If gold continues to slide, GG may see $14 or $15 before it sees the $20s again. High beta bounces will continue though even if the bear continues. Last bounces were to $29 and $25. Seasonal weakness is still happening in June.
All in is too dangerous for me, but GG has the assets and balance sheet to survive this downturn much better than most. Until this bear market for gold is broken I have to slowly accumulate on weakness and assume lower lows are possible.
Last two lows were 20 and 17, so maybe we see 14 or 15 this time. Watch gold prices for clues. We'll get another good bounce at some point, though. Maybe we dump to $14 and then get a miracle rally to $21. Last rally was $17 to $25 six months ago. One before that was from $20+ to $29+. It looks bleak right now, but it always does before another rally gets going. If you accumulate like me down here, do so very slowly as it looks like another new low is on tap. Bear chart if I ever saw one!
Accumulate slowly starting near the lows. More bounces along the way, but we could see $15 before we see $20. If gold slides to $1,000 all the gold miners will suffer, GG included. GG has the best balance sheet and assets and the best chance to survive a prolonged downturn, so you average in slowly and get a good bounce to ride somewhere along the line. There is risk, so don't get in too deep on the drops. Buy slowly.
POT is a heck of a lot better near $30 than it was near $38. The 5% divvy pays you to wait for the next run higher, and the low valuation level sets you up for a reversal. Any stock can drop further, but POT looks like a limited downside stock here near $30 imo.
Until proven otherwise, silver is in the fifth year of an ongoing bear market and it would not be at all surprising to see another lower low of say $13 or even $12. As prices start hitting cash costs we will see econ. 101 start slowing production. If you go from $48 to $12, my guess is a 75% drop says you're about done dropping much. I accumulate slowly on weakness at these depressed levels.
We'll see what the next new low is - I would guess $15 or even $14. I like GG, but you can only accumulate slowly near the lows. The drops can be brutal, but the pops give you a 40% to 50% bounce off the lows.
needs to wind down so free cash flow can wind up. There is plenty of excess capacity for years to come in the industry, so green fields are out of the question as long as prices remain so depressed. Sustainable free cash flow becomes critical in this very competitive industry. Hopefully 2016 and 2017 will see cap ex wind down and free cash flow wind up. With a 5% dividend, POT is a good bet to see better years ahead even with depressed prices.
Cash costs of $10-$12 an ounce for silver sets a floor of sorts. Gold might want to test $1,000 soon. Now if you want crazy gambling, check out NUGT. That sucker moves all over the map, but mostly down, down and down some more.
than the leveraged miners. Gold is the dog and silver is the tail. GG and SLW are getting creamed but the fully unlevered bullion banks (SLV, PSLV, GLD) hold up much better in this lousy market. PSLV is down 75% from its 2011 peak and selling at discount yesterday. I don't think silver bullion has much further to drop!
Silver and gold are way out of favor. Shorting metals has become popular with traders, which tells me the market is ready to bounce. I always prefer PSLV to SLV when I can buy it without a premium. I own 'em both and continue to accumulate on weakness with new lows. When silver was in bull market mode, PSLV could trade at a 20% premium. With a bear market going on five years, silver traders are having trouble getting bullish. PSLV trades at a quarter of its all-time high. Down 75% - wow. Not too much further to go if you think silver won't become free!
It is precisely because of SLW's very strong balance sheet that I'll wager a small bet on this beaten up mining related stock. The plunge from the twenties to twelve was over done if there ever was such a thing! The tax issue and shareholder law suits will take time to resolve, but the company is basically very sound and remains profitable even if you raise tax on income.
Commodities are all weak, with oil being the last to fall and still weak. Its a gamble right now, with a bounce at some point coming but when is another matter. I prefer silver bullion trusts to commodity futures contracts because of contango and roll-over fees, but everything is getting whacked right now!
That's why you buy SLV and especially PSLV when it trades at a little to no premium or even a discount to NAV. PSLV regularly trades at a 2 or 3% premium but sometimes like now (silver is way out of favor) it trades at a small discount. Silver bullion trusts like SLV and PSLV follow or track spot silver prices with little expense. Its the cheapest and easiest way to buy and sell the commodity at a very low cost. GLD and IAU work for gold, but I prefer silver to gold because silver has intrinsic value and gold has very little (in the words of Warren Buffett). As silver prices drop below the cost of production, production will eventually slow. The problem is mines take years to develop and production doesn't adjust quickly in a long-term cycle business.
once $46ish support was broken. We could be headed for $35 or less . At some point the collapse runs out of gas, but the negative mojo remains strong. Down $46 from the peak and its still going down strong. I have to think it can't drop much more than another $10 or so. I will again try starting at $40+ and see what happens in the $30s. The drop is getting carried away.
One can hope they've bottomed. GG and GDX at $13 look good to me, but we need a bounce in gold to get a good bounce here with the miners. A bounce is definitely due after the past couple months. What a disaster!
after lagging by up to two points recently. They run in tandem even though GG should offer better downside protection due to its balance sheet and mines. Everything has been blitzed lately with miners.
That's about a 20 year high I believe. Some shifting might occur from gold to silver here. Silver (in relation to gold) just keeps getting cheaper, but that ratio is getting very high now.