ann: trial mining update, page-69

Hey Bruce,

Yes a very enjoyable game last night even though only one goal was scored, but we had multiple exciting attacks on goal.

Some good news for the sector we are in (IMO that is).
An influential commentator out of a large multinational investment bank has turned bullish on gold and gold stocks.
That is particularly interesting because this guy has been very negative on gold and gold stocks for at least 2-3 years.
His commentary is not meant for us ordinary folk so sorry but I don’t have any links to post.

He commented on some similar points to those I posted yesterday and he mentioned the fact that so many have turned bearish and have sold out of gold and gold stocks. The COT chart I posted yesterday showed the small specs are no longer net long- a rare event. He also included a chart on gold seasonality that was different to mine in monthly numbers (maybe looked at a different time period) but also showed that the Jul-Sep qtr is the strongest seasonally.

He also mentioned that tax loss selling on gold stocks would have been particularly strong this year because of how far down they are and that plenty of investors would have strong profits in the banks etc they need to offset.
He also suggested most gold stocks are well below their worst case scenario valuations (whatever their worst case is- assumptions and analysis were not shown).
He talked about an AUD of 85c which I hope to see and if that eventuates, POG in AUD would be back up to $1600 even if USD gold stays flat. Rather than a flat POG though gold seasonally usually rises for the next 3 months followed by a slightly down Oct but then further strength for the remainder of the year so odds are in our favour that we might get a double whammy of lower AUD and higher US POG. I still won’t be surprised with a counter rally in our dollar but the attempt over the last few days appears to be weak so far and hopefully it fails.
I follow this guy because he is often very good with his calls with the broad market. Shame I didn't follow his bearishness on gold more closely over the last few years but I see his switch from strong bear to bull as very positive. His call is for the next few months so don’t get pissed with me if we have a few more down days! Tax loss selling generally does seem to end before the end of June so with some stocks we may already be over it- others might go through another week yet but that’s a gamble trying to time it that closely. That variance in when a stock has completed its tax loss selling might be what we are seeing today with PRU down 8% on a new low but KCN up 4% and up 16% from its May low. SLR is 32% up from its May low and ABU is 13% off its low.
If this guy is now bullish on the producers with most of them on slim margins, then I am very bullish on ABU with its likely very fat margins.
More charts on gold seasonality below (the one produced by the guy mentioned above showed strength skewed earlier in the period with July the strongest month but still showed the Sept qtr as the strongest.
Ignore the red circle in the top chart which includes Jun and leaves out Sep, and look at Jul-Sep for the qtr we are moving into.
Aug and Sept are traditionally stronger than July so hopefully the way things play out for ABU in particular are;
late Jun through July rally post tax loss selling, then this following through in Aug/Sep on the back of seasonal strength in gold price. News from trial mining co-incides with the entire period hopefully followed by granting of ML.
Those are the seasonal patterns, so its a game of probabilities on timing now lining up with still very strong fundamentals.