Free Editorial

ZIRP Über Alles

From the July 12, 2016 HRA Journal: Issue 254

Wall St’s doing the happy dance again. You’d think the SPX is well through a massive rally instead of just a couple of percent higher than it was 15 months ago. Never let facts get in the way of a good story.

Traders are pleased about June’s strong payroll numbers and even more pleased that there isn’t more obvious Brexit fallout. I don’t think the Brexit story is over yet.  It may not harm markets further but that will depend on how messy the divorce between Britain and the EU ultimately turns out to be. Read More


From the June 23, 2016 HRA Journal: Issue 253

Well, ok then.  Unexpected.

You already know what the big story is this issue.  I ripped out the old editorial and rewrote it in the wake of the Brexit vote.  I hate sounding like I’m making too big a deal out of an issue that is only a few hours old but this is one of those cases where any number of long term effects are obvious.

Risk Off is back.  With a vengeance.  Unlike some recent episodes gold is very much benefiting from the change in tone.  The foundation for that was laid when generalist money started entering the space.  One of the most likely outcomes of Brexit is lower for longer interest rates and vast liquidity injections by central banks.  All of that, for a change, is gold positive.  I don’t think this is a market where gold will be punished or be one of the first assets jettisoned when things get scary.  Read More

Was That It?

From the June 5, 2016 HRA Journal: Issue 252

Well, if that was the correction I’d have to call it underwhelming.  Ok, I admit the payroll report debacle was a bit of a “save” at least where the producers are concerned.  They were down several percent and things clearly could have gotten worse if the payroll number had been a huge beat rather than a huge miss.

It’s a piece of news that is making everyone happy at least for now. Wall St bulls see an accommodative Fed, whatever the reason, as the path to new highs they have been pining for since last May.  They might get their wish if there are enough FOMC members making dovish speeches in the next few weeks.  That said, given how foolish they currently look, said FOMC members might be wise to just clam up for a while. Read More

Early Innings

From the May 18, 2016 HRA Journal: Issue 251

“Fed Fear” is back.  In the past few sessions we’ve seen the first sizeable decline in gold prices since the rally started early in the year.  “Sizeable” is a relative term.  There are plenty of traders heading for the hills but, really, we’re talking about a 3-4% down move. 

Could it drop further if the Fed really does pull the trigger next month?  Possibly, though I don’t think it would fall more than another $20-30 and I’m not sure we’ll see even that.  As I explained in the last Journal the bulk of the Outside Money coming into the space is basing their decision on the view that we will be in a negative real interest rate environment in most major currency blocks for some time to come.  While those traders will also be influenced by market sentiment and currency gyrations their basic thesis is not the same as a gold bug treating bullion as the “anti-dollar.” Read More

We're Due: A New Bull Market

From the April 29, 2016 HRA Journal: Issue 250

You think it would be easy writing an issue at the end of a month like this.  You know “smile to the crowd, take a victory lap, etc.”  Not so much.  The month was SO good I was left struggling how to couch updates for stocks that have doubled or tripled in a couple of weeks.  I’m not complaining.  It’s a good problem to have obviously but you’ll understand if I sound a little bipolar in spots. It’s hard not to be paranoid after moves like that. Read More

Ms. Congeniality

From the April 3, 2016 HRA Journal: Issue 249

So far so good.  We’re a month past PDAC and the world has not come to an end yet.  Well, there’s always tomorrow.

Markets, especially the NY variety, are happy and the rally that started there in February presses on.  I still don’t expect new highs near term but I admit I’m not far from being wrong on that one.  We’ll see if the fun continues once the next earnings parade starts and the share buybacks are blacked out for a few weeks.

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The Central Bank Trifecta

From the March 13, 2016 HRA Journal: Issue 248 

Another PDAC and Subscriber Summit down and resource stocks –so far—are relatively unscathed.  The remaining central bank meetings during the next week will set the tone at least until the next earnings season starts in a month.

Mario Draghi will be a tough act to follow for other central bank heads.  He went out of his way not to disappoint this time. The markets are pricing in a dovish duet by Janet Yellen.  Probably a correct read but this would be a good time for the Fed to raise rates if they really want to do it.  It might be worth waiting to see how that turns out.  A hawkish stance would be something of a surprise and an actual rate increase would be a shock to the markets.

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Losing Their Religion

From the February 26, 2016 HRA Journal: Issue 247

The markets have certainly stayed interesting and have been a happy place lately if you’re bullish on gold.  We’ve seen bounces before, especially this time of year so it’s no surprise that resource stock traders need more convincing.  Q2 can be a weak time for gold and we’ve all seen the “PDAC curse” too many times to count.

There’s a bit of a pullback going on now. So far $1200 has been strong support for gold prices which is pretty impressive given where we were a couple of months ago.  We’ll see if it keeps holding but as you already know I do think the bottom is in for gold.  It’s more a question of what the rally looks like and how long it goes.

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2016 Preview Part III; Metals

From the January 31, 2016 HRA Journal: Issue 245-246

This is the third of three parts of the 2016 preview that appeared in HRA Journal Issue 245-246.  This part deals with the outlook for various metals.  The assumptions about what the economy will do (see Part I) underlie the discussions on metals though each has unique supply/demand issues. In most cases the supply demand balance looked better than expected though, obviously, market sentiment will drive markets short term.  Volatility will be high.

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2016 Preview Part II: $US, China and Oil

From the January 31, 2016 HRA Journal: Issue 245-246

This is the second of three parts of the 2016 preview that appeared in HRA Journal Issue 245-246.  This part deals with the outlook for the US Dollar, China and oil.  The final section, dealing with several metals, will be issued shortly.

Read More


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