Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
A 1998 film staring Jim Carrey "on the air...unaware" the only real person in a fake set populated with actors. Kitco is used by 000's of investors to get gold and silver spot prices and commentary from plausible re-assuring commentators like Bubba Horowitz.
But twice this week their gold market reporting has been worthy of "The Truman Show's climatic moment where the producer/controller of the deception says to Truman "there is no more truth in the real world"...so Truman should stay in the artificial world for their benefit and entertainment.
I contend that this morning during Globex trading when the US was asleep a paper gold and silver waterfall smash sell order came in to take gold down to below $1850 and silver towards $25. Why ? Because both gold and silver closed last night dangerously close to confirming a weekly outside move with gold needing to close tonight at $1864 or higher and silver $25.90 or higher. As of start of 22/1 silver was above the level and gold was just $4 below.
The USD Index closed last night at 90.09 suggesting that the rally off 2.5 year lows was stalling. There has been no "news" out that justified today's gold and silver dump. It's all about manipulating perception and painting the tape for the prices at the end of the week as low as possible.
Ultimately it's because the bullion cartel know they can't stop the precious metal price rises they can only slow them down using derivatives shorting dumps. They want to try and keep sentiment and interest in pm's as deflated as possible in lead up to Biden $1.9trn stimulus because it's launch will be very positive for gold and silver.
What did Bubba "Trader talk" say about today's smash ? "gold fails to take out resistance. Selling should resume. But here's the peach "we can only use price action to be on the right side of probability. After all the markets are a game of probability."
Are the gold and silver derivatives markets reflecting true price discovery or are they a Truman Show ?
That is why the Fed,IMF and ECB are so concerned about Bitcoin because it's huge price rise is acting as a fire alarm signalling that some investors already see the unsustainable nature of the debt bubble and QE to infinity and are grabbing the few assets without counterparts risk. Centamin's share price has been trapped like all the gold sector but patience will be rewarded. Hang in there.
My explanation is twofold. Firstly, a lot of US and Canadian gold miners pay negligible dividends so traditionally the Directors like to trade their stock purchases on decent moves after holding for at least 12 months.
John Thornton has bought a lot of Barrick stock in large chunks as with the N.Am style of giving confidence to institutional investors and retail buy making large stakes in their own company stock. He bought a significant slug of stock when Mark Bristow was appointed. Over 2018-2019 Barrick stock went sideways. But in 2020 it has doubled. So if you have a holding that was $60m in value that is now $120m + in 2020 it makes a lot of sense to cash some in. I see no mystery, Thornton and the other listed co sellers were just doing the harvesting they tend to do when they get a 100% profit.
Secondly, US mine directors have to hold their acquired stock for at least a year to reduce their tax from 37% to 20%. IN 2020 many family offices of the very rich have been selling some of their high profit holdings before the tax year end of 31/12/20. They were harvesting and anticipating potential capital gains tax changes. There is a distinct possibility that a Biden government will increase US Capital gains taxes. So your list of gold co Directors 2020 sales is consistent with prudent wealth management by gold mine stock directors taking some capital off the table at the current tax rate.
A lesson from this for our CEO is that to be a leading international gold company and attract more global institutional shareholders would be to set an example of confidence in the company and your strategy and buy a significant holding in Centamin shares now while they are still cheap.
To date Martin Horgan has only invested £20,000 for 16,405 CEY shares. As things stand the non exec Chairman Rutherford has risked x12 what Horgan has. I find that troubling and the optics are terrible and reminiscent of Pardey who collected a total of 7m CEY shares options at no personal capital risk.
Ideally, I would like to see Martin Horgan buy 573,595 shares so that his personal investment capital at least matches his share option award (6/6/20 590,000 share options granted). Then I will consider him to be aligned with shareholders. At the very least he should now buy 200,000 shares to at least match Ruthford's commitment.
Right now Martin Horgan has bought the least CEY shares apart from M.Cloete Non-Exec 15,000 shares. Come on Martin prove you are confident in your strategy for Centamin to risk a meaningful sum investing in the shares. That would align you with Eric Sprott, Pierre Lassonde, John Thornton and indeed Naguib Sawiris.
I suspect that the "actor" that smashed the paper gold and silver markets in an instant this morning was the Bank of International Settlements. The normally discreet power behind the world financial system, the central banks central bank. They regularly intervene in the FX, precious metals and bond market.
This p.m. paper dump selling is so brazen on a risk off day it appears to have been forced on them out of desperation on a day when gold and silver would naturally rise as safe haven assets without counter party risk.
Why have they done it ? To slow the inevitable rise of gold and silver with the announcement of the inflationary $900bn new US stimulus. In November and this month it is now clear that the bullion cartel failed to overwhelm the cohort of longs that appear with increasing confidence at each delivery month on Comex since March.
The cartel banks shorting paper gold and silver for enormous profits for many years are now trapped with massive net shorts in a precious metal bull market and rising inflation signals. These banks all have to declare their precious metal position values on a mark to market basis as of 31/12/20.
Today's attack is actually a sign of weakness. All they can do is hamper and slow the inevitable rise. Will today go down as the precious metal market equivalent of the REPO blow up of 16/9/19 ? If the cartel banks can't get prices down they are going to have to start buying back their huge short books. And guess what JPM is no longer net short. Precious metals are starting to get very interesting .
This re-balancing was the first since 2016 when both gold and CEY had a major price change. CEY is down 91.5p since the last re-balancing 18/9 .Therefore the ETF re-balancing was likely to have selling impact today and an exceptionally high volume. We got both. Compare the last 5 re-balancing days :
Date Close Vol
20/12/19 111.65 13.25m
20/3/20 107.2 15.5m
19/6/20 165.3 17m
18/9/20 213.5 13.5m
18/12/20 119.90 25.49m
So while there was some buying this morning it got washed out this afternoon.
Today is the quarterly re-balancing of the two gold mine stock ETF's that CEY is a constituent of. At the last Qtr shuffle 18/9 CEY closed at 213.50. So the re-balancing will see volatility in the price and some price weakness if CEY's relative holdings are reduced.
Today is also Quad witching in the US. Expect volatility.
when CEY does absolutely nothing in a narrow range for days and weeks. That gradual compression squeezing the price range could be setting it up for an explosive breakout to play catch up to a new bull cycle. The catalysts are all there but in a downtrend the negativity and scorn for the gold mine shares usually continues even when the turn has already started. Gold miners have yet to react to catalysts:
Gold braking out above $1840 on Tuesday broke the 4.5month downtrend. First test resistance at $1900
US $ Index below the psychological 90.0 and at lowest level in 2.5 years
US Fed statement signalling acceptance of a weaker dollar & to hold US interest rates down till at least 2023
Potential new stimulus before Congress breaks for holidays
Commodities (copper, steel, cotton, soya beans) starting to respond to inflation, lower dollar. Precious metals to catch up
Bitcoin a complementary store of value but not a physical hard asset is trading $23,000 new ATH
In 2021 new US government will unleash much much more stimulus
Buying CEY price weakness here will likely be temporary opportunity before the next up cycle gets going soon. By any measure the gold shares remain historically cheap and under owned. But when the current general stock bubble in US (not UK Ftse still down 13% YTD) has its next overdue correction I expect CEY and the other debt free producers to do very well.
Thanks mrtibbles I will have look at it. A developer gold mine share that I have bought this year that is coming along nicely is Pure Gold dual listed on Toronto TMX.PGM and LSE as L.PUR.
A Canadian developer with a v. experienced team and mega shareholders in Eric Sprott 10% , Newmont 9% and Anglo Ashanti 15% ,out of total of 394m share in issue. The development has been fully funded to production. But it is their drilling for the next phase which could be the real game changer says management. Phase 1 is to become a 100k oz pa producer but drill results suggest they could have much more going forward.
The only downside is that London is its secondary listing so volumes to date have been averaging only 150k p day and there's a big spread between bid and ask.
After E.Sprott bought 39m Pure shares in June the price has risen in 3 step movements and we now appear to be starting another breakout with a new ATHigh Friday and today in anticipation of inclusion in GDXJ ETF on Friday 18/12 and first gold pour by year end.
Something to ponder while CEY gets its mojo back.
118.50p seemed like a bargain to me.
I should have noted in earlier post that the Dec Fed meeting is tomorrow and Wed 16/12 after which they will make a statement - which usually moves markets ! I also note today the US $ Index at 90.50 (which has a strong inverse correlation to the gold price) is trading at 2.5 year lows.
A lot of hedge funds like the pairs trade of $/gold. Are they shorting the $ here in anticipation of Fed action and expecting more money printing ? All good for gold and miners going forward.
This morning taking advantage of the pre Christmas share price sale I bought some more CEY shares. After 4.5 months of gold price weakness and CEY price halving I think we are close to digging in solid around $1800 for gold and CEY at 8p down for the year seems ridiculous. We're set up for a new year rally in both gold and gold stocks. Biden getting confirmed potentially today by Electoral College votes would just underline the upside potential here.
Perhaps this week could been the turning point to higher gold and gold stock prices. Last year's gold price started rallying after the 17-18 December FOMC meeting meeting statement. The US economy (not Wall St) desperately needs more help from the Fed and the Treasury. The government and Congressional leaders only have until Fri 18/12 before the holidays to pass an interim stimulus deal. I hope they make a deal.
It was the Eric Sprott Weekly Wrap Up on Youtube that first alerted me to the potential of Pure Gold when he recommended it three weeks in a row 2/10, 9/10, 16/10.
I believe that he has been a strong catalyst to bringing in new investors here ever since he bought 39m shares 10% in June this year.
Eric Sprott hasn't been on the Sprott weekly wrap for the last month and the alternate guests have not talked about individual stocks. Craig Hemke , the host, announced on Fri 12/12 weekly wrap that Eric Sprott will be back talking about his stock picks again this Friday 18/12.
If so, I think it highly likely that he will re-iterate his enthusiasm for Pure Gold on which he has opined " it could be the next Kirkland Lake".
Glengarth and zeratul thanks for the very positive news that the potential GDXJ share buying could be 14m+ shares. Toronto average daily traded around 1m shares and LSE PUR 150,000 shares traded per day. All very price supportive going into first pour and from developer to producer.
zeratul thanks for update. I agree that if PURE is included in the GDXJ re-balancing on Fri 18/12 there could be another decent % rise. What I am not so sure about though is that Van Eck might buy 36m shares. That seems excessive. But I hope that you are correct!
36m shares would account for 9% of the 394m Pure shares in issue. GDXJ ETF usually spend 0.3-0.5% of their ETF holding allocation on new entrants. As of Q3 re-balancing :
Novo Resources 0.24% of GDXJ holding
Wallbridge 0.31%
Great Bear 0.49%
My feeling is that an initial GDXJ investment will be between 1.3-2m shares. Still good and certainly price rise supportive but not transformational in and of itself. But as a aperitif before first pour it would be welcome.
Sorry typo in Step 3 re date of high
Should read 11/8 104.5p low to 11/9 163p high +56%
Hi Kums, this is my first PUR post after taking a holding in November at 134p. With reference to your 200p target by first pour I was thinking along the same lines:
I noted how since 7/5/20 PUR has had three well defined stair step moves higher that each last about one month and have added between 56% and 76% from support to new high:
Step 1: from 7/5 48.5p low to 9/6/20 85p high +75% support to new high
Step 2: 16/6 75p low to 13/7 132p high +76%
Step 3: 11/8 104.5p low to 13/7 163p high +56%
I would suggest that we have now started Step 4 and if it follows the previous one month duration pattern it may reach the high around 25/12 or when first pour is confirmed. If one takes a more conservative +50% uplift on this step that is a minimum of 180p target.
Step 4 : 25/11 120p low to 25/12 ? 180- 200p by first pour
Onwards and upwards.
Good to see CEY and gold now perking up and Bubba Horowitz of Kitco's Trader Talk now long gold having traded short since 12/8. However one ominous dark cloud for the London market and gold stocks is the impact of a Brexit deal or no deal.
It wouldn't surprise me if the LSE has a one or two day panic sell off if a "no deal" Brexit happens. I will personally use it as an opportunity to buy on exceptional weakness. If on the other hand there is a workable deal agreed then I believe we will see a relief rally for the stock market, and for Sterling. But "risk on" general stocks might well benefit rather more than "risk off assets" like gold equities.
Get through the potential outcome of a Brexit "no deal" and the next couple of months have plenty of gold positive catalysts: a new President ?, further weakening of US$, much more US stimulus, and a dovish Fed holding rates at zero. Q1 2021 is looking very gold positive.
The US equivalent of our Brexit storm cloud is of course the outcome of the Presidential election. Has Biden won fairly ? Will the Supreme Court be called on to judge ? If Trump stays he'll have to stimulate to help the US avoid a depression. And they have still not hit peak Covid. Vaccines for the US are weeks if not months away.
If there is no change and Biden is installed then a Biden splurge of money printing is potentially only 2 months away! Then gold stocks will have a hare to chase.
US November Non Farm Payrolls are due out at 13.30 today and the consensus forecast is dire: +478,000 jobs compared to October's +638,000 jobs. The upward momentum has stalled. This at a time when the US has yet to see the peak of it's second COVID wave and there are 10m who will lose unemployment benefits by end Dec at the same time as the eviction moratorium ends.
The banking cartel are still $30bn net short Comex paper contracts despite a $339 gold price pullback and options premium profits on the decline. Usually they wack gold on NFP day with waterfall sales to try to support equities and dollar investments.
But if the cartel sell more paper gold contracts today to suppress prices they risk being required to find and deliver more physical gold in the live month of December. And seasonally December to February are strong gold months.
I know how you feel. CEY the most annoying share on the stock market!! Enjoy your Guinness, I hope its a cold one.
As a patient investor I am also an opportunistic trader when the price is right. I decided to buy today and I will tell you why.
Last year on the December Comex options expiry day both CEY and gold bottomed. Today is December Comex gold option expiry. So I have taken a trading position buying Centamin today separate from my long term investment holding.
Now I will wait and see whether my next Guinness is for commiseration or joy.
US $ Index's latest rally attempt petered out on Wednesday 11/11 at 93.17. That is good for gold.
On back of excessive stock market "risk on" reaction to the Covid vaccine news gold hit 3 month low on Wed 11/11 of $1863.90. But once again as with September's drawdown the support at $1850 held. Today gold may be indicating that the 3 month healthy backfilling could be approaching an upside breakout. As of this afternoon's gold rally half of Mondays $83 drop has now been recovered.
The vaccine boost and US stocks at new record highs mean that downside surprises could shock and stop out the overextended and over leveraged. That is precisely why gold and now cheap miners are the best hedge here.
The Indian harvest has been very good which will benefit gold buying and Diwali and frustrate the paper gold price suppressors.
Since March Comex has become a reluctant but increasingly important physical gold delivery exchange. The Comex December contract is about to face another round of delivery demands. But what has changed is that the cartel are no longer working collectively to heavily short every rally. Hence the gold price once again approaches $1900.
The most hopeful sign isn't that the gold consolidation is likely approaching a breakout it is that 30 banks are net $39bn short paper Comex gold and silver contracts and they can no longer get the prices low enough to get out even. To sell more short now just increases their liabilities.
Centamin needs a sentiment boost to get the algos thirsty. A licence award would be timely just as gold and miners are on the turn upwards.
Siko, thank you for a timely update and I am glad to hear you were able to buy some while the price is on sale. Each cycle has to reach excess and we must be close to a selling climax here now at this modest price. Any positive news from the auction and we could get a slingshot move.
Bring it on.
Those that wish CEY had been taken over by Endeavour may have added to this afternoon's slump.
Reuters report out 10.30 am US Eastern time
https://www.kitco.com/news/2020-11-10/Gold-miner-Endeavour-Mining-in-merger-talks-with-Teranga.html