An important line in the sand

and another one bites the dust

Gold has continued its upward momentum this morning. After the big drop after the Fed announced taper, gold has climbed $64 per ounce. It is now pushing up against a big line in the sand for continued gains, $1830.

You can see gold has been here before, three times in fact. Gold pushed up in mid-July. It tried again at the end of July. It dropped heavily after that second attempt but quickly picked up steam and attempted another breakout at the beginning of September. Since then, it has gone to test the lows again and has stair-stepped its way up to testing $1830 once more. Gold has been heavily range bound since mid-June, nearly 6 months. It seems as if gold has been consolidating since it hit its most recent peak of $2010 in August of 2020. I anticipate a breakout and a retest of $1900.

I am beginning to consolidate my holdings. I’ve been slowly selling off my coal stocks and exiting anything that isn’t uranium or oil. I’m beginning to build a position in GDXJ and GLD by selling puts. I’m also adding to my UUUU and NXE holdings. I am looking to buy either on any down days. I’m also looking to add USO calls on any pullbacks.

Concerning uranium, US Secretary of Energy, Jennifer Granholm made an announcement concerning nuclear energy. Sec Granholm is in Glasgow for the Convention on Climate Change. She has used this time make several announcements on behalf of the Department of Energy. One of those announcements was “Global Nuclear Energy Transitions and Communities”. This is an initiative to accelerate the “replacement of coal power plants with new advanced nuclear technologies”. She went on to state that,

These initiatives will provide expert resources and create a blueprint for countries transitioning to a clean and just energy economy with nuclear as a key pillar.  The initiative will focus on nuclear's role in advancing environmental justice and equity; integrating variable renewable resources to the grid; and uplifting economies and quality of life, especially through coal plant conversions.

According to the Department of Energy, uranium is now considered a focus for attaining “environmental justice”. This is big news for uranium holders. All uranium miners were up on the news.

As I’ve said before, this uranium story is still in its early stages. Right now, all we’ve heard is talk. Talk that China is building 150 new reactors, that Europe wants nuclear labelled as “green”, and now Secretary Granholm has stated that nuclear power is part of the agenda of the US. Once we get into the action phase of nuclear power when power plants are actually built and uranium is needed, expect shortages to develop and the price of uranium to go sky high. This is a long-term holding for me and I’m looking to add to it every chance I get.

Finally, the last bit a news today concerns the Fed. Federal Reserve Governor Randal Quarles has submitted his resignation today. If you remember, he was the Fed Vice Chairman for Supervision before his four-year term in that capacity expired and he was not renominated. This means he was the main man of big bank oversight. He had become of a target of Elizabeth Warren for his reduction of bank regulations during his term. He had joined the Fed in 2017 as an appointee of Trump. Quarles could have stayed in his position until 2022 but instead decided to leave the central bank as the leftists take over. Biden now has four open spots to fill at the Fed. This signals another defeat for the idea that the Fed is somehow not political. We’ve seen a targeting of Trump appointees and several have now resigned. Count this as another scalp for Warren.