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My guess is that they and their acolytes will be somewhat disappointed on Friday afternoon and probably hoped for a bigger follow through decline and anticipated that today's BIS gold swaps and options expiry would add to the downward pressure. But the BIS hit on gold at lunchtime taking the price down $14.5 lasted only an hour before the price made an impressive surge back to unchanged.
Comex will be closed for the bank holiday on Monday which increases the chance of gold rising to start the new week and month. Gold is on course to close up for 5th month in a row and back to unchanged for the year. The key gold miner ETF GDX set a new high for the year at $40 this Wednesday.
Centamin will have better days and weeks to come. Have a good bank holiday everyone.
They're now bankers and analysts.
Perhaps we were getting too complacent with the share price slowly drifting up for the last 3 weeks. We were due a Centamin banana skin. Yet to put this into perspective today's price drop is only the second of more than 4% in 2021. At the same stage last year we had had 17 >4% sell-offs and that was 4 months before the pit wall RNS !
It is a fact that bankers, brokers and analysts don't signal their real intentions, after all they want to make money for themselves not you or I.
As a long term holder Centamin has an uncanny habit of having positive news or momentum colide with a black swan event. The Company RNS got knocked off by the 82p headline. Make the target price outlandishly low to maximise the catch. 82p was the ATH way back in 2008 before the mine was producing. The share price hasn't traded down there since Feb 2016.
Note also that Liberum use a gold price which is already 5% below the current gold price and make no reference to the fact that a rising gold price and even a revaluation of fiat currencies would change all their assumptions.
I don't hold much value in broker ref's but Berenberg's have tended to reflect the mood and sentiment of the share price well for the last 18 months. Their last one 22/4 was Buy and raised target from 126p to 131p.
For my part gold, silver and their miners are likely to do well over the next few months. Today's tree shake just gives investors a cheaper entry price.
50% of US investment now goes into ETF's. Last Friday the GDX, the largest PM miner ETF (which CEY is a constituent of) closed the week at 37.40 the highest weekly close year to date.
Currently GDX is at 37.63 setting up a new higher weekly close for the year. GDX is building up for an assault on the 5/1/21 YTD high of 39.00. It could be tested next week.
A good week of consolidation for hard asset alternatives to overpriced US stocks, property and bombed out bonds. It will take a while for general investors to rotate into the gold space but inflation always works as a catalyst. Eventually.
Lots of damning revelations about the behaviour of the gold and silver paper markets just underlines how desperate they and the bullion banks are. Comex gold and silver have had waterfall selling every day this week but the bid soon comes back. They must be having nightmares about how do they close out their enormous gold paper shorts especially if the wafer thin silver physical balance breaks. Silver investors are calling the Comex and LBMA bluff.
Gold, GDX and gold miner 8 month downtrend is now over and a few new investors are now coming in. If the trends for inflation and the USDI also continue then gold and silver will likely be set up for some upside surprises. After an 8 month sector downtrend there is considerable latent energy to explode first with a relief rally and secondly due to sector rotation.
I think silver could fire up this neglected hard asset haven from rising inflation as the everything else bubble starts to deflate.
Hold and buy on pullbacks.
Today the LBMA reported that "accounting errors" caused them to overstate their silver holding by 3,300 tonnes (96,251,100 oz). Bear in mind that to hold off a potential delivery default in March the LBMA calmed the market by announcing that they had added 118 m. oz physical silver. Yet it now appears that all but 22m oz of that addition was imaginary ! So nothing to see here it was just an accounting error ? What does this do for confidence and credibility of the paper PM markets and the regulators ?
In an age of rising inflation for all to see in the US and depreciating fiat currencies investors are now competing hard with industrial buyers for every silver physical ounce. Comex gold deliveries are also running at a record rate as investors seek to protect their capital with hard asset insurance with no counter part risk. Mining shares now braking out of their multi month downtrend reflects rising interest and accumulation.
The stresses in the paper PM markets now seems to be producing cumulative damage to their paper control mechanism. What will be the next catalyst ? Tomorrow we get the latest US inflation data. US momentum and tech stocks are stalling which usually leads to a move into risk off assets like PM's. Is the next Comex delivery and Basel 3 the final straws ? The Basel 3 Net stable Funding ratio requirements starts 27/6/21.
Recent bias makes us believe we can forecast the likely near future from the recent past. What if today's LBMA admission is really telling us that the paper shell game is almost up ?
the higher precious metals will rise. Ultimately they are going to be hoisted by their own petards. Since the Feb delivery scare on Comex all the key manipulators have been caught out trying to mislead, deceive or lie and it is all on record. I'm talking about CME, Goldman Sachs, the CFTC and the Perth Mint. The LBMA has helpfully set out in their latest Report that "should another social media (retail silver) buying frenzy occur, higher prices would almost certainly be triggered, which would be met by heavy selling".
Consider what Bubba Horowitz wrote on Kitco 27/4 "whether or not the precious metals are manipulated, they still go through the price discovery process." That is classic obfuscation. The process of free price discovery is impossible in the precious metals markets precisely because because of unlimited short selling that magically appears overnight. As such gold and silver are the only commodities where a synthetic paper price dictates the physical price.
The manipulators don't like being questioned and they really don't want to deliver real bullion. I urge everyone to follow wallstreetsilver on Reddit and buy some silver bars or coins and see if we can break their game.
Physical gold and silver, producer gold miners and cryptos. Because at some point all the carefully crafted perception management and market manipulation will unravel. Signs that we are close are the US stock indices struggling to drive higher.
Yet at these heady valuations one group, the "smart" money is selling stocks at a record rate while the not so smart risk on gamblers have taken on a record amount of margin debt. Thanks to QE $560bn has made its way into the US markets over the last 5 months. That is more than the total for the last 12 years.
In the lead up to the start of May Comex silver deliveries the cartel and their allies have shown by their words and actions that they are very worried about losing control. Only desperate underwater shorts would sell more to try to reduce deliveries. CME's Jeffrey Christian has labelled the Reddit Wallstreetsilver followers as "idiots" for buying physical silver to challenge the cartel. J
So if you haven't bought any physical silver yet now is the ideal time to start. This Saturday 1/5 is the 10 year anniversary of the rigged takedown of silver in 2011.
At some stage owning hard and alternative assets without counter party risk is going to be the most popular and therefore hard to get investments. Right now no one wants gold mine shares. I can wait. Mean reversion will come.
Cowichan how about Sib-Still go for B2gold, a 1m gold oz p.a producer operating in Namibia, Mali ,Burkina F, Colombia and the Philippines. Market cap CAN$ 6.25bn. Harmony is a non starter as they operate in S Af.
Do you think Endeavour will be in their sights ? That could give Sawiris a clean exit to be cash ready for his next gold mine move.
Thanks Arfur for an interesting and thought provoking post yourself. I would point out that where it may figure as the worst Q1 for the suppressed paper gold price that was not the case for the physical market.
US Mint best Q1 for gold Eagles coins since 1999, and best Q1 for silver Eagles since 2016.
Perth Mint Q1 best Q on record for gold, 4th highest Q for silver.
Indian gold demand came roaring back in March to a record 471 tonnes
Comex which ideally doesn't want to deliver anything more than the bare minimum is now having to deliver record amounts. Comex has become a delivery vehicle for big investors. For the moment they are managing to scrabble and cope. But the May silver contract is a big one and that could be a real test later this month.
So all of those bombing raids selling huge volume in the lightly traded overnight before Europe opens through March was to keep the pressure on potential gold and silver bargain hunters to keep out. And to allow the bullion banks to take huge profits buying back some of their gold shorts put on since Aug high into the double bottom at $1680 in March. The added bonus of this artificial suppression is that the weaker price then saw GLD ETF etc generate a 107.4 tonne outflow of gold in March. And the bullion banks then picked up the cheap physical. Wash rinse repeat. That is why they hate the Gamestop, Robinhood and Reddit attention because it shone a light on their cosy deals that only benefit them.
The banks problem now is that gold is off 20% from the high and is relatively cheap and bargain hunters are about. At these levels the banks can't dive-bomb the Comex paper market after they have just managed to cut their exposure. Meanwhile the real asset which they have hypothecated to crazy levels has major problems meeting physical demand.
As to silver it's a tiny physical market with enormous industrial and rising investor demand. If the banks try and take silver down to $22-$23 I think they will set off a tidal wave of retail buying which will likely overwhelm their cosy setup.
Like I say I am encouraged by the outlook for Centamin and pm's.
Centamin can't get out of the dark cellar without a change of sentiment to the sector and to the leverage key gold. So gold currently at $1755 the highest since 25/2 is encouraging. Attached to gold the GDX ETF is making a positive patterned at 34.62 is now at highest level intraday for 7 weeks. Centamin will take it's cue from GDX and GDXJ as a constituent of both.
A weekly gold close above $1745 would be highest week close in 6 weeks with next target $1800 last above 7 weeks ago 24/2. GDX first target is to close above 34.50 which starts to make the Feb - Mar trading look like a reverse head and shoulders pattern: Left S. 19/2 32.74 Head 30.90 1/3 Right S. 31.83 30/3. Real resistance for GDX is at 36.00 which we haven't closed above for 10 weeks 20/1/21 when Centamin closed at 123p.
Encouraging signs for a recovery path for gold and gold miners. But with the general US stock market indices at or near all time highs the sentiment is worryingly complacent. The S&P Index sentiment has a reading of 90 (out of 100) and the VIX volatility Index is at 9 suggesting little investor fear right now.
My reading is that the markets calm progress is concealing extreme fragility. The Fed is trying to talk confidently yet is a prisoner in their own trap of more money printing and zero interest rates. Biden's solution of more debt fuelled spending will give a short term sugar rush. Then watch out.
Overall seems like a good time to own contrary hard assets like physical gold, silver,cryptos and quality gold miners.
Holding gold stocks in a price slump is difficult. Adding to holdings is nerve-racking knowing that one will have to wait it out and no guru or technical analysis can forecast it. Marketsniper Francis Hunt on Youtube summed it up well "you are wrong, wrong,wrong,wrong...and then suddenly very right to be invested in quality gold miners".
Have we now found a bottom from which buyers will start to outbid the sellers ? Some signs are encouraging. The GDX today is at a 7 week high. GDX is critical to CEY investors as the majority of gold stocks investors just buy the ETF rather than the individual shares . If GDX can breakout above $36 it may well confirm the end of the 8 month pullback and the end of the recent scorn for the sector.
The bullion banks did not waterfall sell gold and silver to close March. The Archgos hedge fund margin call just underlined the inherent risk with all of the derivatives for the large banks. Basel 3 is now only 12 weeks away. April is a key delivery month for silver so it could be another catalyst for investors to get involved in precious metals again.
As one of the ew investment sectors which is cheap gold miners are just waiting to be in demand. Once some buy others will follow. Maybe today is an early indicator of interest.
The attached chart shows that our Cinderella sector actually stacks up as best in class comparing operating margins/PE ratios in 2020. I expect more investors to buy some physical precious metals or some cheap mine stocks in the next few months as hard asset insurance against depreciating fiat currencies and overpriced US general stocks.
https://kingworldnews.com/gold-mining-stocks-are-about-to-skyrocket/
A range of opinion is important to get a perspective. I regard this week as a positive step forward for Centamin and it's outlook. The positive viewpoint includes:
CEY best weekly close in 5 weeks
FY results without a new setback. A pleasant change.
Paper gold price into options expiry 25/3 set for a 3 week close higher than 8/3 swing low $1681
Today despite rise in 10Yr T to 1.664 and USDI to 92.71 +0.18 gold held it's own
The squeeze in the physical silver coin/bar market is building and April could surprise us all to the benefit of the whole PM sector.
Have a very good weekend everyone, especially Sotolo. Is it just me or does anyone else read Sotolo's posts and think of Eeyore ? "...don't worry about me. Go and enjoy yourself. I'll stay here and be miserable."
It is good to see co-ordinated Director buying but I am disappointed with the relative purchases of the two most important Directors the CEO and CFO. But the timing of the purchases looks compelling. They have been well advised about Centamin share price cycles.
Statistically over the last 13 years (2009-2021) the year low has been recorded in Qtr1 in 7 years out of 13 and in Qtr4 in 4 years out of 13. So all of us who have been buying since the Nov 2020 price breakdown below 120p are aligned with a good buy price in every year without a production setback RNS (ie May 2018 and Apr 2019).
Are we set fair to now gain from a decent advance that is triggered by a turn in gold or GDX ? Monday's FY results were tidy and well received and took away some nagging doubts about the new team and strategy. Of course there was disappointment that there was no follow through. But the same applied to decent results for Barrick, Endeavour, and others and it's all down to the continued negative sentiment for the sector. But this will end. With the results out of the way Centamin is now well placed for the macro or micro catalysts to trigger the traditional Spring/summer rally. Just like spring 2016 or April-Aug last year.
There is a historic parallel to the Directors buying this week. Back on 21/3/2011 the new Centamin CEO Harry Michael bought 1m shares at 125.85p.
As things stand the CEO and the CFO who run the company have purchased less shares than 3 non execs: Rutherford 250,000 shares; Bankes 220,000 shares, and Dr Fawzy 140,000 shares.
Are Horgan and Jerrard going to buy more or is that it ?
It's good to see some Director buys. I would now like to see Martin Horgan make a meaningful purchase himself. It is odd to talk about the great potential of Centamin but only buy 16,405 of CEY shares. Horgan's holding is the second smallest of all of the directors. Ideally I would like to see our new CEO now demonstrate his optimism in the company and the future share price. Usually an entrepreneurial gold mine company CEO buys more than any other Director. Currently just to match Jim Rutherford and the Finance Director he would need to buy 250,000 +.
Note how industry leaders like Pierre Lassonde, Sean Boyd, Rick Rule and Eric Sprott put great store in backing CEO's who have bought significant shareholding stakes in their own companies. Among the question marks about Andrew Pardey's stewardship was that he did not buy a single share in the company. Directors who rely on share options give the appearance of treating the public limited company as a sinecure with entitlements.
To attract new institutional investors going forward Horgan needs to lead by example and buy a meaningful stake while the price is still cheap.
Thank you El Prof, Dash and Somnamna for good points here this morning.
Centamin isn't at fault today in terms of results or messaging. No, the key to renewed sentiment and enthusiastic momentum buying for the gold co's remains with the paper gold price. Sure enough to start the week gold was smashed very early this morning to maintain the perception that gold is "out of favour" and help the underwater bank shorts. Don't expect Kitco, Bloomberg or Reuters to comment on today's smash.
The bullion banks know that they are trapped. As is the Fed and their perception management of the strong dollar and benign inflation.
Today's Centamin's results were positive but then so were those last week of Barrick, Endeavour and Majestic silver in the last week.
I am encouraged that the GDX ETF is now 10% up from its low of 3/3 when gold hit $1689.8 and bounced. The bank shorts can't sell any more paper contracts and the physical market is tight. In terms of cycles after an 8 month and $400 decline GDX may be signalling that gold is close to a new upswing. Then the gold companies and Centamin will have a another run like H1 2016 or the breakout of April last year. But next time the breakout may have real staying power.
Well said Razors. I could stomach the overgenerous share options granted only two months into his role if he had already made a large personal purchase...just like all the leading gold and silver mine CEO's in US and Canada.
Rick Rule says there are two types of precious metal mine company. The preferred oneType mine gold and nurture their shareholders and shareholder returns. The other type mine the shareholders.
Arguably Centamin has far too many shares in issue and they are far too cheap. What is Horgan going to do about that. A new gold rally will lift all mine stocks but I want to see some genuine progress from management as to where we are going with our collective considerable investment.
They owe it to us.
A well balanced summary of our collective angst as gold mine shareholders not yet at the party. But I do believe Cinderella (Gold,silver and miners) will be off to the ball soon.
We've had a 7 month slump where miners have fallen x2 gold's drop co's like Barrick and the accident prone mid-caps with higher beta and low price high volatility...like CEY,HOC have declined 50% from last August's new ATH. It just rubbed in how out of favour the miners are but that can change very rapidly as April 2020 proved.
As a contrarian trade a long overdue general stock market correction will set off the next gold rally and it will catch many unawares.
But in this cheap price doldrums it is an ideal time to bargain hunt especially if you are a wealthy director who shared $305m from the sale of your last company Toro. There is a Centamin precedent I was a shareholder when the late Harry Michael on his appointment as CEO bought on 21/3/11, 1m shares at 125.85p. An investment of £1.2m which demonstrated commitment to the cause.
That would cheer up holders if Horgan stepped up and shared the angst and the future profits by now matching his share options with his own money. The price is 16% less than Harry Michal paid in 2011. A bargain which will soon be gone.
Is this the bottom ? Has gold has found a tradable floor after a 6 months 15% pullback and consolidation. If yes, expect CEY and miners to start to wake from their 6 month slump and reflect their leveraged 2-3x move of the price of gold.
Between 1/4/20 low 88.04 CEY gained 164% in 4 months to ATH at 233.30p on 6/8 just and gold topped out a day later at $2089. I am looking for a catalyst that sets off the next gold rally to test that $2089 high. As a contrary asset the break out could be very close now.
General US stocks including tech are overvalued and are struggling to push on. It needs at least a pullback to re-vitalise and bring in new buyers. The Fed sends out mixed signals that there is no inflation to worry about yet the 10 yr Treasury confirms investors are getting concerned. The Bloomberg commodity Index has clearly broken into a rally signalling inflation.
Traders have been seeking one final shakeout in gold down to $1700 and a key day reversal but I am not sure that it will happen. Next week's Comex contract expiry on Wed 24/2 especially for silver could be the catalyst for higher pm prices ahead.
Holding physical gold, silver and quality producer miners will be rewarded as true stores of value for those with the patience... an investors greatest asset. Hang in there.
Silver is the key. A silver close tonight above $26.40 would be the 2nd highest weekly close in the last 21 weeks, 2nd only to last friday's weekly close. The silver to gold ratio continues to decline and now is at 67.9:1. A clear sign that silver's consolidation is ending and it can lead gold and miners. The Reddit fandango gave some very useful publicity to silver "the most undervalued commodity still only 50% of it's 1980 price".
The Reddit crew chosing to buy SLV ETF (controlled by JPM and Blackstone) shares and options was a poor choice? The only weapon that has any real chance of taking on the bullion banks paper short is in physical market. But other investors piled in to US silver coins and small bars. They are likely to now hold those which is good in a physical market already tight. We will know on first Comex delivery date in 12 days 24/2/20 what affects the Reddit wave has had. What are the big industrial silver buyers like Samsung, Apple thinking ? Will they move to stockpile if silver breaks $30 ? Bad news for the paper silver short banks.
If you look at a 3 year or 10 year weekly bar chart of silver you will see a lovely cup 2011-2020July and a handle Aug 2020-Feb 2021 which could be very close to completing. We will know when silver puts in a weekly close above $30.
First steps are to see if silver can close above $26.40 on the week tonight. That would be only the 2nd week after last week in 21 weeks of weekly close above $26.40 and may tell us that despite Fri-Mon Reddit whipsaw price event silver is ready to rally. The silver to gold ratio is now 67.9:1 at it worst last year it hit 128:1.
Biden's stimulus bill is going to Congress and then his green new deal. All positive for silver as a vital industrial metal and poor man's gold as money that holds it's value. If silver does break out of $30 soon it will likely drag gold up with it. The bullion banks do not want a new precious metals rally to start from here but as of now the 6 month downtrend since August highs is getting very long in the tooth.
A silver rally will wake up their ETF's SLV, SIL,SILJ and then gold and GDX and GDXJ. The ETF's fire up the individual mine shares.
What could hold this up ? An overdue US stock market correction in Feb or March. That could keep miners down for a few more weeks and then be the rally leaders...just like last June-Aug. Remember the algos that do most of the trading don't care about individual company issues - when the trend is "on" the algos pile in to the ETF's which respond in unison. Retail investors who see the trend then buy cash holding, divi paying, no debt miners first.
Or does this small challenge to the hedge fund hegemony represent the start of long term disruption to the plutocracy ? The regulators could easily go after the retail investor but if they do I think that could be fuel on the fire. Just think of all the other manipulated markets which they control. The bullion banks should be worried. I doubt that we will soon be back to business as usual.
"A multibillion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble." Chrystia Freeland, The Rise of the New Global Elite, January 2011
Gold stocks remain scorned because they are not needed yet. But real price discovery of gold and silver are coming and when they do the mine stocks will soar if you can hold on. For now silver is getting interesting. Yesterday, I was hoping for a weekly close over $26 for only the second time in 5 months. Now a close over $27 is possible. But what is more important is that it could be signalling the end of silver's 6 month consolidation phase. It is good when the more volatile silver leads because it will pull gold along soon enough too.
Cey price weakness this week is frustrating but silver may be signalling that the clouds are clearing. If I were Martin Horgan I would be taking advantage of these cheap prices and building a sizeable stake in CEY with his own money. It would also help him promote CEY to fund managers if he had a meaningful stake.