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Alas, the paper dump at 4am was steep.
The info leaked, obviously. The jobs report is less reliable than the National Enquirer, and everybody knows it, but they trade on it anyway because they know others trade on it. This ride is getting worse and worse. Or better and better for anyone inside the loop.
IIRC, they took it down over 5% in mid February in a similar information environment. I made a lot of money off of it, a lot for me, especially after betting wrong on the long bond last fall. I felt comfortable with the bet on GDX back then. It's starting to feel the same, but GDX is still 30% higher than on that day in February. To be, or not to be...
Long holds are better off not looking at all. For a trader/long like me I should have stuck to selling rips and buying dips. I still think we need a gap filled on gold and silver but it may have have some more downside risk as general equities are still getting the most attention.
I have not made any moves. I am tempted because I'm thinking again that the market has over-reacted and will reverse course, whether it takes days, weeks, or at most a few months. However, the lack of urgency I'm also feeling is because I agree with you. I'm also a little worried that, on the whole, election year shenanigans will favor equities.
I think so. That said, you mention future weakness in the USD. That would bode well for foreign investments of many kinds as well as for PMs and miners. That said, I see a melt-up of the USD as a risk. For foreign investors, it's not about how strong or weak the USD ought to be, rather about how it relates to their own currency. When you look at Yuan, Rupees, and Yen as a Chinese, Indian, or Japanese investor, respectively, we can imagine many of them in the past opting to transfer as much of their wealth into assets valued in USD. When the polarity reverses on that, it will be a boon for us investing in PMs and PM miners, and the bottom may fall out of US equities and bonds both. But before the parity reverses, it could get ugly.
www.zerohedge.com
Nah. that was Nathan Rothschild, "when there's blood in the street, I'm buying"
Are you saying the gold mining stocks are lower than they should be, or higher? I deal in physical metals regularly, but don't hold them for any long term, other than a small amount that I've had for years. I have never really looked at mining stocks until I recently bought Newmont in January, because they mine some copper, as well as silver. It seems that a lot of mining companies I looked at back in January were pretty small market caps, and I try to stick with bit larger companies, in general, when investing in stocks.
I am not sure what exactly he his referring to if it is a new thing. The correlation between GDX and GLD is rather high in recent months. In early April we saw GLD march upwards and GDX lag behind, though GLD gave up those gains by the end of the month. Where I would argue that miners are under-valued is that the demand for gold is increasing yet the long term trend line for GDX is flat or declining, despite inflation. If we entertain the notion that these major miners are about where they should be, they were over-valued in the past. If, conversely, we suppose their valuations were anything close to correct in the past, they are under-valued today. I think the latter is the case, as equities, not to mention bitcoin, have been on fire, drawing investors away from these stocks for reasons having nothing to do with fundamentals and everything to do with speculative appreciation, not to mention the effects of passive investing in ETFs like SPY.
Yes gold miners are undervalued related to the underlying gold price in a few ways. So lower.
Previous bull markets have seen miners do exceptionally well relative to the underlying gold and silver price. They were also very poorly managed and foolish. Now, they have learned the lessons of the past and are managing capital much better (in general).
There is no record of how much gold China has stored up nor is the buying levels something we can trust. I tend to think they hold many more reserves than what is publicly released and silver is even now a popular retail purchase.
timesofindia.indiatimes.com
