Free Editorial
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.
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
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