# Precious Metals



## Andrej (Feb 25, 2010)

Looking at 10 year charts today, noticed a lot of the stocks in this group seem to have had a drop on par with the great correction of 2008. Anyone have any insight? Time to buy inverse gold etf? Time to load up on PM stocks? Is this another sign that gold price is rolling over?


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## dubmac (Jan 9, 2011)

I'm buying Canadian Resource Fund (McKenzie) each month rather than putting $ in GIC's and Bond funds - I think that this is a great opportunity to load up on PM and resource related stocks. The fund is -25% on the year.


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## Sherlock (Apr 18, 2010)

No idea why this is happening but I have added to my positions in several junior miners last week. Hope they make a turnaround soon.


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## Belguy (May 24, 2010)

What is gold currently yielding?

http://pragcap.com/why-warren-buffett-hates-gold


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## dogcom (May 23, 2009)

I am also adding more to my gold stock exposure and bought more today even though we could still be in for a rough ride as gold itself finds a bottom. One would ask then why not wait, but the problem with waiting is that when these things do take off it can happen very quickly.


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## Belguy (May 24, 2010)

I believe that precious metals investments can legitimately be included as part of a well diversified portfolio. An allocation of 5 to 10 per cent would be appropriate for most investors. 

I hold the RBC Global Precious Metals Fund in my portfolio.

http://funds.rbcgam.com/pdf/fund-pages/monthly/rbf1038_e.pdf

Precious metals investment are inherently volatile as the performance chart of the above fund demonstrates. And so, if like me, you are a buy-and-hold investor, expect the inclusion of precious metals investments in your portfolio will add to it's volatility.


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## moneyisfornothing (Feb 18, 2012)

1560 area is very strong support in the past two years.
i like randgold a lot .
bought some today.
i would not be surprised to see that level , which in case a mkt colapse happens will be violated and the 1400 last seen in ........ hmmmm may/11 is next support.
either way nothing goes down or up in a straight line.


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## Andrej (Feb 25, 2010)

What's the best way to play falling gold bullion? Technicals seem pretty negative. No speak of printing more $$$... Looks like it might be rolling over.


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## zylon (Oct 27, 2010)

*GDX breakout chart*












> The price action over the past week is extremely positive. Note the head and shoulder pattern on this chart.
> A “textbook” breakout has occurred, even while bullion has struggled a bit.
> 
> I’ve set a target of the $47.11-$48.33 price zone. That price area should bring in some momentum-based hedge funds, which could push the price even higher.
> ...



*GDX live chart:*
http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=4&dy=0&id=p42901917662


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## Toronto.gal (Jan 8, 2010)

Thanks for the info. Zylon!


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## zylon (Oct 27, 2010)

*gold index up 8.6% last week*

http://investdb.theglobeandmail.com...02&pi_currency=&pi_param_1=TSX+Sector+Indexes










*Snip:*


> ...So I would expect the precious metals to bottom well before everything else does. In fact, we could be looking at a situation where the metals and their shares rebound sharply while the U.S. equity markets continue to decline. This could last many months. I want to point out that the GDX bottomed in October 2008 and was up 100% before the S&P 500 bottomed in March 2009. So over a five month period the GDX doubled while the SPX declined 25% ...
> ~Mike Krieger
> http://libertyblitzkrieg.com/2012/05/24/the-big-print-is-coming/


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## Miser (Apr 24, 2011)

Correct me if I am off base on this one.



Most times when the "sh!t hits the fan" everything falls.

Commodities, oil, financials etc,......AND gold/silver.

US dollar and Treasuries rise a lot. Flight to safety.


This time something was different.
I can't remember when a market shiver didn't cause gold/silver to also fall?



This is an anomoly for me.

Who is now buying gold?? Other than me??


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## Argonaut (Dec 7, 2010)

Just last August.. the markets crashed and gold hit an all time high. If gold rises more than silver percentage wise, like on Friday and last August.. then it is a fear/safety trade. If silver rises more than gold then it is an inflation/easing trade.


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## Spidey (May 11, 2009)

I was just rereading Warren Buffett's comment on gold and how an ounce would buy acres of productive farmland, etc. His ultimate argument being that farmland has practical value but gold does not. However, one problem with that argument is that the same one can can be made about a stack of thousand dollar bills. Ultimately it is just a stack of paper. It seems to boil down to whether one regards gold more as a currency or an industrial product. 

However, I suppose in Buffett's defense he might agree with that assessment and counter that is why he prefers to hold equity in good companies over the dollar bills as well. (Mind you he must always have some cash available.)


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## Mike59 (May 22, 2010)

Miser said:


> Correct me if I am off base on this one.
> 
> 
> 
> ...


I'm in the same boat and am fully allocated to metals. I have been piling into mining shares and bullion like a madman since last fall (check some of my other posts), and it's starting to finally make the turn...
Was lucky enough to buy Silver Wheaton around $24 a few weeks back. 

I'm up to 35% of my portfolio in metals plays, the rest is in cash and own zero stocks otherwise. All chips are on the table, betting against the Bernank :encouragement:


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## HaroldCrump (Jun 10, 2009)

Miser said:


> This time something was different.
> I can't remember when a market shiver didn't cause gold/silver to also fall?


There were rumblings of QE-III this past week, which pushed up both gold and silver.
Given how strong the USD has become since last summer, I think the time is ripe for QE-III.


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## Sampson (Apr 3, 2009)

I wouldn't be surprise if the Obama administration pushes for QE-III to get some positive reaction from the economy before the elections.


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## webber22 (Mar 6, 2011)

If QE3 is announced it could be soon:
This Thursday at 10am Bernanke testifies before the Joint Economic Committee on the economic outlook in Washington.
Then on the 20th they have the FOMC meeting and press conference.


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## zylon (Oct 27, 2010)

> The protracted correction in gold and precious metals stocks that began
> in September 2011 appears to have ended. Our conclusion is based on historically
> reliable gauges of sentiment, valuation and technical factors. (We will publish the
> specific readings on these gauges with our second quarter investment letter on June 30.)
> ...


http://tocqueville.com/insights/gold-gold-mining-shares-and-qe


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## Miser (Apr 24, 2011)

zylon......your article and what is most important, IMHO

*The acquisition and possession of gold is not a speculation on higher prices. It has become a core component for the preservation of wealth in a cosmos of complexity and chaos*.


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## dogcom (May 23, 2009)

Looking at a chart of GLD there looks like a good chance that gold breaks lower here and heads to its final low in July which would be a great opportunity to buy for a big seasonal rally. It has tried a number of times to break down since October and I think we are now in the right spot for that washout to occur just like the gold stocks did a few months ago.


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## zylon (Oct 27, 2010)

*2 critical positions for today's markets*

1/ cash
2/ fetal
~John Stephenson, BNN June 27, 2012


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## Spudd (Oct 11, 2011)

zylon said:


> 1/ cash
> 2/ fetal
> ~John Stephenson, BNN June 27, 2012


Funniest thing I've read all day.


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## Miser (Apr 24, 2011)

dogcom said:


> Looking at a chart of GLD there looks like a good chance that gold breaks lower here and heads to its final low in July which would be a great opportunity to buy for a big seasonal rally. It has tried a number of times to break down since October and I think we are now in the right spot for that washout to occur just like the gold stocks did a few months ago.


How far you see the washout???

Zylon......LMFAO!!!


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## dogcom (May 23, 2009)

Maybe as low as 138 to 140 on GLD as a through in the towel horrible bearish sentiment washout ending sometime in July. This may be where the final launch to a parabolic game ending spike in gold will start from with the end being in 2014 after the Euro has been washed out the US sinks from the weight of its debt and we get ready for a party in the normal stock market to start in 2015. This may not happen on this time line but it seems the most likely as regular stocks are always strong in year 5 of every decade.


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## zylon (Oct 27, 2010)

*Metals and Mining Shares – The Good, the Bad, the Ugly*



> As I approach my 29th year in and around Wall Street, I find myself deeply immersed in the worst bear market of my entire career. In a business where failure is the norm, I went against my own multi-decade advice and “sent it in” on junior resource stocks. The results up until now are that I find myself down more on paper than I ever even imagined I could be worth. Given this and the fact that my main livelihood is generated from the junior resource industry, one may want to think twice (or even more) before even considering what I have to say. (I suspect my wife feels that way at the moment.) ~Peter Grandich
> 
> More follows:
> http://www.grandich.com/2012/07/metals-and-mining-shares-–-the-good-the-bad-the-ugly-2/


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## v_tofu (Apr 16, 2009)

huh, and here I thought Gold and silver bars were just for crazy tin foil hat people like me.

What next? Are you going to tell me you city folk keep your bars stored in your safe beside your 12 guage and 308's as well?


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## Belguy (May 24, 2010)

Franco-Nevada rated a 'buy' on BNN today:

http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=fnv-T

Also Alamos Gold:

http://www.google.ca/finance?cid=685355

Do your own due diligence before investing.

If economic conditions lead to a rise in the U.S. dollar, then this does not bode well for gold. However, longer term, the outlook for gold looks positive all factors considered.


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## zylon (Oct 27, 2010)

*Erste Group analyst Ronald-Peter Stöferle*



> In regards to an important pillar of strength underneath the gold price Ronald explained that, *“Negative real interest rates are by far the most important factor—we’re not seeing negative real interest rates only in the US and the Eurozone, we’re seeing them also in China, in India, in Vietnam, in Turkey, and so-on. This is also a big chapter in my report, I think that emerging markets…are much more important for the demand side at the moment, much more important for physical demand than the US or the Eurozone.”*
> 
> With respect to the value to be found in the mining sector, Ronald added that, *“You have to differentiate between both physical gold…and mining shares which are an investment. I think that both are very attractive at the moment, the risk reward ratio for gold mining equities is very, very attractive…I think it is one of the most underweighted sectors all over the globe. From a fundamental perspective, gold mining shares are really cheap.”*
> 
> http://bullmarketthinking.com/ronal...rweighted-sectors-in-the-globe-at-the-moment/


.. and from a chartist's perspective; Peter G says: Don’t forget we need two consecutive closes above $1,650 on gold before we can give the “all-clear” signal.

gold price (eod)

Added: a pretty pic from Aden Sisters


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## Belguy (May 24, 2010)

If you are expecting years of deflation ahead, avoid gold!

"Be careful about gold. All commodities plummeted in value during the Great Depression."

--Les Whittington, Toronto Star, July 30.


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## Miser (Apr 24, 2011)

I wonder what the world wants?
Inflation or deflation?

We have had inflation 70's and survived, had deflation 30's and it was a mess.
You feel lucky Ben.....well do ya punk???


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## zylon (Oct 27, 2010)

*Category: cutest pig at the abattoir*

Snip:


> As you can see below, since its price peak on November 4 through July 26, Groupon has lost $15 billion in market capitalization. Facebook has lost even more in dollar value in a shorter amount of time: From its intraday high on May 18 through July 26, the market cap of the company has dropped $34 billion. These losses pale in comparison to *all the money invested* in gold funds in the U.S. combined.
> 
> 
> 
> ...


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## el oro (Jun 16, 2009)

Gold and silver are currently offering a great risk/reward opportunity. It's a textbook technical analysis setup if there ever was one. If this pattern plays out then Friday was the beginning of a swift and sizeable precious metals rally in the coming days, weeks and months.

My play:
One gold stock, longish term hold (SSL.V)
Silver futures, stop loss around 26 (if reached then the rally failed and correction continues), initial profit target at 200dma currently @ 30.86ish and will leave some contract(s) to hold in case of a continued rally back to 50.

Right or wrong, I can't wait to find out!


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## dogcom (May 23, 2009)

Gold and gold stocks should be ready to rally now that we have entered the seasonal period of strength and if it doesn't then we could be seeing a 2008 pattern where everything goes down in a flight to cash. Even so you would think that there wouldn't be that many speculators left to sell gold stocks at the level they are at now.


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## Dopplegangerr (Sep 3, 2011)

Ive got 200 in G and 500 in PAAS, I am ready to roll


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## DonM (Apr 20, 2009)

For those of you looking for a spec play in British Columbia with great potential - take a look at the news releases from Pretium Gold (T.PVG) - pretty impressive drill results so far. As always do you own DD.


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## boipinoi604 (Feb 13, 2012)

Speaking of which, I am looking for a low MER Precious Metal Bullion fund preferably no loads.


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## Dopplegangerr (Sep 3, 2011)

What about CEF.A, its a ETF that tracks gold and silver bullion


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## Navigate Sensibly (Oct 24, 2011)

dogcom said:


> Gold and gold stocks should be ready to rally now that we have entered the seasonal period of strength and if it doesn't then we could be seeing a 2008 pattern where everything goes down in a flight to cash. Even so you would think that there wouldn't be that many speculators left to sell gold stocks at the level they are at now.


Yes, except if everyone can predict seasonal strength, then it would be too easy to pick the winning sector, is it not?


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## saad1253 (Sep 11, 2011)

boipinoi604 said:


> Speaking of which, I am looking for a low MER Precious Metal Bullion fund preferably no loads.



RBC Precious Metals is a pretty good fund. Sorry didnt read you were looking for a Bullion fund. I think Sprott has one. But why not go with an ETF?


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## saad1253 (Sep 11, 2011)

Dopplegangerr said:


> What about CEF.A, its a ETF that tracks gold and silver bullion


I prefer a pure gold play, like IAU etf.


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## boipinoi604 (Feb 13, 2012)

saad1253 said:


> RBC Precious Metals is a pretty good fund. Sorry didnt read you were looking for a Bullion fund. I think Sprott has one. But why not go with an ETF?


Because I will incur $29 per trade if I go with etf. I'm currently with TD Waterhouse with only a maxed out TFSA which doesn't qualify for low trade cost.


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## dogcom (May 23, 2009)

Navigate Sensibly said:


> Yes, except if everyone can predict seasonal strength, then it would be too easy to pick the winning sector, is it not?



I agree completely if you just looked blindly at seasonal strength and went with it. Gold miners sentiment is terrible right now and almost everyone except for a few seasonal strength types have sold off their shares with both hands at this point. No one wants to own gold stocks so for me to own them when no one wants them going into seasonal strength seems like a good time to be in them. Of course I could be wrong and they sell off worse then anytime in the last 100 years compared to the price of gold, so I feel the odds should be on my side here.


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## webber22 (Mar 6, 2011)

Here's a good interview about how the government / central banks manipulate gold, silver, and stocks quite legally through some little known act

http://www.youtube.com/watch?feature=player_embedded&v=T0jpso4jDC4#!


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## el oro (Jun 16, 2009)

Posted upthread Aug. 5th:



$1600 Gold by 2011 said:


> Gold and silver are currently offering a great risk/reward opportunity. It's a textbook technical analysis setup if there ever was one. If this pattern plays out then Friday was the beginning of a swift and sizeable precious metals rally in the coming days, weeks and months.
> 
> My play:
> One gold stock, longish term hold (SSL.V)
> ...


Needless to say, the past 2 months have been fantastic for precious metals as well as other markets. I sold my silver futures on the way up and still holding SSL, although I did take some profits.

Now, gold and silver might be offering another great risk/reward opportunity!!!! They've taken a break over the past few weeks or so and once again, we are potentially on the verge of another fast and furious upleg. In mid-August, platinum and palladium started to explode higher. A few days later, gold and silver began thrusting higher as well. Once again, platinum and palladium have been surging higher in recent days. And today gold and silver appear (at least to me) to have closed on the verge of a breakout. This needs to be confirmed tomorrow or soon with a >$1800 gold close and >>$35 silver close. If this upleg plays out as anticipated, silver should surge towards $40+. If silver closes below $34 then I know I'm wrong. Once again, I'm long silver futures from today. Risk ~$5k/contract to make ~$25k+/contract.

I'm less confident this time around due to the overbought conditions, but things can stay overbought for a long time.

Now, how can a non-futures trader benefit from this type of information (btw anyone else trade futures here?)? Browsing the forums here, it looks like people sell everything in one go. If you can afford it, I'd suggest buying enough of a position that so you can buy and sell in multiple tranches. There is a phrase in trading that goes something like "Cut your losers short and let your winners ride". You cut your losers short with predetermined stoplosses, that's well known. But how can you let your winners ride? This is where the multiple tranches comes in. Let's use my silver trade as an example:

If I buy 2 silver contracts today at $35, I can plan to sell my first contract when silver is overbought. This, however, is already the case. So, I'll set my first target to $39 (I'd say this move will replicate the last move of $28 to $34 but I want to be conservative). At this point, I'd likely bring my stoploss on the second contract to breakeven at $35. Now, what do I do with the other contract? Now you're riding the wave up and your exit should be based on momentum. I suggest using the "moving average crossover" as your exit. You can look this up online but the basic idea is that in a trending market, you take 2 moving averages (say 10 and 20) and buy when the faster (10) is above the slower (20) and sell during vice versa.

If this sounds complicated and, just pull up a chart of gold or silver or xgd.to or your favourite precious metals stock. On the chart, show the 10 and 20 day simple moving averages (dma). Now, if you bought a position a little while ago and are anxious to sell, sell half now and sell the other half when the 10dma goes below the 20dma. And voila! You don't have to hate yourself if it continues to rocket higher after you sell, while potentially increasing your final exit price over time.

PS: This is for entertainment purposes only as I'm probably wrong about everything!

Edit: I was right about being wrong. No follow through today so exited half. Now I'll let a certain moving average crossover signal the exit for the remainder.


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