***MAY 2012 Gold and Silver Stocks/Options/Futures trading thread***
cohodk
Posts: 19,100 ✭✭✭✭✭
PC is slacking.
Thought I would start off the new month with a chart I posted last month. The ratio is now 0.125. Is gold about to severely underperform equities?
Thought I would start off the new month with a chart I posted last month. The ratio is now 0.125. Is gold about to severely underperform equities?
Excuses are tools of the ignorant
Knowledge is the enemy of fear
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Comments
02-May-12 07:04 ET In Play Barrick Gold misses by $0.01, misses on revs; reaffirms FY12 gold production, cost guidance (40.44 ) : Reports Q1 (Mar) adj. earnings of $1.09 per share, $0.01 worse than the Capital IQ Consensus Estimate of $1.10; revenues rose 18.0% year/year to $3.64 bln vs the $3.76 bln consensus. Barrick maintains its full year 2012 gold production guidance of 7.3-7.8 million ounces at total cash costs of $520-$560 per ounce and net cash costs of $400-$450 per ounce. The co expects full year 2012 copper production of 550-600 mln pounds at C1 cash costs of $1.90-$2.20 per pound.
02-May-12 06:52 ET In Play Barrick Gold increases quarterly dividend 33% to $0.20 from $0.15 per share (40.44 ) :
Read more: http://www.briefing.com/GeneralContent/Platinum/Active/TickerSearch/QuickSearch.aspx#ixzz1tj3zfUTp
Knowledge is the enemy of fear
All comments from Briefing.com.
Newmont Mining +1.8% after beating by a penny and reaffirming its FY12 guidance (48.57 +0.84) : Co last night reported Q1 (Mar) earnings of $1.15 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $1.14; revenues rose 8.8% year/year to $2.68 bln vs the $2.69 bln consensus. CO is maintaining 2012 co-wide outlook for production, CAS and capital expenditures. Average realized gold and copper price of $1,684 per ounce and $4.01 per pound, up 22% and no change, respectively, from the prior year quarter; Attributable gold and copper production of 1.3 million ounces and 35 million pounds, down 2% and 35%, respectively, from the prior year quarter; Gold and copper costs applicable to sales of $620 per ounce and $1.98 per pound, up 11% and up 78%, respectively, from the prior year quarter; Cash flow from continuing operations of $613 million, down 38% from the prior year quarter. Second quarter gold price-linked dividend of $0.35 per share, an increase of 75% from the prior year quarter "During the first quarter, we continued to invest in the development of our Akyem project in Ghana, which remains on schedule for initial production in 2014. Regarding Conga in Peru, the project continues to be suspended pending further analysis of the economic and technical impacts from the recently released report from the independent panel.
Agnice-Eagle Mines beats by $0.22, beats on revs; reaffirms FY12 production/cost guidance (35.84 +1.43) : Reports Q1 (Mar) earnings of $0.59 per share, excluding non-recurring items, $0.22 better than the Capital IQ Consensus Estimate of $0.37; revenues rose 13.4% year/year to $474.1 mln vs the $442.88 mln consensus. Payable gold production2 in the first quarter of 2012 was 254,955 ounces compared to 252,362 ounces in the first quarter of 2011. Without considering past production from the Goldex mine (operations suspended October 2011), the 2012 result was a quarterly record from the other five operating mines. The higher level of production in the 2012 period was due to increased production at each one of the co's five operations, year over year, as the mines mature and operating efficiencies continue to be achieved. Total cash costs for the first quarter of 2012 were $594 per ounce. Agnico-Eagle is reiterating its production and cost guidance for 2012, which remains unchanged at 875,000 to 950,000 ounces of gold at total cash costs per ounce of $690 to $750.
Goldcorp misses by $0.05, misses on revs (41.05 +0.60) : Reports Q1 (Mar) earnings of $0.50 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus Estimate of $0.55; revenues rose 10.9% year/year to $1.35 bln vs the $1.48 bln consensus. Goldcorp's current 2012 gold production guidance is 2.6 million ounces at total cash costs of $250 to $275 per ounce of gold on a by-product basis and $550 to $600 per ounce of gold on a co-product basis. The co is currently analyzing the potential impact of first quarter production delays at Red Lake to Goldcorp's overall 2012 production and cash costs.
Knowledge is the enemy of fear
It would be like figuring out the annual cost to operate a car without including the insurance. I would guess that cash costs allow us to somewhat compare the different miners. But
I have a feeling that even those guys aren't reporting it as apples to apples. It's great that their cash costs are all around the $600-$700 range indicating close to a $1,000 margin.
The next question is how do so many of them find ways to achieve quarterly losses?
Primero Mining +3% after beating Q1 ests, maintaining FY12 guidance (2.86 +0.08)
Co reported Q1 EPS of $0.19 vs $0.08 Capital IQ Consensus Estimate; revs +29% YoY to $44.0 mln vs $39.22 mln single est. Primero maintains its full year 2012 production guidance and expects to produce between 100,000 and 110,000 gold equivalent ounces, based on 80,000 to 90,000 ounces of gold and 4.5 to 5.0 million ounces of silver, with 500,000 to 750,000 ounces of silver expected to be sold at spot prices. Cash costs for 2012 are expected to be in the range of $630 to $660 per gold equivalent ounce or between $310 and $340 per gold ounce on a by-product basis.
Stillwater Mining misses by $0.05, misses on revs (11.12 ) : Reports Q1 (Mar) earnings of $0.02 per share, $0.05 worse than the Capital IQ Consensus Estimate of $0.07; revenues rose 19.3% year/year to $203 mln vs the $245.84 mln consensus. The Company's mines produced a total of 120,800 ounces of palladium and platinum during the first quarter of 2012, a 7.9% decrease from the 131,200 ounce production in the first quarter of 2011 and a 6.0% increase from the 114,000 ounces produced during the fourth quarter of 2011. Most of the variability in production is the normal result of changes in mining conditions, the allocation of manpower and associated differences in mining productivities. Based on production results for the first quarter of 2012 and projections for the remainder of the year, the Company is reiterating its full year guidance for mined production of 500,000 ounces. Total cash costs per mined ounce (a non-GAAP measure defined below) averaged $514 in the first quarter of 2012, compared to total cash costs of $437 per ounce for the first quarter of 2011
Anglogold sees Q1 production of 980K oz vs. guidance of 1.03 mln oz due to safety stoppages (34.07 ) : On Feb 15 2012 AngloGold Ashanti guided first quarter 2012 gold production at 1.03Mozs at total cash costs of $820/oz - $835/oz at an average exchange rate of R7.40/$, BRL1.70/$, A$1.01/$, and AP4.35/$ and fuel at $110/barrel. Safety stoppages continued to negatively impact group production from its South African mines during the first quarter of 2012. In total, safety stoppages and the subsequent ramp-up associated with safely restarting ultra-deep mining areas, resulted in 76,000oz of lost production in the three months ended March 31. AngloGold Ashanti's first-quarter 2012 gold production was around 980,000oz, which is also likely to have a consequential impact on unit total cash costs, partially mitigated by weaker rand exchange rates. In addition, AngloGold Ashanti will report a deferred tax charge resulting from the increase in Ghana's corporate tax rate, as applicable to AngloGold Ashanti under its Stability Agreement, from 25% to 30%. This will, however, be more than compensated for by a deferred tax credit created by the reduction in South Africa's marginal tax rate applicable to gold mining companies from 43% to 34%, following the introduction of withholding tax on dividends that replaced the secondary tax on companies
Gold Fields announced attributable Group production for March 2012 quarter is expected to be 827k gold equivalent ounces, approximately flat yoy; 2012 full year production guidance of 3.5-3.7 mln oz. (12.83 +0.01) : Co announced that attributable Group production for the March 2012 quarter (Q1 2012) is expected to be 827k gold equivalent ounces which is similar to the production from the corresponding quarter a year ago (Q1 2011: 830k gold equivalent ounces) and taking into account seasonal variances underpins the 2012 full year production guidance of 3.5-3.7 mln oz. Total cash costs and notional cash expenditure (NCE) for the quarter are expected to be approximately US$875/oz (R218,000/kg) and US$1,285/oz (R320,000/kg) respectively. Gold Fields NCE for Q1 2012 compares 'favorably' with the average NCE for the peer group of US$1,281/oz for CY 2011. This guidance is based on exchange rates of ZAR/US$7.77 and A$/US$1.05 for Q1 2012.
Read more: http://www.briefing.com/GeneralContent/Platinum/Active/TickerSearch/QuickSearch.aspx#ixzz1toa1scOO
Knowledge is the enemy of fear
Yup, good money going to die in the miners and i'm making my contribution.
Knowledge is the enemy of fear
Not great news for miners. On the hand looking at the finviz.com TA charts a very large % of the 100 or so US exchange listed miners are once again sitting on support lines of
varying degrees. Heavies like GG and ABX are falling in free space in vicinity of the apex of their 2008-2009 triangles. But the next 14 by market cap are all sitting on or very
near to intermediate trend lines. If those 14 start breaking down....then whoosh. Dollar bounced today to backtest it's 7 month downtrend line break at 79.42. If it gets through
that area all heck will break loose with PMs, miners, stocks, etc.
daily miner charts
From Sinclair:
Very simply, hyperinflation and what you erroneously call deflation occur together. Inflation is the increase in world money supply.
Deflation is debt failure. All other definitions are spurious. .....and they can easily occur together.
Knowledge is the enemy of fear
Author notes a failed daily dollar cycle that is left-translated. Dollar's high for the current intermediate/12 month cycle is probably in. This analysis has worked well for him in the past.
Fwiw the dollar has bounced to the 50% fib mark from the recent 80.2 high. The 62% fib is close by at 79.6. Shouldn't take long to get the next direction following today's backtest
of the 7 month uptrend line.
Th dollar continues in its uptrend from Sept and is trading above the upward sloping 200dma. Nothing negative in that chart.....yet. It is making a wedge pattern that probably has another month of sideways action before breakout.
Knowledge is the enemy of fear
<< <i>Averaged into GDX at 44.54 via short puts.
Yup, good money going to die in the miners and i'm making my contribution.
Closed short puts. Made 4c. Re-collecting my bullets for another day. Still own position at 45.57 after closing covered calls.
Knowledge is the enemy of fear
Bullish fundamentals for PM prices. Not good news for mining shareholders.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>GDX hit a 52 week low on Thursday. Could be the buy of the year. >>
More like a 104 week low this past month. But it could be the buy of the year. I'm sure many were saying that in early Sept 2008 when it
was at a 52 week low and had already fallen by 50%. Problem was, it still eventually went another 40% lower over the next month. Total drop in
2008 was 70%. But those buying at the Sept low in 2008 saw themselves back into a profit position within a few months. This current drop is "only" at 35%.
Yup, this is where money goes to die.
Lets see if gold can hold Thursday's lows. Silver is already below.
Knowledge is the enemy of fear
occurred in late September.
Gld/Slv volume ratio ramped up steadily for 8-9 weeks from Feb-April. The last 2 weeks it's been ramping downward. The GLD/SLV gap at 55.0 nearly filled with today's 54.8. Now in the 12th day of this rally which is on the long side for gsr. There's also an interesting trend line anchored at the March 1st low that rides nicely through about a dozen points up to today's high. That could be one of the mid-lines of the current wider gld/slv channel. Today's move also ran up close to the 22 month downtrend line that started back around 70. The last 2 rallies in GSR lasted about 2 months each. This one is now a few days over that. RSI hitting the same 69 point that the Nov-Dec rally ended at. CCI with some neg divergence. The fact that RSI has meandered up to 69 suggests it probably won't see a blow up type move as in late September. This move looks more like the Nov-Dec rally. 3 out of the last 4 moves seemed to end abruptly with RSI at 65-70. Current macd is lower and looks sluggish compared to the 2 month rally levels seen from May-Dec. The 3 up moves in 2011 were all 2 months each. In 2012 we've seen 2 months down and now 2 months up again. Today's volume ratio of .38 is much lower than the 0.50 to 1.30 seen over the past 2 months. The Aroon10 compression is very similar to that of late December along with same # of waves. StochRsi doesn't have the "easy to spot" 3 peaked top as seen on earlier moves. This one so far has double peaks. ATR continuing to ramp to the bottom and nearly at the same level as last April-May at 0.60 when GSR was bottoming around 31.
GLD to SLV ratio
<< <i>Doubled up on GDX position at 43.86. Ave price now 44.72.
Yup, this is where money goes to die. >>
Im hearing bells tolling.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
Knowledge is the enemy of fear
I knew it would happen.
<< <i>So, what you seem to be saying is that GDXJ will be worth looking at around 16. >>
Im not sure if I have ever made any reference to GDXJ.
Miners do seem to be getting timely for a bounce. I am long, and losing.
Edited 3:14----Talked myself into buying some GG calls. A sucker born every minute.
Knowledge is the enemy of fear
And conversely, on the upside I would expect some degree of leverage due to these same factors, without actually leveraging on margin.
I knew it would happen.
<< <i>People gonna start to question this "store of value" concept. >>
That is the intent of those who wish to control the price. What remains to be seen is who will be left standing. My vote goes to the true market.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
above 55 to 58-60 to do more damage as having silver and gold drop together is working just fine. The wide gap area from 52.5 to 55.0 formed back in January
has now been filled. Some fairly small gaps still left up at 55.5 and 57.5. Also a lower gap at 52.0-52.5. Right now about half way between the high and low one.
I always felt that the 58-60 line would hold. So I think that breaking above that 2 yr downtrend line is the smaller probability. There's also an intra-channel trend
line coming up from the March low that is now acting as resistance at 55 as well. Also some horiz resistance around 55. There was huge ratio volume on today's
GSR move so it was a complete change from yesterday's lackluster volume. I still think GSR is in a 4th wave pullback that won't overlap the previous low of 58.3
on wave 1. There are also some 20 and 35 yr resistance lines from previous long term lows that seem to cross in the 55-60 range. Another reason why I think those
levels will hold. Both GSR and the USDX have put in year long rallies that are getting very long in the tooth based on previous ones. The London traders came back
to work today and made their presence known from 2 am to 10 am. Also noted a huge volume spike this morning in the GDXJ/SPY ratio as shares of GDXJ were
being dumped like mad. Either capitulation or the start of another intermediate downtrend. With GDXJ options expiring end of next week, I'd sort of expect weakness
right up to then. It stinks but it is what it is. The important 3-10-30 yr TBond auctions are this week so that was another reason to whack the risk trade. The 3 yr auction
today was ok with a 3.49 bid to cover at $34 BILL sold. With the more important 10 and 30yr coming up it doesn't seem like gold will get any traction until they're done.
Out of gold's daily, weekly, and monthly macd, rsi, and w%r only the daily macd is not showing a strong neg divergence (1 out of 9). PMs somewhat decoupling from
the dollar today imo. That may have been one of the things keeping them up prior to today. That left translated/failed daily dollar cycle not of much help the last 5 days.
If gold does hit the $1580's I'd say there's an excellent chance it will hit $1545 if only to fill the next closest GLD gap. And then not far from there you have gaps at $1519 and
$1488. Those could go down in rapid succession if this one at $1586 gets tagged. In fact the whole GLD range covering $1545-$1586 is sort of like one extended gap.
They are close enough now that I can't see the first one or two not being filled. Gold likes to fill them gaps quickly. And fwiw there are GLD gaps all the way down the lower $400's.
Then again, there are plenty of gaps in Apple from $7-$100.
Reports Q1 (Mar) earnings of $0.18 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.20; revenues rose 11.0% year/year to $1.04 bln vs the $1.07 bln consensus. As previously announced on January 16, 2012, Kinross expects to produce ~2.6-2.8 million gold equivalent ounces in 2012. Production cost of sales per gold equivalent ounce is expected to be in the range of $670-715 for 2012
Read more: http://www.briefing.com/Platinum/InDepth/InPlay.htm#ixzz1uKZP75oN
That is the intent of those who wish to control the price
Seriously?
Knowledge is the enemy of fear
Bong.....Bong.....Bong
Time to buy.
Doubled up on GG calls.
Knowledge is the enemy of fear
<< <i>Im hearing bells tolling.
Bong.....Bong.....Bong
Time to buy.
Doubled up on GG calls. >>
Out of GG calls. Made 27%.
Should have held as it looks like miners may try to make bullish engulfing candles today. Still have GDX though.
Knowledge is the enemy of fear
<< <i>Should have held as it looks like miners may try to make bullish engulfing candles today. Still have GDX though. >>
Yesterday's massive volumes in GDXJ/SPY ratio sort of smelled like capitulation. But this morning's follow through and pull back on even larger
ratio volume sort of sealed it...at least for the short term. GDX expiration is next week so I don't think they will be allowed to get too far for the moment.
At least there was no gap up to have to return to. Interesting that the stockcharts P&F charts for GDX (26) and HUI (392) have wildly different price objectives.
You would think they would be fairly close in range (ie GDX around 40). If you want to see a chart in capitulation look at JAG. Doubt it goes any lower. But how
much lower would one expect after a 90% two year drop on a producer? Took out the Oct 2008 low yesterday.
Largest up volume day for GDX since the Feb 2010 capitulation following gold's pull back from $1225 to $1044. This is also larger than the August 2011 light off
day when Ben released QE2.
Knowledge is the enemy of fear
<< <i>If you want to see a chart in capitulation look at JAG. Doubt it goes any lower. But how
much lower would one expect after a 90% two year drop on a producer? Took out the Oct 2008 low yesterday. >>
Oh my! Now that's a painful chart!
Knowledge is the enemy of fear
Reports Q1 (Mar) earnings of $0.32 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.28; revenues fell 2.4% year/year to $404.2 mln vs the $431.72 mln consensus. The gold margin increased by 20% from $854 per ounce during the first quarter of 2011 to $1,023 per ounce during the first quarter of 2012 as 22% price increases more than offset the increases in costs. Weighted average cash costs2 were $679 per ounce, compared to $544 per ounce in the first quarter of 2011. Cash costs at IAMGOLD-operated sites were $596 per ounce compared to $487 per ounce in the first quarter of 2011
Read more: http://www.briefing.com/Platinum/InDepth/InPlay.htm#ixzz1ubmjuLzC
Knowledge is the enemy of fear
Starting to look more and more likely. Considering GDX bottomed at 15 in October 2008, anything from 25-38 could be in the cards. The descent is still on auto-pilot.
GLD is so close to the 147 gap ($1513) it seems like an excellent bet from here. The gap around 150 seems almost certain to get filled this week ($1545). Then the wide gap at 137 ($1412) is pretty inviting and corresponds to one of Armstrong's numbers. We've already had 2 retests of the August triangle breakout ($1532 and $1522). Extending that support line out would give a logical 3rd touch around $1470. That almost looks like the best we could from here. It's been a key support line since May 2011. Don't see why that can't continue. Chart technicals are now trumping fundamentals, regardless of what they are. The Euro banks have enough dynamite underneath them to easily surpass what US banks went through in 2008.
Gold's final wave last summer above $1577 might have not been part of the normal plan. Maybe it was just there to help bail out JS and his missed $1650 target from Jan 2011. Had gold corrected as it probably should have in July and August, it would have retreated to the $1325-$1425 support range. That may be gold's real target along with that large GLD gap at 137 ($1412). Time to consider uber bearish options. Gold hates gaps, even in GLD. It may not be a coincidence that GLD has left no gaps above 158 currently unfilled ($1625). Maybe it gets that before going for more of the deeper ones.
I knew it would happen.
Knowledge is the enemy of fear
<< <i>On the gold chart, the 2008 debt meltdown looks alot like the mid-2011 debt meltdown - only from a higher point. The government's reaction will determine the direction and magnitude. Seems pretty clear-cut from where I see it. >>
So for gold to go higher Q3 would be necessary. Feed the Pig.
Washout time, and we still have the usually bearish Wed and Thursday left this week.
GLD gap at 150 now filled ($1544). Next target is 147 ($1512).
For virtually ANYTHING to go higher, you're looking at QE.
When this gutting is over, it may actually be time for Jmski52 to dabble in GDXJ.
I went so far as to put GDXJ on my new i-phone's stock tracker.
Everytime I pony up to the bar, I have to ask myself - "do you trust paper? Do you trust Wall Street? Do you trust the government regulators?"
"Well, do ya - punk?"
Then I back away from the bar and buy some more precious metals.
One day, I'll be wrong. But it ain't now.
I knew it would happen.
McLellan is saying we're not seeing a bottom until around June 5....
Gold wants $1300---which would be approx the same drop as in 2008 (30%).
Knowledge is the enemy of fear
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>GDXJ, at all time low, is something to be watching. >>
Being a fairly new stock it wouldn't be at a new all time low if it were around in October 2008. If it were around in 2008 it probably
would have gone to single digits (7 or 8). Currently just under 18.
Starting to look like that the worst is yet to come. GDXJ H&S breakdown projects to $13....another 25-30% lower from today.
There are numerous important material stocks also close to breaking down their H&S patterns. And we already have major indicies
in breakdown too. It's starting to look like October 2008 all over again. HUI/Gold ratio at a lowly .25 and probably headed to .21 or .20.
A good bounce could come at any time. But the trend is in full blown ugly mode for miners, esp. juniors. To make things worse the broad-based CDNX which is a
very reliable slow mover just broke down it's 2 yr H&S over the past 2 days. It projects down to 680...or near the 2008 bottom.
Time to consider the bad as well as the good. With no formal QE3 this could start to get away from us. The FED will react slowly as usual.
The one positive thing about GDXJ is that it has reached its measured decline based on the earlier decline from Dec-January. Maybe a bounce due here after this week options
expiration ends.
CDNX weekly
I knew it would happen.
<< <i>It's too early to call today a reversal but it could be the beginning with the bounce off of $1526.70, I don't have my hopes up just yet. The fractal energy shows that this pattern is at or near its end, although on rare occasions it can keep going. Also at this point, it would appear that all of the selling would have to be complete. Public opinion is about as negative as it gets, though I suppose it could go always go down further.
I'm starting to think we can retest that 2008 sentiment low....maybe even beat it. Notice how that sentiment bottomed in July/August yet prices continued down for another 2 months
into late October. We're actually going to need to get some positive divergence in the sentiment before price turns around. Look as some of the big material stocks like RIO, BHP,
VALE, FCX, etc. If those continue their descent, then PMs will continue with them. Recall back in the 1970's how the GSR and stock market cycled up and down a number of times
(6X over 14yrs). This could be the next bounce down in stocks and up in GSR. When it reaches the top of the band we'll cycle back the other way. The strong hands in gold remember
2008 and they probably don't want to be strong hands again. This downturn could shake many of them out if it hasn't already. I think there are still many left to be shook out.
China’s Gold Imports Jump as Country May Become Biggest User
Excerpt:
Imports from Hong Kong were 135,529 kilograms (135.53 metric tons) between January and March, from 19,729 kilograms in the year-earlier period, according to data from the Census and Statistics Department of the Hong Kong government. Shipments in March rose 59 percent from February, yesterday’s data showed.
2011 marginal costs from $12 to $28
Some interesting articles on the cost to mine silver. In the 1st post a retired geologist chimes in. For most silver mining companies a typical marginal cost is in the low to mid $20's.
"Cash costs" or "byproduct costs" are fairly useless other than to get more investors to buy shares. Fresnillo is one of the lowest at $12/oz. They are not the norm.
Knowledge is the enemy of fear