Friday: Iran's hostility toward Israel put gold at one point to $2,447 an ounce, up $75, before it cooled to below $2,400. Silver rose more than a full $1 USD, then pared most gains. Platinum gained $25 an ounce to $1,013, then ditto. Still, reciprocating of blue chips continues. Below.
“I buy gold because I’m afraid it will go to $5,000. I buy it because I’m afraid it will go to $7,000.” — Rick Rule, investment strategist
“The dollar used to be called TINA, — there Is No Alternative. Gold is the new alternative. I call her GINA.” — Canada miner Pierre Lassonde to James Grant’s Interest Rate Observer
Of note, sister metal palladium, once twice the platinum price, declined Thursday. On Friday, palladium bolted 3.8% higher to $1,082. Then it too activated the brakes.
Oil zig-zagged with Iran’s possible attack on its neighbor. See chart here please.
Copper and copper cathode, also facing severe shortages in the coming 24 months, was hesitating at $4.25 a pound. Friday it was reaching $4.31 a pound, its best price since May 2022. Copper, the global glue of growth, appears headed to $4.50 a pound — we’ll see.
CPER appears to be in a strong bullish trend.
Its 200-day moving average is upwards sloping
and the MACD histogram is above 0. Comparative
Relative Strength analysis shows that this
issue is outperforming the S&P 500.[Charles Schwab & Co.]
“The violence and persistence of the rally in the monetary metals suggest a short squeeze is being engineered by some entities flush with cash — or entities empowered to create infinite cash. That a huge short position in the monetary metals long has been maintained by Western central banks via futures contracts, other derivatives and the Bank for International Settlements is extensively documented even as it remains a prohibited subject among Western financial news organizations and most financial analysts.”
Also, here is a real-time gold update from my former colleague, Myra Saefong at MarketWatch: see article please. Worth the 2-minute view, TCRs.
Gold: Wottup?
“We learned that China’s central bank had been buying a lot of gold, and had been joined by tremendous demand from the Chinese people. But over the succeeding weeks, the buying has been absolutely relentless. It’s led me to believe that something else is afoot. This is a level of demand that seems greater than even what we’re seeing from China.”
More available from Brien, whose resources investing conference will stage its 50th show this year: just ping me.
Xtra-Gold Resources XTG XTGRF as well underpriced base on its Ghana assets and net income — our second-longest-held nat-resources holding (since 2009). Ivanhoe Mines IVN IVPAF — longest held, 2003; EMX Royalty and Val-d’Or Mining VZZ in third place — 2012 or so.
Note: European Gold Forumhas 20-minute video presentations from miners: Zürich. Free right now -- see below please *.
TCRs, let’s return to the thrust of “reciprocal gold theory.” This occurs (theoretically) when gold’s price pace starts to reciprocate blue-chips’ decades of peaks. That is probabkly happening this week as major stock indexes drop in the face of a gold, silver, platinum-etc. lengthy rally.
Our banker in London, Simon Catt of Arlington Group, says, “Gold shares are only just waking up to record high gold prices. Newmont NEM, the world’s largest gold miner, today trades around $40 per share compared to $78.89 per share all-time highs in April 2022.”
Simon this morning explained the chart just below of the 1971 gold vs. the S&P 500 (and other markets): “Stocks and gold have done equally well in 50 years but perhaps what’s about to happen is gold is about to out-perform.”
I point out that part of gold’s respectable clutch on purchasing power stems from its low price in 1971, when then-President Nixon and his advisers closed the cashier’s window for exchanging USD for gold; this is when cross-currency trading began in force.
Gold keeps pace with blue chips since early 1970s, this chart shows.[Simon is hosting a free video check-in April 17. The Zoom will have Pierre Lassonde of roy-co Franco-Nevada; BRICs strategist Luke Gromen; resources investor Eric Sprott; two others. See details and sign up here please.]
I am expectant. The 2024 (since mid-October 2023 gains, actually) weekly gains in gold came as blue-chip indexes and the U.S. dollar kept marking new highs.
Weeks such as this for metals and other commodities were rare until this year; and I hope they will become more common: when metals, and their attendant miner-co equities, mark gains as blue-chip investments decline. See please: The Calandra Report — White Hot (Gray) Metals
“Measured against stocks, gold has not budged in 50 years,” Simon tells us.
I point out also that USD vs. the 6-currency basket of our major trading partners, the DXY, is stubbornly near its highest level since mid-November. Gold, and most commodities priced first in USD, as a rule fall when USD climbs.
The silver lining for gold holders is that the gold they (you, we, I) hold exchanges for record-high amounts of those currencies, the euro, yuan, Swiss franc, British pound, Japanese yen, Swedish krona. Let’s keep the “night lights” on.
Alas, as my Toronto contacts (one a broker, one a strategist, one a mining CEO and one a banker) chide me:
“Physical gold and silver are moving and the shares of the underlying, the equities, are virtually comatose. We have seen disconnects before between equities and commodity prices but what we see on the quote screen is as ever.”
The stock broker one adds his “biggest fear is take-unders.”
Oh, you mean something akin to Ontario’s Alamos Gold AGI’s getting Québec’s Orford Mining for a beggar’s price? (I received our AGI shares for ORM today-Wednesday and will be adding them to our Alamos pile here at home.)
Or the China-miner’s planned steal of a cash purchase of Osino Resources OSI OSIIF? (I own Namibia’s Osino.)
Back to the reciprocal gold thesis that Idaho strategist Peter G. Palmedo pioneered with the now-deceased global markets analyst Barton Biggs at least 22 years ago; ’tis a long time coming. (We have discussed this at length six or so times since 2021, TCRs.)
Peter runs a gold fund out of Sun Valley, Idaho, and he is the 44% owner of West Vault Mining WVM WMVDF. (I own WVM shares and have for years now.) The vault theme = the Nevada permitted and shovel-ready mine at West Vault’s Tonopah concession = figuratively the same as owning gold in the ground, just far cheaper than buying bullion.
Peter, a so-called quant, also chairs West Vault; another large stake the 68-year-old strategist has in the Sun Valley Gold Fund is Vista Gold VGZ.
As you know, TCRs, I enter investments when they are going down in price. This makes me unpopular on the family front … even when I am gifted, in commodity rallies such as this year’s (2024), with an occasional throwaway, of ‘Well, it’s about time.’
I continue to search for what professionals call deep-value and-or oversol
I just started a small stake, as discussed, in Metalla Royalty & Streaming MTA as I expect fund managers and other larger-than-le-hoi-polloi
“We are going to grow from just under 4,000 (royalty) gold-
My two preferred and long-term royalty holdings are EMX Royalty EMX and Elemental-Altus Royalties ELE ELEMF. See trading notes below. +
Uranium is on my oversold list, again.
Some uranium comments:
“I think that the U-correction is over and that it was a very necessary process; things were getting overheated and overly speculative on a few hundred thousand pounds that took it up 15 bucks to the high (spot was $105 three or 4 weeks ago), says Bill Sheriff of enCore Energy EU and TCRs, NF NFUNF, both of them owned here at home.
Bill adds, “I expect a slow climb back to the highs unless Vladimir (Putin) cuts us off. In general a healthy market that will have more upside surprises than downside.”
Daniel Major of GoviEx Uranium GXU tells me this morning from London, “Spot U is in the high 80’s ($88.76/lb) and last long-term contract is reported at $80/lb, up from $75 at the previous month end. So the U market continues to look strong.”
He notes “still uncertainty on U.S. sanctions on Russian material. ”
As with other uranium execs, Daniel expects the “nuclear story” and attendant physical uranium and explorer/producer stock prices to continue their 3-year streak in choppy fashion. Microsoft and other tech-cos will keep developing and-or contracting SMRs — small modular reactors for projects that need power sooner rather than later. Why?
Marc Henderson of Laramide Resources LAM LMRXF just this morning tells me from Toronto:
“Artificial-intel developers are using tremendous amounts of electricity. Leading tech companies all are getting on board small modular reactors, partly because their data centers are hardly green at the moment and AI is a voracious consumer of electricity.”
Marc points to this week’s WSJ quote from California-based chip-designer ARM”s CEO, René Haas: “By the end of the decade, AI data centers could consume as much as 20% to 25% of U.S. power requirements. Today that’s probably 4% or less.”
I own GoviEx, EU, NF, Laramide Resources, Skyharbor Uranium, CanAlaska Uranium; I am considering buying shares of F3 Uranium FCU FUUUF. (I accomplished that with a starter stake of 2,000 shares.)
+ Trading Notes: Purchases in the past 5 or 6 days include moreBanyan Gold BYN; more EMX Royalty; more Elemental-Altus Royalties ELE.
In order to purchase more Ivanhoe Electric IE and more DHT Maritime Holdings DHT, and to pay taxes (Marin County, California, property tax), I sold at a 22% or so short-term profit a small amount (less than $500 USD) of Western Copper & Gold WRN. I might regret that if WRN gets a takeover offer for its Yukon copper-gold project.
I also sold approx. $900 of holding-co Orecap Investment OCI ORFDF at break-even; Orecap is lightly traded and holds sizable stakes in QC Copper & Gold; American Eagle Gold; Awale Resources; Baselode Energy; two or three others.
As noted, last week I sold $1,400 USD of accelerating Ivanhoe Electric IE, of which we own approximately $13,000 USD worth, all profitably since first purchase four months ago; and $750 of (also) accelerating uranium-co enCore Energy EU, whose shares I still own.
In the post-market earlier this week, looking to replace those $1,400 of IE shares in a separate family account, I sought in another family account to purchase more Ivanhoe Electric shares; I got them. I added yet more IE earlier this week. So, even-steven.
As discussed, with the continued fervor for miners’ shares, I sold a $450 stake in short-term gainer Aztec Minerals AZT and I used the funds to start a small stake in Metalla Royalty & Streaming MTA.
I intended this week to sell a slice of accelerating Ivanhoe Mines IVN IVPAF: 1,000 shares of some approx. 80,000 shares held. I have yet to sell. So, likely that happens next week.
My only non-resource buy, a three-year winner here at home, is DHT Maritime Resources — crude carriers in Europe, Middle East. NYSE — and I just added again Thursday. This is choppy, and DHT just released first-quarter average lease rates that are in the ballpark of analysts/observers. A dividend is announced each quarter, and that will occur in the next week or so. DHT is based in Bermuda for tax partnership purposes.
Any continued or accelerated military conflicts and rebel attacks in the Middle East will raise lease rates for VLCCs, very large crude carriers, and at the same time conceivably reduce traffic in Red Sea and regional waterways.
*European Gold Forum in Zürich: all videos are free as of Friday April 12.
Some 318 folks attended the yearly Denver Gold Group event this week.
Investors numbered 182 and company delegates 87, Executive Director Tim Wood weighs in. So, 48 companies in all with 4 late cancellations, among them Karora dur to Westgold M&A, and I-80 Gold IAU, due to an “upsized” financing. Meetings numbered 721 for the 3 days.
“Great energy despite equities lagging metal prices,” Tim says this evening.
These videos are available now, courtesy of the companies:
| Agnico-Eagle |
| Alamos Gold |
| Centerra Gold |
| Coeur Mining |
| Equinox Gold |
| Hecla Mining |
| Hycroft Mining |
| IAMGOLD |
| Metalla Royalty & Streaming |
| Osisko Development |
| Pan American Silver |
| Red 5 Limited |
| Royal Gold |
| Silver Mines Ltd. |
| Skeena Resources |
| Triple Flag |
| Wesdome |
— Thom Calandra
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Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities.
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