Tag Archives: silver

Raymond James Recommends Gold?

From King World News on October 12th:

With very little in the U.S. stock market looking like a low-risk entry, consider gold as an alternative option. Recall, the metal broke the downtrend that had been in place since 2011 back a couple of months ago, and has now pulled back to that former resistance line. It should now offer some support, and the 40-week moving average also sits around there, further adding to the importance of the zone (see bullish breakout and test of support below). (click to enlarge):

This graphic above from the KWN report is based on chart-reading analysis. I’m not a big “chartist” or “technicals” advocate, but hedge fund algos and day-traders love to chase “technicals” and price velocity – in either direction. To that extent, the completion of chart “formations” can become a self-fulling prophecy.

Having said that, the fundamental support for substantial upside adjustment to the price of gold becomes more compelling the day, not the least of which is an acceleration in the accumulation of physically delivered gold bullion by several eastern hemisphere countries.

I wanted to highlight the call by Raymond James because, interestingly, a couple different advisors from Raymond James subscribed to the Mining Stock Journal yesterday. I was wondering why until I saw the report posted on King World News. If just a small percentage of retail/high net worth investment advisors begin to allocate capitol to the mining stocks, it will trigger a massive move higher in mining stock prices. Currently, relative to the price of gold, the only time in the last 20 years that mining stocks have been more undervalued was in December 2015.

Sprott (the firm) is currently recommending that its clients invest in an emerging junior exploration gold mining company.  I recommended this particular stock to Mining Stock Journal subscribers in April about 25% below its current price.  I’m chatting with the CEO today and will be updating my outlook for this stock in next Thursday’s issue.  I will also be featuring the stock of a mid-cap mining stock that I think has 30-50% upside by the end of the year if the price of gold continues to move higher as I believe it will.

On average and in general,  since the inception of MSJ, I have been able to dig up junior mining stock investment ideas before the big firms discover, promote and channel client money into them.  I am starting to feature mid-cap miners with stocks that have been unreasonably beaten down in price this year because those are “low hanging fruit” risk/return plays in which 25-50% can be made in a short period of time.  I recommended call options on SA (Seabridge Gold) in the 9/21/17 issue that are up 300% since then.

You can find out more information by clicking on here:  Mining Stock Journal information.

Can The Fed “Normalize” Without Collapsing The System?

The official lies about the economy keep mounting.  The Dallas Fed reports that its regional economic activity metric surged in early September, despite the complete shut-down of Houston for a few days during the “measurement” period.  The “general activity” index spiked up to a 7-month high. Clearly the quality of this report is suspect, to say the least.

Contrary to this report, the Chicago Fed’s National Activity Index plunged to -0.31.  It was the weakest reading since last August and a huge plunged from the July reading of 0.03. The Street was expecting 0.11.  Because of the nature of this index (85 sub-components measured at the national level) it takes a lot to “move the needle” for this metric.  A negative point-three-one reading implies that the national economy broadly contracted during August.

Clearly the Dallas Fed propaganda was intended to reinforce the Fed’s empty threat to raise interest rates and “normalize” its balance sheet .  Silver Doctors invited me onto their Friday weekly market podcast to discuss the latest propaganda that spewed forth from the Fed’s FOMC meeting earlier in the week, the western Central Banks’ losing battle to push the price of gold lower and the continuing deterioration in the U.S. political and economic system:

The precious metals is in the early stages of another bull market run, like the one that occurred from 2001-2011. This one is being driven by the China-led movement to remove the dollar as the world’s reserve currency and replace with a currency that will incorporate incorporating gold back into the monetary system. The Mining Stock Journal is a bi-weekly newsletter that will help you get invested ahead of the next huge capital flow into the precious metals sector. To find more, click here:  Mining Stock Journal

“Best 20 quid a month I’ve ever spent.” – subscriber from the UK

The United States Of Hubris

The U.S. Government is following the propaganda formula used by Joseph Goebbels that was devised by Sigmund Freud’s nephew, Edward Bernays. The basic idea is to keep repeating a lie enough times so that eventually the masses believe it. The “Russia hacked the election” propaganda is the perfect example. Hillary Clinton first mentioned it in reference to “Russia hacked the DNC emails” during one of the debates. That lie transformed into the “Russia hacked the election” false-narrative repeated every 30 seconds on Fox News, CNN and the greater mainstream media. In truth, to this day not one single shred of evidence has been produced to support the claim. And yet, the lie perpertuates and the public fears Russia. Charles Dickens could not have scripted a better socio-political parody.

This guest post is from “Antonius Aquinas:”

This year, as of yet, North Korea has not been responsible for a single death of a foreign national. Nor has the tiny communist state ever used a nuclear weapon against an enemy like the US did with its immoral and hellish destruction of two Japanese cities, Hiroshima and Nagasaki at the conclusion of WWII.

On the other hand, since the start of the Trump Presidency, US-backed forces have been responsible for the deaths of some 3700 civilians in Mosul, Iraq.** This is not to mention its murderous armed strikes in Yemen and Afghanistan. Nor is American aggression limited to direct military action, but its arms supply sales to despots and its puppets has escalated tensions and makes conflicts that do break out much more brutal.

Fortunately, for the future of global peace, US hegemony is coming to an end. The nation is hopelessly broke while its welfare/warfare economy is beyond reform and faltering badly which means that when the inevitable collapse does happen, it will mean the end or a serious pull back of the Empire. A similar situation took place in Great Britain in 1945 after it took part in another senseless global conflict which liquidated the British Empire once and for all.

Click here to read the rest: The United States of Hubris

Gold Breakout Signals A Financial Hurricane Coming Onshore

I found it amusing that Mohamed El-Erian wrote an opinion piece for Bloomberg which asserted that gold is not much of a “safe haven these days.”  His thesis was entirely devoid of material facts.  His underlying rationale was that safe haven capital was flowing into cryptocurrencies rather than gold.  I guess if one has a western-centric view of the markets, that argument is a modicum of validity.  However the scope of the analysis omits that fact that the entire eastern hemisphere is converting fiat currency at a record pace into physical gold that requires bona fide delivery outside of western custodial roach motels.

Elijah Johnson invited me onto his podcast sponsored by Silver Doctors to discuss why the financial upheaval beginning to engulf the United States will be much worse than the 2008 “Big Short” crisis.  We also discussed by the precious market has always been and will continue be the best place to seek shelter from coming financial hurricane:

If you are looking for ways to take advantage of the next move higher in the precious metals bull market, you can find out more information about the Mining Stock Journal using this link:  Mining Stock Journal subscription information.

“Stock Market?” What Stock “Market?”

“There are no markets, only interventions” – Chris Powell, Treasurer and Director of GATA

To refer to the trading of stocks as a “market” is not only an insult to any dictionary in the world that carries the definition of “market,” but it’s an insult the to intelligence of anyone who understands what a market is and the role that a market plays in a free economic system.  By the way, without free markets you can’t have a free democratic political system.

The U.S. stock is rigged beyond definition. By this I mean that interference with the stock market by the Federal Reserve in conjunction with the U.S. Government via the Treasury’s Working Group on Financial Markets – collectively, the “Plunge Protection Team” – via “quantitative easing” and the Exchange Stabilization Fund has destroyed the natural price discovery mechanism that is the hallmark of a free market.  Capitalism does not work without free markets.

Currently a geopolitically belligerent country is launching ICBM missiles over a G-7 country (Japan).   In response to this belligerence, the even more geopolitically belligerent U.S. is testing nuclear bombs in Nevada.  The world has not been closer to the use of nuclear weapons since Truman used them on Japan.  The stock markets globally should be in free-fall if the price discovery mechanism was functioning properly.

To compound the problem domestically in the U.S., the financial system is now staring down a potential financial catastrophe that no one is discussing.  The financial exposure to the tragedy in Houston is conservatively estimated at several hundred billion.  Insurance companies off-load a lot of risk exposure using derivatives.  The potential counter-party default risk connected to this could dwarf the defaults that triggered the AIG and Goldman Sachs de facto collapse in 2008.   The stock “market” should be down at least 20% just from the probability of this occurrence.  Forget the hurricane issue, Blackrock estimates that insurance investment portfolios could lose half a trillion in value in the next big market sell-off.  Toxicity + toxicity does not equal purification.  The two problems combined are the equivalent of financial nuclear melt-down.

Last night after the news had circulated of the missile fired by North Korea, the S&P futures dropped over 20 points and gold shot up $15.  As I write this, the Dow is up 50 points, the SPX is up over 3 points and gold has been taken down $20 from its overnight highs.  Yet the two catastrophic risks above have not changed in potential severity.   Pushing around the markets is another propaganda tool used by the Government in an attempt to control the public’s perception.  In the words of the great Jim Sinclair, “management of perception economics,” or “MOPE.”

The good news is that, while the systemic puppeteers can control the markets in general, they can’t control the individual parts.  There has been a small fortune to be made shorting individual stocks.  Today, for instance, Best Buy reported earnings that predictably “beat” the Street estimates but it warned about future sales and earnings.  The stock has plunged 11% from yesterday’s close.  The Short Seller’s Journal featured Best Buy as a short in the May 28th issue at $59.  The target for this stock is $12.50, where it was in 2013.  I recommended some January 2019 puts as high probability trade to hit a home run on this idea.

Other recent winners include Chipotle, General Electric, Tesla (short at $380), Bed Bath Beyond in December at $47 and may others.  The more the PPT interferes in the markets to keep the major indices propped up, the more we can make from shorting horrendously overvalued stocks that can’t hide from reality. There’s very few investors and traders shorting the market, mostly out of fear and the inability to do fundamental research.  The Short Seller’s Journal focuses on the areas of the stock market that are no-brainer shorts right now.  You learn more about this product here:  Subscription information.

I really truly look forward to every Monday morning when I get to read through your SSJ. Again, last nights one was great. I have added to the BZH short position and I have had a lot of success adding to CCA each time it has tagged its 200 dma from below. I have done it four times now and each time it has sold off hard within the next several days. I plan to do the same again if it tags it again this time as it has bounced again.  – subscriber feedback received earlier this week (James from England)

 

Is The Precious Metals Sector Set-Up For A Big Run?

I had not noticed until I looked mid-day today (Thursday, Aug 24th) and saw that the HUI index was above 200. It ended up closing just above 200. I want to see it hold above 200 dma and move higher from there before I get excited.  But the chart has become mildly bullish.  GDX, which is a larger representation of the large-cap mining stocks, looks even more bullish that the HUI:

I’m not big advocate of using chart “technicals” to forecast the next move in any market, but many traders, hedge funds and investors use them and they can become “self-fulfilling prophecies.” You can see that GDX (same with HUI and GDXJ) has been trending sideways since early February in a pattern of rrowing volatility. Chartists look at this as a pattern that predicts a big move in either direction. I’ve drawn in a white downtrend line through which the GDX appears to have climbed over. It’s also now above its 50/200 dma’s (yellow and red lines, respectively). I’m not ready to declare a “break-out” yet, but I’m feeling optimistic going into the eastern hemisphere’s biggest seasonal period for accumulating physical gold:

The gold chart above is a 2-yr daily for the price of gold as represented by the Comex continuous gold futures contract. Since April the price has been hitting its head on $1300. I remember when gold attempted to break above $400 in late 2003/early 2004. It took several attempts to get up and over $400. Around that time Robert Prechter had predicted that gold would drop to $50. How well did Prechter’s charts work then?

There’s one of many catalysts away from sheer eastern physical demand or an errant tweet
from Trump that can push gold a lot higher in conjunction with the U.S. dollar index quickly falling a lot lower. The most pressing issues currently are the rising geopolitical tensions between Russia/China and the U.S., the upcoming Treasury debt-ceiling battle and, what is becoming more apparent by the day, a deteriorating U.S. economic and financial system.

Speaking of physical demand, extremely negative ex-duty import premiums have been
observed in India. Many of you may have read standard gold-bashing propaganda pointing to that as evidence that India’s new sales tax is affecting gold demand. But quite the contrary is true. As it turns out, there was a loop-hole in the Goods and Services Tax legislation that scrapped a 10% excise duty on imports from countries with which India had signed a Free Trade Agreement. Currently Indian gold importers appear to be sourcing gold from South Korea, which enables buyers to avoid the 10% import duty entirely. Until the Indian authorities move to close this loophole, we won’t have good feel for how much gold is flowing into India until the official monthly statistics are released. Based on the import trend in June and July, there continues to be an usually large amount of gold imported into India this summer. It will likely pick up even more as we head into the India festival season this fall.

The above commentary is from the latest issue of the Mining Stock Journal.  For those of you with huge profit in Novo Resources, I provide some information about Novo that is not in the analyst reports.  It includes some technical information about the nature of the assay results produced up to this point.  The issue contains analysis in support of buying two primary silver producers whose stocks have been sold off well below their intrinsic values.   New subscribers get all of the back-issues.  You can find out more about the MSJ here:   Mining Stock Journal information.

America’s Supernova: The Final Stage Of Collapse

I started observing the slow-motion train-wreck in process in 2001 – a year removed from my perch as a junk bond trader on Wall Street and living several thousand miles away from NYC and DC in the Mile High City, where the view is a lot more clear than from either coast.

The United States has been in a state of collapse for several decades.   To paraphrase Hemingway’s flippant description of the manner in which one goes bankrupt, it happens in two ways:   slowly then all at once (“The Sun Also Rises”).

The economic decay was precipitated by the advent of the Federal Reserve;  then reinforced by FDR’s executive order removing gold from the citizenry’s ownership, the acceptance of Bretton Woods, and the implementation of what is capriciously termed “Bretton Woods Two” – Nixon’s disconnection of the dollar from the gold standard.  If you study the monetary and  debt charts available on the St. Louis Fed’s website, you’ll see that post-1971 both the money supply and the amount of debt issued at all levels of the system (public, corporate, household) began gradually to go parabolic.

I would argue the political collapse kicked into high-gear during and after the Nixon administration, although I know many would argue that it began shortly after the Constitution was ratified in 1788.  At the Constitutional Convention, someone asked Ben Franklin if we now had Republic or a Monarchy, to which Franklin famously replied, “a Republic, if you can keep it.”

Well, we’ve failed to keep the Republic.  Now the political, economic and financial system is controlled by a consortium of big banks, big corporations, the Department of Defense and a handful of very wealthy individuals, all of which are ruthlessly greedy and misanthropic.

The current political and social melt-down is nothing more than a symptom of the underlying rot – rot that was seeded and propagated by the implementation of fiat currency and a fractional banking system.  The erection of the Fed gave control of the country over to those with the authority to create paper money and issue debt.

And now the political and social clime of the country has gone from ridiculous to beyond absurd.  James Kunstler wrote a must-read piece which captures the essence of the Dickensian  societal caricature that has sprung to life before our very eyes (Total Eclipse):

What do you know, long about Wednesday, August 16, 2017, House Minority Leader Nancy Pelosi (D-Cal) discovered that the United States Capitol building was infested with statues of Confederate dignitaries. Thirty years walking those marbled halls and she just noticed? Her startled announcement perked up Senator Cory Booker (D- NJ) who has been navigating those same halls only a few years. He quickly introduced a bill to blackball the offending statues. And, of course, the congressional black caucus also enjoyed a mass epiphany on the bronze and stone delegation of white devils…

…Just as empires tend to build their most grandiose monuments prior to collapse, our tottering empire is concocting the most monumentally ludicrous delusions before it slides down the laundry chute of history. It’s as if the Marx Brothers colluded with Alfred Hitchcock to dream up a melodramatic climax to the American Century that would be the most ridiculous and embarrassing to our posterity.

I would urge everyone to read the entire piece, which I’ve linked above.   And now for America’s coup de grace, it has offered up “president Trump,” which by the way not any worse than the alternative would have been.  Rather, it’s another symptom of the cancer beneath the skin.

Empires in collapse are at their most dangerous to the world when they are on the brink of imploding.  I was discussing this with a good friend the other day who was still clinging to the brainwashing we received in middle  school history classes that “America is different.” This just in:  America is not different.

The Financial Times has written a disturbing – yet accurate – accounting of the current turmoil facing the White House and the world (America Is Now A Dangerous Nation):

The danger is that these multiple crises will merge, tempting an embattled president to try to exploit an international conflict to break out of his domestic difficulties…Mr Gorka’s flirtation with the idea that the threat of war could lead Americans to rally around the president should sound alarm bells for anyone with a sense of history…Leaders under severe domestic political pressure are also more likely to behave irrationally.

In commentary which reinforces my view presented above, the FT article closes with:

A final disturbing thought is that Mr Trump’s emergence increasingly looks like a symptom of a wider crisis in American society, that will not disappear, even when Mr Trump has vacated the Oval Office. Declining living standards for many ordinary Americans and the demographic shifts that threaten the majority status of white Americans helped to create the pool of angry voters that elected Mr Trump. Combine that social and economic backdrop with fears of international decline and a political culture that venerates guns and the military, and you have a formula for a country whose response to international crises may, increasingly, be to “lock and load”.

The current “everything bubble,” fueled by the creation of massive amounts of fiat money and debt issuance is America’s “supernova.”  It’s the final explosion of fraudulent currency printing and credit creation.   I sincerely hope that when the pieces hit the ground, there will be enough material with which the original Republic can somehow be reconstructed.

 

The Dollar Is Screaming “Buy Gold (and silver)”

First this, but don’t take our word for it:

The US Dollar is under considerable pressure. Week after week, we talk about how the dollar has been going down for the count. It can only take so many hits. Gold and silver are the safe haven assets to own through a currency crisis, and for the moment, the precious metals have been on the clearance sale rack since July. At what point do the dollar bulls capitulate? It has been years since the dollar has come under pressure, and the frequency in which everybody is a genius yet bouncing from job to job, including in the financial sector, there are now so few analysts/financial advisers/traders who have seen a bear market, that one wonders if anybody will hear it when it roars?

The pressure is building. Just look at copper and ask these questions:

  • Is mining supply down for everything, or just copper?
  • How is copper rallying, yet silver price action has found everything except for a bid?
  • If copper finished the quarter with 2nd place overall gains, across all asset classes, second only to crude, then why are the precious metals so far behind?

Here’s a closer look at copper action of late:


The consolidation is impressive, spanning several months. With the recent 7% gains in just the month of July, is copper set for another leg up, or will it come crashing down to the weakness of gold and silver? Gold prices have been trading in a $20 range since last week. Seriously. To the penny. At a price of approximately $1275 going into Friday’s trading action, gold looks ready to either break-out or break-down:

Silver prices are looking very bullish:


Earlier this week, we reported that mining sector 2nd quarter earnings have now hit full stride. Second quarter earnings from the miners have been mixed. Gold miners seem to be weathering the storm, but silver miners not so much:

GOLD CONSENSUS EPS ACTUAL RESULT
Barrick (ABX) $0.2 $0.22 BEAT
Rand Gold (GOLD) $0.74 $0.88 BEAT
SILVER CONSENSUS EPS ACTUAL RESULT
Endeavour (EXK) $0.02 $0.00 MISS
First Majestic (AG) $0.05 $-0.02 MISS

The performance of the miners begs a the question:

Are the silver miners no longer able to compete, or is silver under-priced when compared to current market conditions?

On the fundamental front, we have several issues to be concerned with. ADP Payroll data suggests poor labor market conditions. According to the most recent report, the manufacturing sector shed 4,000 jobs in July, 2017. Today is the official Bureau of Lies and Statistics BLS Nonfarm Payrolls report, and as we are now over half a year into 2017, this employment data is perhaps the most important release ever. We shall not reiterate what a disaster the rest of the economy has become. The “Stock Market” is at record highs, though the barrage of incoming data paints the picture of a seriously sick economy, and it is perhaps terminal.

SilverDoctors.com has been on the leading edge of Gold News and Silver News Since 2011. Each month, more than 250,000 investors visit SilverDoctors.com to gain insights on Precious Metals News as well as to stay up-to-date on World News impacting the metals markets.

Western Central Bank Fear Of Gold Is In The Air

Ballooning open interest, heavy fix selling, aggressive post-settlement selling, flash crashes – this all seems a lot of bother. Perhaps the Other Side is afraid of something. – John Brimelow from his Gold Jottings report

Wednesday  evening at 7:06 EST, at one of the least liquid trading periods of the 23 hour trading day for Comex paper gold, a “motivated” seller unloaded 10,777 August gold contracts into the CME’s Globex trading system, knocking the price of gold down $9 in 25 minutes.  There were no obvious news or events reported that would have triggered any investor to dump over 1 million ozs of gold with complete disregard to price execution.

Rather, the selling was the act of an entity looking to push the price of gold a lot lower in “shock and awe” fashion.  The 10.7k contracts sold were just the August contracts.   There was also related selling in several other contract months.  To be sure, the total number of contracts unloaded included  hedge fund selling from stop-losses triggered in the black boxes of momentum-chasing hedge funds.

In addition to the appearance of frequent, strategically-timed “fat finger” flash crashes, the open interest in paper gold on the Comex has soared by 23,000 contracts since last Friday. This added 2.3 million paper gold ounces to the Comex open interest, which represents nearly 27% of the total amount of alleged physical gold ounces sitting Comex vaults.   In fact, the total paper gold open interest on the Comex is 455,605 contracts, or 45.5 million ounces of gold. This is 530% more paper gold than the total amount of gold reported to be sitting in Comex vaults.

The dramatic rise in open interest accompanied gold’s move in price above the 50 dma.  It’s typical for the bullion banks on the Comex to start flooding the market with additional paper contracts in order to suppress strong rallies in the price of gold.  Imagine what would happen to the price of gold if the regulatory authorities forbid the open interest in Comex gold contracts to never exceed 120% of the total amount of gold in the Comex vaults.  This is unwritten “120% rule” is de rigeur with every other commodity contract except, of course, silver.

The “flash crash” and “open interest inflation” are two of the obvious signals that the western Central Banks/bullion banks are worried about the rising price of gold.  The recent degree of blatant manipulation reflects outright fear. I suspect the fear is derived from two sources.  First is a growing shortage of physical gold that is available to deliver into the eastern hemisphere’s voracious import appetite.  Exports from Swiss refineries have been soaring.   India’s appetite for gold has not been even slightly derailed by the 3% additional sales tax imposed on gold.

Speaking of India, the World Council has put forth a Herculean effort to down-play to amount of gold India has been and will be buying.  After India’s 351 tonnes imported in Q1, the WGC tried to shove a 90 tonne per quarter forecast down our throats for the rest of the year. India’s official tally for Q2 is 167.4 tonnes.  Swing and a miss for the WGC.  Now the WGC  is forecasting  at total of 650-750 tonnes for all of 2017.

The WGC forecast is idiotic given that India officially imported 518.6 tonnes in 1H and 2H is traditionally the best seasonal buying period of the year AND a copious monsoon season means that farmers will be flush with cash – or rupees, rather – which will be quickly converted into gold.  Two more swings and misses for Q3 and Q4 and the WGC is out of excuses for why India likely will have imported around 1,000 tonnes, not including smuggled gold, in 2017.  This aggressive misrepresentation of India’s gold demand reeks of propaganda.  But for what purpose?

Back to the second reason for the banks to fear a rising price of gold:  the inevitable collapse of the largest financial bubble in history inflated by Central Bank money printing and credit creation.   The trading action in the gold and silver markets resembles the trading activity in 2008 leading up to the collapse of Lehman and the de facto collapse of Goldman Sachs.

One significant  difference is the relative effort exerted to keep a lid on the price of silver.   In early 2008, with the price of silver trading between $17 and $19, the open interest in Comex silver peaked at 189k contracts (Feb 29th COT report).   Currently the open interest is 206k contracts and it’s been over 240k.    In late 2008, the Comex was reporting over 80 million ozs of “registered” silver in its vaults. “Registered” means “available for delivery.” There were thus roughly 3 ozs of paper gold for every reported ounce of physical gold available for delivery.  Currently the Comex is reporting 38.5 million ozs of registered silver. That’s 5.3 ozs of paper silver for every ounce of registered silver.

As you can see, the relative effort to suppress the price of gold and silver is more intense now than in 2008.   Given what occurred in 2008, I have to believe that fear emanating from the western banks currently is derived from events unfolding “behind the curtain” that are worse than what hit the system in 2008.