GoldNuggets — A Golden Milestone
GoldNuggets Digest: bull market birthday, trio of triangles, gold ETF flows, silver portfolio allocations, gold vs cost of production, and a ChartStorm...
The GoldNuggets Digest is our weekly publication. It contains “nuggets” of Charts & Research on gold, commodities, and macro —issues and insights which we think will be interesting and useful for investors.
Bull Market Birthday
Mike Zaccardi observes that we’re about to hit a major milestone: “gold’s bull market turns 10 years old next month!“ (source)
Nothing says 10 years has to be the limit, certainly we should think about risk, but also there are still a lot of forces in motion that could easily carry the current bull market on higher for longer.
Trio of Triangles
Jesse Colombo observes: “Gold’s surge over the past year has featured multiple triangle patterns and now another one is forming. If it breaks out successfully, it projects a rally to $5,200 for gold and $72 for silver.“ (source)
In the short-term the resolution of this triangle one way or the other is going to be really critical in setting the tone for the next phase of things.
Gold ETF Flows — Retail Rinse
Warren Pies observes on the popular GLD (gold) ETF: “From record inflows to extreme outflows. Retail sentiment toward gold has normalized...Gold bottom for this correction is in or close.“ (source)
And indeed, you might argue the purpose of corrections and consolidations is to washout some of the extremes in sentiment and positioning.
Silver Allocations
I noted the other day that “investor allocations to silver look pretty low vs history, but are steadily turning up. For something that has potential dual-tailwinds (monetary and macro) I’d say this looks early; room to run.“ (source)
And in general I will say I’m more bullish on silver vs gold at the moment.
Gold Price vs Cost of Production
And lastly a huge chart for miners: “we are seeing a rapidly widening gap between the annual average gold price and the average cost of production. On the upside, this (should) mean larger profits for gold miners, but also likely larger capex to bring new supply online.“ (source)
It really is one to make you think too, because one thing I’ve observed is in the past when we saw similar premiums in the gold price vs cost of production it basically served as a valuation signal (that a top was near).
But again, if gold manages to stay higher for longer and if miners can keep costs contained then that’s a recipe for printing money for miners.
ICYMI: I wrote up a mid-week “ChartStorm” on gold the other day.
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I saw that chart this week- good eye Callum
The silve allocation point is intresting. Lower allocations historicaly mean more room to run.