RE: Baserite4 Mar 2021 17:20
I think the SP drift is more Gold-Price related than CEO atm.
Gold may trade sideways for a few weeks and even test $1680 but will then bounce back firmly in H2 with inflation rising and interest rates not able to follow. I copy the below from COBR board. A good summary:
'It’s true many small cap gold stocks are down today. Even ones with good news like PUR have pulled back. The market punishes delays and lack of news more so when gold is down. As small caps are a leveraged play you kinda can’t have it both ways.
However, on a technical $1700 was a resistance and a bounce ‘could’ indicate a bull reversal. It, POG, had a look at 1707 and held. If it moves up through resistance here that is very positive. It needs to get back to the 1800 hemline though for a real lift off.
On a macro basis 1.4-1.6 on 10yr treasuries has watered gold down. However, once the market factors in that inflation will rise because the Fed cannot afford to hit the economic recovery with higher interest rates to peg back inflation and in reality the probably don’t want to. The market will reprice PM’s.
Having inflation higher means that the consumer can pay for the yield as the huge US borrowings are inflated away and if you knock 2% inflation off of 1.6% interest rates you actually net out with a negative 0.4% rate. So back door negative interest rates are on the horizon.
Those that concur with that narrative, whilst others are waiting for more indicators should be buying PM’s or better still for liquidity and leverage, cashed up small cap miners! I’m buying so rather biased!'
So expect a gold bounce later in the year. What does it mean for EEE now? F all. But it give Mr M a reason to do what we see today. If you are tempted to dance, be aware the MM's will pull this back up when they choose in the blink of an eye.
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