The Lemon Fool

Wondered what others are doing in terms of PM's

I hold a lot of both Au & Ag.....after 5 years of doing pretty much nothing (except the brexit £ drop bonus) and watching pretty much every other asset class rise, I'm getting pretty hacked off.....

Ag has been particuarly dreadful experience over the last 5 years.........

I used to listen to the likes of Schiff et al and now see them for the snake oil salesmen they are.

I'm nearing capitulation and hating this asset class.

On this basis it must now be a great time to buy.

How are others feeling

Hampshirelad wrote:How are others feeling

You are correct to note that the last five years haven't been the greatest for holders of precious metals, but the period includes part of the decline that followed gold's record high in September 2011, so perhaps bullion was set up for a fall at that point. In any case, looking at a weekly chart of the past five years, I see gold clearly making higher lows out of the bottom in late 2015. That looks constructive to me, although the $1,350-$1,375/ounce area seems to be serving as upside resistance for the moment.

I have no particular plans for now as far as activity, but was having vague thoughts a couple of months ago about maybe buying some silver coins to add to my holding. I view my bullion as a "forever" position, and my motivations for continuing to hold are pretty much the classic ones addressed in the infographic below.

http://www.visualcapitalist.com/billion ... us-metals/

In my case, there's particular emphasis on 1) portfolio diversification (gold and equities have a low correlation, so bullion sits nicely alongside my income-generating stocks) and 2) doubt that the removal of extreme monetary accommodation by central banks will be easy or painless.

Buy in small amounts and just hold.

Ag is a waste of time due to VAT
Au on the other hand is a safety net I use, and I don't worry about price fluctuations. If it ever doubles or quadruples this will say more about the health of fiat currencies rather than the price of gold.
I try to hold 10% of my SIPP/ISA in physical Au.
Laugh, tell me it is archaic, I know it doesn't have a yield, but it is my doomsday insurance, and with Corbyn & co on the horizon I am glad I have it.
If I never use it, fine. I'll dip it into in my later years or use it to give someone else a better start.

Gold made another higher low last month, coming down to $1,245 an ounce or so versus $1,210-ish back in July, so bullion is certainly looking well supported at the moment. But it's interesting to me that at the same time, gold recently made lower lows against both the pound and the euro, which leads me to wonder whether the perkier dollar chart might simply reflect weakness in the U.S. currency.

The past few months have been rather dismal for owners of gold, which traded above $1,350 an ounce as recently as 19 April and is now around $1,220/oz. And looking at a two-year chart, gold has definitively made a lower low, violating the pattern of higher highs and higher lows that played out during 2017. So definitely not the price action that I would have wanted.

However, there is a pretty obvious reason for gold's recent weakness, which coincides with a sharp strengthening of the dollar after declines for much of last year. With the U.S. economy doing so well and the Federal Reserve continuing to tighten policy, some kind of upward move was probably to be expected at some point. Not the greatest thing for investors in precious metals, of course, but that's life in the markets.

For those who choose to hold gold, - do you hold it through an ETF such as GLD or through a gold miner such as Rangold resources?

richfool wrote:For those who choose to hold gold, - do you hold it through an ETF such as GLD or through a gold miner such as Rangold resources?

I use GDX which is an ETF of all the major North American gold miners.

And Silver Wheaton which is a proxy for silver.

In both cases I use options and try and use the volatility of the underlying as a benefit.

The only individual miner I own is Randgold, which I bought a few times but only when it got down to about four quid a share. It seems to have support there.

Lootman wrote:I use GDX which is an ETF of all the major North American gold miners.

And Silver Wheaton which is a proxy for silver.

In both cases I use options and try and use the volatility of the underlying as a benefit.

The only individual miner I own is Randgold, which I bought a few times but only when it got down to about four quid a share. It seems to have support there.

Thanks for those thoughts.

I think I might have missed an opportunity to buy Randgold Resources, in view of the price rise resulting from its proposed merger with Barricks Mining. It also looks as if the business will then trade as Barricks and not on the LSE.

I was looking for something to take a position in at a low point.

I have also been looking at Fresnillo, as I note it mines gold as well as silver, and pays a dividend yield of about 3.4%. Though I'm not sure if I should be concerned because of it being Mexico based.

https://www.hl.co.uk/shares/shares-sear ... lo-usd0.50

https://www.hl.co.uk/shares/share-resea ... rrick-gold

I can see logic in the Van Eck Vectors ETF - GDX, as it embraces a number of gold miners from different countries and some silver miners (the latter not more than 20%). No yield and TER a little high at 0.53%

richfool wrote:For those who choose to hold gold, - do you hold it through an ETF such as GLD or through a gold miner such as Rangold resources?

Another option for holding gold is to buy through a platform like BulllionVault who claim to store $2BN of bullion (38 tonnes of gold and 500 tonnes of silver) for 70,000 active clients. They also offer platinum. You will pay a commission when buying and selling and a monthly storage fee. I have found their platform and customer service to be very good.

Pendrainllwyn

The Federal Reserve raised rates again yesterday, but IMV the Fed's statement and rate forecasts were positive for gold.

Firstly, the Fed dropped the "accommodative" language from its statement, indicating that the Fed Funds rate is nearing what is viewed as the neutral level. Secondly, the forecasts showed the current tightening cycle ending in 2020, with three rate rises expected in 2019 and one in the following year. The forecasts were updated to include 2021 for the first time and showed that no hikes are anticipated that year. So this cycle is more than halfway over - eight increases done and five more to come, assuming another rise in December of this year.

I would also suggest keeping in mind that the Fed has been tightening for almost three years now (since December 2015), and while it has been moving at a measured pace, at some point that will start to bite. For example, housing is generally viewed as rate-sensitive AFAIK, and the U.S. housing market has been distinctly weak in the last three or four months (although housing starts did strengthen in August). There are definitely people quoted in Bloomberg stories who see the current cycle ending sooner than anticipated because they expect the economy to start slowing.

Quite the turnaround for the PMs and PM equities today. Gold rose about 3% and silver was up 2%, and the PM shares I looked at (FRES, HL, CDE, ABX, NEM) generally gained 6-7%.

Gold priced in pounds is having a good run - up almost 5% in three weeks to the highest level since November 2016 as of the Monday p.m. fix, according to the LBMA website.

Gold was fixed Tuesday morning at £1,073.22/ounce, the highest price since November 2012, according to LBMA data. In euros, gold is at €1,200/oz for the first time since April 2017.

And investing.com shows that gold futures have touched $1,366.40/ounce today, the highest price since July 2016, according to LBMA figures.

Gold continues to advance: currently trading at $1,392.95/ounce, £1,093.60/oz and €1,230.90/oz, according to a variety of websites.

CommissarJones wrote:Gold continues to advance: currently trading at $1,392.95/ounce, £1,093.60/oz and €1,230.90/oz, according to a variety of websites.

Yes. I presume this is as a result of developments around Iran.

My modest holding of ETF SGLN is doing very well thank you.

I took the opportunity to sell out of my gold holding: having bought SGLN early 2019, 8% up in under 6 months will do me, especially as I bought the position with no great expectation of a gain. Going to recycle the cash, probably into more Hurricane Energy shares, taking their weighting to >12% of my portfolio. War with Iran would be good for oil price, so risk on!

Gold is still ranging to the upside and finishing the week with a flourish: today's session highs are $1,414.95/ounce, £1,107.14/oz and €1,245.90/oz, according to various websites. However, current prices are well down from the highs, so maybe that's a sign that the upward move is set to pause. In any case, bullion priced in dollars is up a bit more than 4.5% for the week, which is a pretty serious move for gold.

I've been holding loads of GBS and PHAG for ages (14% of my SSAS pension)

Interest rates on the floor and probably going lower
Trade tensions between USA and China
10 minutes from Mr Trump pushing the big red button against Iran
Don't mention the B word

Now certainly doesn't seem to me to be the time to think about selling.

Laughton wrote:Now certainly doesn't seem to me to be the time to think about selling.

Agreed. I have a holding of physical that was amassed in 2002-04 and no plans to sell. Earlier this year, it seemed to me that it might be a good idea to put more money into PM investments while gold was still below £1,000/ounce, as the financial and geopolitical trends seemed to be supportive. Wish I had acted. I am hoping for a pullback of reasonable magnitude from the current highs, which would leave me sorely tempted to buy a batch of FRES shares.