Yep, it's that time of year again, when the seasonals ( fundamentals) are moving in favor of the precious metals. There are several sources for seasonal charts, Goldeagle is one, Kitco another, but here is a simple copy from Adam Hamilton...
And the link to the Seasonal story.......
Now, if we can agree pms's seasonality is bullish, then next is to identify which stories are worth following. In the Main index of senior type producers, there are some good choices with charts that show promise should a breakout occur in either the underlying metal or the SP itself. Goldcorp, Angico Eagle, Iamgold, KInross, Alamos are a few. In the junior realm, the small cap stuff has some interesting candidates in the Silver arena. Looking at purely resources and metals that at some point should move to challenge their historic highs.... ( silver is the only metal that has not reached it's historic high of $50) Currently just over $14. And please no debates on the Hunt Bros, as their position was small compared to the concentrated position today of 3 bullion banks. So, if the metal has loads of room to go, and some of these tiny caps are sitting on millions of ounces, what is the upside?
Bear Creek - is the 2nd largest undeveloped silver deposit in the world today with 362 million ounces of silver in Peru. Also, it has billions of ounces of lead and zinc to boot. Current SP is aprox $1.82 and Aug.28th it closed down some 2.67% and is trending upwards in a channel touching the oversold part of the channel. Simple stuff and easy to read....Good support lies at the 200dma
Next on the list is Orko Silver, which I had mentioned some time ago. Orko lists the average grade per tonne as 201, which makes it the 2nd richest grade of an undeveloped deposit in the world. The 3rd best grade in silver deposit is 111 grams per tonne. Quite a drop. So, a fabulously rich grade and as of yet, still undetermined just how many total ounces. Pan American has entered the picture as joint venture partner is is responsible for all the field work, drilling and exploration going forward. And is also totally responsibile for the cost. Pan American has a sterling history of production and building mines, so Orko's deposit, once drilled out, could contain 250 - 300 million ounces before PAA gains it's share. ( only when PAA brings the deposit into production does it earn it's share) On the chart.....it is shorter term downtrend which was broken to the upside Aug.28th and has some corresponding upturn in MACD and RSI oscillators. An important fact was the accompanied volume, which was above average, which makes the close price more reliable. On the day, it logged a 9.52% gain with a close near its intra day high which is another positive.
Unlike the first 2 exploration plays, this one is a producer and warrants has some cash flow and production. IN July, it broke above it's 50dma and 200dma and held it well. Support sits underneath the current closing price of Aug.28th of .58 cents. on it's website, GPR states it is "one of the fastest growing silver producers in Mexico" and has 100% ownership in 2 operating mines. As you can see, in July it's price hit a low at aprox .45 cents and has trended upwards since. It has closed above it's 200 and 50dma and support looks strong underneath. Volume could be better, but it is still summer.
So there you have it, 3 junior plays in silver and seasonally, early for participation. Is precious metals the place to be or are there other areas. Unfortunately, only a crystal ball can answer that accurately, but with the 4th quarter approaching, it may not be a pleasant time for the USD and fundamental support for a rally or even holding the current .78 on the USDX is slim to none imho. Despite the predictions of letter writers, the USD has no hope of a sustained rally, because fundamentals always trump technicals in the long run. So that is very bullish for commodities and especially precious metals. And silver does have a concentrated short position on the Comex, so unwinding that won't be easy. It is said by silver experts, ( Ted Butler) that the short position on the Comex Silver is equal to all the above ground stocks of silver in the world. A google of his writings will tell you more.
Be aware that I do own Great Panther and Orko Silver shares.
cheers and good luck