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denpal
Posted on: Sep 16 2019, 03:25 PM


Group: Member
Posts: 1,166

Good news today, the Tanzanian Govt has approved our move to 100% ownership of the project from 51%. Once our directors have replaced the previous ones, the government will approve the mining licence. If you've been following the story you'll know this is great news, been a fairly long and testing wait to get to this point. NB the Govt has a 16% FCI which comes out of our 100%. DYOR, I hold these.

ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE
OreCorp Receives Tanzanian Mining Commission and Fair Competition Commission Approvals
OreCorp Limited (OreCorp or the Company) is pleased to advise that its wholly owned subsidiary, OreCorp Tanzania Limited (OreCorp Tanzania) has received the Tanzanian regulatory approvals required to complete the acquisition of 100% of Nyanzaga Mining Company Limited (NMCL). OreCorp Tanzania has received approval from the Tanzanian Mining Commission (TMC) to acquire control of NMCL and further approval from the Fair Competition Commission (FCC) to acquire 100% of NMCL. NMCL is the Tanzanian company which holds the Nyanzaga Gold Project (Nyanzaga or Project) and has applied for the Special Mining Licence (SML).
The Company would like to thank the Chairman and the Chief Executive of the TMC and each of the Commissioners, and the Director General and the Chairman of the FCC and each of the Commissioners for expediting the approval processes.
OreCorp anticipates that the acquisition of 100% of NMCL will complete in the coming days. OreCorp has appointed one director to the board of NMCL and will replace the other directors of NMCL. As indicated in our previous ASX release (2 September 2019), the Company had been advised by the Ministry of Minerals that the SML would be granted following the completion of the change in ownership of NMCL.
The Company considers the TMC and FCC approvals as significant milestones and further demonstrates the constructive working relationship that the Company has with all levels of the Government of Tanzania (GoT). Successful conclusion of the transaction will ultimately deliver Tanzania and all its stakeholders the first large scale gold mine development in over a decade. Upon the grant of the SML, the Company will welcome the GoT as a shareholder in NMCL.

For further information please contact:
Matthew Yates
+61 417 953 315
CEO and Managing Director
  Forum: By Share Code

denpal
Posted on: Sep 15 2019, 06:43 PM


Group: Member
Posts: 1,166

Good commentary here https://www.moonofalabama.org/2019/09/attac...yemen.html#more
Especially the comments. This guy Bernhard has quite a following and is usually right on the money.
  Forum: Macro Factors

denpal
Posted on: Sep 10 2019, 11:21 AM


Group: Member
Posts: 1,166

Share price holding at 43c, have noticed buy depth has greatly increased this last few days, buyers being careful not to scare the horses by buying patiently. There is a latest presentation out that reads well, although not really any new information.
  Forum: By Share Code

denpal
Posted on: Sep 10 2019, 11:18 AM


Group: Member
Posts: 1,166

SYR came out with an ann. today on the market price for graphite, reduced from $US477 to 400 tonne and has impacted them causing them to reduce production and look for strategies to keep going. Their sp down 32%. They say they are a big supplier to the Chinese market.

I don't hold these, just saw them in the biggest loser chart on my platform!
  Forum: By Share Code

denpal
Posted on: Sep 2 2019, 06:43 PM


Group: Member
Posts: 1,166

Today's chart, 2 year weekly.
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  Forum: By Share Code

denpal
Posted on: Sep 2 2019, 03:15 PM


Group: Member
Posts: 1,166

Great ann. today confirming ORR will take 100% ownership in the project and that the mining licence is on track to be issued. If you look at what the share price was a couple of years back when we had 25% with a right to move to 51%, coupled with the greatly increased gold price now and hence margin, today's sp at 46c appears to have a lot of headroom yet.

I've got confidence in management (proven Africa mine developers) and happy to hold a lot of these.
  Forum: By Share Code

denpal
Posted on: Aug 24 2019, 07:29 PM


Group: Member
Posts: 1,166

I see I posted here in 2016 about First Majestic - have held these from $4.47 right up to $25 then back to $6 and currently it's $14.62......sold half in 2016 at $14 or so after missing the peak, but now it's looking very good again as per the chart. They are in the GDX index and still one of the purest play silver miners.

When the Gold/silver ratio reverts to the historical average of around 50:1 from the current 85:1 that will be an added tailwind for silver miners.

An interesting point is the ratio of First Majestic to the price of silver. The key point is that since the start of this year silver has increased 12% but the miner has increased 90%.
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  Forum: Investment Discussion

denpal
Posted on: Aug 24 2019, 11:51 AM


Group: Member
Posts: 1,166

Here's an interesting article, which is exactly what Pensana is planning to do, sell the concentrate to China.
https://kalkinemedia.com/2019/08/23/chinas-...ayers-like-kta/
This is not a day-trading share, IMO it's a matter of getting set then waiting for the re-rates to kick in over the next year or so as milestones are reached. As an addititional kicker if China restricts rare earths exports as part of their response to the US's trade war, I would say there will be a mad scramble for REE assets globally. There was a bit of a play a couple of months back in juniors like ARU, PEK and GGG, but this fizzled out.

  Forum: By Share Code

denpal
Posted on: Aug 24 2019, 11:37 AM


Group: Member
Posts: 1,166

Here's the chart for the last five years. Since the previous highs the company has reached agreement to acquire 100% of the project, and of course the gold price has increased $A650/oz or 25% since then, ie August 2016.
The big risk is sovereign.......but the management are not new players in this space.

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  Forum: Macro Factors

denpal
Posted on: Aug 23 2019, 06:57 PM


Group: Member
Posts: 1,166

Yes, we need the mining licence granted, that is the key. I do have confidence in management - if they can't do it no one can. Elections are coming up there soon and the government will want to get this done before then I have heard. Of course Rift Valley is now renamed Pensana.
  Forum: Macro Factors

denpal
Posted on: Aug 23 2019, 03:26 PM


Group: Member
Posts: 1,166

One of my puppies ORR has gone up a little during this pullback. I suggest some light reading and finding out about management's past successes are worth doing. I hold quite a few of these from 18c.
  Forum: Macro Factors

denpal
Posted on: Aug 23 2019, 03:23 PM


Group: Member
Posts: 1,166

I agree rare earths are a good play now. I've had shares in Pensana code PM8 for quite a while and believe it has great potential. Management are proven winners, they have a massive deposit in Angola close to all infrastructure, and plan to sell concentrate to China, and not going down the black hole of building a separation and refining plant. They think capex of $150M will get the mine running.

Events due are updated MRE and PFS shortly then a second listing on the LSE later this year. They've just had a ten for one share consolidation. Things are looking quite good.
  Forum: Investment Discussion

denpal
Posted on: Jan 4 2019, 06:13 PM


Group: Member
Posts: 1,166

Yes it is at an all time high in AUD. XGD has done amazingly in the last month. Surely we consolidate now. My main hold is NST as for the last few years, also added EVN last year and there are a few others too like SAR doing very well.
  Forum: Macro Factors

denpal
Posted on: Feb 25 2017, 04:44 PM


Group: Member
Posts: 1,166

Have a look at Adam Hamilton's latest article on 321gold.com, things are looking good for gold right now as speculators have had nothing to do with gold's gains since December and when they do pile in there will be a big effect.
  Forum: Macro Factors

denpal
Posted on: Feb 18 2017, 04:03 PM


Group: Member
Posts: 1,166

I'm still in here, one day soon they will find something substantial surely.....at least dilution isn't on the cards with the income from Cannon. It's always a risk with unproven juniors......
  Forum: By Share Code

denpal
Posted on: Jan 15 2017, 05:11 PM


Group: Member
Posts: 1,166

Here we are six months later, at the same share price pretty much, see updated chart.

SLR is going well, on target for 135,000 oz or so of gold this FY, at an AISC of $A1280/oz leaving a +$A300/oz margin at current gold prices. The share price has risen 38% since the December low.

There has been a lot of buying lately by the GDX/J funds.

I hold these.
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  Forum: By Share Code

denpal
Posted on: Jan 10 2017, 04:26 PM


Group: Member
Posts: 1,166

Here's a chart on the ASX gold sector, XGD. It's up 27% in the last month and has just regained the 200dma.

It looks quite bullish by the looks, let's see where it gets to in the next few months.
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  Forum: Macro Factors

denpal
Posted on: Jan 7 2017, 08:28 PM


Group: Member
Posts: 1,166

Worth a listen. Note the HUI index is lower now than it was in 1996.......that's what he is talking about (actually he mentions the XAU index but same thing really).

http://kingworldnews.com/looking-hit-big-2...isor-just-said/
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  Forum: Macro Factors

denpal
Posted on: Jan 7 2017, 08:45 AM


Group: Member
Posts: 1,166

Interesting new article by Adam Hamilton below - the gold sector is already up significantly over the last month and he sees a replay of what happened last year (a huge increase). I largely waited on the sidelines through the last quarter of 2016, once the pattern broke down, and redeployed in gold stocks like NST and SLR at the beginning of December, a little early as the mid-December swoon was a nasty one. The ASX XGD gold sector is up 26% since the mid-December low, with individual mid-cap stocks up as much as 40%, eg SLR, RSG, RMS, SAR. We now await the USD weakening (crowded long USD trade) and the US sharemarket correcting which will keep gold going upwards. I note the HUI/Gold ratio has strengthened significantly since the mid-Dec low, ie the gold stocks have risen much more (18.5%) than the price of gold (5.5%). But is still extremely low compared to the longer-term average as the article demonstrates.

From what Hamilton says, if conditions result in a mean reversion overshoot we're looking at a 262% increase from here. Last year the HUI increased from 99 to 286 between mid-January and the end of July = 190%. And the gold sector is even more hated this year than last year which is a great contrarian signal.

It wouldn't surprise me though if we had a breather now until after the Trump inauguration.



Gold Stocks Shine in 2017
Adam Hamilton
Archives
Jan 06, 2017


The gold miners' stocks are rocketing higher again after suffering a rough few months. Following sharp selloffs on gold-futures stops being run, the Trumphoria stock-market surge, and a more-hawkish-than-expected Fed, this battered sector had largely been left for dead. But gold stocks' strong fundamentals finally overcame the dismal herd sentiment last week, paving the way for this sector to shine again in 2017.

This "shine again" assertion likely seems dubious to casual observers, since the gold miners' stocks suffered a miserable Q4'16. The leading HUI NYSE Arca Gold BUGS Index plunged 21.1% in a quarter where the benchmark S&P 500 broad-market stock index surged 3.3%. Naturally gold miners' profits are fully dependent on gold prices, and this metal fell 12.7% in Q4 which proved one of its worst quarters ever.

Thus no sector has been more out of favor in recent months than precious metals. Gold and therefore gold-stock bearishness abounded, with bullish outlooks dwindling near nonexistent. But viewing gold stocks solely through the extremely-distorted post-election lens is a serious mistake. Despite their sharp Q4 selloffs, this sector as measured by the HUI led the markets by still soaring 64.0% higher in full-year 2016!

If any other sector like technology or financials or even energy had seen such dominating performance last year, the financial media would be endlessly extolling it. But not gold, it's just too contrarian. 2016 was a solid year for gold, with its 8.5% rally nearly catching the S&P 500's 9.5%. As of Election Day, gold was still up 20.3% year-to-date which trounced the 4.7% of the S&P 500. Gold really did shine last year!

The highlight of gold's first up year since 2012 was certainly the first half. Between a 6.1-year secular low in mid-December 2015 on highly-irrational Fed-rate-hike fears and early July, gold powered 29.9% higher in its first bull market since 2011. And over roughly that same 6.5-month span, that leading HUI gold-stock index soared 182.2% higher! Gold stocks' stellar performances dominated the markets last year.

Nearly a year ago as the HUI fell to miserable 13.5-year secular lows, I advised that a major new gold-stock bull was imminent. Last January's gold-stock prices were fundamentally absurd relative to this sector's underlying earnings power even at then-prevailing gold prices. A similar extreme sentiment-distorted pricing anomaly just happened last month. So 2017's gold-stock setup is just as bullish as 2016's proved!

Sadly most traders succumbed to the recent groupthink bearishness to foolishly bury their heads in the sand regarding gold stocks. The same thing happened a year ago. Speculators and investors alike are always ignoring the most-beaten-down sectors which usually have the greatest upside potential. So it's incredibly important to get up to speed on gold stocks as 2017 dawns, before they are bid far higher again!

Maintaining perspective is the key to overcoming the dangerous herd emotions of greed and fear. They convince traders to wrongly buy high and sell low, ultimately leading to catastrophic losses. But armed with the big picture, it is much harder to fall into the trap of extrapolating recent performance out into the indefinite future. This first chart looks at the gold-stock bull over the past year rendered in HUI terms.


After nearly tripling in just over a half-year by early August, the red-hot gold stocks were indeed due for a serious correction as I warned in July. Infected with rampant greed and wildly overbought, this sector soon sold off hard in August. Sharp corrections in bull markets are totally normal and very healthy, as they bleed away excessive greed to keep sentiment balanced. After that gold stocks stabilized in September.

But as October dawned, an anomalous adverse event slammed them out of the blue. The gold-futures speculators who dominate short-term gold trading must deploy stop losses to protect themselves from these hyper-leveraged trades. They had a big mass of stops set near $1300, which had proven strong support for gold since it soared in late June on that Brexit-vote surprise. That was a logical level to protect capital.

After drifting lower in late September, gold finally slipped into that futures-stop-infested zone around $1300 in early October. The consequential stops triggering soon cascaded, and gold's sharp selloff became self-feeding. The resulting mass stopping quickly spilled into gold stocks, causing the HUI to plummet 10.1% on October 4th! While painful, that surprise event was an extreme anomaly that wasn't sustainable.

Indeed gold stocks soon stabilized again, with buyers returning near their key 200-day moving average and parallel bull-market-uptrend support in October. Gold and its miners stocks climbed on balance right into election night, when they soared in futures and overseas trading as Trump took the lead in Florida. All pre-election market behavior strongly suggested gold would surge if Trump somehow managed to win.

American gold futures blasted 4.8% higher from that afternoon's close on election night, hitting $1337. And over in Australia gold stocks were soaring 15%+! But later that very night as Clinton conceded to virtually eliminate the risk of a contested election, the US stock markets started to rally sharply out of limit-down 5% S&P-500-futures losses. And as the anti-stock trade, gold was hammered on that stunning reversal.

Gold is a unique asset that moves counter to the stock markets, making it essential for diversifying stock-heavy portfolios. Gold investment demand naturally surges when stock markets weaken, as gold's gains help to offset stock losses. But when stock markets seemingly do nothing but rally indefinitely, investors soon forget about prudently diversifying portfolios. So sharp stock rallies temporarily kill gold demand.

As gold dropped in the days after the election surprise on the Trumphoria stock-market rally, the gold stocks were blitzed again with another mass stopping. On November 10th and 11th, the HUI plummeted 7.8% and 8.0%! These horrific losses were the final straw for most gold-stock investors, destroying their will to remain in such a volatile sector. So gold stocks went from loved in mid-2016 to despised in mid-November.

But again perspective is crucial. How often does a radical outsider like Trump run for and actually win the US presidency? Nothing like that has ever happened before. Any market selloff driven by an extreme anomaly is never sustainable. Gold stocks didn't plunge because their fundamentals were failing, but because an epic surprise post-election stock-market rally seduced investors out of gold back into lofty stocks.

Again since that extreme gold-stock selloff was purely sentimental and had nothing to do with the hard fundamental realities of the gold-mining industry, these battered stocks quickly stabilized. Despite the stock-market euphoria and resulting gold antipathy, the HUI ground sideways for an entire month from mid-November to mid-December. The unjustified extreme gold-stock selling had largely exhausted itself.

But on December 14th, the Fed surprised on the hawkish side so gold and gold stocks took another hit. While traders had universally expected the Fed to hike rates for the second time in 10.5 years, they did not expect elite Fed officials to forecast three more rate hikes in 2017 instead of two previously. So yet again gold stocks were crushed in emotional fear-drenched selling, ultimately pummeling the HUI to 163.5.

Those were essentially February levels, last seen on the first trading day of March. While that post-Fed selloff wasn't an extreme anomaly like the early-October and post-election ones, it was devastating to already-tattered gold-stock psychology. An astonishing 2/3rds of gold stocks' bull market in the first half of 2016 had been erased! The gold miners were universally hated, the pariahs of the investment world.

But that didn't make any sense at all. As of its very closing low the day after last month's Fed decision, the gold stocks as measured by the HUI were still up a fantastic 47.0% year-to-date! That compares to just 10.7% for the S&P 500, and this sector likely remained the top performer in 2016. In any other sector in all the stock markets, traders would be salivating at buying the dip after such a supremely-anomalous selloff.

Instead of fretting about a 42.5% drop over 4.4 months largely driven by two unrepeatable events, traders should've been remembering gold stocks' powerful first-half gains. Back in July and August when the gold stocks were high, investors and speculators alike were falling all over themselves to deploy capital to chase gains. But they were nowhere to be found when these miners' stocks plunged to fire-sale prices.

I can't help but marvel at this glaring disconnect. I've spent decades actively speculating in the stock markets, and have shared our contrarian research via my financial-newsletter business for 17 years now. The most-shocking revelation I've learned is how susceptible to groupthink psychology the vast majority of investors and speculators are. They love to buy high when greed reigns, but refuse to buy low as fear mounts!

Last summer traders were eagerly rushing to buy gold stocks high, to chase the strong gold-stock gains. Yet just a few months later when these very-same elite gold miners were deeply on sale for 40%+ off, these same traders who loved them last summer wanted nothing to do with them. What is so hard to understand about buying low and selling high? Buying low means embracing fear when few others will buy.

Fully wrapped up in popular bearish sentiment, traders totally lost sight of the gold-stock fundamentals in much of November and December. I did my best to help them overcome that, spending long weeks in late November and early December digging deeply into hard gold-mining fundamental data from these companies' just-published third-quarter financial reports. Yet that super-important research fell on deaf ears.

I dug deeply into the top 34 component companies of each of the dominant gold-stock ETFs, the GDX VanEck Vectors Gold Miners ETF and the GDXJ VanEck Vectors Junior Gold Miners ETF. It turned out in Q3'16 these elite GDX major gold miners reported average all-in sustaining costs of $855 per ounce. And the elite GDXJ junior gold miners weren't much worse at $911 per ounce. These numbers are crucial.

All-in sustaining costs reveal what it costs the gold miners, individually or as an industry, to maintain and replenish their current operations. Between Election Day and year-end, the gold price averaged $1177 per ounce. Extending to all of the dismal Q4'16, that climbed to $1218. And even at worst after the Fed decision, gold only briefly fell to $1128. None of these gold levels were remotely close to threatening $855!

Even on gold's worst day in Q4, the elite gold miners of GDX were still earning big profits of $273 per ounce. That equates to an amazing 24% profit margin that most industries would sell their souls for. At the Q4 average gold price, these earnings were fully a third higher at $363 per ounce! Yet the irrational fear was so great that gold stocks were battered back to prices first seen in July 2003 when gold traded near $360.

Stop and think about that for a second. Just a couple weeks ago, in a quarter where the gold miners likely earned $363 per ounce mined after all expenses, their stock prices were trading at levels first seen 13.4 years earlier when the entire gold price was less than current profits! The only words that come to mind to describe this are ridiculous, ludicrous, and absurd. The recent gold-stock prices weren't righteous.

For 7 weeks in a row I wrote comprehensive essays explaining this extreme gold-stock anomaly, and thus what radical upside the gold stocks had. As always I put my money where my mouth was, buying and recommending 8 new specific gold-stock and silver-stock trades on December 20th and 4 more on December 27th to the subscribers of our weekly Zeal Speculator newsletter. We also added new call options.

On December 31st I extended the buy recommendations to our monthly Zeal Intelligence newsletter with 5 new gold-stock and silver-stock trades. The incredible opportunities in these beaten-down gold stocks trading at fundamentally-absurd prices were explained in depth in real-time to our subscribers as they happened. Prudent contrarian traders who listened instead of ostriching are now making out like bandits.

Being so close to year-end, I didn't expect the new investment buying to flood into gold stocks until the new year. But it's always important to get deployed before everyone else catches on, as that's when the buy-low opportunities are the greatest. And out of the blue on no news, gold stocks started rallying on the day before the long Christmas weekend. That strong contrarian buying persisted for most of last week.

And as 2017 dawned this week, investors immediately started looking for deeply-undervalued sectors to position in for this new year. And the still-beaten-down but-quickly-recovering gold stocks won a sizable portion of those capital inflows despite their tough fourth quarter. As of the middle of this week, in less than 3 weeks since its extreme post-Fed low the HUI has already catapulted an amazing 17.6% higher!

As always the stocks of the smaller gold and silver miners with superior fundamentals we specialize in enjoyed gains amplifying those seen in the major miners dominating the HUI and GDX. And despite the sharp rebound gold stocks have seen in recent weeks, they are just getting started. Odds are this sector will once again prove one of if not the best-performing sector in all of 2017, building on 2016's strong gains.

As of the Wednesday data cutoff for this essay, the HUI was still only trading at 192.3. That merely took it back to levels seen in the immediate post-election plunge. The gold stocks still remain well below their strong 200dma and bull-market-uptrend support zones, and 32.3% under their early-August bull-market high per the HUI. The gold stocks' upside potential from here remains vast, as evidenced on all fronts.

In addition to battered technicals, gold-stock sentiment was crushed to hyper-bearish levels late last year. It will take a long time and a lot of rallying to eradicate that excessive fear and restore sentiment balance to this sector. And fundamentally, gold stocks remain wildly undervalued relative to the profits they can spin off at prevailing gold prices. A quick proxy for that is the HUI/Gold Ratio, rendered here.


I've often discussed this chart extensively in the past, including nearly a year ago when calling a new gold-stock bull the very week 13.5-year HUI lows were witnessed. In a nutshell, the HUI/Gold Ratio distills the key fundamental relationship between gold prices, gold-mining profits, and therefore gold-stock price levels into a single line. Gold-stock prices tend to trade in a range relative to underlying gold levels.

On the day after the Fed's hawkish surprise last month, the HGR fell to 0.145x. In other words, the HUI closed at 14.5% of gold's close. Outside of the extreme record HGR anomalies seen in the last half of 2015, that was among the lowest HGR levels ever. Back in mid-January 2016, the HGR briefly fell to an all-time low of 0.093x. But such crazy lows are unsustainable sentiment-driven anomalies, temporary distortions.

As of the middle of this week, the HGR has still only recovered to 0.165x. From 2009 to 2012, which were the last normal years between 2008's stock panic and 2013 when the Fed's radical QE3 started to levitate the stock markets and crush gold, the HGR averaged 0.346x. So merely to mean revert back up to normal levels relative to today's prevailing gold prices, the HUI still needs to rally another 109% from here!

But that's far too conservative for a couple major reasons. All mean reversions out of extremes tend to overshoot proportionally in the opposite direction. So the abnormally-low HGR levels in recent years driven by extreme fear will almost certainly yield to abnormally-high levels in coming years fueled by excessive greed. A proportional overshoot yields a topping HGR target of 0.599x, for another 262% HUI rally.

And gold itself isn't going to remain at the artificially-depressed low levels seen since the election. Gold-futures speculators will return with a vengeance as the wildly-overcrowded long-US-dollar trade reverses dramatically in 2017. And gold investors will flock back as the bubble-valued US stock markets inevitably roll over into their long-overdue bear. Thus gold is looking at 2017 gains far better than those seen last year.

As gold mean reverts higher, gold-mining profits greatly leverage and amplify its gains. Gold-mining costs are largely fixed when mines are planned. That's when engineers decide which ore bodies to mine, how to dig to them, and how to process that ore. This determines how much capital investment is necessary to bring mines online, huge fixed costs. After that, variable operating costs don't fluctuate too much.

Plugging higher gold prices into any HGR target, either an unlikely strict mean reversion or a very-likely proportional overshoot, yields commensurately higher gold-stock price targets. The math is simple. Take any gold level you find likely in the coming years, multiply it by 0.346x or 0.599x, and you get the HUI levels that can support. The battered gold stocks are likely only just starting a mighty new multi-year bull market!

You can certainly ride the coming massive gold-stock gains in those leading GDX and GDXJ gold-stock ETFs. But at best they will mirror sector gains, as they are over-diversified and held back by too many underperforming gold stocks with inferior fundamentals. A carefully-handpicked portfolio of elite gold and silver miners with superior fundamentals will see gains dwarfing those of the gold-stock ETFs and indexes.

At Zeal we've literally spent tens of thousands of hours researching individual gold stocks and markets, so we can better decide what to trade and when. As of the end of Q3, this has resulted in 851 stock trades recommended in real-time to our newsletter subscribers since 2001. Fighting the crowd to buy low and sell high is very profitable, as all these trades averaged stellar annualized realized gains of +24.1%!

In order to reap success like this, you have to stay informed all the time. You can't abandon gold stocks when they are weak and out of favor, as that is when the greatest buying opportunities arise. An easy way to stay abreast is through our acclaimed weekly and monthly newsletters. They draw on our vast experience, knowledge, wisdom, and ongoing research to explain what's going on in the markets, why, and how to trade them with specific stocks. For only $10 per issue, you can learn to think, trade, and thrive like a contrarian. Subscribe today, and deploy in our new stock trades before they power far higher!

The bottom line is gold stocks are really set to shine in 2017, as early trading is already proving. This sector was just battered to fundamentally-absurd price levels in the wake of the election surprise. With gold-mining earnings remaining strong, the recent gold-stock lows were fully driven by extreme bearish sentiment. Such fear anomalies never last, always paving the way for massive mean reversions higher.

The latest one has already started, and gold stocks still have easy potential to at least double from here even at low prevailing gold prices. But as the overbought stock markets and US dollar inevitably reverse lower this year, gold's own bull will resume. Higher gold prices will greatly increase the profitability of gold mining, and fuel a major new multi-year gold-stock bull. As always the early investors will earn fortunes.

###

Jan 06, 2017
Adam Hamilton, CPA



Thoughts, comments, or flames? Fire away at zelotes@zealllc.com. Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally. I will read all messages though and really appreciate your feedback!

Copyright©2000-2016 Zeal Research All Rights Reserved.


321gold Ltd




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  Forum: Macro Factors

denpal
Posted on: Aug 17 2016, 04:03 PM


Group: Member
Posts: 1,166

Yes it's done really well this year, a 5-bagger in 2016.

Actually a number of gold juniors are up several hundred percent this year, it's a very exciting time for sure. it seems there are not many enjoying these stellar gains though, or if they are they're not on this forum.

I see the ASX gold sector is down nearly 5% today, no reason I can see, as POG in AUD is still $1750.
  Forum: By Share Code

denpal
Posted on: Aug 14 2016, 01:59 PM


Group: Member
Posts: 1,166

This is what has been happening lately to the share price.
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  Forum: By Share Code

denpal
Posted on: Aug 10 2016, 07:29 PM


Group: Member
Posts: 1,166

Here's the 2 year daily chart. Progress seems to be OK.
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  Forum: By Share Code

denpal
Posted on: Aug 10 2016, 03:35 PM


Group: Member
Posts: 1,166

Good news today on Korean drilling progress, SP up to 44c accordingly. Drill results will be next month.
  Forum: By Share Code

denpal
Posted on: Aug 10 2016, 03:33 PM


Group: Member
Posts: 1,166

The gold project scoping study was released today, all looks good and they are starting the PFS immediately.

There's also a new presentation.

SP now 65c.
  Forum: By Share Code

denpal
Posted on: Aug 4 2016, 04:17 PM


Group: Member
Posts: 1,166

I see the rather thin sell side has been cleaned out on a good rise today to 55c. It's broken out from an ascending triangle but there is no volume available.
  Forum: By Share Code

denpal
Posted on: Aug 2 2016, 06:56 PM


Group: Member
Posts: 1,166

Look at AG code in the US, that's First Majestic. It is up 5x this year and is highly leveraged to silver (and also a low cost producer). Around 70% of all its metal sold is silver the rest gold and lead. Around 20Moz pa Equiv.

I have held these for a long time, under FR (Canada).
  Forum: Macro Factors

denpal
Posted on: Aug 2 2016, 03:40 PM


Group: Member
Posts: 1,166

Apart from the gold main game, this is pretty good for a first pass drilling on their Nickel-Copper prospect:

ASX RELEASE:
2 August 2016

Significant Nickel-Copper Drill Intercepts from
Akjoujt South Project, Mauritania

The Board of OreCorp Limited (OreCorp or the Company) is pleased to announce the
results from the reconnaissance diamond drilling program at the Akjoujt South Project
in Mauritania. Significant nickel-copper mineralisation has been intersected at shallow
depths over broad widths and significant strike length in four of the six holes drilled. The
drilling was designed to test the coincident geochemical, trench and geophysical
anomalism identified in previous campaigns.

Highlights Include:

 Nickel-copper mineralisation intersected from depths as shallow as 2m below
surface
 Drill intercepts are up to 31m down hole width, with peak nickel and copper
values of 1.34% and 1.29% respectively
 Mineralisation has been encountered over a total of one kilometre in strike
length, comprising a series of sub-parallel gossan/sulphide zones individually up
to 350m in strike length.
 Better drill intercepts include:
− ASPDD002 31m @ 0.31% Ni and 0.21% Cu from 11m; and 9m @ 0.21% Ni and
0.10% Cu from 94m
− ASPDD003 13m @ 0.35% Ni and 0.24% Cu from 2m; and 15m @ 0.58% Ni and
0.40% Cu from 19m (incl. 3m @ 1.28% Ni and 0.29% Cu from 29m)
− ASPDD004 16.7m @ 0.40% Ni and 0.22% Cu from 16.3m (incl. 1m @ 1.05%
Ni and 0.23% Cu from 31m)
− ASPDD005 4.7m @ 0.39% Ni and 0.20% Cu from 116.8m (incl. 0.70m @ 1.00%
Ni and 0.15% Cu from 116.8m)
 Petrology has confirmed a nickel-copper sulphide style of mineralisation

The Directors are greatly encouraged by these results. Follow-up work has already
commenced and additional geophysics is being planned ahead of further drilling at this
highly prospective project.
  Forum: By Share Code

denpal
Posted on: Jul 30 2016, 02:18 PM


Group: Member
Posts: 1,166

https://www.paydirt.com.au/resources/gmj121...cember-News.pdf

Good article to read on the Tanzania JV deal. We're talking a 25% share of a 4.1M oz deposit (or 2.8M oz at a higher cut-off), and a 237,000m existing drillset which will enable a JORC compliant resource to be completed with no more drilling.

Depending on the NPV, ORR could increase their share to 51%, but even if it remains at 25% that is still great.

Fully diluted it is valued now at $85M, with an EV of $68M (they have $17M cash).
  Forum: By Share Code

denpal
Posted on: Jul 22 2016, 03:59 PM


Group: Member
Posts: 1,166

A couple of news links for reference;

http://www.proactiveinvestors.com.au/compa...iant-64677.html

https://www.businessnews.com.au/article/Orecorp-raises-16m
  Forum: By Share Code

denpal
Posted on: Jul 22 2016, 03:43 PM


Group: Member
Posts: 1,166

A bit of flurry this afternoon, up to 39.5c with a single $50k order at 39c too.
  Forum: By Share Code

denpal
Posted on: Jul 22 2016, 03:38 PM


Group: Member
Posts: 1,166

Tanzanian gold junior going places earning in to an existing multi-million ounce deposit. Management is ex-Equinox and Omegacorp and Mantra = winners. Management own a substantial portion of the company too.

I've taken a long-term position here.

I also have some Rift Valley which is nearby, management includes Geoff Gilmour from Andean, another huge home-run with their proving up and selling their Argentinian multi-million ounce Cerro Negro gold deposit.
  Forum: By Share Code

denpal
Posted on: Jul 19 2016, 03:34 PM


Group: Member
Posts: 1,166

Moving up nicely, now 43.5c and we are advised drilling has started in Korea, 70% funded by the Korean government. Seem to be some keen buyers here.
  Forum: By Share Code

denpal
Posted on: Jul 15 2016, 04:55 PM


Group: Member
Posts: 1,166

I'm in on these at 35.5c, the story sounds pretty good and the one year chart looks good too.
  Forum: By Share Code

denpal
Posted on: Jul 11 2016, 05:47 PM


Group: Member
Posts: 1,166

Thanks for the heads-up, I will research this one. I originally bought this ten-odd years ago at 20c, one of my first gold shares, but sold them a long time ago.
  Forum: By Share Code

denpal
Posted on: Jul 11 2016, 03:17 PM


Group: Member
Posts: 1,166

Today we are at 70c, up 6% with a lot of buyers. Lots of other goldies up 5-6% today.
  Forum: By Share Code

denpal
Posted on: Jul 6 2016, 04:21 PM


Group: Member
Posts: 1,166

http://www.321gold.com/editorials/thomson_...n_s_070516.html


[b]New Trading Range For Gold Stocks[/b]
Stewart Thomson
email: [email="stewart@gracelandupdates.com"] stewart@gracelandupdates.com
[/email]email: [email="stewart@gracelandjuniors.com"] stewart@gracelandjuniors.com
[/email] email: [email="stewart@gutrader.com"]stewart@gutrader.com

[/email]
Jul 5, 2016

  1. The gold price action in 2016 is now getting widespread attention. The upside fun can continue, but when “the crowd” is very excited about the next possible move, the wise professional investor takes the view that a more relaxed outlook may be in order.
  2. Please click here now. Many economists are raising their upside price targets significantly, and most precious metals charts do look very good.
  3. That’s all the more reason for investors to “enjoy the ride” at this point in time, rather than get overly excited about predicting the next price movement.

  4. For now, investors should focus on the strong fundamentals that are in place for gold. It’s hard to do the opposite of what the crowd is doing all the time, but to achieve long term financial success in the gold market, that’s what must be done.

  5. Please click here now. Double-click to enlarge. That’s the daily chart of the British pound versus the US dollar. The pound may be about to begin another Brexit-related leg down, from a bear flag formation. That’s good news for gold.
  6. Please click here now. Double-click to enlarge this US dollar versus Japanese yen chart. Both the dollar and the pound are “risk-on” currencies, while the yen is a safe haven.
  7. A new leg down for the dollar against the yen may be getting underway, and that’s also good news for gold.
  8. Please click here now. Double-click to enlarge this phenomenal daily silver chart.
  9. The recent silver price action is impressive, and resistance at $18 has now become solid support.
  10. For a longer term look at the silver chart, please click here now. Double-click to enlarge.
  11. Silver has surged close to the high of $21.44 hit back in 2008. Many investors have horrific memories of that period of time, and that former high may now act as a form of price resistance.
  12. Silver often acts like a levered version of gold. I don’t think investors who feel the urge to buy silver now are making an error, given the huge amount of institutional enthusiasm for the entire precious metals sector that is occurring now.
  13. Having said that, given the importance of the $21.44 price zone, a decline to about $18 could easily happen. I don’t think the next price movement can be predicted easily at this point in time, but if they are buyers now, silver-oriented investors should prepare themselves to take more buy-side action at $18.
  14. Please click here now. Double-click to enlarge this important daily gold chart.
  15. Gold is flirting with the Brexit highs, and it appears to have staged a decent upside breakout from a loose rectangle. That’s a positive development, and it suggests that gold may make its way towards $1392, or even $1440.
  16. If gold can rise to about $1392 or higher, the entire $1285 - $1335 area would become a strong support zone, like $18 is now for silver.
  17. Gold stocks and silver stocks are the star performers of 2016. Can they continue to shine?
  18. Well, please click here now. Double-click to enlarge this GDX daily chart.
  19. GDX just staged a very interesting upside breakout. After rising above the 2015 highs in the $23 area, GDX just surpassed the 2014 highs near $28.
  20. This is a very exciting development. Institutional money managers like to see stocks making multi-year highs, and gold stocks are doing it while most mainstream assets languish!
  21. Since the $1045 area lows, gold has rallied more than $300 to the recent highs. Cost-cutting programs at many gold mining companies have been in place for the past few years, and most of companies were anticipating the gold price to be under $1200 in the coming years.
  22. This gold price rally is producing quite a shocking rise in company earnings for many miners.

  23. From here, my fundamental and technical analysis of this situation suggests that GDX could quickly establish a new trading range, roughly between $25 - $40.
  24. That’s good news not just for the mining companies, but for the entire global gold community!
Thanks!

Cheers
st

Jul 5, 2016
Stewart Thomson
Graceland Updates
website: www.gracelandupdates.com
email for questions: [email="stewart@gracelandupdates.com"]stewart@gracelandupdates.com
[/email]email to request the free reports: freereports@gracelandupdates.com


Tuesday 5th July, 2016
Special Offer for 321Gold readers
: Send an email to freereports@gracelandupdates.com and I'll send you my free “Gold Stock ETFs Versus Individual Miners” report! I cover the relative merits of each type of investment, and include key buy and sell tactics for each ETF and stock! Graceland Updates Subscription Service: Note we are privacy oriented. We accept cheques. And credit cards thru PayPal only on our website. For your protection we don't see your credit card information. Only PayPal does.

Subscribe via major credit cards at Graceland Updates - or make checks payable to: "Stewart Thomson" Mail to: Stewart Thomson / 1276 Lakeview Drive / Oakville, Ontario L6H 2M8 / Canada Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am. The newsletter is attractively priced and the format is a unique numbered point form; giving clarity to each point and saving valuable reading time.

Risks, Disclaimers, Legal
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

Are You Prepared?

321gold Ltd



6081

  Forum: Macro Factors

denpal
Posted on: Jul 6 2016, 03:26 PM


Group: Member
Posts: 1,166

MME you really ARE talking to yourself, just like I am doing pretty much on my goldie threads.....I think the long bear market since 2011 burnt out most bugs, pity as the gains have been incredible just mean reverting let alone now a bull market re-establishing itself.

Just the last month NST and SLR my main shares in normally the worst month of the year have gained 21%, and this on top of multiple lots of gains from last October - SLR has quadrupled, NST has increased 130% and First Majestic my Canadian silver major has almost quintrupled yet there is virtually no-one here discussing this exciting time!.....

I must admit I am still 15% in cash, have been left behind but will deploy on a decent pullback whenever that may be. The problem is the pullbacks have been so shallow I've had to chase stuff to re-enter, and now everything looks so high I don't want to pull the trigger.
  Forum: By Share Code

denpal
Posted on: Jul 4 2016, 07:29 PM


Group: Member
Posts: 1,166

Well this is pretty exciting alright.
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  Forum: Macro Factors

denpal
Posted on: Jul 4 2016, 03:23 PM


Group: Member
Posts: 1,166

If this spike isn't hammered down pretty quickly, I'd say you're right. Silver is known for rocketing in the right conditions.........
  Forum: Macro Factors

denpal
Posted on: Jul 1 2016, 07:50 PM


Group: Member
Posts: 1,166

It may be that funds pile into gold, for very good reasons. Given how tiny the PM sector is compared to the capital available, a moonshot will result. I read today that gold has had its best H1 half year since 1980. That's really saying something.
  Forum: Macro Factors

denpal
Posted on: Jul 1 2016, 05:06 PM


Group: Member
Posts: 1,166

Quote from the below link: "First Majestic Silver has been one of the world’s best-performing stocks in 2016, nearly quintupling at best in recent months. This outstanding Canadian silver miner runs extensive operations in Mexico, and is one of this metal’s purest producers. Despite its blistering run this year, First Majestic remains incredibly well-positioned to greatly leverage silver’s mean reversion higher. Investors should take a look.



First Majestic Silver’s amazing fundamentals won me over as a fan years ago, and I definitely have a dog in this fight. As silver was grinding along near major secular lows late last year, we recommended a new long-term investment in First Majestic at $3.20 in our monthly newsletter. Then in mid-January as silver stocks languished, we added another new First Majestic trade at $2.51 in our weekly newsletter".




http://www.zealllc.com/2016/fmsilsrs.htm


  Forum: Investment Discussion

denpal
Posted on: Jul 1 2016, 04:57 PM


Group: Member
Posts: 1,166

Who would have thought silver would be over $US19 now?
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  Forum: Macro Factors

denpal
Posted on: Jul 1 2016, 04:55 PM


Group: Member
Posts: 1,166

Looking pretty good once again, climbing the wall of worry to a large extent still.
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  Forum: Macro Factors

denpal
Posted on: Jul 1 2016, 04:52 PM


Group: Member
Posts: 1,166

Updated chart, we're now back up at 55c after a low of 41.5c or so at the end of May. I missed that opportunity hoping it would go lower still, but bought back in at 49c, basically getting 12.2% more shares for the same capital.
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  Forum: By Share Code

denpal
Posted on: Jul 1 2016, 04:47 PM


Group: Member
Posts: 1,166

Here's the daily 1 year chart.
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  Forum: By Share Code

denpal
Posted on: Jul 1 2016, 03:18 PM


Group: Member
Posts: 1,166

Now $5.20, if things hold up in the POG looks like we could be building towards another strong run.
  Forum: By Share Code

denpal
Posted on: Jun 16 2016, 03:52 PM


Group: Member
Posts: 1,166

First Majestic really is a quality pure-play silver miner, approx 70% of its revenue is silver. Hard to beat I reckon.
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  Forum: Investment Discussion

denpal
Posted on: Jun 16 2016, 03:50 PM


Group: Member
Posts: 1,166

Gold and PM stocks continue to rise, a lot of strength for this time of the year.
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  Forum: Macro Factors

denpal
Posted on: Jun 6 2016, 03:01 PM


Group: Member
Posts: 1,166

Huge day in XGD, up 12%. That is one massive green candle!
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  Forum: Macro Factors

denpal
Posted on: May 27 2016, 06:58 PM


Group: Member
Posts: 1,166

Tracking as expected, surely it will get down to around 40c at this rate, which is the 61.8% Fib of the 32>55.5c rise. Hopefully there will be a panic of some sort triggered by goodness knows what to create the spike low buying opportunity. Of course this may not happen in so dramatic a fashion.

There's a bit to watch, PM sector indices like GDX, HUI and SIL, ETF's like NUGT and DUST, the COT report, the Gold price and the AUD to assess where the low is for this retracement going into the June seasonal low. All these can be monitored on Bigcharts or Stockcharts by the way for free which is what I do, in the event you aren't on a trading platform.
  Forum: By Share Code

denpal
Posted on: May 20 2016, 03:57 PM


Group: Member
Posts: 1,166

Looks like we are heading for a decent correction in the PM sector even though it may not last long, ie 4-6 weeks. Hopefully I can buy in again in the low 40's.
  Forum: By Share Code

denpal
Posted on: May 16 2016, 07:55 PM


Group: Member
Posts: 1,166

Huge today today, have now sold out at 55c and will keep an eye on what happens. Could go either way depending on the gold price and USD/AUD. It certainly looks stretched above the 200dema. At this stage I'm more interested in capital preservation than some further gains.
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  Forum: By Share Code

denpal
Posted on: May 13 2016, 06:51 PM


Group: Member
Posts: 1,166

I agree, IGR was a great company in its own right. Murchison was a disaster for SLR, the worst timing possible to be commissioning a high-cost low-grade mine.

I wonder though, would someone like a cashed-up NST swoop on it.
  Forum: By Share Code

denpal
Posted on: May 13 2016, 04:28 PM


Group: Member
Posts: 1,166

What a week!! Hard to credit the re-rate that has occurred here in such a short time. I hold these.
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  Forum: By Share Code

denpal
Posted on: May 13 2016, 03:45 PM


Group: Member
Posts: 1,166

This linked article below backs up the recent article I posted below by Adam Hamilton. The "mean reversion" and "overshoot" arguments are where the fortunes are already starting to be made. Consider some gold miners have doubled and tripled over the last nine months and that is just the start. We know there will be pullbacks, some violent. It's not easy to stay on board a ride like this. Good luck.

The XGD Gold index is now within a whisker of doubling since 1 December 2015.

http://kingworldnews.com/the-us-economy-ma...all-of-mirrors/
  Forum: Macro Factors

denpal
Posted on: May 13 2016, 03:27 PM


Group: Member
Posts: 1,166

Incredible run in the ASX gold sector, helped by a weakening AUD.

Is anyone else following the action here?
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  Forum: Macro Factors

denpal
Posted on: May 9 2016, 03:30 PM


Group: Member
Posts: 1,166

I have just stuck with First Majestic, the share price has tripled this year!
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  Forum: Investment Discussion

denpal
Posted on: May 7 2016, 03:51 PM


Group: Member
Posts: 1,166

This is topical: http://www.321gold.com/editorials/hamilton...lton050616.html




Gold Stocks Too Far Too Fast?
Adam Hamilton
Archives
May 06, 2016


The gold-mining stocks have skyrocketed this year, radically outperforming every other sector. Smart contrarians who bought them low late last year and in January have seen their capital doubled, tripled, and even quadrupled! But such blistering gains raise the ominous specter of crippling overboughtness, conditions preceding major toppings. Have gold stocks come too far too fast to continue their epic run?

The magnitude of recent months' gold-stock surge is simply stunning. Between mid-January and the end of April, this sector's flagship HUI NYSE Arca Gold BUGS Index blasted 131.8% higher in merely 3.3 months! This was largely mirrored by the leading gold-stock ETF, the GDX VanEck Vectors Gold Miners ETF. GDX saw stupendous gains of 107.1% over this same span. Gold stocks have been on fire!

But naturally such fast gains have left this sector severely overbought by nearly every measure. That includes the moving-average convergence-divergence indicator, the distance of gold-stock prices above their 50-day moving averages, these same 50dmas' gap over gold stocks' 200dmas, and the lofty heights of gold-stock prices relative to their 200dmas. All these indicators also apply to gold-stock indexes and ETFs.

Any technician could easily make the case that gold stocks are positioned for an imminent collapse in light of their extremely-overbought technicals. In fact, that's the only rational interpretation for analysts focusing exclusively on this sector's current situation. But as always in the markets, broader context is absolutely essential. Making trading decisions without considering the bigger picture usually ends poorly.

The vast majority of market wisdom on overboughtness comes from major toppings. Extreme levels of overboughtness are famously seen after major bull markets running for years spark popular euphoria sucking in legions of new traders. If the gold stocks had just enjoyed a multi-year bull run to new record highs, and everyone was super-excited about them, then today's extremes would be screaming sell signals.

But that's not the case at all. Today's extreme overboughtness comes after far-more-extreme anomalous secular lows. There's no popular euphoria in gold stocks today, and certainly no major highs. Only a few months ago, no one beyond the most-hardened contrarians would even dare consider deploying capital in this left-for-dead sector. The current overboughtness was born out of crazy lows, not lofty heights!

Just like weather, the biggest price changes in the markets rapidly follow the greatest anomalies. The largest temperature shifts ever witnessed in weather data happen right after the most-unseasonable extremes. After near-record cold, the mean-reversion temperature swing back up to normal levels will be big and fast. Those resulting typical seasonal levels will be sustainable despite the extreme ramp bringing them.

Maintaining perspective in the markets is the key to overcoming the tyranny of the present over traders' psychology, which usually leads to bad losing trades. When 2016's incredible gold-stock surge is put back into the proper context of the months and years leading up to it, today's extreme overboughtness has very different implications. Despite this sector rallying very far very fast, it is nowhere near topping.

In my decades of intense market research and speculation, I've found one of the best ways to measure how far how fast prices have moved is relative to their own 200-day moving averages. 200dmas aren't static baselines that are soon rendered obsolete, they gradually evolve with price trends. And they work to thoroughly squelch the sometimes-serious volatility in prices, helping clearly delineate prevailing trends.

Many years ago I developed a simple trading tool called Relativity. It recasts prices as multiples of their own 200dmas, by dividing the former by the latter. When charted over time, these multiples tend to form horizontal trading ranges. They express the critical relationship between prices and their 200dma baselines in perfectly-comparable constant-percentage terms. Relativity actually quantifies "too far too fast".

This first chart looks at the Relative HUI, or rHUI, in red. That's just this leading gold-stock index's close on any given trading day divided by its 200dma then. The actual HUI is superimposed in blue, along with some key technical lines including its 50dma, 200dma, and 2.5-standard-deviation Bollinger Bands. While gold stocks are extremely overbought, the context is the polar opposite from a major topping episode.


On April's final trading day last Friday, the HUI blasted 7.2% higher to 233.5. That stretched this index to an astounding 1.738x its 200dma, in other words this sector was nearly 74% above that key baseline! Such extremes are exceedingly rare, that happened to be an incredible 13.9-year high in the rHUI. Out of 3612 trading days since 2002, the rHUI only exceeded 1.7x on 13 of them. That's a third of one percent.

And until last Friday, every single one of these extreme rHUI readings showing extreme overboughtness happened in May and June 2002. And that was indeed a major topping, the climax of the enormous 310.7% initial bull run in the first 18.6 months of gold stocks' new secular bull. But interestingly even in that example, the HUI merely consolidated sideways from there before surging to major new highs in mid-2003.

But I was actively trading gold stocks way back then, and certainly remember the euphoria as the HUI hit that extreme overboughtness. This small contrarian sector was growing popular among mainstream investors, as the general stock markets were trapped in the final months of a cyclical bear which would slash the broad-market S&P 500 index 49.1% lower over 2.6 years. That was a real gold-stock topping.

Today's situation is radically different. Back in mid-July 2015, an extreme gold-futures shorting attack crushed gold so the HUI plummeted to a brutal 13.0-year secular low by early August. Then it ground sideways near those extreme lows until mid-January, when support at 105 briefly failed. That stretched the gold-stock sector as measured by the HUI to extremely-anomalous apocalyptic 13.5-year secular lows!

That very week I wrote a comprehensive essay on those extreme gold-stock lows, highlighting that they were truly fundamentally-absurd. The gold stocks were literally trading at prices last seen in July 2002. But back then gold was trading near $305, and had yet to exceed $329 in its young secular bull. And that January 2015 day saw gold trading 3.6x higher near $1087! Those gold-stock levels were supremely irrational.

Considered the other way, gold had fallen to a deep 6.1-year secular low in mid-December on Fed-rate-hike fears that history proves were totally unfounded. The last time gold had hit that very same $1050 level, the HUI was 3.7x higher. The gold-stock prices in mid-January were ludicrous, as the markets seemed to be betting that gold miners could only sell gold for 3/11ths of its prevailing price! It was sheer insanity.

That was one of the greatest pricing anomalies we'll ever witness in our lifetimes, fueled by truly mind-boggling levels of prevailing fear. And it was that ultra-anomalous downside extreme from which this massive 2016 gold-stock bull was born. This year's sharp gold-stock surge to today's near-record levels of overboughtness wasn't born in euphoria, but utter despair. It's a righteous mean-reversion price swing.

The dominant reason gold stocks have come so far so fast is their pricing in January was so ridiculous. And today's stretched technicals screaming warnings of severe overboughtness are the direct result of those downside extremes. If gold stocks hadn't plunged so far so fast last summer, then languished at such crazy lows until January, their technical situation would look far different today as this chart shows.

The HUI's 50dma was incredibly low before this latest gold-stock buying erupted, and its 200dma was in an extreme downward trajectory. So any measures of overboughtness based off these key moving averages are bound to show extremes. 200dmas in particular are so slow-moving that new bull markets often show severely-overbought readings in their initial months until their 200dmas finally reverse north.

Provocatively this even happened in the broader stock markets back in 2009 as their mighty new bull was born from the ashes of 2008's first stock panic in a century. Later in 2009 the entire S&P 500 stretched an extreme 20%+ beyond its 200dma, levels that would normally signal a massive imminent selloff. Yet heeding such sell signals would've been a colossal mistake, as the stock market's new bull would run for years.

When prices start mean reverting higher to rebound out of extreme lows, technical indicators often flash dire warnings of extreme overboughtness. This happens in the initial months of major new bull markets that will power much higher on balance for years. So this particular post-bottoming environment emerging from major secular lows is the exception to the rules of overbought indicators. This is true in gold stocks too.

Before we dig deeper into severe overboughtness early in massive new gold-stock bulls, it is also very important to consider the HUI's absolute levels today. If gold stocks were now trading near major secular highs, which would naturally generate euphoria, then their overboughtness would indeed have grave bearish implications. But the HUI merely hit a modest 19.9-month high last week, not a 20-year one!

Gold stocks last traded at these levels in late 2014, before a couple bouts of panic selling on extreme gold-futures shorting. All the HUI has done in 2016 is regain its uptrend channel enjoyed in late 2014 and the first half of 2015 before last summer's anomalous breakdown exacerbated by that extreme gold-futures shorting attack. So in absolute terms, gold stocks remain pretty darned low in the grand scheme!

While the HUI was indeed up a scary-sounding 110.0% year-to-date at last Friday's peak, it had still only rallied 42.3% since the dawn of 2015 and a minor 18.1% since early 2014. A mere 40%ish sector rally unfolding across 16 months or 20%ish over 28 months wouldn't even warrant a second glance by any technicians. Considered in broader context, today's gold-stock levels are practically yawn-inducing!

That's even more evident zooming out from this many-months perspective to a secular many-years one. This final chart looks at the HUI and rHUI since 2008, encompassing the last major gold-stock bull. This sector more than quadrupled emerging from those anomalous 2008-stock-panic lows, soaring 319.0% higher in 2.9 years. And provocatively gold stocks were the most overbought in that bull's early months!


Back in early 2009 soon after gold stocks had started powering higher again, the HUI stretched up near 1.4x its 200dma multiple times. That's fairly rare statistically too. Out of those 3612 trading days since 2002, the HUI only spent 154 above 1.4x its 200dma. That works out to 4.3%. I remember hearing the same arguments about gold stocks being dangerously overbought back in 2009 as well, portending a topping.

Yet much like today, by that point they had merely doubled on the way to a quadrupling. I just explained a few weeks ago why today's gold stock bull is due for another easy double after already doubling by that point. The gold stocks looked very overbought technically in 2009 simply because they were mean reverting out of an anomalous downside extreme of major secular lows, moving averages hadn't caught up.

Again 200dmas in particular take some time to turn. With calendar months averaging 21 trading days, a 200-day moving average encompasses fully 9.5 months of price action. So until a new bull market out of major secular lows passes the halfway point in this critical moving average, it still mostly reflects the downside price action leading into that secular low. 200dmas can't keep pace with prices as bulls first ignite.

Thanks to their very gradual nature, it always takes some months for 200dmas to bottom, reverse, and turn north decisively. That lagging reversal period can't reflect the intense buying common early in new bulls. Bull-market price trajectories generally follow a flattening parabolic path, like a ball being thrown up at a steep angle initially. Gains are fast in the first year or so, but then decelerate as the bull matures.

So somewhat paradoxically, the most-overbought levels in bull markets are usually seen in their first year. That was true of both gold stocks in their last bull, and general stock markets in theirs. Between 2009 and 2011, both HUI and S&P 500 Relativity multiples gradually moderated as those respective bull markets powered higher. By the times each peaked, they weren't overbought at all on a technical basis!

With the exception of rare popular-mania blow-off tops, bull markets generally don't die with readings of extreme overboughtness. Instead they gradually run out of steam as the supply of new buyers willing and able to commit more capital dwindles. So outside of that extreme mania situation, overboughtness has never been a good indicator of bull markets ready to give up their ghosts. It is actually an early-bull thing.

Still, today's HUI way up at 1.74x its 200dma is far more extreme than the early-2009 overboughtness of 1.40x. But that's misleading, a distortion from the technical lead-ins to both new gold-stock bulls. Back in late 2008, this sector's secular-low extremes were very short-lived lasting mere weeks. That's a sharp contrast from late 2015's, which ran for 5.5 months. That long span of lows really dragged down the HUI's 200dma.

Note in this chart how high the 200dma bottom was in early 2009 following late 2008's fleeting extreme low compared to early 2016's 200dma bottom after late 2015's lingering lows. Since the HUI's 200dma was dragged to anomalously-low extremes even by secular-bottoming standards as this year dawned, naturally the typical sharp early-bull gold-stock rally is going to stretch much farther above such lows.

And rather amazingly, 2016's young new gold-stock bull was actually considerably less extreme than the one emerging from 2008's stock panic! Back in late 2008 it only took the HUI 45 trading days, or 9 weeks, to double out of its extreme fear-drenched secular low. But in early 2016 the HUI took 57 trading days, more than 11 weeks, for that same initial double! Gold stocks advanced farther faster last time around.

So all gold-stock investors and speculators need to realize that the perceived extreme overboughtness of this sector today is misleading. Gold stocks have indeed come very far very fast in recent months, but they are nowhere near as overbought as the classic technical indicators suggest. Those very indicators remain heavily skewed by the abnormally-long period of gold-stock secular lows persisting late last year.

There is almost zero chance today's extreme overboughtness heralds the end of this young gold-stock bull as some fear. In fact, just the opposite is true. The fact that gold stocks soared so far so fast in early 2016 to achieve severe overboughtness shows typical early-bull behavior. It suggests this new gold-stock buying is strong enough to persist for years, with capital inflows continuing to drive gold stocks higher.

That being said, overboughtness remains an important short-term indicator. Though May happens to be gold stocks' strongest month of the year seasonally in bull markets, with an average HUI gain of 6.9% between 2001 and 2012, summer is coming. June and July are the weakest time of year for the entire precious-metals realm, the dreaded summer doldrums. Odds are gold stocks will drift lower as usual then.

So for investors and speculators worried about deploying more capital after such a blistering gold-stock rally, we may very well see better entry points towards late July if normal seasonals hold. While there is certainly no guarantee that normal market conditions will exist this summer with all the craziness in the markets this year, that's what probabilities favor. A few-month consolidation would be very healthy for this bull.

Despite their extreme overboughtness and weaker seasonals ahead, the gold stocks remain radically undervalued relative to the prevailing gold price. That's what drives their profits and thus ultimately their stock prices. At $1250 gold, the HUI would have to soar near 433 to merely mean revert to its post-panic average level relative to gold without overshooting. That's more than a double even from this week's levels!

If you want to multiply your wealth in this new gold-stock bull, we can help. At Zeal we've spent the last 16+ years intensely studying and actively trading this high-potential contrarian sector. We aggressively recommended many new gold-stock and silver-stock trades to our subscribers in recent months. Their unrealized gains are massive, with many already doubling, tripling, or even quadrupling! And we're not done.

We'll be adding many more trades as new buying opportunities arrive in the coming months and years. You can put us to work for you with our acclaimed weekly and monthly newsletters. They draw on our vast experience, knowledge, wisdom, and ongoing research to explain what's going on in the markets, why, and how to trade them with specific stocks. Over the decades we've helped our subscribers learn to think, trade, and thrive like contrarians with many hundreds of gold-stock and silver-stock trades. For just $10 an issue, you too can reap the fruits of our hard work. Subscribe today!

The bottom line is gold stocks are indeed absolutely overbought after skyrocketing in 2016. But this isn't some dire bearish topping signal as feared. Technical overboughtness is actually common in young bull markets, since the moving averages haven't yet had time to fully reverse and reflect the new trend. Severe overboughtness following major secular lows is actually a confirmation a new bull should run for years.

Gold stocks only look extremely overbought today because their recent major secular lows persisted for far longer than normal. That dragged their moving averages far lower than normal, greatly exaggerating recent reads on key technical indicators. But those will soon normalize. Gold stocks remain radically undervalued relative to prevailing gold prices today, so their mean reversions higher have a long ways to go.

###

May 06, 2016
Adam Hamilton, CPA



Thoughts, comments, or flames? Fire away at zelotes@zealllc.com. Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally. I will read all messages though and really appreciate your feedback!

Copyright©2000-2016 Zeal Research All Rights Reserved.


321gold Ltd



  Forum: Macro Factors

denpal
Posted on: May 6 2016, 03:54 PM


Group: Member
Posts: 1,166

We're in blue sky today, no doubt helped by the release of a good presentation.

What's not to like? $A286million cash too and no debt.

I hold these.
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  Forum: By Share Code

denpal
Posted on: May 6 2016, 03:37 PM


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Posts: 1,166

Still being re-rated, it's doing well. Up 150% this year compared to up 56% for the ASX Gold sector XGD.
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  Forum: By Share Code

denpal
Posted on: Mar 14 2016, 04:06 PM


Group: Member
Posts: 1,166

Interesting. NST was smashed today, down 11.87%! EVN down 7.42%. I did buy some NST today at $3.50 - just a few.

Yet POG in AUD is OK at $1661.

The huge COT Commercial short position has a few people expecting a big retracement, this may be driven by a weakening Euro and strengthening USD which impacts the USD POG.......we will see.
  Forum: Macro Factors

denpal
Posted on: Feb 28 2016, 03:56 PM


Group: Member
Posts: 1,166

This is a real micro-cap alright! The chart looks OK, coming out of a basing formation.

The only Canadian share I have is FR.TO, a best in class pure-play silver producer. It's up 80% this year. It's highly leveraged to an increasing silver price, something we expect may happen sometime in the next year or so.
  Forum: Investment Discussion

denpal
Posted on: Feb 27 2016, 08:21 AM


Group: Member
Posts: 1,166

Well the ASX gold sector has had a great time lately, helped by a strong POG in AUD. It's up 72% from the Aigust 2015 low and has increased 36% in 2016 so far.

Surely time for a pull-back? Looked like it was going to happen earlier this week then it strengthened again. I see volume on some of the component companies this last few days has been fairly low.
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  Forum: Macro Factors

denpal
Posted on: Feb 20 2016, 10:03 AM


Group: Member
Posts: 1,166

Clearly in the process of being re-rated due to rising margins. The share price has about doubled in the last two months, whereas the ASX All Ords Gold sector XGD has increased 33%.

Volume has been rising steadily for the last month now.

POG in AUD is very healthy now at over $A1700/oz with big margins given AISC of $A1,250/oz. That is a 36% margin or $A450/oz.

I hold these.
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  Forum: By Share Code

denpal
Posted on: Feb 14 2016, 12:02 PM


Group: Member
Posts: 1,166

This is the ASX Gold sector chart for some local context
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  Forum: Macro Factors

denpal
Posted on: Feb 13 2016, 07:10 AM


Group: Member
Posts: 1,166

Happy reading for gold stock investors!


Gold-Stock Upside Targets

http://www.321gold.com/editorials/hamilton...lton021216.html
  Forum: Macro Factors

denpal
Posted on: Feb 12 2016, 06:28 PM


Group: Member
Posts: 1,166

A good effort, today was gold's big breakout day on record-breaking volume.
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  Forum: By Share Code

denpal
Posted on: Feb 11 2016, 03:43 PM


Group: Member
Posts: 1,166

Surely ripe for a pullback now, but with all that is going on the gold sector who knows? Have some dry powder in case it does pull back to the 300-320 zone but that may not happen for a while if overseas events trump it.

Plenty to read at zerohedge on NIRP possibly going to -4% or more, ie hugely negative. That's why they want to ban cash, to stop withdrawals from the banking system. Good for gold though.
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  Forum: By Share Code

denpal
Posted on: Feb 11 2016, 03:25 PM


Group: Member
Posts: 1,166

That looks better. Finally a bit of volume and pushed through 25-26c.

As a marginal producer the leverage is great here on rising POG so long as management doesn't do anything dumb.
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  Forum: By Share Code

denpal
Posted on: Feb 6 2016, 04:15 PM


Group: Member
Posts: 1,166

The latest article by Adam Hamilton is really relevant, entitled 'Gold, Miners rocket higher' at http://www.321gold.com/editorials/hamilton...lton020516.html

He talks about the leverage, AISC levels etc and how undervalued this sector is still compared to historical norms. Reversion to mean is something that many of us would understand as 'multi-baggers on sale'!

HUI is up 34% this year already, XGD.ASX is up 15% so has a lot of catching up to do.
  Forum: Macro Factors

denpal
Posted on: Feb 5 2016, 05:29 PM


Group: Member
Posts: 1,166

Well it's doing fine, 220c seems like a red herring now. Looks like a cup and saucer pattern has now formed. It's been a swift ride up from 250c although with a massive air pocket hit a week ago but has since recovered.
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  Forum: By Share Code

denpal
Posted on: Oct 30 2015, 02:40 PM


Group: Member
Posts: 1,166

Sold out at 313c a week ago, now back in at average of 282c. Net result 10% more shares for the same capital.

Interestingly the gap has now closed and on support just above the 38.2% Fib retracement.

I suppose it could still retrace further though the AUD Gold price looks pretty good to me.
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  Forum: By Share Code

denpal
Posted on: Oct 14 2015, 04:27 PM


Group: Member
Posts: 1,166

Probably a matter of nowhere else to go on terms of investment, an exhaustion of sellers, and a sentiment change. Goldies have trimmed their costs and some are doing quite well now on their margins. I think it's a combination of all of the above with a realization goldies are highly leveraged to an increasing gold price coming off ridiculous lows.
  Forum: Macro Factors

denpal
Posted on: Oct 14 2015, 03:23 PM


Group: Member
Posts: 1,166

Finally come awake the last 6 weeks up 23% today. First week over the 200dma for more than 2 years.
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  Forum: By Share Code

denpal
Posted on: Oct 14 2015, 03:18 PM


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Posts: 1,166

New ATCH today.
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  Forum: By Share Code

denpal
Posted on: Oct 12 2015, 06:00 PM


Group: Member
Posts: 1,166

There's a stealth bull market developing in goldies, this has happened over the last 6 weeks;

BDR up 70%
SLR up 65%
RMS up 61%
NST up 48%
RRL up 38%
DRM up 38%

XGD up 38% (gold sector index)

I only hold NST and SLR of these.

This is worth a read: http://www.321gold.com/editorials/hamilton...lton100915.html
  Forum: Macro Factors

denpal
Posted on: Oct 12 2015, 10:37 AM


Group: Member
Posts: 1,166

Breakout from the rectangular pattern of the last two years.

A number of 6% gains so far today, BDR, SLR, RRL etc.
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  Forum: Macro Factors

denpal
Posted on: Oct 7 2015, 02:37 PM


Group: Member
Posts: 1,166

It's still going, what a run.
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  Forum: By Share Code

denpal
Posted on: Oct 5 2015, 01:10 PM


Group: Member
Posts: 1,166

A big day in the ASX gold sector, lots of goldies up 5-6% with PRU, BDR and SLR up 8-9%.

NST still making record highs, up 46% in the last month.
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  Forum: Macro Factors

denpal
Posted on: Sep 29 2015, 04:01 PM


Group: Member
Posts: 1,166

XMJ is lowest since 2008, down 4.65% today. Failed bear flags on many indexes. This has been a gimme for shorters.
  Forum: Investment Discussion

denpal
Posted on: Sep 29 2015, 03:53 PM


Group: Member
Posts: 1,166

Up again today of all days, this must be a flight to quality.

It hasn't looked back since it gapped up on the daily from 2.22 to 2.33 on 17th September.
  Forum: By Share Code

denpal
Posted on: Sep 25 2015, 02:49 PM


Group: Member
Posts: 1,166

It's in a long-term uptrend, reflecting earnings growth.
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  Forum: By Share Code

denpal
Posted on: Sep 25 2015, 11:55 AM


Group: Member
Posts: 1,166

Hey Flower, just because it's run pretty hard over the last three weeks. It would be natural to rest a little bit at support then leg up again.

Yes I agree this is the best gold pick on the ASX. Quality of management is the key.

I hold these.
  Forum: By Share Code

denpal
Posted on: Sep 25 2015, 10:20 AM


Group: Member
Posts: 1,166

We're in blue sky today........

Surely time for a rest soon.
  Forum: By Share Code

denpal
Posted on: Sep 24 2015, 03:52 PM


Group: Member
Posts: 1,166

Very close to the ATCH here........
  Forum: By Share Code

denpal
Posted on: Sep 18 2015, 06:39 PM


Group: Member
Posts: 1,166

Lots of action in NST the last two days. There seem to be people in a real hurry to get on board here. Of all the gold companies this is the best I reckon, principally due to management that has real competence. I hold these and have done since early days.
  Forum: Macro Factors

denpal
Posted on: Jul 9 2014, 05:49 PM


Group: Member
Posts: 1,166

With an announcement like that, that is a good reason for re-rating.
  Forum: By Share Code

denpal
Posted on: Apr 2 2013, 04:45 PM


Group: Member
Posts: 1,166

Well Flower, not many gold supporters left now, a bit lonely in here!

I read today that the time to buy gold stocks is when no-one not even oneself wants to buy. I wonder if we get one more dip down before a decent upswing. Quite happy with my NST though, also PXG, but SLR has been a bit exasperatingly weak.
  Forum: Macro Factors

denpal
Posted on: Apr 2 2013, 04:41 PM


Group: Member
Posts: 1,166

Yes progress is steady. One day this sector will rotate...........a few more bail-in haircuts will help.
  Forum: By Share Code

denpal
Posted on: Apr 2 2013, 04:40 PM


Group: Member
Posts: 1,166

Exactly, what complete idiots. Probably hijacked by geeks.

Let's hope S/S gets more traffic now. I promise to do my bit too, although not much to report in the PM sector these days until gold fever strikes again!

Keep it simple Sharescene!!
  Forum: Off Topic Chat

denpal
Posted on: Feb 19 2013, 05:45 PM


Group: Member
Posts: 1,166

FA cannot reflect sentiment unlike TA. Gold stocks are getting smashed on sentiment it seems, as the fundamentals are fine.
  Forum: By Share Code

denpal
Posted on: Jan 14 2013, 07:37 PM


Group: Member
Posts: 1,166

Did you see NST's ann. today, total costs look well under control.
  Forum: Macro Factors

denpal
Posted on: Jan 13 2013, 02:50 PM


Group: Member
Posts: 1,166

I would think a decent move up in PM prices, not ballistic mind you but steady and looking like being sustainable, would snap the downtrend of the miners.
  Forum: Macro Factors

denpal
Posted on: Jan 12 2013, 11:24 AM


Group: Member
Posts: 1,166

Looking quite good now, this chart from new Maurice Hubbartt article at www.321gold.com.
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  Forum: Macro Factors

denpal
Posted on: Jan 9 2013, 04:00 PM


Group: Member
Posts: 1,166

Things are looking up.

http://www.kitco.com/ind/Trendsman/20130103.html

http://www.kitco.com/ind/Maund/20130107B.html
  Forum: Macro Factors

denpal
Posted on: Dec 14 2012, 11:54 AM


Group: Member
Posts: 1,166

flower, you couldn't have seen today's burst coming! May be short covering?

I see SLR is up strongly as well.
  Forum: By Share Code

denpal
Posted on: Dec 10 2012, 03:27 PM


Group: Member
Posts: 1,166

Certainly some buying interest today.
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  Forum: By Share Code

denpal
Posted on: Dec 9 2012, 02:58 PM


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Posts: 1,166

And you can add ongoing development costs which are a capital cost but nevertheless drain cash.
  Forum: Macro Factors

denpal
Posted on: Dec 1 2012, 05:08 AM


Group: Member
Posts: 1,166

http://www.kitco.com/ind/Conner/20121126.html
  Forum: Macro Factors

denpal
Posted on: Nov 28 2012, 10:09 AM


Group: Member
Posts: 1,166

Stewart Thomson at 321gold.com

http://www.321gold.com/editorials/thomson_...n_s_112712.html

Monthly silver chart looks good.
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  Forum: Macro Factors

denpal
Posted on: Nov 25 2012, 09:23 AM


Group: Member
Posts: 1,166

Maurice Hubbartt latest.


www.321gold.com
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  Forum: Macro Factors

denpal
Posted on: Nov 22 2012, 03:07 PM


Group: Member
Posts: 1,166

The Roadmap For $3,000+ Gold, $100+ Silver & 1,650 HUI

http://kingworldnews.com/kingworldnews/KWN...%2C650_HUI.html
  Forum: Macro Factors

denpal
Posted on: Nov 20 2012, 03:16 PM


Group: Member
Posts: 1,166

Lovely Inverse Head and shoulders continuation pattern here on the weekly.

Read here about this pattern: http://peterlbrandt.com/do-continuation-he...s-really-exist/

I hold these long-term.
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  Forum: By Share Code

denpal
Posted on: Nov 16 2012, 10:21 AM


Group: Member
Posts: 1,166

Toby Connor latest. He's good I find.

http://goldscents.blogspot.co.nz/

Wednesday, November 14, 2012

MAJOR BUYING OPPORTUNITY

I'm just going to do a quick post today. The relevant factors are that gold appears to have put in an intermediate degree bottom last week. Miners are being dragged down at the moment as the stock market makes its final move into an intermediate bottom. This happens pretty much like clockwork every 20-25 weeks (currently on week 23).

Invariably when stocks move down into one of these major cycle bottoms the selling pressure infects everything. It finally grabbed the miners today even though gold has barely budged. Not to worry though, we've seen this happen dozens of times in the past, and the miners always snap back violently once the selling pressure in the stock market exhausts.

More importantly than where things are going tomorrow or the next day is where they are headed over the next intermediate cycle. As I have diagrammed in the chart below the dollar is due for a move down into a yearly cycle low around mid February or early March. Roughly the same time as last year. This will drive the next intermediate rally in gold (and stocks) for about the next 12-15 weeks.
I'll say it again. Buying anywhere around these levels will deliver big gains over the next 3-4 months. Probably largest in the miners, but certainly significant in virtually all sectors.

This is that period of time that comes only once or twice a year when the chartists get fleeced (the charts always say the market is going lower at intermediate bottoms. This is why chartists always miss these major bottoms. You need different tools to spot these kind of buying opportunities.) and the smart money positions for the next leg up.

The choice is yours. Do you want to sell at the bottom again, or will you be a buyer this time and make some money? (I think big money.)

Posted by Toby Connor at 7:42 PM
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  Forum: Macro Factors

denpal
Posted on: Nov 8 2012, 03:22 PM


Group: Member
Posts: 1,166

Good time to accumulate. Once the USD starts its southward move POG will pick up. Seems the gold stocks are very sensitive to a rising POG now so we can expect good leverage.

I've bought quite a few RVY, which has a link with Andean Resources and the Gilmour father and son. Geoff Gilmour is the Executive Director of RVY. They created a multi-million ounce gold junior exploring in Argentina and then sold it for more then $3B. The ASX listed shares went from 20c to $6.50. If you read the presentation from August 2012, they have extended a gold corridor with some amazing hits like 11m@23g/t, 18m@18.3g/t, 12m@21.6g/t and 24m@10.6g/t all at depths between 21-66 metres. These hits are outside the current JORC resource.

Their goal is +3Moz in 12-18 months time, they already have 760koz, plus around $8M cash and of course a small MC of $26M and EV of approx $18M. They are based in Tanzania which seems all good compared to many other African countries.

The shares probably won't go up short-term, but I'm looking at three years out from here.

This is my African PXG look-alike.
  Forum: Macro Factors

denpal
Posted on: Nov 7 2012, 04:05 PM


Group: Member
Posts: 1,166

I've stuck with NST, very happy with progress.
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  Forum: Macro Factors

denpal
Posted on: Nov 5 2012, 07:58 PM


Group: Member
Posts: 1,166

Sovereign risk, nothing more and it is a real risk that investors need to be mindful of. After management quality that is probably the next most important point. This is bad news for investors alright.
  Forum: By Share Code

denpal
Posted on: Oct 20 2012, 01:44 PM


Group: Member
Posts: 1,166

I still reckon the cup & handle pattern is shaping up well. Another week of weakness then a two week recovery up to form the right side of the handle which will take us into the US election period.

The pattern looks better on a weekly chart.
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  Forum: Macro Factors

denpal
Posted on: Oct 20 2012, 04:36 AM


Group: Member
Posts: 1,166

This is what I meant, chart courtesy of Maurice Hubbartt
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  Forum: Macro Factors

denpal
Posted on: Oct 16 2012, 12:04 PM


Group: Member
Posts: 1,166

I'm waiting to buy close to the end of this correction.
  Forum: Macro Factors

denpal
Posted on: Oct 15 2012, 04:06 PM


Group: Member
Posts: 1,166

I've ended up with the options, worth nothing at the moment and expiring in July 2013 at 35c!!! duh!!!!!!

The only way out here is to double up at .005c to bring the average way down and hope that the comedy act can get going by then. He needs to be strapped down and have his mo ripped off one hair at a time.
  Forum: By Share Code

denpal
Posted on: Oct 11 2012, 03:28 PM


Group: Member
Posts: 1,166

Could we see 1700 as the 38.2% fib of the 1525>1795 move? Probably won't go that low.

I think we may see a move down to 1720-1730 or so, completing the handle of a cup and handle then up again beyond 1800 to challenge the ATH of 1923.
  Forum: Macro Factors

denpal
Posted on: Oct 10 2012, 03:57 PM


Group: Member
Posts: 1,166

http://www.proactiveinvestors.com/companie...iles-35737.html


Phoenix Gold to generate 'substantial cashflows' monetising stockpiles





The ore agreement with Norton highlights Phoenix's success remaining a self-funded gold explorer by monetising historic stockpiles of ore. Cashflows from this strategy have helped fund exploration which has delivered a four-fold resource increase in less than two years to 2.24 million ounces.

Phoenix Gold (ASX: PXG) has executed a Right to Mine Agreement with Norton Gold Fields (ASX: NGF) for the development of the Stage One cutback of the Catherwood gold mine - which is located in the prolific Goldfields region of Western Australia.

Stage One will generate substantial cash flow for Phoenix as the company's ore will be processed at Norton's 3.5M tpa Paddington processing facility located 35 kilometres east of Catherwood, with all ore haulage to utilise existing haul roads.

Payment to Phoenix will comprise an initial deposit, prior to mining commencing, after which payments will be made to Phoenix on an agreed rate per ounce of gold recovered. The payments to Phoenix have a guaranteed floor price and Phoenix share in any upside should the mine exceed production estimates.

The agreement has Norton funding the mining, haulage and treatment of ore from Stage One of Catherwood cut back - with Phoenix retaining ownership of the project and all associated tenements.

Jon Price, managing director for Phoenix commented: "This agreement combined with earlier stockpile sales agreements with Norton have satisfied our objective of generating cash internally to self-fund further work on our core projects.

"Monetising historic stockpiles and our non-core mining projects provides funds without risk or distraction, so we can focus on our strategy, which is to grow resources at our larger projects as fast as possible. Along with this we plan to complete mining studies to determine optimal mining and processing routes for our core projects."


Catherwood BFS

Phoenix completed a Bankable Feasibility Study on Catherwood in 2011, with results indicating a mine design comprising a two stage cut back to the existing pit at Catherwood. The Stage One and Two designs produced 313,600t at 2.69g/t Au for 27,000 ounces and up to $15.6M in free cash flow at A$1,500/oz gold price.

However, the BFS assumed Phoenix owned and operated a processing facility at Castle Hill around 5 – 10kms to the north of Catherwood. Since the BFS was announced Phoenix completed the appropriate studies and documentation to apply for mining approvals from the relevant state departments.

Following approval, Phoenix treated ore from Catherwood through the toll treatment mill in Coolgardie to verify the metallurgical assumptions within the BFS and also generate cash for the company.

Due to the very positive results, for both grade and recoveries, from the treatment of the ore Phoenix completed infill drilling of the supergene hanging wall zone within the Stage One design in early 2012.

An updated geological model was prepared for third party operators to review with ongoing negotiations resulting in execution of the deal with Norton. Development of the mine is expected to commence within the next three months with first gold production expected in the March Quarter 2013.


Analysis

Phoenix will use cash generated to fund exploration and studies on larger projects, with Stage One production estimated at 19,000 ounces at a grade of 2.4g/t.

Based on the current Australian dollar gold price of A$1700 an ounce, gross cashflows of around A$32 million will be generated on the sale of the gold, generating 'significant cashflow' for Phoenix.

The sale of these small stockpiles makes Phoenix a self-funded explorer, with the company growing the resource base four-fold in under two years to 2.24 million ounces.

Shares in Phoenix Gold have recently started to trade higher to around $0.35 as the resource has grown and more ore agreements have been established - compared to $0.20 mid-year.

The increase in share price could be just the beginning, and with $3.8 million in cash and EV/Resource per ounce of under $25 - Proactive Investors expects the share price to continue to rise as the resource grows.

There is also additional upside for the EV/Resource per ounce to move closer to the peer average of around $50.

Another plus is with the cash generated from ore agreements - the company doesn't require large equity capital raisings - and therefore no dilution to the stock.
  Forum: By Share Code

denpal
Posted on: Oct 2 2012, 06:00 PM


Group: Member
Posts: 1,166

Could still have some gas in the tank......
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  Forum: By Share Code

denpal
Posted on: Sep 29 2012, 11:04 AM


Group: Member
Posts: 1,166


Super Force Signals - A Leading Market Timing Service
We Take Every Trade Ourselves


[b]The Golden Price Magnets[/b]
Morris Hubbartt
Weekly Market Update Excerpt
posted Sep 28, 2012


US Dollar Bear Flag Chart

  • The dollar has hit my initial downside target. To ascertain what’s next, I use three important charts to create a financial roadmap.
  • The 80.50 area is important to my timeline analysis, which suggests this move higher is only a countertrend “pop”. It’s not a game changer. The projected right shoulder of an h&s top is taking shape, as a bear flag.
  • This pattern suggests a quick resumption of the dollar’s downtrend. It also implies that my $2015 target price for gold could be acquired by November.
US Dollar Sell Signal Chart

  • The dollar's long term risk is demonstrated by this weekly chart. Whereas the dollar is oversold on the daily chart, this powerful weekly chart indicates an immense move lower is just beginning.

  • My experience with these types of situations is that placing your bets on the picture portrayed by the weekly chart, is the best course of action.
US Dollar Pillars Of Blood Chart

  • This is a 20 year monthly chart. A major price breakdown has already taken place.
  • It demonstrates the importance of the 80.50 area.
  • After a small move sideways or slightly higher, downward pressure should once again dominate the dollar’s movement.
  • Note the dotted black lines that I’ve highlighted. I believe the downtrend is already underway, and any rally will be limited to the confines of this bearish channel.
Gold $2015 Magnet Chart

  • My work continues to forecast gold will rise to $1850 in the short term. From there, I am projecting a pause, and then a powerful move should take gold to $2015 by mid-November.
  • My working model projects only light pullbacks will occur, before gold acquires $2015. I don’t think you need to worry about anything more than a 5% drawdown.
  • Once new highs are achieved in the $2015 area, I am projecting a much deeper correction.
  • At this moment, all my intermediate term technical indicators are showing green lights for gold!
GDX Walk Of Fame Chart

  • You can tell a lot about a bull when it pauses. After reaching the upside targets I set for gold stocks several weeks ago, the market pulled back briefly, before racing higher again.
  • I am now projecting a rise to the $55-$57 area again, followed by a modest but frightening pullback. That decline should halt near $48.
  • From there, I’m projecting a 3rd assault on the $55-$57 zone. After some hesitation, GDX should then surge higher.
  • I expect $66 to be acquired by January. If the gold market gains serious momentum, it could happen by mid-November.
GDXJ $27 Magnet Chart

  • GDXJ successfully acquired my $25-$27 target area. The market then pulled back slightly, and raced higher over the past two days. I’m projecting that this move will take GDXJ to $27.
  • Volume patterns are solidly bullish.
  • There is a lot of support in the $22 price zone. It should act like a “price trampoline”, if GDXJ were to decline instead of rise. Junior gold stock investors should be in fairly good spirits now. QE3 and talk of QE4 should also help to boost morale.
  • RSI is no longer overbought and is in a position where strong momentum moves can occur. MACD is at a level of 0.924. Before a serious price correction begins, I am projecting that it reaches 2.00.
Silver RSI Fake Out Chart

  • Silver refuses to back off. That probably tells you a lot about its future. I call this chart the “RSI Fake Out”. Look to the left of the chart. A week ago I noted the similarity of RSI now, to the situation in 2010.
  • You can see that RSI became very overbought in both instances. Many investors panicked recently, as they did in 2010 when the same thing happened. My analysis suggests sharp pullbacks will continue to occur, rather than a significant correction.
  • In the short term, my worst case scenario has silver going to $31.50, but I don’t think that will happen. I think $44 will be acquired fairly quickly. In the longer term, I see silver running to $150, and possibly higher!


Sep 28, 2012 Super Force Signals special offer for 321Gold Readers:
Send an email to trading@superforcesignals.com and I'll send you 3 of my next Super Force Surge Signals free of charge, as I send them to paid subscribers. Thank you! The SuperForce Proprietary SURGE index SIGNALS:

25 Surge Index Buy or 25 Surge Index Sell: Solid Power.
50 Surge Index Buy or 50 Surge Index Sell: Stronger Power.
75 Surge Index Buy or 75 Surge Index Sell: Maximum Power.
100 Surge Index Buy or 100 Surge Index Sell: "Over The Top" Power.

Stay alert for our surge signals, sent by email to subscribers, for both the daily charts on Super Force Signals at
www.superforcesignals.com and for the 60 minute charts at www.superforce60.com

About Super Force Signals:
Our Surge Index Signals are created thru our proprietary blend of the highest quality technical analysis and many years of successful business building. We are two business owners with excellent synergy. We understand risk and reward. Our subscribers are generally successfully business owners, people like yourself with speculative funds, looking for serious management of your risk and reward in the market.

Frank Johnson: Executive Editor, Macro Risk Manager.
Morris Hubbartt: Chief Market Analyst, Trading Risk Specialist.

website:
www.superforcesignals.com
email: trading@superforcesignals.com
email: trading@superforce60.com

Super Force Signals
422 Richards Street, Suite #300
Vancouver, BC V6B 2Z4
Canada



###

Sep 28, 2012
Morris Hubbartt

321gold Ltd




4945
  Forum: Macro Factors

denpal
Posted on: Sep 23 2012, 10:36 AM


Group: Member
Posts: 1,166

I love the way this story is written. That book Reminiscences of a Stock Operator is a real classic, in fact its time to read it again!
  Forum: By Share Code

denpal
Posted on: Sep 22 2012, 10:01 AM


Group: Member
Posts: 1,166

http://www.321gold.com/editorials/sfs/hubbartt092112.html

Silver 44 Magnum Chart

  • Silver looks set to add to recent gains. Volume is solid. MACD is moving steadily higher.
  • Note the highlighted timeframe of October, 2010. The RSI indicator surged to an extremely overbought condition. Technicians became very nervous and sold. I call volume the market’s “great truth teller”, and it signalled that the overbought RSI should be ignored. Only a small correction occurred, and then silver rocketed to almost $50!
  • I think the market is now poised to run towards $125. First, I am projecting a move up to $37.50, and then a shallow correction down to the “big buy zone”. That area between $32 and $35 is where momentum players can add to core positions, in size.
  • From there, I have set a target price of $44, where active traders could book some profit. Clint Eastwood used a .44 magnum handgun to “make his day”. Will $44 silver help to make your day? I think it will!

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  Forum: Macro Factors

denpal
Posted on: Sep 22 2012, 09:59 AM


Group: Member
Posts: 1,166

http://www.321gold.com/editorials/sfs/hubbartt092112.html
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  Forum: Macro Factors

denpal
Posted on: Sep 21 2012, 05:24 PM


Group: Member
Posts: 1,166

Personally I think nuclear power is in trouble after Fukushima, ie not a popular investment medium given the apparent severe danger to life if something goes wrong. Most of the uranium companies are on life-support with dreadful charts. I sold out of my Canadian one this week - Uranium One, and will put the proceeds into First Majestic silver miner. I used to be a uranium-bull back in 2006-2007 and did very well out of the uranium boom. Now I'll stick to precious metals since their uptrend is firmly established and is stable not peaking.

Unfortunately, $1 invested in Uranium One back in 2006 is now worth 31c, whereas $1 invested in First Majestic is now worth $5.75. That disparity will grow larger over time I believe.
  Forum: By Share Code

denpal
Posted on: Sep 21 2012, 05:13 AM


Group: Member
Posts: 1,166

Nice recovery off the low.
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  Forum: By Share Code

denpal
Posted on: Sep 20 2012, 03:33 PM


Group: Member
Posts: 1,166

The serious buying continues today.
  Forum: By Share Code

denpal
Posted on: Sep 19 2012, 06:13 PM


Group: Member
Posts: 1,166

A good day for PXG.
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  Forum: By Share Code

denpal
Posted on: Sep 19 2012, 06:11 PM


Group: Member
Posts: 1,166

Looking at a couple of juniors that may transition to something worthwhile:

PXG has been on a tear lately, still cheap on EV/oz let alone the multi-million ounce potential. Their target is impressive, yet so far they have goal-kicked time after time. Current resource 2.3M oz at 1.5g/t.

RVY is unknown, but, hands up if you've heard of Andean Resouces and their Argentinian discovery? You know, 10c to $6.50 in under five years? Geoff Gilmour ex-Andean is an Executive Director and Warren Gilmour ex-Andean holds 15M shares. It would pay to read the latest announcements IMO. They have $9M cash or so too. They are looking for a JORC of 2-3M oz in 18 months or so.

DYOR, I hold both and have done for some time.
  Forum: Macro Factors

denpal
Posted on: Sep 18 2012, 02:15 PM


Group: Member
Posts: 1,166

http://www.silverseek.com/article/silver-market-update-6351

<h2 class="title">Silver Market Update</h2> Clive Maund | Monday, September 17th The strong uptrend in silver of the past several weeks is believed to mark the start of a major uptrend that should take the price comfortably to new highs before it’s done. On the 12-year log chart for silver below we can see that this uptrend is still in its infancy, as it has a target at the top channel return line shown, which means it should get to over $60 on this advance, a modest objective given the stunt pulled by the SPSC (Silver Price Supporters Club) over at the Fed last week.


Silver is approaching an inner trendline that appears to still have some validity, the pale blue trendline shown on the chart, and given that this coincides with a resistance level shown on the 2-year chart below and that silver is now critically overbought short-term, and also that its COT readings are at extreme levels, and also that the good news is now on the street, a period of consolidation or a minor reaction here looks likely, which would set up the next upleg. Before leaving the 12-year chart note the momentum breakout shown by the MACD indicator at the bottom of the chart.


Silver’s 2-year chart makes plain that it has now broken out decisively from the long corrective downtrend in force from April – May of last year. Moving averages are now swinging into bullish alignment again for the first time in a long time and we should soon see the “Golden Cross” where the 50-day moving average rises up through the 200-day, and the latter turns up, which will be a sign that the new uptrend is becoming established. Silver is now critically overbought on its RSI indicator shown at the top of the chart, which suggests that it is likely to take a rest soon before continuing higher – most likely it will consolidate for a while, and perhaps react back somewhat – but it is not expected to react back much, given that the Fed last week hooked up the fire hoses to the gas pump with every intention of spraying gasoline on the spreading fires of inflation. This makes perfect sense from their point of view, as the massive QE now set in motion will enable them to continue to enrich their crony pals in the banks and on Wall St by simply passing this spirited into existence money straight to them, and by propping up the bond market, and pass the bill for this munificence on to the middle and lower classes via roaring inflation and a zero return on savings.

The 6-month chart for silver shows recent action in much more detail. On this chart we can see the powerful, steep uptrend of recent weeks, that has in part been fuelled by panic short covering, of course, and last week got an extra boost from the grandstanding by the Fed, which was on a scale that surprised even those expecting QE, for not only did they announce QE, but they even went as far as promising that it would be open-ended, and also their intention to clamp interest rates near to zero for another year, until 2015. This is all music to the Precious Metals markets of course, and all but guarantees ongoing strong uptrends. Nevertheless, we can see that silver is heavily overbought here short-term with several technical factors pointing to it needing to take a rest before continuing higher, and this fits with the fundamental situation as all the good news is now out and on the street.


One technical factor pointing to silver needing to take a breather here is the latest COTs. On the COT chart below we can see that Commercial short positions are about to fly off the scale, with Large and Small Spec long positions being at very high levels too, and here we should note that this data is only up to date as of last Tuesday, so Thursday’s spike in the silver price can reasonably be expected to have driven these positions to even more extreme levels. This makes a period of consolidation or a reaction here likely before the uptrend continues towards our objective at new highs.

SilverSeek.com
  Forum: Macro Factors

denpal
Posted on: Sep 12 2012, 04:21 PM


Group: Member
Posts: 1,166

email from Phoenix MD Jon Price to subscribers:

Dear All

Please find attached the results of our first deeper diamond drilling programme. Drilling went down to 200m and intersected some spectacular widths and grades.

We can now clearly demonstrate that Castle Hill’s multi million ounce potential with grade improving with depth and remaining open in all directions.

This is a very large gold system and we have defined up to 3,000 per vertical metres in Stage 1. Easy open cut mining and conventional milling with 4 other projects with in 15km.

Castle Hill is certainly living up to its name as our flagship and company making asset.

We will release a full geological summary shortly showing a lot more detail on the project and are now looking ahead to double the Resource at Castle Hill and push the total resource to 3-4M oz.

Kind Regards,
Jon Price
  Forum: By Share Code

denpal
Posted on: Sep 12 2012, 03:48 PM


Group: Member
Posts: 1,166

There's a lot more to come too. Castle Hill could turn into a super-pit. I love the description "open in all directions" and "grade increasing with depth".

I see the options up 50% today to 12c now.
  Forum: By Share Code

denpal
Posted on: Sep 8 2012, 12:27 PM


Group: Member
Posts: 1,166

Silver chart
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  Forum: Macro Factors

denpal
Posted on: Sep 7 2012, 04:36 PM


Group: Member
Posts: 1,166

This EW chart on Sharelynx.com is part of Jim Sinclair's commentary on jsmineset.com.

Click on the image to show the full size.
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  Forum: Macro Factors

denpal
Posted on: Sep 5 2012, 08:28 PM


Group: Member
Posts: 1,166

thanks to dub.......
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  Forum: Macro Factors

denpal
Posted on: Sep 5 2012, 08:17 PM


Group: Member
Posts: 1,166

Definitely a lot of potential, 2m oz is achievable here going on their presentation.
  Forum: By Share Code

denpal
Posted on: Sep 5 2012, 08:16 PM


Group: Member
Posts: 1,166

I see Warren Gilmour has bought more on-market.
  Forum: By Share Code

denpal
Posted on: Sep 5 2012, 07:54 PM


Group: Member
Posts: 1,166


Has QE3 Already Begun?
Tuesday September 04, 2012 11:45



GOLD & COMMODITIES MAY BE SAYING YES

According to recent statements by Bernanke, the Fed stands ready to act with further easing of monetary policy (QE3) if economic conditions warrant it. But let's face it, because the Fed has never been audited we only receive the data they deem fit to publish. We know the government lies to us about inflation, unemployment, GDP, etc. Does anyone really believe the Fed is publishing true accounting numbers? I'm starting to suspect Bernanke has already begun the next round of quantitative easing.

Politically, QE is a hot potato and impossible to publicly announce. But there have been enough hints (the last FOMC minutes may have been the loudest) that it is clear Bernanke intends to print. Hey, we are in a currency war after all, and one can't win the war if you don't shoot your guns!

First case in point; the CRB exploded out of its three year cycle low in June just as I had predicted. Oil is already knocking on the door of $100 a barrel again. Grains in many cases have rallied 50% or more and show no signs of reversing. As a matter of fact, the CRB is showing no inclination to even retest the summer bottom. The complete failure up to this point of commodities to retest the three year cycle low is in itself a warning bell that something has changed. I think we can all agree that the global economy didn't all of a sudden ratchet into high gear, creating a surge in demand. Barring that, the only thing that would generate this kind of explosive move without even a hint of a correction would be another round of massive liquidity injections.

Another odd development is the action in bonds. A month and a half ago the bond market started to discount the inflationary surge as commodities launched out of their three year cycle low. Mysteriously, two weeks ago, interest rates started to tank.



One has to ask themselves, who in their right mind would be buying bonds with a negative yield in a rapidly accelerating inflationary environment?
This sudden reversal in interest rates is another warning bell, in my opinion, that QE3 may have already begun, and Bernanke is already buying bonds in the attempt to hold interest rates under 2%.

The next confirmation will come from the stock market. As we have seen in the past, the daily cycle in the stock market has tended to stretch far beyond its normal timing band (35-40 days) during periods of quantitative easing. The current cycle is due to bottom right around the next Fed meeting on September 13. If stocks are still rising with no clear decline into a cycle low by mid-September that would be a pretty clear sign in my opinion that Bernanke is lying to us and QE3 has already begun.



If I am correct then the penetration of the three year cycle trend line by the dollar index on Friday is going to be a harbinger of hard times ahead for the world's reserve currency.



As many of you may recall I've been expecting the three year cycle low in the CRB to correspond fairly closely to a top in the three year cycle on the dollar index. So far the rally out of the May 2011 three year cycle low has been very weak. The dollar still isn't close to moving above the 2008-2011 three year cycle high, and has now formed a monthly swing.



The dollar’s three year cycle is now at risk of having topped in only 14 months in a left translated manner. If so, this greatly increases the odds that we will see the dollar index fall below 72 and probably below 70 by the time the next three year cycle bottoms in mid-2014.

If the dollar's current daily cycle continues to drop all the way into the FOMC meeting on September 13, it will be unlikely we see any significant corrective action in commodities or stocks for the next two weeks, and at that point I am going to seriously entertain the idea that the Fed is lying to us and has already begun the next round of bond purchases.

The big question though, is how do we invest based on this possibility?

First off one doesn't want to be short if there is even the slightest risk that the Fed has resumed bond purchases. Second, one has to ask themselves which sector stands to benefit the most from another massive increase in liquidity?

The obvious answer is commodities. But most commodities have already rallied quite significantly as we've seen with the grains and energy. That doesn't mean there isn't more upside, I'm sure there is. But I think much larger percentage gains are going to be made in the precious metals as price and breadth are still quite depressed in this sector.

The metals are now set to "catch up" as traders take profits on some of their other commodity positions that have already generated large gains, and look to put that capital back to work in undervalued areas with more upside potential (precious metals, especially miners).

It's been my theory for several months now that we saw a B-Wave bottom for gold back in May.



With the recent breakout of the frustrating consolidation zone that always follows a B-Wave bottom I think gold is now ready to begin the initial phase of the next C-Wave advance.



Gold is now entering the high demand fall season. It has been my expectation that gold will generate its first test of the all-time highs sometime this fall. If my intermediate cycle count is correct (explained in depth in the nightly premium newsletter) we should see a move above the A-wave top of $1800 and a rally close to $1900 by late October or early November. At that point the intermediate cycle will enter the timing band for the next corrective move, which should prevent gold from breaking out to new highs



Following an intermediate degree decline in late November to mid-December, the breakout to new highs should occur during the next intermediate cycle this spring, followed by a retest of that breakout at the next intermediate bottom.



Yes I know these daily and intermediate cycle counts are somewhat complicated and beyond the scope of this short article. I do cover them extensively in my premium newsletter. Suffice it to say that cycle analysis lays a general guideline for when to expect major bottoms, and to a lesser extent tops. I like to think of it as a tool that signals when to step on the gas and when to start tapping on the brakes.

While I don't think gold has much chance of moving above $1920 this year, conditions are definitely in place for a significant rally in the sector over the next couple of months. Miners and silver in particular, have the potential to generate some pretty respectable gains over the next 2-3 months.

By Toby Connor
GoldScents
www.goldscents.blogspot.com


  Forum: Macro Factors

denpal
Posted on: Aug 29 2012, 03:57 PM


Group: Member
Posts: 1,166

flower, where do you get $8M from?
  Forum: By Share Code

denpal
Posted on: Aug 29 2012, 03:56 PM


Group: Member
Posts: 1,166

Finally the news we've been waiting for most of this year.


LAKE DISAPPOINTMENT UPDATE
ASX ANNOUNCEMENT
29 AUGUST 2012


Reward Minerals Ltd and subsidiary Holocene Pty Ltd are pleased to advise that the
Company has received written notice from Western Desert Lands Aboriginal Corporation
(WDLAC) recommending that Heritage Approval be granted in respect of the Lake
Disappointment Clearance Area.
Heritage Approval completes the outstanding conditions of the Mining and Indigenous
Land Use Agreement (MILUA) and paves the way for its registration and the granting of
mining licences for the Lake Disappointment Project, allowing the Company to move
ahead with its development programme.
The Company is very pleased with achieving this latest milestone, and we look forward to
further building the close association with WDLAC and the Martu people on the
development of the Lake Disappointment Project.
As a result of the Clearance Heritage Survey conducted late in February 2012, the
Clearance Area has been precisely defined and agreed to by WDLAC and Reward.
Reward/Holocene have advised WDLAC of their agreement to comply with the conditions
of the December 2011 agreement and the February 2012 Clearance Area Survey Report
and to satisfy the commercial terms previously agreed to under the MILUA in December
2011.
Reward will proceed with payment of agreed costs and issue of the first tranche of
Reward Options to WDLAC as required under the MILUA. The relevant agreement
documents will also be lodged shortly with the Native Title Tribunal for Registration as an
Indigenous Land Use Agreement.
Section 18 Works Approval Application
The Company has also prepared a Section 18 application for approval to establish an
access track, exploration camp, pilot evaporation ponds and to conduct infill drilling of the
Lake Disappointment Cleared Area. A copy of the application documentation has been
approved by WDLAC for its lodgement with the Department of Indigenous Affairs (DIA)
and the Aboriginal Cultural Materials Committee (ACMC) for approval.
Additional Tenement – EL(A)45/4090
Reward recently applied for Exploration Licence 45/4090 of 156km2 adjoining its current
Lake Disappointment project tenements. The new application if granted will extend the
Company’s land holdings north to the Talawana Track completely covering the
Miscellaneous Licence 45/302 required for the project access track. The earlier objection
to the grant of L45/302 by a third party which had previously applied for the ground but
recently withdrew its application has now lapsed.
Further information will be provided as it becomes available.

Dr Michael Ruane
Director
on behalf of the Board
  Forum: By Share Code

denpal
Posted on: Aug 24 2012, 07:38 PM


Group: Member
Posts: 1,166

Page 1 of 10

Miyabi Gold Project - Tanzania

New Gold Discoveries

Chui Prospect
11m @ 23.0g/t Au from 54m down hole
Dalafuma Prospect
18m @ 18.3g/t Au from 45m down hole
12m @ 21.6g/t Au from 66m down hole
24m @ 10.6g/t Au from 21m down hole

Highlights
 Recent drilling has discovered a new gold zone at the Chui Prospect.

 The Chui Prospect, located approximately 1 kilometre along strike
from the Dalafuma Prospect, is open at depth and extends over a
length of 900m.

 Drilling has confirmed high‐grade mineralisation continuity at the
newly discovered Dalafuma Prospect; it extends over a length of 300
metres and is open at depth.

 The Company plans follow up drilling on the Dalafuma and Chui
Prospects as soon as possible.
Bright Star Resources Limited (BrightStar) is pleased to announce that
recent drilling results indicate a strong potential to increase the current
520,000 ounce gold resource on the Miyabi Gold Project.

The potential for additional resources comes from both the newly
discovered zone of gold mineralisation at the Chui Prospect and the
recently discovered zone of gold mineralisation at Dalafuma which are
located to the south of the known gold resources (Figure 1).

BrightStar's Managing Director, Mike McKevitt said "These are extremely
encouraging results and support our belief that Miyabi has much more to
reveal."











ASX/MEDIA
RELEASE

20 August 2012


Board of Directors:

Didier Murcia
Non‐executive Chairman

Michael McKevitt
Managing Director

Geoff Gilmour
Executive Director

Keith McKay
Non‐executive Director

Gosbert Kagaruki
Non‐executive Director


Tel. +61 (08) 9200 4404
Fax +61 (08) 9200 4413


ABN 86 121 985 395

ASX code "BUT"
ASX MEDIA RELEASE

Page 2 of 10


Figure 1 ‐ Miyabi Gold Project Structural Corridor showing known gold mineralisation

MIYABI GOLD PROJECT – BACKGROUND
The Miyabi Gold Project is located approximately 200 kilometres southwest of the city of
Mwanza in the Lake Victoria Goldfields, Tanzania (Figure 1). The property has Mineral
Resources contained in several deposits totalling 12.4 million tonnes at 1.3 g/t gold. This
Resource comprises 520,000 ounces of gold (at a 0.5g/t cut‐off), estimated in accordance
with JORC (2004). The resource comprises 370,000 ounces of Indicated Mineral Resource
and 150,000 ounces of Inferred Mineral Resource and was estimated in 2006.

In April 2011, BrightStar entered into a joint venture with African Eagle Resources plc where
BrightStar may earn a 75% interest in the Project by sole funding exploration to completion
of a bankable feasibility study.

Six of the seven individual gold resources estimated to date occur in an en‐echelon pattern
of shear zones within a major structural corridor that cuts across the northwest corner of
the Miyabi greenstone belt. This major structural corridor is named the Miyabi Structural
Corridor (MSC), it trends northeast to southwest extending for a length of 7.7 kilometres
through the Miyabi property and is some 800 to 1,000 metres wide (Figure 1).

The existing gold resources within the MSC extend along a strike length of approximately 3.5
kilometres in the south western half of the structure and are clustered over a width of
approximately 500 metres from the centre of the structure towards its northern boundary
ASX MEDIA RELEASE

Page 3 of 10
(Figure 1). Gold mineralization is hosted by sheared, silicified and sulphide bearing mafic
schists of possible meta‐sedimentary origin. The whole area of the MSC is totally obscured
by soil cover and a sub‐surface laterite layer.

Previous drilling by African Eagle focused mainly on the area containing the current gold
resources and immediate strike extensions. Consequently, large areas of the highly
prospective MSC remain to be effectively drilled and this became the prime focus of
BrightStar's exploration program in 2012.

The potential for new zones of gold mineralization within the MSC, but outside the area of
current resources, was clearly demonstrated with the discovery of the Dalafuma Prospect in
June 2012. RC drilling under a RAB drill hole, which intersected 21 metres @ 6.7g/t gold
from 21 metres (announced in December 2011), confirmed the high grade gold
mineralisation extended to depth and along strike.

MIYABI RC AND AIRCORE DRILLING PROGRAM 2012
The recently completed RC and Aircore drilling program largely focused on the new
Dalafuma Prospect and other targets within the MSC. Between 29 May 2012 and 31 July
2012 a total of 54 RC holes for 4,971 metres and 52 Aircore holes for 2,138 metres were
drilled.

The drilling program achieved two notable successes:
 A new 900 metre long zone of gold mineralisation was discovered approximately 1
kilometre along strike from Dalafuma and named the Chui Prospect. While drilling
at Chui is presently limited, one significant high grade intersection has already
been obtained.
 A 300 metre long mineralised zone with several very significant high‐grade gold
intersections was confirmed on the Dalafuma Prospect.

Drilling Results on Chui Prospect
The new Chui Prospect is located approximately 1 kilometre along strike to the southwest
from the Dalafuma Prospect and some 300 to 500 metres to the south of the gold resources
(Figure 1).

Two traverses of Aircore drilling (19 holes) and two traverses of RC drilling (4 holes) on a
total of four sections at 200 metre intervals have discovered a new zone of gold
mineralisation which extends in a northeast to southwest direction for some 900 metres
(Figure 2). The zone appears to dip steeply to the northwest.
  Forum: By Share Code

denpal
Posted on: Aug 24 2012, 07:34 PM


Group: Member
Posts: 1,166

http://www.kitco.com/ind/Aden/20120823.html

Get Ready for Take Off!
Thursday August 23, 2012 14:18
Gold is on the rise after months of sluggishness.
After all, it’s been almost a year since the $1900+ record high was reached, yet the gold price hasn’t declined even 20%. Think about it... considering the 170%
gold rise (from the 2008 low to the year ago record peak), gold has only given back 19+%.
Gold’s strength reinforces the reality of an unbalanced financial world.
Accumulation time is drawing to a close, but it’s still not too late to buy new positions.
Gold will now look promising by staying above $1630, but it’ll be clearly out of the woods above its 65-week moving average at $1650. How high could gold go?
GOLD TIMING: Bottom in & poised to rise further
Many of you know the ins and outs of our favorite intermediate indicator. But for the benefit of new readers and to refresh the main points with older readers,
we’d like to review it.
This is pretty technical. But if you follow along we think you’ll agree that this indicator helps measure the timing and growth potential for each intermediate gold
rise, as well as the declines. It’s worked well over the years, including during the bull market of the 1970s.
Bear markets also have these intermediate moves, but with subtle differences.
Gold is a cyclical market and its moves tell us a lot about the world and other markets. Right now, it’s telling us the 11 year bull market is alive and well.
This leading indicator is shown on the following Chart Overall, gold has intermediate moves we call the A through D pattern. The As and Cs identify the gold
rises, and the Bs and Ds identify gold’s declines.
During a bull market, the C rises tend to be the best leg up in the bull market when gold shoots up
to a record high. In fact, this reinforces the strength in the bull market because if record highs are
not reached, it would raise a red flag.
The A rises are normally moderate. But if an A rise reaches a record high, then it’s reinforcing an
exceptionally strong bull market. B declines also tend to be moderate, and together with the A
rises, you could say it’s a consolidation time... preparing for the next strong C rise.
The wild moves tend to be the C rises and the D declines. D declines are the sharpest when gold
corrects the most.
D declines usually fall to test the 65-week moving average during a bull market. It wasn’t until
2008 that gold’s D decline broke clearly below this moving average for the first time in the current
bull market.
The intensity of the crisis took hold, but it didn’t take long for gold to jump back up. And we don’t
think it’s a coincidence that gold then went on to have the longest and best C rise in the bull
market!
Gold rose almost 120% from April 09 to September 11... a C rise twice as strong and twice as long
as all of the C rises since 2001.
This rise has essentially coincided with the ongoing unprecedented problems we have in the world.
The best C rise before that was in 2005-06 when gold shot up almost 58%, followed by the
2007-08 rise of nearly 56%.
SO WHERE ARE WE NOW?
Here’s a twist and some food for thought... Gold fell from its September record high almost a year ago and it declined nearly 20% to its December low. This fall
alone could’ve been a D decline because the indicator fell to the low area and gold tested its moving average. The percentage decline was also in line with
former D declines.
Then the 16% rise to the February high was within reason for an A rise, while the 14% decline from the February highs to the recent May lows was also normal
for a B decline.
If this proves to be the case, and the B low is complete, then gold is getting ready to take off in another C rise. And if the bull market stays true to form, we’ll see
a record high reached before the leg up is over!
Once gold closes and stays above $1650, we could see it jump up to the $1700 level. Above $1700 means $1800 would be the next target.
If gold rises in a C rise, similar to the 2006-2008 C rise, gold could then reach record highs near the $2200 - $2400 level.
By Mary Anne & Pamela Aden
  Forum: Macro Factors

denpal
Posted on: Aug 24 2012, 07:28 PM


Group: Member
Posts: 1,166

http://www.321gold.com/editorials/thomson_...n_s_082112.html

Stewart Thomson reckons:

  1. Please click here now. You are looking at the monthly chart for the Dow Transports, and what is arguably one of the most bullish price patterns in the history of markets.

  2. There appears to be a truly gargantuan bull continuation reverse head & shoulders pattern in play. It has been forming for five years. I think that most stock market investors are probably underestimating the amount of quantitative easing being planned by the Fed.
  3. The size and shape of that pattern indicate that the Transports could rise to about 10,000. Could the Dow Industrials double in price, from here? I think the Dow can double in price, and will do so, because another round of quantitative easing would make institutional money managers begin to view the dollar as the "risk-on" trade, and the Dow as more of a currency and a "risk-off" trade.
  4. What does that mean for your gold stocks? It probably means they are going to rise quite dramatically. Please click here now. The highs at point B were created by GDX banging into the lows at point A.

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  Forum: Macro Factors

denpal
Posted on: Aug 24 2012, 07:23 PM


Group: Member
Posts: 1,166

Longer term though, what about this? Maurice Hubbartt chart.
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  Forum: Macro Factors

denpal
Posted on: Aug 24 2012, 11:39 AM


Group: Member
Posts: 1,166

Inverse H&S target 130, looks like consolidation 110-120c range is here for a short while.
  Forum: By Share Code

denpal
Posted on: Aug 24 2012, 11:14 AM


Group: Member
Posts: 1,166

I'll just keep holding these until the trend changes, the good anns keep on coming.
  Forum: By Share Code

denpal
Posted on: Aug 23 2012, 06:10 PM


Group: Member
Posts: 1,166

And last but not least, the ratio of GOLD to SILVER..........one ugly looking chart (good for silver though!).
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  Forum: Macro Factors

denpal
Posted on: Aug 23 2012, 06:05 PM


Group: Member
Posts: 1,166

This is First Majestic, a pure-play silver miner on the TSX, shows how strong it has been during this corrective period. Looking for great things here if POS does its thing. In a word, leverage. The second chart shows the leverage of the miner to the POS.

The charts are log-scale by the way.
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  Forum: Macro Factors

denpal
Posted on: Aug 23 2012, 06:02 PM


Group: Member
Posts: 1,166

Needs to crack $31 to move above the downtrend line.......
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  Forum: Macro Factors

denpal
Posted on: Aug 22 2012, 03:51 PM


Group: Member
Posts: 1,166

PXG now has 2.24 million ounces of shallow gold at 1.7g/t.

This latest ann. has added 405,000 ounces.

Share price doing OK at 23c too.




PHOENIX GROWS CASTLE HILL GOLD PROJECT RESOURCE
BEYOND 1 MILLION OUNCES
HIGHLIGHTS
 Castle Hill grows 40% to 1,059,000 ounces with multi-million ounce potential1
 Phoenix's total Resources increase to 41Mt grading 1.7g/t for 2.24 million ounces (Table 1)
 Resource envelope very shallow from surface to 80 metres depth
 Further Resource growth anticipated from recently completed deeper diamond drilling
 Conceptual Mining Study well advanced and due for completion in 8 weeks
 Low cost open cut mining, excellent metallurgy and close to infrastructure
 1.7 million ounces of current Resource within 15km of Castle Hill on existing haul roads

Figure 1: Project location, Phoenix tenements and centre of development
1
See Note 3




Page 2 of 3

22nd August 2012

Overview
Phoenix Gold Limited (ASX: PXG, "Phoenix") is pleased to advise that its Castle Hill gold project (Figure 2)
has increased to 21.7Mt at 1.5g/t Au for 1.06 million ounces (Table 1). The project is located on the
highly prospective Kunanalling shear zone in the heart of the Western Australian Goldfields (Figure 1) less
than 50 km from the regional mining centre of Kalgoorlie.
This latest Resource update represents a four-fold increase since the project was first acquired in 2010.
The Resource update at Castle Hill increases Phoenix's Total Mineral Resources for Phoenix to 40.5Mt at
1.7g/t Au for 2.24 million ounces (Table 1). This is a 276% increase in resources in less than 2 years.
Importantly, over 1.6 million ounces of the total Resource base is within a 15km radius of the central
development centre at Castle Hill (Figure 1) and is linked by existing haul roads in all directions.
"Castle Hill is fast becoming the latest large scale gold discovery in Western Australia's Goldfields and
we have barely scratched the surface. The recent Kintore deal will give us near complete ownership
over this large gold system and is clearly demonstrating its multi-million ounce potential," Managing
Director Jon Price said.
"Our focus is now squarely on growing this resource below the current 80 metres and completing
conceptual mining studies to determine optimal mining and processing routes including the
construction of our own processing plant at Castle Hill," Mr Price said.
The upgrade includes the maiden Resource for Kintore that forms part of the Castle Hill gold system
following the recent acquisition. A significant program of data validation, re-logging, re-assaying and
survey was completed in June and July to bring the new Resource in line with internal reporting standards
and JORC classification (Table1).
The current Resource envelope at Castle Hill extends only 80 metres from surface. Deeper Reverse
Circulation ("RC") and diamond drilling commenced in May 2012 with results expected in the September
Quarter. A further Resource upgrade is anticipated in the December Quarter as the new data is included
into the current resource model. The project has delivered a significant endowment in the first 80m from
surface and Phoenix believes there is considerable potential for the mineralisation to continue at depth to
become a multi-million ounce gold project1.
Conceptual mining studies including pit optimisations and designs, metallurgical reviews, schedules and
economic evaluations have commenced using the updated resource model to determine optimal mining
and processing pathways. These studies will assess the merit of including the construction of a standalone
processing facility plant at Castle Hill. Castle Hill has the potential to be a near surface large scale open cut
mine processed by conventional milling with excellent metallurgical recoveries all within 50 km of
Kalgoorlie.
A detailed synopsis of the Castle Hill Gold Project will be released in the coming weeks to highlight the
geology of the mineralisation, the robustness of the gold system along strike and the endowment
potential, particularly at depth.






Page 3 of 3

22nd August 2012

About Phoenix

Phoenix Gold Ltd is an emerging Australian exploration and development company with an extensive land
holding on the Zuleika and Kunanalling shear zones northwest of Kalgoorlie in Western Australia, home to
some of Australia's richest gold deposits.
Kalgoorlie-based Phoenix is aiming to significantly grow its JORC-classified resources and to self- fund
aggressive exploration through the development of advanced mining projects that can deliver cash flow in
the short term.
The 100% owned Castle Hill gold project is emerging as a flagship asset with the potential to become a
multi-million ounce gold mine1 with excellent metallurgy and close to all major infrastructure. Castle Hill is
one of many well-endowed gold systems within Phoenix's portfolio.
With a balanced mix of exploration (new discoveries and extensions) and development of a sustainable
production profile, Phoenix aims to grow a significant gold company for the benefit of all stakeholders.
Table 1: Phoenix Gold – Summary of Mineral Resources



Notes:

1. Stockpiles report material mined from historical mining operations at Lady Jane, Broads Dam, Premier, Catherwood, Bluebell, Mick Adam and Shamrock.
2. The information in this report that relates to Exploration results and Mineral Resources is based on information compiled by Mr Ian Copeland. Mr Copeland, who is a member
of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Geoscientists, is a full time employee of Phoenix Gold. Mr Copeland has
sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a
competent person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Copeland has given his
consent to the inclusion in the report of matters based on the information in the form and context in which it appears.
3. Information that relates to exploration and production targets refers to targets that are conceptual in nature, where there has been insufficient exploration to define a
Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.
4. The information on exploration targets is based on a conceptual range of targets as follows: Tonnage range: 2 million to 20 million tonnes, grade range: 1.5 g/t Au to 5 g/t Au

Visit us at www.phoenixgold.com.au
For further information please contact
Investors Media
Jon Price, Managing Director - PXG Michael Vaughan or Fiona Meiklejohn
(08) 90 212 704 FTI Consulting
info@phoenixgold.com.au (02) 8298 6100 or (08) 9485 8888
  Forum: By Share Code

denpal
Posted on: Aug 22 2012, 12:41 PM


Group: Member
Posts: 1,166

Today acclaimed money manager Stephen Leeb told King World News, “... it will be very difficult going forward to acquire large amounts of silver.” Leeb, who is Chairman of Leeb Capital Management, also said that because of this, “... the price of silver is literally going into the stratosphere.”





Here is what Leeb had to say: “This is going to be very important for the silver market going forward, Eric. As an example, photovoltaics is a tremendous way to generate electricity from the sun, but it uses a large amount of silver. The major difference between photovoltaics and other ways of generating energy from the sun, is that the other methods require a great deal of water.”

&lt;/frame&gt; Stephen Leeb continues:





“One of the methods being used to garner energy from the sun requires six to seven times more water than nuclear, and nuclear already requires tremendous amounts of water. The point I am trying to make is that photovoltaics requires a bare minimum of water and in some cases no water.





Water, which is becoming much more of a concern in today’s world, is going to be critical going forward in terms of supplies....



“Also, if you look at fracking, you are not going to be doing fracking unless you have a lot of water. And you are not going to be running a lot of nuclear power unless you have a lot of water. So water becomes a key constraint.



So the fact that photovoltaics doesn’t use any water is utterly critical. If we are going to build out infrastructure, and use the sun as a major producer of electricity, you have to put photovoltaics at the top of that list. In fact, the growth rate of photovoltaics has been exponential over the past few years.





The growth of this industry strongly suggests that silver is going to play a critical role, and a much larger role than previously assumed in the whole energy equation. I’m talking about silver as an industrial metal. The problem going forward is how to connect the dots between how much silver we produce and how much we are going to need for energy and electricity production, particularly in China.





So silver has two drivers going forward. One is the monetary aspect because silver is money. But the other is the industrial component, and the demand for silver to cultivate energy is going to skyrocket. Later on, people will not believe you could buy silver in the $20s. It’s a gift right now at $29.





I think it will be very difficult going forward to acquire large amounts of physical silver. Countries will have a very hard time picking up the necessary silver they will need for all of the demands. When you couple in the investment boom, that is still in front of us, that means the price of silver is literally going into the stratosphere.





The Chinese know this and that is why they are buying so much physical silver, as well as gold. I have said to many times that we are going to have a mania in the junior mining shares, but we are also going to have a mania in the price of physical silver.”





© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.


http://kingworldnews.com/kingworldnews/KWN...ratosphere.html
  Forum: Macro Factors

denpal
Posted on: Aug 20 2012, 06:10 PM


Group: Member
Posts: 1,166

AMX chart
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  Forum: Macro Factors

denpal
Posted on: Aug 20 2012, 04:16 PM


Group: Member
Posts: 1,166

Up 12% today I see.......
  Forum: Macro Factors

denpal
Posted on: Aug 18 2012, 02:44 PM


Group: Member
Posts: 1,166

flower what are your thoughts on AMX, MC $108M, $43M cash, 3.1Moz resource, Burkina Faso.

The share price has reduced from $3 to 50c over the last 18 months with the chart looking quite good for a rebound should the POG and sentiment for the miners strengthen.
  Forum: Macro Factors

denpal
Posted on: Aug 16 2012, 08:07 PM


Group: Member
Posts: 1,166

http://www.minyanville.com/sectors/preciou...0/2012/id/43128

Eric Sprott is re-weighting into silver.
  Forum: Macro Factors

denpal
Posted on: Aug 16 2012, 07:55 PM


Group: Member
Posts: 1,166

NST is a market darling in the gold sector, that's fairly obvious and of course for good reason. There are a lot of frogs to be kissed in the ASX gold space before finding a prince that's for sure.

Won't be long before we're well over $1 and holding there, looking at the trend IMO.
  Forum: By Share Code

denpal
Posted on: Jul 14 2012, 07:53 PM


Group: Member
Posts: 1,166

Exactly, holding the right stock is vital, ask IGR punters, or NMG for that matter. There are precious few worth holding IMO.

ASX Goldies - I hold mainly NST and SLR as they are quality producers with growth, plus PXGOA and NMGOA for specs, the latter looking somewhat risky now with commissioning delays.

  Forum: Macro Factors

denpal
Posted on: Jul 14 2012, 01:48 PM


Group: Member
Posts: 1,166

http://www.kitco.com/ind/Hamilton/20120713.html

The above link has the charts.


PM Summer Doldrums 4
Friday July 13, 2012 14:57

With gold, silver, and their miners’ stocks drifting listlessly near correction lows, the sentiment in precious-metals land is even more pessimistic than usual. Bears abound while bulls are now an endangered species. But interestingly, demoralizing consolidations are par for the course this time of year. Throughout most of their secular bull, the precious metals have suffered during the summer doldrums.

Back in the era of wind-powered tall ships, the doldrums were the name given to the areas of the oceans near the equator where prevailing winds often didn’t exist. These periods of dead calm meant there was no wind for sails, trapping ships for days or even weeks. Many years ago I thought this was a great analogy for how PMs feel in the summer. They drift lethargically and all hope for progress vanishes.

The ironic thing is even though this phenomenon happens nearly every summer like clockwork, it always crushes sentiment. The great majority of traders aren’t disciplined enough to study the markets and learn their rhythms, so each year the PM summer doldrums discourage them anew. It is amusing in a way, but also sad since the resulting poor sentiment bleeds everywhere eroding the resolve of all PM traders.

The best way to combat this irrational bearishness is to understand why it happens and how it tends to look in terms of prices. Naturally gold is the key to the entire precious-metals realm, silver and the PM stocks merely follow its lead. The reason gold prices slump to a long seasonal ebb in summer is because this metal’s primary driver, global investment demand, is very uneven across a typical calendar year.

While worldwide gold demand sees big spikes in autumn, winter, and spring for various income-cycle and cultural reasons, there are simply none during the summer. If you are not familiar with the strong seasonality gold exhibits, you can get up to speed with one of my gold-bull-seasonals essays. There are no big buying catalysts in summer, and vacationing traders aren’t all that interested in the markets anyway.

In orbital-mechanics terms, summer starts at the summer solstice in late June (longest day of the year) and ends at the autumnal equinox in late September. But in financial-market terms, summer is simply considered to be calendar June, July, and August. It is these market summers over which the precious metals’ performance needs to be considered. Understanding them will steel you against PM despair.

But we can’t do a straight price comparison across summers, as prevailing price levels have climbed dramatically throughout gold’s secular bull. Back in 2001 in the early days, gold averaged just $272 on close that summer. But by last summer (2011), the average gold price had soared 498% higher to $1627. Obviously a $10 move in 2001 was far more significant than the same move a decade later.

To make all the precious-metals summers perfectly comparable in percentage terms across their entire secular bull, we have to individually index them. So this thread of research indexes each summer for gold, silver, and the flagship HUI gold-stock index. Each index is set at 100 as of the close on the last trading day of May. That way any given percentage move looks the same regardless of base price levels.

Rendering these individual summer indexes on charts is very illuminating. Each summer from 2001 to 2011 is shown in yellow. While this looks like a mess of spaghetti on these charts, it reveals general trends and outlying summers. All 11 of the indexes from these previous summers are then averaged, the red line. This shows the prevailing trend. Finally our current summer to date is superimposed in blue.

And we have to start with gold, since its fortunes drive silver and precious-metals stocks. When gold is strong, the rest of the PM realm leverages its gains. When gold is weak, its losses are amplified. And in the dead calm of the summer doldrums, gold tends to drift along listlessly with no wind for its sails. How can traders expect upside action in silver and PM stocks when gold is lethargically consolidating?



And lethargically consolidate gold does, as you can see here. The red average of all the yellow individually-indexed summers from 2001 to 2011 is pretty flat. For its entire bull, on average this metal has spent summers drifting from 2% below to 2% above its market-summer starting point at the end of May. A 2% move either way over a 3-month period is hardly noticeable, essentially purely sideways.

And before gold’s magnificently-bullish anomaly last summer, gold’s average summer performance was indeed dead flat with a downside bias. My last essay in this series has a similar chart from before the wild summer-2011 surge. But even that amazing event didn’t alter gold’s average summer performance much. Without any major income-cycle or cultural buying catalysts this time of year, gold just drifts.

As the individually-indexed summers in yellow show, the center mass of this drift is between 95 and 105 in indexed terms. Gold tends to stay between 5% below to 5% above its final May close the great majority of the time in June, July, and August. As you can see above, contrary to all the pessimism today gold has actually done quite well so far in this summer of 2012. It spent much of June high in its trading range.

There are outlying summers of course, where one-off factors lead gold to break out of its usual summer-doldrums consolidation to both the downside and upside. Back in June 2006, gold plunged in a sharp correction after rocketing to a major new bull-market high in May. And in August 2008, this metal sold off sharply as a global bond panic ignited a gargantuan US dollar surge that hammered gold prices.

There were upside outliers too. Back in July 2008 gold powered higher rapidly as commodities prices reached a then all-time high before that autumn’s once-in-a-lifetime stock panic obliterated them. And of course last August gold skyrocketed on last summer’s contentious debt-ceiling debate in the US. With traders believing there was actually a risk of a default on US Treasuries, safe-haven capital fled to gold.

While these occasional outliers really capture traders’ attention, and sometimes distort their perception of how gold usually performs in the summer, they are short-lived. After falling below the center-mass drift’s support in 2006 and 2008, gold soon returned to trend. And after surging above the usual summer-consolidation resistance in 2008 and 2011, gold soon fell sharply to reenter the trend channel.

Last year this reversion happened later in September, when gold plunged as you can see on this chart. The point is gold’s seasonal tendency to drift sideways in the summer doldrums is so darned strong that even rare breakouts never last. Given its price history for this entire bull in June, July, and August, there is simply no reason to expect anything more than a boring sideways consolidation during any summer.

Yet every year, traders wail and gnash their teeth about gold’s poor summer performance. Have they no charts? Is that particular summer the first they’ve ever experienced? It is amazing how few traders take the time to consider price action within historical context. Without that knowledge, they are doomed to make poor decisions. And selling low near gold’s major seasonal low in late July is a big one.

Nearly every summer, there is widespread capitulation in gold, silver, and the PM stocks over the next couple weeks. Both speculators and investors somehow hoping for gold to miraculously buck its decade-old summer trend and surge are sorely disappointed. So they whine and cry and dump their positions at exactly the wrong time. Late July marks gold’s major seasonal low ahead of its massive autumn rally.

And you can clearly see that autumn rally accelerating in September on this chart. After struggling all summer just to maintain its late-May levels, on average gold has powered 5% higher by late September. So if you can hold on through the summer doldrums, ignore the ubiquitous bearish psychology and sit tight, usually you will be richly rewarded in autumn when major seasonal gold-buying spikes return.

And this is not very hard if you understand these summer doldrums. Because of this ongoing research we’ve been doing for many years now, I never expect anything but drifting from PMs in the summer and advise our subscribers to do the same. If you can’t handle the psychological stress of a sideways grind, you can simply put your head in the sand and ignore the markets for a few months. Go on vacation!

While silver has a fanatical following, technically it is merely gold’s lapdog. Throughout its entire secular bull the only times it has surged are when strong gold prices ignite interest in the precious metals. While there are a handful of short-lived exceptions, the vast majority of the time silver can’t do anything unless gold is being bid higher fast enough to be exciting. So naturally silver doesn’t fare well in summer either.



Every summer without fail, I get dozens of anguished e-mails from silver enthusiasts wondering why the white metal can’t make any headway. But as this chart shows, there is no reason to expect it to during the PM summer doldrums. Silver’s average summer performance is even considerably worse than gold’s, drifting between its May close and 5% lower. And silver’s autumn rally also starts later on average.

Silver is a hyper-speculative metal that needs excitement in order to thrive. Capital only floods in when traders expect a major surge in gold. And since these are very rare in the summer, silver almost always has a hard time catching a bid. Note in this chart that the yellow outliers above the center-mass drift’s resistance are much more muted than gold’s, while downside outliers are more common.

Silver tends to drift between 10% above to 10% below its May close in any given summer, with a definite downside bias as evidenced by the preponderance of indexed summers and the sub-100 average. While silver indeed has great potential to soar and leverage gold’s gains, June, July, and August is simply not the time to look for one of its periodic spikes. Silver is dead in the summer, trapped in the doldrums.

But despite all the silver bearishness out there, silver’s action in early June was its best of this bull as the blue line shows. And despite the slide since, this metal has still managed to remain above its long-term summer average on balance. So while you wouldn’t know it without this context, silver is actually exhibiting considerable relative strength this summer. But the odds argue it will still likely end August close to late May’s levels.

Provocatively even though they are doomed to grind sideways in the summers too, gold stocks fare considerably better than silver this time of year. This last chart looks at the flagship HUI gold-stock index with the same individually-indexed methodology to keep all summers perfectly comparable in percentage terms. Realize that gold stocks actually start rallying on average well before the market summer ends!



This year the HUI has enjoyed a strong early summer as well, although it knifed below its average summer performance this week. Like silver, in general it tends to consolidate between 90 to 110 indexed. It is interesting that this 10% above and 10% below is double gold’s 5% above and 5% below for both the HUI and silver. These subordinate precious-metals plays indeed leverage the price action in gold itself.

But unlike silver, after getting sucked into gold’s major seasonal low in late July the gold stocks start rallying dramatically on average in August. In indexed terms between late July and the end of August the HUI tends to climb from around 96 to 103 or so. This is a sizable rally in percentage terms, and one speculators and investors definitely want to catch. And it soon accelerates in autumn with gold’s rally.

By late September the HUI tends to approach 110 indexed. So from late July to late September, gold stocks as a group have advanced nearly 15% on average throughout this entire secular bull. This is a heck of a rally! And the only way to ride it is to be a contrarian and fight the crowd. When everyone else is convinced gold stocks are heading much lower in late July, you have to buy then or hold on to what you have.

But even with this August rally, the gold stocks don’t tend to end the summer much higher than they started it. Seeing the HUI up 3% on average over a 3-month span is certainly not enough to generate any excitement. And this is why gold-stock traders have to steel themselves from the dreadful sentiment wasteland spawned by the summer doldrums. It is hard not to sell when everyone else loses hope.

Understanding the strong gold seasonals is essential for all speculators and investors participating in this wildly-profitable precious-metals secular bull. There are times of the calendar year where big demand spikes emerge around the world which quickly push gold higher. But there are other times when demand is flat so gold makes little progress. And the biggest and longest by far is the summer doldrums.

How on earth can sideways-grinding precious-metals prices demoralize traders in June, July, and August when this is what they always tend to do during the market summers? When you don’t expect too much, you can’t be let down. And the lackluster historical gold, silver, and HUI price action during the summers certainly proves that it is irrational to expect anything more than a listless drift during this long seasonal lull.

At Zeal we are always prepared for the PM summer doldrums. If the gold stocks enjoyed a strong spring rally, we usually realize the lion’s share of our profits by early June. And unless there is a compelling company-specific reason, we try not to sell when everyone else is this time of year. When those usual late-July seasonal lows in gold and the HUI roll around, we often capitalize on the poor sentiment to buy new positions low ahead of the autumn rally.

And this year is no exception. We have some amazing high-potential gold stocks on our books right now that are weak because of the usual summer pessimism. And we will likely add more around late July and early August. So if you are one of the few remaining contrarians strong enough to buy low when everyone else is scared, get ready. You can research some of the world’s most-promising gold juniors in our latest fascinating 27-page fundamental report on our dozen favorites.

And instead of being worried all the time about the markets, you can gradually learn to thrive through our acclaimed weekly and monthly subscription newsletters. In them I draw on our vast experience, knowledge, wisdom, and ongoing research to explain what the markets are doing, why, where they are likely heading, and how to trade them with specific stock trades as opportunities arise.

The bottom line is the summer doldrums almost always trap the precious metals in a listless, demoralizing drift. After over a decade of June, July, and August grinding, traders really ought to expect nothing more during this seasonal ebb. While upside breakouts from the usual drifts can happen occasionally, even they are short-lived. Without major gold-demand spikes, summer simply has no sizable buying catalysts.

For speculators and investors aware of this tendency, all it takes is a little patience to weather precious-metals summers. But sadly the majority of traders refuse to study the markets and advance their knowledge, so every summer their depression returns anew and they foolishly sell low. Thankfully we can take advantage of this mistake, and buy low to load up our books ahead of the big autumn rallies.

Adam Hamilton, CPA
July 13, 2012
www.ZealLLC.com


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
  Forum: Macro Factors

denpal
Posted on: Jun 25 2012, 03:53 PM


Group: Member
Posts: 1,166

They have got to 1.835 million ounces, well done.

The share price is bad at 18.5c, reflecting the general market.

I still like PXG, and hold the OA's which thankfully are 2014 expiry.


25 JUNE 2012
CASTLE HILL GOLD PROJECT GROWS PHOENIX’S RESOURCES TO
OVER 1.8 MILLION OUNCES OF GOLD
Highlights
 CASTLE HILL RESOURCE GROWS BEYOND 650,000 OZ
 PHOENIX’S RESOURCES INCREASED 208% SINCE 2010, NOW EXCEED 1.83M OZ
 OVER 90% OF CURRENT RESOURCE IS SHALLOW, WITHIN 80 METRES OF SURFACE
 SELF FUNDED PRE-FEASIBILITY STUDIES COMMENCED CASTLE HILL AND BROADS DAM
 EXCELLENT METALLURGY AND CLOSE TO MAJOR INFRASTRUCTURE
 FURTHER RESOURCE GROWTH EXPECTED FROM 50,000 METRE DRILLING PROGRAMME
AND DETAILED DATA REVIEW OF NEW PROJECTS
Overview
Phoenix Gold Limited (ASX: PXG, “Phoenix”) is pleased to advise that its Total Mineral Resources
have increased to 32.4Mt at 1.8g/t Au for 1.835 million ounces (Table 1). This represents an
increase of 208% since initial project acquisition in 2010.

The recent upgrade includes increases to resources at Castle Hill from drilling completed in the
December and March Quarters and the recently announced increase at the Broads Dam gold
project.
Castle Hill
The resource at the flagship Castle Hill project, on the Kunanalling shear zone, has grown from an
initial 253,000 oz to 655,000 oz, a near threefold increase in less than 2 years. The current
resource envelope is from surface to 80 metres depth with little to no drilling beneath. Strike
length is now over 7 kilometres and remains open in all directions.
Lateral extension drilling has been highly successful in linking structures to form a large
continuous mineralised system with broad mineralisation in the tonalite supplemented with high
grade vein sets in the adjoining basalt. Multiple veining can be found in a number of different
rock types. The Company says deeper drilling currently underway is focussed on growing the
resource below the current envelope at 80 metres from surface.
Importantly, 376,000 oz is currently in the Measured and Indicated resource category and a pre-
feasibility study has commenced on Castle Hill Stage 1 (Figure 1) to assess optimal mining and
processing routes and indicative capital and operating costs for mine development.
Further drilling results are expected in the September Quarter.

“Castle Hill is fast becoming the latest large scale gold discovery in Western Australia’s Gold fields
and we have barely scratched the surface. The recent Kintore deal will give us near complete
ownership over this large gold system and is clearly demonstrating its multimillion ounce
potential,” Managing Director Jon Price said.
“Our focus is now squarely on growing this resource below the current 80 metres and completing
mine development studies to determine optimal mining and processing routes including the
construction of our own processing plant at Castle Hill,” Mr Price said.
  Forum: By Share Code

denpal
Posted on: Jun 15 2012, 05:51 PM


Group: Member
Posts: 1,166

flower you're on the money here. I have held NST a while and am very happy with that.
  Forum: By Share Code

denpal
Posted on: Jun 15 2012, 11:48 AM


Group: Member
Posts: 1,166


Silver Lake Resources enhances economics for Murchison with Hollandaire maiden copper Resource
Friday, June 15, 2012 by Angela Kean Les Davis, managing director of Silver Lake Resources, told Proactive Investors today the Hollandaire deposit could enhance the overall economics of the Murchison Project. “Simplistically for every $30 million worth of margin that the copper can bring to the Murchison Gold Project, it reduces your total cash cost up there by $300 an ounce.” Silver Lake Resources (ASX: SLR) is adding value to its Murchison Gold Project through the delivery of a high grade maiden copper-gold resource at its Hollandaire deposit, with the potential for the copper to also be processed through the existing mill just 4 kilometres away.

The company has defined an initial Inferred JORC Resource of 1.1 million tonnes at 2.4% copper, 0.5 grams per tonne (g/t) gold and 13g/t silver, with around 78% of the copper Resource averaging 4%.

Importantly, this is just the start with a further Resource upgrade expected once all assays from the 50-hole drilling program have been received.

Les Davis, managing director, told Proactive Investors today the Hollandaire deposit could generate modest capital for the company with the addition of a copper grinding circuit and flotation devices at the mill to process the copper in addition to the gold.

“It really enhances the overall economics of the Murchison Projects, particularly on gold, because simplistically for every $30 million worth of margin that the copper can bring to the Murchison Gold Project, it reduces your total cash cost up there by $300 an ounce. That’s pretty significant.”

Further economic upside lies in the discovery of a gold blanket of mineralisation in the upper 50 metres of the deposit, above the copper resource.

“When you go to open pit this copper resource you’re going to have basically a cash positive pre-strip because of the gold content in the upper sort of 50 metres of the area,” Davis said.

So far, Silver Lake looks to have a copper resource located 50 vertical metres from the surface with an average thickness of 10 metres and some 50 metre thick zones.

Demonstrating the broad, high grade intersections being delivered, previous assays include 50 metres at 1.4% copper from 50 metres; 10 metres at 6.1% copper, 1.2g/t gold and 13.6g/t silver from 86 metres, 5 metres at 1.6% copper from 200 metres and 9 metres at 1% copper from 54 metres.

The mineralisation remains open to the southwest and at depth.

The Hollandaire deposit could begin production as an open pit gold mine, followed by an open pit copper mine with gold and silver credits followed by an underground operation.


Extensive exploration

Silver Lake has begun a $20 million exploration program within the Eelya Complex, which hosts the Hollandaire deposit.

At Hollandaire, the company has so far completed 29 reverse circulation and 21 diamond holes, with 44 extensional holes drilled outside of the current resource, since drilling recommenced at the deposit in late March.

This extensional drilling program has substantially increased the mineralised area to 500 metres by 300 metres with varying thickness from 4 to 50 metres.


Major gold player

Silver Lake is developing into a major Western Australian gold player with three large gold projects – the 1.7 million ounce Mount Monger project, the 1.9 million ounce Murchison project and the 1 million ounce Great Southern project.

The company's goal is to define a major gold Resource of 10 million ounces over time at the three projects.


Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.

  Forum: By Share Code

denpal
Posted on: May 14 2012, 04:52 PM


Group: Member
Posts: 1,166

Apparently an appllcation for the mining licence has been made with $90k deposit. This means the Martu have signed off on the heritage survey. Let's see where the sp gets to. There was heavy buying up to this morning's TH.
  Forum: By Share Code

denpal
Posted on: Mar 31 2012, 09:43 AM


Group: Member
Posts: 1,166

Looking good finally, and due for a decent bounce. I bought a bunch more NMGOA at the lows this week.
  Forum: By Share Code

denpal
Posted on: Mar 24 2012, 01:27 PM


Group: Member
Posts: 1,166



Gold-Stock Panic Levels
Adam Hamilton
Archives
Mar 23, 2012


The beleaguered gold stocks have spiraled lower this month, heaping misery on poor fools like me naive enough to invest in them. Dwindling interest and capital has left this realm a desolate wasteland, I've rarely seen anything so deeply out of favor. In fact, relative to gold the gold stocks are now back down to levels only seen briefly during 2008's epic stock panic! Are they dying, gasping their last breath?

This question has enormous implications for speculators and investors. If gold stocks are doomed to never rally again, we ought to cut our losses and move on. But if this embattled sector is likely to return to favor in the near future, then its current extreme malaise is an incredible contrarian buying opportunity. The more any sector is loathed and forgotten, the more potential its stock prices have for massive rallies.

As I ponder this vexing puzzle, my mind keeps returning to how the stock markets in general work. Any stock is ultimately a fractional share of its underlying company's future profits stream. If those profits are high or rising relative to the stock price, investors bid up the stock to reflect its underlying economic reality. Over the long term, the markets eventually price all stocks to fairly represent their profits.

And despite the many challenges of mining gold, profits are rising dramatically. My business partner Scott Wright recently updated his fascinating research thread proving this. By painstakingly analyzing detailed data from individual major gold miners collectively representing nearly half of global mined production, it is apparent gold-mining profits are amazing. Last year the average gross margin of this elite group ran $915 per ounce, or an astounding 58%! Gold miners are making money hand over fist.

As long as such fat profit streams continue, the immutable law of long-term stock pricing guarantees gold stocks will eventually be bid up to reflect their earnings. The only way today's brutally-cheap prices make sense fundamentally is if gold is on the verge of a serious collapse. The price of gold is everything for the gold-mining business, strictly controlling the profitability limits of mining this scarce metal.

Gold is so dominantly central to this sector that its stock valuations can best be expressed relative to gold. Since gold prices directly control profitability, and profitability drives long-term stock prices, gold naturally drives gold-stock price levels. My favorite way to look at this relationship is via the HUI/Gold Ratio. It simply divides the daily close in the flagship HUI gold-stock index by the daily close in gold itself.

And as you can see in this chart, the HGR looks positively apocalyptic today. This critical ratio is rendered in blue, and slaved to the right axis. Underneath for comparison purposes is the raw HUI in red. With the HUI in its numerator, a rising HGR indicates the gold stocks are outperforming gold. Conversely a falling HGR, the norm for the past year, means gold is outperforming gold stocks.


Let's buck convention and cut to the chase at the lower right. This week the HGR slumped to levels only seen two other times in this secular gold bull. The first was way back in early 2002 when the gold-stock bull was just getting underway so participation was light. And the second was briefly during late 2008's once-in-a-century stock panic. Quite literally, relative to gold the gold stocks are trading at stock-panic price levels today!

Is this rational? Do these dirt-cheap prices fairly reflect the current and future profits streams the gold miners are spinning off? History argues no way. The entire stock-panic event essentially encompassed the second half of 2008, with normal market conditions existing before. Over the 5 years between mid-2003 and mid-2008, the HGR averaged 0.511x! The HUI tended to trade at about half the price of gold.

Now the longer any trend in the stock markets persists, the more likely it is righteous and justified by core underlying fundamentals. A 5-day or 5-week or even 5-month trend is probably dominated by psychology. But a massive 5-year one transcending many greed-fear sentiment cycles certainly isn't. There has to be some underlying fundamental reason, or it never would have lasted so long.

Thus I believe this 5-year pre-panic average HGR of 0.511x established the baseline relationship of gold stocks to gold in normal market conditions. Ever since the depths of panic despair in late 2008, I've believed and written that this HGR ought to eventually mean revert to pre-panic norms. And though it hasn't yet, that certainly doesn't mean it won't. We and our subscribers have still made a lot of money in gold stocks since the panic by betting on this HGR mean-reversion thesis.

And indeed as expected, the HGR initially rocketed up fast out of its crazy-oversold panic lows. But unfortunately it stalled out about a year later heading into autumn 2009. Though it consolidated not far from those recovery highs for well over a year after that, in early 2011 the HGR started to slump. And this troubling trend has continued more or less unabated to this day, thrashing the poor gold stocks.

While everyone is understandably cursing the day they first heard about gold stocks now, there are some critical things on this chart to consider. First, note that the last time the HGR fell to today's levels during the stock panic they weren't sustainable for long. With gold stocks so radically and irrationally beaten down relative to gold, they were due for a massive rally for fundamental reasons. And indeed one soon launched.

If gold stocks couldn't sustain such panic levels relative to gold even right after the most extreme fear event of our lifetimes, why should they today when no one is particularly frightened about anything? When stocks are battered to ludicrous fundamental levels relative to their profits streams, contrarian value investors soon pour in capital which bids up their prices and rectifies the pricing anomaly.

Second, note that throughout this entire secular gold and gold-stock bull, gold stocks' favor in the eyes of investors and speculators naturally flowed and ebbed. A year or so where traders love gold stocks and bid them up dramatically relative to gold is followed by a year or so of capital exiting. These sentiment cycles driven by popular greed and fear happened before the panic and are still happening after it.

So regardless of how high gold stocks ought to be fundamentally relative to gold, after an entire year of underperformance they are now due for a major outperformance cycle. Some catalyst is almost certain to soon emerge that will entice capital back into the forgotten gold stocks. This will drive them to rally much faster than gold, probably for a year or so if the duration of past sentiment cycles continues to hold true.

Finally, how high are gold stocks likely to go relative to gold as the wildly-pessimistic sentiment today gradually yields to optimistic sentiment as they rally? After 3 rough post-panic years, you may think that expecting a return to pre-panic HGR norms around 0.511x is crazy. No problem. Even the post-panic average HGR (from 2009 on) is now running at 0.364x, which we can use as a conservative baseline.

As of the middle of this week, the HGR closed at a hyper-discouraging 0.288x. To merely return to its post-panic average of 0.364x, no big stretch by any means, we would need to see a 27% HUI rally. And after being so radically undervalued at panic levels, the odds are great that this sentiment-driven mean reversion will overshoot. The more extreme the sentiment pendulum is dragged in one direction (fear now), the farther it subsequently swings back in the opposite direction (greed) to fully rebalance sentiment.

So how about 0.41x, which is the HGR's upper resistance in this depressed post-panic era. This ratio has spent plenty of time above 0.41x in 2009, 2010, and 2011, so it isn't some pie-in-the-sky goal. To just regain this weak post-panic standard for greed and enthusiasm, the HUI would have to surge 43% higher from here. And realize that all these targets assume gold merely stays flat, which isn't very likely given the rampant fiat-currency inflation around the globe.

Thus even if you think I'm a total nutcase for still expecting to see gold stocks regain pre-panic norms sooner or later, the incredible opportunity in today's HGR mean-reversion play doesn't require such a belief. Even purely in depressed post-panic terms, gold stocks are due for a major outperformance relative to the metal they mine which will carry their stock prices a lot higher from here.

And zooming in to this very post-panic period offers more detailed insights into what is going on in the HGR. This next chart considers 2009 on, the "New Normal" as elite bond investor Mohamed El-Erian likes to call it. In addition to the first chart's data, this one adds a third series that shows where the HUI would hypothetically be trading if the HGR mean reverted to its pre-panic secular average of 0.511x.


This post-panic perspective really drives home just how incredibly cheap the gold stocks have become relative to gold. The recent apocalyptic HGR levels are even below early 2009's secondary-panic-low ones. The state of gold stocks' prices relative to their fundamental driver today is truly the worst it's been since the stock panic. And that event offered a once-in-a-lifetime ultra-cheap gold-stock buying op!

Prior to spring 2011, the HGR was indeed regaining ground relative to gold. After a fast initial recovery that made fortunes for brave contrarians like us willing to buy during and after the panic when everyone else was terrified, the HGR continued trending higher. Its rising uptrend is rendered above. At a couple HUI major interim highs in this timeframe, the actual HUI peaked at 81% to 82% of where it would have hypothetically been trading at the pre-panic average HGR of 0.511x.

But last April, the strong support of this post-panic uptrend started to crumble. It wasn't that the gold stocks were falling initially, but gold was shooting up and the HUI wasn't following. While the metal rocketed a staggering 8.7% higher that month (closing at new all-time record highs on half its trading days), the HUI merely crept 3.4% higher. Gold-stock traders were understandably skeptical of this metal's exuberant surge.

And indeed the reckoning soon started in May, when gold plunged 5.7% in its initial 4 trading days. Despite not rallying earlier in line with gold, the gold stocks still took a major blow from this worried gold psychology. The HUI plunged 10.0% over this short span! This relative outperformance of gold (falling less in a correction) drove the HGR down to 0.36x or so. This HGR-support breakdown, especially in spring, wreaked tremendous sentiment damage.

One problem was gold and the gold stocks were heading into the dreaded summer doldrums. June, July, and August, when many traders are enjoying long vacations and countless others lose focus on the markets, are usually a wasteland for the precious metals and their producers. So there was little incentive to buy the cheap gold stocks heading into last summer, thus the HGR continued to drift lower.

And then gold did something it has never done before in this entire secular bull, it defied all precedent to rocket higher in July and early August. Obama's record profligacy and resulting mind-bogglingly-huge deficits were on the verge of sparking the first downgrade of US Treasuries in our nation's history. No one knew how the markets would react to such a catastrophe, so capital flooded into gold on gigantic safe-haven demand. But the gold stocks didn't really participate, the uncertainty was too intense.

Thus the HGR's brutal collapse continued into August. Incredibly the day gold peaked at super-overbought levels that month (which I warned about at the time), the HGR was merely running at 0.319x. This was not much higher than what was seen in early 2009 at the secondary stock-panic lows in a time of extreme general-stock-market fear! Weathering this brutal May-to-August period sapped the strength and will of the remaining gold-stock investors.

So as capital fled this sector, instead of peaking at 82% of hypothetical HUI levels at its pre-panic average HGR this flagship gold-stock index was merely hitting 66% to 67%. Gold-stock investors and speculators had lost faith in this sector, too demoralized to risk deploying new capital. All these events together were really like the perfect storm for gold-stock psychology, collectively spawning a slow spiral lower to today's panic levels.

But once again, don't lose the forest for the trees. Yes gold stocks stink these days, yes they have performed poorly for an entire year. This is inarguable. But such episodes are not uncommon in the stock markets, which are moved around by perpetual cycles of greed and fear. As sectors get too popular greed grows extreme, sucking in all near-term buyers which leaves only sellers, so a correction soon erupts.

But eventually the resulting fear gets too extreme, convincing everyone susceptible to selling to exit which leaves only buyers. And then the sector gradually returns to favor as capital migrates back in to chase the resulting bargains. These sentiment cycles, trader psychology, are what account for the lion's share of all short-term stock-market action. And boy, are the gold stocks ever overdue for returning to favor again!

In addition to needing to flow again after such a serious ebbing, gold stocks' prices ultimately need to reflect the profit streams their underlying companies can spin off. Over the long term, the stock markets are a weighing machine. Cheap stocks generating big profits attract contrarian value investors, and their early buying ignites the rising stock prices that attract in other traders. This process feeds on itself.

The only potential monkey wrench in these inexorable market processes is a big plunge in the gold price, which is very unlikely today. This entire secular gold bull has been largely driven by massive paper-money inflation all over the world. The major money supplies are being grown by central banks at 7%-to-8% rates annually. Meanwhile the global mined gold supply only increases by about 1% a year. So with far more paper money available to chase relatively less gold, its secular bull remains far from over.

And if gold doesn't plunge in the coming months, the HUI's mean reversion back up to reasonable levels relative to gold is probably inevitable. If you're skeptical, consider the example of silver. The Silver/Gold Ratio plunged in the panic just like the HGR, and people thought silver would never regain those levels relative to gold. But I took the contrarian side and argued the opposite. And indeed silver eventually regained favor and not only attained its pre-panic SGR average, but greatly exceeded it in early 2011!

Mean reversions are one of the most powerful forces in the financial markets. And gold stocks are in the catbird's seat with two huge ones in their favor. Not only do gold stocks need to be much higher to reflect today's prevailing gold prices fundamentally, but this sector's psychology is due for a radical shift as well. Thus just like back during the stock panic, today's panic-priced gold-stock levels aren't sustainable.

Though our gold-stock positions have taken big hits in the past 5 months as well, we haven't given up on this sector. We continue to actively research it, looking for the most fundamentally-promising companies to buy to ride the mean reversion. And naturally the elite juniors continue to capture our attention. These small companies' gains should really leverage the HUI's as gold stocks inevitably return to favor.

We just finished a major 3-month deep-research project looking into the universe of junior gold stocks trading in the US and Canada. Through hundreds of hours of painstaking research, we gradually whittled over 600 juniors down to our dozen fundamental favorites. We profiled each in a fascinating new 29-page report hot off the presses this week. It is a rare opportunity to have one of our popular reports release right near panic-grade lows. Buy yours today, a steal at just $95 ($75 for subscribers).

Of course we also publish acclaimed weekly and monthly subscription newsletters loved by speculators and investors all over the world. In them I draw on our vast experience, knowledge, wisdom, and ongoing research to explain what the markets are doing, why, where they are likely heading, and how to trade them with specific stock trades as opportunities arise. We have plenty of great gold stocks on our books, which you can buy today much cheaper than our entry prices. Subscribe today and buy low!

The bottom line is gold stocks are so deeply oversold and out of favor that they are trading at panic levels relative to gold. Such an anomaly wasn't sustainable even with the panic's extreme fear, and it certainly isn't sustainable today. All stocks are ultimately priced to reflect their underlying profit fundamentals, and gold stocks are no exception to this ironclad rule. And their sentiment can't stay this depressed forever.

So despite all the gold-stock hate out there, this beaten-down sector is overdue for a major rally. And even if you don't believe pre-panic levels relative to gold are attainable again, merely mean reverting by depressed post-panic standards offers an enormous buying opportunity. Valuations and sentiment ebb and flow everywhere in the stock markets, and gold stocks are not immune from these powerful forces.

###

Mar 23, 2012
Adam Hamilton, CPA



So how can you profit from this information? We publish an acclaimed monthly newsletter, Zeal Intelligence, that details exactly what we are doing in terms of actual stock and options trading based on all the lessons we have learned in our market research.

Please consider joining us each month for tactical trading details and more in our premium Zeal Intelligence service at www.zealllc.com/subscribe.htm.

Questions for Adam? I would be more than happy to address them through my private consulting business. Please visit http://www.zealllc.com/adam.htm for more information.


Thoughts, comments, or flames? Fire away at zelotes@zealllc.com. Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally. I will read all messages though and really appreciate your feedback!

Copyright ©2000-2012 Zeal Research All Rights Reserved.


321gold Ltd



  Forum: Macro Factors

denpal
Posted on: Feb 3 2012, 06:58 PM


Group: Member
Posts: 1,166



New EW Silver Discovery
Alf Field
Posted Feb 2, 2012


I have received numerous emails asking about silver. This article was prompted by a question enquiring what the silver price might be if my gold forecast of $4,500 proved to be correct. The question caused me to take a closer look at silver.

The reason why I have written very little about silver in the past was because the beautiful Elliott Wave (EW) symmetry and predictable relationships visible in gold were not to be found in silver. This article reveals a new EW discovery that proves that EW is alive and well and living in silver.

I first wrote about silver in December 2003 in an article titled “US Dollar Implosion – Part II”. The brief piece on silver was tacked onto the end of that article. In view of its brevity, the 2003 silver piece is reproduced in full below:

SILVER

(Click on images to enlarge)


“In past crises, the wealthy protected themselves by purchasing gold and gold related assets. Ordinary people, by far the greater number, could rarely afford to buy gold. Being far cheaper, they previously had to buy silver. This metal became the poor man's choice as an asset to protect their savings. Silver has so far lagged gold in the early stages of this bull market, but that situation seems about to change.”

“Throughout recorded history the average relationship between silver and gold has been 15oz silver to 1oz gold. The ratio at present is a far higher 75:1 ($400/$5.30). This is massively out of line. If gold were to double to $800 per oz, it would not be unreasonable to expect the silver/gold ratio to decline sharply, possibly as low as 40:1. With gold at $800, this would position silver at $20.

Thus a 100% increase in the price of gold could possibly be accompanied by a simultaneous 400% increase (perhaps more) in the price of silver. This offers significant opportunities both in silver bullion and silver mining shares.

The above graph of the price of silver has been borrowed from an excellent recent article by Dan Norcini entitled "A Technical Look at Silver - Update". What is quite clear from the graph is that silver's 22-year bear market down trend has come to an end. As Dan Norcini says, a new bull market in silver has been born. It is difficult to argue against this contention and I have no intention of doing so. A silver price above $6.80 would complete a fabulous head-and-shoulders base formation. With this as a foundation, it would be possible to project a very large rise in the price of silver for the future.” – end of the December 2003 quotation.

Silver did reach $20.68 in March 2008 at the same time that gold peaked at $1003. The silver to gold ratio was thus 48.5 in March 2008. The lowest this ratio has reached SINCE 2001 is about 32, achieved at the end of April 2011 when gold was around $1570 and silver peaked in the $49 area. At that point gold had experienced a 6-fold increase from its bull market starting point of $255 while the silver price rose 12-fold from its starting point of $4 in November 2001.

The quick answer to the question of what the silver price will be when gold gets to $4,500 is to pick your favorite silver/gold ratio and divide it into $4500. The current ratio incidentally is about 51. If you choose the lowest ratio achieved since 2001 of 32 that would produce a silver price of around $140 ($4500 divided by 32).

This is not a satisfactory answer, so I decided to approach the Elliott Wave analysis of silver from a different angle. Instead of working upwards using the analysis of the minor waves, which was the technique used in the gold calculations, what if we worked backwards in silver starting with the larger waves?

Gold and silver tend to move in tandem, not in an exact synchronization, but enough to suggest that the Major waves of both metals should coincide from a time perspective. We know that in gold the Major ONE wave peaked in March 2008 at $1003 and that Major TWO declined to $680 in November 2008.

Silver also had a peak in March 2008 at $20.68 and declined to an important low of $8.77 in November 2008. If we assumed that the peak at $20.68 in March 2008 was the end of Major ONE and the decline to $8.77 the end of Major TWO, how would the various percentages work out? When I did these calculations I was astonished at the relationships and wave counts that emerged.

The chart below is the monthly spot silver price shown in log scale so that the percentage changes are visible. The bull market started in November 2001 at a price of $4.02. From that point to the suggested peak of Major ONE at $20.68 there are five clear waves visible, marked 1-2-3-4-5. The prices at the various turning points are also displayed.


The analysis of the suggested Major ONE wave is set out in the body of the chart. The typical impulse wave relationships are immediately apparent. Both corrective waves 2 and 4 are similar (-33.7% and -35.9%). Whenever two corrective waves are similar it is a signal that they are part of the same larger wave structure. On its own, this fact would confirm that the 5 wave move from $4.02 to $20.68 was a complete wave of larger degree.

There is further corroborating evidence. Waves 1 and 5 are similar at +106% and +115%, a usual EW feature. Wave 3 should be the longest wave, and it is at +171%. In addition, if one multiplies the gain in wave 1 of +106% by 1.618 it produces 171.5%, exactly the gain in wave 3. These relationships are evidence that the rise from $4.02 to $20.68 is a completed impulse wave and that we can call it Major ONE.

Having completed this 5 wave up move, the next correction in Major TWO would be expected to be one degree larger than the two corrections of 33.7% and 35.9% in Major ONE. As shown on the chart, Major TWO declined from $20.68 to $8.77, a loss of -57.6%. The two corrections of 33.7% and 35.9% are close to the Fibonacci 34. The next higher number in the sequence is 55, close to the actual decline of 57.6% in major TWO. Incidentally, if we take the 35.9% decline and multiply it by 1.618, it gives a figure of 58%, very close to the actual decline of 57.6%.

These relationships suggest that silver has completed the same shaped bull market as gold has and that it is at the same stage in its development. Thus silver has probably also completed the first intermediate up wave of Major THREE, in this case from $8.77 to $49.52, a gain of +$40.75 or +464% and has also completed intermediate wave 2 of Major THREE, being the decline from $49.52 to $26.39 or -47%.

How does this decline of -47% measure up in terms of EW relationships? As with gold, where the corrections in Major THREE were shown to be larger than the corrections in Major ONE, the same applies to silver. The corrections in Major ONE shown in the chart above were close to -34%. If we multiply 34% by another Fibonacci relationship of 1.382 we get 47%!

This is mind-blowing stuff for an analyst who did not believe that EW applied to silver!

We can now attempt to make some price forecasts. Silver, as with gold, is starting intermediate wave 3 of Major THREE, which should be the longest and strongest wave in the bull market. It should certainly be longer than intermediate wave 1 which was the gain from $8.77 to $49.52, or +464%, as shown above.

Thus the gain in wave 3 of Major THREE should be larger than +464%. It should be a gain of at least 500%. Starting from the $26.39 low, a gain of 500% would produce a target price of $158.34 for silver. That is the number which equates with the $4500 price forecast for gold and produces a silver to gold ratio of 28.4 ($4500 divided by 158.34).

The gain in gold was forecast to be 200% for this move while the forecast rise in the silver price is 500%. Silver is again predicted to perform better than gold based on these EW calculations.

A word of caution is appropriate at this stage. All EW studies are based on probabilities. While the wave counts may provide a high degree of confidence in the forecasts, one cannot be 100% certain of any forecast. It is necessary to have a point at which it is obvious that the forecasts are wrong. In the case of this silver study, the line in the sand is at $26.00. If the silver price drops below $26.00 the odds are that the above calculations will not work out.

A further word of caution: silver is not for the faint hearted. Silver is considerably more volatile than gold and the corrections are much larger. Silver corrections can and do happen quickly. They are emotionally gut-wrenching and it is easy to get shaken out of one’s position near the bottom of a large correction.

###

Feb 1, 2012
Alf Field


Comments may be directed to the author at: ajfield@attglobal.net

Disclosure and Disclaimer Statement: The author has personal investments in gold and silver bullion, as well as in gold, silver, uranium and base metal mining shares. The author’s objective in writing this article is to interest potential investors in this subject to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell any stock, currency or commodity. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions. The author has neither been paid nor received any other inducement to write this article.

321gold Ltd



  Forum: Macro Factors

denpal
Posted on: Feb 2 2012, 04:52 AM


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Posts: 1,166

http://kingworldnews.com/kingworldnews/KWN...ok_to_Gold.html
  Forum: Macro Factors

denpal
Posted on: Feb 2 2012, 04:52 AM


Group: Member
Posts: 1,166

http://kingworldnews.com/kingworldnews/KWN...ok_to_Gold.html
  Forum: Macro Factors

denpal
Posted on: Jan 28 2012, 06:49 AM


Group: Member
Posts: 1,166

'Iran oil war will bring EU to knees'Fri Jan 27, 2012 2:4PM GMTIran's lawmakers are considering a plan to completely stop oil exports to EU member states.An Iranian lawmaker says entering into oil war with Iran will bring European Union member states to their knees as Tehran will prevent the export of even one drop of oil.

“The Islamic Republic of Iran has the world's third biggest oil reserves and cannot be eliminated from global energy equations,” Seyyed Emad Hosseini, spokesman for the Majlis (parliament) Energy Commission, said on Friday.

The lawmaker said playing with the world's third biggest oil power will certainly affect international oil and gas transactions and Europe will not be immune from oil price fluctuations.

He stated that the Iranian Majlis is considering a plan to completely stop oil exports to EU members which will initially paralyze the economies of Italy, Spain and Greece.

“Iran is powerful [as a country] and oil sanctions imposed by European countries will only harm the European Union because Iran can easily prove its oil supremacy in the Middle East region,” he said.

Hosseini added that Europe will definitely lose its oil war with Iran because European countries are grappling with numerous domestic challenges and disruption of Iran oil flow will lead to the escalation of domestic pressure and crisis in EU member states.

During their latest meeting in Brussels on Monday, January 23, EU foreign ministers reached an agreement to ban oil imports from Iran, freeze the country's central bank's assets within EU, and ban sales of diamonds, gold and other precious metals to Iran.

EU foreign policy chief, Catherine Ashton, claimed that the new sanctions aim to bring Iran back to negotiations with P5+1 -- US, UK, France, Russia, China and Germany -- over the country's peaceful nuclear program.

The United States, Israel and their European allies accuse Tehran of pursuing military objectives in its nuclear program and have used this pretext to impose four rounds of sanctions and a series of unilateral sanctions against the Islamic Republic.

Iran has refuted the allegations, arguing that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, Tehran has a right to use nuclear technology for peaceful use.

SS/HGH
  Forum: Macro Factors

denpal
Posted on: Jan 27 2012, 04:49 PM


Group: Member
Posts: 1,166

This:

Eric Sprott, Chairman of Sprott Asset Management, had this to say about Chinese purchases of gold and the recent announcement that Iranian oil will be acquired using gold: “There are two things I think are important about that. One, it’s a statement that gold is a currency. That is by far the most important thing. I think the other thing is, if it actually transpires that way, what does it mean for the demand for gold? Because now it’s considered currency, it’s, in essence, your working capital. You have to have it. It’s like a store, you have to have money in the till.”&lt;/frame&gt;
“So it’s obviously going to increase the demand for gold and we have seen some data that China has been a rather large buyer of gold. People will consider it a currency and it has to necessitate more buying. You know, Eric, I think one of the really interesting things that happened was the imports of gold into China, from Hong Kong, which always were less than 20 tons a month, all of the sudden, beginning about 5 months ago, went 20 (tons), 30, 40, 80 and in November 102 tons. 102 tons is a staggering number.


The world mines, excluding China, less than 200 tons a month. China cannot continue to buy 102 tons and not have the price escalate dramatically.”
  Forum: Macro Factors

denpal
Posted on: Jan 27 2012, 02:45 PM


Group: Member
Posts: 1,166

This is the transcript from my recent post:

Today billionaire Eric Sprott told King World News the Chinese cannot continue to buy gold as aggressively as they have been without there being a dramatic increase in the price. Eric Sprott, Chairman of Sprott Asset Management, had this to say about Chinese purchases of gold and the recent announcement that Iranian oil will be acquired using gold: “There are two things I think are important about that. One, it’s a statement that gold is a currency. That is by far the most important thing. I think the other thing is, if it actually transpires that way, what does it mean for the demand for gold? Because now it’s considered currency, it’s, in essence, your working capital. You have to have it. It’s like a store, you have to have money in the till.”&lt;/frame&gt;
“So it’s obviously going to increase the demand for gold and we have seen some data that China has been a rather large buyer of gold. People will consider it a currency and it has to necessitate more buying. You know, Eric, I think one of the really interesting things that happened was the imports of gold into China, from Hong Kong, which always were less than 20 tons a month, all of the sudden, beginning about 5 months ago, went 20 (tons), 30, 40, 80 and in November 102 tons. 102 tons is a staggering number.


The world mines, excluding China, less than 200 tons a month. China cannot continue to buy 102 tons and not have the price escalate dramatically.”


Sprott had this to say about today’s Fed announcement that it will leave rates at zero until late 2014: “Obviously it’s dramatic what has happened. It would appear there will be no restraint whatsoever on the part of the Fed. Assuming this announcement causes gold to break its declining wedge, which I believe it has, I expect some serious fireworks to the upside.”


When asked about his latest PSLV offering, Sprott stated, “We closed on $349 million. The underwriters did exercise the over-allotment in rather short order. We have committed to purchase it (silver). I think the deal was very successful. Obviously the premium has come down here (on PSLV), but it’s typically traded at a 16% premium and right now it’s at 8%. It takes a little while to digest the stock that was issued, but I’m hopeful we will get back to where we were.


There’s been a big move since we did the issue....


“We’ve all heard the reports that it’s pretty tight (in terms of supply). Every data point I see suggests people and institutions want to buy silver in the same dollar amount as they are buying gold.
We see the US Mint has sold 5.6 million ounces so far in January and I’m sure they will have a record high month. We’re selling as many dollars of silver coins as we are gold coins by the mint, which means we are selling 50 times more physical volume of silver. The availability (of silver to gold) is 7 to 1 in physical, but people are buying it at like 50 to 1. So something has to give there.


I would love to share with your viewers I was speaking with a company, this is a gold company, who is trying to organize a dividend payment being made in gold or silver and/or cash. Apparently 60% of the people (asked) were opting for the precious metal and half of those agreed to take it in silver. Again, another confirmation of silver buying. Our last tranche (in PSLV) we raised $349 million. Our last tranche in gold we raised $312 million. Again, one to one buying, so I’m pretty upbeat about where silver should be going.


As you know I always thought we would go back to the 16 to 1 ratio to gold, which means based on today’s prices silver should be $100. I really do believe silver was going to blow through $50 back in April/May when, all of the sudden, margin rate increases came through and one billion ounces of paper silver was sold that day.


I’m of the feeling that it will go back through $50 this year. Once it goes through $50 I think it could take on a whole new life and really energize itself. Longer-term my target is 16 to 1 to gold and I’m very upbeat on gold. I’m sure gold is going north of $2,000 this year, so obviously silver can get up to $150 in due course.”


When asked if there has been traction with regards to his call to silver companies to hold physical silver instead of cash, Sprott replied, “There has been traction. One company, Endeavor Silver, only sold 1/3 of their output in the December quarter because they thought the price was being depressed. They decided to wait and sell it at a different time.


We did have one silver producer actually participate in the PSLV (offering), which was very encouraging to me. I think we’re making a little bit of momentum on that front. Of course, I’ve given lots of chats to silver producers about what I think has gone on in the silver market. I think we’re making some progress.”


  Forum: Macro Factors

denpal
Posted on: Jan 26 2012, 03:05 PM


Group: Member
Posts: 1,166

http://kingworldnews.com/kingworldnews/KWN...Gold_Price.html
  Forum: Macro Factors

denpal
Posted on: Jan 25 2012, 06:57 PM


Group: Member
Posts: 1,166

Luckily I sold out of this dog at 20 or 25c ages ago! The rare earths had me interested for a while........but Bronzewing brought grief to VRE as well previously.
  Forum: By Share Code

denpal
Posted on: Jan 22 2012, 03:41 PM


Group: Member
Posts: 1,166

http://www.silverseek.com/article/silver-m...nuary-16th-2012

My 1,000th post!!! I think silver will go on to have big increases in value over the next few years and am positioned accordingly.

My only ASX silver play is CCU, and my TSX one is FR.
  Forum: Macro Factors

denpal
Posted on: Jan 21 2012, 07:08 AM


Group: Member
Posts: 1,166



Gold-Stock Upleg Cycles
Adam Hamilton
Archives
Jan 20, 2012


Despite gold's powerful secular bull over the past decade, gold stocks remain vexing to investors and speculators. Though this metal's miners have yielded truly colossal bull-to-date gains, they failed to leverage the record-high gold prices seen in much of 2011. So naturally traders aren't very enthusiastic about this sector at the moment. But they sure would be if they understood the gold-stock upleg cycles.

No bull market, no matter how powerful, fundamentally strong, or long-lived, rises in a nice linear fashion. They all flow and ebb, surging forward two steps in major uplegs before retreating back one step in major corrections. Visualize a sine wave oscillating within a rising trend. This seemingly-capricious behavior is actually very beneficial to bulls' health and longevity, it keeps sentiment (greed and fear) balanced.

And unsurprisingly gold stocks, with their extraordinary volatility, are no exception to this ironclad bull-market rule. Gold stocks' amazing bull market has advanced in fits and starts. This technical price action is driven purely by sentiment, the same dynamic that affects every popular market. And since many gold-stock traders love gold's timeless qualities with a nearly-religious fervor, emotions run higher in gold stocks than most other sectors.

Strong feelings really amplify the impact of sentiment. Gold stocks' dazzling uplegs from time to time create huge gains that ignite unsustainable greed and euphoria. But that sucks in all near-term buyers too soon, leaving only sellers. So demoralizing corrections soon follow, dragging the great sentiment pendulum to swing all the way back to the opposite extreme of excessive fear and anxiety. This dynamic creates the bull-market upleg cycles.

Once you understand these gold-stock cycles, much of the anxiety about gold stocks underperforming gold vanishes. They are easiest to see in the flagship gold-stock benchmark, the NYSE Arca Gold BUGS Index. Thanks to its unwieldy name, this Basket of Unhedged Gold Stocks is better known by its symbol HUI (pronounced "huey"). Its component list is comprised of 16 of the largest and most-widely-held gold-mining companies in the world, so it's a great proxy for major gold stocks' performance.

While gold's own secular bull was born in April 2001, the HUI's started a bit earlier in November 2000. If you weren't interested in gold back then, you can't even begin to imagine the sheer degree of popular antipathy for gold and its miners. Only the bravest and hardest-core contrarians dared to tread in this left-for-dead wasteland in the early 2000s. But the HUI's staggering performance since is one heck of an argument for the wisdom of contrarian investing!


Since its humble origins when everyone literally thought gold-stock investors were stupid and/or insane, the HUI has powered 1664.4% higher at best as of September 2011! Over this same secular span, the general stock markets as represented by the benchmark S&P 500 index actually lost 14.2%. Gold stocks have been one of the best-performing sectors of the past decade, if not the very best. Such gains should be legendary today, universally lauded.

But this sure wasn't an easy road psychologically, actually far from it as any gold-stock trader will be quick to attest. The HUI advanced in fits and starts, its enormous uplegs were followed by vexing consolidations lasting well over a year. This made gold stocks a challenging emotional roller coaster for traders, all too easy to get bucked off of for all but the most disciplined. The last time I looked at HUI upleg cycles in late 2007, before the stock panic, I coined this behavior the surge-drift pattern.

Once every couple years or so, gold stocks surge to new bull-market highs in massive uplegs. The realized gains we and our subscribers have earned being heavily long during these surges have made us fortunes. Boy are they fun! But after these surges come the necessary reckonings to rebalance sentiment, in the form of drifts. So gold stocks drift sideways for a year or two after their surges, seeing much-smaller consolidation uplegs at best periodically.

This surge-drift dynamic is certainly logical when viewed through the lens of sentiment, which drives all short-term price action. After any massive upleg's enormous gains, greed grows excessive. All near-term buyers have already bought in, and the traders who had positions early enough to ride the surges to huge profits are thinking about locking in their gains. Their selling soon caps the overextended surges.

Major new highs also spawn widespread worries. Traders always wonder if they are sustainable or if prices will soon collapse back down to the lower levels everyone was comfortable with. So after a surge, a consolidating distribution phase kicks in. Existing gold-stock owners gradually sell, both to realize profits and because they grow discouraged as more time passes since the fast rallies died. But new buyers gradually replace them. The longer that prices consolidate near their new highs, the more traders come to believe they are righteous and fundamentally justified.

This surge-drift pattern continued unabated until 2008's once-in-a-century stock panic. The monster fear superstorm spawned by that epic anomaly ripped every sector to shreds, even gold itself was hit hard. All this heart-stopping fear terrified gold-stock traders, who dumped these miners like they were infected with the Black Death. So the HUI plummeted to crazy levels not seen since mid-2003, even though gold merely retreated to late-2007 levels.

Just before that stock panic slammed the markets, the HUI had enjoyed a massive upleg driven by its fourth surge. So gold stocks were due to consolidate anyway when the stock panic interrupted them. But instead they were crushed to such ludicrously-oversold levels that their fundamentals demanded they rebound fast as I wrote extensively about at the time. We and our subscribers bought gold stocks near their apocalyptic lows in that panic's dark heart, and were subsequently richly rewarded in the sharp post-panic recovery.

By late 2009 the HUI had regained its interrupted consolidation range, and by late 2010 gold stocks were once again surging to new record highs. This bull's fifth surge was anemic for a variety of reasons beyond the scope of this essay, but it led to the consolidating drift we've found ourselves mired in over the past year or so. And at a year old, this drift is starting to get longer in the tooth by bull-to-date standards. Around this far in is when the next surge tends to start slowly marching higher out of the bottom of the drift.

For over a decade now gold stocks have advanced in this surge-drift pattern without fail, even an ultra-rare stock panic merely stretched out an in-progress drift. Surges gradually turned excessive fear into excessive greed and coined enormous realized gains for prudent contrarian traders. Then the subsequent drifts bled off that excessive greed until only fear and anxiety remained. This happened over long-enough spans for traders to grow comfortable with the new higher-price baselines.

Surge, drift, surge, drift, surge, drift. And since we are now in a drift, what comes next? A new surge! Gold stocks' poor performance relative to gold in 2011 is not a harbinger of a sector that is doomed to fade, but a typical basing behavior we have seen many times before in this secular bull. The past year has bled off greed and enabled traders to accept the recent higher price levels as the new norm. Buyers are gradually returning, including elite hedge funds. This is a perfect setup for the next surge's massive upleg!

One problem with secular-scale charts is the earlier price action always looks trivial in comparison with recent price action. While this distortion can be addressed with logarithmic charts, they introduce interpretation problems of their own. So in order to get a better feel for how large the HUI's surge-drift cycles have been, this next chart annotates the size and duration of each major upleg and correction. Gold-stock surges have been fantastically lucrative to ride.


The first three surges' massive uplegs that look minor visually on such a long-term chart were actually enormous. For an index to hit major new bull-market highs, the advances can't be immaterial. We are talking about HUI gains near 145%, 125%, and 137% in merely 6 months to a year! While the last couple surges were more muted than those in the early years, they still saw huge 72% and 64% rallies over similar spans. If you are deployed in quality gold stocks during one of these surges, your capital balloons dramatically.

All the HUI uplegs over this entire bull (excluding the initial post-panic recovery) averaged gains of 80.7% over just 7.9 months! No matter how challenging the HUI's surge-drift pattern makes owning gold stocks psychologically, the prize is well worth the pain. We are talking about 11 separate opportunities over 11 years to almost double your capital in gold stocks! This is incredible during a secular stock bear where the general stock markets merely drifted sideways.

But the necessary cost of these awesome uplegs was the subsequent corrections essential to rebalance sentiment. They protected this gold-stock bull from soaring too fast and burning itself out prematurely. Excluding that mind-boggling 70.6% plummet during the stock panic, the HUI's average correction ran 26.1% over 2.8 months. Considering gold stocks' enormous upside potential during a secular gold bull, such retreats are relatively minor in the grand scheme even for buy-and-hold investors who ride them out.

The latest big swing in the gold-stock upleg cycles was the 23.5% correction over 3.7 months that likely ended in late December. This is right in line with the average, and means the next cyclical move due is a gold-stock upleg. And given where we are in the surge-drift cycles late in a major consolidation, there is an excellent chance that this next gold-stock upleg will mushroom into a full-blown massive surge one.

While cycle analysis is purely technical by nature, fundamentals certainly support this bullish gold-stock outlook as well. A couple weeks ago I dug into where the gold stocks were trading relative to gold, their primary fundamental driver. And amazingly gold stocks are so unloved and out of favor today that they are back down near levels only seen before during the stock panic! The HUI would have to soar far from current levels merely to return to average valuations relative to gold.

When bullish fundamentals coincide with the end of a correction late in a drift in the gold-stock upleg cycles, it is about the best setup ever seen for gold stocks. They are now due for a major upleg, and more and more big-money traders including elite hedge funds are arriving at this very conclusion. With the gold price remaining so high yet gold-stock prices still so low, investors and speculators are starting to understand that gold stocks need to surge again.

Take one more look at this chart, and note where the HUI is today (call it roughly 500) and when it originally achieved these levels. Back in March 2008 when the HUI broke through 500 for the first time in history, gold was approaching $1000 for the first time ever. Yet today with gold 2/3rds higher, which translates into radically-higher profits for gold miners, the HUI is still languishing near 500. Mark my words, there is no way this anomaly is sustainable!

In the stock markets, any company's stock price is ultimately bid up to reflect the earnings stream its underlying business can generate. Gold stocks are no exception. They aren't going to stay at early-2008 levels while gold continues powering far higher. And this 2008 comparison is particularly interesting in terms of upleg-cycle analysis. You could actually make the case that the current drift is about 4 years old instead of just over 1, implying the gold-stock spring is more tightly wound. So the coming surge ought to catapult gold stocks much higher to make up so much lost ground.

But even if the next great surge to major new highs somehow tarries, we are still due for an upleg regardless. Today is a fantastic time in the gold-stock upleg cycles to buy gold stocks at low prices. And as the charts above show, such opportunities never last for long. With such high odds that the next major surge is due imminently, I sure wouldn't want to risk not having big exposure in elite gold stocks.

These opportunities are magnified even more since gold itself is due for a major upleg as well. As I detailed last week, the combination of an overbought US dollar and oversold gold is a recipe for a strong upleg in the yellow metal. And nothing gets investors and speculators interested in buying gold stocks faster than a major gold rally. With the US dollar ready to launch gold, the gold stock opportunities are even more compelling.

At Zeal we've been actively trading this gold-stock bull since the very beginning. Over the past decade I've probably done more analytical work studying it than almost anyone else on Earth, devoting thousands of hours. The resulting knowledge and experience have led to gigantic realized gains in gold stocks for us and our subscribers over the years. Our overall trading track record since 2001 is stellar. All 598 stock trades (about 4/10ths gold stocks) recommended in our subscription newsletters have averaged annualized realized gains of +48%! Not too shabby during a secular stock bear.

And lately thanks to this bullish setup we've started buying again. This time we are focusing on junior gold producers, companies with far-better potential to soar than the majors in the HUI. We are drawing from the pool of our dozen favorites profiled in a comprehensive new fundamental report. This fascinating 34 pages is the fruits of hundreds of hours of expert world-class research, where we started out with around 100 junior gold producers trading in the US and Canada and gradually narrowed this population down to our fundamental favorites. Buy yours today while gold stocks still remain cheap!

All our hard work ultimately flows into our acclaimed weekly and monthly subscription newsletters. In them I draw on our vast experience, knowledge, wisdom, and ongoing research to explain what the markets are doing, why, where they are likely heading, and how to trade them with specific stock trades as opportunities arise. Wouldn't you like our decades of experience in your corner, helping you cut through the noise to make better trading decisions? Subscribe today and start thriving!

The bottom line is this powerful secular gold-stock bull has always advanced in fits and starts. This surge-drift pattern has certainly been vexing psychologically for traders who don't understand it. But it has actually enhanced this bull's health by keeping sentiment balanced, a huge boon for its ultimate longevity. And today these gold-stock upleg cycles suggest a major surge to new bull-market highs is imminent.

After spending well over a year basing high, and remaining incredibly cheap relative to prevailing gold prices, gold stocks are starting to catch the attention of serious capital. As we've seen in the past similar situations late in consolidation drifts, the new buying feeds on itself and gold stocks are soon soaring. While it definitely takes a contrarian bent to buy after a long drift, the potential rewards are immense.

###

Jan 20, 2012
Adam Hamilton, CPA


So how can you profit from this information? We publish an acclaimed monthly newsletter, Zeal Intelligence, that details exactly what we are doing in terms of actual stock and options trading based on all the lessons we have learned in our market research.

Please consider joining us each month for tactical trading details and more in our premium Zeal Intelligence service at www.zealllc.com/subscribe.htm.

Questions for Adam? I would be more than happy to address them through my private consulting business. Please visit http://www.zealllc.com/adam.htm for more information.


Thoughts, comments, or flames? Fire away at zelotes@zealllc.com. Due to my staggering and perpetually increasing e-mail load, I regret that I am not able to respond to comments personally. I will read all messages though and really appreciate your feedback!

Copyright ©2000-2012 Zeal Research All Rights Reserved.


321gold Ltd



  Forum: Macro Factors

denpal
Posted on: Jan 19 2012, 03:05 PM


Group: Member
Posts: 1,166

I hold both. In a real panic all stocks will tank without exception I reckon, and by a lot more than the physical.
  Forum: Macro Factors

denpal
Posted on: Jan 19 2012, 11:04 AM


Group: Member
Posts: 1,166

Chris Whalen continues:


"So Europeans, who have the wherewithal, of course they are going to flee to gold. They are going to flee anywhere where they believe they can preserve principal. I hear the same concerns from US investors by the way. So if you are looking for havens, where can you go? You can go into physical gold and take delivery.

There are lot of people doing this now because they look at the gold market, the ratio between outstanding contracts and physical available for delivery and they don't like it. They actually want the gold in their vault. So there has been a boom of building (vaults) in Switzerland, Asia and other markets where you can take physical delivery of gold in your own name. That's not a good sign (in terms of confidence in the system).

When people are actually fleeing markets and they want to take delivery of the underlying, you know you really have a panic on your hands....

http://kingworldnews.com/kingworldnews/KWN..._Into_Gold.html
  Forum: Macro Factors

denpal
Posted on: Jan 19 2012, 10:56 AM


Group: Member
Posts: 1,166

http://kingworldnews.com/kingworldnews/KWN..._This_Move.html
  Forum: Macro Factors

denpal
Posted on: Jan 18 2012, 06:08 PM


Group: Member
Posts: 1,166

http://harveyorgan.blogspot.com/

GoldFieldsMineral Services reports that central banks have been loading up on gold. This has been reported to you on many occasions throughout the year. This should be no surprise to you:

(Courtesy GFMS/Jim Sinclair/ Dow Jones newswires)



[b][b]GFMS reports substantial offtake of Gold by Central Banks[/b][/b]
[b][b]Dow Jones news is carrying a report this morning from GFMS (formerly Gold Fields Mineral Services) detailing the amount of gold purchased last year by the world's Central Banks. It was indeed a formidable number.

The net purchases of the yellow metal came in near 430 tons, a more than 5-fold increase on the previous year. It was also the highest level recorded since 1964.

To give you a sense of the significance of these purchases - the amount of NET purchases by Central Banks in 2010 was a mere 77 tons!

Surprising to me was the fact that Mexico was the largest buyer as far as the official monetary sector goes. GFMS reports that they added almost 100 tons of gold to their reserves. I would have thought it would have been China to lead the pack.

The other surprising fact was that signatories to the Central Bank Gold Agreement ( this was set up to limit the amount of gold sold by European Central Banks ) sold less than 10 tons for 2011.

The summary - Central Banks are now absorbing a significant amount of world gold production. This should continue to provide very good downside support for the metal on price retracements lower as these banks do NOT CHASE PRICES HIGHER but are there to buy at levels they consider gold to have "value".
-END-
[/b][/b]
  Forum: Macro Factors

denpal
Posted on: Jan 18 2012, 05:56 PM


Group: Member
Posts: 1,166

Very interesting indeed: http://kingworldnews.com/kingworldnews/KWN..._Shortages.html
  Forum: Macro Factors

denpal
Posted on: Jan 17 2012, 06:04 PM


Group: Member
Posts: 1,166

Hard to believe the sp is only 47c in 2012. I sold out years ago at after accumulating patiently at 25-30c pre-NUP spinoff and building a big position. I suppose it was a much more speculative market in those days; these days any news no matter how good gets sold into in a matter of hours it seems. In those days the future was very bright, and ARU was an early mover; not sure now how bright it is now, seems there are many hurdles to the final goal of production and massive dividends.
  Forum: By Share Code

denpal
Posted on: Jan 13 2012, 07:37 PM


Group: Member
Posts: 1,166

http://kingworldnews.com/kingworldnews/KWN...#036;2,000.html

This guy has credibility it seems. Worrying times for all.
  Forum: Macro Factors

denpal
Posted on: Jan 13 2012, 02:16 PM


Group: Member
Posts: 1,166

I'm sure you're right. I'm more interested in the long-term trend continuing than short-term moves.
  Forum: Macro Factors

denpal
Posted on: Jan 13 2012, 12:27 PM


Group: Member
Posts: 1,166

Gold Correction Is Over

By: Alf Field

-- Posted Thursday, 12 January 2012 |

There is a strong probability that the correction in the price of gold has been completed. This article has four separate sections. They are:

1. The Elliott Wave (EW) justification for thinking that the correction in gold is over.

2. Why corrections happen in gold from a fundamental viewpoint.

3. The extent to which manipulation affects the gold price.

4. A possible “black swan” event that could trigger a gold price surge.

Justification for the end of the gold price correction:

In EW terms, the correction consists of three waves, an A wave down, a B wave rally and a final C wave decline. There is usually a relationship between the A and C waves. Often they are equal or have a Fibonacci connection. The chart below is of the gold price using PM fixings:

[/size]


In this case, the A and C waves are equal in percentage terms at 14.5% and 14.7%. The overall decline from $1895 to $1531 is -$364 or -19.2%. My speech to the Sydney Gold Symposium last November – link at http://www.symposium.net.au/files/4ec58abcb729a.pdf - showed that the largest corrections in the previous Intermediate wave from $700 to $1895 were about 12% in PM fixings. The forecast was that the current correction from $1895 would be one degree of magnitude larger than 12%. A decline of 19.2% qualifies as one degree larger than 12%.

An interesting observation is that if 12% is multiplied by the Fibonacci relationship of 1.618, the result is 19.4%, very close to the actual 19.2% decline for the correction. The chart below is of the gold price in Comex 2mth forward prices:



[size="2"]


The Gold Symposium speech suggested that the correction would be between 21% and 26% in spot gold prices. The actual decline was from $1920 to $1523, a loss of -$397, or -20.7%. This is just below the target range but qualifies as one degree larger than the 14% corrections in the previous up move from $680 to $1913.

The C wave of the correction in the chart above reveals some symmetrical subdivisions which confirm that the C wave was completed at $1523 on 29 December 2012. With all the minor waves in place and with the correction being of the correct size, that should be the end of both the correction and Intermediate Wave II.

The probability of this analysis being correct is high, perhaps 75%? Smaller probabilities allow for: (i) this to be an A wave of a larger magnitude correction; (ii) the current correction becoming more complex, perhaps reaching the lower price targets (e.g. -26%); and (iii) the possibility of deflation, defaults and depression emerging, also testing lower price targets.

The up move just starting should thus be Intermediate Wave III of Major Wave THREE, the longest and strongest portion of the bull market. The gain in Intermediate Wave I from $680 to $1913 was 181%. The gain in Intermediate Wave III should be larger, at least a 200% gain. A gain of this magnitude starting from $1523 targets a price over $4,500. The largest corrections on the way to this target, of which there should be two, should be in the 12% to 14% range.

Why Gold is prone to numerous corrections:

Gold is unique amongst metals, partly because it is not consumed, but also because it has some unusual qualities. It has no utility value. One cannot eat it or drink it. It earns no income, does not corrode and does not tarnish. Other qualities include divisibility (a quantity of gold can be divided into smaller quantities) and it is fungible, (one ounce of gold can be substituted for another ounce of gold of the same degree of fineness). There are large stocks of gold available and new annual production has generally been less than 2% of the stock of gold. These are the very qualities that caused gold to be used as money over the millennia.

Other metals and commodities are produced for consumption. When their stocks build up due to supply exceeding demand, holders become forced sellers due to the cost of storage or due to spoilage. Thus the price of the commodity drops to a level where marginal producers go out of business until demand exceeds supply. Then stock levels decline until they are exhausted and conditions of shortage prevail. This results in sharply rising prices for that commodity, eventually attracting new suppliers. In soft commodities, weather conditions can also play havoc with stock levels, causing dramatic price changes.

The point is that with all commodities other than gold, stock levels are important determinants in the price of the commodity. Gold has been accumulated over the years because it was money or as a hedge against a range of fiscal, economic and political risks. The stock of gold relative to new annual gold production has always been high.

In 1971, when the $35 per ounce link between the US dollar and gold was severed, it was assumed that all the gold produced throughout prior history was about 90,000t. This is a rubbery figure and should probably be a higher number. As it is not important to this discussion, we will use 90,000t as a starting point. Over the centuries some gold was lost or was no longer available to the market. If we assume that about 15,000t was lost, it means that in 1971 about 75,000t of gold was available to the market. New production in 1971 was 1,450t, less than 2% of the available stock of gold.

One reliable figure available in 1971 was that gold held by central banks and official institutions was about 37,000t. By deduction, the remaining 38,000t of the available stock must have been owned by investor/hoarders in the form of bullion, coins or jewelry. New production of 1,450t in 1971 was meaningless when compared to stocks of 75,000t. The future gold price was going to be determined by what existing holders of gold did with their stocks and what the level of demand would be from new buyers. For several reasons there was considerable new buying of gold during the 1970’s, resulting in a sharply rising gold price.

Fast forwarding 40 years to our current situation, new mine production over this past 40 year period may have been about 90,000t, of which perhaps 10,000t has been lost or consumed by industry or in jewelry not suitable for reclamation. That leaves 80,000t to be added to the 1971 estimated stock level of 75,000t, giving a current total gold stock of 155,000t. Recent annual production has been about 2,500t, which is still under 2% of the available stock.

Whereas the gold owned by central banks and official institutions in 1971 was a reliable amount of about 37,000t, we no longer have accurate figures for gold held by official sources. We know that central banks have reduced their holdings over the years, either by selling or leasing.

Central banks no longer publish accurate figures of their gold holdings, but for purposes of this discussion, let us assume that the current level is 30,000t, a decline of 7,000t from 1971 levels. The central bank sales of 7,000t must have been absorbed by the investor/hoarders, taking their adjusted total to 45,000t before adding the 80,000t of new production since 1971. That means that new buyers have entered the market over the past 40 years and have swelled the total gold held by investor/hoarders to perhaps 125,000t. (38,000+7,000+80,000). That is a lot of gold!

These numbers are guesstimates as there is no way to substantiate them. The important thing is that the trend indicates that investor/hoarders must own a considerable amount of gold, at least several times larger than the quantity held by central banks. Whenever gold goes to new all time high prices, all investor/hoarders have a profit on their holdings of gold. When the gold price rockets $400 per ounce from $1500 to $1900 in just seven weeks, as it did last July and August, the profits available to investor/hoarders are vast and mouth watering. Not surprisingly, many decide to take some profits while new buyers become cautious due to the rapid price rise.

The result is a correction in the gold price. This is a normal occurrence and will happen from time to time, especially when the gold price pushes to new highs. The natural result of a large stock of gold held by investor/hoarders is that occasional corrections must be expected.

Extent of manipulation in the gold market:

It is hard to visualize much manipulation in the physical market for gold when investor/hoarders own 125,000t and the volume traded is large. The futures market is another story. Gold futures trading became popular in the 1970’s when the price was freed from its $35 per ounce collar. It was possible to control a large amount of gold for a deposit of 10% or less, enabling punters to gear up their positions substantially.

There are many similarities between casinos and futures markets. In a casino the house holds the punter’s money and issues plastic chips for them to gamble with. The odds offered by the casino always favor the house so that there are always more losers than winners, the difference being the profit margin for the casino. In the futures market, every transaction requires someone else to take the opposite bet. Both parties put up the necessary deposits which are held by the market operator. Again losses will always exceed gains, the difference being accounted for by the brokerage and market costs.

In a casino, if one had an unlimited amount of money, one could devise a method of escalating bets so that when one eventually had a win, all prior losses would be recovered plus the desired percentage profit. For example, in roulette over a lengthy period all columns or dozens (the 2 to1 shots) come up slightly less than 33% of the time. A player betting on one of these with unlimited funds would know that sooner or later a winning bet would occur. When it does, the player recovers the cumulative losses plus the desired percentage profit. A foolproof system? Not quite. Casinos impose limits on each table for every bet, which prevents this.

In the futures market it is possible for players with unlimited funds to operate a similar system on the short side of the gold market. As explained in the previous section, corrections do happen in the gold market, especially after the price has risen to new highs. If the player knows that a correction will occur eventually, with unlimited funds he can increase his short position at higher prices until the correction happens. Then he closes his position, hopefully banking a profit.

This could be circumvented by imposing limits on the size of the position that a player can build, just as the casinos impose limits on each type of bet. This is extremely difficult to regulate and monitor in the futures markets. The authorities probably rely on the knowledge that every contract sold short has to be bought back at some time, thus the position is self-correcting. This is true, but the manipulation aspect occurs when the correction has started and the player with the big short position gives the market a nudge on the downside, triggering stop loss orders.

Most players on the long side are operating on margin. That is the attraction of the futures market, to gear up profits. These players are operating with limited funds, so they either have stop loss orders in place, which become market orders when triggered. Or they fail to provide additional cash when their brokers ask for more margin, which causes the broker to sell out their positions, once again placing sell orders “at market”.

“At market” orders are sold at whatever the best buying price is available at that time in the market. If this happens when markets are thin and the major markets are not operating, this can cause an avalanche of selling. The sharp downward spike on 26 September last year is typical of what can happen in these circumstances. That is the time when the “deep pockets” player will probably be covering his short position.

It should be obvious from this that the futures market is an extremely dangerous place in which to participate in the gold market. There are other risks that have only recently come to light regarding futures markets. Sticking with the casino analogy, assume that you have had a bit of luck in the casino and decide to cash in your plastic chips. When you get to the cashiers counter it is closed with a sign saying “Run out of money. Come back tomorrow morning”. You return the next day only to find a sign saying that the casino is bankrupt and is closed! Enquiries elicit the information that the cashier took all the casino’s money, went to a nearby casino and lost the lot.

In the futures market, the operator holds all the cash while the punters have contracts. The operator uses the cash to pay out the winners and cover expenses. Assume that the futures operator decides to take a risky position for the operator’s own benefit in another market but uses the cash contributed by the punters. The risky venture goes sour and the operator goes bankrupt. The punters are left high and dry. While all the facts have yet to emerge, it seems that this is possibly what caused the demise of MF Global.

As the world navigates this period of great financial and economic crisis, we need to be extremely vigilant and cautious with our investments. Be wary of paper claims on gold and always be conscious of the old saying: “Gear today, gone tomorrow”. Limit investments to what one can afford to pay for in cash.

A possible “black swan” event that could trigger a sharp gold rally:

To achieve the EW target of $4,500 on the next upward move will require something to trigger substantial new buying of gold. What could that event be? By definition, it will be a surprise to all market participants, a “black swan” event. That doesn’t prevent us from making a guess.

One likely area from which problems could emerge with very large numbers are derivatives. The Bank for International Settlements produces a list of outstanding derivatives twice a year. The latest report can be found at: http://www.bis.org/statistics/otcder/dt1920a.pdf. This reveals that the total notional value increased from $601 trillion (with a “t”) at December 2010 to $707 trillion at June 2011. Nearly all of the increase was accounted for by interest rate contracts which now have a notional value of $553 trillion, some 78% of the total.

As we discovered in 2008, derivatives are benign until losses occur. Once losses emerged from credit default obligations, it was game on for the GFC. Interest rate derivatives protect banks from interest rate rises. Most banks borrow short but have large loan books at fixed rates for long periods. Thus a big rise in interest rates could trigger claims on these derivatives.

For the time being, rates seem to be locked at virtually zero in the USA, but this is not the case in Europe. Europeans are learning the lesson that rates rise when investors become concerned that the borrower can’t repay the amount borrowed, let alone the interest on the capital. When we drill down further into the BIS statistics at http://www.bis.org/statistics/otcder/dt21a21.pdf we discover that $219 trillion of the interest rate derivatives are denominated in Euros, compared with $170 trillion denominated in US Dollars.

If just 10% of the interest rate derivatives in Euro’s produce losses, the world’s banking system would be looking down the barrel of a loss of $22 trillion. That is enough to bankrupt the entire world’s banking system, something that the politicians of the world could not tolerate. What would a bail out of $22 trillion do to financial markets? What would it do to the gold price?

If it is not interest rates, there are $64 trillion of foreign exchange derivatives and a “mere” $32 trillion of credit default swaps outstanding that could produce “black swan” surprises.

Alf Field

12 January 2012

Comments to ajfield@attglobal.net

Disclosure and Disclaimer Statement: The author has personal investments in gold and silver bullion, as well as in gold, silver, uranium and base metal mining shares. The author’s objective in writing this article is to interest potential investors in this subject to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell any stock, currency or commodity. Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions. The author has neither been paid nor received any other inducement to write this article.


  Forum: Macro Factors

denpal
Posted on: Jan 5 2012, 07:05 AM


Group: Member
Posts: 1,166

So we now have confirmation from RWD that the mining agreement and ILUA has been executed. This has been prompted after several shareholders approached RWD and Michael Ruane asking about the status of the mining agreement, ie was it actually executed or not.

This will be Australia's first domestic potash producer.

On 200ktpa the margin looks like around $350/t, ($600/t-$250/t) around $50mpa NPAT (not including loan amortization on project finance). On 400ktpa, $100mpa NPAT.

This is Sulphate of Potash (SOP) remember, not Muriate of Potash (MOP). The price premium has been growing over the last few years and is now 40-50% in favour of SOP. The reason is that SOP does not cause the soil to salt up, and there are few producers globally.
  Forum: By Share Code

denpal
Posted on: Jan 5 2012, 06:56 AM


Group: Member
Posts: 1,166

LAKE DISAPPOINTMENT POTASH PROJECT UPDATE
ASX ANNOUNCEMENT
04 JANUARY 2012


On 23 December 2011, Reward Minerals Ltd advised that it had reached agreement
with the Western Desert Lands Aboriginal Corporation (WDLAC) and the Martu
people on the terms of a Mining and Indigenous Land Use Agreement (ILUA) for the
Company’s Lake Disappointment Potash Project.
Following queries from a number of shareholders, the Company provides the
following additional information for clarification.
1. On 20 December 2011, at a Special General Meeting of Martu held at
Parngurr, the Resolution in respect of the proposed Agreement between
WDLAC and Reward Minerals Ltd was put to the members present.
The meeting resolved in favour of WDLAC/Martu people entering into the
Agreement on the terms and conditions negotiated between WDLAC and the
Company over the past twelve months.
A Members Certificate was signed at the meeting by the Common Law Holders
as required under the Native Title Act for registration of an ILUA.
2. The Mining and Indigenous Land Use Agreement was executed by WDLAC on
23 December 2011 in Perth with Chairman, Brian Sampson and Deputy
Chairman, Teddy Biljabu signing on behalf of WLDAC and Chairman, Colin
McCavana and Director, Michael Ruane signing on behalf of Reward.
The ILUA provides for Reward, WDLAC and the Martu people to work in close
association on the development of the Lake Disappointment Project. The Company
is enthusiastic about building a strong working relationship with WDLAC and the
Martu people that will provide training, employment and economic benefits to the
Martu people as well as increased shareholder value for all Reward shareholders.
The Company is now in the process of engaging new staff to recommence activities
on the Lake Disappointment Project including resource upgrade, feasibility activities
and the Clearance Heritage Survey scheduled to occur in March to advance the
project as rapidly as possible.

Dr Michael Ruane
Director
on behalf of the Board
  Forum: By Share Code

denpal
Posted on: Jan 4 2012, 05:11 AM


Group: Member
Posts: 1,166

I also agree with that. I don't have a problem with flower's posts.
  Forum: Macro Factors

denpal
Posted on: Jan 2 2012, 07:01 AM


Group: Member
Posts: 1,166

It may be 40% or so of the XGD index, perhaps even more.
  Forum: Macro Factors

denpal
Posted on: Jan 1 2012, 02:28 PM


Group: Member
Posts: 1,166

Can you do the charts in AUD?
  Forum: Macro Factors

denpal
Posted on: Jan 1 2012, 01:58 PM


Group: Member
Posts: 1,166

http://www.financialsense.com/node/7228

<h1 class="title">Martin Armstrong: The Entire Global Monetary System Needs to be Revised (Transcript)</h1> <h3></h3>Jim: Joining me on the program is Martin Armstrong. Armstrong became a very successful business forecaster with Armstrong Economics or Princeton Economics with head offices in Paris, London, Tokyo, Hong Kong, and Sydney, employing more than 240 people around the world. In 1983, the Wall-Street Journal cited Armstrong as its highest-paid advisor. He became one of the top currency analysts, and his work was requested by the Presidential Task Force; The Brady Commission investigating the 1987 crash. Martin, I want to begin our discussion on economics, and one of the problems with a lot of economic consulting firms today is they are so far off the mark. A good example is, this year economists were predicting 3% economic growth. When that did not happen in the first half of the year, they were talking about a second half recovery which is looking rather weak. What distinguished your work at Princeton Economics and what gave you the ability to make the accurate forecasts that you did when you were at Princeton and are still doing today?

Martin: Well, I think largely the difference was that our clientele was international. And that really forced me to look at everything through everybody else’s eyes. And what you begin to see is that unfortunately in the United States, the predominant economic community tends to look at just the United States as if we are the only thing that really matters. And I think largely that is where they always end up failing. For example, the ’87 crash, the reason we were really the only firm that was able to forecast that was simply because it is a fairly common sense thing. I mean, if you have sold all these assets – I mean the Japanese bought Rockefeller Center, all the bonds in the United States et cetera they were buying – and then you stand up, you form G-5, which is now G-20. But in 1985, and then you say, well to ease the trade problems and create employment in the United States, we are going to force the dollar down by 40%. So they do not understand because they only look at it from an American perspective. But if you bought a lot of assets in Mexico, and Mexico stands up and says, by the way, we are going to devalue the Mexican peso by 50% next week. Don’t you think you would sell and get out of there?

That is the problem in America is that we do not understand or respect so much the impact that we have globally. And the ’87 crash took place because of foreigners selling everything. And if you look at the economic statistics, nothing happened. Interest rates didn’t rise. There were no bad economic numbers, absolutely nothing. And that is what made it such a shock to everybody domestically, and that is when we got called in and the Brady Commission at the end said – well they did not want to admit that the G-5 cost them. At the end they said, well we think it had something to do with currency. And when you are getting into these currency swings of 30 – 40% in a two or three year period, you are dramatically changing the way capital moves globally. And probably any of your listeners that are invested in emerging markets or in Europe, whatever you have made on a particular stock in Europe, you have lost by the decline in the Euro. So, it does not much matter if I say, gee look I can make you a billion dollars real quick in Zimbabwe and they are going through hyperinflation. And it doesn’t mean anything. So, you have to really look at things on a global perspective, and that has been largely the problem in the United States that it is too domestic in all its forecasting and everything else.

Jim: Your model predicted once again the top in the financial markets in February 2007, and then you also predicted the bottom. So once again, was it looking at the global macro-picture that gave you that confidence because our guys over here completely missed it?

Martin: Yeah, you cannot look at things just purely domestic at all anymore. We have a global economy. And if you look at the contagion that has taken place, that began off of mortgages in the Unites States. I mean it wiped out Iceland, it has created a world recession to the point that on October 15th, you have demonstrations around the world on this occupy Wall Street stuff. So, we really have to understand it, but everybody is connected globally. And there is nothing that we can do that doesn’t affect somebody else, and this is part of what you hear in criticism coming from Russia and China about the US dollar being reserve currency, because if we increase our money supply to affect domestic rates, that is exported then, and they are suffering from inflationary pressures that are coming to their land as well.

So everything is very much connected, and the politicians do not appreciate, I think, really how globally the economy has evolved. I testified before congress in 1997 and they were asking, well gee, well how come no American companies got any of the contracts in China to build the Yellow River Damn. And I said, well look, the United States and Japan are the only two countries in the world that tax worldwide income. I said, so a German company bidding on the same project to build over there is already 35% cheaper. Then the German citizen who decides they would like to go over there and work for a year does so tax free from Germany. Only the US and Japan tax worldwide income, and if you find a dime in a parking lot in London, they want their share.

But that is the problem. We’re not competitive. And in the United States you can see it like there is three states that do not charge income tax. Delaware doesn’t charge sales tax, so a lot of people move from Pennsylvania to Delaware just to have their mail order business. People do move around because of these issues; and you have a lot of people that – a lot of companies – that have left cities because of taxation. We really have to pay attention and be competitive on everything that we do.

Jim: This recently caused the head of Coca-Cola to say that United States has become one of the most inhospitable places to do business. So this gets back to your point in your testimony because if we have more regulations, if we have more taxation, if we are taxing the money wherever it goes, it makes us less competitive. And now we are not just competing against Europeans, we are competing against the Chinese, we are competing against the Brazilians, so it is really a global world and you would think, Martin, that members of congress would begin to recognize that.

Martin: Well unfortunately they’re not economists. Most of them are not even business people. Most of them tend to be probably the dominant profession of lawyers. And they have this attitude that they can pass a law and everybody has to comply. But that is not the case. You can pass a law and say 65 miles an hour and nobody can go above that. I mean, we are always looking at more and more regulation, and the problem is that we had this economic decline and then the natural response from someone is to say it wasn’t regulated enough. We had more than ten agencies regulating the CDSs that collapsed. Not a single one did anything to prevent a central crisis in this country. We keep adding layers and layers and layers of regulation, but they simply do not work. I mean the SEC has not prevented one economic recession, one economic decline. We have too many agencies and that is the problem of why they created Homeland Security because they admitted that a lot of these agencies had information on 9/11. Even the people who were from the first attack on the world trade center had drew the world trade center on the walls of their jail cells with planes going into it a year before. They took pictures all kinds of stuff, but nobody does anything. You have too many agencies and so they create Homeland Security supposedly to sit on top of all these agencies to get the information, and we are just so over regulated. I mean, just have one agency to do this. Why do we need so many different ones and they all contradict each other and then they compete and won’t share information. So we seem to defeat everything we do, but the answer is always to not improve what we have, but always add another agency until the point we have so many people running around, it is crazy.

Jim: Yeah, we just added, in the Financial Regulations Bill, a consumer protection agency. What are they going to do that is any different than the other agencies that are out there regulating the financial markets?

Martin: Absolutely nothing. And if you really look carefully, the issues that created the problem which was the derivative CDSs, they still didn’t regulate. So they regulate everything else around it, but they just don’t do whatever is right at that point in time. And they made it worse because these instruments are now – they changed the accounting system where you’ve adopted Japan, so we are not even mark to market anymore. Now it is basically they do not have to even report a loss, until they take it. So, you are seeing the result of that in Europe where all of the sudden some banks are going down, and people are then saying, oh my God, look at the portfolio that they had on these CDSs, but they do not legally even have to report them. So it got worse, not better.

Jim: Let’s talk about maybe one of the reasons why QE2 failed. I mean, the Fed announced last year, QE2, it was supposed to stimulate the economy, bring down the unemployment rate, but what it did is it exported that money overseas. It forced a lot of those governments, especially in Asia that are pegged to the dollar to print more money. Now they are dealing with higher inflation rates. And Martin, we’re stuck today with a market that is exactly where it was when the Fed announced QE2. In your view, will they announce another QE3 or a QE4 as some on Wall Street anticipate if the economy weakens?

Martin: Well unfortunately they feel they have to do something. But in all honestly as I think they do realize, at least the people at the Fed, that no matter what they do, they can’t stop it because we are in a global economy. I mean, you take the QE2 idea, then okay, fine you are going to buy 30-year bonds and you are going to take them in, and therefore, in theory people will want long-term … there’ll be a shortage of long-term debt, so therefore they’ll lend more back to the mortgage market. Again, that shows the problem of this myopic view of the world. China said, well gee thank you very much. And they shortened their maturity by selling those 30-year bonds and moving down to two year notes or less.

So, the problem we have is that there is no way to stimulate the economy because if they pump in the cash, there is no guarantee it just stays here. They export it overnight. We do not know who owns what. The only think we do know is that 40% of the interest that is on our national debt goes out to foreigners. So, the old economic theories where fixed exchange rates system and all these things after World War II, it just does not exist anymore. And we really have to sit down and revise the entire world monetary system because nobody knows what they are doing.

Jim: I want to go to the Euro for a moment and I want to have you comment on – I think it surprised a lot of people the movement in the Euro markets with their problem. People do not understand how capital is mobile today and it can move. So as European problems accelerated, money moved out of the Euro, capital flowed into the United States strengthening the dollar (because we had a lot of dollar bears at the beginning of year) and in that process, not only did it strengthen the dollar, but it brought down interest rates … now a lot of people would credit that most of this came as a result of Fed policy. But is not it more a movement of global capital, Martin?

Martin: Yeah, exactly the same precise thing happened in 1931. Most people do not realize … well it is another one of the things they tend to leave out of the history books. But virtually all of Europe defaulted on its national debts in 1931. Britain went into a moratorium. They eventually came back and honored it. South America defaulted. China defaulted. You can go to an antique dealer and you will find a lot of these bonds. They are very pretty, and some of them are very nicely framed up for people. But as that happened, the capital came here and that is what pushed the dollar up to all time record highs going into depression. Now, politicians did not understand what they were doing then either. And that is when they came out with Smoot-Hawley and said, “Oh this is protectionism”, and they were trying to force the dollar down back then as well. Eventually FDR devalued the dollar, and in 1934—and that kind of got things going up a little bit after that—but what we are seeing in Europe and what the Europeans did not do properly, they thought they were creating a single currency. What they didn’t do was they didn’t create a single debt. So, they left the national debts in each of the members. And what they did at that point in time is really they left … by doing that you are creating a derivative that okay, fine the Deutsch Mark does not exist anymore, or the Greek Drachma. But if I short the Greek bond, it is effectively the same thing as if it were the currency. I can isolate just Greece and sell that.

Now what happens is that pressure has been pulling Europe apart. And they are not prepared to consolidate the debt to stop it, and they keep putting band-aids on to try and prevent it. But it’s not going to happen. I mean Europe is collapsing under this monetary idea that they had, and the way I can explain it in American terms, I mean, if you can imagine what chaos we would have if all 50 states were allowed to issue federal government debt. I mean, it would be an absolute free for all. And unfortunately in Europe, there is no single European bond. Every country issues its own, and then the banks use those independent states, they take their debt and they use that for their reserves to say that the banking system is secure. Now, when you start taking Greece down and people start attacking the bonds of Spain and Italy and so on, what happens is, now you are attacking the actual reserves of the bank. So, now we have a banking crisis develop. So, I mean, Europe is just … the politicians won’t do the right thing, and therefore it is just turning into a real basket case.

Jim: Martin, does the Euro survive? In other words, let’s say they are forced through a financial crisis to create some kind of political union because right now as you pointed out, they have a monetary union without the political union to go along with it. So, you have these disparate policies of countries issuing different bonds. Can they survive, or does this whole thing fall apart?

Martin: I seriously doubt under the current conditions that they would survive. And that is going to cause a lot of economic turmoil and that kind of brings us back to where the domestic analysts here will get it wrong again, because as that capital comes fleeing from the craziness in Europe, that will only push the dollar up even higher. And right now, you have Japan is also an economic basket case. The Yen is going up to record highs because right now people are pulling money back to Japan because they need it so desperately. But once that is over, then it will flip and the capital will start coming back out again, and that will then drive also the dollar back up. And then our politicians here will get mad about you know the implications on trade, etc. Our trade deficit will get worse. Unemployment will rise. They’ll blame it on that. And then we will be back to the same old stuff where we were in the 30s. But Europe has to–there is no real domestic confidence to support a political union. And everybody’s blaming everybody else at this point, and probably the majority of the opinion is against any kind of a political union. And you are seeing the massive amount of people protesting – there are like 10,000 people out there in Spain about this occupy Wall Street.

We’re getting the youth in a lot of these countries—to bring up Southern Europe—unemployment rates are like 30% and in some cases up to 50. And then you are looking at major political disruptions here. And where we go is not – does not look too good as long as the politicians refuse to sit down and actually look at what is happening. They are all just trying to hold on to their power.

Jim: Now when we go back and translate that here as the dollar moves up, as it is doing now, meaning that it is going to make our exports more expensive. And then you have politicians here calling for currency manipulation by other countries not realizing the global economics. Yet, Martin, we have, here in the US, more calls for more regulation, more taxation, and more government intervention. It is amazing to see this transpire. It is like nobody has ever gone through and read a history of what we did in the Great Depression that turned a recession into a depression. About the only thing it seems like Mr. Bernanke learned from that was to print more money. But in a global economy, when he prints money, it comes back and boomerangs here.

Martin: Yeah, I mean we are still living under a lot of the old Marx’s agenda in many ways. And it sounds nice, I mean, you see these people saying we are the 99%. But what they really do not understand if you confiscate all the assets of top 1% what are you going to accomplish? Will it do anything? It will not even balance the budget. I mean, that is not our real problem and you can keep raising the taxes all you want, but we have deficits far beyond that. And we are not going to solve the problem that way. We really have to do a serious, serious reform. And if you take, for example, what the tea party has been saying. It sounds nice: balanced budget, okay, but we have debt that is continuing to increase. And so what will happen is, is that the cost of interest to keep carrying this debt that we never pay off is going to continue to escalate. Eventually that would reach 100% of total expenditure. So you can have a balanced budget and the debt crowds out everything else from Medicare, you know, all the way to unemployment benefits. There will not be any of that left. So, a balanced budget, we are beyond that too. We really have to do a serious monetary and economic reform here. And the government has been doing this since World War II. They borrow year after year after year. And there is just never any intention of paying anything back.

If you go to a bookstore, alright, you can go look for basically the World Almanac, little paperback type thing. And in the beginning, look there and they have tables, all the data on the national debt, and year after year they’ll list how much you paid in interest. If you add up the interest expenditure between 1986 and 2006, you’ll see that 80% of the increase in the national debt was all interest. So, we are not getting anything for this. Forty percent of that money is going out of the country. So, it’s just astonishing to me that you can cut every program you want, but the national debt is off the table. You cannot negotiate it. You cannot – I mean, we have to create a new monetary system. We just have to do so. The debt is going to take over absolutely everything to the point we won’t have any kind of expenditures for anything. I had called the doctor for my mother, and they said they are no longer taking Medicare patients because they are anticipating cuts coming through in January. So, you can have these nice programs, but they keep chopping away at them because of the rise in the national debt cost. They can say, oh we are going to tax the rich. Okay, fine go ahead. Take everything they have. It will not stop the continual growth in the national debt. I mean it is like the pink bunny that is on the Energizer commercial. It is just going to keep on going. So, unless we sit down and start really seriously saying, look we have to revise everything and let’s look at this, there is not much that we are really have to look forward to, other than shear economic chaos.

Jim: Is it going to take a crisis, Martin, as we saw take place in the 30s which unfortunately lead to World War especially with tariffs and the modern equivalent of currency wars that we are seeing take place today. Is it going to take a crisis before they act because they seem to want to continue the same policies? You are hearing, okay we will be okay if we just tax the rich. They need to pay their fair share. But as you pointed out, you could tax the rich, take away their money, you are still going to have a budget deficit and we are still sending interest overseas. In fact I read a figure that we are paying China in interest on the debt it owes; we are paying them enough interest to pay for their entire military expenditures.

Martin: Sure, I mean, it is incredible that they always want to blame corporations and say, oh they ship jobs overseas and that is why we are losing jobs. If you look at the amount of interest that we are paying that is leaving this country, it is far more than what we are losing in trade. And it is a shame because we just have a lot of rhetoric all the time rather than just looking at the simple truth. And it seems to be a lot of dogma, I think, that prevents people from even looking at things, or they just do not want to. I’m not sure. But politicians are … I mean, I’ve worked with a lot and it is very frustrating because you can tell them, listen, you know the trains coming down the street and it is going to – if you do not step out of the way, you are going to get killed. Well, I do not see anything right now.

Martin: And they just will not act until there is a crisis. Yet to them it is kind of like, you know a guys comes up to you and says, listen I just saved your life. And you look at him and you say, yeah, what’d you do? Well, you see that car at the top of the hill, somebody did not put the break on, it started rolling down, it would have hit you, so I jumped in the car, put the break on. So I saved your life. The guy does not see it, so he goes yeah, how do I know you are not just lying? And that is the way the politicians look at it that they can’t win an election by saying, vote for me because I stopped you from losing your house. And they would much rather that you are under the gun of losing your house and then say, vote for me and I will prevent it, but they won’t act in advance. So, unfortunately that is I think what is wrong with our political system. And the two words, political economy should have been divorced the first moment they met, but unfortunately that is what we have to live with. And so they will not act until the crisis happens. And then they want to have their big hearings. And then they want to investigate. And then they always want to criminally charge somebody but they have tied investigations to every stock market crash since 1907, they have never found this mythical short player that pushed everything down. But it’s great grandstanding. All of the yelling and screaming that they did over the derivatives but they still did not – they still did not regulate them. They still did not stop the CDSs from being issued. They did nothing. They regulated other things, and added more agencies and more government jobs, but they actually did not do anything to prevent what was happening. And to tell you the truth the reason they will not do so is because the banks that they were looking at are primary dealers. A Primary dealer is the one that settles the government debt for them. So, they are never going to charge criminally any of those banks because they have become kind of like the financial crack dealer. They are not going to give them up. If they really wanted to help the economy, they should have shaved 25% off of the mortgages and basically funded it that way. That would have prevented all these massive foreclosures and the problem with the foreclosure is … you know some people will say, oh that is liberal you are taking … but the problem is – all that property now comes out onto the market. By that coming onto the market, even if you have a house and you are current on your mortgage payment, now your property has declined in value because of everything else that is being sold. It is all interconnected. And so, the worst recession ever is always a real estate recession, because people will spend money as long as they feel they have equity in their home. If they feel that they no longer have that equity in their home, for retirement or whatever, they don’t spend money. So, a real estate recession is the worst of all, and that is what we have.

Jim: I want to move on to the topic of gold. We have been talking about how the global markets work. We’ve got capital flows coming into the United States that is driving the dollar up. And we probably have the best looking house in a bad neighborhood. Let’s talk about gold for a minute because there is some out there that propose the silly notion that if we had a gold standard, we would not have these problems even though when we had a gold standard, governments continued to print money. The 1920s in the US is a good example of that. How does gold fit in here?

Martin: Well, gold is a good historical hedge, not against inflation, that is nonsense as well. It is really a hedge against political instability. And that is what we are really into at this stage in the game. It is a sovereign debt crisis that is developing on a global scale. Gold in 1980 was eight seventy five. And even if you look at foreign cars, a Porsche was about fifty thousand dollars back then. It is now about a hundred and ten or so. So, with gold being at sixteen to nineteen hundred in that area, it is not overly priced. It is about on par with everything else that has risen. I mean a Cadillacs in 1995 was – top of the line was about forty five thousand, now they are also about a hundred thousand or so. So, we are not looking at something abnormally overpriced compared to everything else. Gold will eventually run up dramatically as the crisis in the global sovereignty debt issue more or less percolates up all the way around the world. But – and then you have the possibility of gold going up to like five thousand dollars or something like that. But the main difference with gold is that, gold standards are not … I think they are just sales pitches for people that tried to sell gold. Gold is not a hedge against inflation and it is not – a gold standard’s not going to do anything. We have been there and done that. Really I mean, we had a gold standard and politicians would not raise the price of thirty five dollars because they would have to admit that they printed more than they were supposed to. So, they kept it at thirty five dollars until 1971, and Nixon could no longer hold it. We would have lost all the gold to Europe. So, he closed the gold window. That’s the only thing he really could do at the time. So, the idea of creating any kind of a standard, it does not matter what it is with, it does not really – has never historically worked. And that maneuver has been tried even going back to the times of Babylon. There are tables there that they had produced which have survived listing all of the commodities and what are the prices to be regulated to be sold at. So, I mean this idea has been around a long time. But nothing is going to force the politicians to suddenly be magnanimous or find religion. They are always going spend more. They are always going to say vote for me, I will give you this, that and the other thing and I’ll let somebody else pay for it later on. And that is the kind of system we have. So, gold is more of an independent vote so to speak, that the main advantage of gold is that it’s at least movable. Those fleeing Germany and Russia have found that out. You can have a very nice house but you cannot take it with you. So, gold has always just literally been more of a store of wealth. It is not money and that has always been some of these you know people that keep trying to sell it for some reason or another make up these stories that are just not true. It is a store value. It will rise in value against government uncertainty. And that is really what we are looking at.

Jim: Final question if I may, Martin, as you look forward over the next twelve months, what are your models tell you about the economy in the markets?

Martin: Well, basically I think we are headed into going into the end of 2015 is where we are going to get another big, I think, economic crisis. I think that is probably where the sovereign debt crisis comes to a head. But between now and then, unfortunately it just looks like more and more of a bull market for volatility. I think that initially we can still see gold consolidate a little bit. I would not expect it to take off dramatically yet. Largely a lot of people are still confused trying to figure out what is going to happen in Europe. There are people that want to be optimistic about it. But the old story of the difference between optimist and pessimist is that the two are on the top of the Sears Tower and they get blown over. And the pessimist immediately starts praying, oh my God, I’m going to die. And the optimist as he’s passing the fourth floor says well so far so good.

Martin: So, I think that pretty much sums up our problem. There are people that just do not want to admit that there are economic problems and unfortunately refusing to address them early on is kind of like cancer. I mean, you can cure it if you deal with it, but if you do not deal with it, and you wait until the very last end, it’s too late. So I think we are in a bull market of volatility. And that is what we are looking at, particularly over the next two years.

Jim: Alright well listen, Martin, as we close, you are having a world economic conference in Philadelphia, tell our listeners about it. It is going to be held December 3rd and 4th.

Martin: Yes, we are doing a … the first day is really more for people that are more professional traders. That is kind of an analytical training session more or less. The second day is world economic conference which I always enjoy because we have people flying in from absolutely everywhere in the world. They are coming from India, South East Asia, Japan, Australia, and South Africa, all of Europe. I mean we have participants coming from everywhere, and the main thing that I think a good international audience does it allows you to see the global economy right there in the room. You can see the capital flow as opposed to just these myopic domestic type things. And that is why I enjoy them. That’s why we call them a world economic conference because basically everybody comes from all over the world. And we cover the whole world, not just the United States. And basically show the interconnectivity of what is going to happen over the next few years and why.

Jim: And if our listeners want to find more about that conference or make reservations, can they just go to your website?

Martin: Yeah, they can go to armstrongeconomics.com or they can go to martinarmstrong.org, and they’ll find details about the conference there that they can look at, and if you want to send an email to armstrongeconomics@hotmail.com, and we’ll be glad to forward the details of that. And I do not know what seating is left yet but I am sure somebody will take care of it for them.

Jim: Alright. We’ve been speaking with Martin Armstrong from Armstrong Economics. You can find out more about Martin’s work, his blog, by going to his website armstrongeconomics.com. Martin, I want to thank you so much for joining us on the Financial Sense Newshour. I hope you’ll come back and talk to us once again.

  Forum: Investment Discussion

denpal
Posted on: Dec 31 2011, 06:22 AM


Group: Member
Posts: 1,166

King World News is a great resource for the latest interviews with key players:

eg Jim Sinclair, John Williams, Eric Sprott, John Embry, John Hathaway, Michael Pento, Rick Rule, Martin Armstrong, Gerald Celente etc

There's a blog and also a radio interview section if you have the time to listen. I prefer to read because it's much quicker to do so.

www.kingworldnews.com/kingworldnews/King_World_News.html
  Forum: Macro Factors

denpal
Posted on: Dec 31 2011, 06:11 AM


Group: Member
Posts: 1,166

Mungo, many thanks for reminding me of this presentation of Alf's. I'd forgotten all about it even though I printed it out at the time!!

He is supposed to have retired so it was great of him to come out and update us all on the impending largest and strongest wave of the entire gold bull market; Intermediate Wave III of Major Three............target $4,500 with only two 13% corrections.

I'll stick with his prediction thanks.
  Forum: Macro Factors

denpal
Posted on: Dec 24 2011, 05:21 AM


Group: Member
Posts: 1,166

This is the chart as of yesterday. Will be interesting to see where this goes.
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  Forum: By Share Code

denpal
Posted on: Dec 24 2011, 05:10 AM


Group: Member
Posts: 1,166

This is the ann.
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