Gold futures for June delivery closed down 2.92% on the Comex today. The metal closed at $2343.40 an ounce. The drop came on a lessening of fears that the exchange of attacks between Israel and Iran would quickly lead to a wider Middle East war. And on growing sentiment that the Federal Reserve isn’t likely to cut interest rates soon. The drop in the gold contract for June delivery was the largest since February 3, 2023 when it fell 2.8%.
After Israel and its allies (with the help of some Arab states that don’t want to see a wider Middle East war and who aren’t thrilled with the growing power of Iran and its proxies) succeeded in shooting down almost all of the drones (170), ballistic missiles (120), and cruise missiles (30) launched by Iran against the country, will the two sides both declare victory and claim that honor is satisfied or will one or the other escalate the war with another round of attacks? As of early Monday trading in Asia, the oil and gold markets have reacted with concern but not panic. Gold, up 13% already this year to a record above $2,400 an ounce, moved higher but the gains were relatively modest. Spot gold climbed 0.8% to $2,361.92 an ounce as of 6:20 a.m.in Singapore. The global oil market opened to the upside but by less than 1%. And prices have been steady to slightly weaker since then.
Here are the first 8 picks for my GREATER Growth Stocks Special Report. More on the way.
I’m hearing some chatter that says bond traders and analysts are stepping aside from the bond rally. Or are planning to do so. Their argument is that the move has been too far, too fast. Specifically, I’ve heard talk of selling if the yield on the 10-year Treasury hits 4.00%. On Friday, the yield was 4.20%. So I’d be watching to see if anything like a bond rally pause or reversal materializes during the days ahead of the Federal Reserve meeting on December 13
Gold (for February 2024 delivery) was trading at $2087 an ounce on New York Comex today, December 1. That easily beats the old record high of $2051.50 an ounce back in August 2020. The shiny metal is up 12% from $1830 an ounce in early October. The SPDR Gold Shares ETF (GLD), which holds gold, is up 2.53% in the last month as of November 30. History, and the price action on the Gold Shares ETF, tells us that at this point in a strong gold rally, it doesn’t pay to chase gold itself, but it does pay to buy shares of gold miners.
Yesterday, Thursday, November 2, Barrick Gold (GOLD) reported earnings of 24 cents a share for the company’s this quarter. That was ahead of the 21 cents a share consensus estimate among Wall Street analysts. In the third quarter of quarter of 2022, the company reported earnings of 13 cents a share. The surprise was the fourth for Barrack in the last four quarters. But to me other news overshadowed the earnings themselves.
A few days ago I recommended selling positions in the SPDR Gold Shares (GLD) and in the VanEck Gold Miners ETF (GDX) on the grounds that with bon yields rising, gold wouldn’t move higher. (This was all, of course, before Hamas attacked Israel and sent markets running for safety. On Friday, October 13, Comex gold for December delivery was up 3.11%.) So what I am I doing today recommending Barrick Gold (GOLD) as the third pick in my Special Report “10 Contrarian Bargains to Buy Now”?
a lot of individual stocks are cheap right now, I’d argue. 180 of the 500 stocks in the S&P 500 trade now at the same or lower price that they commanded a year ago. And for many individual stocks the performance is even worse. For example, Luminar Technologies (LAZR), a maker of LIDAR safety and navigation equipment for cars, is down 40% in the last three months. Albemarle, the world’s leading supplier of lithium, is off 27% in the last three months. Nidec (NJDCY), a Japanese maker of small electric motors and electric vehicle drive trains, is down 13% in the last three months. I’d argue that these and the rest of the 10 Contrarian bargain stocks that I’m going to recommend in this Special Report share a number of characteristics that have led to their losses over the last few months or longer.
Gold was up 1.9% in trading on COMEX today to $1876 an ounce on war in Israel and Gaza and fears that it would become a wider conflict in the region. I’ve been looking for an exit from two of my gold positions for a while now. And tomorrow is a good exit point, I think.
So what do you do with your portfolio for the rest of 2023? And what’s your best strategy to be prepared for 2024? In Part 1 of this Special Report I laid out the 10 developments that I thought would drive the financial markets for the rest of 223 and into 2024. Today, in Part 2, I’m going to give you the first 2 of 10 moves to take–with as much detail and as many specifics as possible–that you should be making now to position your portfolio for the uncertainties of the last quarter of 2023.
This week’s Quick Pick is First Quantum Minerals (FQVL). I’ve talked about copper as an equity kicker in gold mining stocks in a previous video. Barrick, a huge gold producer, is also a significant copper producer and is looking to expand its copper production. The company is currently in “informal talks” with First Quantum Minerals. Year to date, First Quantum Minerals is up 21% and 34% in the last three months, so it definitely shows good short-term momentum. In the long term, copper demand will see tremendous growth in the global climate change economy, including in electric vehicle production. The other benefit here is copper and, of course, gold is a good hedge against inflation which I predict will continue higher than the Federal Reserve and consumers would like for quite some time. Put copper, with its growth potential, together with gold, with its role as an inflation hedge, in one mining stock and you’re starting to look at something good.
This week’s Trend of the Week is Gold with a Copper Kicker. Going long gold is a good way to go short on the market–gold will go up if the market goes down. Gold mining stocks also have an advantage–an upside kicker–since while mining for gold, the companies also produce a lot of copper. There is growing demand for copper in green energy products like electric vehicles. At the moment, gold stocks are trading on the price of gold alone but miners are adding to copper reserves knowing that it will be a big equity plus. I don’t think these copper kickers are priced into the stocks right now. Newmont (NEM) just purchased Newcrest, which has big copper reserves in Australia and Papua New Guinea, making Newmont not only a global gold leader but also a major producer of copper. Barrick Gold (GOLD) has also increased its copper production substantially. Gold is a great way to hedge the market in the short term, but these copper kickers have long-term upside potential as the cost of copper continues to rise.
