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DrJamain - if you believe there's still significant downside risk, despite Fresnillo's torrid performance since Feb 2021 then 1) Why have you (and others) been buying so-called 'dips' all the way down from £12 and 2) Why still persist with FRES now? I stopped buying 'dips' long ago because it's completely detached from PMs and SP has been one directional for a long time now.
It's not just the cumulative MTM losses absorbed over the last 11 months but also the opportunity cost of what you could have earned had the FRES chunk been invested elsewhere. No I don't mean pixelated monkey JPEGS but NASDAQ/S&P500 trackers.
It's groundhog day again today with FRES down for no logical reason whatsoever. We're 10% down on the month, flat over 6 months and 31% in the red YTD. Absolutely tragic.
Well thanks for that philosophical gem TheThinker :) Other asset classes have breached ATHs multiple times since the pandemic e.g. housing market, S&P 500/Dow Jones/NASDAQ, crypto but it is PMs that have been underwhelming thus far both in relative and absolute terms. Given the insane debt monetisation and runaway price inflation, gold and silver ought to be multiples of current price levels.
Inflation-adjusted, gold did not even eclipse 2011's ATH last year and as you mentioned, silver is only halfway to it's previous ATHs.
I am a physical stacker and long on PM miners but we know too well that both gold and silver are constantly in the crosshairs of TPTB which is why I will never make bold price targets for either.
BLS CPI came in higher (shock horror) than expected...No surprise there, from memory every month bar one this year price inflation has come in at a higher print than projected.
FRES was walked down -2% today to 910p as they knew PMs would spike after inflation reading and look at FRES now...
Should still be £10.50+ easily at these PM levels though.
12 quid? We were at £13.50 last summer and I suspect quite a few on here still have positions at 12 quid or above.
I still cannot quite believe SP is broadly flat 6 months backward looking and barely +7% or so since MSCI debacle.
Offloaded yesterday @929 and back in today @910, I don't know why I do this to myself hahaha.
The usual walking FRES down shenanigans today, presumably because we have BLS CPI release in 25 mins...Should be a monster and give us a bit of a bounce later.
Pokerchips - Not a chance of 3-4% for Treasuries? You do realise that 10-year yield was >3% as recently as 2019? Yes the world has changed since then but suggesting "no chance", well, I'm going with Michael Burry on this one...
Big tech and property have both enjoyed stunning runs over the last 18 months but are in need of material corrections and the Fed will happily facilitate that (as they've done before), perhaps not as dramatic as a "crash" but the artificial inflating of both asset bubbles will run its course shortly.
Spindler - they certainly can afford higher nominal yields than 1.2-1.3%. It depends on your assumptions but 3-4% is the upper range of interest expense affordability.
Bondholders will simply not accept a paltry c1% yield medium to long term with inflation this high, there will likely be many more tantrums to come which will push yields up.
Real 10-year yield is circa -4% at best and that's being generous by actually taking CPI as gospel, in reality price inflation is far higher. We have a deeply negative real rate environment and yet gold is still below $1,800, I'm not sure how that bodes well...
A lot of smart money (including Michael Burry) are betting big on rising yields in Q4 which won't be good for gold but let's see!
Astro - are you new here? This is the story of FRES post-February 2021.
Noggers - share price not doing bad? We are back to where we were 3 months ago during the MSCI deletion shenanigans (830ish), net movement is next to zero and for considerable periods we were sub-800.
DrJamain - you'll get 100% consensus here on that point, FRES share price versus PM levels is an outrageous divergence. However, despite thousands of posts dedicated to this topic; we still don't know why.
Market maker manipulation/shenanigans/games was a fair hypothesis several months ago, but we're now heading towards August sub-800p so that theory doesn't hold water anymore. We're actually now even lower than we were during the MSCI sell-off, 820-830 was a key support level back then.
FRES free float is very small, so if there was a scheme between some players to hammer the price down and hoover up the free float prior to a monster run in PMs, well it wouldn't take THAT long to complete. The only thing we can say with certainty is that there has been scant institutional and big player interest in FRES for months and without that, we're going nowhere unfortunately.
Vaccination rates aside (I'll address that later), the US is open for business; 2 of the 4 biggest states by economic output (Texas and Florida) will not be locking down again. Whereas in Europe (particularly in the UK), many people are all to happy to continue lounging around and getting pinged ('Oh darn it, not again' they exclaim) as they can't go to work.
With regards to vaccination rates, the US only marginally lags Germany, Spain and Italy but is ahead of the rest of the EU. Both Spain and Italy (particularly the latter) remain ticking time bombs for the EU and Euro, so being slightly ahead of the US in terms of vaccinations is hardly a trade-off for the state of their economies and longstanding structural problems.
Time will tell of course but I think the USD fightback is only just beginning, although unusually this has not depressed the gold price too severely. After all we must not forget (despite last year's run above $2000), $1820 is actually still very high!
Kando - the imminent USD capitulation and crash narrative has been peddled for nearly 3 decades now, it's not going to happen and I'm surprised so many still harp on about this (YouTube has something to do with it). If people actually understood the global monetary system and just how dependent the world remains (and needs) USD, they wouldn't say such things. Even China doesn't want a severe and sudden dollar devaluation or crash. Russia recently announced complete dedollarisation, guess what? No one cared, DXY was marginally up on the day.
You seem (as do others) to be under the impression that the US is the only country engaging in mass debt monetisation. Japan has been at it since the early 90s and JPY has had a dire year, USD/JPY continues to strengthen and even hit 111 recently. I'm currently based in the Philippines, guess what? They're at it here as well and now PHP is weaker than it was against USD at the beginning of the pandemic, despite imports falling off a cliff and low demand for foreign currency. Just look at our beloved GBP as well, floundering below 1.36, I'm in my early 30s and even I remember the days of GBP/USD above 2!
The Fed know exactly what they're doing. I project that they will allow nominal yields to increase marginally later this year (yes they can afford to do this, >3% on the 10y is probably the red line though) which will make Treasuries more appealing and give USD further tailwinds. Dollar will also benefit from the US recovering and growing faster than Europe & Japan, which let's face it isn't difficult at all.
C'mon DBNO this isn't a tree shake, otherwise it's been a 5 month long tree shake. FRES free float is tiny, if players were employing nefarious means to hoover up shares on the cheap (in advance of PMs rocketing) then they could have completed that long ago.
Dollar fightback and an expectation of rate increases sooner rather than later are spoiling our PM party, I hope this doesn't continue but it could get a lot worse. $1757 and $26 for PM prices is still high in the context of history and yet FRES is languishing below £8.
It needs some big institutional players to step in with some juicy block trades but it appears there are no takers at these levels which frankly still astonishes me...
Beware folks, DCI Spindler is on the case...
Gareth, it either moves in cycles or it doesn't? Cycles typically are not a matter of opinion...Did you really foresee anything like sub-800p earlier this year? Let alone last year when we touched 1380p.
carvegyber - you've written an eye-watering 6,344 posts, been consistently wrong every week since February (even before this as well) yet you continue to pepper the boards with your deluded ‘wisdom’ as if you’re some respected market oracle who everyone is waiting to hear from? You have no shame do you...Absolutely extraordinary.
At the beginning of 2020, gold was still sub-1600 which was 20%+ below the $2000+ it achieved in 2011. For people who have an IQ higher than room temperature, the period of 2011-2020 was a well known lost decade for PMs with many professional and retail investors completely wrongfooted. If you can't understand such basic concepts then there's not much more anyone can do to help you.
Retail investors in particular lost an absolute fortune (thus far) during that period because the buying momentum was in 2011 at the highs through fears of hyperinflation due to QE2 (not at the bottom in 2015), how could you not know this? I'm not privy to a secret dossier on PMs; the information is out there in the public domain. This is one of the key sources of resentment and anger for retail PM stackers (particularly Wallstreetsilver) with many ploughing into silver in the $40-$50 range and gold at $1,900+.
DusterMan - was that a serious post or a satire?
"Any entry at around these prices will sooner or later be in a nice profit" has been said almost every day on here since February. There is 'we can all be wrong now and again' and then there's so comically wrong on a weekly basis that I'm amazed some people still stick their head above the parapet. I'd probably delete my account and throw the computer away if I'd been that wrong.
"Higher silver & gold prices are here to stay" - that is in no way a certainty and the omens are not looking good. We've had unprecedented debt monetisation and consumer price inflation at its highest for 40 years, yet PMs are stalling. To make matters worse, the dollar isn't even strong at the moment. If yields climb later this year (I'm backing this) and US economic growth races ahead of Europe and Japan (not difficult), DXY will go north of 95 again and PMs will plummet.
We've been here before in 2011. People screamed hyperinflation and ramblings about money printing then look what happened...PMs entered a 10 year bear market. Those people are still underwater, talk about a bad investment...
The thing that concerns me is FRES is languishing sub-800p and yet PMs are actually still high at the moment relative to history. I shudder to think how low FRES could go if PMs nosedive.
That's definitely part of it. It's amusing when people say "USD is backed by nothing", well it's backed by the world's largest economy (still) and by far the most powerful military in the history of mankind, so you know, if push came to shove during a sovereign debt crisis...Haha.
Speaking of which, at least we've finally got some planes to put on those Queen Elizabeth-class aircraft carriers, they can help us at the negotiating table when we're dealing with UK debt holders in the future :)
It's either the market saying, 'we don't believe you and we all know you're going to have to raise earlier than that" and/or it's the usual spivs jumping up and down on the suspension bridge to engineer volatility and make money, including hoovering up PMs after they've knocked them down.
IMO, I think it's both reasons.