Bumble

The WSB crowd did a good job of short-squeezing an overly-shorted stock and making money out of it. If the reports are correct, hedge funds lost $40 billion, so applause is due. That is how markets work. But you have to learn to know when to take your profits. Maybe GME was cheap at $20 and shouldn't have been shorted at $30, but it is certainly not worth $200. It will go back to $30 to $40 soon enough. Too many of the Reddit crowd are naive traders who are playing with tools they don't understand.
Last year on a Reddit forum I saw a post saying: I bought this call option on a stock and the stock has gone up, but my option has gone down, why is that? They posted a screenshot showing the contract note. Someone replied pointing out that they had sold the option, not bought it. This highlights two important points. There are naive traders who don't even know whether they are buying or selling. And there are platforms like Robinhood that are letting these naive traders do risky things like write options, which have potentially unlimited downside.

The WSB crowd did a good job of short-squeezing an overly-shorted stock and making money out of it. If the reports are correct, hedge funds lost $40 billion, so applause is due. That is how markets work. But you have to learn to know when to take your profits. Maybe GME was cheap at $20 and shouldn't have been shorted at $30, but it is certainly not worth $200. It will go back to $30 to $40 soon enough. Too many of the Reddit crowd are naive traders who are playing with tools they don't understand.
Last year on a Reddit forum I saw a post saying: I bought this call option on a stock and the stock has gone up, but my option has gone down, why is that? They posted a screenshot showing the contract note. Someone replied pointing out that they had sold the option, not bought it. This highlights two important points. There are naive traders who don't even know whether they are buying or selling. And there are platforms like Robinhood that are letting these naive traders do risky things like write options, which have potentially unlimited downside.

I wonder about how up-to-date those short figures are. Bear in mind that funds can trade large amounts of shares off-exchange. Even if they are correct, it may be that the original shorts have covered their positions and others have moved in. I don't care to speculate in retailers, because I know nothing about them, but if I did I would rather be short than long GME at the moment. If the shorts have deep enough pockets, they will just ride out the current price mania and wait for normality to return.
Also, the number of shares in a company is not a constant: GME might decide to issue new shares in order to extinguish their debt. Nobody could really blame them if they took advantage of the opportunity - it would be the prudent thing for any company to do if they found themselves with an inflated share price.
That is where silver is different. We know the rate at which it is produced, and it can't be printed. A company can go bust, but demand for silver will not go away. The silver price is held down by shorting, but like gold, there is pressure on physical supply.

On Sunday, there was a large sale of gold which took the price down to $1800 temporarily, taking advantage of the illiquidity while the markets were closed. Another happened first thing Tuesday, before Comex open, again taking the price down to $1800. Both times the price fall did not stick and gold recovered to close up. This kind of movement is usually bullish. It either indicates a failed attempt to drive the price down, or a successful attempt to get the price down temporarily to wash out weak hands and remove stop loss positions.

On Sunday, there was a large sale of gold which took the price down to $1800 temporarily, taking advantage of the illiquidity while the markets were closed. Another happened first thing Tuesday, before Comex open, again taking the price down to $1800. Both times the price fall did not stick and gold recovered to close up. This kind of movement is usually bullish. It either indicates a failed attempt to drive the price down, or a successful attempt to get the price down temporarily to wash out weak hands and remove stop loss positions.

On Sunday, there was a large sale of gold which took the price down to $1800 temporarily, taking advantage of the illiquidity while the markets were closed. Another happened first thing Tuesday, before Comex open, again taking the price down to $1800. Both times the price fall did not stick and gold recovered to close up. This kind of movement is usually bullish. It either indicates a failed attempt to drive the price down, or a successful attempt to get the price down temporarily to wash out weak hands and remove stop loss positions.

Nah. That guy is clearly an amateur. Check out this video of day trader Stephen Kalayjian for a real rig.

Nah. That guy is clearly an amateur. Check out this video of day trader Stephen Kalayjian for a real rig.

Bear in mind that gold competes for investment money with other asset classes. Investors are expecting the USA to spend lots of money on infrastructure and this will be good for many stocks, especially in the construction, manufacturing and basic materials space. Add to that the fact that a lot of people are piling into BTC because it has doubled in a few weeks and the sky is the limit. So investors are leaving gold behind, at least for now. Gold will probably do better if price inflation starts to pick up, because the central banks will almost certainly keep interest rates low.

Bear in mind that gold competes for investment money with other asset classes. Investors are expecting the USA to spend lots of money on infrastructure and this will be good for many stocks, especially in the construction, manufacturing and basic materials space. Add to that the fact that a lot of people are piling into BTC because it has doubled in a few weeks and the sky is the limit. So investors are leaving gold behind, at least for now. Gold will probably do better if price inflation starts to pick up, because the central banks will almost certainly keep interest rates low.

There is an interesting recent video on Youtube called "Trouble in Paradise as LBMA and COMEX Challengers Emerge" from a channel called GoldSilver Pros. https://www.youtube.com/watch?v=1x4ysOBdsmM
It is about half an hour long. If you don't have time to watch, here is my own brief summary.
According to a Reuters report (https://www.reuters.com/article/gold-lbma-exclusive-idUSKBN27S0NK), the LBMA has sent a letter to a number of countries that are involved in bullion dealing, expressing concern that they are not doing enough to prevent gold being used for money laundering and/or that they are not being sufficiently concerned about whether their gold is being sourced unethically. Reuters report that they believe the letter is specifically targeted at UAE, because Dubai has become a major trading hub for gold and has many refiners that are not LBMA registered. The unspoken threat is that the UAE might be blacklisted by the LBMA if they fail to comply with their standards.
However, the LBMA is just a trade body and has no authority as a national or international institution. Ahmed Bin Sulayem of the Dubai Multi Commodities Centre responded with a post on LinkIn (https://www.linkedin.com/pulse/raising-bar-ahmed-bin-sulayem/) accusing the LBMA of monopolistic practices and double standards, and suggesting that the gold industry would be better served by a new international regulatory body.
The Comex, which during 2020 was supported by the LBMA when it was struggling to source physical gold, has joined in by delisting the UAE based Al Etihad Gold Refinery and withdrawing eligibility of its bars. (https://www.cmegroup.com/notices/marget-regulation/2020/07/MKR07-31-20C.html)
The presenter believes that the reason behind this spat is that the forthcoming implementation of the new Basel banking rules, including the Required Stable Funding provisions, will put pressure on the LBMA, because it lacks liquidity. Evidence for this is that in 2013, the European Banking Authority failed to rank gold as a High-Quality Liquid Asset (HQLA) because the LBMA was unable to provide sufficient data to demonstrate the liquidity of the London gold market.
The LBMA itself published a note (http://www.lbma.org.uk/_blog/lbma_media_centre/post/net-stable-funding-ratio-update/) criticising the new funding provisions and claiming that they will result in increased settlement costs and reduced market liquidity. This is because the required Net Stable Funding Ratio (NSFR) does not account for *unallocated* balances of precious metals, which is the predominant form in which the LBMA holds gold.
The presenter's opinion is that the LBMA and the Comex may lose their grip on the international gold trade, and that international trade is likely to move towards the Asian and Middle Eastern countries.

The gold price was driven down hard first thing. It may have been to get a low price on the London a.m. fix (at 10.30 GMT), or it may just have been to get a low start to the day. The low price didn't hold, but it didn't recover fully either.

Just noticed that GCL.L has ongoing charges of over 4% per year. Bit pricey. Their biggest holding is Nexgen Energy (NXE) which has risen sharply recently and probably explains most of GCL's rise.

GCL up strongly again today.
Another interesting company is MP Materials Corp. (MP) which is an American company specialising in rare earth metals. Many of these are needed for renewable energy. Most currently come from China, but there is likely to be  a push towards local production, if only to protect the supply chain.

Crux has a recent interview with Bushveld Minerals here:  https://www.youtube.com/watch?v=fX4pIRRzB9Q
 

A slightly different tack is RE Royalties Ltd. (RE.V). This is a small company that owns royalties in wind, solar and hydro projects. I've been watching it for a while and may jump in at some point.

Data from 2016. It is interesting how even 40 years on, the countries of eastern europe have not recovered from the ravages of communism.

Data from 2016. It is interesting how even 40 years on, the countries of eastern europe have not recovered from the ravages of communism.

Data from 2016. It is interesting how even 40 years on, the countries of eastern europe have not recovered from the ravages of communism.

Here we are again in the last week of an even-numbered month. This is when the big traders push the price around to get their futures contracts and options into the money. I'm not too worried about the price of gold or silver. Stocks, on the other hand, may well see some tax loss/tax gain selling before the end of the year.

It's a matter of timescales. Whoever wins the US election, there will be a lot more stimulus spending and a lot of debt monetization, and some of this money will find its way into the stock market. On a shorter timescale (between now and the year end) there may be a lot of tax loss/tax gain selling. Biden might increase capital gains tax. It only needs US investors to think that he might, and they will realize any gains they currently have before the year end to lock in a lower tax rate. This would cause a fall in the next two months followed by a rise in January when the buying back starts.

BP and Shell are all about the price of oil. It has been stuck around $40 for a while now. For as long as it stays there, oil companies' woes will continue. You should not expect a recovery in the share prices unless you believe that oil will ruturn to at least $60 or so. At present, there is still a glut in production, and stocks of oil reserves are growing. The Saudis and the Russians have been cutting back a little, but both are under enormous fiscal pressure and will increase production on any sign of increased demand. Meanwhile the plague has depressed economic activity and reduced demand. A game changer would be the USA deciding to ban fracking, but Biden has said he will not do that. It is not really a happy time to own oil stocks, though like others here I will keep a close eye on them with a view to buying back in.

Does anyone know why Anglo Pacific Group (APF.L) is so cheap? I bought them two years ago at about 140, and then sold at about 190. They are now back down to 105. This is a stable, reliable company on a P/E of 7, paying a dividend of over 6%. It is a royalty company with assets in base metals and potash. I understand that it owns thermal coal royalties and these are of diminishing value, but even so, this seems ridiculously cheap for a royalty company. I'm looking to buy back in.