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GOLD SHARES / such as: GDX, GDXJ, CDNX etc.

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The Gold Stock Thread / GDX, GDXJ, CDNX etc.
==================================
: goldaxez.jpg : http://tinyurl.com/GEI-GDXJ (a link to here)
"There is a season, Turn, turn, turn..."
Oct.2012 Podcast : on FBB

I have be waiting to start this thread for some time. I think the time is right. Not yet for buying, but for study. The time for buying lies ahead, and when it comes, it will be nice to be ready with the right tactics and the right targets. Help me to find them !

 

===== Panel =====

Update on Gold shares : HUI, GDX, GDXJ charts
HUI / Unhedged Gold shares ... All-data : 5-years
HUI_zpsjpclrddg.gif
GDX ... All-data : 5-years : 12-mos
GDX-All_zpswjc082ns.gif
GDX-3 years
GDX_zpsb8zxatto.png
GDXJ-3 years
GDXJ_zpsfx2jiela.png

===== Unquote =====

GDX has a longer history, so I start with a look at that chart:

GDX / Gold Miners etf ... GDX-chart : GLD-chart+144dMA : GDXJ-chart : GDXtoGDXJ
gdx.png

GDXJ vs. GDX and GLD/Gold ... update : LT-w/HUI
gdxjetc.png

What this chart shows for me is that GDXJ is more volatile than GDX.
So if we buy in a rising trend, then GDXJ may rise faster than GDX, giving a better return.

Ratio: GDXJ-to-GLD
gdxjtogld.png

The Junior Golds are near record lows in relation to the Gold price.
If you take the mean ratio over this period (maybe 20%), then...
Buying GDXJ at $22.00 is like buying Gold at $1134.
How do I get that? GDXJ-$22 / 20% = GLD-$110 / 9.7% = Gold-$1,134

GDXJ should be a good bellwether for opportunities in the sector, and there's another advantage:
You can trade options on the ETF, securing the upside / or protecting the downside with less risk.

Here's another related index, which is bound to be highly volatile:

GLDX / Gold Explorers ... update : GLDX-vs-GDXJ
gldx.png

=== ===
LINKS :
Link to this thread------ :: http://tinyurl.com/GEI-GDXJ
Top 10 GDXJ holdings :: http://etfdb.com/etf/GDXJ/holdings/
The Larger portfolio--- :: http://www.etfchanne...ngs&symbol=GDXJ
Daily Gold prices ------ :: http://www.usagold.c...es/history.html
Gold stocks / valuation :: http://www.kitco.com.../02052013A.html

THE PATTERN looks awfully familiar to me

 


ANOTHER POINT of view -
Does this extreme sentiment mean the correction's end is near ?
83009281.png

On prior occasions it has signalled a low in Gold prices
/Sentiment : http://www.sentimentrader.com/

A Useful Comparison - longer term ... since-9/30/08

aa2v.gif
chart 2 ... update
cdnxetc.gif

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(Back just after the time of launch, here is how the new index was described)

 

Junior Gold Miner ETF is Luring Investors - As Gold Tops Records

gslarge.gif : GDXtoGDXJ : iday / G : J / Support levels

Dec. 1st (2009?) by Tom Lydon

 

An exchange traded fund (ETF) aimed at the small- and mid-cap gold mining companies has already been greeted with some solid, impressive interest among investors.

 

Market Vectors Gold Miners Juniors (NYSEArca: GDXJ) is up 7% since its Nov. 11 launch, piquing the interest of investors. Don Dion for The Street days that GDXJ already has an average daily trading volume of more than 2.8 million shares. The father to GDXJ, the Market Vectors Gold Miners (NYSEArca: GDX), has a three-month average daily trading volume of 12.6 million shares. (More on the launch here).

 

Junior mining stocks have been a good play for investors to take. However, trying to pick one or two winning junior companies is difficult at best. GDXJ holds 39 such companies, offering exposure to the entire sector. The top 10 holdings in the fund make up 46% of the weighting. For that reason, investors and prospective investors should get familiar with GDXJ’s top components. (What about the gold rally?)

 

Gold prices have soared to a record high of $1,199.49 today as demand for the metal was pushed by a weakening U.S. dollar. Analysts say that despite record-high prices, gold could go even further, reports AFP.

/source: http://www.etftrends.com/2009/12/junior-gold-miner-etf-luring-investors-gold-tops-records/

==================

"GDXJ holds 39 such companies" /

What is in the GDXJ etf now? : Latest Holdings - Post#04

 

Top 10 - as of 2009/11/12 : source : Updated Top 10

CDE- : Coeur D'Alene : 056.9 : $ 1,191m : 6.42%

SSRI-: Silver Standard : 051.5 : $ 1,003m : 5.40%

NGD-: New Gold Inc.- : 251.2 : $ 0,873m : 5.24%

HL--- : Hecla Mining-- : 177.3 : $ 0,946m : 5.10%

GRS- : Gammon Gold- : 089.1 : $ 0,878m : 4.73%

==== 26.89%

AGI .t : Alamos Gold Inc : 080.6 : $ 0,808m : 4.35%

SVM.t : Silvercorp Mtls. : 117.6 : $ 0,712m : 3.84%

SMF.t : Semafo Inc. ---- : 187.8 : $ 0,708m : 3.81%

EGU.t : European G'flds : 095.1 : $ 0,648m : 3.49%

GSS-- : Golden Star Rs. : 175.6 : $ 0,598m : 3.22%

==== 18.71% = 45.60%

 

The Larger portfolio: http://www.etfchannel.com/lists/?a=stockholdings&symbol=GDXJ

 

CDNX / Canadian Venture Index ... update : CDNX-vs-XAUu : And-GLD

 

cdnx.png

 

Now, compare its performance (Below) with that of XAU companies, that actually produce gold. From 2002 to 2007, CDNX and XAU move more-or-less in tandem. Partly, that was because CDNX comes had become very undervaled in 2000-2002. And partly, because these small companies were seen as a smart-and-leverage way to "play" rising gold prices.

 

But then the 2007-2008 "crash" came. And CDNX fell by 85.6% from :

 

Peak Level : 3,371.57 - 23 Apr.2007

Low- Level : 0,684.31 - 08 Dec.2008

Decline---- : 2,887.26 - over 19 Mos. : -85.6%

Bounce to- : 2,423.79 - 08 Mar.2011

Low- Level : 0,684.31 - 08 Dec.2008

Points rise : 1,739.48 - over 27 Mos : +254.2%

Note: (1739.48 / 2887.26 = 60.24% retracement)

 

That big drop impaired CDNX equities more than XAU equities, which had cash flow from Gold production. The smaller companies soon arn out of cash and had to raise money at low prices, dilluting the value of their equity. So when the bounceback came, these companies had vastly increased the number of shares outstanding, and prices rises were blunted by the dillution.

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The Junior Gold Thread / GDXJ, etc.

==================================

GDXJ should be a good bellwether for opportunities in the sector, and there's another advantage:

You can trade options on the ETF, securing the upside / or protecting the downside with less risk.

Let's examine some Option Prices.

 

Starting out, with Spot VIX at 20.87% ... update : 6mos-VIX

vixv.png

 

VOLATILITY Calculations : Forward Vol, is at a premium to spot VIX (20.87%) at the present time:

=====

SPY- : $134.75 : Jun$134.0c : $5.75 / Jun$163.0p : $6.13 = $12.68 / 9.41% x 1.89 = 17.78% /0.8 = 22.23% : b1.00

 

GLD- : $162.70 : Jun$163.0c : $6.80 / Jun$163.0p : $6.88 = $13.68 / 8.41% x 1.89 = 15.89%/0.8 = 19.87% : b0.89

 

GDX- : $ 52.47 : Jun$53.00c : $3.35 / Jun$53.00p : $3.78 = $ 7.13 /13.59% x 1.89 = 25.69%/0.8 = 32.11% : b1.44

 

GDXJ : $ 25.86 : May$25.63c : $1.93/ May$25.63p : $1.70 = $ 3.63 /14.04% x 2.23 = 31.31%/0.8 = 39.14% : b1.76

(1 day later):

GLDX : $ 10.88 : Apr$11.00c : $0.50*/Apr$11.00p : $0.60*= $ 1.10 /10.10% x 2.89 = 29.19%/0.8 = 36.49% : b1.64

GLDX : $ 10.88 : Jul.$11.00c : $0.90*/Apr$11.00p : $1.00*= $ 1.90 /17.46% x 1.67 = 29.16%/0.8 = 36.45% : b1.64

*estimate: actual spread is very wide.

=====

*(TimeCalc: Jun: 0.2788 / 0.5280 : 1.89 // May 0.2019 / 0.4494 : 2.23 // Apr 0.12/0.346 : 2.89 )

 

 

It is not surprising to see that GDXJ options are priced at a Vol. (39.14%) which is almost Double (97% higher than) the volatility on GLD options (19.87%), and that GDX options are lower than that- about 82% of the Vol. of GDXJ.

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Top 10 - 2012/03/05 : http://etfdb.com/etf/GDXJ/holdings/

=====

AGI.t- : Alamos Gold Inc: 5.10%

SVM.t : Silvercorp Mtls. : 2.96%

Pmnxf : Perseus Mining : 2.91%

NSU-- : Nevsun Res.--- : 2.88%

MFN- : Minefinders ---- : 2.55%

==== 15.74%

KCN- : Kingsgate Cons. : 2.43%

KGI-- : Kirkland Lake G : 2.24%

BTO.t : B2Gold Corp.--- : 2.20%

Mdsmf : Medusa Mng.-- : 2.15%

DPM.t : Dundee Prec Mt : 2.13%

==== 11.15% = 26.89%

71 cos + 73.11% = 100%

The Larger portfolio: http://www.etfchannel.com/lists/?a=stockholdings&symbol=GDXJ

 

Here's the largest holding:

AGI.t- / Alamos Gold Inc ... update : vs.GDXJ

agiq.png

 

And here's one of the charts that I like at the moment:

NSU-- : Nevsun Res.--- : 2.88%

nsud.png

 

This would be a "dangerous" pick, after the recent fall on heavy volume. I wouldn't consider buying until I had a good look at the fundamental situation - which may have triggered the recent price drop. In any case, it looks like "it wants" to test $3.50.

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Beyond the Top 10

The Larger portfolio: http://www.etfchannel.com/lists/?a=stockholdings&symbol=GDXJ

 

Next 15 Holdings... (per above link)

BAA-- : Banro Corp-------- : 2.24%

EXK-- : Endeavour Silver : 2.06%

AR.t-- : Argonaut Gold---- : 2.02%

FSM-- : Fortuna Silver---- : 1.94%

EVNau: Evolution Mining : 1.92%

====

TXG.t : Torex Gold Res. : 1.90%

RBY-- : Rubicon Min'rls. : 1.87%

AZK-- : Aurizon Mines--- : 1.84%

RIO.t- : Rio Alto Mining-- : 1.76%

AVR.t : Avion Gold-------- : 1.68%

====

XG --- : Extorre Gold Mn : 1.65%

SBMau: St Barbara Ltd---: 1.65%

IAU.t- : Intrepid Mines---- : 1.58%

JIN.t-- : China Gold Int'l-- : 1.49%

CSI.t-- : Colossus Mnlrs-- : 1.49%

====

Next 5:

Next 5:

Next 5:

 

And here are some of the charts that I like at the moment:

RBY-- : Rubicon Min'rls. : 1.87%

xx

AZK-- : Aurizon Mines-- : 1.84%

xx

IAU.t- : Intrepid Mines---- : 1.58%

xx

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I picked up a few junior miner ideas at the PDAC which I will try to write up in the next week or so.

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I picked up a few junior miner ideas at the PDAC which I will try to write up in the next week or so.

Yes. Please do!

I hope it was a successful conference for you.

 

The following chart is from the Gold thread

Gold stocks are cheapest they have been in 3 years.

http://postimage.org/image/z62xbxveb/

 

huigold.gif

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Also look at GLDX which is the ETF for the explorers ... chart

Thanks.

I had forgotten that index

 

GLDX / Gold Explorers ... update : GLDX-vs-GDXJ

gldx.png

 

It is bound to be volatile, and that will be good if you can time your buys well.

I reckon it is still in a downturn, and needs to test $10 again, at a minimum.

 

I will add a GLDX chart to the Header here.

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For the lazier investor, there's also the Ruffer Baker Steel Fund that operates in the smaller end of the market (about 60% <$1bn)

http://www.ruffer.co.uk/cmsfiles/reports/RBSGF_Monthly_report.pdf

Is it traded?

Have you got a got a symbol ?

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Thanks.

I had forgotten that index

 

GLDX / Gold Explorers ... update : GLDX-vs-GDXJ

gldx.png

 

It is bound to be volatile, and that will be good if you can time your buys well.

I reckon it is still in a downturn, and needs to test $10 again, at a minimum.

 

I will add a GLDX chart to the Header here.

Yes, no buy signal there ...

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I have positions in both GDX and GDXJ - long term buying (on weakness) and holding. Looking for $100+ for gdx and $70+ for gdxj.

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I have positions in both GDX and GDXJ - long term buying (on weakness) and holding. Looking for $100+ for gdx and $70+ for gdxj.

Is that predicated upon a Future Gold price assumption? Or something else?

 

How would you calculate the "Future Gold Price"? - Here's how I would do it:

 

The GDXJ to GLD Ratio is now 15%, and average maybe 20%, with a high of perhaps 25%, and so:

 

A GDXJ price of your $70 means:

==============

Ratio

15% : GLD-$467 / 0.097 = Gold-$4,811

20% : GLD-$350 / 0.097 = Gold-$3,608

25% : GLD-$280 / 0.097 = Gold-$2,887

 

Are you as optimstic as that on Future Gold prices? Why not- it is a possibility.

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Is it traded?

Have you got a got a symbol ?

 

Sadly not - it's a mutual fund.

http://www.google.co.uk/finance?q=MUTF_GB%3ACF_RUFF_BAKE_15AYRK5

 

Had a very poor 2011 (-30%), but had an awesome run from the lows of late 2008. I remember Jonathan Davis (of recent podcast fame) talking about these guys very favourably in the heady days of HPC.

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Sadly not - it's a mutual fund.

http://www.google.co.uk/finance?q=MUTF_GB%3ACF_RUFF_BAKE_15AYRK5

Had a very poor 2011 (-30%), but had an awesome run from the lows of late 2008. I remember Jonathan Davis (of recent podcast fame) talking about these guys very favourably in the heady days of HPC.

One of my favorite ways of holding a diversified portfolio of Gold shares, is by purchasing shares in...

 

ASA / ASA Corp. ... 10yr-Weekly : 2yr-D / vs-GDX vs-GLD : 6mos-D : Intraday

 

A Great Buy at $25.50 maybe?

 

asaall.png

 

Advantages in buying ASA shares or options:

 

+ It pays a dividend of about 2.5% per annum (at $27) - $x.xx in latest quarter

 

+ It normally trades at a discount to NAV: latest - x.xx% / Discount range about -xx% to xx%

 

+ The discount normally widens when the shares are cheapest

 

+ It is diversified, and therefore much less exposed to "single mine risk"

 

+ I can limit my risk by purchasing options, rather than investing the full sum in the shares

 

+ Over 10 years, ASA has outperformed: ABX, NEM, KGC, and virtually ties the XAU

 

== == ==

LINKS:

 

ASA website- :: http://www.asaltd.com/

ASA discount :: http://www.asaltd.com/Tools/NavTicker/frontend/itemlist.asp?reset=1

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The WARNING Power of Gold shares

 

Deep drops in Gold share prices have heralded slides on the Price Of Gold

 

Here's XAU versus GLD/Gold ... update : XAU-daily

 

animalfarm1.gif

 

Notice how in 2008, XAU dropped below its price channel, and soon thereafter Gold slid to deeper lows.

 

If XAU now drops to fresh lows for the year - and lower, that may be a serious warning sign.

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What are the advantages to owning GDXJ or GDX for that matter over a selection of hand picked gold/silver stocks. Obviously there is greater diversification within an ETF holding but doesn't one pay extra fees for the privilege. The dividends on individual stocks seem to outweight those from GDX/GDXJ aswell.

 

I sold out of my physical gold holdings towards the end of February. My intention is to buy a third of them back cheaper over the next weeks and put the rest in mining stocks (GDX/GDXJ or otherwise). I like NEM,SLW,HL,2899,GFI,GG,ABX amongst others.

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GDX has a nice dividend as well - $.69c in 2011 (or was it $.60 - can't recall).

 

0.150 according to dividendchannel.com

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(this table was done years ago - Needs updating):

 

The Philadelphia Gold & Silver Index (XAU):

 

Sym- #... Resv...Prod..Cost...Price...Shs Os...MktCap...MC/oz..TotC

------ .. ---- . ----. ---- . ----- . ------ . ------ . ----- .----

NEM#01... 97.0...8.20..$175..$24.00... 394.0...$9,456..$97.48..1435

ABX#02... 79.3...6.07..$160.. 17.98... 536.0... 9,637..121.53.. 971

AU-#03... 88.0...6.67..$185..$23.42... 214.4... 5,021...57.06..1234

GOLD#4... N/A.................XX.XX.... XX.X..... XXX...XX.XX.. XXX

FCX#05... 50.3...2.40..$180?. 14.73.... 88.5... 1,304...

FCX.a...... ..................14.30.... 55.5..... 794...41.71.. 432

PDG#06... 47.0...2.80..$165...11.60....328.4....3,809...81.04.. 462

HGMCY#7.. 27.0...2.14..$230...10.46....144.6....1,513...56.04.. 492

GG #21.... 5.1...0.58..$ 85?..16.20.... 82.5....1,336..261.96... 49

MDG#24.... 2.1...0.40..$150...13.03.... 75.9..... 989..470.95... 60

AEM#26.... 3.3...0.23..$200?..12.29.... 67.1..... 825..250.00... 46

SIL#??.... 2.x?........$xxx?..12.09.... 34.7..... 420..210.00... x

......... ---- . ---- ----- . ----- .. ----- .. -----

 

XAU..... 401.1 .29.49. $176..$65.23 .. 538.2 . 35,104..$87.52..5181

 

Big 5/6. 361.6..26.41..$172... N/A .... N/A....29,659..$82.02..4534

GOLD#4....59.4.. 4.00..$190... 8.80....469.0....4,127..$69.48.. 760

 

Big Six..421.0..30.41..$174... N/A .... N/A....33,786..$80.25..5294

 

XAU: 0.745 oz./Share

Notes:

1. Goldfields of So.Africa (GOLD) is not in the XAU Index

2. SIL figures were unavailable for these calculations

3. New Newmont (NEM) has 0.246 oz./share

... If multiplied by 3.5 (HUI eqv.) = 0.861

====

/source: http://uk.advfn.com/cmn/fbb/thread.php3?id=1074300

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Dr Bubb,

Great idea for a thread. Would like to know what you are thinking is the catalyst for this sector to be investible? Since you mentioned you are not there yet, however study is warrented.

Myself, I have been there for a while with limited success

For me personally, the teachings of Bob Hoye have been instructive in that this sector prospers during the post bubble contraction phase when the REAL price of gold rises. Usually for maybe a 20 year period. Seems CB QE may have defered this phase since it has served to run up the price of oil and overall input costs to mining. I think one of the catalyst will soon be a deflationary contraction since it would drive up the real price of gold.

 

 

Brent Cooks theme in this sector is watch out since it is high risk. Proceed with professional advice.

 

 

As for me I maintain a core portfolio in the Royalties as I feel this derisks the PM sector as much as one can and the royalties seem to be better positioned than the majors. After the core portfolio

I have been building a portfolio of about 10 -15 exploration silver/ gold/ copper/diamond stocks.

 

 

Best idea: Virginia Mines. I see this as a core value due to its goldcorp elonore royalty as an Arbitrage with the future value of gold plus the best exploration company in Quebec.

An exploration company with an inner core royalty which derisks the exploration component

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