金鉱株の冬ラリー 4 by Zeal
最後の2段落だけ、訳を入れておきました。
Gold Stocks’ Winter Rally 4
Adam Hamilton November 1, 2019 3158 Words
This year’s
dawning winter rally has great upside potential despite the big
recent surges in gold and its miners’ stocks. Gold’s decisive
bull-market breakout left traders way more excited about this sector
than they’ve been in years. The resulting bullish new-high
psychology should feed on itself leading to growing capital
inflows. Gold stocks still have a long way up to go to normalize
relative to higher prevailing gold prices.
最近のゴールドと金鉱株の大きな上昇にもかかわらず今年の冬ラリーの潜在力は大きい。ゴールドのブル相場ブレークアウトでトレーダはここ数年でみてとても熱狂している。結果としての新高値心理の強気が資金流入増加を引き起こす。ゴールドの高値に応じて正常化するまで金鉱株の道のりは長い。
Adam Hamilton, CPA November 1, 2019 Subscribe
Gold Stocks’ Winter Rally 4
Adam Hamilton November 1, 2019 3158 Words
The
gold miners’ stocks have surged in 2019, blasting higher after
gold’s first bull-market breakout seen in several years. That
powerful summer rally left them really overbought, necessitating a
correction to rebalance exuberant sentiment. That grinding
consolidation lower has set them up nicely for their winter rally,
this sector’s seasonally-strongest time of the year. These seasonal
tailwinds will amplify their next upleg.
Seasonality is the
tendency for prices to exhibit recurring patterns at certain times
during the calendar year. While seasonality doesn’t drive price
action, it quantifies annually-repeating behavior driven by
sentiment, technicals, and fundamentals. We humans are creatures of
habit and herd, which naturally colors our trading decisions. The
calendar year’s passage affects the timing and intensity of buying
and selling.
Gold stocks
exhibit strong seasonality because their price action mirrors that
of their dominant primary driver, gold. Gold’s seasonality
generally isn’t driven by supply fluctuations like grown commodities
see, as its mined supply remains
relatively steady
year-round. Instead gold’s major seasonality is demand-driven,
with global investment demand varying considerably depending on the
time in the calendar year.
This gold
seasonality is fueled by well-known income-cycle and cultural
drivers of outsized gold demand from around the world. And the
biggest seasonal surge of all is just getting underway heading into
winter. As the Indian-wedding-season gold-jewelry buying that
normally drives this metal’s
big autumn rally
winds down, the Western holiday season ramps up. The holiday spirit
puts everyone in the mood to spend money.
Men splurge on
vast amounts of gold jewelry for Christmas gifts for their wives,
girlfriends, daughters, and mothers. The holidays are also a big
engagement season, with Christmas Eve and New Year’s Eve being two
of the biggest proposal nights of the year. Between a third to a
half of the entire annual sales of jewelry retailers come in
November and December! And jewelry historically dominates overall
gold demand.
According to
the World Gold Council’s latest data,
between 2014 to 2018 jewelry accounted for fully 58%, 57%,
47%, 53%, and 51% of total annual global gold demand. That averages
out to 53%, which is far bigger than investment demand. During
those same last 5 years, that weighed in at just 20%, 22%, 37%, 30%,
and 26% to average 27% of the world total. Jewelry is nearly
twice as large as investment demand!
That frenzied
Western jewelry buying heading into winter shifts to pure investment
demand after year-end. That’s when Western investors figure out how
much surplus income they earned during the prior year after bonuses
and taxes. Some of this is plowed into gold in January, driving it
higher. Finally the big winter gold rally climaxes in late February
on major Chinese New Year gold buying flaring up in Asia.
So during its
bull-market years, gold has always tended to enjoy major winter
rallies driven by these sequential episodes of outsized demand.
Naturally the gold stocks follow gold higher, amplifying its gains
due to their great profits leverage to the gold price. Today gold
stocks are now once again heading into their strongest seasonal
rally of the year, driven by this annually-recurring robust
winter gold demand.
Since it is gold’s
own demand-driven seasonality that fuels gold stocks’ seasonality,
that’s logically the best place to start to understand what’s likely
coming. Price action is very different between bull and bear years,
and gold remains in a younger bull market. After falling to
a 6.1-year secular low in mid-December 2015 as the Fed kicked off
its latest
rate-hike cycle, gold powered 29.9% higher over the next 6.7
months.
Crossing the +20%
threshold in March 2016 confirmed a new bull market was underway.
Gold corrected after that sharp initial upleg, but normal healthy
selling was greatly exacerbated after Trump’s surprise election
win. Investors
fled gold to chase the taxphoria stock-market surge. Gold’s
correction cascaded to monstrous proportions, hitting -17.3% in
mid-December 2016. But that remained shy of a new bear’s -20%.
Gold rebounded
sharply from those anomalous severe-correction lows, nearly fully
recovering by early September 2017. But gold failed to break out to
new bull-market highs, then and several times after. That left
gold’s bull increasingly doubted, until June 2019. Then gold
surged to a major
decisive breakout confirming its bull remains alive and well!
Its total gains grew to 47.8% in early
September, still small for gold.
Gold’s last mighty
bull market ran from April 2001 to August 2011, where it soared
638.2% higher! And while gold consolidated high in 2012, that
was technically a bull year too since gold just slid 18.8% at worst
from its bull-market peak. Gold didn’t enter formal bear-market
territory until April 2013, thanks to the crazy
stock-market
levitation driven by extreme distortions from the Fed’s QE3 bond
monetizations.
So
the bull-market years for gold in modern history ran from 2001 to
2012, skipped the intervening bear-market years of 2013 to 2015,
then resumed in 2016 to 2019. Thus these are the years most
relevant to understanding gold’s typical seasonal performance
throughout the calendar year. We’re interested in bull-market
seasonality, because gold remains in its younger bull today and
bear-market action is quite dissimilar.
Prevailing gold prices varied radically throughout these modern
bull-market years, running between $257 when gold’s last secular
bull was born to $1894 when it peaked a decade later. All these
years along with gold’s latest bull since 2016 have to first be
rendered in like-percentage terms in order to make them
perfectly comparable. Only then can they be averaged together to
distill out gold’s bull-market seasonality.
That’s accomplished by individually indexing each calendar
year’s gold price action to its final close of the preceding year,
which is recast at 100. Then all gold price action of the following
year is calculated off that common indexed baseline, normalizing all
years regardless of price levels. So gold trading at an indexed
level of 105 simply means it has rallied 5% from the prior year’s
close, while 95 shows it’s down 5%.
This
chart averages the individually-indexed full-year gold performances
in those bull-market years from 2001 to 2012 and 2016 to 2018. 2019
isn’t included yet since it remains a work in progress. This
bull-market-seasonality methodology reveals that gold’s strongest
seasonal rally by far is its winter one which tends to start
in late October. That portends big gains in coming months from
correction-depressed gold stocks.
During these modern bull-market years, gold has enjoyed a pronounced
and strong seasonal uptrend. This whole concept of seasonality
relies on blending many years together, smoothing away outliers to
reveal underlying core tendencies. On average by year-ends, gold
has powered 14.8% higher from the prior-year-final-close 100
baseline! And the majority of these major gains accrue during the
winter rally.
On
average gold’s winter rally starts powering higher in late October,
right after the seasonal correction following gold’s autumn rally.
This major winter-rally bottoming has technically averaged out to
arrive on that month’s 16th trading day, which was October 22nd this
year. But gold’s powerful bull-breakout rally left it with an
extreme
gold-futures-selling overhang, which sure ramps up the odds its
bottoming will be
delayed.
Seasonality defines mere tendencies over long spans, not
primary drivers. And seasonals often exhibit mean-reversion
patterns after major price moves. That may moderate some of gold’s
early-winter-rally potential this year. Gold’s autumn rally
naturally comes before its winter rally, running from mid-June to
late September in these modern bull-market years. These autumn
rallies have averaged modest 5.7% gains.
But
late this past June soon after that seasonal rally started, gold
achieved that glorious decisive bull-market breakout. That
radically improved psychology, unleashing a deluge of new buying
from both gold-futures speculators and
normal gold
investors. So over that usual autumn-rally span, gold surged
13.6% higher this year! That’s 2.4x the seasonal average, major
outsized gains, which may have pulled forward buying.
After its autumn rally, gold suffers a seasonal correction running
from late September to late October. It is the most severe of all
gold’s seasonal corrections, dragging this metal down from its
seasonal uptrend’s overhead-resistance line back to its lower
support. That pre-winter-rally seasonal correction has run 1.9% on
average. This year gold fell a worse-than-normal 2.8% in that span,
part of a larger 5.2% pullback.
That
still left gold entering its seasonally-strongest span at higher
levels than normal, 1.080x its 200-day moving average this
year! Over the past 5 years, at that late-October seasonal
bottoming gold was only trading at a tight average of 0.987x its
200dma. So gold being much higher than usual heading into its
strongest season may retard its coming winter-rally gains. But they
could still prove large on pure sentiment.
Rather than buying low like they are supposed to, investors instead
love buying high. They love chasing winners, throwing more capital
at them the higher they run. Gold’s powerful summer surge this year
has left investors far more excited about and bullish on gold
than they were in all recent late Octobers. So gold’s
self-reinforcing new-high psychology could really unleash a
much-larger-than-normal winter rally.
Whether gold’s coming seasonal gains prove smaller or bigger than
usual, its strong season is still well worth riding. It starts with
November, which has seen big average gold gains of 2.7% from 2001 to
2012 and 2016 to 2018. That makes for gold’s second-strongest month
of the calendar year! After that surge gold tends to consolidate
high in December, which has averaged comparatively-unimpressive 1.0%
gains.
But
then comes January, which enjoys major gold demand after investors
figure out how much surplus income they generated the prior year.
January’s average 3.1% gains are the largest seen out of all the
calendar months! That momentum coasts into February, which is no
slouch either averaging 1.9% gains. Gold’s 4.1-month-long winter
rally is the only seasonal one commanding a cluster of
big-gold-rally months.
So
late October to late February is when gold enjoys peak seasonal
tailwinds. This can really amplify gold’s gains if it is
already heading higher for sentimental, technical, or fundamental
reasons. After gold’s powerful decisive-bull-breakout surge this
past summer, investors are more excited about gold than they’ve been
in years. So the alluring new-high psychology could unleash
sentiment-fueled momentum buying.
The
bigger gold’s winter rally, the better the gold miners’ stocks will
perform during this same coming seasonally-strong timeframe. The
gold stocks enjoy powerful sentimental and fundamental boosts when
gold rallies consistently. Higher gold prices turn trader sentiment
bullish on its miners, motivating them to deploy capital which
forces gold-stock prices higher. That bullish psychology is
fundamentally justified this year.
Gold-mining profits really amplify underlying gold gains. The
higher gold prices flow directly through to bottom lines, as
production costs are largely fixed when mines are being planned.
Gold miners’ profits leverage to gold is really important to
understand, illuminating why gold stocks are the best way to ride
gold’s major seasonal rallies. The gold miners’ earnings
should explode
higher on gold’s breakout surge!
The
leading gold-stock investment vehicle is the GDX VanEck Vectors Gold
Miners ETF. It includes the world’s biggest and best major gold
miners. Every quarter I analyze the latest operational and
financial results from GDX’s elite gold stocks. While this current
Q3’19 earnings season is well underway, it won’t be finished until
mid-November. So the latest full results available are still
Q2’19’s, which proved strong.
That
quarter the GDX gold miners reported average all-in sustaining costs
of $895 per ounce.
That was much lower than gold’s average price of $1309, yielding
industry profits of $414 per ounce. But gold’s
breakout-surge-fueled upleg catapulted its prices radically higher
in the recently-finished Q3’19. That left the average gold price a
stupendous 12.6% higher quarter-on-quarter near $1474!
That’s a massive jump.
These much-higher prevailing gold prices greatly amplify gold-mining
earnings. The major gold miners’ AISCs don’t change much
quarter-to-quarter regardless of prevailing gold prices. They
averaged a tight $889 over the last 4 quarters. Assuming that holds
in Q3, GDX’s major gold miners’ profits have likely skyrocketed
41.3% QoQ! Much-higher gold prices make huge gold-stock gains
fundamentally-righteous.
A
big gold-stock winter rally is certainly justified this year after
gold’s bull-breakout surge. This next chart applies this same
seasonal methodology to the traditional HUI NYSE Arca Gold BUGS
Index. We can’t use GDX here since its price history is
insufficient, it was only born in May 2006. But since GDX and the
HUI hold most major gold miners in common, they
closely mirror
each other. Gold stocks see big winter rallies.
During these same modern gold-bull-market years of 2001 to 2012 and
2016 to 2018, the gold stocks as measured by the HUI enjoyed average
gains of 14.9% between late October to late February. That also
makes the gold stocks’ winter rally their largest seasonal one
of the year, besting both the spring rally’s 12.2% gain and autumn
rally’s 9.3% upside. Gold stocks enjoy their best cluster of strong
monthly rallies now.
The
monthly performances underlying these calendar-year seasonals are
easier to understand if gold-stock seasonality is instead sliced
into months. This next chart does just that, offering a
more-granular perspective on seasonality. Each calendar month in
these same modern bull-market years is individually indexed to 100
as of the previous month’s final close, then all like months’
indexes are averaged together.
From
2001 to 2012 and 2016 to 2018, the major gold stocks averaged strong
4.1% gains in Novembers. That ranks it as the third-best calendar
month of the year for gold miners. Their drop off in December is
much milder than gold’s too, as that month still enjoys good 2.9%
average gains. Then January picks up quite dramatically with a 3.8%
average surge, while February’s 4.2% is the second best of the
calendar year!
Gold
stocks’ winter rally is unique in not seeing any significant
weakness within its span, unlike both the spring and autumn rallies
which suffer sizable mid-run pullbacks. There’s been no better time
seasonally to be heavily deployed in gold stocks in these modern
bull-market years than this late-October-to-late-February
winter-rally span. Gold stocks’ collective performance in coming
months largely depends on gold’s.
The
more gold rallies, the more bullish speculators and investors will
grow on its miners’ stocks. And the more capital they will deploy,
bidding gold-stock prices higher. If gold’s powerful autumn rally
pulled forward too much buying, lower winter-rally gold gains will
certainly weigh on gold stocks’ upside. But if new-high
psychology flourishes in gold driving it considerably higher,
the gold stocks will certainly soar again.
Their recent massive autumn-rally surge highlights how fast they can
rocket with gold rallying materially. Between mid-June to late
September, the major gold stocks per the HUI blasted 28.4% higher.
That is 3.1x better than gold stocks’ average autumn rally, a
really-strong run. Despite that surge they still have real
potential to see those outsized gains continuing during their
coming winter rally, for multiple reasons.
Fundamentally last quarter and the current Q4’19 are almost certain
to see the gold miners enjoying their best earnings in years, both
in absolute and growth terms. That’s going to validate traders’
decisions to allocate capital to this high-flying sector. Despite
gold’s healthy bull-market correction, so far in Q4 its high $1494
average price still rivals Q3’s $1474. Much-higher gold-mining
profits will fuel big investment demand.
In
addition the gold stocks remain really undervalued relative
to gold, the dominant driver of their profits. A quick proxy for
this is found in the
GDX/GLD Ratio,
the daily close in GDX divided by the daily close in the leading GLD
SPDR Gold Shares gold ETF. This GGR hit 0.211x in early September
as the latest gold-stock upleg peaked, which was a 2.5-year high.
At worst by mid-October the GGR slumped back to 0.188x.
Since this gold-stock bull was born in mid-January 2016, its average
GGR has run 0.187x. But when gold is rallying consistently on
balance and gold-stock traders wax bullish, gold stocks tend to
shoot way higher relative to gold. In the summer of 2016 when
gold stocks were last in favor, the GGR averaged 0.244x. To regain
that GDX would have to rally about 25% from late-October levels,
assuming gold is just flat.
And
the GGR was much higher in the past when gold-stock psychology was
much better. Between GDX’s birth in May 2006 and August 2008 before
gold stocks were ravaged in the first stock panic in a century, the
GGR averaged 0.583x. From 2009 to 2012, the normal post-panic
period before extreme Fed QE distortions started gutting gold, the
GGR’s mean was 0.381x. Recent years’ low levels are an anomaly.
The
gold miners’ stocks still have vast lost ground to regain relative
to gold. That will gradually come as long as this gold bull
continues powering higher on balance in the years ahead. The GGR
needs to mean revert dramatically higher, arguing for
better-than-normal gold-stock upside whenever gold rallies. That
includes in its seasonal winter rally this year. New-high
psychology could spawn outsized gold-stock buying.
Regardless of how it plays out over these next 4 months, gold and
its miners’ stocks are now entering their seasonally-strongest
span of the year. So once gold’s own indicators including
speculators’
gold-futures positioning and gold’s overboughtness levels give
the green light, traders should aggressively add
fundamentally-superior gold and silver miners. Their stock prices
are likely to rally strongly by late February.
The
key to riding any gold-stock bull to multiplying your fortune is
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The bottom line is
gold stocks are just entering their seasonally-strongest period of
the year. Their big winter rally is fueled by gold’s own, which is
driven first by outsized demand from holiday jewelry buying and
later new-year investment buying. So both the metal and its miners’
stocks have strong tendencies to rally between late October to late
February in bull-market years. It’s the best calendar span to own
gold stocks!
要約すると、金鉱株は季節的に強い時期になった。金鉱株の大きな冬ラリーはゴールドによるものだ、その需要の第一は年末の巨額な宝飾品需要によるもので、その後新年の投資需要がある。こうしてゴールドと金鉱株は10月遅くから2月初めに強い時期を迎える。金鉱株を買うには最良の時期だ。
要約すると、金鉱株は季節的に強い時期になった。金鉱株の大きな冬ラリーはゴールドによるものだ、その需要の第一は年末の巨額な宝飾品需要によるもので、その後新年の投資需要がある。こうしてゴールドと金鉱株は10月遅くから2月初めに強い時期を迎える。金鉱株を買うには最良の時期だ。
最近のゴールドと金鉱株の大きな上昇にもかかわらず今年の冬ラリーの潜在力は大きい。ゴールドのブル相場ブレークアウトでトレーダはここ数年でみてとても熱狂している。結果としての新高値心理の強気が資金流入増加を引き起こす。ゴールドの高値に応じて正常化するまで金鉱株の道のりは長い。
Adam Hamilton, CPA November 1, 2019 Subscribe