DrBubb's Diary - April 2018 Trading - v.111

[drbubb]

TOP of Page Header ... : Channel-GE : MP : PP : Charts : Acore : Fringe :

: : :

3d : ag : au : 10d-Gvs.UK : >News : DrRp : AJo : Fox : WRH : Arc : RenA : Rvd : FxN :

/ all data: 8yr: 32mo:12mo : 5mo 2mo :  BTC 10 5d / SLV-lv

02/28: 0.6100 x10950-(- 50) =6680: -100:10950Mar(-800):6680/( -750 :11.2%):+0100:11048 +025,-.007: 11.6
03/31: 0.6817 x$7091- +200 =4834 -050:$7041Jun(+403):4800/(+603+12.6%)
04/10: 0.6800 x$6742- +200 =4585
04/15: 0.6858 x$8340- +200 =5720 - 050:$8290Jun(+403):5685/(+603+10.6%):+0000:$8310 - 030,-.000: 9.30
04/21: 0.6900 x$8820- +200 =6086 +015:$8835Jun(+403):6096/(+603+9.89%):+0000:$8830 +010,-.000: 9.47
04/24: 0.6935 x$9288- +200 =6441 +000:$9288Jun(+403):6441/(+603+9.36%):+0000:$9310 +022,-.000: 9.60
04/25: 0.6950 x$9550- +150 =6609 -015:$9535Jun(+353):6627/(+503+7.59%):+0000:$9,575 +025,-.000: 9.67
04/29: 0.6942 x$9407- +100 =6530 +010:$9417Jun(+203):6537/(+303+4.64%):+0000:$9,477 +070,-.000: 9.65
======
-Bonus: 0.225 x12750=$3337; x$9417= $2119: 4418: H:4588 / 0170/0.726=$234: $9,651 : to New High !

[drbubb]

On 10/16/2017 at 5:21 AM, drbubb said:

Uranium is cruising for a retest of the lows...

Uranium participation / U.t ... all-data :

 

A buy window is open. Ideal low: Probably during tax-related selling over the next two months.

A sensible target for that low would be mid-Nov., based on history.

 

TOP Producing uranium co's

1. Cameco (TSX:CCO,NYSE:CCJ)

2016 uranium production: 27 million pounds (13,500 MT)

Cameco accounts for approximately 17 percent of global uranium production, and has mines in three countries. In the US it owns the Smith Ranch-Highland operation in Wyoming’s Powder River Basin, as well as the Crow Butte operation in Nebraska. The company’s notable Canadian operations include Cigar Lake and McArthur River/Key Lake, where it holds partial ownership. Additionally, Cameco has a 60-percent stake in a mine in Kazakhstan.

In 2016, Cameco produced slightly less uranium than it did the previous year. Commenting on the company’s performance, President and CEO Tim Gitzel said, “[t]he past year proved to be another difficult period for the uranium market. However, despite the uranium spot price hitting a 12-year low, the performance of our core business — uranium — was solid, and in line with our outlook.”

So far in 2017, the company has hit at least one snag. In February, Tokyo Electric Power Company Holdings terminated its uranium supply contract with the company, citing force majeure circumstances. Cameco has rejected the termination, and has said it will enforce its rights to recover losses. Terminating the contract could cost the company $1.3 billion in revenue for uranium deliveries through 2028.

 

U.t / Uranium vs CCO.t / Cameco ... update

==

[drbubb]

Global Stock market Comparison

RESISTANCE may be futile - or Not

SPY-vs.UKX, PSEI : 10-d :

Let's see if SPY can punch above important resistance near $271.

SPY ... update

If it can, the old highs may be retested

Equivalent Resistance for FTSE is 7,300

UKX ... update

The Philippines Stock Exchange Index is already breaking down

PSEI ... update : 5-yrs :

[drbubb]

SPX Resistance May Prompt A Massive Short Squeeze The Tech Trader

Today, we are calling the potential for a massive upside breakout move on what we believe is a massive Short Squeeze position just above resistance in the SPX.  Take a look at these charts.

This SPY chart showing our Advanced Adaptive Dynamic Learning Cycles and the Stage 1 basing pattern that we referenced yesterday is still very valid.  This resistance channel, near the top of the yellow rectangle, is very clear and we can see prices are tightening near the top of this channel.  Our ADLC cycle modeling system is showing a very clear upside breakout – the massive Short Squeeze move.

This SPX chart shows a similar setup with a resistance channel near 2675 and a very clear upside potential to near 2800 or higher.  What is interesting about this chart is that the Standard Deviation channels show this move would actually be considered a “reversion trade” - back to within normal pricing channels.  This means that we could see a much broader move higher with this upside potential – possibly well above 2850.

 

Many Attempts and Still No Breakout

Markets

By MarketSlant Editor 2d ago 926

 

The stock market failed to break above its short-term consolidation on Friday, as investors feared that the Syrian conflict may further escalate. They were right because there was a U.S., U.K. and France air strike on Saturday. However, expectations before the opening of today's trading session are positive and we may see another attempt at breaking higher. Will it be successful?

The U.S. stock market indexes lost between 0.3% and 0.5% on Friday, following higher opening of the trading session, as investors were worried about Syrian conflict escalation. The S&P 500 index retraced some of last week's uptrend and it currently trades 7.5% below its January 26 record high of 2,872.87. Both, Dow Jones Industrial Average gained and the technology Nasdaq Composite lost 0.5% on Friday.

The nearest important level of resistance of the S&P 500 index remains at around 2,670-2,680, marked by last weeks' local highs. The resistance level is also at 2,695-2,710, marked by March 22 daily gap down of 2,695.68-2,709.79. On the other hand, the nearest important level of support is at around 2,645, marked by Friday's daily low. The next support level is at 2,635-2,640, marked by local lows.

> https://www.marketslant.com/article/spx-resistance-may-prompt-massive-short-squeeze

[drbubb]

Wednesday was a good day for GCM's stock

But it is still WAY below adj. Book Value per share at c$12.40 (will come down towards C$5-6 as debs are converted)

GCM.t / Gran Columbian Gold ... 10d : 5yrs : 12mos : $2.55 +0.12 : +4.94%, vol.: 486,383

Recent Comments - from the Stockhouse Bullboard

RE:...:Solid production for March

Thank you Chupaca..
Not long ago I was shareholder of Lake Shore which was sold for $ 950 MM and was producing 170 000 oz /year .Of course there are many other things to consider but Gran Columbia at this price is well undervalued.
21 000 000 shares at $ 2,40=$ 50 M + debt or $ 150 MM.
I d'ont know what I'm missing but Grand Columbia looks to me a ''screaming buy.''

/ 2 /

If you add the warrants and the shares that will likely be issued as part of the 2018 debentures, you end up with about 54m shares outstanding which is still only about 2x EBITDA on current prices. Basically every multiple point increase in the stock is worth about C$2.40/ share and peers trade closer to 6x.

/ 3 /

Keep in mind when reading the twelve trailing months production figure  of 187,485 ozs . that there were 42 days of the strike in that time that effected production figures . Also before the strike workers were intimidated by the rebels to miss work . As well , equiment was damaged and capital work at Segovia was disrupted , so the next 12 months are going to see a lot of improvement . If no other problems come up we should be well past 200K ounces of gold .
/ 4 /

You make good points wayned - GCM became a 200,000+ oz producer by doubling production in 2 years - despite some extraordinary headwinds. Having cleared these hurdles there's every reason to expect GCM to continue to outperform.
Method has calculated the fully diluted price to EBITDA to be just 2x. Production should continue to rise, and AISC decline. It would seem that forward fully diluted price to EBITDA might be more like 1x. I don't think there is a rational justification for GCM being this cheap.
/ 5 /

"Why do the Big Houses avoid it?"

Waiting to see how the debentures get sorted out is my guess . Hopefully in a few weeks that will all change .

/ 6 /
Ownership: Who owns the largest blocks of GCM?
Co-chairman Serafino Iacono owns approx. 8% of the company . If the restructure works as planned he will own close to 10% .  He told me some time ago  if he bought any more he would have to declare he was trying to take ownership under TSX rules . I don`t know if that`s true or not but there is lots of insider ownership .
/ 7 /
Why so cheap? - Country risk, ie Columbia?
There is little country risk in Colombia anymore . I posted only a few days ago about friends who had just returned from vacation there . The World Bank rates Colombia #7 in the world for investment safety , tied with Canada . I would say Colombia is a better bet for resource developement  than Canada . Just look at the companies that have left Alberta or look at  Kinder Morgan throwing in the towel frustrated with Canada . The Ring of Fire has been symied by First Nations for 15 years . I could go on all day about broken hopes in Canada but Colombia is a very good place to be for resource investment  .

/ 8 /
Great volume again today (Monday was: 327,998 shares; Tue.: 285,448; Wed.: 486,385)
Not sure how they are keeping it down, but hopefully deal gets done Thursday and the lid comes off. Been adding weekly in anticipation of a nice pop. Would like to get close to real value. Thoughts?
/ 9 /
Method wrote: What insider sales are you referring to?
(Miller only owned GCM.DB.V so they should be getting all cash in a few weeks if everything goes according to plan and GCM.DB.V hasn't really traded.)
Subin was liquidating shares and 2020 debs on the 20 and 21st of Feb. Actually the insider report shows selling all throughout Feb. Do you understand what happened after Miller died and why Subin controls all the assets and why the selling occurred? No reason to panic.
( Yup, I understand It and think I was the first to mention it here but he only sold some bonds and never converted any to shares. He also only sold bonds above par which makes sense if he planned to sell the entire position anyway on the redemption.
i agree there is no reason to panic and wasn’t suggesting anyone do so. )

>  more at http://www.stockhouse.com/companies/bullboard#YSjd6bD2SyUc77ag.99

[drbubb]

Just 6% of the public Trust the media... and most of those are on the Left

An alarmingly low number of Americans say they trust the media

Apr. 18, 2016, 5:35 PM

WASHINGTON (AP) — Trust in the news media is being eroded by perceptions of inaccuracy and bias, fueled in part by Americans' skepticism about what they read on social media.

White House press secretary Josh Earnest takes questions during the daily briefing at the White House in Washington.

Just 6 percent of people say they have a lot of confidence in the media, putting the news industry about equal to Congress and well below the public's view of other institutions.

In this presidential campaign year, Democrats were more likely to trust the news media than Republicans or independents.

. . .  A majority of people get news from social media, most frequently by far from Facebook. "Facebook is the place where everyone is, and so you're not necessarily looking for news, but you're getting it," Rosenstiel.

Yet only 12 percent of those who use Facebook say they have a lot of trust in the news and information they see on the site.

Twitter attracts smaller numbers for news than Facebook, and about 18 percent have a good deal of trust in what they read there. There was also viewer skepticism of other social media sites.

> http://www.businessinsider.com/ap-poll-just-6-percent-of-people-say-they-trust-the-media-2016-4

Hmm.

Those little-trusted sources, like the Lie Stream media and Facebook, and almost entirely Leftwing dominated

/ 2 /

I cannot seem to find an update - maybe Gallop stopped publishing the polls when Trust collapsed.

(But we can see from these 2016, that it was only Democrats, who ever had much trust in The Media, but then it is "their" media, dominated by a leftwing bias):

https://infographic.statista.com/

[drbubb]

SILVER SQUEEZE?

SLV / Silver etf... update

Silver -- for Update, click here

Silver Short Squeeze in Progress

David Erfle  Wed. Apr. 18, 2018

A few weeks ago, I alerted you to the bullish situation being created in the silver market since the global equity panic ended on February 9th. A few hours ago, the silver price began to take off like a scalded cat without any recognizable catalyst, other than the reasons I spoke of in this article. Based on the extreme bearishness of the speculator positions in the latest silver Commitment of Traders report, the price of silver can rally very quickly and far beyond what fundamental and technical analysis projects."

This silver short squeeze could easily drag gold along with it and break the safe haven metal out of a huge rounded bottoming pattern which has been building below $1375 for nearly five years. The rounded bottom in the GDX, which I alerted you to last week, may have been the warning of these bullish developments taking place this morning.

If you have positioned yourself accordingly while this set-up was taking place, I would strongly advise ceasing to trade until the sector becomes extremely overbought on a weekly basis.

> http://www.kitco.com/commentaries/2018-04-18/Silver-Short-Squeeze-in-Progress.html

COT report for Silver ... update

Note the Low level (-xx) of Net Silver Contracts held by NonCommercial - lowest during the One Year period. In the past, Silver price rallies were launched from Lows.  These positions "set the table" for a short squeeze.

[drbubb]

Watch Silver’s Breakout Potential, Says This Analyst

Anna Golubova

Silver has been missing out on a lot of the positive price action lately, said Robinson, adding that this surpassed trend could intensify this week’s rally even further.

“The coiling price action over the past couple of years could lead to a strong move,” he wrote. “Furthermore, large speculators in the futures market have given up on the precious metal in recent weeks by turning from net-long to net-short for the first time since 2003.”

Robinson is not the only one to call for a big move in silver. Goldmoney published a report on Wednesday stating the silver remains significantly undervalued and estimating that prices could soon see a more than 30% jump.

“Silver prices are trading almost 25% below the values predicted by our price model. This is the largest downside deviation we have seen in over 25 years,” Goldmoney’s VP and lead researcher Stefan Wieler said. “In order to maintain this downward pressure on silver, speculators would have to continue to sell over 500 million ounces of paper silver per year. A reversal of this positioning could lead a >30% rally in silver prices in our view.”

> http://www.kitco.com/news/2018-04-19/Watch-Silver-s-Breakout-Potential-Says-This-Analyst.html

[drbubb]

GOLD is also sitting at a possible Breakout Point

GLD / Gold etf ... update

MNT.t / Royal Canadian Mint ... update

Shows LOWS every year, near year end

[drbubb]

BTS ... 5-mos --- What next?  A breakout is possible

==

[drbubb]

NEW WEEKLY DATA - A quiet Week

==== : Fye'16 : Fye'17 : +-%chg :  01/05 :  02/02 :   03/02 :  03/29  :  04/06 :  04/13  :  04/20 :
Gold : 1151.7 : 1309.3 : +13.7% : 1322.3 : 1337.3 : 1323.4 :  1327.3 : 1336.1 : 1347.9 : 1338.3 :
GLD- : 109.61 : 123.65 : +12.8% : 125.33 : 126.39 : 125.39 : 125.79 : 126.39 : 127.45 : 126.63 :
SPY- : 223.53 : 266.86 : +19.4% : 273.42 : 275.45 : 269.08 : 263.15 : 259.72 : 265.18 : 266.61 :
SPX- : 2238.8 : 2673.6 : +19.4% : 2743.2 : 2762.1 : 2691.3 : 2640.9 : 2604.5 : 2656.3 : 2670.1 :
Sp/Au 194.4%: 204.2%: ====== : 207.5%: 206.5%: 203.4% : 199.0%: 194.9%: 197.1%: 199.5%:
Silvr : 16.580 : 17.150 : +3.44% :  17.285 : 16.710 :16.470 : 16.268 : 16.360 : 16.660 : 17.160 :
SLV- : $15.64 : $15.98 : +2.08% : $16.22 : $15.66 : $15.56 : $15.41 : $15.43 : $15.68 : $16.13 :
XLE : $75.32 : $72.24 : -4.09%: $74.97 : $72.46 : $66.95: $67.41: $67.35 : $71.41 : $73.30 :
WTIc: $53.72 : $60.42 : +12.4% : $61.44 : $65.45 : $61.25 : $64.94 : $62.06 : $67.39 : $68.30 :
Au/Wt:  r-21.4 :  r-21.7 : ====== :  r21.52 : r-20.43 : r21.61 : r-20.44 : r-21.53 : r-20.01 : r-19.59 :
Ngas: $3.350 : $2.950 : - 11.9% : $2.795 : $2.850 : $2.690 : $2.730 : $2.700 : $2.730 : $2.740 :
Cop'r: $2.510 : $3.305 : +31.7% : $3.230 : $3.190 : $3.120 : $3.030 : $3.060 : $3.070 : $3.130 :
Weat : 408.00 : 426.25 : +4.47% : 430.75 : 446.75 : 500.00 : 451.00 : 472.25 : 472.50 : 477.25 :
Corn : 352.00 : 350.75 : - 0.36% : 351.25 : 361.50 : 385.25 : 387.75 : 388.50 : 386.25 : 385.50 :
CRB- : 192.51 : 193.86 : +0.07% : 193.45 : 197.44 : 194.12 : 195.36 : 192.25 : 199.70 : 201.92 :
DBA : $19.97 : $18.76 : -6.06%: $18.83 : $18.97 : $19.39: $18.18: $18.72 : $18.91 : $18.85 :
D/crb: 10.37% :  9.67% : ====== : 9.73%  :  9.61%  : 9.90% :  9.31% :   9.74% :   9.47% :  9.34% :
Xle/D: r-3.770 : r-3.850: +2.14%: r-3.981 : r-3.820 : r3.453 :  r-3.707 : r-3.600 : r-3.776 : r3.888 :
DXY- : 102.38 : $92.30 : - 9.85% : $92.01 : $89.19 :: $89.91 : $89.81 : $89.78 : $89.50 : $90.07 :
====
Gold : 1151.7 : 1309.3 : +13.7% : 1322.3 : 1337.3 : 1323.4 : 1327.3 : 1336.1 : 1347.9 : 1338.3 :
Au/hd: r1.401 : r1.58E : ====== : r1.584 : r-1.589 : r-1.587 : r-1.569 : r-1.554 : r-1.557 : r-1.546 :
Hold : 822.17 : 830.00 : +01.0% : 834.86 : 841.35 : 833.98 :  846.12 : 859.99 : 865.89 : 865.89 :
GDX- : $20.92 : $23.24 : +11.1% : $23.67: $22.91 :  $21.49 : $21.98 : $22.07 : $22.89 : $22.71 :
WPM: $19.32 : $22.27 : +15.3% : $21.95 : $21.13 : $19.32 : $20.37 : $20.60 : $21.24 : $21.31 :
Gdxj : $31.55 : $34.13 : +8.18% : $34.48 : $32.29 : $31.73 : $32.15 : $32.39 : $33.49 : $33.40 :
PHM: $18.38 : $33.34 : +81.4% : $34.54 : $30.70 : $28.95 : $29.49 : $30.03 : $29.29 : $28.54 :
EEM- : $35.01 : $47.30 : +35.1% : $49.13 : $49.05 : $48.13 : $48.28 : $47.08 : $47.57 : $47.26 :
ShCm: 3103.7 : 3307.2 : +6.56% : 3391.8 : 3462.1 : 3254.5 : 3168.9: 3131.1 : 3159.1 : 3071.5 :
PhpSi: 6840.6 : 8558.4 : +25.1% : 8770.0 : 8810.8 : 8458.6 : 7979.8: 7945.7 : 7900.0 : 7726.7 :
XLF-  : $23.25 : $27.19 : +16.9% : $28.41 : $29.36 : $28.44 : $27.57: $27.17 : $27.46 : $27.88 :
IWM- : 134.85 : 152.43 : +13.0% : 154.75 : 153.83 : 152.35 : 151.83: 150.36 : 153.95 : 155.55 :
F/iwm 0.1724 : 0.1784 : =====  : 0.1836 : 0.1909 : 0.1867 : 0.1816 : 0.1807 : 0.1784 : 0.1792 :
BTC-- : $948.5 : 13,100 : x13.8X : 15,840 : $8,800 : 11,117 : $7,401 : $6,589 : $8,000 : $8,800 :
==== : Fye'16 : Fye'17 : +-%chg :  01/05 :  02/02 :   03/02 :  03/29  : 04/06 :  04/13 :  04/20 :

Barrons Data : http://www.barrons.com/data?mod=BOL_TOPNAV_DATA

[drbubb]

ASA Gold & Precious Metals Ltd.

... update : 3-yrs : 3yr-vs-GDX :

Discount to NAV ... update : website :

3-yr

ratio: ASA-to-GDX - like discount to NAV

==

[drbubb]

The Bitcoin correction may be over - an ABC correction is in place

BTS ... 12mo : 5mo : 10-d :

$10,000 next resistance?

==

 

[drbubb]

BREAKFAST ?
Cocoa

Coffee

Sugar

 

[drbubb]

Donald J. Trump‏Verified account @realDonaldTrump 10h10 hours ago

So funny, the Democrats have sued the Republicans for Winning.

Now he R’s counter and force them to turn over a treasure trove of material, including Servers and Emails!

===

MARL LEVIN CONCURS:

"The Liberals have no idea how stupid Tom Perez is.  The DNC has opened up DISCOVERY."

Mark Levin Show 04-20-2018 Democratic Party files lawsuit against Russia, Trump campaign

You are allowed to defend yourself, so defense lawyers have opened the Door -- to aggressive litigation to explore "the evidence", like the DNC server. etc,

Levin: "I am telling you: THIS IS A GOLD MINE!"

"I am strongly recommending to everyone to use this as a chance to defend themselves, with vigorous litigation!"

"Mr Comey has condemned himself" (with his memos, including leaks, which he gave "to a friend")

[drbubb]

Space mining set to produce world’s first TRILLIONAIRE in galactic gold rush

Earlier this year, physicist Michio Kaku described asteroids as “flying gold mine in outer space” that could replenish any metal shortage on Earth.

Examples of valuable asteroids include one rock measuring 3,000ft across that contains $5.4 trillion worth of platinum.

And now it is predicted the first trillionaire will make their fortune in outer space.

> https://www.dailystar.co.uk/news/latest-news/697701/space-mining-first-trillionaire-asteroid-mark-zuckerberg-bill-gates-jeff-bezos

[drbubb]

Jeff Christian thinks gold will stay Rangebound "for another 2-3 quarters", if there's no big drop in stocks

GLD / Gold etf ... update

 

Gold Won’t Rally Unless This Happens - CPM Group (Part 2)

Apr 20, 2018

Guest(s): Jeffrey Christian

Unless there is a much more negative economic view from investors’ consensus, then gold is unlikely to break out of its current trading range, said Jeff Christian, managing partner at CPM Group.
“It’s going to take higher interest rates to move gold higher,” Christian told Kitco News on the sidelines of the IPMI Precious Metals Mobility Symposium.
Christian noted that a lot of times rising interest rates are positively correlated to gold, since higher rates ... (read more)

[drbubb]

Big Test For Gold

failure at $1,330 could be ugly.

The 10-year notes are pushing 3% and the dollar is spiking, leaving gold in danger of breaking down. With silver coming back to support after breaking out to the upside, gold better hold $1,330 or the weak hands will start selling.

> http://www.kitco.com/commentaries/2018-04-23/Big-Test-For-Gold.html

[drbubb]

Silver Has Potential For 50% Rally - Bloomberg Intelligence

David Lin Monday April 23, 2018

(Kitco News) - Fundamentals are in place for precious metals, especially silver, to significantly break out of current trading ranges, according to a report from Bloomberg Intelligence.

The report said that silver has a history of lagging its industrial metals companions and can rally as much as 50% by simply “catching up.”

“Essentially unchanged from June 2016, silver has plenty of room to catch up to the 50% rally in the Bloomberg Industrial Metals Spot Index and 3% decline in the trade-weighted broad dollar,” the report said. “It's been about 50 years since silver's 12-month range was this narrow, increasing the likelihood of a sharp rally.”

Silver has traded range-bound for the last year, testing lows of $15.57 an ounce but barely breaking past $18 an ounce at its highs. Its yellow metal counterpart, by comparison, has rallied 9% in 2017, widening the gold/silver ratio to highs of 82.

Mike McGlone, senior analyst at Bloomberg Intelligence, said that fundamental macro forces, especially a weakening dollar, remain the key catalysts for a potential breakout of range-bound commodities like precious and industrial metals.

[drbubb]

Gold On The Defensive

Peter Hug Monday April 23, 2018 08:30

Kitco Commentaries | Opinions, Ideas and Markets Talk

Featuring views and opinions written by market professionals, not staff journalists.

Commentaries & Views

Share this article:

(Kitco News) - On holiday last week, I am missing the nuance of the past few trading days. We suggested that the technical picture was looking positive with the caveat that $1,355 on a close basis was necessary to create further upside momentum. Looking at last week’s charts, traders were unable to push gold through this level. The weakness overnight was generated from two factors. The first was North Korea’s statement that it was prepared to suspend its nuclear program. This may prove to be a ploy to get the U.S. to the negotiating table. It squarely puts the onus on the U.S. to follow through on the meeting. Backing away now will create the perception that the U.S., not North Korea, is the impediment to peace on the peninsula. The second is the U.S. 10-year bond, which is approaching a 3% yield.  The increase in yield has pushed allocations into the $U.S. and hit the commodity space. Silver, which has been reacting positively in response to stronger oil prices, has also backed off its recent highs, as oil prices weaken against the quieter geopolitical landscape. Technically, gold needs to hold support at $1322 and requires a break above the $1,337 area to spark new interest.

By Peter Hug

 

Gold, Silver Sell Off As U.S. Dollar Surges

Jim Wyckoff Monday April 23, 2018

(Kitco News) - Gold and silver prices were solidly lower in early-afternoon U.S. trading Monday. The metals sold off in the face of an appreciating U.S. dollar on the world foreign exchange market. The U.S. dollar index hit a more-than-three-month high today. There is also little risk aversion in the marketplace at present, which is another bearish element for the precious metals markets. June Comex gold futures were last down $13.40 an ounce at $1,325.00. May Comex silver was last down $0.518 at $16.65 an ounce.

A feature in the marketplace at present is rising world government bond yields. The U.S. 10-year Treasury note yield is nearing 3%, which is a four-year high. Some argue that rising bond yields are bearish for gold, pulling investor demand away as gold produces no dividends or interest income. However, rising bond yields also suggest rising inflationary pressures. Problematic inflation is a bullish element for hard assets like the metals. Still, present worldwide inflation levels are not (yet) deemed problematic.

[drbubb]

[drbubb]

Commodities Are Flashing a Once-in-a-Generation Buy Signal

Frank Holmes

Since the commodities supercycle began unwinding nearly 10 years ago, many investors have been waiting for the right conditions to trigger mean reversion and lift prices. I believe those conditions are either firmly in place right now or, at the very least, in their early stages. Among them are factors I’ve discussed at length elsewhere—a weaker U.S. dollar, a steadily flattening yield curve, heightened market volatility, overvalued U.S. stocks, expectations of higher inflation, trade war jitters, geopolitical risks and more.

In addition, nearly 60 percent of money managers surveyed by Bank of America Merrill Lynch believe 2018 could be the peak year for stocks. A recent J.P. Morgan survey found that three quarters of ultra-high net worth individuals forecast a U.S. recession in the next two years.

All of this makes the investment case for commodities, gold and energy more compelling than at any other time in recent memory.

Exhibit A is the chart below, which I’ve shared before but recently updated with new data. Relative to equities, commodities are as cheap right now as they’ve been in decades. This is literally a once-in-a-generation opportunity that investors with a long-term view should seriously consider. For perspective, had you invested in a fund tracking the S&P GSCI or an equivalent commodities index in 2000, you would have seen a compound annual growth rate (CAGR) of around 10 percent for the next 10 years, according to Bloomberg data.

We all know that past performance is no guarantee of future results, but it’s doubtful you’re going to get a clearer or resounding signal that now could be an ideal time to add to your commodities exposure. If you feel as if you’ve been stuck at a traffic light these past few years, just waiting to put your foot on the accelerator, you can breathe a sigh of relief because the light may have just turned green.

. . .

China’s One Belt, One Road Still Needs Biblical Amounts of Materials

Also bolstering the commodities investment story is China’s massive ongoing “Belt and Road” megaproject, also known as the Silk Road Economic Belt. In a note last week, CLSA reminded us that the infrastructure initiative is still in its infancy, expected to be completed by 2049. It will cut through as many as 68 countries across Asia and Europe, affecting an estimated 62 percent of the world’s population. China has already spent approximately $180 billion to complete various projects, but many billions more will go toward building roads, ports, dams, high-speed rail, airports and more—all to “enhance regional connectivity,” as President Xi Jinping put it, and strengthen China’s economic clout.

To give you some scale as to how monumental and historic this undertaking truly is, the graphic below, courtesy of BHP, compares the development to the U.S. Marshall Plan, then one of the most expensive projects in human history. The Belt and Road initiative could eventually cost 12 times as much or more, with total spending estimates ranging between $4 trillion and $8 trillion.



Estimates of how much energy and natural resources will be needed during the development phase vary wildly, but I think it’s fair to assume that demand will continue to be supported for some time.

Gold Supply Concerns Highlight Its Rarity

Gold ended last week down slightly, the first time in three weeks it’s done so. It looks as if gold investors took some profits late in the week after the yellow metal came close to breaching $1,360 on Wednesday.

I still believe gold could hit $1,500 an ounce this year on rising consumer and producer prices, which I think are understated. This is more than apparent when you compare the official U.S. consumer price index (CPI) and alternative measures such as the New York Fed’s Underlying Inflation Gauge (UIG). And as Dr. Ed Yardeni points out in a recent blog post, the word “inflation” appeared as many as 106 times during the latest Federal Open Market Committee (FOMC) meeting, a sign that Fed members could be getting more and more concerned about mounting inflationary pressures.

Read more at http://www.stockhouse.com/opinion/independent-reports/2018/04/23/commodities-are-flashing-once-generation-buy-signal#WCujQZdu7Q4Q8lVP.99

[drbubb]

Ten Year rates are testing 3.0% - Possible breakout ahead

TNX / 10 year rate x10 ... update

Interest rates attempting 25-year breakouts!

by kimblecharting - Apr 24, 2018 9:24 am

Interest rates have been falling for nearly three decades. Could the trend of lower rates be over? 

The chart below shows a big test to this trend is in play right now.

[drbubb]

There is Over $7.5 Trillion In Debt That’s Highly Vulnerable To Rising Rates – Here’s What To Expect

by Palisade Research - Apr 24, 2018 9:32 pm

With the Fed raising short term rates, and the U.S. 10 yield eclipsing 3% – debt tied to LIBOR will be greatly affected

[drbubb]

Gundlach On Gold: "Something Big Is Happening... It's Getting Exciting"

"It’s getting almost exciting...something big is happening...an explosive, potential energy of a huge head-and-shoulders bottom base is signaling a move of $1,000 in gold prices."