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The long-cycle in precious metals has peaked, writes Citi's Jon Bergtheil, arguing we'd need a...

The long-cycle in precious metals has peaked, writes Citi's Jon Bergtheil, arguing we'd need a level of systemic risk higher than the past few years to warrant a continued bull run. Especially vulnerable are the PM miners (GDX, SIL) which benefit from what may be mistaken belief $35 silver and $1,600 gold are the "new normal."
Comments (21)
  • youngman442002
    , contributor
    Comments (5131) | Send Message
    Lets see what happens with all those options next week...I think someone is going to ask for the delivery...
    20 Feb 2013, 11:55 AM Reply Like
  • New Low Observer
    , contributor
    Comments (2007) | Send Message
    A declining trend that has been in place since September 2011 for GDX and April 2011 for SIL and this guy is just now telling us that the long cycle has peaked. Makes you want to buy the metals based on the lack of insight and bad timing.


    Wake up Bergtheil! We are probably closer to the bottom of the cycle rather than the peak (give or take another -20% to -30% decline in the XAU).
    20 Feb 2013, 12:06 PM Reply Like
  • 1GreatCFA
    , contributor
    Comments (779) | Send Message
    I tend to agree New Low Observer. Gonna wait and see what happens Monday...will be highly revealing if more and more important people start asking for their gold. What's interesting to me, even more, is the producers who have been hit by higher costs AND lower gold pricing here.
    20 Feb 2013, 01:31 PM Reply Like
  • New Low Observer
    , contributor
    Comments (2007) | Send Message
    Hi 1G,


    What is fascinating is that most would have never thought that there would be the problem of higher costs at such elevated levels in the price of gold.


    I mean, when gold was $700/oz, it was assumed that it would be peaches and creme for the producer if the price got to $1,200. Yet, here we are at $1,600 and saying that they're getting hit by higher costs.


    Even the best laid plans don't seem to work out.


    20 Feb 2013, 01:36 PM Reply Like
  • lrcgn
    , contributor
    Comments (4) | Send Message
    Silver, like gold has long been overpriced, as as the horaders now are finding out, their gamble is NOT going to pay off. They have failed to find new " suckers" for the " other sucker" theory, and the prices will drop to where they can be sustained @ $ 18.00 Ag and $ 700 Au, but it will take a while, after all if things went staight up or down, it wouldn't be hard to make money as a specualtor, would it?
    20 Feb 2013, 12:34 PM Reply Like
  • davidshelton
    , contributor
    Comments (309) | Send Message
    Gold prices @ 700usd can not be sustained when "All in" costs are way north of that and over 1000usd/oz for some of the miners I follow. There's a lot less gold out there that can be mined for cheap. Despite huge investment in exploration and new projects in the last decade overall average ore grades continue to decline and the number of big finds continue to dwindle. I don't see much further downside from here....
    20 Feb 2013, 02:15 PM Reply Like
  • tombmanager
    , contributor
    Comments (11) | Send Message
    It would only be appropriate that Citi would come out with this BS. They don't want to see the dollar go bye bye, which it very likely and silver will rise again....those naked short sellers have driven the metals down, but not for long !!!
    20 Feb 2013, 12:37 PM Reply Like
  • Russ Browne
    , contributor
    Comments (4) | Send Message
    Citi bank telling us what is coming? Like these banksters saw the 2008 housing crisis coming! The taxpayers bailed out the banksters with a 700 Billion dollar gift and then they gave themselves a bonus!


    New York bankers own the politicians, the Treasury Dept. is a revolving door for Goldman Sachs. Some of Obama's biggest campaign contributors are bankers, Obama will not prosecute them or make them pay more taxes, they own him. He is instead going after the middle class and the higher income people that run industry and create real jobs so he can give it to the banksters (70% of the 16 Trillion dollar debt is interest payments) and keep the civil servants employed who really produce no wealth.


    Gold should have a rally after March/April into the summer of 2013, then the final low will show up in the June area of 2014, the debt crisis is not over, Europe and Japan will go down first, then the USA and will drive Gold to $5000+ after Economist Martin Armstrong's pi cycle date of 2015.75 (late 2015) , the peak may come in 2016 and as as late as 2020. Give a man (Armstrong) the credit as he has been predicting this crisis since the 1980's when Reagan's people ignored his warnings.


    See more here...
    and here...
    20 Feb 2013, 01:01 PM Reply Like
  • Silver Rob
    , contributor
    Comments (27) | Send Message
    Exactly since when has Citi told the truth? They were #1 in bogus home loans. They never mention that did they? Exactly what makes
    them trust worthy now?
    20 Feb 2013, 11:33 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
    Let's wait for a retest of the 1540 level in gold and the 26 level in silver and talk again. The Pt complex doesn't really count, since it's a binary trade based on volatile and relatively unpredictable labor dynamics in SA, which curiously seemed to start once Pt reached its 1400 level lows last year. Ignore the Citis, do your own research, and draw your own conclusions.
    20 Feb 2013, 01:11 PM Reply Like
  • blueice
    , contributor
    Comments (2947) | Send Message
    I will tell you this, in the past two years many if not most miners have been beat up fairly well...


    Still bullish on Ag, thanks to the bubble heads in WDC....


    [Federal government debt, the biggest bubble since helium]
    20 Feb 2013, 01:23 PM Reply Like
  • Mad Matt
    , contributor
    Comments (76) | Send Message
    You are RIGHT ON THE MARK, blueice!! You are so right on the fundamentals, and Ag will be staging a nice comeback, SOON. All those shorts are going to have their real shorts handed to them.
    20 Feb 2013, 01:32 PM Reply Like
  • Toddwade71
    , contributor
    Comment (1) | Send Message
    There is no way that any entity, be it private, public or both, is going to manipulate away the debt situation faced today.
    There is no way that the US is going to become a net exporter of energy in amounts that could even slow down this rate of growth in the debt.
    There is no way this flat line recovery is going to turn into a boom in business.
    There is no way that the unemployment figures are going to have a sustained improvement short of all the unemployed giving up hope and shifting to the underemployed list.
    There is no way that you can set such records in increased liquidity and not have explosion inflation regardless of business activity.
    There is no way that the Fed can liquidate its holdings of treasuries in an orderly manner without collapsing the Treasury market.
    There is no way the Fed can liquidate any toxic paper it took on from banks internationally in the crisis of 2008.
    There is no way the Fed can step away from QE which would mean higher interest rates without collapsing the flat line so called economic recovery.
    20 Feb 2013, 02:13 PM Reply Like
  • dunce1239
    , contributor
    Comments (95) | Send Message
    Prices do not follow cycles, if they did people could time trade. As long as the fed, the ECB, and the Japanese keeps printing, devaluing the dollar, the price of commodities will climb in fiat terms.
    20 Feb 2013, 02:13 PM Reply Like
  • George Bliss
    , contributor
    Comments (4) | Send Message
    Let it drop, I expect it will. And while the big banks work their magic to get the price lower, I'll keep buying physical silver. The Jr Miners aren't impressing me at all, but I will ride them to zero if I have to. I have a (within) 10 yr train of thought (starting in '09) PM's will be the only game in town.
    20 Feb 2013, 02:15 PM Reply Like
  • dubonaire
    , contributor
    Comment (1) | Send Message
    Don't panic guys!
    Read the article on the Coppock indicator for the buy signal.
    It is quite helpful.
    20 Feb 2013, 02:15 PM Reply Like
  • Archman Investor
    , contributor
    Comments (2319) | Send Message
    As always one should never listen to anyone involved on Wall Street.


    Tell me what has changed in this country? Anyone?


    Still ultra high unemployment (the real % of people not working in this country is absurd)
    More Americans than ever rely on the government and it's handouts just to survive.
    The above statement is going to put a massive strain on an already strained entitlement system.
    Most Americans have almost zero net worth.
    The government will never, ever stop spending
    There is no way at all the government is ever going to repay any of its debts.
    This "game" can keep going for quite awhile and it will for sure.


    I am not a precious metals bug. I own physical metals and they do make up about 5% of my total net worth. If I never need them for anything i will pass them down to my kids.
    The wealthy through time have always owned precious metals. They have always been a part of the elite's net worth and Wall Street never wants average Americans to know that. They do not want average Americans having any leverage of the banking cartels. That is a deadly secret they want to be kept hidden.


    What I am is someone who refuses to sit there and be brainwashed by the liars on Wall Street who want to keep this Ponzi scheme going and going for as long as it can go on.
    20 Feb 2013, 02:17 PM Reply Like
  • Skylane15
    , contributor
    Comments (6) | Send Message
    I don't know if anyone here is a gun owner, but if you are you know how scarce ammo is. It disappeared almost overnight, it just cannot be purchased, silver and gold will be no different when their time comes. I view gold and silver as insurance against currency collapse, everyone should have some. If you don't have it in your possession, all you have is the same worthless paper you are trying to protect against. I would never short any of it.
    20 Feb 2013, 02:18 PM Reply Like
  • jhooper
    , contributor
    Comments (5197) | Send Message
    Its really bad for those of us that rely on ammo made out of silver.
    20 Feb 2013, 02:46 PM Reply Like
  • urinmymachine
    , contributor
    Comments (4) | Send Message
    It's plain and simple, a parabola. Problem is, we are at the peak of the parabola. Honestly, long term trends can't support anything higher than 1200, and it should look more like 800 within 2 years. This is based on an old bet made in the 70s, where the price of gold was $800 and the gold speculator bet the economist that gold would be $2000 an ounce within 3 years. The economist drew a line and said it would be $200 an ounce again soon. Who do you think won that bet? Nothing goes up logarithmically and there is a certain gravity to speculation which always ruins a party. This time is no different.
    20 Feb 2013, 06:38 PM Reply Like
  • Raffib
    , contributor
    Comment (1) | Send Message
    The whole thing is a fraud carried out by artificial means to keep the $US where it is. It should be much lower; given the inverse relationship with gold and silver and other metals, gold should be much higher. Chances are the white collar criminals behind this manipulation are now piling up on gold and silver in every form possbile - bullion, certificates, ETF's and Call options...
    21 Feb 2013, 10:52 AM Reply Like
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