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Post by richardsok on Aug 4, 2021 20:35:55 GMT
BTD in precious metals. No rush yet. Q for you Uncle: Could you please remind us if precious metals or long bonds act as a better hedge against equity market corrections? Do precious metal miners also have similar (albiet lower) hedging qualities? Thanks. I'm not uncle -- but this is what I know: during the crash of '08 gold's collapse was every bit as severe as equities'. Precious metals are hedges against a fail in fiat currency -- but not hedges against bear markets.
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Post by uncleharley on Aug 4, 2021 20:48:26 GMT
BTD in precious metals. No rush yet. Q for you Uncle: Could you please remind us if precious metals or long bonds act as a better hedge against equity market corrections? Do precious metal miners also have similar (albiet lower) hedging qualities? Thanks. I have never studied the subject in a context of either precious metals or bonds. If I wanted a hedge against an equity market correction I would first trim the positions that appear to be the most vulnerable. How or if I would deploy the proceeds of that trimming would depend on what appears to be the most attractive at the time. Much would depend on were the markets are in the cycle when I decided to make some changes. BTW, gold is up, silver is down & long bonds are up today.
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Post by yogibearbull on Aug 4, 2021 20:52:14 GMT
Stockcharts has data on $SPX (SP500), $GOLD (bullion), $XAU (gold-miners) since 1990. As charts may default later to 1 year, I am including both the LINK and screenshot. There is a high correlation between $SPX and $XAU, but gold bullion can sometimes do its own thing. Dates can be changed to analyze any periods.
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Post by chang on Aug 6, 2021 13:10:35 GMT
My preference is SILJ, but when the breakout is executed they will all move up. I put SILJ, SIL and SLVP on my Yahoo! Finance watch list just for fun. The volatility is bonkers. The LT record of these is abominable. I am going to keep watching for fun, but it will take a lot for me to stick my toe in the silvery water. $5-6 looks like a pretty good floor for SILJ, but I don't think we can expect to see that any time soon. Its current value of $14 looks mighty precarious from a chart POV. Incidentally, silver just plunged 2.5% in the pre-trade.
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Post by anitya on Aug 6, 2021 14:39:51 GMT
I need to see Gold move above its moving averages. That might be today. stockcharts.com/h-sc/ui?s=$GOLD&p=D&b=3&g=0&id=p14483447819&a=414745197&listNum=86 Right now the spot price of gold bullion is sitting on its 20 dema, just below the 200 dema, which is just below its 50 dema. All of which are just above a support level. A surge in trading volume today would very likely push gold above those levels and I would again be bullish on the miners. Fwiw, my preference would be the silver miners, but CEF is also an alternative in that space. When one moves, theyall will move. EDIT: They are off. Buy a little of each. I woke up to notice that they are 3% up and gapped up at open. Seem like confirming moves up. Do you include pre-market action in Gap review? The above Gap Up nicely filled and more on the way down! May be GLD and miners are acting uncorrelated to USD as they are supposed to. Glad kept out of the nauseating moves. Will leave this to the pros.
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Post by uncleharley on Aug 6, 2021 19:52:37 GMT
My preference is SILJ, but when the breakout is executed they will all move up. I put SILJ, SIL and SLVP on my Yahoo! Finance watch list just for fun. The volatility is bonkers. The LT record of these is abominable. I am going to keep watching for fun, but it will take a lot for me to stick my toe in the silvery water. $5-6 looks like a pretty good floor for SILJ, but I don't think we can expect to see that any time soon. Its current value of $14 looks mighty precarious from a chart POV. Incidentally, silver just plunged 2.5% in the pre-trade. I am staying long for the weekend. The very short term intraday chart indicates to me that SILJ is not ready to collapse.
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Post by chang on Aug 9, 2021 0:19:38 GMT
Yikes, silver down another 3% in the premarket. At some point, silver (or the miners) is going to be a buy. SILJ, SIL and SLVP are an interesting collection. Despite SILJ being a "Junior", the other two also have a SC/MC portfolio. (SLVP's M* "ownership zone" is almost identical to SILJ's.)
All three are ★ or ★★ rated - meh. They all have a lower yield (0.6-1.46%) than I would have expected from miners. (GDX yields 2.62%.)
Canada is 59-82% of the portfolios, as you would expect. But there are some significant differences in the non-Canada part, e.g., Russia, Mexico, Brazil, Peru, Korea, Japan, South Africa, UK, etc.
Assuming the whacking continues, if I decide to stick my toe in the water, I'm not sure how I would choose among these. Maybe by ER (SILJ-0.69%; SIL-0.65%; SLVP-0.39%). Or maybe it doesn't matter?
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Post by ignatz on Aug 9, 2021 1:17:17 GMT
Matter for a short term trade?
All 3 lost over 70 percent during the 3 years ending 12/31/15.
All 3 were up at least 89 percent during the 2 years ending 12/31/20.
Don't know how I could hold any of them for the long term unless it were a meaningless percentage of total equities.
Which points to trying to catch a short term trend for a significant portion of total equities, in which case stuff like ER would be of very little interest.
But as usual, I see too many fuzzy conditional terms like "should" and "might" applied to technical analysis. Whiplash after whiplash.
I got lucky with a GDX trade 4 or 5 years ago. It was maybe 8 percent of my equities, but added under 1 percent to my total return for that period....thus I continue to try to talk myself out of this stuff.
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Post by richardsok on Aug 9, 2021 10:31:02 GMT
.... and right on time, here's the WSJ out with an article on gold today - that it has been an erratic inflation hedge, reliable only over very long periods. Excerpt: --------------
....many ... believe that gold is a good inflation hedge. This belief isn’t supported by the data, however. If gold were a good and consistent hedge, the ratio of its price to the consumer-price index would have been relatively steady over the years. But that hasn’t been the case
Gold is only a good inflation hedge over time frames far longer than any of our investment horizons
Gold’s weakness as an inflation hedge may be even more pronounced today... because “gold is currently very expensive compared to its history.” The current gold-to-CPI ratio stands at 6.5, for example, nearly double its 50-year average of 3.6.
Even though the price of gold is 50 times as high as in 1971, stocks have performed even better.
....the only reason gold came even this close to matching stocks over the past 50 years was its huge return during the first decade following Nixon’s announcement. Take away that decade, and gold has lagged behind even intermediate-term Treasury notes
....Gold’s inconsistent correlation with stocks and inflation makes it difficult to project how it will perform over the next 50 years. (A new complication is that gold may have competition from cryptocurrencies.)
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What surprised me in the article is the claim that gold is now expensive relative to its history vs the CPI. I'd have thought the opposite. I have seen undeniable inflation in the past year or so, but no corresponding rally in gold.* (*Retail gas up around 40%, McD small fries now at 1.79 etc)
Thinking I may have to reconsider getting back into gold & instead treat it and NEM & ASA, etc as regular assets to trade on technicals. Its choppy ineffectiveness as a portfolio hedge is a startling new wrinkle for me. Now that PMs are dropping hard, it may be time to be more interested -- not less.
Not going to dump my cache of coins, either. That's for my youngsters -- WSJ or no WSJ.
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Post by richardsok on Aug 9, 2021 10:52:42 GMT
And about those gold mining etfs & sector volatility: Kyrgyzstan's takeover of Centerra's large mining operations a few weeks back may still be sending jitters around the sector. Peru, Chile and some other emerging mkt governments are also elbowing miners for more taxes, royalties, stock and so on. Kyrgyzstan's grab sets an unwelcome precedent for many investors.
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Post by yogibearbull on Aug 9, 2021 12:05:31 GMT
For me, the so-called position-trading has worked for gold-miners. So, I basically have stable position in GDX and GDXJ (newer) and then I add to them during selloffs, and take some off the table when they run up. I had my fill of GDXJ around $43.xx already when it was there recently, so I am not rushing to add again. But it looks a decent entry point for those wanting to add. This isn't following T/A although I watch charts and T/A signals. stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=0&dy=0&id=p50206344493
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Post by uncleharley on Aug 9, 2021 12:13:31 GMT
For me, the so-called position-trading has worked for gold-miners. So, I basically have stable position in GDX and GDXJ (newer) and then I add to them during selloffs, and take some off the table when they run up. I had my fill of GDXJ around $43.xx already when it was there recently, so I am not rushing to add again. But it looks a decent entry point for those wanting to add. This isn't following T/A although I watch charts and T/A signals. stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=0&dy=0&id=p50206344493If you change that chart to a weekly you will see that GDXJ has made a triple bottom this yr. I would not expect another test of that level before having a meaningful rise.
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Post by liftlock on Aug 9, 2021 14:02:24 GMT
For me, the so-called position-trading has worked for gold-miners. So, I basically have stable position in GDX and GDXJ (newer) and then I add to them during selloffs, and take some off the table when they run up. I had my fill of GDXJ around $43.xx already when it was there recently, so I am not rushing to add again. But it looks a decent entry point for those wanting to add. This isn't following T/A although I watch charts and T/A signals. stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=1&mn=0&dy=0&id=p50206344493If you change that chart to a weekly you will see that GDXJ has made a triple bottom this yr. I would not expect another test of that level before having a meaningful rise. Colin Twiggs reports that Gold has closely tracked the inverted 10-year TIPS yield over the past 15 years. tradingdiary.incrediblecharts.com/2021-07-28-markets.php
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mrc
Lieutenant
Posts: 104
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Post by mrc on Aug 11, 2021 19:37:36 GMT
Any preference between GLD and IAU? IAU seems to be cheaper and it did outperform that much.
I hold USAGX - USAA Precious metals fund now. Thinking about half & half of metals stocks and metal.
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Post by yogibearbull on Aug 11, 2021 19:55:32 GMT
mrc, IAU is cheaper with good liquidity. SGOL is even cheaper with sufficient liquidity.
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Post by uncleharley on Aug 13, 2021 16:29:34 GMT
A midday check of my charts shows that GLD, SLV, and their respective miners are making a strong move up today. The move is on trading volume that is above average. They seem to have established an important bottom if not "the" bottom.Broad market stock indexs are flat and longer dated treasuries are up but their charts are indecipherable at this time.
EDIT; Afternoon trading was at best flat and the trading volume tailed off. Back to nuetral for me.
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Post by uncleharley on Aug 14, 2021 16:26:05 GMT
This weeks McClellan Market report has a useful discussion on the relationship between short term treasurey rates and the price of gold. According to their study, inflation adjusted, short term rates are inversely corralated to the price of gold except when the adjusted rate becomes too negative. At this time the inflation adjusted rate for a 90 day treasurey is a negative 5.3% which is negative enough to create a huge headwind to any advance in the price of gold. If this negative rate is transitory as the Fed believes, it should correct itself soon and the price of gold could ressume its ralley. However no one has defined what transitory is, nor is there any indication that inflation is decining. Nor is their any indication that the fed is ready to push short term rates up. That makes me short term bearish on precious metals. Long term I am still a bull. Fwiw
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Post by paulr888 on Aug 14, 2021 16:36:22 GMT
Hi Harley ..... Given this, how is your portfolio positioned now? What do you do when the wind is more at your back? Thanks.
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Post by uncleharley on Aug 14, 2021 16:41:19 GMT
My portfolio is currently long on precious metals. My intention is to sell at least part of my position on monday. Weekend headlines can change my mind, but I am short term bearish on gold or silver or just about anything associated with them.
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Post by richardsok on Aug 14, 2021 19:22:58 GMT
Three thoughts about the dollar & PMetals this morning. The other month that takeover of Centerra Gold by the gov't of Kyrgyzstan (or however it's spelled) surely does add another level of risk to all other third world mine owners. Bad precedent, especially if strongmen see no downside consequence for such an act. Most African & S. American governments probably regard such miners as (a) necessary evils or at least (b) cash cows that can always be milked further or (c) simply seized. No one sheds tears for mine owners.
Any mining stock I own in the future will be north american.
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Another thought. Despite all evidence to the contrary for the past three decades, I have always maintained the notion that gold is a hedge against inflation. (It probably is, I'm now guessing, but compensates for inflation only in great sudden bursts when masses of people suddenly rush to it in times of fear.) For the most part gold has laid dormant or stuttered aimlessly about and inflation be damned. It clearly has NOT kept pace with the smooth erosion of the dollar for the last 40 years like Big Macs and "Forever" postage stamps have.
so: how could I possibly have maintained such a blind (and expensive!) delusion for so long?
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Finally -- we're on the cusp of committing ANOTHER $3Trillion to spend -- much of it in permanent future entitlements. If that doesn't break the back of the dollar, what will? This isn't the straw that breaks the camel: it's the anvil.
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Post by paulr888 on Aug 14, 2021 19:53:59 GMT
Gold, real estate and commodities are inflation hedge.
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Post by uncleharley on Aug 15, 2021 1:28:49 GMT
"Finally -- we're on the cusp of committing ANOTHER $3Trillion to spend -- much of it in permanent future entitlements. If that doesn't break the back of the dollar, what will? This isn't the straw that breaks the camel: it's the anvil."
I do not disagree with that statement However I frequently wonder what it would take for some other currencey or group of currencies to become the worlds most favored reserve currencey rather than the USD? Or a Crypto currencey?
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Post by FD1000 on Aug 15, 2021 14:19:19 GMT
VGPMX isn't exactly a PM fund. GLD+GDX have been a bad choice for 1 year + 10 years. VGPMX was good for one year, but still bad for 10 years. You can also see how higher volatility takes away all the extra performance compared to the SP500. If I wanted to invest in PM, I would go with VGPMX because it's a lot more than PM funds- "This fund looks for opportunities arising from changing investor sentiment resulting from cycles of under- and overinvestment in capital-intensive industries. At least 25% of the fund will be invested in precious metals and mining securities. It also focuses on opportunities to invest in companies with scarce, high-quality infrastructure assets—typically in utilities and telecommunications—that are viewed as irreplaceable and therefore have enduring value. In addition to stock market risk, the fund is subject to currency risk and country risk. Long-term investors seeking global equity exposure and who are comfortable with the added volatility in international investing may wish to consider this fund."
Attachments:
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Post by uncleharley on Sept 2, 2021 12:01:03 GMT
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Post by yogibearbull on Sept 3, 2021 13:33:30 GMT
NEM is among the top SP500 movers this AM. So, gold-miners may be picking up bids for a rebound. My positions are in GDX and GDXJ.
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Post by uncleharley on Sept 3, 2021 18:54:14 GMT
I just checked the daily charts for the precious metals ETF's that I track and what a treat to they are to see today. I believe we have caught a turn, hopefully it is THE turn. SILJ continues to be my fave, but they are all making decisive moves up while the USD remains weak.
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