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Wasn't there an ETF or something to directly play the VIX, or was that just options?
Hard to disagree with that logic. It looks to me that gold still has more upside ST and I do think there are fewer gold bulls than you believe right now, but I would also be not at all surprised to either retest the lows or even break them modestly and retest the low 800's at some pt this year. I'd feel much better if gold were at 900+ with oil at $80.
If we closed where we are now in gold would that change anything for you? Would you cover or simply wait to short more higher?
I'm guessing this is mostly a TA call for you, but wondering if you're planning on oil dragging gold lower ultimately along w/most other commodities at some pt in the near future as oil seems like it's in a final either 5 of 3 or 5 of 5 from an EW perspective.
TIA
GRZ has put 300 mil into the mine thus far. Also there's some inherent worth to the mine. Chavez has compensated in the past for "stealing". GRZ is cheap enough here to have some value. But it could be dead money for how long??? It could and probably will go lower still. Shame. It seemed like GRZ did everything they could to play by the rules and consider all impacts and thus that's why they were granted the permit, but KRY was denied. Chavez must have done too much coke one night and decided otherwise. LT this will hurt the country just like what they did w/the oil sector.
Mexico still looks decent, but depends on feelings of nationalism. If oil declines heavily in the next 1-2 years then it may be possible to see the same stuff there. However ST, IT doesn't look to be an issue.
Again you'd be nuts to touch GRZ. Clarification....
http://biz.yahoo.com/bw/080430/20080430006535.html?.v=1
I'm going to mostly stick w/Canadian and US based plays. Everywhere else is 3rd world legal system.
It was dirt cheap at 7, a steal at 5 and now the deal of the century at 2.5...assuming they don't steal the mine - big if. Not touching it. Looks like Chavez may let them build the mine and then find a way of stealing it.
Don't see a catalyst for $300 fall until the Fed gets much closer to 1% FF short of true market crash. More than likely gold will have upside blowoff similar to oil prior to any big drop. Agree though it's certainly not risk free, but playing more lagging/value based PMs here most of which are still cheap based on sustained 700-800 gold.
Oil yes, gold maybe. Lots of ways this can still play out. Could simply have a decoupling period between the two.
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24410621
Gold still very historically cheap vs oil and cheap in general given this market climate of financial uncertainty.
Don't follow this one. Was the news really that bad to justify the drop we've seen today?
Buying op in your opinion?
How about we worry about getting back above .40 and holding before jumping the gun.
1.6 billion seems unrealistic a few years out in my mind, but if everything went perfect and gold goes to $2000+ who knows.
Potential bullish interpretation for the HUI
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24306436
I'm gold bull LT, but ST somewhat worried about this chart:
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24306281
On the flip side there's a possibility the HUI is forming a falling wedge which is traditionally bullish, but in this market climate I doubt it'll hold. Looking at HUI 390 again as the first step on a break down.
If gold does break thru to the 2nd or 3rd support it'll probably be the last time to accumulate the physical so cheap.
So are they putting grease on the hill today?
CSCO acting better than expected, but if gold stocks are any indication of future gold/liquidity then we're still going lower ST.
No disagreements there.
You make me want to get a decent book on geology, mining, etc. I never really knew the difference other than it existed. Thanks that was very insightful.
Again according to Rob Martin it's not just about higher gold prices they are going to change the type and method of leaching to make it more profitable. This is from a conversation almost a year and half ago but he felt he could make it more profitable than past methods even at prior gold prices. Felt that the prior method was inefficient FWIW.
They've been saying it'll be resolved in the next few months for well over a year now. Fact is there's nothing in the agreement which specifies a maximum time limit to resolve this. I don't see why it would be over in the next few months unless WEX's backs down or GPXM agrees to far less. Doesn't seem like either party wants to cave. I'd be happy to be wrong though.
I still like Ashdown and the potential it's just that MR has the ability to add 50 to 100 mil to the market cap overnight if they can get it into production and prove up the resources. A rough rule of thumb is that for each mil ounces of resources I'd expect anywhere from 40 to 60 mil to be added to the market cap. Ashdown has the same potential if they prove up more resources - maybe more so, but the market seems to place less value on moly in the ground right now vs gold.
I did most of my DD 1.5 years ago so it's from memory. I could be wrong, but I'm pretty sure the 2 largest shareholders are over 60 and 70+ respectively. My main pt is their not likely to change their mind over GPXM. Probably has more do with feeling like they gave away Ashdown too cheaply when prices were depressed.
Very good pts. I tend to agree. I don't see WEX and GPXM joining forces anytime soon. It's not just about LT views/direction. The hatred at this pt is intense and WEX is owned by essentially 2 people. They are both old and I don't expect them to change anytime soon in their attitudes/position towards GPXM. They feel they were wronged in some way more so than just this dispute w/the agreement. They HATE GPXM. You don't combine w/somebody you hate.
Gold bull top still many years out I'm guessing, but we'll probably have a sizable correction at some pt, but I think higher first. If they can bring in some decent cash this year and at least prove up the possibilities of MR with 1,000+ gold then people will definately care. As always it'll probably take longer than we expect. They are making the right moves, just too slow for everyone's taste.
I think I'll just wait for MR to go into production. It'll probably happen sooner anyway.
I asked Rob about this about 2 months into the process and I got him to admit that there's nothing in the agreement that stipulates how long artibration or mediation will last. It's in WEX's interest to drag this out as long as possible as they have nothing to lose by doing so. I wouldn't expect anything anytime soon, but if it does get resolved the market would certain welcome almost any outcome at this pt.
Gotcha. I just feel there should be one theory that would somewhat explain both camps. I realize there could be more than one factor here, but given the deep discounts across the board there's probably 1 primary reason. Will let it go.
Certainly possible. My point was simply that your theory doesn't seem to explain why ALL the juniors with minor exceptions seem to be lagging so badly here with 900+ gold whether they have proven reserves or not.
That's certainly an ok theory, but it doesn't seem to hold water. You've got issues such as GSS, IAG, MFN, MRB and GBN to name some mid/smaller caps that are fairly liquid (except maybe MRB) and trading at deep discounts to their big cap peers. None of them should require much cash, if any going foward w/the expection of MRB, but given their agreement they won't need much and they have cash flow to back up any loan.
I only see 2 legit explanations and I'm not crazy about either:
1) We are very close to a major IT top where breadth has become worse and worse
2) Risk adversity has become so high that money doesn't want to speculate in anything, but the most liquid issues.
I don't really like theory #2 since it doesn't account for the smaller investor. As a group they were enough to push the juniors higher in 2003. The volume is simply not there in many issues.
I have a hard time believing #1 given the FA environment, but it's possible deflation is hitting faster than I think. If these stocks are truly as cheap as I think they are there should be some buyouts here.
It's bizarre either way. Maybe it'll make more sense in a few months looking back. I do remember energy investors going through the same thing the first time oil went thru 40 and onto 60. During the subsequent pullback the oil shares were bought hard. We haven't had any real shakeout in gold yet. PMs - all too often. Dunno...
I continue to believe from a sentiment standpoint gold is trading about 2-3 years behind energy. As such the big breakout (to all time highs, we're there but it's not spectacular yet (say $42 oil equiv) is just now happening. In the next year we should start to get a much broader group of investors/funds/interest which should drive prices quite a bit higher. Last of the easy money potentially.
I had this debate w/AJ, but I do feel that the break over 875 was significant. We spent multiple days above and today's move resembles nothing like the speculative move at the end of the 70's nor even some of the gold spikes during the past 7 years mostly on geo-political instability. This move is entirely FA driven. Here's part of the exchange I had w/AJ (who sees a double top from the 80's - which I totally disagree)
http://investorshub.advfn.com/boards/read_msg.asp?message_id=26185670
The canadian spec juniors are either the best/easiest buy of this whole cycle or the biggest red flag here.
(edit) Many juniors are already priced for $700 POG or lower. Yes they would draft down on POG down $50-100, but I don't think it would last very long. More risk to missing upside here imho from a risk/reward standpoint (in the junior PMs vs gold).
On the flip side at the rate that they've been appreciating of late could probably wait for a new ST high on gold and still find enough value out there (more on Canadian spec junior side).
Considering that gold only recently broke out to an all-time high and considering the FA backdrop you really don't hear that much about gold these days. We are at a critical pt here. In the next few weeks we'll probably either start a much deeper correction or we'll yet again leave the traders behind. I'm betting on the later although I wish there was more strength in the junior to confirm. You're right about the catching up. If not then I take it to mean that the Fed is so far behind that deflation is already taking hold.
I agree that at some pt it probably will do a 50% or 38% retrace, but given the current FA backdrop I expect it to go higher first. I'm no stranger to being wrong though. I've been in gold since 2001 so maybe I'm brainwashed at this pt.
There's little comparison between the recent top in the S&P and gold's (double) top if you want to call it that. But I'm not going to try to convince you. You seem pretty determined.
Gold could still selloff and hit your lower target or even lower IT, but it would take a big time deflation and I don't think the Fed or other CBs will let that happen ST so quickly. LT they probably don't have much choice. So I do expect gold to take a big hit at some pt prior to going parabolic.
I'm not expecting a repeat of '79, but I do think gold will go parabolic at some pt during this move 2, 5 or 10 years from now. How long this move last depends on a lot of factors not just the Fed.
1) Gold had an all-time of 875 as far as I know. The fact that it broke that and went to 920 first prior to selling off I think is significant. We've already proven that the 875 barrier is no biggie.
2) In my mind there's little difference between 1,000 gold and 1,200+ here. Most of the incremental demand is investment related. Those that focus on falling jewelery demand here are very misguided.
3) Global markets sold off between 2001-2003 and gold and gold stock outperformed everything. Why does this time have to be different? We've had a period of decoupling now that's going to get stronger and stronger going foward. Track the $Hui:$spx ratio longer term. Big breakout signaling the next leg imho.
4) Gold has underperformed most commodities the past few years and is relatively cheap by comparison. It has recently just started to outperform again. Once this trend starts I don't think it peters out this quick.
5) The Fed has to cut a lot more. Dollar will stay reasonably strong simply because the other currencies also have their problems (Yen, Euro) or have become overvalued. However gold is rallying globally now so a stronger relative Dollar is not as big of a concern to me ST, IT. Long term the Dollar still has big problems.
6) Gold is starting to act like a currency here. No way China can diversify into gold with their surplus Dollars, but they can move an incremental portion. The gold market is tiny by comparison.
7) At the present there is no big deflation scare even though it's certainly happening in many parts of the markets. I don't think gold gets wacked until the Fed and other CB have shot their load and it still makes little difference. By that time I think gold could be 1,500+. Then maybe deflation takes us back to 600-800 again before going much higher.
8) The econ news will continue to get worse for sometime going foward. Until there's more clarity the Fed will have to stay on it's easing course. Even if we somehow manage to have a soft landing (I can't see it) we won't know for sometime. In that environment gold should stand to gain from easing as well as financial instability.
9) Yen-carry trade has more to unwind, but once the forced selling is over the forced selling pressure on gold/gold stocks will abate imho.
10) In the 70's gold spent just 4 days above 600. I see no double top. In percentage terms this gold move is not anywhere extreme nor has it gone parabolic yet.
11) Public is still completely ignorant on gold. If we can't have a wave III in gold under these circumstances then when? It seems to be that gold is tracking energy, but with a 2 year lag.
I would prefer gold to stay above 820 preferably above 850 ST. If not I may have to revise my scenario.
These are just off the top of my head. Sorry if it rambles.
I think this was always part of the plan or at least the Fed figured they would have to lower this far sooner than later. They were just talking tough trying to pop commodities prior to this action to alleviate inflation concerns. Right now they look clueless.
You'll probably have to revisit your gold targets ST, IT due to this event. Looks like gold will go over $1,000+ in the next month imho.
ABX is finally revealed to have blown it. They could have had the whole company probably for 20-22 back when they made their failed bid at 16. They were greedy and arrogant. This deal could have been even better, but overall I'd say it's very good for NG. Increase share and no threat of lawsuits (at least from ABX or grace) anytime soon.
Markets must have been expecting more since this should add at least $3+ to market value and probably more once ABX releases updated results from DC.
Added this morning and will add more on dips.
Aren't we that 2nd mouse? I thought the first one died when gold and gold shares fell in mid Aug when they should have been rising? I really prefer to think of myself as the 3rd or 4th mouse, but if you say 2nd then it's ok w/me.
Your TA tends to be better than mine, but it appears that this is a classic acceleration of trend (keep in mind today's pre-market gains). Sure there's resistance here and till all-time highs, but we could just as easily blow thru it to $1,000 by end of the year or even month's end.
It's easy for the gaps to fill when we've been stuck in a trading range for the past 2 years. If this is a true breakout we shouldn't retrace as far as those gaps for a very long time. Jobs number this friday more than anything will determine PM direction for the next 2 weeks imho.
Thanks for the feedback (eom).
What sort of net declines would make you think "grease" is coming back on this hill?
Would you mind sharing your current take on the HUI and gold here? Both still look ok to me here, but I can't see much more damage taking place before I'd get concerned.