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

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They have to be horrific charts for anyone assuming, a few years back, that gold stocks would simply leverage gold. The hype of hyper-inflation no doubt distracted many from the sober fact that gold is a form of liquidity. Stocks, on the other hand, are an asset and therefore more vulnerable to market dynamics in a cycle of deleveraging.

True.

But the main problems have been rising capital expenditures, and production costs, combined with disappointing exploration efforts

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True.

But the main problema have been rising capital expenditures, and production costs, combined with disappointing exploration efforts

 

Sure. But by assuming the general [macro] points made in my previous post, you would have predicted the non-performance of stocks... or the outperformance of gold relative to them a few years ago. This is the kind of thing successful investing/ trading is made of.

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This is the kind of thing successful investing/ trading is made of.

... and is NOT so easy to acheive.

It is much easier in hindsight

 

+ Those who look at the Ratio of Jr Gold stocks-to-Gold, see a big oppportunity here

+ Those who see how they have had to dillute their shares to stay alive, may be concerned

 

Which is right? Both are.

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... and is NOT so easy to acheive.

It is much easier in hindsight

 

.... hence my point about the relevance of a predictive macro theory for the investor/ trader. 'Hindsight' usually belongs to the spectator/ critic on the sidelines. Of course, you need a theory to predict.

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.... hence my point about the relevance of a predictive macro theory for the investor/ trader. 'Hindsight' usually belongs to the spectator/ critic on the sidelines. Of course, you need a theory to predict.

 

Sure, I do that kind of research, often successfully.

But the trick is to make the predictions in advance, and have the courage to act on them.

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Sure, I do that kind of research, often successfully.

But the trick is to make the predictions in advance, and have the courage to act on them.

 

Yes, and coming back to the point of those horrific charts, what an irony that the 'all-in gold bug' was more often than not buying gold stocks or silver. Not many where predicting the outperformance of gold per se relative to all else. ... and acting on it.

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...the 'all-in gold bug' was more often than not buying gold stocks or silver.

Not many where predicting the outperformance of gold per se relative to all else. ... and acting on it.

Who are you speaking about ?

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Who are you speaking about ?

 

No one in particular... that is a general/ generic term. You could say the gold [silver] bug crowd [it would be poor form to talk of people and not ideas/ views don't you think?]

 

Point is, the prediction that has eventuated is the one which conceived gold as a form of liquidity [as opposed to an inflation hedge] and made sense of within a deflationary outlook. This outlook is the one that best makes sense of those horrific long term charts you posted [horrific for the (hyper) inflationists] that expected gold stocks to leverage gold. I think it is fair to say that outlook has been effectively falsfied. Wouldn't you agree?

 

 

Exetersinversepyramid.jpg

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Yes, for years the "leverage to Gold" idea did not work for gold stocks.

 

But that came after years where it did work

 

I think the problem was that Cash costs (on new projects) were rising as fast, or faster than Gold prices

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Great - here's another

 

THE SCRIPT - used by Junior Mining promoters

 

http://www.youtube.com/watch?v=1vluCiabIvA

 

KEY QUESTIONS TO ASK

====

+ These guys are answering unanswered questions : will they make a discovery?

+ People are more important than property : inventory the IP in the co.

+ What is the co. about? What skill sets?

+ Pareto's law: 80% is done by 20% : 4% generate 65% of capital gains

( Previous success IS a useful indicator of future success )

+ Who is the second most important person in your co? Why?

+ What is this property about: describe the property - What will the prize be?

( If he is looking for a small deposit, eliminate it.)

+ What is the evidence for the potential you expect?

+ How will you test your thesis? What next, after you have a yes or no answer?

 

+ How does your previous success equip you for this current challenge?

+ Money questions: 2 years= 18mos : How much needs to be spent?

 

For more than half, it is a paper-trading, lifestyle exercise.

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Funny, Don Coxe in an interview with Eric King i listened to yesterday said something about the profitability of mining, "If you can't make a profit at $1720 [an ounce for gold] then maybe you are in the wrong business" or something like that. Made me chuckle.

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CDNX Looks encouraging - and it may be saying "Don't worry"

 

CDNX versus GDX, GDXJ ... update

 

cdnx.gif

 

CDNX is holding above its lows of the year, and even above its Low of last week.

With GLD and Gold stocks (like GDX & GDXJ) hit so hard, that is very encouraging.

It seems the CDNX sellers are tired, are not panicking, and have run out of stock to sell.

 

If you look closely at the above chart, you will see the Loow-of-Yr was late June for CDNX. Then it made a higher low in late July. when GDX & GDXJ bottomed (blue arrow, above.) In other words, the GDX/GDXJ Low was "unconfirmed" by CDNX. We are seeing the same sort of thing now. CDNX had a lower low was week, and so today's weakness, and new Low in GDX/GDXJ is unconfirmed by CDNX.

 

But we will need a sharp rally on good volume pretty soon after the Low is put in, to confirm it is an important bottom.

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Still no guarantee that the recent Gold Low will hold - Watch the volume

 

"A Christmas low" ?

 

MP3 : http://commoditywatch.podbean.com/mf/web/4am2u/2012-10-14-GMY-DF-E-56.mp3

 

In the interview, I spoke about a possible a-b-c completing around Christmas time: GLD-chart

 

gldm.gif

 

The volume on that recent low is higher than I would like to see,

so maybe it will need to be retested in the next few days?

 

If the nearby support ($158?) is convincingly broken, a fall to GLD$140-150 is possible / GLD-chart

 

83348707.gif

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The relative strength in CDNX is an encouraging sign - but it may be seasonally driven. / chart

 

cdnx.gif

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CDNX is flirting with giving a MAJOR BUY signal ... update-2yr : 1 year : 3yr : 5yr (w/o GDXJ)

 

cdnxgdxj.gif

 

That would come if it could Punch above the 55d-MA, confirmed by then also pushing about the 76d-MA,

and turning these MA's positive.

 

This Signal has worked very well in the past.

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O/t but I just noticed that platinum has now surpassed the price of gold in GBP.

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