Saturday, 24 August 2013

Precious metals and miners make a U-turn

After grinding lower the first week of August, precious metals made a U-turn. The sentiment change sent the heavily depressed miners soaring. HUI/Gold made it to 0.20 last week and now stands at 0.195. (for fresh graphs, check the GoldMinerPulse page). While we could barely imagine any value below that 0.20 threshold until recently, we're glad the gloomy days are behind us (at least for a while). Last Friday gold peaked above $1400 intraday for the first time since early June.
Silver has been rallying even more than has the yellow metal. After peaking at 67 the gold/silver ratio is sliding to less extreme levels: gold silver now stands at 58, after another 3.8% surge of the silver price. The "performance disparity graph" on the GoldMinerPulse (GMP) page clearly shows that despite the onset of a revival, we are miles away from anything remotely normal.

Long term performance of Miners and explorers included in the GoldMinerPulse database, sorted from loss to gain since November 19, 2010. Click the graph to see its true size.

Eleven components in that GMP database are down over 90% since I started monitoring performance back in November 2010. This implies a permanent impairment that a powerful rally won't heal. Only twelve miners (out of 99) in the database are above their break-even point, though gold is up a few percent since fall 2010. The median miner (with an equal number off better and worse) now is down 63.3%.

Individual miner performance can be checked on the page: Miner's performance. It provides names to the above anonymous ranking.

Junior miners and explorers

Since August 2, the contributor driven explorer and junior spreadsheet” recovered and almost halved its accumulated loss. The list now stands at a 17.25% loss. Cap weighed that translates to a loss of 15.3%. Some of the "heavyweights" are recovering better than the "nanocap" penny stocks. Since August 9 (last update of the spreadsheet), we are up 10.8% on average and 13.9% cap weighed. 17 list components are up against only two down with two more unchanged.
Last week four miners changed loss for profit since inclusion: Argonaut gold, Ivanplats, Sandstorm Gold and Timmins Gold. We now have six list components up since inclusion against 14 down, with Platinum Group Metals at break-even. There are pretty impressive gains for Aurcana, Romarco Minerals and Oceana Gold. These miners significantly reduced their loss incurred over the first six months of 2013.

Leveraged miner ETF's

Direxxion again made a reverse split on NUGT. This 10:1 consolidation comes a little late. The onset of the PM miner recovery sends NUGT soaring. Over the long haul, NUGT still is down well over 90%. The shares of the 3x bear PM miner ETF, DUST, were split in 2. Again fairly late as the DUST ETF is bleeding on the miner recovery. The long term profit (since Oct 2011, in the above spreadsheet) on DUST is down to 36%. 

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