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Gold & Precious Metals

What History Says for Gold Stocks in 2018-2019

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Posted by Jordan Roy Byrne - The Daily Gold

on Tuesday, 21 November 2017 06:06

It has been a while since we’ve applied historical analysis to the precious metals sector. It is something we really enjoy as history can help define and contextualize current trends and help us spot opportunities. Back in March of this year we noted that the gold stocks could be following the path of recovery of housing stocks since their 2009 bottom. Recently, James Flanagan of Gann Global Financial has produced some excellent videos discussing some historical comparisons that are quite relevant to the gold stocks at present. We saw his videos, remembered our housing analog and wanted to take it a step further. What was the path of recovery of markets following mega bear markets?

We define a mega bear market as at least an 80% decline that lasted roughly three to four years. The image below highlights the data we’ve compiled. Some of the bears are only two years long but they follow the general recovery path. That consists of a very strong initial rebound that lasts six to twelve months which is followed by a correction and consolidation which usually lasts 18 months to two years. Then, the market begins its next impulsive advance.

MegaBearRecoveries

Next we will look at the three best fits to the gold stocks at present. 

The housing stocks may be the best analog. They lost 81% during a bear market which lasted nearly four years. Then they recovered 137% before correcting 42% over 18 months. Over the next 18 months (from the 2011 low to 2013), the housing stocks gained 177%



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Gold & Precious Metals

Gold Consolidates & Uranium Blasts Higher

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Posted by Morris Hubbartt - Super Force Signals

on Friday, 17 November 2017 06:12

Today's videos and charts (double click to enlarge):
 

SFS Key Charts & Video Update

w1



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Gold & Precious Metals

Two-Thirds Of The Top Primary Silver Miners Suffered Production Declines In 2017

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Posted by Steve St. Angelo

on Thursday, 16 November 2017 06:40

It has been a rough year for many primary silver miners as two-thirds have suffered declines in production.  Also, many high ranking silver producing countries are also experiencing a pronounced reduction in their domestic silver mine supply.  According to the data put out by World Metal Statistics, Chile’s silver production is down 20% in the first eight months of the year, while Australia is down 19%, Mexico declined 2% and Peru lower by 1%.

The Silver Institute will be releasing their 2017 Silver Interim Report shortly which will provide an update on current silver production and forecasts for the remainder of the year.  However, I believe global silver production will take a big hit this year due to several factors including, falling ore grades, mine closures, and strikes at various projects.

For example, Tahoe Resources was forced to shut down its Guatemalan Escobal Mine in July due to a temporary suspension of its operating license by the country’s Supreme Court.  However, even after the Guatemalan Supreme Court reinstated Tahoe Resources Escobal Mine’s license in early September, an ongoing road blockade has hampered the ability of the project to continue mining.  Regardless, Tahoe’s silver production declined a stunning 6.7 million oz Q1-Q3 2017 versus the same period last year.

Now, on the other hand, silver production at Fresnillo’s operations in Mexico jumped by nearly six million oz during the first three-quarters of 2017 primarily due to the start-up of its San Julian Mine phase II expansion and a ramp-up of its phase I:

Top-Primary-Silver-Miners-Q1-Q3-2017-Production-768x550



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Gold & Precious Metals

Precious Metals: Patience Is Golden

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Posted by Stewart Thomson - Graceland Updates

on Wednesday, 15 November 2017 06:05

1.    Without growth in Western gold ETF holdings, the “decent but not spectacular” demand from China and India is not strong enough to move the gold price higher.

2.    Please click here now.  The SPDR (GLD-nyse) fund gold holdings currently sit at about 843 tonnes.  There has been very little change in the total tonnage for several months.  That’s neutral for the gold price.

3.    Governments don’t like their citizens to own much gold.  Restrictions they impose (like India’s import duty as a recent example) dampen demand enough so that the price rises very slowly most of the time.

4.    Economic growth in China and India are increasing demand (the love trade) and mine supply is contracting, but the process is essentially “Chindian water torture” for investors who want to see the price skyrocket like it did in the late 1970s.

5.    Investors that want “big action” in the gold price need to wait patiently for the US business cycle to peak.  

6.    For the price of gold to really sizzle, the business cycle needs to have an inflationary peak.  That hasn’t happened since the 1970s.  Many gold price analysts have used overlap charts that suggest the gold market now is akin to the 1976-1978 period.

7.    I look at fundamentals first, and charts second.  From an inflationary standpoint, the US economy looks more akin to the late 1960s than the late 1970s.



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Gold & Precious Metals

My Conviction in Gold Royalty Companies and Bitcoin

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Posted by Frank Holmes - US Global Investors

on Tuesday, 14 November 2017 05:41

COMM-bitcoin-11102017

Some of you reading this might already be familiar with the “Parable of the Talents,” but it’s worth a brief retelling. The story, which appears in the gospels of Matthew and Mark, involves a master who entrusts three servants with some of his “talents,” or gold coins, while he’s away on business. Two of the servants take a risk by putting the money to work and end up doubling their master’s wealth. The third servant, however, buries his share to “keep it safe” and so doesn’t generate any returns. (Indeed it likely loses value because of inflation.)

When the master returns, he’s so pleased at how the first two servants grew his wealth that he puts them in charge of “many things” and invites them to share in his own success.

The third servant, though, he calls “wicked and lazy” and says he might as well have deposited the money in a bank while he was away—at least then he would have received a little interest. The servant is punished by having his share of the talents given to the two who faithfully grew their master’s money, leaving him with nothing.

The lesson here should be plainly obvious, and we can express it in a number of different ways: There can be no reward without risk. You must spend money to make money. You reap what you sow. This should resonate with investors, entrepreneurs and any true believer in the power of capitalism.

Jesus’ parable applies not just to individuals but to corporations as well. Companies must grow to keep up with the rising cost of labor and materials and to stay competitive. To do that, they must put their money to work just as the two servants do.

And just as the two servants were invited to share in their master’s success, corporate growth has a multiplier effect—for the company’s employees and their families, shareholders, the local economy, strategic partners, companies up and down the supply chain and much more.

A Bonanza for Precious Metal Royalty Companies as Exploration Budgets Have Declined



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