Precious Metals Fundamentals From Different Angles

We are (finally) on the anticipated bounce in the miners.  They will need to exceed a few key resistance levels we are watching to even think about getting bullish beyond a bounce.  But people did get too bearish and the sector needed relief.  So…

Also, the sector’s macro fundamentals have not fully come in line (per my personal gauges).  You may remember my old Macrocosm shtick, and that is going to come back into view as we manage the sector going forward.  Let the promoters blather on about inflation, but we’ll stick to the funda that work, which preceded the last tradeable upturn in 2016 not to mention the big bull ignition in 1999-2001.

But then there is Keith Weiner with his supply/demand based fundamentals for the metals.  I highlighted him once recently and his new post is a worthwhile read as well.  He’s got the supply/demand based fundamental prices of Au and Ag well above the current market prices and I am going to keep an open mind on the metals, especially gold.  See Why Did Silver Fall?

Speaking of gold and silver, the Central Fund of Canada (a holder of both metals) is still selling at a 4.5% discount.

cef

Central Fund is a good deal now relative to its net assets.  Hearken back to the days when gold bugs drove CEF in excess of a 10% premium.  So I’ll repeat, as a committed buyer (as opposed to day trader) you do not ever want to be running with a rabid gold bug.  You want to buy after he’s been put down.

Meanwhile, here’s my really cool (to me, at least) Macrocosm graphic soon to be making its return to a website near you.  A well known writer was touting gold miners and inflation not 2-3 weeks ago.  Then look what happened.  Look how tiny the ‘Overt Inflationary Effects’ planet is.  Almost as tiny as the ‘China/India Love Trade’ planet.

If we can marry real macro fundamentals with the likes of Weiner’s supply/demand fundamentals along with either a sector washout or constructive technicals… well, that’s when you pound a table.

macrocosm

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