Metals are not going to stop crashing until the US dollar turns. I’ve been banging on about that for some time. I don’t know when that will be. Nor does anyone. But this US dollar action feels like the parabolic blow-off that you get towards the end of bull markets, rather than the creeping disbelief you get at the beginning.
Jul 14, 2022·edited Jul 14, 2022Liked by Dominic Frisby
Made more money shorting Silver in the last 2 months than I've made being long it over the last 2 years, although I recognise this position is a derivative of a long USD trade. Sadly, because I'm doing it within an ISA and SIPP, this leaves only inverse ETF's as a vehicle to use. I've done it via 3SSI - a triple-leveraged daily short ETF that uses swaps.
This has been a fantastic portfolio hedge in the last 2 weeks, and whilst I wouldn't usually choose a leveraged short ETF to establish a position against a commodity, I recalled how hard and fast Silver bombed in February and March 2020, and decided this would be a good vehicle to try to take advantage of the same thing happening again. Some caveats here:
1. This is a synthetic swap-based ETF so wide open to counterparty risk in the event of a banking crisis.
2. In a choppy market, the time decay caused by the daily swap resets will vapourise your position over an extended time period.
3. When the US Dollar turns, I agree that Silver will most likely catch a bid and you want to be at least 1000 miles away from 3SSI when that happens...
For the time being though, it's a great portfolio hedge - especially if Silver ends up going back to $12.
I recall Julian Brigden accurately calling the turn in both Silver and the USD back in March 2020, so would recommend keeping an eye on the JulianMI2 twitter handle for anybody currently in the long USD trade.
Another reason to absolutely love platinum. Per the World Mining Council (or someone of a similar name) the all in production cost of producing platinum is $800-900 an ounce, ignoring low cost russia who come in at the $600s. And these were prices in circa 2018. Adjusting for inflation platinum is trading at or below its effective 'cost'. Precise figures may vary but you get the drift, it effectively gives you a price floor. As far as im concerned this makes it 'risk-free', or at least more risk free than your classical government's version of the same!
I haven't looked at platinum that closely so I will take another look based on the information you have supplied. I have a little silver and gold, and plan to buy some more when I feel it's close to the bottom. I have heard figures of $900 for gold from Harry Dent...surely it can't go that low can it???
Made more money shorting Silver in the last 2 months than I've made being long it over the last 2 years, although I recognise this position is a derivative of a long USD trade. Sadly, because I'm doing it within an ISA and SIPP, this leaves only inverse ETF's as a vehicle to use. I've done it via 3SSI - a triple-leveraged daily short ETF that uses swaps.
This has been a fantastic portfolio hedge in the last 2 weeks, and whilst I wouldn't usually choose a leveraged short ETF to establish a position against a commodity, I recalled how hard and fast Silver bombed in February and March 2020, and decided this would be a good vehicle to try to take advantage of the same thing happening again. Some caveats here:
1. This is a synthetic swap-based ETF so wide open to counterparty risk in the event of a banking crisis.
2. In a choppy market, the time decay caused by the daily swap resets will vapourise your position over an extended time period.
3. When the US Dollar turns, I agree that Silver will most likely catch a bid and you want to be at least 1000 miles away from 3SSI when that happens...
For the time being though, it's a great portfolio hedge - especially if Silver ends up going back to $12.
I recall Julian Brigden accurately calling the turn in both Silver and the USD back in March 2020, so would recommend keeping an eye on the JulianMI2 twitter handle for anybody currently in the long USD trade.
Another reason to absolutely love platinum. Per the World Mining Council (or someone of a similar name) the all in production cost of producing platinum is $800-900 an ounce, ignoring low cost russia who come in at the $600s. And these were prices in circa 2018. Adjusting for inflation platinum is trading at or below its effective 'cost'. Precise figures may vary but you get the drift, it effectively gives you a price floor. As far as im concerned this makes it 'risk-free', or at least more risk free than your classical government's version of the same!
https://www.goldpriceforecast.com/explanations/platinum-production-cost/#:~:text=The%20all%2Din%20sustaining%20costs,can't%20go%20on%20indefinitely.
I haven't looked at platinum that closely so I will take another look based on the information you have supplied. I have a little silver and gold, and plan to buy some more when I feel it's close to the bottom. I have heard figures of $900 for gold from Harry Dent...surely it can't go that low can it???