Free Editorial

Breakout

From the HRA Journal: Issue 275

After a few false starts, gold has finally broken through $1300 convincingly, and looks comfortable at its current perch at $1340.  It would be easy to blame it all on politics but, as I noted in the last issue, I don’t think that’s the case.  It’s an overdue move and the initial move through $1300 occurred before Kim’s provocative launch of a missile over Japan.

Politics is an issue too, as we saw when gold dropped $10 when a bipartisan agreement was reached to push the debt ceiling fight back three months.  But, again, it’s important to note gold bounced back from that loss almost immediately.  There are a lot of moving parts at play in the market and most seem to favour gold for a change. Read More

Not Just Politics

From the HRA Journal: Issue 274

The USD got its bounce thanks to the payroll report but it wasn't a strong one and is dissipating already. Surprising the bounce wasn't larger given the huge short position.

North Korea turned out to be a whipsaw. The gold price was lifted, then knocked back, as the tension mounted then receded. Gold has other drivers and having the political one ease off is better for us in the long run.  I don’t think the downtrend in the USD is over for reasons I go into in the editorial.  Seeing gold prices rise on days the big markets are doing well is a good thing. I want to see gold getting bought because people think it’s cheap, not because they see some catastrophe on the horizon. Read More

Reporting Season

From the HRA Journal: Issue 273

The trend to a weaker US Dollar and strengthening gold, and base metal, prices continues. As I note in the main editorial, there are 2-3 data points dead ahead that should determine whether the oversold greenback gets a bounce.  I say “should” because the clown show in Washington keeps getting in the way of economic metrics, so who knows? 

Even if the USD bounces after this week’s payroll report the downtrend is very strong and will be hard to reverse. Gold really should be trading higher already. We won’t get a lot of lift for gold producers until it does I think. Read More

It's Complicated

From the HRA Journal: Issue 272

Things changed a lot in the past two weeks. The US Fed’s promises to keep tightening financial conditions look a lot shakier than they did at the start of the month, thanks to a series of weak economic readings in the US.

I still think we need to be wary of central bankers but with bond yields softening again and plenty of money flows into the major markets things look less dangerous than they did in June. Not safe, mind you.  Overvaluation is and will continue to be a problem. Overvalued, complacent markets are always in greater danger of a larger fall but I don’t see a near term catalyst for one. Read More

A Passive Aggressive Market

From the HRA Journal: Issue 271

I really hate sounding like the “boy who cried wolf” when it comes to major markets.  Nonetheless, I’m shocked at how little impact central bankers have had as they all started talking, planning or threatening tightening.  Traders on Wall St in particular seem completely unconcerned by these comments. Clearly, traders don’t believe central bank words will be followed by actions.  I’m afraid they may be wrong about that this time and we may see some wild swings when that sinks in.

Read More

Is GDXJ "A Thing"?

From the HRA Journal: Issue 270

You can sense the frustration when you talk to anyone trading gold producers or large developers.  Gold has staged something of a comeback and there are good reasons to think that should continue.  You’d never know it to look at the main gold stock indices though.  They are lagging badly.

The editorial in this issue deals with that subject. I increasingly believe the large restructuring of the GDXJ ETF is having an outsized impact on the trading of many gold producer stocks.  At a philosophical, and rational, level that concept seems ridiculous to me.  Why should the ETF drive the stocks? Read More

The MIF Issue

From the HRA Journal: Issue 269

Thanks again to all of you who made the effort to attend MIF last weekend.  We had a great set of talks and presenting companies.  Those of you who couldn't’ make it can see everything by checking the link on this page where all videos from the event will be posted.

Metals in general and gold specifically had a pretty weak couple of weeks.  That weighed on everything. Everyone has their own downside targets but it looked like we might be putting in another bottom this week. Read More

Just Go With It

From the HRA Journal: Issue 268

Trump hasn’t started a war. Yet. Other market worries like the French election also turned out to be overblown—so far at least.

We’ve seen some zigs and zags in the past two weeks as the market bought into, then dismissed, then bought into the reflation trade.  I remain cautious for both political and economic reasons but I also think we need to be realists. Traders have built such high expectations into this trade that its been overwhelming everything else. Read More

Some Cracks Appear

From the HRA Journal: Issue 267

I was about to hit the send key on this one when the proverbial crap hit the fan in the form of a US missile attack on Syria.  I think that is a tempest in a teapot but it could have some secondary effects that will make things more interesting. The US rallies around its president when bullets start flying so this action might give Trump’s terrible approval ratings a big bounce.  Trump seems to view the world in simple terms.  Here’s hoping he doesn’t decide an air strike is a nice little pick me up every time he feels unloved... Read More

Colour Me Surprised (Ok, Not)

From the HRA Journal: Issue 266

The Fed raised rates as expected and the world didn’t come to an end, also as expected.  Metals have had a nice bounce post Fed that I’m fairly comfortable will continue in gold’s case at least and perhaps base metals as well.

As always there was a deluge of PDAC news, much of it less than noteworthy.  The update section is pretty long.  The conference itself was positive with slightly higher attendance than last year.  Most were concerned about “the Curse” as gold and most metal prices were falling every day during the show.  The recent reversal has calmed some nerves though, if its maintained. Read More

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