The Lemon Fool

There has been little interest in Gold (currently 1259.97) until recently, but here are two charts:

https://stockcharts.com/h-sc/ui?s=$GOLD, showing that Gold has broken decsively up through the 50 dma and has reached the 200 dma, and

https://stockcharts.com/freecharts/pnf. ... PWPBWAYRBO[PA!B5][D][F1!3!1.0!!2!20], showing the long term p&f with the comments: "Double Top Breakout on 17-Dec-2018" and "Bullish Price Objective (Tentative): 1403.5”.

IG's comment today is at https://www.ig.com/uk/news-and-trade-id ... ude-181221, including: "...anything that holds above $1240 remains a buying opportunity. Further gains target $1282 and $1285..".

Gold would appear to be a strong Hold, with the possibility of further upside if it can decisively break up through the 200 dma. (Only my amateur opinion, of course, so DYOR etc.)

Season's greetings

Jon

P.S. I should have said for the benefit of those who haven't used the charts/casual readers of this thread that the charts are constantly updated, and that I copied them around 11.30 am this morning.

Jon

The biggest US gold miner (and the only one in the S&P 500 index) Newmont Mining (NEM) was up 5% yesterday on a day when the Dow was down 450 points. That caught my attention and I sold some GDX (gold miners ETF) puts and used the premium received to buy some GDX calls.

Lootman wrote:The biggest US gold miner (and the only one in the S&P 500 index) Newmont Mining (NEM) was up 5% yesterday on a day when the Dow was down 450 points. That caught my attention and I sold some GDX (gold miners ETF) puts and used the premium received to buy some GDX calls.

Belated congratulations, Lootman, on what looks like a very astute move.

One thought occurs to me. Now that Gold is well over 80 times the price of Silver ($1275.58 and $15.21 respectively) this is time to think about silver. Its commercial use may be open to question, but as a store of value it is historically extremely cheap in terms of the price ratio of the two commodities. Silver's price is stuck in a rut. One to follow closely.

Jon

Jonetc15 wrote:

Lootman wrote:The biggest US gold miner (and the only one in the S&P 500 index) Newmont Mining (NEM) was up 5% yesterday on a day when the Dow was down 450 points. That caught my attention and I sold some GDX (gold miners ETF) puts and used the premium received to buy some GDX calls.

Belated congratulations, Lootman, on what looks like a very astute move.

One thought occurs to me. Now that Gold[...]

One thought occurs to me. That is a synthetic long. Why not just buy the ETF outright? Presumably for the leverage??


GS

Jonetc15 wrote:

Lootman wrote:The biggest US gold miner (and the only one in the S&P 500 index) Newmont Mining (NEM) was up 5% yesterday on a day when the Dow was down 450 points. That caught my attention and I sold some GDX (gold miners ETF) puts and used the premium received to buy some GDX calls.

Now that Gold is well over 80 times the price of Silver ($1275.58 and $15.21 respectively) this is time to think about silver. Its commercial use may be open to question, but as a store of value it is historically extremely cheap in terms of the price ratio of the two commodities. Silver's price is stuck in a rut.

I have a small position in silver - Wheaton Precious Metals (WPM). It's an interesting animal in that it doesn't actually mine metals but rather buys the future output of silver mines. As such it is a pure play on silver and does not have all the risks and costs of mining. There is a similar security for gold - Franco-Nevada (FNV)

GoSeigen wrote:One thought occurs to me. That is a synthetic long. Why not just buy the ETF outright? Presumably for the leverage??

True. The difference is that my position can be entered for zero cost. My long call will capture any rise in the underlying whilst my worst case, if GDX falls, is that I effectively have to buy GDX at the current price.

So yes, leverage, in effect. The strategy is called a Risk Reversal:

https://www.investopedia.com/terms/r/riskreversal.asp

Lootman wrote:So yes, leverage, in effect. The strategy is called a Risk Reversal:

https://www.investopedia.com/terms/r/riskreversal.asp

Ah, so you're short already and hedging?

Doesn't matter too much, bullish call anyway, and I kinda concur, though the trade seems too easy to be the right timing...


I'm already long so not too bothered what happens.


GS

Lootman wrote:

Jonetc15 wrote:Now that Gold is well over 80 times the price of Silver ($1275.58 and $15.21 respectively) this is time to think about silver. Its commercial use may be open to question, but as a store of value it is historically extremely cheap in terms of the price ratio of the two commodities. Silver's price is stuck in a rut.

I have a small position in silver - Wheaton Precious Metals (WPM). It's an interesting animal in that it doesn't actually mine metals but rather buys the future output of silver mines. As such it is a pure play on silver and does not have all the risks and costs of mining. There is a similar security for gold - Franco-Nevada (FNV)

Just to note that Silver has risen sharply over the past few days and at $15.65 it's now above its 200 dma - see: https://stockcharts.com/h-sc/ui?s=$SILVER. Its RSI at 72.01 is around overbought. Looking back five years (by adjusting the range) Silver is now at a level which three times since the start of 2017 has been a support (and the bottom of a range) and therefore is now resistance. But perhaps the relative cheapness historically to Gold will strengthen the attraction of Silver - at least so long as Gold continues to be in demand. Worth watching.

Jon

The (very) long-term p&f chart of Silver shows the resistance level to which I referred above: https://stockcharts.com/freecharts/pnf. ... PWTBDANCNO[PA][D][F1!3!!!2!20] (with the comment, "Low Pole Reversal on 31-Dec-2018")

Here, too, is the same p&f chart for Gold: https://stockcharts.com/freecharts/pnf. ... PWTBDANCNO[PA][D][F1!3!!!2!20] (with the comment, "Low Pole Reversal on 24-Dec-2018")

Jon

Jonetc15 wrote:The (very) long-term p&f chart of Silver shows the resistance level to which I referred above: https://stockcharts.com/freecharts/pnf.php?c=%24SILVER,PWTBDANCNOPWTBDANCNO%5BPA%5D%5BD%5D%5BF1!3!!!2!20%5D (with the comment, "Low Pole Reversal on 31-Dec-2018")

Here, too, is the same p&f chart for Gold: https://stockcharts.com/freecharts/pnf.php?c=%24GOLD,PWTBDANCNO%5BPA%5D%5BD%5D%5BF1!3!!!2!20%5D (with the comment, "Low Pole Reversal on 24-Dec-2018")

Jon

URLs fixed. The first P&F shows no breakout for silver yet... gold rangebound for now ...

GS

Many thanks, GoSeigen, for fixing the URLs. With my limited IT skills I didn’t realise that there was a problem (and I wouldn’t have known how to fix it). I do in fact click on each link at the preview stage as a test before submitting any post.
ATB
Jon

Any views on Golden Prospect Precious Metals Ltd (GPM)? I came across it whilst researching ways to gain exposure to gold, and it also includes some silver miners. It includes exposure to explorers, developers and producers with a small amount of bullion thrown in. I note it has charges totalling 3.56%.:

https://www.hl.co.uk/shares/shares-sear ... s-gbp0.001

Jonetc15 wrote:

Lootman wrote:The biggest US gold miner (and the only one in the S&P 500 index) Newmont Mining (NEM) was up 5% yesterday on a day when the Dow was down 450 points. That caught my attention and I sold some GDX (gold miners ETF) puts and used the premium received to buy some GDX calls.

Belated congratulations, Lootman, on what looks like a very astute move.

One thought occurs to me. Now that Gold is well over 80 times the price of Silver ($1275.58 and $15.21 respectively) this is time to think about silver. Its commercial use may be open to question, but as a store of value it is historically extremely cheap in terms of the price ratio of the two commodities. Silver's price is stuck in a rut. One to follow closely.

Jon

See my preceding post -what about the idea of Golden Prospect Precious Metals Ltd (GPM) which would give exposure to gold, gold and silver miners?

richfool wrote:Any views on Golden Prospect Precious Metals Ltd (GPM)? I came across it whilst researching ways to gain exposure to gold, and it also includes some silver miners. It includes exposure to explorers, developers and producers with a small amount of bullion thrown in. I note it has charges totalling 3.56%.:

https://www.hl.co.uk/shares/shares-sear ... s-gbp0.001

It seems to be a tiny fund, with a high expense ratio, investing in smaller and more speculative miners. I feel sure it would be off to the races if we get a big spike in gold prices, but it's too off-beat in my opinion for a core precious metals holding.

I'd rather hold GDX or GDXJ, the two leading ETFs for gold miners and junior gold miners respectively.

Lootman wrote:

richfool wrote:Any views on Golden Prospect Precious Metals Ltd (GPM)? I came across it whilst researching ways to gain exposure to gold, and it also includes some silver miners. It includes exposure to explorers, developers and producers with a small amount of bullion thrown in. I note it has charges totalling 3.56%.:

https://www.hl.co.uk/shares/shares-sear ... s-gbp0.001

It seems to be a tiny fund, with a high expense ratio, investing in smaller and more speculative miners. I feel sure it would be off to the races if we get a big spike in gold prices, but it's too off-beat in my opinion for a core precious metals holding.

I'd rather hold GDX or GDXJ, the two leading ETFs for gold miners and junior gold miners respectively.

Thanks Lootman.

I had looked at GDX, but don't want to get into the cost of exchanging currencies or additional broker costs involved with holding non-UK stocks. I guess that leaves me with (ETF's) SGLN or PHGP.

richfool wrote:

Lootman wrote:

richfool wrote:Any views on Golden Prospect Precious Metals Ltd (GPM)? I came across it whilst researching ways to gain exposure to gold, and it also includes some silver miners. It includes exposure to explorers, developers and producers with a small amount of bullion thrown in. I note it has charges totalling 3.56%.:

https://www.hl.co.uk/shares/shares-sear ... s-gbp0.001

It seems to be a tiny fund, with a high expense ratio, investing in smaller and more speculative miners. I feel sure it would be off to the races if we get a big spike in gold prices, but it's too off-beat in my opinion for a core precious metals holding.

I'd rather hold GDX or GDXJ, the two leading ETFs for gold miners and junior gold miners respectively.

Thanks Lootman.

I had looked at GDX, but don't want to get into the cost of exchanging currencies or additional broker costs involved with holding non-UK stocks. I guess that leaves me with (ETF's) SGLN or PHGP.

Is there anything to choose between SGLN or PHGP, apart from the slight difference in charges (0.25% v 0.39% and the fact that PHGP is domiciled in Jersey and SGLN in Ireland?

On 21 December 2018 Gold was $1259. It’s currently (27 July) $1940. The p&f chart raises the question when the price will take a breather/consolidate:
https://stockcharts.com/freecharts/pnf. ... !!!2!20%5D

Jon

£1 invested in stock accumulation at the start of 1972 would have been £180 value at the end of 2019

£1 invested in gold at the start of 1972 would have been £80 value at the end of 2019

50/50 of both initially, bought and held would be valued at £130 at the end of 2019

50/50 yearly rebalanced and the value would have been £240 at the end of 2019. You'd be holding 33% more shares than at the start, and 3 times as many ounces of gold as at the start.

Can TA improve upon just simple yearly rebalancing, which after all is a 'trading plan', albeit the most simplest? I suspect not as both stocks and gold prices are volatile and often surprise.

Jonetc15 wrote:On 21 December 2018 Gold was $1259. It’s currently (27 July) $1940. The p&f chart raises the question when the price will take a breather/consolidate

My guess is the gold price will only fall once stocks take off again. I think the rebound was because feel good due to beating the first wave, plus growth in big tech doing the heavy lifting, compounded (in my opinion) by mega hyped up stocks like Tesla and Shopify

I think stocks will go sideways and only get bullish again when there is a workable vaccine and everyone who wants has been vaccinated (end of the year?) or Covid miraculously almost-disappears like Swine flu (herd immunity?). That could be some time, hence party time for gold right now.