Source: Bob Moriarty for Streetwise Reports 08/06/2018
Bob Moriarty of 321 Gold profiles a company exploring in British Columbia’s Golden Triangle, in the shadow of the Eskay Creek Mine, the world’s highest grade VMS gold mine.
It appears that I missed my call for a low in gold by $25 and a few days. For months I have been calling for a low in the June/July timeframe with the DSI below 10. Gold dropped to $1204 and change on the 2nd of August well below my belief that we saw the low at $1240 a few weeks back.
So I didn’t get a bull’s eye; I was off on the price of gold by 3% but I did hit the target near the center. And I’m perfectly comfortable crawling out on a limb and saying the worst is behind us for gold with the DSI hitting 6 on the 2nd. The worse sentiment gets, the greater the springboard higher as the speculators get creamed once more.
The permabulls will be whining about how the Bullion Banks have stolen from the speculators once again. However if the price of gold is going down and speculators are selling to cover their long positions or to go short, it is the speculators driving the market, not the commercials buying contracts.
Anyone using the term Bullion Banks is blowing smoke anyway in an effort to confuse. If Bullion Banks really were trading, which they aren’t, they would be classified as large speculators.
The commercials are mining companies and consumers of gold such as jewelry manufacturers who overall have an overall natural bias to be sellers. Mining companies are eager sellers at high prices and jewelry manufacturers are eager buyers at low prices. Commercials tend to buy at bottoms and sell at tops. Speculators sell at bottoms and buy at tops.
We “should” have a rally into September for the metals and resource shares based on both sentiment and seasonality. A DSI of 6 means people were really negative on gold. And a simple glance at your favorite shares will show while the temperature may be hot outside, the markets have been colder than a well digger’s ass. That should change. When the DSI gets above 90, think about taking some money off the table. If it gets to 94, dump everything.
I’m going to expand on some comments I made a month ago in an interview on Energy and Gold where I said we would see the crash of the century sometime in the September/October timeframe.
Anyone with an IQ over room temperature who spends any time thinking about money and the economy is well aware that the Central Banks around the world have been pumping money into the economy for ten years. The financial system actually died in September of 2008. The money has done nothing but pump up a corpse. It looks alive but take my word, it is rotten to the core. And anyone with a lick of cents knows the shit is going to hit the fan someday because you can’t spend your way to prosperity or borrow to become rich.
I made my comment before Netflix and Facebook plunged by over 20% in July. The four FANG stocks account for 50% overall of the volume in trading on Wall Street. That’s what you will see just before a market crashes. I could be 100% wrong and the market could climb to infinity but some day people are going to sober up and sell. In 1929 the market topped the first week of September and crashed at the end of October. I suspect Facebook and Netflix are telling us the play is just about over and the fat lady is gearing up for her solo.
Those who love throwing rocks at me can fairly say that I’m wrong because both “Bitcon” and Tesla have shot higher but both “investments” are a form of a negative test for Mensa. You have to be in the lowest 2% of the population to be buying either. If you are buying both, you qualify as brain dead. They are both scams designed to take money from idiots and do a wonderful job.
Given that what I think is no more than my gut feel and I am no more an “Expert or Guru” than any of the other fools around, you might want to do or change nothing at all. But times are dangerous and if the general markets crash, investors are going to sell everything they can get a bid on including resource shares. So at the very least, have a game plan just in case this blind squirrel stumbles across an acorn. Either sit on some cash ready to pluck the low hanging fruit or plan on sitting it out no matter how dismal prices get.
When the dust settles, commodities and resources will be king for many years and the used toilet paper Wall Street and governments have been peddling will be revealed by its scent just what it is really worth.
I have been saying for at least three months that there are a variety of good junior resource companies that would be cheap in a decline. We have had the decline, at least for now and speculators have bred a counter trend rally good for the near future. Eskay Mining Corp. (ESK:TSX.V) is one of the interesting companies I have invested in.
Eskay Mining has 52,000 ha of various projects in the heart of the Golden Triangle in northern British Columbia. In early 2017 the company did a deal with SSRM where for a total investment of $11.7 million in the SIB project of Eskay, SSRM could earn a 60% interest in 12,000 acres of the project. As of now, Eskay owns 80% of SIB and Kirkland Lake the remaining 20%.
Last year as part of their earn in, SSRM spent $3.7 million drilling …read more
From:: The Gold Report