2016 Fearless Gold Sector Forecast : Stay The Hell Away

Build Your Gold Watch List – but keep your portfolio in other sectors :

This past year was one of the worst ever for large mining companies, which suffered because of falling commodity prices and high leverage. They needed cash badly, and the streaming companies were more than happy to provide it. Mining giants such as Barrick Gold Corp., Glencore Plc, Teck Resources Ltd. and Vale SA all sold streams in 2015.

For junior or producing gold companies and their investors, the range of forecasts and continued volatility suggest it’s wiser to ignore the crystal balls for now and instead focus on what companies can control, like ensuring a sound business plan, keeping their balance sheets strong, monitoring costs, and building value for their shareholders.

Trends are against gold:

1) no inflation can be detected

2) rising interest rates offer a money making alternative while we watch and wait

3) global unrest in the middle East, Africa and Ukraine continue unabated but don’t move the panic button to ” buy”

4) Peter Schiff continues to see gold at $5,000  ( our best contrarian indicator )

This is the time of year when analysts roll out their economic forecasts for the New Year. For those who keep a close eye on gold prices, this can be a painful process.

It’s been another tough 12 months for the yellow metal, with prices falling for the third consecutive year — down about 10 per cent in 2015 alone. Prices touched a high in the neighbourhood of $1,300 and, as the year drew to close, they neared six-year lows around $1050.

That’s a big dive from the heady days of 2011, when gold hit over $1,900 an ounce.

What made things even more difficult for the sector in 2015 was the price volatility. Just when it appeared prices might be on a firm trajectory upward, they would then fall, creating more uncertainty among everyone from investors to gold companies.

That volatility is making it harder for prognosticators to estimate 2016 prices with any certainty. It’s the proverbial attempt to nail Jell-O to a wall.

That doesn’t prevent them from trying. But the resounding lack of consensus suggests it is a fraught exercise. Some are breathlessly proclaiming we’re on the brink of a new gold bull market. On the flip side, Goldman Sachs and JP Morgan predict it will fall to the psychologically important $1,000 US-per-ounce level — or lower — in 2016. Bank of America Merrill Lynch believes it will average $950 an ounce in early 2016 before recovering. Slightly more optimistic forecasters, like HSBC, predict gold will average $1,205 next year.

Gold is different from other metals in that its prices are not driven largely by typical supply and demand. While the prices of other metals, like copper or silver, tend to rise and fall as economies grow and shrink, a lot of different forces affect gold’s price. It’s used as a store of wealth, unlike most other metals (you don’t store copper to get rich), and it’s considered a “safe haven” — used as a hedge against political and economic uncertainty.

Inflation and the U.S. dollar are two major forces behind gold’s prices. In 2015, they didn’t work in gold’s favour. The collapse of the price of oil has kept inflation in check, which is bad for gold because of its role as a hedge against rising prices. The U.S. dollar has been strong — another blow for gold, which performs contrary to the greenback. Some say one of the reasons for the strong dollar was ongoing speculation that the U.S. Federal Reserve would raise rates for the first time in almost a decade. The Fed did that on Dec. 16, but there was minimal impact on gold due to the central bank’s dovish approach of a gradual tightening of future rates.

 

The dark side of metal streaming deals: Strapped mining companies trade future value for cash ( Financial Post )

 

In September, Robert Quartermain did something highly unusual for a mining executive — he signed a streaming deal with an early exit strategy.

Precious metal streaming companies looking to team up to tackle bigger deals

Valerian Mazataud/Bloomberg

Overwhelmed by the sheer volume of opportunities available in volatile commodity markets, precious-metal “streaming” companies are looking to team up to take on large acquisitions that they might not be able to readily afford on their own.

Continue reading.
Quartermain, the CEO of Vancouver-based Pretium Resources Inc., was alarmed at how much value miners are giving away in gold and silver stream sales, in which future output is sold at below-market prices in exchange for an instant cash infusion.

So when he sold a US$150-million stream on Pretium’s Brucejack project in British Columbia, he insisted that the deal include buyback options for Pretium in 2018 and 2019, and that it cap the number of gold and silver ounces that can be sold.

“When you start putting in higher levels of streaming, and the stream lasts forever, then the potential upside starts going to streaming holders and (away from) your existing shareholders,” Quartermain said in an interview.

This will go down as the biggest year ever for metal streaming deals, and it’s not even close. Miners have raised US$4.2 billion from 11 stream sales in 2015, according to Financial Post data. That is nearly double the US$2.2 billion raised in 2013, which is the second biggest year on record.

For the most part, mining analysts and investors have cheered these deals. But their sheer number has caused alarm for some observers, who worry that miners are giving away vast amounts of future upside once metal prices improve.

The metal streaming business was created back in 2004. In these transactions, a streaming company like Silver Wheaton Corp. gives a mining company an upfront cash payment. In return, it gets the right to buy a fixed amount of precious metals production from the miner at a fixed price that is far below the market price. The streamer can then sell the metal for a profit. The biggest players in this business are Silver Wheaton, Franco-Nevada Corp. and Royal Gold Inc.

This past year was one of the worst ever for large mining companies, which suffered because of falling commodity prices and high leverage. They needed cash badly, and the streaming companies were more than happy to provide it. Mining giants such as Barrick Gold Corp., Glencore Plc, Teck Resources Ltd. and Vale SA all sold streams in 2015.
On the surface, these deals made a lot of sense for mining companies. Their stock prices are so depressed that they do not want to even think about issuing equity. And the last thing this sector needs is to take on more debt. So they sold future metal production instead.

“When companies are between a rock and a hard place, they often sell what’s good because they can’t sell what’s bad,” said John Tumazos, an independent analyst.

The problem is that streams destroy much of the future “option value” for mining companies. Since the streaming metal is typically sold at fixed prices far below the market price, the streamers get all the benefit when market prices go up.

To take an extreme example, Silver Wheaton was buying silver from some mining companies at less than US$4 a pound in 2011, when silver prices rose to almost US$50. It was a massive transfer of wealth from mining companies to a streaming company.

Another concern is that streams can eliminate the exploration upside from a mine. If a miner has agreed to sell a fixed percentage of gold or silver production from a mine to a streamer, it will have to sell more metal if it makes a new discovery on the property and boosts production.

When companies are between a rock and a hard place, they often sell what’s good because they can’t sell what’s bad
John Ing, president and gold analyst at Maison Placements Canada, said streaming is reminiscent of hedging, in which metal is sold in fixed-price contracts. Hedging was all the rage in the gold industry in the 1990s, when prices were low. But it became a massive liability once prices rose far above the value in the contracts. Barrick had to spend more than $5 billion to unwind its hedge book in 2009.

Eventually, hedging became a toxic word in the industry. It is almost nonexistent today.

“It wasn’t until the price of gold went up that everybody realized what Barrick was leaving on the table,” Ing said.

“The same thing is going to happen (to streaming) when the price of gold goes up again. Not until then will people focus on the dark side of the streams.”

For investors that don’t like streaming, the good news is that miners are starting to preserve more upside for themselves in these transactions.

For example, Barrick struck a US$610-million stream sale with Royal Gold last August that guarantees higher sale prices down the road. For the first 550,000 gold ounces and 23.1 million silver ounces that Barrick delivers to Royal Gold, it receives 30 per cent of the prevailing spot prices. For every ounce after that, it receives 60 per cent of the spot prices. So if silver prices go up, Barrick stands to benefit.
Pretium Resources Inc.

Pretium’s Brucejack project in British Columbia.
Pretium went even further by negotiating optional buybacks of its stream and capping the total amount of gold and silver to be sold. If Pretium discovers more metal at the Brucejack project, it won’t go into the stream.

Traditional streaming companies like Silver Wheaton and Royal Gold are looking to buy streams that will last for decades, so Pretium’s deal is not for them. Instead, Pretium sold the stream to two private equity firms, Orion Resource Partners and Blackstone Group.

These companies are just looking for a good return and are not bothered by the idea of having their stream re-purchased in a few years. That is a relatively new concept in streaming, and it could be a game-changer if more private equity firms and other players decide to compete with traditional streamers.

Quartermain said his deal is proof that miners have alternatives to conventional streaming. He hopes other companies will follow Pretium’s lead and try to maintain some upside in these deals.

“We’ve shown you can, even in challenging markets, finance good projects and achieve that upside for shareholders,” he said.

 

 

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on Amazon.com ( Books)

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Hedge Funds Are Back to Bearish on Gold as Price Slump Deepens : Preparing For – $1000

 

 

  • Money managers hold first net-short position since August
  • Assets in global bullion ETPs drop to lowest since 2009

Prices are trapped in their worst rout since July as Federal Reserve officials talk up improvements for the U.S. economy and reinforce signs that they’re ready to raise borrowing costs for the first time since 2006. That prospect has sent investors fleeing. Assets in exchange-traded products backed by gold have fallen to the lowest since 2009. Money managers are holding a net-short position in the metal for first time since August as their long wagers shrunk to the smallest in seven years.

The bears are being rewarded after futures last week dropped to a five-year low. The outlook for increasing borrowing costs poses a few hurdles for gold. Because the metal doesn’t pay interest, it loses out to competing assets, such as bonds. At the same time, higher rates usually favor a stronger dollar and cut demand for alternatives, while a strengthening economy means investors are less interested in bullion as a haven. More than $6.5 billion was wiped from the value of gold ETPs since mid-October.

“Gold is dead in the water and is an asset class that should be avoided,” said Chad Morganlander, a Florham Park, New Jersey-based money manager at Stifel, Nicolaus & Co., which oversees about $170 billion. “We continue to believe that dollar strength will be an anchor on metals, and in particular on gold.”

Fund Wagers

Futures have dropped 9.1 percent in 2015 to $1,076.30 an ounce on the Comex in New York. Prices fell for five straight weeks, the longest slide since July 24. The net-short position in gold futures and options was 8,989 contracts in the week ended Nov. 17, U.S. Commodity Futures Trading Commission data released three days later show. That compares with a net-bullish position of 21,530 contracts a week earlier. Investors trimmed their long holdings to 92,318, the smallest since December 2008.

Bullion, long considered a haven during times of geopolitical turmoil, failed to sustain brief gains last week following the Nov. 13 terrorist attacks in Paris that left 129 people dead and injured another 352. In addition to being ignored by investors, the metal is suffering from weak physical demand, particularly in India, which vies with China as the world’s top bullion buyer. Valcambi, one of Switzerland’s largest gold refiners, projects annual Indian imports of 850 metric tons. That’s down from the average 875 tons in the past five years.

“Investors have become somewhat inured with terrorism,” Jack Ablin, chief investment officer in Chicago for BMO Private Bank, which oversees $68 billion, said by telephone. “They just see it as an ongoing risk, but a single event is not enough to derail an economy or a market, so investors have chosen to ignore it.”

Gold is heading for a third straight annual loss amid speculation that the Fed will soon start tightening monetary policy.Minutes from the Fed’s October meeting released last week showed officials stressed that “it may well become appropriate” to raise the benchmark lending rate in December. Goldman Sachs Group Inc. analysts led by Jeffrey Currie said they expect bullion to extend losses over the next 12 months, according to a report on Nov. 18.

Paulson Stake

The slump hasn’t deterred billionaire hedge fund manager John Paulson. His firm, Paulson & Co., left its holding in the SPDR Gold Trust, the world’s biggest bullion ETP, unchanged in the third quarter, a government filing showed Nov. 16.

While traders are pricing in a more than two-thirds chance of a rate increase in December, the Fed minutes showed policy makers largely agree that the pace of increases will be gradual. The rate outlook may already be “absorbed by the market for now,” Karvy Commodities Broking said in a report Friday.

“The Fed has made it clear they are likely to hike in December — they’ve also telegraphed that they are going to move very slowly from thereafter, so there’s a little less enthusiasm for the dollar,” said Dan Heckman, national investment consultant in Kansas City, Missouri, at U.S. Bank Wealth Management, which oversees about $126 billion. Still, “we have a very low inflation and a very low-growth environment, and it’s hard to make a case for gold.”

TAX HAVEN 101 ” BEST” DEPENDS ON YOUR GOALS – GOING OFFSHORE – A PRIMER http://youroffshoremoney.com

Gold Plunges : Peter Schiff “It’s going to be a ‘horrible Christmas’ “

Well , a horrible Christmas for the folks who followed Peter Shiff’s constant refrain to buy gold.

( as opposed to AMP advice to sell at $1800 .

Gold

INDEX UNITS PRICE CHANGE %CHANGE CONTRACT TIME ET 2 DAY
USD/t oz. 1,086.30 -17.90 -1.62% DEC 15 11:24:10
JPY/g 4,286.00 -38.00 -0.88% OCT 16 11:23:43
USD/t oz. 1,089.56 -14.36 -1.30% NA 11:49:12
EUR/t oz. 1,014.24 -0.04 0.00% NA 11:49:50
GBP/t oz. 730.31 +4.41 +0.61% NA 08:28:35
JPY/t oz. 134,191.44 -210.72 -0.16% NA 11:48:54
INR/t oz. 72,028.75 -709.10 -0.97% NA 11:49:20

 

The Grinch has nothing on Peter Shciff .

On CNBC’s “ Futures Now ” Thursday, thecontrarian investor said that while Americans are wrapping presents this holiday season, they should instead brace themselves for “a horrible Christmas” and possible recession.

“I expect [job] layoffs to start picking up by the end of the year,” Schiff said, pointing to retailers as the first victim. “Retailers have overestimated the ability of their customers to buy their products. Americans are broke. They are loaded up with debt,” he said. “We’re teetering on the edge of an official recession,” and “the labor market is softening.”

For Schiff, there is no one else to blame but theFederal Reserve . As he sees it, the central bank’s easy money policies have created a bubble so big that any prick could send the U.S. economy spiraling out of control. And that makes the possibility of hiking interest rates slim to none.

Read More Oil driving markets, not Fed: Cashin

“The Fed has to talk about raising rates to pretend the whole recovery is real, but they can’t actually raise them,” said the CEO of Euro Pacific Capital. “[Fed Chair Janet Yellen ] can’t admit that she can’t raise them because then she’s admitting the whole recovery is a sham and that the policy was a failure.”

Related Quotes

According to Schiff, the recent rally in the dollar (Intercontinental Exchange US: .DXY) is “the biggest bubble that the Fed has ever inflated” and “it’s the only thing keeping the economy afloat.” The greenback hit a three-month high this week after Yellen said a December rate hike was a “live” possibility.

Read More Sorting out the influence of the strong dollar on revenues

“[The inflated dollar] is keeping the cost of living from rising rapidly and it’s keeping interest rates artificially low. It’s allowing the Fed to pretend everything is great,” Schiff said. “Eventually the bottom is going to drop out of the dollar and we are going to have to deal with reality,” he added. “That reality is we are staring at a financial crisis much worse than the one we saw in 2008.”

Schiff, a longtime Fed foe, has been doubting a rate hike for some time. And while his predictions for a stock market and dollar crash have yet to pan out, he has maintained his stance that the Fed’s hands are tied.

Correction: This article has been revised to reflect Schiff said the bottom will drop out of the dollar.

Get your tax haven planning in gear for 2016 Read more at http://www.youroffshoremoney.com

 

 

 

Why Gold Miners Just Keep On Diggin’ A Deeper Hole For Themselves

What does Peter Schiff not understand?

If only gold mine operators could flatten their debt mountains as easily as they can the real things.

Mining companies built up record borrowings to boost gold output during a 12-year bull market in the metal that stopped dead in 2011. The 42 percent slump in prices since then leaves them effectively servicing the debt with devalued currency.

Gold mining companies boosted debt to take advantage of rising prices.

Output that might have fallen as gold sank has continued on to all-time highs as producers need to generate enough cash from sales at lower prices to keep up payments on what they owe.

That’s squeezed profitability and share prices, with a benchmark index of 30 of the biggest precious-metals miners falling to the lowest levels since 2001, when bullion was barely a quarter of its current rate of $1,110 an ounce.

Equities tumble to their lowest since 2001.
Equities tumble to their lowest since 2001.

“The industry is in a shocking state,” said Mark Bristow, head of Randgold Resources Ltd., the producer with the best share performance in the past decade. “Everyone is still focused on production and not on profitability.”

Growth in output has exacerbated an oversupply that makes a recovery in the bullion price harder to achieve, Bristow said.

Gold production continues to rise even as prices fall.
Gold production continues to rise even as prices fall.

Debt held by 15 of the biggest producers including Barrick Gold Corp. and Goldcorp Inc. hit a record $31.5 billion at the end of the first quarter, up from less than $2 billion in 2005, according to data compiled by Bloomberg Intelligence.

That was spurred by the dash for growth when prices were rising, including $8.5 billion for Barrick’s mine in the Andes mountains and C$8.2 billion ($6.3 billion) for Kinross Gold Corp.’s bet on Mauritania. In the past decade, world output expanded 24 percent to last year’s 3,114 metric tons.

“The whole industry is being encouraged to continue to live on hope,” Bristow said. “The question is how much cash flow do you need to expunge the debt? There’s nothing really left to create value for shareholders.”

Braggin’ Rights :Gold Reaches Lowest Since 2010

We sold and advised YOU to sell at $1800

We told you repeatedly Peter Schiff was leading you astray

For six years, investors have been guessing how much gold China owns. On Friday, they found out and the results were underwhelming.

China said it boosted bullion assets to about 1,658 metric tons, less than brokers at GoldCore Ltd and Sharps Pixley Ltd. expected. Futures dropped to the lowest since 2010 on Friday as signs of improving U.S. economic growth further diminished the metal’s appeal as a haven.

With investors in the U.S. scoffing at the precious metal, bulls were holding out hope that buying from China could help to buoy demand. The Asian country is the world’s biggest gold producer and vies with India as the top consumer. The price rout worsened the outlook for miners, with shares of Barrick Gold Corp. dropping to the lowest since 1991 on Friday.

“I’m shocked by how small the figure is,” Ross Norman, chief executive officer of dealer Sharps Pixley, said by telephone from London, referring to China’s gold reserves. “I don’t think I was alone in thinking they have accumulated three times as much.”

Gold futures for August delivery dropped 1.1 percent to $1,130.90 an ounce at 11:16 a.m. on the Comex in New York, after touching $1,129.60, the lowest since April 2010.

The reserve figures “were disappointing in some aspects and reflected that China isn’t adding gold as much as people thought it was,” Bernard Dahdah, a precious-metals analyst at Natixis SA in London, said in a telephone interview. “It begs the question of what’s been happening to the gold produced that hasn’t been taken by the central bank.”

Weekly Drop

Prices extended losses after a government report showed new-home construction in the U.S. climbed in June to the second-highest level since 2007. The metal is heading for a fourth straight weekly decline as Federal Reserve Chair Janet Yellen has indicated that the central bank will increase interest rates this year amid the improving economy.

Higher rates cut the appeal of precious metals because they don’t pay interest or give returns like other assets such as bonds and equities. Gold futures in New York fell for a seventh straight session, the longest streak since November.

Shares of Barrick Gold, the world’s biggest producer of the metal, fell as much as 6.5 percent in Toronto. The Philadelphia Stock Exchange Gold and Silver Index, a gauge of miners, slumped as much as 4.2 percent, reaching the lowest since January 2002.

“There is just no interest in the market to own gold,” Donald Selkin, the New York-based chief market strategist at National Securities Corp., which manages about $3 billion, said by telephone. “The Fed’s hawkish stance is the biggest culprit for the decline that we are seeing in the precious-metals market.”

Now get your watch list updated – from Amazon.com Books

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Why Peter Schiff is still wrong about gold

While Peter Schiff, and others of his ilk, have remained staunchly bullish on gold since the all-time highs in 2011, I feel they have done a terrible disservice to those who have followed them for the last three-plus years of (relative) pain.

Schiff is an uber-bull, or gold bug, as some may call him, who continually calls for $5000 gold. Since markets move in two directions and not just up, I believe that anyone who is uber-anything should be dismissed, as there is no appropriate substance being proffered by simply saying the word up every day. Ultimately, they will be right, but, in this case, you have to deal with a multi-year 40%-60% drawdown before eventually being correct.

Myra Saefong had a piece earlier this week reiterating Peter Schiff’s perspective about gold going to $5000. So, let’s look at Mr. Schiff’s underlying perspective a little more closely, and see if he is finally going to be right. Or should people consider our perspective that Mr. Schiff’s followers have more pain to experience in the near term, as metals have a lower low to be seen before the next bull phase takes hold.

First, last year, Mr. Schiff was of the exact same perspective regarding gold, and, he has been of the same perspective on gold since it topped in 2011. However, we called the top to gold within six dollars of the actual top in 2011, while most were still looking for gold to exceed the $2000 mark along with Mr. Schiff. In fact, we even called the downside targets correctly even before gold topped. Since that time, gold has lost 41% of its value from its high to low during this correction. Yet, Mr. Schiff has stayed staunchly bullish during this 40% draw down.

Second, last year, Mr. Schiff maintained the perspective that “renewed weakness in the dollar and strength in oil and other commodities will add to gold’s appeal during 2014.” Despite its drop, Mr. Schiff simply dismisses it as being “completely out of touch with reality.

I want to digress for a moment and point out something to those that feel that the dollar must drop in order for metals to rise. There is nothing written in stone that states that the dollar must fall for the metals to rise. In fact, if one closely observed the market action since November of 2014 until the end of January of 2015, gold rallied almost 15% while the dollar rallied over 9%. And, yes, we expected both markets to rally together at that time, too.

Third, Schiff seems to claim that only further quantitative easing will cause the metals to rise. But, this was the same perspective he had with all the previous QE programs were instituted by the Fed. We had QE1, QE2, Operation Twist, and then QE3, and metals are still near their lowest levels in four years. Yet, we are to believe that QE4 will be the one that supposedly causes the metals to rise to $5,000? Does anyone else see the inconsistency in this argument?

Fourth, in Schiff’s recent interview, he noted that “what is holding gold back . . . is the idea that the Fed is going to be raising interest rates.” Wait a second. For years, all people have been talking about is that a rise in interest rates evidences inflation, which is the real driver of gold. So, isn’t the common theme that gold will go up when rates go up, because that is supposedly a signal of inflation?

Yet, when looking a little deeper into what Schiff is now suggesting, it seems that low interest rates are needed to cause gold to rally? Is not a drop in rates commonly viewed as being associated with periods of deflation? So, is it deflation which will cause gold to rally or is it inflation?

The answer is that gold’s movement is not based upon either if you look honestly at the history of gold’s movements. Let’s take a look at the 2007-2009 time frame, which evidenced the most recent period of deflation in our markets, and see if we can glean anything from the metals action in relation to deflationary market pressures and dropping interest rates.

We all know that the S&P 500 topped in October of 2007 and began an estimated 300-point decline into March of 2008, and then we saw a corrective bounce in the equities for a couple of months. During that same period of time, the metals continued to rally. So, here we have “evidence” of the metals supposedly rising during a period of deflation.

But, when we then look toward the May 2008-March 2009 severe decline in the equity market, we witnessed the metals also experienced significant declines within that time period. In fact, gold lost a little more than 30% (yet, rallied again, thereafter). So, when one is presented with these facts, does it make sense that the metals are surely going to rise during periods of deflation and/or low interest rates?

One has to put aside their personal biases toward the metals and recognize that they are not necessarily going to rise during periods of deflation, or due to the drop in the dollar or interest rates. Oddly enough, metals can rally during periods of deflation or dollar appreciation, and they can fall during periods of deflation and dollar appreciation.

The same applies to periods of inflation as well. I know you are likely thinking to yourselves, “Avi has really lost it this time.” But in all honesty, how can you come to terms with the reality of how they reacted during the 2008 broad equity market carnage, which was clearly a deflationary event? Did they act as the supposed “safe haven” during the strongest period of deflationary pressures experienced since the Great Depression, especially while interest rates were dropping precipitously?

The one thing said by Mr. Schiff with which I agree is that “the moves in gold come in waves.” And, these wave movements are driven by waves of sentiment. That is exactly what we track. In fact, not only did the tracking of market sentiment allow us to make various calls, such as the drop into the November 2014 low, but at this time, unlike Mr. Schiff, we still believe that lower lows and more pain are still in store for those that have been continually bullish since 2011.

So, I would urge anyone reading prominent pundit “expectations” about metals to test them against the reality of the price action history. If someone suggests to you that it is a matter of interest rate sensitivity or an inflation/deflation argument or a factor of quantitative easing, you need to think long and hard about if the price history of metals supports their proposition. I suggest that it will not.

Rather, metals are purely a sentiment trade, and unless you understand how sentiment drives metals, you will more than likely be caught on the wrong side of a popular fundamental argument. Ultimately, he will be right. But, do we all have the deep pockets to be able to withstand yet another drop to lower lows before being proven right?

See chart on GLD 2007-2009.

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Peter Schiff : The Real Crash – Book Review – Spectacularly Bad Timing and Bad Advice

 

 

The Real Crash

America’s Coming Bankruptcy – How to Save Yourself and Your Country

2012

St.Martin’s Press

 

page 29:

“… the next big bet is shorting the U.S. government. How ?

1) by shorting the dollar…

2) brace yourself for rapid inflation…

3)by buying physical gold…

4) and gold mining stocks…

5) holding strong foreign currencies like …the Canadian dollar…

 

OMG – wrong for five out of five

 

J.Bass

Here is our recent letter:

Managed Accounts Year End Review and Forecast

November 2014 – 40 % cash position
Gold and Precious MetalsThe largest gains for our clients came from the exit from the gold producers at $18oo an ounce and continuing until we hold no gold and no gold miners . This from the author of The Gold Investors Handbook.2015 – We continue to be on the sidelines for this sector – regardless of the gnomes of Switzerland . As a safe haven gold simply wasnot there for investors despite turmoil in the Middle East, Africa and Ukraine.How much more frightening can the prospect for peace be than to have wars in multiple locations? Secondly the spectre of inflation – on which I have given numerous talks – simply failed to materialize. In fact economists and portfolio managers such as myself are now more concerned about deflation – and the spectre is a Japanese style decades long slide in the world economy.

Shipping Sector / Bulk Shippers You can review our stock market letter athttp://www.amp2012.com to follow our profits in the shipping sector before our retreat as overcapacity has yet to effect continued overbuiding. In 2008-9 rates-  illustrated by the Baltic Dry Index – were at their peak. The BDI hit over 10,000. Today it is roughly 10 % of that benchmark and the sector slide continues. We have an impressive watchlist of former ” darlings” – but we are content to watch and wait.

The returns for Jack A. Bass Managed Accounts

2014  17.9 %

March 10 Update:

LONDON (Reuters) – Gold fell almost 1 percent to a three-month low on Tuesday as the dollar rose to a near 12-year peak versus the euro on renewed expectations of a mid-year hike in U.S. interest rates.

Spot gold dropped to its lowest since Dec. 1 at $1,155.60 an ounce in early trade, and was down 0.4 percent at $1,161.90 by 1048 GMT.

Platinum fell to a new near-five-year low of $1,125.75 an ounce. The metal has dropped 5.1 percent since the start of the year on expectations of lower demand from the automotive sector and higher mine supply.

“Dollar strength overnight in Asia sent the complex lower,” Deutsche Boerse’s MNI senior analyst Tony Walters said.

“The trend is your friend and people will continue to sell rallies,” he added. “Seemingly the only spanner that could be thrown into the works at the moment is if the Fed doesn’t raise rates in June, but the market is short … and it continues to go in its favour.”

Gold took a hit after Friday’s strong U.S. non-farm payrolls data boosted expectations the Federal Reserve would begin increasing interest rates by the middle of the year.