Free Editorial

The Fear/No Fear Market

From the HRA Journal: Issue 280

So far, so good. That may not be your immediate take away as you read the rest of the first page but I’m fairly content with how the first month of the year is unfolding. Yes, I think we may be in for an immanent correction on the major equity markets. But I think that is a GOOD thing, not a bad one.  We are way, way overdue for one. The longer the big markets run without some sort of corrective selling, the more likely it is that the next drawdown is a major, not a minor one. Read More

Tax Loss Season - Threat or Opportunity?

From the HRA Journal: Issue 278

Thanks again to those of you who came out to MIF on November 10th and 11th.   We had a full house again and a great group of speakers and presenters.  The newsletter writer presentations have been uploaded to the Beneath the Surface channel on YouTube (https://www.youtube.com/user/BeneathTheSurfaceBTS) and the corporate presentation will soon follow for those of you that missed it or want to listen to them again.

As the editorial notes, it’s tough to be a buyer this time of year.  Tax loss selling as a major feature of the junior resource sector and so is generally weak Q4 gold sentiment.  You shouldn’t be buying just because something is cheap but cheap is better than dear if it’s a stock you already like for other reasons.   I’ve noted a few I like in the updates. Read More

More Trick Than Treat

From the HRA Journal: Issue 277

Apologies for this issue coming out as late as it has.  I’ve been down with a cold and on antihistamines for a week.  I rarely catch colds, which might explain why I don’t write well when I’m drugged up.  Several companies released news in the last 36 hours and, since the issue was late already I figured I’d better include them.  So, long update section again.

Gold continued to struggle since the last issue but copper made a comeback and other base metals at least held their own.  The recent USD uptick hurt them a little, but base metals are pro-cyclical, so if things aren’t going well for gold near term, they should go better for copper and zinc. Read More

The Fed Strikes Back

From the HRA Journal: Issue 276

Well that sucked. After a move to $1380 gold quickly turned tail and gave up its gains. That took some of the speculative shine off the market.  One piece of good news is that gold equities are still trading (slightly) better than bullion which is generally a positive sign even when gold’s behaving poorly.

Northern Hemisphere reporting is in full swing and there are A LOT of updates.  Many are drill results though a few are from companies with drill results still to come.  Notwithstanding the drop in gold prices, companies that have reported strong drill results, especially the high-grade variety, are still getting well rewarded. Read More

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

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