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Business/Finance See other Business/Finance Articles Title: Gold Is Rangebound, Summer Will Present Opportunity Gold Is Rangebound, Summer Will Present Opportunity Written by Gerardo Del Real Posted May 25, 2016 Gold remains rangebound and has for the past two months. The robust gains during the first quarter have many proclaiming a new gold bull market. Gold futures settled last Friday at $1,252 — down 1.6% — for a second straight weekly loss, as there are growing expectations of an increase of U.S. interest rates. Silver saw an even bigger loss — of 3.5% — its lowest in about a month, also on concerns about dollar strength due to a raise in rates. A raise nearly everyone had stated was not very likely before the latest Fed minutes were released. I outlined the reasons why I not only thought a raise is likely, but probable, in June/July (most likely July) last week before the Fed minutes were released. The inability for gold to push higher will hopefully lead to a sharp pullback that will allow us incredible entry points. At Resource Stock Digest Premium the mandate is very clear, take advantage of a potential last significant leg down in the price of gold to average in to the most exciting opportunities in the sector. Use what I call the “junior resource lazy months” to scoop up great companies on the cheap, by staying on top of the markets and using volatility to our advantage. For those of you who are subscribers to Resource Stock Digest Premium, which is finally available and timed to put me to work over the summer on your behalf, expect a healthy dose of trader alerts, as the summer volatility that I see on the way presents itself. (Publisher's Note: You can order Resource Stock Digest Premium directly from this link.) Though I’m as excited as anyone for the gains that we’re going to see, that doesn’t mean we buy everything, or all at once, or just buy and never sell. No, no, no. Taking a shotgun approach to the junior-resource sector is a great way to make yourself your own worst enemy in this market and limit your upside. Which leads us to one such company that has done the limiting upside party in spectacular fashion. Here’s the newest entry of “I Call BS.” “I Call BS” Lydian International (TSX: LYD) The new gold bull market is either here — subject to one last violent shakeout in my opinion — or right around the corner. Either way a company like Lydian, with estimated mineral resources containing five million ounces of gold and targeted annual production at 200,000 ounces annually should — even in today’s market — have a market cap greater than the C$65 million or so it currently commands. However, at the bottom of the market Lydian management decided to guarantee themselves a good living in the form of paychecks, indefinitely, and agreed to $80 million in private placements. Another financing was announced last week. Otto Rock at IKN, (click the link below for the blog) summarized it best. I don’t know Otto personally or have any stake in recommending the blog, but I’m there every day and if you’re relatively new to the sector, it should be a daily click for you. It might make you smile, it might make you mad, but it will force an opinion out of you and that’s a good thing. Here’s the link — and here’s his summary of the post: This is what they wrote (in the headline): "Lydian Shareholders Overwhelmingly Approve $80 Million Private Placements" And this is what it means: "Lydian Shareholders Overwhelmingly Approve the financing deal that snatched away all the blue sky upside from shareholders at its Amulsar project just weeks before the gold miner market turned from bear to bull and handed hundreds of millions of dollars of money that should have gone to the company backers as reward for their patience and loyalty to a bunch of suits who got lucky with timing because the people running LYD are dumbasses and by the time the deal was done the original backers didn't stand a chance of making any meaningful protest because they'd been diluted out.” I agree. And though it was mentioned earlier in the week by Otto, I’m going to go ahead and mention it again, because it’s a great example of how a company with a very good asset and very good upside can have all those factors working for it and still manage to find a way to limit the upside. Management limited the upside for both older shareholders and newer ones, who each saw the potential of the resource, and bought with the expectation that management would work in the interest of those shareholders. For whatever reason, that did not happen here. And for that reason I call BS. Poster Comment: Own gold and silver (and survival supplies) now since the balloon may go up soon. Then it will be every man for himself. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: BTP Holdings (#0)
Friday gold, not gold futures, closed at 1206; we'll see what Tuesday brings.
#2. To: Lod (#1)
I remember when the Hunt brothers tried to corner the silver market and lost their shirts. ;)
May and June are the slow seasons. The Asians are taking over the pricing. And the Hunt brothers did it on borrowed money. The CME voided their contracts because members of the board were shorting silver when the price was escalating. Can't happen again. The Asians are buying silver and gold. We should see the markets going higher by September.
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