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June 3, 2019

7 @ 7:00

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1. Gold, which just posted its first monthly gain since January, hit a 2-month high this morning to kick off the month of June…the yellow metal has traded between $1,309 and $1,319 so far today and is up $11 an ounce at $1,316 as of 7:00 am Pacific…holdings of SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, rose 0.32% to 743.21 tonnes on Friday…global economic fears and the resulting moves in bond prices and yields have lit a fire under Gold, enabling the metal to break out of its roughly $1,275 to $1,300 range from most of the last 45 days…Silver has jumped 16 cents to $14.72…Copper is up a penny at $2.64…Nickel is off 3 cents to $5.39 while Zinc is a penny lower at $1.20…Cobalt remains flat at $15.42…Crude Oil has rebounded 52 cents a barrel to $54.02 after last week’s big slide and its worst monthly performance in 6 months…the U.S. Dollar Index has retreated one-fifth of a point to 97.55…manufacturing activity in the U.S. fell last month to its slowest place of growth since October 2016, according to data just released by the Institute for Supply Management…meanwhile, manufacturing activity in the euro zone has contracted for a 4th month in May and at a faster pace…President Trump’s tariff threat against Mexico may produce its desired result: Mexico’s socialist President Obrador hinted over the weekend that his country could tighten migration controls to defuse Trump’s threat to impose tariffs on Mexican goods, and said he expected “good results” from talks planned in Washington this week…China’s rhetoric on the U.S. trade relationship intensified over the weekend with the release of a white paper…speculation is that a retaliatory framework may include restrictions on Rare Earth shipments…Chinese Vice Commerce Minister Wang Shouwen also refused to say whether the leaders of both countries would meet at the G-20 summit in an attempt to work out an agreement later this month…

2A private survey of China’s factory sector showed today that manufacturing activity was slightly better than expected last month..the Caixin/Markit factory Purchasing Managers’ Index for May was 50.2…analysts polled by Reuters had expected the indicator to come in at 50…the PMI reading for April was 50.2…growth of new orders grew in May, and the rate of new business growth quickened slightly in the last month, Caixin said in a statement…the stronger rise in overall new business supported a renewed expansion in buying activity among Chinese manufacturing firms…though only slight, it was the first time that purchasing activity had increased for 5 months…however, front-loading of exports to the United States in an effort to avoid higher tariffs may have masked underlying weakness in the economy…meanwhile, business confidence slipped to the lowest level since the survey series began in April 2012

3. Commerzbank on factors contributing to Gold’s climb:  “Market participants are concerned mainly about the damage being done to the global economy by the trade disputes between the U.S. and China and between the U.S. and other countries.  A recent sharp fall in stock markets and bond yields also makes Gold a more attractive alternative investment.  Then there is the nuclear dispute between the U.S. and Iran. The budget dispute between the EU and Italy is also likely to flare up again now that the European Commission has sent Italy a warning letter about its public finances.  The country is likely to face punitive proceedings in the near future given that the Italian government this evening looks set to officially reject the EU’s calls for more budgetary discipline.  And last but not least, political uncertainty in Germany has increased”

4. The Dow, on a 6-week losing skid, is down another 51 points as of 7:00 am Pacific to begin a new month of trading…in Toronto, the TSX is flat while the Venture is off 1 point at 601…interestingly, the Venture has outperformed the Dow, S&P 500, NASDAQ and the TSX over the past 6 weeks (the Venture is down just 1% while the Dow, S&P 500, NASDAQ and TSX have lost 6.6%, 5.3%, 6.8% and 3.4%, respectively)…historically, a period of outperformance by the Venture has been a bullish signal for not only the Venture but the broader markets in general…the Canadian Marijuana Index is under pressure again this morning after last week’s plunge as money starts to shift from cannabis into select resource plays…Great Bear Resources (GBR, TSX-V) has charged to a new all-time high of $4.19 in early trading…GBR gained more than 30% last week after reporting 14 m grading 12.3 g/t, including 31 g/t over 4.6 m, at its Dixie Project in the Red Lake Camp…significantly, this near-surface result came from a new area (Bear-Rimini zone) approximately 2.5 km north of the Hinge zone, hosted by a new exploration target (the LP fault and adjacent lithologies)…Benchmark Metals (BNCH, TSX-V) is pushing higher on strong volume in early trading, up 3 cents at 28.5 cents, as it attempts to break out above a long-term downsloping channel on its 6-year monthly chart…the company is gearing up for a major drill program at its promising Lawyers Project, a past producer, 45 km northwest of the Kemess Copper-Gold mine in north-central British Columbia…Benchmark believes its program has the potential to significantly increase the existing Gold-Silver resource to a new resource target of greater than 5 million Gold equivalent ounces (Gold and Silver) while remaining remain open in width, at depth and along strike for further expansion with future drilling programs…there appears to be no shortage of high-grade targets…on Friday the company released new data from previously unpublished, historical drill results that were recently acquired for the Amethyst Gold Breccia (AGB) zone, a new target area…drill hole 82 intersected 86 g/t Au and 584 g/t Ag over 7 m along the Lawyers Gold-Silver trend…Nighthawk Gold (NHK, TSX-V), which last week reported 35 m true width grading 13.5 g/t Au at its Colomac Project in the NWT, has hit a 5-month high of 42.5 cents in early trading…Amex Exploration (AMX, TSX-V) has released fresh drill results targeting the High-Grade zone (HGZ) at its Perron Project in northwest Quebec, highlighted by 5.9 m @ 32.2 g/t including 0.5 m @ 374 g/t at a vertical depth of ~220 m (PE-1947)…

5. Exploration drilling at Osisko Mining’s (OSK, TSX) Lynx deposit has intercepted a high-grade mineralized extension 400 m down-plunge from the nearest resource wireframe, and 300 m down plunge from recent high-grade intercepts including 322 g/t Au over 4.3 m…drill hole OSK-W-19991-W2 intersected 33.4 g/t Au over 3.7 m at approximately 1,200 m vertical depth within a strong silica and sericite alteration zone containing sulphides with local visible GoldOsisko President and CEO John Burzynski commented, “Deeper drilling at Windfall continues to pay off.  The new extension of Lynx brings great potential for adding significant new high-grade ounces to the deposit.  This step-out clearly demonstrates that strong mineralization continues at depth. Infill drilling up-plunge and further step-out drilling down-plunge is in progress”

6. Corvus Gold (KOR, TSX) has received encouraging results from 4 additional holes targeted on the western and southwestern extension of the Mother Lode deposit in Nevada…results continue to demonstrate the expansion potential of the deposit to the west where mineralization remains unconstrained…furthermore, Corvus believes that these results have increased the potential for adding a new and higher-grade block to the current mineral resource model as well as outlining new target areas for mineral resource expansion drilling…in this important Western extension of the Mother Lode deposit, hole ML19116 (36.6 m @ 2.03 g/t Au and 25.9 m @ 2.43 g/t) has a deep intercept that intersected a dike in the lower plate carbonates, below the main deposit, which like other intrusive related deep intercepts consistently returns +2 g/t Au with broad core zones of +3 g/t Gold…these results continue to outline a deeper, hotter, intrusive related, lower plate hosted, Gold system like the deep intercepts in holes ML19104 with 16.8 m @ 4.4 g/t Au and the bottom of hole ML19109 which ended in 4.1 g/t Au, and will be the focus of the next round of exploration at Mother Lode…

7. Don’t fear the onset of a recession: Robeco, the Dutch investment giant, has looked at how various assets performed during the time between an inversion of the U.S. yield curve and the start of a recession…the firm’s numbers show that during similar episodes since the late 1970’s, the strongest-performing asset class has been – believe it or not – stocks…U.S. stocks posted median returns of 7.4% a year during these pre-recession periods, followed by government bonds (5.7%) and commodities (5.3%)…Gold was wildly volatile, posting great returns during the run-up to the 1980 and 2008 recessions, but miserable results before the 1981, 1990 and 2001 downturns…corporate bonds also produced widely varying results…if nothing else, the historical numbers suggest investors should not be dumping stocks willy-nilly on fears of a potential recession…those fears, being pushed at the moment by much of the mainstream media, may also be wildly overblown…

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1 Comment

  1. Very good article related to lithium


    Comment by Sylvain — June 3, 2019 @ 7:03 pm

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