Gold Price And Gold Miners Analysis

May 26, 2018


You people know me. You have, over the years, grown to know me as a “Fighter of the GOOD FIGHT”, albeit it flawed and certainly vulnerable to all sorts of criticism whether warranted or not. For years, I have been writing “Gold and Gold Miners” as an emotional and psychological balm of sorts; it allows me to calm myself down and FOCUS upon the things that are affecting the world, the markets, sentiment, and my sanity. By putting my thoughts to (digital) paper, I am at once afforded the luxury and privilege of expunging myself of afterthought. I write, quite simply, what I think and whether or not it is relevant, accurate, or poignant, arrives as an important non-sequitur in the process. However, at least I deliver it and minus the usual cover-thine-ass drivel of the blogosphere “keyboard bullies” who hide away in foreign lands and try to pretend that they are willing to “step up”. The headline this morning that I tweeted about was a ZeroHedge post that ran as follows:

DOJ Launches Criminal Probe Into Bitcoin Price Manipulation 24/doj-launches-criminal-probe-bitcoin-market- manipulation

I decided to “bite my tongue” and simply re-think the process as this bile-inspiring headline came into view. Gata’s Bill Murphy and I have been exchanging views on this since 2006 and it should be added that before I decided to expunge my opinions tonight, there was ZERO commentary in the blogosphere on the ZeroHedge article. To use the phrase “awe-inspiring” would be an understatement; to use the phrase “RCMP- inspiring” would be appropriate. I have watched the bullion bank traders play with gold and silver “pricing” for years by way of blatant interventions that have zero “outcome risk” because they simply are invulnerable to financial harm while under the umbrella of the U.S. Treasury or the central banks of the “rest of the world”.

You readers of my commentary are privilged to obtain the musings of a truly mad human being that has actually been DRIVEN to madness by the actions of the global banking community. Here is the critical path to understanding how the banks rule EVERY FACET of the “money business”. Why is it that the banks are suddenly launching a “criminal probe” into “Bitcoin Price Manipulation” when they have ample evidence, extremely well-documented by all of my fellow GATA members, of a total criminal and fraudulent conspiracy to suppress prices for the precious metals? Who, exactly, are the people behind the DOJ that are insisting that Bitcoin be “probed” while precious metals have been “RAPED” since 1981? If you are able to assist me in delivering “answerability” to this series of inquiry, you arise as the supreme winner and take away the prize.

The other day I wrote about how tampering with the natural order of things usually results in dire outcomes as unintended consequences prevail 100% of the time. Looking at the manner in which government planners implement programs designed to improve the quality of life for its citizens, what leaps off the page is that government does not know more about the environment than Mother Nature. To wit, every time the government intervenes in anything in an attempt to improve outcomes, be it in city planning, highways, ecology, or finance, they fail. They are notoriously poor visionaries with little or no effectiveness in anything other than running re-election campaigns and where they are appointed rather than elected, they are even worse (as in garbage collection, road repair, and health care). So when I read that the DOJ has decided to launch a probe into Bitcoin “price manipulation”, I want to hurl my computer into lovely Lake Skugog.

Of note this week is the all-reliable notion applicable to only the precious metals markets that unlike most other technical set-ups in all other markets, “breakouts” are to be sold and “breakdowns” are to be bought. Last week we had a severe technical breakdown with the all-important $1,300 level being smashed and a low on Monday of $1,281.20 as the Large Speculators puked out their longs as the Commercials covered their shorts. I tweeted at the time that I was going long silver and I did so on Tuesday and Wednesday by opening option positions for July expiry in SLV. As you know, I look at the Gold Miners and Silver as confirmation tools for gold’s technical set-up and you can see that, despite weakness in the entire complex, both the HUI and silver have been outperforming gold since March which gives credence to the belief that the second half of 2018 is going to be a spectacular one for the PM’s. In fact, that technical “breakdown” under $1,300 may have just been the last chance to upload gold with a 12-handle for a very long time and possibly for eternity. Now, I don’t want to hear a bunch of angry flamers if we get a modest dip below $1,300 next week as this U.S. dollar strength sends the algobots into “berserk mode”.


You will recall my discussion of the Gold-to-Silver-Ratio (“GTSR”) from a few weeks ago when gold was challenging the $1,365-1,370 “resistance zone” (what a joke), and I was debating whether or not to add to my longs or whether to simply short the GTSR at around 82. I must have had fifty emails asking why on earth I would short gold with the “breakout” looming on the horizon. Well, I opted to bet on silver outperfoming gold rather than on the precious metals continuing their advances and what then transpired was the waterfall decline in silver from $17.38 to $16.04 and the crash in gold from $1,365 to $1,281. However, the GTSR dropped from 81.75 (where I shorted it) to the current 78.66 level for a gain of 3.77% versus what would have been fairly severe losses. I am now considering lifting the gold short but want to see if the RSI for gold has one more dip next week.

As for the junior gold/silver exploration issues, I always reduce exposure in the weeks leading up to the big PDAC held in Toronto each March because the seasonality trade for the juniors truly does begin at the end of February, barring any new discoveries or sustained advance in precious and base metal prices. Unfortunately, there have been some interesting drill intercepts reported in the past couple of weeks with Goldsource Mines reporting 123 metres of 1.92 g/t gold in Columbia and our old namesake Tinka Resources reporting 32 metres of 9.6% Zn with absolutely zero effect upon either share price. In fact, Tinka hit a 52-week low immediately after the release and is down 44.52% YTD despite having raised a pile of money at $.48 per unit. I only write this because the results that have been disclosed in the past eighteen months have been nothing short of impressive but in today’s wold of valuation and trading, you need a great deal more than simply good results to advance a stock. You also need a market. Right now, the appetite for junior explorers is weak (at best) and non-existent (at worst) and until we get a big advance in the underlying commodities, we are going to be challenged. (Nevertheless, I am continuing to assist Stakeholder Gold Corporation with their $2m raise at $.25 and urge anyone that is interested to email me or call me at the locations provided below. We have to drill Goldstorm in June!)

COT Report

This week was basically a non-event. The silver market remains baffling with little upon which to comment other than the GTSR which we covered earlier.


Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in Marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

A gold nugget can be worth three to four times the value of the gold it contains because they are so rare.