There’s a great opportunity at the moment for anyone ready to make a decisive move in gold.
With the Federal Reserve's FOMC meeting coming very soon, there is a trade that I believe will realize a few +10 percent gains.
The obvious play is as follows…
Purchase stocks in gold before the FOMC meeting, either today or tomorrow. Then sell on Thursday.
We are expecting a pretty soft announcement from the Fed regarding its benchmark figure, no one is really thinking they will move it, so investors and financial organizations are probably betting short on gold stocks and long on the greenback.
This should encourage the smart investor to take our advice and buy up gold stocks, as optimistic news will carry off the greenback longs, and gold will be affected in the opposite way by the shorts.
The only logical outcome is a gold price increase.
I was reminded by a trusted friend at Pana Mining Holding Group that a similar scenario occurred during an FOMC back in March.
I’m purchasing gold today and will be making more than a couple of quick profits Thursday.
A few of the main gold contenders are New Gold, Gold Fields Ltd. and Goldcorp.
Goldcorp is a very popular, low end gold company that closed late last week at $17.09. How far down do I think that could go? Possibly to the $15 mark over the next couple of days. Not a bad entry point at all.
Gold Fields Ltd. produces slightly more upmarket gold and has facilities from Africa to South America to Australia. Its shares closed at just over $4 but could lose 50 cents.
New Gold is a similar multinational mining company with gold, silver and copper containing assets all over the globe. It also engages in significant exploratory work. Their shares lost a little bit more than expected last week going down to $4.46 but there would be no shame buying this one up at about $4.10.
There are a few more possibilities including a couple of nice vector ETF’s like Gold Miners and Junior Gold Miners which both track the sector performance and have given a lot back to investors historically, especially 5 years ago at the height of the gold boom.
Both of those will see a +10 percent gain or more on Thursday and are well worth backing. If you want quick profits, get in gold now.
Wednesday 8 June 2016
Tuesday 7 June 2016
What’s driving the gold increases this year?
I’m 99% sure that the bullion rally this year is being driven by inflationist gold bugs. Inflationary fears breed purchases, resulting in the gold sector going higher since the end of the first quarter.
At the start of the year the gold and silver index climbed in a very bearish environment. Then last month saw silver making a slightly higher low versus gold and some edgy overbuying at the end of April. Around that time we spoke to executives of Pana Mining Holding who described deflation rumors as “old news.”
That was basically the signal for the ‘inflation trade’ to begin with many commodity markets including gold and silver benefiting, as well as a few emerging markets. Not to say there has been no risk in getting involved with buying at this point it just takes a steady mind and some courage to enter the market at such a significant stage.
However, when the gold/silver ratio changed back those same markets would weaken. This shows how sensitive an indicator that ratio is on so many levels, not least the ability of the market to react to inflation. At the moment, that reaction has been minimal and hasn’t really approached the level of a full blown correction.
Everyone loves a gold and silver inflationary bug, even if we die hard traders often complain about Fed inflation policies. A lot of capital inflow usually results and plenty of opportunity for profits. That’s just the fundamental nature of the beast.
Inflation is bound to taper off at some point and those traders who have been doubling down are likely to get burnt at some point. Luckily the inflation has a nifty habit of self-correcting just when you least expect it so it means keeping a keen eye on the ratio and trying to preempt the bounces.
In summary, the last few months have been a journey and not a bad one at all. Silver has led the way rocking alongside inflation and many investors with foresight have been able to read the signs and make some healthy profits in the first quarter of the year. And the greenback has not let anyone down, keeping its dominant bearish complexion, regardless its short term fluctuations.
At the moment I’m not going to commit and say there is a real correction coming in the sector any time soon. I readily admit that the current rally has been unpredictable, especially to those new in the game, and many have just plain got their timing wrong.
However, gold having these cyclical phases, I think we will see this latest cycle ending pretty soon and the whole sector will reset and follow the same pattern.
At the start of the year the gold and silver index climbed in a very bearish environment. Then last month saw silver making a slightly higher low versus gold and some edgy overbuying at the end of April. Around that time we spoke to executives of Pana Mining Holding who described deflation rumors as “old news.”
That was basically the signal for the ‘inflation trade’ to begin with many commodity markets including gold and silver benefiting, as well as a few emerging markets. Not to say there has been no risk in getting involved with buying at this point it just takes a steady mind and some courage to enter the market at such a significant stage.
However, when the gold/silver ratio changed back those same markets would weaken. This shows how sensitive an indicator that ratio is on so many levels, not least the ability of the market to react to inflation. At the moment, that reaction has been minimal and hasn’t really approached the level of a full blown correction.
Everyone loves a gold and silver inflationary bug, even if we die hard traders often complain about Fed inflation policies. A lot of capital inflow usually results and plenty of opportunity for profits. That’s just the fundamental nature of the beast.
Inflation is bound to taper off at some point and those traders who have been doubling down are likely to get burnt at some point. Luckily the inflation has a nifty habit of self-correcting just when you least expect it so it means keeping a keen eye on the ratio and trying to preempt the bounces.
In summary, the last few months have been a journey and not a bad one at all. Silver has led the way rocking alongside inflation and many investors with foresight have been able to read the signs and make some healthy profits in the first quarter of the year. And the greenback has not let anyone down, keeping its dominant bearish complexion, regardless its short term fluctuations.
At the moment I’m not going to commit and say there is a real correction coming in the sector any time soon. I readily admit that the current rally has been unpredictable, especially to those new in the game, and many have just plain got their timing wrong.
However, gold having these cyclical phases, I think we will see this latest cycle ending pretty soon and the whole sector will reset and follow the same pattern.
Monday 6 June 2016
Limited boost in stock funds as oil giants data released, is gold back?
Some of the world’s key index ETF’s suffered minor declines early in the week as interested parties wait on Q1 figures from a multitude of energy titans.
Arguably the biggest global business giant, Apple, will release data 24 hours later.
Looking at the S&P 500, most of the decreases came as a result of energy stocks. A month long oil rally has seen floor traders cut and run. WTI crude futures leveled out 2.4 percent at $42.75 a barrel.
SPDR dropped just over a single percentage point but is up over 10 percent so far this year. It also reigned in its six month average in April, something we haven’t seen for 2 years. For the year to date, the energy industry is setting the bar for the S&P 500. Nevertheless, SPDR is trading almost a quarter below its yearly high.
The sector that most investors are concentrated on is energy, with earning reports expected this week from titans in the industry such as Chevron, ConocoPhillips, BP and ExxonMobil.
As a result of Halliburton’s recent merger maneuvers with Baker Hughes, the world’s largest oil services provider delayed its Q1 data report for 2 weeks.
Halliburton’s closest competitor, Schlumberger, released its reports last week and suffered a drop in its stock as a result. A statement by the company, who operate in 85 countries, warned that the situation may not improve this year.
The only factor keeping oil stocks trading at a high level, it seems, is the upturn in commodity prices. What everyone associated with the crude business is hoping for, to end the out of control oil glut, is an output freeze. However, this is unlikely to occur in 2016.
Utility stocks, historically a very defensive bet, led S&P 500 sectors this week; with consumer staples and real estate also up at the top.
One ETF that raised a few eyebrows was gold, which rallied with a 0.3 percent jump for SPDR Gold Shares. Analysts at Pana Mining Holding Group say that the commodity ETF is “not likely” to breakout this month. It also attempted to break last month but remained range-bound.
The analyst said that after a very decent first quarter rally, gold has moved into a considerable range of neutrality this month as the market settles.
“There are other lively factors at the moment which might take away some of the limelight from gold such as the U.S. Federal Reserve Open Market Committee (FOMC) meeting and the G-7 summit in Japan, and neither of these will help gold breakout anytime soon, it’s not likely” he said.
Arguably the biggest global business giant, Apple, will release data 24 hours later.
Looking at the S&P 500, most of the decreases came as a result of energy stocks. A month long oil rally has seen floor traders cut and run. WTI crude futures leveled out 2.4 percent at $42.75 a barrel.
SPDR dropped just over a single percentage point but is up over 10 percent so far this year. It also reigned in its six month average in April, something we haven’t seen for 2 years. For the year to date, the energy industry is setting the bar for the S&P 500. Nevertheless, SPDR is trading almost a quarter below its yearly high.
The sector that most investors are concentrated on is energy, with earning reports expected this week from titans in the industry such as Chevron, ConocoPhillips, BP and ExxonMobil.
As a result of Halliburton’s recent merger maneuvers with Baker Hughes, the world’s largest oil services provider delayed its Q1 data report for 2 weeks.
Halliburton’s closest competitor, Schlumberger, released its reports last week and suffered a drop in its stock as a result. A statement by the company, who operate in 85 countries, warned that the situation may not improve this year.
The only factor keeping oil stocks trading at a high level, it seems, is the upturn in commodity prices. What everyone associated with the crude business is hoping for, to end the out of control oil glut, is an output freeze. However, this is unlikely to occur in 2016.
Utility stocks, historically a very defensive bet, led S&P 500 sectors this week; with consumer staples and real estate also up at the top.
One ETF that raised a few eyebrows was gold, which rallied with a 0.3 percent jump for SPDR Gold Shares. Analysts at Pana Mining Holding Group say that the commodity ETF is “not likely” to breakout this month. It also attempted to break last month but remained range-bound.
The analyst said that after a very decent first quarter rally, gold has moved into a considerable range of neutrality this month as the market settles.
“There are other lively factors at the moment which might take away some of the limelight from gold such as the U.S. Federal Reserve Open Market Committee (FOMC) meeting and the G-7 summit in Japan, and neither of these will help gold breakout anytime soon, it’s not likely” he said.
Sunday 5 June 2016
Gold output can’t continue its extraordinary run
It’s more than likely global gold output set a record for the seventh year in a row last year, according to specialists in the field; however this year will be a turning point, with decreases expected.
A Thomson Reuters GFMS statement released recently showed that worldwide gold output climbed 1.7 percent in the first two quarters of 2015. On the GFMS total year predictions; they estimated a grand total of over three thousand tonnes, making last year the seventh record year on the trot.
There is a disclaimer however, and a sure sign that this stellar run is going to end pretty soon. The rise from 2014 was only 0.08 percent. This is opposed to an average yearly increase of 2.4 percent for the previous ten years.
The GFMS representative said, “There are a few reasons that are causing a bullish landscape in the medium term for gold output right now including a simple drop in production levels and grades, and also an unexpected lack of new gold discoveries.”
Speaking to mining executives over at Pana Mining Holdings Group several months ago, it seems their predictions of a drop in global gold output this year were spot on. They said a tightening of (their DELETE) investment in the fields of exploration and development has affected gold’s market value and seen it plummet by nearly half from its crest five years ago.
And it’s not only gold that is suffering. SNL Metals & Mining, a consultancy firm based in the US, have shown from their data that across the whole mining spectrum capital expenditure has dropped about 30 percent last year compared to three years earlier.
A main culprit was the drop in new discoveries, sliding by 60 percent at the end of 2015 compared to the previous quarter. And this was despite a jump in total metals exploration across the entire mining industry.
One upside late last year was the reduction in local costs like labor, power and fuel as a result of a weakening of many currencies versus the greenback. Production was encouraged by greater profit margins.
In those countries where the currency was hit hardest, there has been a noticeable effect on gold shares this year, for example in South Africa. The nation’s gold sector climbed an impressive 25 percent in the first fortnight of 2016 as the Rand dropped to record lows versus the greenback.
A Thomson Reuters GFMS statement released recently showed that worldwide gold output climbed 1.7 percent in the first two quarters of 2015. On the GFMS total year predictions; they estimated a grand total of over three thousand tonnes, making last year the seventh record year on the trot.
There is a disclaimer however, and a sure sign that this stellar run is going to end pretty soon. The rise from 2014 was only 0.08 percent. This is opposed to an average yearly increase of 2.4 percent for the previous ten years.
The GFMS representative said, “There are a few reasons that are causing a bullish landscape in the medium term for gold output right now including a simple drop in production levels and grades, and also an unexpected lack of new gold discoveries.”
Speaking to mining executives over at Pana Mining Holdings Group several months ago, it seems their predictions of a drop in global gold output this year were spot on. They said a tightening of (their DELETE) investment in the fields of exploration and development has affected gold’s market value and seen it plummet by nearly half from its crest five years ago.
And it’s not only gold that is suffering. SNL Metals & Mining, a consultancy firm based in the US, have shown from their data that across the whole mining spectrum capital expenditure has dropped about 30 percent last year compared to three years earlier.
A main culprit was the drop in new discoveries, sliding by 60 percent at the end of 2015 compared to the previous quarter. And this was despite a jump in total metals exploration across the entire mining industry.
One upside late last year was the reduction in local costs like labor, power and fuel as a result of a weakening of many currencies versus the greenback. Production was encouraged by greater profit margins.
In those countries where the currency was hit hardest, there has been a noticeable effect on gold shares this year, for example in South Africa. The nation’s gold sector climbed an impressive 25 percent in the first fortnight of 2016 as the Rand dropped to record lows versus the greenback.
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