Seeking Alpha

Precious metals miners swoon at the open, GDX hits 52-week lows

Comments (33)
  • Hecla shares are at give a way levels.
    19 Dec 2013, 10:03 AM Reply Like
  • Deflation is golds problem:

    23 Dec 2013, 10:10 AM Reply Like
  • This drop in ( gold & silver mining ) prices is certainly a time for nail biting. But, having watched and been involved in this segment of the market since the late 70's, I'm feeling increasingly confident that the market is getting set up for quite possibly an historic rise in pricing, probably starting by the end of January. My crystal ball isn't any better than anyone else's, but there are just too many factors both politically and economically that indicate gold will inevitably shine again, potentially rising higer than many may think in the months ahead. My opinion; 2014 will be the turn-around year of all time for this market.
    19 Dec 2013, 10:21 AM Reply Like
  • I doubt it will happen that soon. Give it a few years.
    19 Dec 2013, 11:29 AM Reply Like
  • I concur that " I'm feeling increasingly confident that the market is getting set up for quite possibly an historic rise in pricing..." based in part on the observation that the PM stocks that I follow are showing signs that their 50 day moving averages are starting to flatten out and move sideways. The 50 dma on Silver Standard has been going up since early December, Make of that what you will.
    19 Dec 2013, 02:10 PM Reply Like
  • Look for the turn-around later today, and into early 2014.
    19 Dec 2013, 10:22 AM Reply Like
  • My only thoughts here are simple. Our government is meddling in the market. So much that normal market moves are not allowed. I have had a feeling for a long time that attempting to manipulate a market as big as our global markets is a fools errand and trying it with any means will end in disaster for the 'attempter'. <(Is that a word?).
    I know, regardless of what fluff comes back, that the real prices to produce PM's is lower than most think. If Ag is needed for industry, and not unimportant things, the ground in Akaska is littered with it and can be dredged up in any amounts needed. With the tiny window of weather up there, it is still economically feasable to mine that way. And the silver up there lays around mines in big boulders and it is not expensive. The big thing is the time to get it, and the conditions. When the thaw comes your equipment must be ready and work 24/7 it ain't easy, but it is there.
    In any case, finding Au and Ag is not difficult, one just has to be willing and smart enough.
    My point is, PM's will always be wanted, needed and sought at any price. I find at my coin money shows there is no lack of desire to go home with the shiny metals.
    When prices of any item weakens for a while, all the know-it-alls profess, "Well that's the end of ______." It ain't the end of the need and desireability of the PM's, they are just at a different price for a while.
    There also have been too much guesswork by folks who have to write something every day to 'keep it going'.
    PM's will always be with us, the price will change, and all you have to do is buy low and sell high, no diff from any other investment. here in America it is an investment, not money yet.
    Go for the gold and the lower it goes the more I like it. For most the lower it goes the less they like it.
    Gols and silver must be bought.
    Capt. Brian
    The Lost Navigator
    19 Dec 2013, 10:22 AM Reply Like
  • Thanks Capt. Brian. Governments manipulation of the gold and precious metals markets are here to stay. Gold and PMs being the historical surrogate or alternative to currency when governments print too much currency; and the resulting flee to gold and PMs.


    By holding large amounts of gold and PMs, Governments have greatly reduced the market ability for gold and PM prices to rise dramatically or suddenly by Governments selling into any kind of surge or panic. Which secures Governments currency to a greater degree than it ever has been. Or greatly reduces the chance of any kind of emergency run on the banks if they are short of anything demanded; with a very large gold backing.


    The good news is gold and PM demand in China, India and anyone with disposable income has not only not decreased, but has increased due to the beyond huge government debt everywhere and the huge skepticism the debt will be paid off legally. Or not likely. Governments huge debt will be paid off in inflated or cheaper currency; making it easier for Governments to pay off their debts and much more difficult for the individual to save or invest; or to find positive return investments.


    The other good news is individuals are almost always smarter than Governments finding a way around their current squeeze on individual investment.


    Look to slightly downward trending gold and PM prices with both volatile up and down blips in the future. The 50 and 100 day moving averages of prices should be the most useful.


    The above scenario favors the large gold and PM miners and refiners; having the lowest costs and the greatest efficiencies.
    And it appears Governments privately favor these large gold
    and PM suppliers as their back up or primary supply source
    to keep the price of gold and PMs flat or trending downward
    to protect their currencies.


    So you can probably still make a buck in gold and PMs. You
    will just need to be smarter and more perceptive than Governments and large gold and PM suppliers and market makers; taking advantage of any market discontinuities that appear in your
    22 Dec 2013, 03:35 PM Reply Like
  • Fed decided to taper when 10 year note was at 2.85. Now it has to deal with the consequence that it may go up to 3.2 soon. I think Fed will be in a more stressful position than miners.
    19 Dec 2013, 10:31 AM Reply Like
  • Buy low and sell high. Basics.
    19 Dec 2013, 10:51 AM Reply Like
  • Does anyone have a pick for "low(est) mining cost/ financially rock solid" gold or gold/silver miner? I want to dabble but this not my area of expertise...Thank you!
    19 Dec 2013, 11:01 AM Reply Like
  • For what it's worth, this investor has chosen AUY, simply because of the apparent quality of management and location of the assets
    19 Dec 2013, 01:41 PM Reply Like
  • Mr Buffett. This is a good company with quality management,control of CAPEX, prepared to adapt to "difficult" operating conditions and assets are in sensible (politically) jurisdictions.



    stock is down 60% on a 1 and 2 year rolling basis.
    19 Dec 2013, 05:31 PM Reply Like
  • AUY
    20 Dec 2013, 12:52 AM Reply Like
  • Warren: You've been doing this for 60 years and you need our advice? :)
    20 Dec 2013, 09:16 AM Reply Like
  • Management doesn't like to skimp on their pay!
    20 Dec 2013, 08:35 PM Reply Like
  • Spec on gold?
    21 Dec 2013, 10:45 PM Reply Like
  • To buffett222. AUY Yamana gold, stats from google finance & has $6.6 billion capitalization, P/E=21; Institutional ownership of 62%. Or in a long downward trending market (the most likely coming and continuing market), you do not want to own medium or small capitalization companies, or high P/E, anything over 14; or large institutional ownership.


    Whenever it suits them, the large institutions dump large share quantities depressing stock prices from weeks to months to years;
    which happened to ABX over the last year; or a good ABX buying time now if you are looking long term. AUY: Price/Book=0.8 attractive; Price/Sales=3.2; Price/Cash Flow=7.9 ugly compared to ABX; or not a good investment compared to ABX.


    ABX Barrick Gold stats from has a market cap of $20 billion which has been as high as $45 billion, or in a good buying mode currently. Forward P/E=8.1, actual around 6 currently,
    Price/Book=1.5; Price/Sales 1.2; Price/Cash Flow=3.8. These stats are the benchmark for comparing to all other gold companies.


    GLD, although large cap at $30 billion, being an ETF mimmicks market prices and all that volatility; or also ugly unless you are one of the one in a million who gets their kicks watching volatility with your money.


    NEM market cap at $11 billion, forward P/E=20; is too pricey compared to ABX.


    Anyone who can find better gold company stats overall than ABX, please point them out. And with all the ABX Barrick bashing going on in the last year from the medium and small miners wall street surrogates, tells you how afraid they are of ABX dominating or increasing their influence of the gold markets; Barrick likely pleasing governments and sovereign banks by helping to hold gold prices steady to downward trending which helps keep currencies more stable.


    ABX Barrick gold has a core of 4 large properties with either the lowest or near lowest operating costs; plus a 5th large property on hold due to environmental obstructionists (fixable and in progress) and short term cash flow challenges (also fixable over time) with even better or lower potential operating costs.


    Several to numerous groups have silently gotten in the way of this new Pascua Lama project to obstruct it any way they can to put off or prevent Barrick from finishing this project and bringing it into operation; and resulting larger influence of the gold market Barrick would have. Or Barrick has the ability with the Pascua Lama gold production to replace most to all of the small and medium miners in most gold markets; unless there is a long term gold price surge.


    The probability of a long term gold price surge is less than 10%, probably less then 5%.


    The Barrick ABX annual report reads like an accountant's dream,
    full of detail statistics and explanations. The closest annual report to wonderful I have seen in a while; if you can tolerate or enjoy learning a companies condition through its annual report.


    The nutshell summary of gold stock above; which should be easy to expand upon in numerous directions; and why Barrick ABX is the benchmark.
    25 Dec 2013, 07:22 PM Reply Like
  • Trades in Canada as YRI, BTW.
    12 Jan, 07:39 AM Reply Like
  • ngd
    19 Dec 2013, 11:31 AM Reply Like
  • Be greedy when everyone else is fearful!
    19 Dec 2013, 01:41 PM Reply Like
  • How can Bernake actually, with a straigh face, state that inflation is at 1.5% and unemployment at 7%?? Is he that stupid, no , just doing what Bama want.


    19 Dec 2013, 01:42 PM Reply Like
  • I agree.
    20 Dec 2013, 12:54 AM Reply Like
  • No. Just doing what his stockholders want. He is the CEO of a bank owned corporation. Giving them the lowest cost of capital and inflation to bail out their bad mortgages, to the extent he's not buying them in QE3. ( I think that stands for Queer Ecomonics, 3 strikes everybody but bankers are out, doesn't it?)
    21 Dec 2013, 10:25 PM Reply Like
  • Dont catch a falling knife? :)
    19 Dec 2013, 01:42 PM Reply Like
  • To buffett222. That is too vague and not in the tradition of the TV Buffett. How about a few specifics the TV Buffet would give us?


    Or just what is too dangerous to catch? Anyone with the time, can probably out wait the downward gold and PM price trend. Or at least catch an upward price blip to sell on. You know those upward gold price blips will be around. Because market makers love to test markets; and love to try to create volatility to suit themselves to set up any kind of gain to sell on.


    Or keeping close track of the market makers in front of price changes, though not easy, will give some people the heads up for an upward price blip sell.


    So I have listed the near obvious here. How about supplying the less obvious here?
    22 Dec 2013, 03:51 PM Reply Like
  • Both SLW and AUY (aka YRI in Canada) have now - as of Jan 10 2014 - crossed above their 50 day moving averages and the 50dmas both appear to be flattening out and possibly about to turn upwards. Very encouraging signs.
    12 Jan, 07:43 AM Reply Like
  • Barrick's 52 Week Low is $13.43. It still is somehow at $16.51 today even though gold is now lower than $1200 an ounce. How much lower will gold have to go before an even larger collapse in the gold miners sector? I don't believe we seen the lowest of GDX yet...
    19 Dec 2013, 01:43 PM Reply Like
  • The just did a huge issue of shares that overwhelmed the demand of buyers. Simple supply and demand of shares overrode gold prices effect.
    20 Dec 2013, 12:21 AM Reply Like
  • that's a 5 year low
    19 Dec 2013, 03:22 PM Reply Like
  • ABX still an interesting and unravelling story. The link below gives a good summary on a number of matters.Interesting to note that the 12 month (rolling) low of $13.43 was only lower back in March 1992 but that was on the way up to >$53 !!
    Still many headwinds for this company.It would appear that the bigger you are things can go horribly wrong with the numbers especially if you are very exposed in difficult sovereignties (e.g. Pascua Lama). That's like having two bad dual citizenships!!!

    19 Dec 2013, 04:52 PM Reply Like
  • To turville. Most of the negative talk and correspondence is from wall streeters and their affiliates supporting the medium and small gold and precious metals miners and refiners; if you follow all the muck closely.


    The small and medium miners will be squeezed out or idled from
    downward trending or stable gold and precious metals prices silently favored by Governments and sovereign banks to protect
    their currencies.


    The ABX balance sheet is at least as solid as anyone elses. It is true their costs seem out of line or high; but are in fact low or relatively low compared to other large miners.


    The downward ABX stock price spiral has been due to manipulators and shorting. The Government has access to the stock records to prove the manipulation. It appears the manipulators have enough money and clout to keep the government substantially distracted from finding them; so far.


    Barrick/ABX built their capital exploration budget in the recent past directly to their revenues or the upward spiral in the gold price. Which forced them to scramble to pay short term debt when the gold price slid dramatically in the last 6 plus months. So 16% more ABX stock was sold in a special offering diluting the rest of the ABX stock that 16%; but enough to cover the short term debt short fall from decreased revenues.


    Having watched ABX closely for last two plus years, the above is what I have come away with.


    Barrick/ABX appears to be the next Google or Apple once all the figurative smoke and fog clears from the downward gold prices.
    The only question in my mind is when it will occur? Next month,
    in a year or two, or five or ten years? Because gold demand is not
    going away, will continue to increase, but will be greatly muffled by
    Governments and sovereign banks manipulations to keep gold and PM prices stable if at all possible; which keeps currencies stable;
    or more stable than they otherwise would be.


    Or bottom line; it is the ABX long term stock gain that matters; not all this noise. Timing will always enter in; even for long term investors.
    22 Dec 2013, 04:21 PM Reply Like
    19 Dec 2013, 04:53 PM Reply Like
DJIA (DIA) S&P 500 (SPY)