5 replies to this topic

[gannman]

hopefully it all sticks and does not do a late day fade i dont think it will 

[CHAx]

Well, that is the key here for sure: follow through on /GC /SI and GDX.   Traders have been trained like Pavlonian dogs to fade every rally.

 

 

/PA and /PL getting interesting too.  Not quite done yet I dont think.... Im going to speculate car makers are shutting down manufacturing because of chip shortage?  And that is the industrial demand evaporating on palladium?

[dougie]

gdx did not follow gold: why?

[CHAx]

gdx did not follow gold: why?

 

Id argue it is a combination of factors that many of you have articulated in the past (general apathy to the sector, fear of risk off in general markets, etc).  But I will add one other thought: large institutional speculators do not need to use the miners for leveraged exposure to gold prices.  They can simply use futures contracts and get very large leverage there, where small speculators may not feel comfortable using these products and prefer using the miners for leverage.  The miners also have the safety net of: if you get the timing wrong, you can sit on them and are less likely to get wiped out (providing you are in the miners with lower costs).  On the other hand, leveraged exposure to gold contracts can wipe out an entire investment if stop losses are not used.

 

Finally, institutions can be hampered by ESG investment guidelines or sector maximum exposures which prevents them from adding to the sector.

[dougie]

 

gdx did not follow gold: why?

 

Id argue it is a combination of factors that many of you have articulated in the past (general apathy to the sector, fear of risk off in general markets, etc).  But I will add one other thought: large institutional speculators do not need to use the miners for leveraged exposure to gold prices.  They can simply use futures contracts and get very large leverage there, where small speculators may not feel comfortable using these products and prefer using the miners for leverage.  The miners also have the safety net of: if you get the timing wrong, you can sit on them and are less likely to get wiped out (providing you are in the miners with lower costs).  On the other hand, leveraged exposure to gold contracts can wipe out an entire investment if stop losses are not used.

 

Finally, institutions can be hampered by ESG investment guidelines or sector maximum exposures which prevents them from adding to the sector.

 

THANKS

[gannman]

well gld and gdx are going lower think we are in a general market sell off fwiw