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Category: Gold and Silver Stocks 2021

The analysis published under this category are as follows.

Commodities

Sunday, November 28, 2021

Silver Mining Stocks Fundamentals / Commodities / Gold and Silver Stocks 2021

By: Zeal_LLC

The silver miners’ stocks have surged higher recently, starting to mean revert out of deep capitulation lows.  Those improving technicals have started thawing the bearish sentiment that plagued this tiny contrarian sector last summer.  The silver stocks’ latest earnings season wrapping up in mid-November revealed how these miners are actually faring operationally and financially.  Do fundamentals justify more gains?

The silver-stock world is really small, with primary silver miners deriving over half their revenues from producing the white metal increasingly-rare.  Only a handful of exchange-traded funds track this forgotten sector, led by the SIL Global X Silver Miners ETF.  While also miniscule with just $1.2b in net assets in mid-November, SIL is the best-available sector benchmark.  The silver stocks have had a wild ride this year.

Their price action closely mirrors gold stocks’, as silver’s dominant primary driver has always been gold.  So SIL’s swings this year closely tracked those in the leading GDX gold-stock ETF like usual.  Silver stocks were enjoying a solid young upleg last spring, with SIL surging 27.5% between late March to early June.  But silver and thus silver stocks were sucked into gold’s sharp mid-June selloff on Fed-tightening fears.

Gold’s taper tantrum for the Fed starting to slow its epic quantitative-easing money printing unfolded in the months leading into that actual announcement.  Between mid-June to late September, several bouts of heavy-to-extreme gold-futures selling crushed the entire precious-metals complex.  The resulting silver-stock carnage hammered SIL 30.2% lower climaxing in an ugly capitulation, fueling serious bearish psychology.

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Commodities

Friday, November 19, 2021

Gold Mid-Tier Stocks Q3’21 Fundamentals / Commodities / Gold and Silver Stocks 2021

By: Zeal_LLC

The mid-tier and junior gold miners in their sector’s sweet spot for upside potential have been powering higher recently.  They’ve blasted to several major breakouts after getting bombed out during gold-futures speculators’ taper tantrum on Fed-tightening fears last summer.  These smaller gold miners just finished their Q3’21 earnings season, revealing whether their fundamentals support more big stock-price gains ahead.

Gold-stock tiers are defined by their production rates.  Small juniors mine less than 300k ounces of gold annually, medium mid-tiers have outputs running from 300k to 1m, large majors yield over 1m, and huge super-majors operate at vast scales exceeding 2m.  Mid-tiers offer a unique mix of sizable diversified gold production, considerable output-growth potential, and smaller market capitalizations ideal for outsized gains.

Mid-tiers are much-less-risky than juniors, and amplify gold’s uplegs much more than majors.  Ironically the leading mid-tier gold-stock benchmark is the misleadingly-named GDXJ Vectors Junior Gold Miners ETF.  It has evolved to be dominated by mid-tiers yielding quarterly outputs of 75k to 250k ounces.  True juniors now only account for a smaller fraction of the weighting in this second-most-popular gold-stock ETF.

Just over a third the size of its big-brother GDX major-gold-miners ETF, GDXJ has certainly had a wild ride this year.  Showing mid-tiers’ huge potential, GDXJ skyrocketed 188.9% in a massive upleg over just 4.8 months into early August 2020!  The extreme greed and overboughtness that spawned necessitated a normal and healthy major correction to rebalance sentiment, so the mid-tiers fell 32.0% into late March 2021.

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Commodities

Tuesday, November 16, 2021

Gold Stocks technically short-term bullish, but… / Commodities / Gold and Silver Stocks 2021

By: Gary_Tanashian

An update of the gold stock bounce

As a TA, I respect charts first and foremost. On occasion that respect has burned me as I’ve missed big profit opportunity or not seen a disaster unfolding that the charts missed. But much more often it helps me profit or saves me from disastrous ends. TA is just one tool in the box. An important one, but it should not stand alone. With the gold stocks especially, the correct macro-fundamentals matter.

Lately, with respect to the HUI Gold Bugs index, TA has helped me (and NFTRH subscribers) manage a low born of over-bearish sentiment at a key long-term support area (230 ), one of three downside targets we’ve had open since the correction began in summer 2020. For management of the correction and its bounces we’ve used various charts of varying detail and time frames. But last week in NFTRH 680 we simplified to the daily view below. With the rally now in full flight it is time to be paying attention to what may come next.

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Commodities

Friday, November 05, 2021

Gold, Silver, and Miners Just Can’t Jump / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

Let’s face it, the metals are not having an easy time breaking out. Short-term rallies end up going nowhere and bearish signs are still in abundance.

Yesterday’s session was once again quite informative, and so is today’s pre-market trading. In yesterday’s analysis, I emphasized the importance of the relative weakness that we just saw in mining stocks, so let’s start with taking a look at what mining stocks did yesterday.

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Commodities

Saturday, October 23, 2021

Gold Mining Stocks Q3 2021 / Commodities / Gold and Silver Stocks 2021

By: Zeal_LLC

The gold miners’ latest quarterly earnings season will soon get underway, with their full Q3’21 results due out by mid-November.  These fundamental reports are invaluable to traders, revealing how companies are actually faring operationally and financially.  Despite Fed-tightening fears hammering gold and gold stocks last quarter, the miners are likely to collectively report outstanding results further lowering their valuations.

After a rough stretch technically this past summer, gold-stock sentiment remains down in the dumps.  This battered sector has few bulls left, with the vast majority of speculators and investors either ignoring the gold miners or despising them.  This overwhelmingly-bearish psychology resulted from a sharp gold-stock selloff between early June to late September.  That trying time tested the mettle of contrarian traders.

The gold miners weren’t market pariahs earlier this year.  Their leading sector benchmark, the GDX VanEck Gold Miners ETF, powered 28.4% higher in just 2.5 months between early March to mid-May.  That solid young upleg was starting to win some converts, with herd sentiment shifting back towards bullish.  Unfortunately that promising start was torpedoed by extreme gold-futures selling on Fed-tightening fears.

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Commodities

Tuesday, October 19, 2021

Gold Mining Stocks: Will Investors Dump the Laggards? / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

Mining stocks were picked up by investors in the latest bullish wave. But these bad performers may be dumped just as quickly as they were bought.

After the HUI Index rallied back above the neckline of its bearish head & shoulders pattern, a new bull market for mining stocks has finally begun. Or has it? Well, after an identical development occurred in 2000, the HUI Index soon invalidated the breakout (and once again confirmed the breakdown) and a sharp decline followed.

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Commodities

Wednesday, September 15, 2021

Gold Miners: Last of the Summer Wine / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

Autumn is just around the corner, and while the precious metals tasted some success most recently, the medium-term is still set for a downtrend.

With Fed Chairman Jerome Powell sticking to his dovish guns and U.S. nonfarm payrolls elongating the central bank’s perceived taper timeline, gold, silver, and mining stocks were extremely happy campers. However, with event-driven rallies much more semblance than substance, I warned on Sep. 7 that the rollercoaster of emotions would likely end in tears.

I wrote:

With the 2013 analogue leading the gold miners down an ominous path, the HUI Index and the GDX ETF have rallied by roughly 8% off their recent lows. However, identical developments occurred in 2013, and neither bout of optimism invalided their bearish medium-term outlooks.

And after the GDX ETF and the GDXJ ETF (our profitable short position) plunged by 5.35% and 6.98% respectively last week, summertime sadness confronted the precious metals. Likewise, with more melancholy moves likely to materialize over the medium term, gold, silver, and mining stocks should hit lower lows during the autumn months.

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Commodities

Thursday, September 02, 2021

Bittersweet Truth for Gold Stocks: What You Need to Know / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

When the Fed entices grown up kids with sweet words, they hit the candy store and stock up on gold, silver, and stocks. A sugar hangover follows.

Beware of the candyman!

With Fed Chairman Jerome Powell performing his usual dovish dance on Aug. 27, gold, silver, and mining stocks were like kids in a candy store. However, with the short-term sugar highs often leaving investors with nasty stomach aches, the sweet-and-sour nature of the precious metals’ performances may lead to pre-Halloween hangovers.

HUI Index: Harbinger of Things to Come

To explain, while the HUI Index invalidated the breakdown below its previous lows, the bullish reversal may seem quite sanguine. However, an identical development occurred in 2013 right before the index continued its sharp decline. Moreover, I warned previously that the HUI Index could record a corrective upswing of 4% to 8% (that’s what happened after the breakdown in 2013) and that it would not change the medium-term implications. And after the index rallied by more than 6% last week, the bounce is nothing to write home about.

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Commodities

Tuesday, August 31, 2021

Gold GDX Stocks, A Proxy for the Precious Metals Complex / Commodities / Gold and Silver Stocks 2021

By: Rambus_Chartology

I’ve been suggesting for some time now that the PM complex is trading at a critical inflection point where they can have a big move in either direction. It may sound like a copout but that is what an inflection point is. Many times at a critical inflection point, in the  case of the PM stock indexes, support can hold beautifully or there can be a false breakout of the the S&R line which can be called a bear trap if the price action trades back above that important trendline.

Tonight I’m going to use the GDX as a proxy for the rest of the PM stock indexes which is showing us a great example of the current critical inflection point. The most basic concept in Chartology is how an important trendline can reverse its role to what had been resistance to support once broken to the upside and vise versa. The psychology behind an important trendline, using the top rail of the 2016 flat top expanding triangle on this weekly chart for the GDX below, is that when the top rail of the flat top expanding triangle was broken to the upside everyone that bought below the top rail is above water. As long as there isn’t a big breach of the top rail most will feel comfortable and not sell.

Every trendline you put on a chart is a support and resistance line, above is bullish and below is bearish. This is why we are always looking for a backtest when we see a breakout of a chart pattern. It doesn’t happen all the time but it does happen enough to always be on guard.

Lets focus on the top rail of the 2016 flat top expanding triangle that starts at the 2016 high and runs horizontally to the right side of the chart. Not many caught the double top that formed just below the 2016 trendline which led to the March 2020 crash low. As you can see there were 3 important touches from below. After the 2020 crash low was put in you can see the vertical rally that ensued but this time the top rail gave way. After several more weeks of moving higher the GDX completed its first backtest which could have been the backtest which would lead to the next important move higher but that wasn’t the case.

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Commodities

Saturday, August 21, 2021

The Rise And Fall Of Gold Stocks / Commodities / Gold and Silver Stocks 2021

By: Kelsey_Williams

The rise and fall of gold stocks is a story of hurt and disappointment. That is because most of the time gold stocks are in decline.

Below are four charts which depict the sad story. Following each chart I will make some brief comments…

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Commodities

Saturday, August 21, 2021

Gold Stocks Break to New Yearly Lows! / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

Ladies and gentlemen, we have a breakdown! Gold stocks underperformed the yellow metal so much that they reached the lowest levels seen this year…

The HUI Index (gold stocks) broke to new 2021 lows while the USD Index broke to new 2021 highs. Just as I’ve been warning you.

Mining stocks’ extreme weakness relative to gold continued yesterday, and while it may seem like the weakness has to have a limit, this limit is likely still quite far from the markets right now.

Let’s take a look at the long-term HUI Index chart for details.

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Commodities

Wednesday, August 11, 2021

GDXJ Junior Gold Miners Setup A Double Bottom – Looking For A Rally Off These Unique Low / Commodities / Gold and Silver Stocks 2021

By: Chris_Vermeulen

The Junior Gold Miners ETF (GDXJ), fell to lows near $43.06 recently, which matched the low from the end of March 2021, near $43.24. Although these lows are not exactly the same, the span of time between these unique lows and the very close nature of them makes them a Double Bottom setup.

It is very likely that this support level will prompt a new upside price rally in Junior Miners targeting $50 to $52 or higher if the support level near $43 continues to hold.

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Commodities

Sunday, August 01, 2021

Gold Stocks Autumn Rally / Commodities / Gold and Silver Stocks 2021

By: Zeal_LLC

The gold miners’ stocks were whacked hard earlier this summer on a Fed-rate-hikes scare.  That serious anomaly really damaged sentiment, spawning exceptionally-weak seasonal performance in this contrarian sector.  But the bruised gold stocks and the metal they mine have trudged through, making it back to the start of their traditional strong season.  That begins with robust autumn rallies that usually start marching now.

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 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.  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.

Indians believe getting married during their autumn festivals is auspicious, increasing the likelihood of long, successful, happy, and even lucky marriages.  And Indian parents outfit their brides with beautiful and intricate 22-karat gold jewelry, which they buy in vast quantities.  That’s not only for adornment on their wedding days, but these dowries secure brides’ financial independence within their husbands’ families.

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Commodities

Friday, July 23, 2021

Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

It seems that choosing GDXJ to short the PMs was a good decision – juniors closed the day at new 2021 lows. Will our profits only grow from now on?

Gold’s yesterday’s intraday attempt to rally was not bullish. On the contrary, it was what usually happens right before a big slide. Especially given the USDX’s breakout.

Let’s start with the latter.

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Commodities

Wednesday, July 07, 2021

HUI Gold Stocks: The Illusionist's Trick Left Investors Speechless / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

The gold miners’ 2021 gains prompted a standing ovation among investors. However, they didn’t notice a magic trick until everything vanished.

The Gold Miners

After the HUI Index plunged by more than 10% and made all of its 2021 gains disappear, the magic trick left investors in a state of shock. But while Mr. Market still hasn’t sawed the HUI Index in half, the illusionist is likely gearing up for his greatest reveal. Case in point: while the Zig Zag Girl captivated audiences in the 1960s, the HUI Index’s zigzag correction leaves little to the imagination. And with the recent swoon a lot more than just smoke and mirrors, the HUI Index’s short-term optimism will likely vanish into thin air.

To explain, despite the profound drawdown, the HUI Index hasn’t been able to muster a typical relief rally. Moreover, with ominous signals increasing week by week, if history rhymes (as it tends to), the HUI Index will likely find medium-term support in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though such predictions seem unthinkable.

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Commodities

Wednesday, June 09, 2021

Gold Mining Stocks: Which Door Will Investors Choose? / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

With the current situation suggestive of a Monty Hall problem, investors are clinging to the first, bullish door. But what if a different option is more likely?

The Monty Hall problem is a form of a probability puzzle, and what it shows is immensely unintuitive. Suppose you are on a game show, and you need to choose one of three doors. Behind one of them is a car and behind the others, goats. You pick a door, and then the host (who knows what’s behind them) opens one of the remaining doors, behind which there is a goat. The host now asks: “Do you want to change your door choice for the remaining doors?” So, what do you do?

It turns out that if you change the door, the probability of winning the car increases… two times! You have a 2/3 chance, instead of a 1/3. Tremendously unintuitive, indeed, but what if the same is happening on the market now? With a bullish prospect representing the door of the first choice, and the technicals and fundamentals the host’s help, wouldn’t it be safer to switch the door to win eventually?

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Commodities

Thursday, June 03, 2021

This Chart Shows When Gold Stocks Will Explode / Commodities / Gold and Silver Stocks 2021

By: Jordan_Roy_Byrne

The rebounds in Gold and Silver exceeded my expectations and closed May in a strong fashion, near the highs of the month.

Gold’s monthly close was the third-highest ever. Silver failed to break resistance at $28.50, but its monthly close at $28 was the second-highest in the last eight years.

As noted last week, Gold and gold stocks have perked up in real terms. 

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Commodities

Saturday, May 29, 2021

Silver SIL Global X Silver Miners ETF Fundamentals / Commodities / Gold and Silver Stocks 2021

By: Zeal_LLC

The silver miners’ stocks have mostly been consolidating high since last summer.  While they’ve enjoyed some sharp rallies, those have been within that sideways-grind trend.  That lack of overall upside progress has left this tiny contrarian sector out of favor, with apathy reigning.  But as their recently-reported Q1’21 operating and financial results revealed, silver stocks’ fundamentals and upside potential remain good.

There aren’t many major silver miners in the world, and only a handful are primary silver producers that derive over half their revenues from silver.  With such a small population, there are only a few silver-stock ETFs.  The leading one is still the SIL Global X Silver Miners ETF, which is also this tiny sector’s best benchmark.  But nearing the end of Q1’21’s earnings season in mid-May, it only held $1.3b in net assets.

Following a mighty upleg that peaked in early August at SIL $51.53, the silver stocks have largely drifted laterally since.  But their high trading range has been wide, encompassing both corrections and attempts at new uplegs.  Plenty of speculators and investors are still interested in this obscure sector, as evidenced by an amazing episode in late January.  That catapulted SIL a blistering 23.9% higher in just three trading days!

That was when Reddit’s famous wallstreetbets forum appeared to be starting to discuss engineering a silver short squeeze with massive retail buying.  At the time I wrote a whole essay analyzing that.  For our purposes today, that fascinating event proved that the right catalyst can still ignite big inflows into silver and its miners’ stocks.  Unfortunately SIL resumed correcting after that, slumping on balance into late March.

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Commodities

Monday, May 17, 2021

Gold Mining Stocks Fundamentals / Commodities / Gold and Silver Stocks 2021

By: Zeal_LLC

The gold miners’ stocks have powered higher in recent months, solidifying a strong young upleg.  But the extended-correction low leading into this latest rally has left sector psychology fairly bearish.  Traders are skeptical about gold stocks’ upside potential, wary of another serious selloff.  The gold miners’ just-reported Q1’21 operating and financial results reveal whether their fundamentals support further big gains.

The first quarter of 2021 was rough for the gold stocks.  Their leading and dominant benchmark and trading vehicle remains the GDX VanEck Vectors Gold Miners ETF.  Its $15.3b in net assets in the middle of this week ran 31x bigger than its next-largest 1x-long major-gold-miners-ETF competitor.  During Q1, GDX dropped a sizable 9.8%.  The gold stocks were increasingly out of favor as gold itself also lost 10.0%.

The gold miners actually proved quite resilient last quarter, as the majors in GDX generally amplify gold’s material moves by 2x to 3x.  Still you couldn’t give away gold stocks in early March as their last extended correction finally bottomed at GDX $30.90.  As these miners’ earnings leverage gold price trends, their stocks got sucked into gold’s vexing momentum selloff.  But as that passed, the gold miners caught a bid.

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Commodities

Monday, May 17, 2021

Junior Gold Miners Should be Rallying – What’s Holding Them Back? / Commodities / Gold and Silver Stocks 2021

By: P_Radomski_CFA

Junior miners may soon suffer a breakdown of the short-term support line. So, what’s responsible for their underperformance of gold and stocks?

Today’s technical part of the analysis is going to be brief, as I have discussed multiple things this week and my comments remain up-to-date. There’s not much to add today, and we’ll go over only one technical chart – the one where we have trading positions – the GDXJ ETF chart. Unlike in the previous days, today I’m going to look at it from the more short-term point of view – through the 4-hour chart.

Before looking at it, please note that yesterday’s (May 13) session was relatively boring in the case of gold futures (they ended the day $1.20 higher), and quite positive for the GLD ETF, at least at first sight, as it closed $0.70 higher. The seemingly odd discrepancy between the two is just a result of different times that are taken into account for calculating both markets’ performance. All in all, yesterday’s session was positive for gold.

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