Haystack 2016

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Gwyde
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Haystack 2016

Post by Gwyde » 10 Jan 2016, 21:25

Gold Mining investors shrugging off bearish sentiment ?

2016 started with an ugly retreat on worldwide stock markets, triggered by a plunge in China where trade was halted a couple of times. Gold was further lifted above its recent lows and broke above $1100 on Thursday. We end the week with a mild retreat at $1104.6, up 4.11% for 2016. Miners respond favorably and HUI/Gold firmed to 0.1072. Are mining investors shrugging off bearish sentiment? Perhaps better be cautious: silver seems to follow reluctantly with a 0.72% gain, only briefly breaking above $14 on Thursday. You find updated graphs on the gold miner pulse blog page. A new long article with a longer term perspective has just been published: Gold miner bear market starting its fifth year.

There are perhaps a few good arguments for caution: the bifurcation among precious metals. The PGM's are off worse since the year started: whereas platinum limits its loss to 1.46% over 2016, closing at $877, palladium shed 12.3%, sliding to $491. This is a fresh multi-year low and down from about $800/Oz only a year ago. I still have to witness a durable gold recovery where the three white precious metals aren't, if not taking the lead, at least following in the slipstream.

Among our benchmark ETFs, gains vary between 1.5% for SIL over 4.7% for GDXJ to 6.3% for GDX, while the 9.3% gain for GLDX mainly is a recovery from the slide during the last week of 2015. With a 3.9% gain, our contributor driven explorer & junior miner spreadsheet is somewhat lagging. The Friday loss (1.63%) is eroding prior gains. We now are down 47.01% on average. The good news is 3 picks are up since inclusion: perhaps less surprisingly Osisko Gold Royalties is up 6.47% since including it on Dec 31st and MAG silver keeps up fairly well. Oceana Gold is the third long time winner joining the select group. With a small single digit long term loss, Pretium Res. also made a come back last week. But the overall balance isn't too favorable: there are 8 advances against 10 declines with Wellgreen Platinum steady over the week.


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Always a tough period...

Post by Gwyde » 22 Feb 2016, 01:15

The Chinese new year has passed and we now are in the year of the monkey. Let's hope not monkey business. American stock markets recovered some of their losses after a decent week. Nasdaq still is down little over 10% for 2016, but the tech index delivered the best return (+3.85%) for the week.

Precious metals sold off after their rally: after the Chinese new year a tough period often starts. Gold has been trending inversely to the broad stock market lately. This correlation may be short term: remember that the major part of the gold bull from early 2003 till late 2007 coincided with the stock market rally after the tech bust. The yellow metal limited its weekly loss to 0.96% closing at $1226 in this short trading week. The white precious metals suffered more: silver slid 2.73% to $15.32. Among the PGMs platinum eased 1.78% to $937 whereas palladium plunged 4.7% to $497. The HUI miners index is down less than 3% making HUI/Gold ease only little. You find updated graphs on the gold miner pulse blog page.

Among our benchmarks, GDX and GDXJ are down 2.44% and 0.88% respectively, while GLDX manages to gain 2.35%. Our contributor driven explorer & junior miner spreadsheet has been in a sunny spot, progressing by 2.86%. The accumulated loss would reduce to 41.86%. However after moving Wellgreen platinum to the exile list, the long term loss only shows 40.07%. This purely 'cosmetic' operation is compensated for when taking the total accumulated result (including profit and loss taking in disvestments) which stands at 44.44%. We have 11 stocks advancing against 7 declining over the week. (Wellgreen Platinum also ended its last week advancing 13%). PLG rallied over 70%; too bad we were deeply into the red on this one, which limits the impact on the aggregated performance. Some profit taking on OGC was about the worst happening to our listed stocks.

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Canadian gold miner performance

Post by Gwyde » 24 Feb 2016, 13:36

Back in November 2010 as I started monitoring the Canadian gold and silver miner performance, I used the mining stocks covered by the GoldMinerPulse database. This source contains resource and reserve information on nearly 100 gold or silver miners, explorers and developers. It has become subscription based from this year onward: as such our 'miner universe' will gradually diverge.

Since bottoming near 100 on Jan 19, the HUI index started an impressive recovery rally. A weekly updated gold miner pulse blog page provides a short term trend on HUI relative to Gold and on the Global X Silver miners ETF: SIL relative to silver. Moreover the mining indexes based on the gold-miner-pulse database are also included, as is a performance disparity graph.

How individual miners went down with the herd during a four year gold miner bear market or miraculously resisted the trend, is shown on the gold miners performance blog page.

Miners are sorted into 5 performance quintiles. These quintiles contain 19 miners/explorers (only 18 in the last quintile). Despite the ongoing recovery, barely half of the miners (10/19) of the top performers quintile is advancing over the long haul. The median (the middle ranking performance) still makes a stiff loss of over 73%: a quadruple is needed to break even here. In the bottom quintile adequately called 'investor's nightmare' you find 16 stocks down over 95% and a few have slid to less than 1% of their value less than 6 years ago. These really are the basket cases: all of them have become illiquid penny stocks. Stock price swings may be high, but it's increaslngly difficult to take advantage of any paper gain because of the bid-ask spread and the thin order book. Why take that risk if the uptrend among decent performers is quite solid?

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Re: Haystack 2016

Post by Gwyde » 12 Mar 2016, 22:27

Platinum, Palladium and Silver relative to Gold.
The rejuvenated gold recovery quickly wipes all past hardship from our collective memories. Yet the yellow metal only bottomed on Dec 3, 2015. The 'white precious metals' continued weakening unabated thereafter until somewhen in January 2016.
Ultimately the GPR peaked at 1.3445 on Jan 21, 2016 with platinum at a $814 record low, before starting its recovery. Since gold simultaneously is strengthening, this doesn't bring about a significant recovery of the GPR. On Feb 29 the GPR even made a second peak at 1.3426 as platinum initially kept lagging gold during its uptrend. By March 4, the GPR stands at 1.268 with platinum is quoting near $1000/Oz.
We aren't out of the woods yet...

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Mining investors half convinced ...

Post by Gwyde » 20 Mar 2016, 23:06

Mining investors half convinced ...
After a lackluster start , stock market advanced this week and eventually the S&P now ends above break-even for the year. The DJ Ind also is up 1.28% year-to-date. Only Nasdaq comp has some more work to do and once more lags with a weekly gain nearing 1%.
Precious metals were jittery last week, with the Wednesday rally essentially determining market direction. Gold holds on to a 0.4% weekly gain closing at $1255, despite fractional losses on four trading sessions. Silver adds 2.1% for the week, closing at $15.79. Among PGM's, platinum adds 0.9% to $971 while palladium continues recovering with a 2.6% weekly gain to $588.

Mining investors are half convinced that the PM rally is sustainable. The HUI adds 3.4% over the week, making HUI/Gold strengthen to 0.144. You find updated graphs on the gold miner pulse blog page. Gains on the benchmark ETF's vary from 3.15% on GDX to 6.65% for SIL. For the third consecutive week, silver miners outperform gold miners as shown by the GoldMinerPulse list based indices. In the top-5 ranking, AZ Mining (formerly Wildcat Silver) has taken the lead. Tahoe, MAG silver and Fortuna Silver only leave gold/silver producer Klondex Mines among the top-5.

Our contributor driven explorer & junior miner spreadsheet didn't continue outperforming. With a 3% gain for the week, the long term loss mitigates to 30.75%. We have 11 list components advancing against 7 declining. Osisko Royalties weakened, giving back its tiny gain since inclusion: we now are down to 3 long term gains. Advances are led by double digit gains for B2 Gold and Mirasol Res, which nears break-even. A 12% decline for Timmin's gold doesn't hurt the list performance too much, since the stock is the list laggard, down over 85%.

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Worldwide mine production of gold and silver

Post by Gwyde » 29 Apr 2016, 09:18

A commonly stated explanation for low (or high) precious metal prices is that "low prices are the cure for low prices". The underlying rationale is that low prices impose marginal mine production to close down thereby diminishing global output. High prices would then allow mining companies to ramp up production by bringing on line mines and ore layers that were not profitable at the much lower precious metal prices. These are simplifications, tending to overlook the essential.

Continue reading at: Worldwide mine production of gold and silver

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Gwyde
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Rick Rule interviewed by Charlotte McLeod

Post by Gwyde » 29 Jul 2016, 00:03

Revisited a video fragment of INN network of early this year.

Always sensible general statements on stock picking.
And a very sensible warning: Rick Rule describes himself a a lousy market timer, which -with hindsight- proves to be right.

http://investingnews.com/daily/resource ... gory=Daily

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Designed to outperform

Post by Gwyde » 14 Sep 2016, 15:37

Remembering what miners resisted best the downturn during the 4 year bear market, I'm evaluating the current composition of two large cap mining ETF's. The blog Designed to outperform pinpoints where the downward risk is lower... and no, I didn't receive a penny for writing this ;-)

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Happy thanksgiving

Post by Gwyde » 24 Nov 2016, 10:09

Sadly the old adage still is valid:
Over this short trading week, American stock markets are almost flat. The usual victims of Thanksgiving are turkeys and precious metals. While there can be no exception to the former, I don't really recall any Thanksgiving week with precious metals rising; perhaps it's worth a statistical study. :roll: (TFMetals forum 30/11/2015)
With the starting levels different, the percentage loss of the gold price is larger than it was last year. By now gold is back down to the level reached during the second week of February, that was the third week after the onset of the gold recovery. It also is the peak level of the last failed recovery attempt (in Oct 2015) which didn't make it to $1200/oz.

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What's left of the 2016 gold rally

Post by Gwyde » 01 Jan 2017, 23:51

As the final curtain on 2016 was drawn, it's time to take stock of the markets during the year.

American stock markets are up, with the DJI failing to gain 20K but booking a decent 13.4% gain over 2016 closing at 19763. Last Wednesday we were within a sigh of 20K. The S&P added 10.05% over the year to close at 2238.8 while the Nasdaq Comp added 8.43% to 5383.1.

Despite a poor last quarter, gold holds on to a 8.5% gain over 2016, closing at 1150.9. Silver does better with a 14.8% advance to $15.88. After a four year slide, PM miners now outperform the metals, with the HUI up close to 64% closing at 182.3 on Dec 30. As a result, HUI/Gold firmed to 0.158. The detailed yearly article provides more info.

It is illustrative that, despite timid advances of precious metals since before XMas, miners showed resilience with the HUI advancing 7.9% over the short trading week (moreover despite sliding towards 2017 on Friday Dec 30). Gold was up 1.65% over the week, while silver only added 1.65%. The PGM's were mixed with Pt lagging with a 1.12% advance to $901 but Palladium showing more vigor: up 2.9% to $678.

Our Benchmark ETF's were mixed, with only GDXJ outperforming the HUI index. The Global-X silver miners ETF SIL only advances by a modest 2.75%, while the gold explorer ETF GOEX slides against the trend. With a 9% advance for the week, our Contributor driven Explorer and Junior Mining spreadsheet is well off. The long term (blunt average) decline is mitigated to 15.46% while cap weighed were again breaking even.

Asanko Gold and Mirasol Resources once more turn long term declines to advances, bringing the advance/decline ratio to a less cumbersome 6 to 13. Both Osisko Royalties and Osisko Mining mitigated long term declines to single digits.

Among references, the gold and silver COMEX future contracts now are rolled over to Dec 2017.

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