Is a Gold Bull Market Finally Starting?

by JDH on June 22, 2019

I have no idea.  Here’s a long term chart:

We all know the story: gold went from under $400 in 2005 to $1,900 in 2011, and that was it.  Gold then took two years to drop into a trading range between $1,050 and $1,375, and that’s where it stayed, for 5 years, until this week.

For the first time since March, 2014 gold traded above $1,400 US, albeit briefly.

The year to date chart is impressive, with a big spike above $1,400 (but that’s how it works with a five year high).

So now what?

$2,000 by Canada Day?


That’s not how it works.

My guess is that this is a big, fast move, and a pullback is necessary, so I liquidated most of my holdings of NUGT on Friday, and I’m sitting on cash, ready to redeploy on weakness.  I like cash.  Cash is king.

That being said, I did not sell any of my gold stock holdings, including my largest holding: EQX.V – Equinox Gold Corp.

From a low under $1.00 (both at the start of the year and again in May), the rocket ride commenced, taking Equinox to $1.45, before settling back in the $1.30 range.

Nice run.

I think, after a pause, Equinox has a lot more room to run, and I expect it to be a $2 stock before the end of the year.

Of course I expected it to be a $2 stock last year, and I was totally wrong, so govern yourselves accordingly.

My order of battle is:

  • hold a few puts on Tesla, since I want to have something when it goes bust;
  • liquidate the majority of my holdings in Canadian pot stocks, which have had their run, and switch some of those funds into US pot stocks; and
  • buy gold stocks on weakness.

That’s the plan.  We’ll see how it goes.  More next week.



Gold: Finally

by JDH on June 15, 2019

Let’s start with a long term perspective on gold; here’s the chart:

From lows around $600 in 2007 and 2008, gold had a great run, topping out over $1,900 in 2011, before collapsing to under $1,050 at the end of 2015.

Of note, gold never fell below $1,000.

The epic crash never happened.

$1,000 is quite obviously very strong support.

From that bottom at the end of 2015 gold entered a four year consolidation period:

From the spring of 2016 to the start of summer 2019 gold has traded between $1,125 and $1,375.  It was a long slow slog.

Which brings us to today:

From $1,266 on May 2, 2019 to a peak of $1,358 on June 14, gold has had an incredible pop, a 7% spike in 6 weeks, something we have not observed for a while.

What does it mean?

Could be nothing.

Trade tensions with China and a spike in oil prices due to hints of conflict may be causing a “safe haven” rush, and if the tensions die down everything could return to “normal”.

Of, after years of doing nothing, gold could be ready to spike.

I’m watching $1,375 and then $1,412, because that’s what my crudely drawn charts say is important.

I am maintaining my position in NUGT, the 3x leverage gold ETF, as a purely speculative play, and I’m also holding some gold stocks (EQX.V is my preferred holding at the moment), and we’ll see what happens.

Could be a disaster.  Could be fun.

For me, this will also imply continuing to liquidate my positions in Canadian pot stocks, which I’ve been doing over the last month or two (although I am looking at US cannabis stocks; they have room to run).

And yes, I am still short Tesla; that dog will eventually die.

That’s the update; more next week.




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