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I just got home and it looks like the golds/silvers had a crappy day, but it also looks like the dollar is falling tonight while the commodity complex, and especially earl, are rallying. Oversold and out of favor are my two favorite paradigms, but I’m not telling you what to do if you are nervous here.
Me? I’m gonna do like Slim and ride the bomb. I’ve got meetings all over again first thing tomorrow so I won’t be able to look in via anything else but Crackberry til mid afternoon. In the meantime, if you’d like to discuss things, open-thread style — and that means anything — I declare this blog a Mario Savio Free Speech Zone.
Have at it!
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Classic Slim:
[youtube:http://www.youtube.com/watch?v=4w36z7XnwOM 450 300]
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About gold.
GLD is a short term futures contract on gold. GLD is currently trading at a premium to the value of its holdings – never mind its expense ratio. When GLD trades at a discount to its holdings is that a reliable buy signal?
Miners are claiming that the cost of the refined metals/end product is less than half of the market cost. Historically, has this been sustained? What’s the quantity of additional supply that’s come to the market because of the higher prices?
ive been trading gold from 585, its been the best and worst trades ive made. so what i will tell u is that when you think u know you dont. but i would say its a long here. its more like a buy it forget it play, like apple was since 2006.
Buy gold on support pivots and make millions.
come stumble my mirth beaten worker, you’re better off w/ CEF Mr. Bezerker
What good is a doomsday device if you don’t tell anyone about it?
Mining has been increasingly constrained, even across the globe by three major factors. The first is price… the 20+ year bear market in gold and silver destroyed the flow of capital into the sector. When gold started acting back up, the industry was far behind in meeting the typical demand from the investment sector.
The second is political… save for sectors of the United States and Canada, most of the gold mining in the world takes place in intemperate political arenas, including Central and South America and sub-Saharan Africa. This too has a huge impact on investment and therefore supply.
Third is environmental. While technology improves in the First World countries, the environmental movement incurs great costs, in both capital and time, on miners seeking to expand.
These big three serve to limit and slow expansion of supply and therefore ensure a positive cash flow mining experience for those well managed miners that can compete.
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Thanks for the comments.
Political and regulatory risk exists in developed markets too – try sourcing water in Nevada, then try getting permits. Finally, run the gauntlet of financing requirements (now with “new” SEC hurdles). Do business in Australia and discover that it’s a two speed economy that’s totally reliant on taxing the miners to maintain their economic “success” – or if you will, keep the one-trick-pony alive. Come to think of it, a 100% net margin in this business is looking a bit puny.
Eggsactly my point. There’s a supply side pinch coming from both directions — First and Third World.
This is true of all mining, btw. It’s just that gold and silver are so much easier to phuck with from a political level because they are literally “treasure.”
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The Slim Pickens Pair Trade is Telmex and Clean Energy.
Yes, they did have a crappy day, one of many recently. My purchases over the past month showed a profit for all of about 10 minutes before turning negative.
Mark Hulbert’s gold sentiment index was at 16.7% on Mar 7th (indicating his gold timers are mostly in cash), down significantly from late Feb. I suspect it’s even lower now. So, I want to believe the PM complex is close to sold out and due for a turnaround, but I’ve been wrong a lot lately.
I’m sitting here, mass noshing samitches.
Maybe the silver market is fucking with me, but it sure doesn’t want to turn down, even if the gold wants to.
Miners are staying relatively upright as well.
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How do Rare Earths look to you down here, Senator?
MCO, REE and QRM all look like nice pullbacks here, but AVL is flashing warning signals.
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You would do yourself a service in the blogging world to change your pic and update daily
Yes, I’m aware. Unfortunately I am extremely busy at this juncture. I will try to catch up this weekend.
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Missing in actionan asleep at the switch!
“Stan?”
Really?
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