Gold, Silver, Mining Stocks: Quo Vadimus? (Where Are We Going?)

The chart above was sourced from spiralcalendar.com with a couple edits of mine. It shows the S&P 500/gold ratio going back to 1980, when the 1970’s gold bull market culminated. I believe before the a complete financial “reset” is imposed on the global financial system, we could see the SPX/gold ratio fall to the level it hit in 1980.

A subscriber asked me if I thought that the fact that stocks like AG, EXK and HL, among many others, are only 50% as high in price as they were when silver hit $20 in the summer of 2016 is a red flag.

I said that I do not see it as red flag for the sector. Rather, I see it as just one measure by which mining shares are extremely undervalued relative to gold and silver and to the rest of the stock market. I always thought that the mining shares ran up in price too quickly during the 2016 rally. The GDXJ rose 300% in six months and investor sentiment had become far too frothy.

In my observation of the moves in the sector from 2001 to mid-2006 and from November 2008 to mid/late 2011, gold and silver lead the sector at first, followed by the large cap producers, with the juniors lagging and then outperforming gold/silver/large caps. That seems to be the progression unfolding now.

If I’m right, and if the metals continue moving a lot higher, we should start to see stocks like AG move well above their 2016 highs. Eventually many of the juniors will be 3-5x higher than their current level. We got a taste of the type of moves juniors will start to make this week.

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The Mining Stock Journal  covers several mining stocks that I believe are extraordinarily undervalued relative to their upside potential. I also present opportunistic recommendations on select mid-tier and large-cap miners that should outperform their peers.  You can learn more about this newsletter here:   Mining Stock Journal information.

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2 thoughts on “Gold, Silver, Mining Stocks: Quo Vadimus? (Where Are We Going?)

  1. Larry Kudlow gets on CNBC and announces the Household Survey number of 590,000 jobs created in August as an unbelievable blowout number.

    I agree only that it is truly “unbelievable” because it is not believable at all. It’s more like people staying home on entitlements such as: receiving a Disability paycheck, welfare EBT card, social security, etc . If people got a job, it is probably a minimum wage job or a waiter/waitress/bartender job. Did they count the homeless on the streets of L.A. & San Francisco and other major cities.

    So, every data point they put out is a big fat lie. Just print baby, just print (and don’t let the public know) because the Fed & Gov’t are sooooo transparent, LOL.

    1. The Bureau of Lying Stastics.

      Total nonfarm payroll employment rose by 130,000 in August, and the unemployment
      rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported
      today (Sept. 6). Employment in federal government rose, largely reflecting the hiring of 28,000
      temporary workers for the 2020 Census.

      In August, the [highly fudged] unemployment rate was 3.7 percent for the third month in a row,
      and the number of [officially counted] unemployed persons was essentially unchanged at 6.0 million.
      (See table A-1.)

      The number of persons employed part time for economic reasons (sometimes referred to
      as involuntary part-time workers) increased by 397,000 to 4.4 million in August.
      These individuals, who would
      have preferred full-time employment, were working part time because their hours had
      been reduced or they were unable to find full-time jobs. (See table A-8.)

      The change in total nonfarm payroll employment for June was revised down by 15,000 from
      +193,000 to +178,000, and the change for July was revised down by 5,000 from +164,000 to
      +159,000. With these revisions, employment gains in June and July combined were 20,000

      Not mentioned AGAIN in the Aug. jobs report are the OVER 95.5 MILLION people STILL unemployed, but not counted as such.

      In Oct 2016 on the campaign trail Donald Trump blasted Obama’s BLS for publishing phony numbers, stating the REAL unemployment rate was more like 42%.

      In December 2017 Trump described the BLS report as “totally fiction.”.

      Other Trump quotes regarding BLS numbers:
      May 31, 2014
      “Unemployment is a totally phony number.”

      June 16, 2015
      “Our real unemployment is anywhere from 18 to 20 percent. Don’t believe the 5.6. Don’t believe it.”

      Aug. 11, 2015
      “Then you hear there’s a 5.4 percent unemployment. It’s really — if you add it up, it’s probably 40 percent if you think about it.”

      Aug. 30, 2015
      “They show those phony statistics where we are 5.4 percent unemployment. The real number, I saw a number that could be 42 percent, believe it or not.”

      Oct. 9, 2015
      “They say 5.3 percent employment. The number is probably 32 percent.”

      Oct. 11, 2015
      “Nobody has jobs. … It is not a real economy. It is a phony set of numbers. They cooked the books.”

      Jan. 17, 2016
      “Look again, you hear these phony jobs numbers? People that gave up looking for jobs? They are considered employed.”

      Feb. 9, 2016
      “Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment. As high as 35 — as in fact, I heard recently, 42 percent.”

      And yet his administration has continued the same massive propagandist fraud.

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