Category: Gold and Silver Stocks 2022
The analysis published under this category are as follows.
Sunday, December 11, 2022
As Inflation signals fade, the Gold Mining Stocks sector outperforms / Commodities / Gold and Silver Stocks 2022
By: Gary_Tanashian
The gold mining sector is doing what it should do amid fading inflation
If you have tuned out inflationist gold bugs since mid-2020 you are now in position to capitalize, unlike scores of inflation bugs who’d already bought (and likely sold into tax loss season, 2022).
Readers of nftrh.com have seen this space write many times how gold is not about inflation. At least not primarily. That compounds with the gold miners, which leverage gold’s standing within the inflated (and periodically deflated) macro. The gold mining sector is not about inflation. As in 2003-2008 the gold miners can rise during an inflationary phase, but as in Q4, 2008 they would then be summarily executed due to poor accumulated fundamentals.
The correction in the gold mining sector from mid-2020 into Q4 of this year was entirely normal to this analysis. What is (or should be) abnormal is excuse making and ghost stories about conspiracy and manipulation to explain why gold miners did so poorly. As you probably know, there is a lot of that out there. It’s tradition in the precious metals complex.
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Friday, December 02, 2022
HUI Gold Stocks Rally Hits Target / Commodities / Gold and Silver Stocks 2022
By: Gary_Tanashian
The HUI rally has hit the logical resistance target where the 200 day moving average meets clear lateral resistance. It has done so in a not particularly overbought fashion due to the chop and grind it took to get here off the lows of the shaded bottoming pattern that we established and tracked in NFTRH over the last several weeks.
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Thursday, November 24, 2022
Could Bitcoin’s Movements Indicate the Fall of Junior Gold Stocks? / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
While comparing gold and bitcoin gives some idea of the patterns in the market, can the slide of junior miners be predicted by the same method?
Those of you who have been following my analyses for a while may be expecting me to write that it is based on the stock market's rally and thus only temporary, as miners will follow gold sooner rather than later. That’s their ultimate source of revenue (current or expected). While that’s true, right now there is another huge factor that’s likely contributing to the situation.
It's most likely the unfolding crypto-drama.
Remember when I previously commented on the link between juniors and cryptocurrencies? What I wrote back then was particularly important with regard to the less known (obscure?) ones with a shady background. In fact, some even call them “shitcoins.”
Tuesday, November 01, 2022
Macro changing in favor of the Gold Stocks Sector / Commodities / Gold and Silver Stocks 2022
By: Gary_Tanashian
Macro changing in favor of the gold stock sector is and has been a process
The process began with the leveling off of inflation’s momentum and continued as the global economy began to show signs of weakness (e.g. US manufacturing deceleration and developing supply chain slack among several other problem areas as exposed during the current earnings season).
While the nominal sector (HUI or the ETFs, GDX and GDXJ) has been bouncing within its intact downtrend it would be best to track other macro considerations along with the chart TA, which could signal a new bull phase by either completing a daily chart bottom/base (which nearly happened on Wednesday, but at least temporarily failed as the index and ETFs did not take out the October 4th highs) or completing a final decline, preferably amid much fear and angst among whatever inflation bugs may still be infesting the sector.
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Thursday, September 01, 2022
Nothing Is Stopping the Gold GDXJ From Reaching 2020 Lows / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Both gold and silver’s results sagged, but gold stocks are the worst performers so far. What is this decline leading to?
Gold moved visibly lower yesterday, silver closed at the second-lowest level in over 2 years, and miners (both GDX and GDXJ) formed their lowest daily close in over 2 years! If someone has chosen to take short positions, profits have increased.
Sunday, July 31, 2022
Gold Stocks’ Rally Autumn 2022 / Commodities / Gold and Silver Stocks 2022
By: Zeal_LLC
The gold miners’ stocks have been thrashed in recent months, crushed as heavy futures selling slammed gold. That obliterated any residual sector bullishness, leaving gold stocks wildly-oversold and deeply-out-of-favor. But having weathered a rough early summer, the battered miners and their metal are trudging back into their traditional strong season. That begins with robust autumn rallies really accelerating in August.
Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year. While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals. We humans are creatures of habit and herd, which naturally colors our trading decisions. The calendar year’s passage affects the timing and intensity of buying and selling.
Gold stocks display strong seasonality because their price action amplifies that of their dominant primary driver, gold. Gold’s seasonality generally isn’t driven by supply fluctuations like grown commodities see, as its mined supply remains relatively-steady year-round. Instead gold’s major seasonality is demand-driven, with global investment demand varying considerably depending on the time in the calendar year.
This gold seasonality is fueled by well-known income-cycle and cultural drivers of outsized gold demand from around the world. Starting in late summers, Asian farmers begin to reap their harvests. As they figure out how much surplus income was generated from all their hard work during the growing season, they wisely plow some of their savings into gold. Asian harvest is followed by India’s famous wedding season.
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Sunday, July 10, 2022
What Needs to Happen for the Gold Stocks GDXJ to Hit New Lows? / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Although the general stock market has risen, this trend may soon reverse. Since it often moves along with gold stocks, junior miners can face a fall too.
Let the S&P 500 Be a Clue
Mining stocks declined significantly this week, but they haven’t severely underperformed gold. There is a good reason for it – the general stock market moved higher recently.
What would have to happen for the mining stocks (in particular, junior mining stocks) to decline in a more profound manner and slide well below $30 (in the GDXJ)? For example, the trend in the stock market could reverse.
Guess what – that’s exactly what’s likely to happen based on what’s going on in the S&P 500 chart.
Tuesday, June 28, 2022
GOLD STOCKS ARE WORSE THAN GOLD / Commodities / Gold and Silver Stocks 2022
By: Kelsey_Williams
Gold stocks latest swoon confirms what has been stated and inferred in my previous articles about gold mining shares – namely, gold stocks are a lousy investment.
The original article linked in the preceding paragraph was published in September 2016. I just finished reading it again and find no reason to edit or modify its contents.
The price of gold peaked in the summer of 2016 – shortly before my article was written and published – at $1357 oz. (monthly average closing price). At that time the GDX (ETF index of gold mining shares) peaked at 30.60.
Both gold and gold mining shares (gold stocks) have been lower and higher since then, and the past six years have seen a fair amount of volatility. Lately, both gold and gold stocks have undergone downside corrections since their most recent highs earlier this year.
So where are we now?
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Monday, June 27, 2022
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Let's not be confused by the temporary USDX weakness. Junior miners are faint and we can expect them to decline again soon.
April and May Replay?
Although history doesn’t repeat itself to the letter, it rhymes. At least that’s what tends to happen in the financial markets.
In today’s analysis, I’ll explain why I think we’re about to see another example of the above in the case of junior mining stocks. There’s a technique that suggests one thing, but there’s also another that suggests that a 1-to-1 analogy wouldn’t be as good a fit, as a slight deviation from it.
So far, the situation in the GDXJ – a proxy for junior mining stocks – has been similar to what happened in the second half of April and early May.
Wednesday, June 01, 2022
Gold Fakeout Instead of Breakout: Is the Gold Miners’ Crash Coming? / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Some analogies in the gold market that may be a hint for investors can be seen right now. If there's a 2008 rerun, what could that mean in the near term?
The precious metals market declined yesterday, and while the move is still small, it’s nice to see that our short positions in juniors are already profitable.
Something quite interesting happened in their price movement at the beginning of yesterday’s session, and that’s what I’d like to start with today.
Tuesday, May 24, 2022
After Recent Highs, What’s Next for the Gold Junior Miners? / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
Signs are pointing to gold’s May rally running out of steam as the USDX reaches its short-term bottom. But how much stamina is left in the yellow metal?
Another day, another higher close in the junior miners. And another day where profits on our long positions in the latter increased. There is a sign that the rally in the precious metals sector is close to being over.
That sign is the situation in the USD Index, and the shape of the gold-USD link.
Saturday, May 21, 2022
Here is Why I’m Still Bullish on Gold Mining Stocks / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
The medium-term outlook for the precious metals remains bearish, but does this mean we can’t profit on shorter-term moves? Quite the opposite!
Precious metals declined yesterday, and so did the general stock market. Is the rally already over?
When I wrote about this rally on May 12, which took place at the same time when I took profits from the short positions and entered the long ones, I mentioned that I planned to hold these long positions for a week or two. Since that was exactly a week ago, the question is: is the top already in?
In short, it probably isn’t. As always, it’s useful to check what happened in the past in similar situations to verify whether what we see is normal or some kind of an outlier that cannot be explained by something that has already happened.
Let’s start with a quote from yesterday’s analysis:
Of course, there will be some back-and-forth movement on an intraday basis, but it doesn’t change anything. Junior miners are likely to rally this week nonetheless. And perhaps not longer than that, as the next triangle-vertex-based reversal is just around the corner – on Friday/Monday.
Friday, March 04, 2022
Gold Miners – Biggest Losers? That’s What Oil Says / Commodities / Gold and Silver Stocks 2022
By: P_Radomski_CFA
After the war-driven gold rally, oil is starting to outperform. History between these two has already shown that someone may suffer. Many suggest: gold miners.
The precious metals corrected some of their gains yesterday, but overall, not much changed in them. However, quite a lot happened in crude oil, and in today’s analysis we’ll focus on what it implies for the precious metals market and, in particular – for mining stocks.
Friday, February 25, 2022
Gold Stocks’ Spring Rally 2022 / Commodities / Gold and Silver Stocks 2022
By: Zeal_LLC
The gold miners’ stocks have mostly been consolidating sideways over this past half-year. They’ve been held down by periodic bouts of heavy gold-futures dumping on Fed-tightening fears. But as those traders exhaust their selling firepower, gold stocks have formed a strong technical base that is birthing their next major bull-market upleg. And a stiff tailwind is mounting as gold stocks enter their strongest season of the year.
Gold stocks exhibit strong seasonality because their price action mirrors that of their dominant primary driver, gold. Gold’s seasonality generally isn’t driven by supply fluctuations like grown commodities see, as its mined supply remains relatively-steady year-round. Instead gold’s major seasonality is demand-driven, with global investment demand varying considerably depending on the time in the calendar year.
This gold seasonality is fueled by well-known income-cycle and cultural drivers of outsized gold demand from around the world. Like clockwork these power major spring, autumn, and winter seasonal rallies in gold and thus its miners’ stocks. Interestingly market forces behind the former are the least-understood out of all gold’s seasonal surges. Maybe that’s why this imminent spring rally has also proven gold’s weakest.
Yet surprisingly gold stocks still enjoy their best seasonal outperformance relative to their metal during these same coming months! So gold stocks’ spring rally has proven their strongest seasonal one during gold’s modern bull-market years. This contradictory mismatch between gold’s worst seasonal rally and its miners’ best one offers an important clue on the spring rally’s motivating impetus, sentiment is the key.
Traders’ psychology exceedingly influences their capital-allocation decisions. They won’t buy gold or gold stocks or anything unless they are optimistic prices will climb on balance. After dark cold winters in the northern hemisphere where the vast majority of the world’s traders live, spring naturally breeds optimism. Its glorious expanding sunshine and warming temperatures universally buoy the spirits of nearly everyone.
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