024 9:48 AM