Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
If you look at the trades that went through in the 20 odd minutes that it happened there was no real opportunity to buy the dip as it were. The only explanation that makes sense is that someone just smashed the price because they did not care about pushing the price lower.
Why would anyone do that? Well the only thing that makes sense to me is a distraction job. i.e to generate the headlines 'Gold is down because the market thinks inflation is transitory'.
hi spindler, can you post a link to that JPM derivative flash crash theory? If they were unwinding a short then they would have been buying? IMO the most likley reason behind the flash crash was an actor trying to hammer the price lower to trigger stops.
i agree with all the below, and have done for some time. Maybe the FRES sp is starting to agree also. Its it inching higher on no real news in the way that it inched lower on no real news in the last 3/4 months. The only change would be a few large shorts closing / new longs opening up.
Hi Spindler, I beleive what you are referring to is the historical allocation of investors to PMs and PM miners is 1.5% of total allocations. At the moment it is 0.5%. A 50% reversion to the mean, not even a full reversion, would be very positive for the sector.
well another inflation print comes in above expectations. at some point people will realise that rates are not gong to rise and that high inflation is therefore not a trigger to sell off PMs but instead to buy them. Investors historial allocation to PM sectors is 1.5% versus the current 0.5%. When the reversion to mean begins plenty will find out that there are not many names to be bought. Pm miners are enjoying increasing margins and profits which looks pretty sensible to me. Perhaps today is the first day with more buyers than sellers. The shorts have to close at some point since this is not going to 0. Anyone short this at all this year is looking very smart and at some point those profits need to be taken.
Hi Auson, if you get margin called and the position is closed by your custodian without the need to obtain your consent then in doing what they did would have created a further loss which they would have to bear themselves Take a look at how credit suisse got nailed by Archegos as an example of how not to do it. I think it is much more likely that the sale was done to lower prices and sweep up stop losses after the employment number created some negative price momentum. All you have to think is why would someone sell a huge amount of futures without caring about the impact they have on the price. The only answer is that they made more money by doing it this way. Its part of the game of trading PM futures although one which is illegal, not that it ever really gets prosecuted.
Pokerchips if you got handed an order to sell $4bn is gold futures ( for whatever reason) would you
a) just hammer away until it was all done at the least liquid time or
b) leg them out over a few days to achieve best execution and thus minimal loss on the position?
If there is already a problem and the position has to be gone then choosing a) only makes it worse and creates a bigger loss.
the only rational explanation is the someone wanted to hammer the price. They got what they wanted.
If that was a forced liquidation then whoever did the selling would be fired probably before they had finished selling the last lot.
No one hits the bids at market for $4bn of sales at the least liquid time of the week, unless they want to hammer the price down. They achieved what they wanted to. All you need to ask is why they did it and what will happen next?
If that was a forced liquidation then whoever did the selling would be fired probably before they had finished selling the last lot.
No one hits the bids at market for $4bn of sales at the least liquid time of the week, unless they want to hammer the price down. They achieved what they wanted to. All you need to ask is why they did it and what will happen next?
Can anyone enlighten me as to the revenue breakdown? It looks as though a lot of sales where held back? I realise the time delay exists on getting an ounce out of the ground and getting it to market, but simply multiplying through the silver and gold output numbers by average realised sale prices gets you to $1.491bn versus their posted $1.466bn. There was a lot of lead and zinc sold too. I had H1 revenue at close to $1.7bn which is a big difference.
In short it looks to me as though there is lot of revenue from H1 that could end up in H2. This could help make H2 numbers look better if management choose to do that .
Any help welcome with this.
What would it take to get this one back to where it was in January? Or even 1 year ago. Being in a massively better financial position with increasing dividends and outlook obviously isn't enough. Mkts are odd at time. Happy to wait here collect some income and look forward to breaking the £10 barrier at some point this year.
HI T123
I think we are all in the same boat. Financials ( to be confirmed tomorrow) should be stellar.
Inflation 'transitory' for now, but could pop higher.
Silver squeeze possible.
SP massively under where it has been historically.
We hope it plays catch up. Lets see what tomorrow brings. I can wait for the market to change its mind on this one.
Hi oliverthehardy, production for H1 2021 is as per recent report . I have estimate selling prices for over the first half.
silver 27,500,000 oz selling price $25?
gold 428,ooo oz selling price $1800?
lead 31,726 tonnes selling price $2,100?
zinc 53,568 tonnes selling price $2,800?
that makes $1.675 bn in revenue. I think you were missing lead and zinc sales.
What does everyone else have?
almost all miners are throwing off cash and massive dividend hikes. RIO BHP etc etc M&A seems to be muted as the execs learned their lessons from last bull market where they went mad. The only miner that is not at a multi year is this one. Bizzare.
the thing that has me concerned is this. Who will be surprised at tomorrows results being mega? Surely everyone can see this and thus perhaps the whole sector is just out of favour. Another spark may be needed to generate interest.