Stock market this week
Latest update: 08-12-2019 17:37
No week expectation but a gold and silver mine update
It made little sense to make a week forecast. All important events for this week are already in the monthly forecast. The gold mine website was launched a year ago.
We started with the silver mine website six months ago. That is why, instead of a weekly forecast, we looked at the results for those gold mine and silver mine shares.
The gold price
A year ago the gold price was 1250 dollars. In the first half of 2019 an increase to the resistance at $ 1350. In mid-June, the gold price broke through the 1350 dollar resistance. That was a very important step. Because in recent years, the gold price had never succeeded in breaking through that 1350 dollar resistance.
After the breakthrough, a strong rise followed until 1560 in early September. The cause of the rise in the gold price was less economic figures and more stimulation from the FED and the ECB. In addition, some trade war fear.
Since Trump's announcement that there was a first-phase trade deal, that fear of trade war disappeared from the gold price. The gold price therefore had to take a step back to just above 1460 last Friday.
If things still go wrong with that trade deal, the gold price is quickly over 1500 dollars again. The trend of economic figures is still deteriorating further.
That in combination with more (necessary) central bank stimulation next year will increase the gold price even further. I therefore expect that with the gold price next year we will go to the old top from 2011 at 1900 dollars.
The silver price
The silver price always follows the gold price. However with a small delay and a huge exaggeration. Six months ago the silver price was $ 14.75. After that the silver price rose very fast. At the beginning of September the silver price was 19.54 dollars.
When the gold price after the summer on the first phase trading deal announcement began to fall, the silver price fell even harder. Last Friday the silver price was 16.57 dollars.
For next year I expect that the silver price will also reach the old top from 2011. That top is at a silver price of 50 dollars.
The 7 gold mine shares in which I invest + 24%
Summer 2018 I saw that there were big opportunities with gold. With the ETF website I often bought gold or gold mine ETFs. However, with individual gold mine shares, I saw even greater opportunities. That was the reason to start a separate gold mine stock website that started exactly a year ago after a long research.
In the beginning, gold mining stocks did not do much. That changed when the gold price broke through the 1350 dollars. Last summer, most gold mining stocks had risen enormously.
After the first phase trading deal announcement, many gold mine stocks had to take a big step back. That has considerably depressed returns. The average annual return (starting one year ago and now one year later) of the 7 gold mine shares has come to 24%.
There has been a change of gold mine share in the past year. Iamgold was sold with a 12% profit on 27-9-2019 and another share was bought back for it. Of the 7 shares, 2 are considerably in the minus.
One company in the portfolio for a year has recently raised extra money through the issue of new shares. However, I continue to keep the share in portfolio because with the extra money they want to accelerate projects. That share issue is now in the price so it may start rising again in the coming months.
If that extra gold production starts, the share will rise much faster. But then we are at least half a year or a year later.
The other share in the minus is the newly purchased share on 27-9-2019. It is a share of just a few cents and then price increases and decreases in percentages quickly appear large.
I bought the stock because the company indicated at the end of this year that it would be able to upgrade the proven gold amount of 1.7 million ounce with bores and a report to 2 million ounce.
Already at the end of 2020, the 3 million ounce needed to start a gold mine was thought to be reached. It works like this. They start drilling. On the basis of those drilling results, it is then possible to drill in even more places.
Once all drilling results have been received, an official report is drawn up according to a standardized method. In that report you can read how much gold is in the ground. The drillings have been completed in a few places.
At the most promising location, however, it turned out not to be about less than 3 kilometers of gold, but more than 7 kilometers. They have therefore opted for more drilling and to raise extra money for this.
A small delay, more money needed and a lower gold price have lowered the share considerably. They are now continuously drilling with 3 drilling installations and expect to be able to complete this by mid-December. The official report must then be drawn up.
That is probably already expected next January. Because of the larger area, there is a good chance that they can already detect considerably more than 2 million ounce of gold.
Which means that the 3 million ounce needed to start a mine can be reached well before the end of next year. The closer one gets to the 3 million ounce (start gold mine), the more the stock will rise.
The other 5 gold mine shares in my portfolio are all quite well in the plus. The best-performing share has a plus of more than 80%. If you want to know in which 7 gold mine shares I invest and why: click here
The 7 silver mine shares in which I invest + 39%
As gold rises, silver will follow in the superlative. Reason to start the silver mine stock website six months ago in early June. The first months went very well because the silver price rose very fast.
After the first phase of the trade deal announcement, many silver mine shares had to take a major step back. Still, a return of 39% remains. Also in just half a year.
The Pan American Silver shares were sold on 2 December with a profit of 66%. The share purchased for that instead increased by 31% last week.
A share in the portfolio is a little bit in the minus. A silver mine is being started there. If production is there, the share will naturally increase.
A share is quite substantial in the min. 2 mining accidents and problems with a newly purchased gold mine. The purchased gold mine had to boost the results. However, production was disappointing and the objectives had to be lowered. That was bad.
Those mining accidents are one-off setbacks, which will no longer bother the stockprice. They will naturally do everything they can to get the production at that gold mine higher again. If it succeeds then the stockprice will recover quickly. Reason for me to keep the share in portfolio.
All other 5 silver mine shares are in big plus. The best-performing share is just under 90%. If you want to know in which 7 silver mine shares I invest and why: click here.
The gold and silver prices have started this year at the most powerful part of the bull market. The graphs from before 2011 clearly show that short-term relapses, such as the past few months, are quite normal.
I expect that the gold price next year from $ 1600 will face a very strong rise. By the end of next year, the gold price will be at $ 1900.
If gold and silver prices rise next year, gold mine and silver mine shares will rise extremely fast. The period 2009 - 2011 teaches us that gold mine and silver mine shares then increase by many hundreds of percent.
As the ultimate price target for the gold price, I still have $ 2700 and can be reached within 4 years.
In the past year I have changed my share little. That will happen more often from now on. Due to the higher gold and silver prices, many companies are accelerating their projects. Suddenly there is much more dynamism at those gold mining and silver mining companies. That provides many more opportunities.
However, I see a spread between several shares as necessary. The above results also show that. Both in the 7 gold mine and 7 silver mine shares, 2 in the minus and 5 in the plus. The average result, however, despite the recent falls in the gold and silver price, is still very nice.