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.
Why did First Majestic get hit so hard?
Looks like they missed estimates when they reported earnings Thursday after the close. I’ve never been an AG fan because I’ve always believed it to be overvalued. I have never recommended it in my Mining Stock Journal. That’s not to say that it’s not a good company that’s well-run. It is. It’s just overvalued by the market.
“I have never recommended it in my Mining Stock Journal”
Really???
Not even as a short term trade opportunity in the 9/15/16 edition??
Did I get a special edition…..my 9/15/16 edition recommends AG as a short term trade opportunity (3 or 4 months)
Here is how that worked out:
9/15/16 closing price $11.66
12/15/16 closing price $7.35
Maybe you forgot because it was such a bad recommendation?
Bottom line with AG: Nothwithstanding AG’s revised production guidance for 2016 plus an
incompetent, if not fraudulent short-sell report issued by a short-seller with questionable
character and integrity, AG’s stock sell-off is highly correlated with the sell-off in the entire
sector. Silver is a volatile asset and AG is a “derivative” of the price of silver. As such, when
the next move higher in the sector occurs, AG’s stock will likely significantly outperform the
sector.
Oh that’s right. I did forget about that. I never recommended it as a long-term fundamental buy. I was expecting a bounce in the market that never materialized and posited AG as a good short-term momentum play if the move higher occurred. Your remark there is really a douche-bag remark. I don’t do end-zone dances on the stocks that I recommend taht at one point have been up anywhere from 200% to 600%. Based on your tenor there, I’m the only newsletter writer under the sun that has had a trade idea that didn’t work out. Your remark is actually an insult to my subscriber base, which incidentally has an unusually low churn rate.