Hello and good Sunday to you. Here are the links of the week.... 
 

Gold Stocks Remain in Position to Rebound
We provide a few charts (seen by you before) and reiterate our view that the miners are likely to rally into or in 2016. 
 

US$ Forecast
Posted several days ago. Our rough forecast for the US$ in 2016. 
 

Fund Managers December Asset Allocation
From the Fat-Pitch Blog. Actionable information in this post.   
 

Credit Market Update
The Macronomy blog takes a look at developments in the credit markets and the opportunities that may arise. Some high level analysis here and fantastic charts. 


Markets Underestimating Inflation?
From economist Scott Grannis' blog. 


Falling Dominoes
Great post from Steve Saville. 


Note: If you come across anything worthy of being included, feel free to send it my way!





Premium Snippets 



Chart 1 shows the updated Gold Stock Bears analog. 

Put the 1996-2000 bear market on the same scale as the current bear market (as done below) and it ended in late February 2016, or in about two months. That goes for the BGMI, HUI or any other gold stock index.
 

Chart 2 shows the longest bear markets in Silver in terms of time.   

We have shown a similar Gold chart in the past as three of Gold's bear markets (in terms of time) lasted 5 full years. The three other long bears in Silver all were shorter than the current bear in terms of price. This chart argues that its possible Silver could make its low and then consolidate for a while before moving higher in earnest. Look what happened at the end of the 1998 to 2003 bear. Silver bottomed in late 2001 but really didn't begin to rise dramatically until 2003. The same thing also happened in the late 1970s. 



 



The coming end to the precious metals bear market may be different than 2008 and perhaps similar to the 2000-2001 bottom. The 2008 bear ended in a crash. Everything rebounded dramatically. The most speculative areas of the sector rebounded immediately. The 2000-2001 bull market bottom was different. Miners bottomed first. Then Gold, then Silver. Also, as I just noted above, Gold led Silver after the bottom in the mid 1970s as it did so after the 2001 bottom. That is the bad news for Silver. There is a chance it could lag the sector. The good news is Silver popped 70% to 90% within 12 months after those other three bottoms (in the chart).

Something similar could also happen with respect to the various groups of mining stocks. Some should recover faster than others. Quality has begun to bifurcate. I chart stocks against Gold and against the sector to get an idea of the leaders of 2016-2017. Their relative strength in recent months and quarters is a hint. Obviously, the stocks we own and follow we think will be the leaders. One thing we can share is we think silver stocks and exploration stocks are at risk of lagging a sustained recovery, if it comes in 2016.

In TDG #444 a 28-page update we included an updated report on a company whose primary asset appears to have strengthening fundamentals due recent macro developments. We noted one of them last week: lower energy prices. Big open pit mines require lots of fuel. For this company, fuel amounted to 30% of its cost and fuel is almost 25% lower then budgeted in a recent study. That is close to a 10% reduction in the operating cost.

To conclude my pontificating, miners may continue to whipsaw and go nowhere until January. Personally, I'd love to see Gold test $1000 but GDX and GDXJ continue to hold their lows (5%-6% lower than Friday's close) or even give a false break lower. That scenario would setup a larger rally in January/February as you'd have Gold bouncing from $1000 instead of $1040. We plan to increase our allocation but leave plenty of room for more buying in Q2 or Q3 2016. We suspect a US$ breakout above 100 could push Gold below $1000 and thus create the best buying opportunity of 2016. 


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