Yes PM Explorers not Producers like RMS
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My view for the week is we should continue to see Wall Street much lower at least 3% IMO, but quite possibly a lot more. Aussie gold stocks IMO are a mixed bag at this point. Some have come back towards where I would say they are looking like value, others have run pretty hard & sure they might be off their highs but still look pretty rich to me. Obviously a rising gold price would nullify that, however I don't expect goldies or gold that matter to roar higher, well not just yet anyway. That time will come & perhaps as early as later this week.
Moosie, IMO there were plenty of reasons why the market would have bought last week & they didn't, when they probably would have before. What I thought was interesting was that managed fund money poured in the week before & now will be on a real loser. Look it may take a breather, who knows, but at this point I don't see any reason to buy. QE pumped up equities to record levels at a time when the US economy was weak & it still is, hence zero interest rates. The QE balloon has just been popped & in these situations TA tends to go out tie window.
Like a dead cat Moosie haha
European stocks did indeed turn negative, however US stocks had what I would term a relief rally mostly underpinned by Berkshire Hathaway's profit soaring 41%! Obviously a stellar result, however I wonder how much of the profit was based on share valuations within their portfolio, so book value rather than cash flow? I'll certainly be taking a closer look.
Gold is still in the doldrums, although if I'm right on where US equities are heading then gold at some point in the next few weeks will benefit.
US equities after running into a brick wall are now in full reverse with nothing seemingly able to stem the losses. In the last seven trading sessions since this thread was started the major indices have dropped circa 4 to 5% & wait for it the massively overvalued Russell 2000 has dropped around 8%! To put this in perspective this is like gold dropping $70 or $105. IMO this is just the beginning of a much deeper correction of around 20%. There is a record level amount of cash on the sidelines which is telling in itself but also promising. The smart money obviously knew not to get involved in such bloated valuations particularly once QE was being wound in. Even the great Sage of Omaha knew the game was up selling far more equities than buying in Q2. At some point this massive amount of money will look to enter the fray, but the money managers have been patient to date & I don't see that changing. Corporate earnings have been relatively strong, but this is a lagging indicator & there have been signs that the US economy is slowing again. IMO hard assets will be one beneficiary of this idle money & I think we are already seeing this in base metals & again IMO it won't be long before gold also attracts growing investment demand.
I thought this was a very interesting read on capex spend in the US & underlines why the US recovery is so narrow & it is lowland jobs that are making up the employment numbers rather than skilled jobs. I particularly like this bit ' Productivity growth in the United States - the rate of growth in the level of output per worker - is near its lowest in 30 years, according to Bridgewater Associates. Spending on research, development and technology, would surely improve this trend.'
http://www.reuters.com/article/2014/...0G60CC20140806
Gold finally managed to break free overnight surging 1.5% & through $1300. Mounting tensions in the Ukraine was probably the main reason, however I suspected with global equities under pressure hard assets such as commodities would attract investors. I find it interesting that the Russians were the blame for equities falling the night before, however last night when equities were basically flat in the US, tensions in the Ukraine have increased with it being reported Russia amassing troops on the boarder. Go figure. US equities did relatively well considering Asian equities were hammered & so were European markets initially to close down around 0.5%. Now gold has made its move it should gain some traction, it wasn't alone with soft commodities also rallying hard, in line with the impact increased tensions in the Ukraine being a massive grain producer, as well as Putin directing Russian importers of food to avoid sourcing from countries supporting sanctions against it.
Worsening sentiment for gold. SPDR GLD down 4 tonnes.
Just on the wires although I had to dig around for it. Although I'm sure the story will gather momentum. Not great for Wall Street!
http://online.wsj.com/articles/bank-...ent-1407355290
The average time for gold from peak to bottom is 19 years, so goldbugs should brace themselves for at least another decade of pain.