Gold Miner Pulse - Friday March 13

I like to ‘isolate this version from the thread of continuously updated blog pages. The abrupt reversion of the gold bull trend and the implosion of all ‘white precious metals’ indeed is a sudden discontinuity.

Whereas on Friday, stock markets enjoyed a bear market rally after the corona virus frenzy caused a worldwide slide, precious metals continued their downward spiral. Miners were slaughtered. Not only they had been retreating with common stocks while precious metals upheld or even advanced, now miners again leverage down the precious metals decline. From 52 weeks high to fresh 52 weeks low in little over a fortnight.

The blog page is monitoring whether trends are persisting. Therefore the graphs posted here are showing daily observations year-to-date or with a 6 months time horizon. For the long term reference frame, see the articles referenced at the bottom.

What preceded:

The HUI/Gold ratio kept range bound as did the yellow metal near $1500/oz. The early Nov plunge of gold didn’t bring about a catastrophic collapse of miners. Yet persisting gold weakness is preventing any progress. As we are nearing the end of 2019, enthusiasm for miners has returned, even while the yellow metal was meandering below $1500/Oz. After some hesitation gold rallying above $1500/Oz again propels miners. HUI/Gold ended 2019 on a high, but gold rising because of the political tension after the elimination of Qassem Soleimani did not inspire miners. HUI/Gold slid to and broke below its 50 dma. The Vancouver Resource Investment Conference didn’t inspire any recovery either. The yellow metal convincingly breaking above $1600 curbed the trend but the Corona virus frenzy slashed miners and precious metals. HUI/Gold plunged both beneath the 50 dma and the 200 dma. The surprise 50 bp rate FED rate cut launched gold higher again with miners reviving despite a tepid stock market response. Below you find the graph of last week (March 6)
 

This week

Silver miners retreated with the broad market, despite metals firming ‘for the wrong reason’ (political tension after the elimination of the Irani general Qassem Soleimani). SIL/silver slid below its 50 dma. Investors are disappointed that silver again lagging gold, with the Au/Ag ratio again in excess of 86. The Vancouver Resource Investment Conference didn’t lead to any recovery either. Silver regaining $18 brought some improvement but the Corona virus frenzy slashed both miners and precious metals.

This is where we stood on March 6, 2020.
 

Who was to predict silver to slide from $18.60 to $14.69 on less than three weeks time? The abrupt slide aggravated this week. Silver miners imploded, reaching bear market valuation as is shown on the new graph.

1. Miners relative to precious metals: a tactical approach; (July 2, 2012)
2. Miners relative to precious metals: An update on 2012;  (Jan 13, 2013)
3. Anatomy of a gold miner bear market (Dec 30, 2013)
4. Three year slide of precious metal miners (Dec 31, 2014)
5. Gold miner bear market starting its fifth year (Jan 3, 2016)
6. Precious metal miners relative to metal prices (Dec 31, 2016)
7. Precious metal mining in 2018: a dark cloud with a silver lining and 2019 outlook (29 Dec 2018)
8. Gold Miner Pulse 2019 (half-year update) (Jul 1, 2019)
9. Precious metal and miner 2019 overview and outlook for 2020. (Dec 31, 2019)

During 2011-15 and even over the long haul, the relative performance of mining majors to the precious metals they produce was disappointing for major gold miners, even while the metals were in a solid uptrend.  See: Gold miners: three decades for naught or Decades of underperformance