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Commodities, and Economic & Political Trends Impacting
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August 6, 2019

7 @ 7:00

Visit the BMR comments section throughout the day for updates and helpful information!

1. Gold has traded between $1,456 and $1,468 so far todayas of 7:00 am Pacific, bullion is up $2 an ounce at $1,465 after an important breakout through $1,450Gold has hit new record highs in a number of currencies including the Canadian dollar, the British pound, the Australian dollar and the Japanese yen…Silver is flat at $16.35…Nickel, which enjoyed a sharp run yesterday, has climbed another 4 cents to $6.79 (see below)…LME Nickel has been the best performing base metal so far this year, rising 30% while most other base metals have been falling…Copper is hovering near a 2-year low, unchanged at $2.57, while Zinc is steady at $1.06…Crude Oil is up slightly at $54.75 while the U.S. Dollar Index has added more than one-tenth of a point to 97.70 after diving yesterday on more U.S.-China trade friction…Goldman Sachs says it no longer expects the U.S. and China to agree on a truce to end their trade dispute before the 2020 U.S. Presidential elections, citing “a harder line” taken by policymakers from the world’s largest economies…the bank’s chief economist, Jan Hatzius, wrote that he expects the Federal Reserve to cut interest rates twice more this year…a speech by the Fed’s James Bullard later today is likely to be scrutinized closely for any further signals on possible actions by the U.S. central bank…China’s fiscal spending increased 10.7% in the first 6 months from a year earlier, the finance ministry said today, underlining the government’s bid to support the slowing economy…the communist country’s fixed-asset investment project approval in the first 6 months increased 81% by value compared with a year earlier as Beijing also ramped up infrastructure spending…President Trump is promising farmers that China’s increasing aggression against U.S. agriculture in the spiralling trade battle “will not be able to hurt them” – and vowed that “if necessary” he will give them more aid in 2020…meanwhile, Trump also lauded a strong U.S. economy in a morning tweet…“Massive amounts of money from China and other parts of the world are pouring into the United States for reasons of safety, investment, and interest rates!  We are in a very strong position.  Companies are also coming to the U.S. in big numbers.  A beautiful thing to watch!”

2. For the first time in 25 years, since the Clinton Presidency, the U.S. Treasury Department has named China a currency manipulator…that action yesterday from the Trump administration came after China allowed its currency, the yuan, to weaken to more than 7 per U.S. dollar – a level many analysts and investors considered critical…Trump, for his part, called the slide in the yuan “a major violation”…Beiijing’s move was clearly made in retaliation to the President’s latest tariff threat…the President announced last week that Washington will slap 10% tariffs on $300 billion of Chinese goods starting September 1…if that goes ahead, the U.S. will have imposed elevated tariffs on all goods it buys from China…the escalation of the U.S.-China trade battle significantly increases the likelihood the Fed will again lower U.S. interest rates yet this year…contrary to a popular mainstream media narrative, President Trump didn’t start a trade war with China – China launched a trade war against the United States beginning in the early 1990’s…it’s just that no President has challenged China until now…of particular concern is China’s theft of American intellectual property which costs the U.S. economy massive amounts of money each year…a 2017 report by the independent and bipartisan U.S. Commission on the Theft of American Intellectual Property put the annual cost of IP theft by all parties at $255 billion to $600 billion in counterfeit goods, pirated software and stolen trade secrets…these figures do not include the full cost of patent infringement…the commission named China “the world’s principle IP infringer”

3. Nickel prices are closing in on a fresh multi-year high on speculation Indonesia might bring forward a planned ban on mineral ore exports much sooner than 2022…a top Indonesian mining ministry official did not deny those rumours yesterday, saying only that “I don’t want to speculate in that regard.  As long as there is no new regulation, the current one remains in effect”under a 2017 mining regulation, Indonesia is due to stop allowing the export of unprocessed ore starting January 12, 2022, after giving miners a 5-year period to build smelters onshore…last month, Indonesia confirmed that it would enforce a ban on the export of raw ore exports by 2022 to make miners process minerals in the country…

4. In the Eskay Camp, Crystal Lake Mining (CLM, TSX-V) has commenced a major diamond drilling program at its Newmont Lake Project, beginning at Burgundy Ridge where 4 shallow first-ever drill holes (RC) late last year confirmed that widespread Copper-Gold-Silver-Zinc-rich mineralization extends to depth…meanwhile, Metallis Resources (MTS, TSX-V) released an exploration update this morning on its Thunder North and Thunder South claims bordering Garibaldi Resources‘ (GGI, TSX-V) Nickel Mountain Project…field investigations have confirmed the presence of gabbros at the “K9” target at Thunder North which represents the southwestern extension of the ~12-km-long Nickel Mountain Gabbroic Complex…ground-based follow-up on Nickel sulphide targets is focused on mafic intrusions at both “K9” and the southern flank of the Lehto pluton…meanwhile, a significant Gold target has been discovered at Thunder South…re-evaluation and mapping of the Hazelton stratigraphy has outlined a potentially large shear zone that’s part of a broader prospective area exposed by a receding glacier…the shear zone, a least 400 m x 400 m, is characterized by intense folding, faulting and stringers of sulphides prospective for high-grade Gold mineralization…meanwhile, Aben Resources (ABN, TSX-V) announced this morning that it has completed 4,000 m (9 drill holes) of a planned 5,000-m drill program at its Forrest Kerr Project…the program may be expanded considerably, depending on initial results…Tudor Gold (TUD, TSX-V) is up 4 pennies at 71 cents through the first 30 minutes of trading, its best level since late 2017

5. The Dow has rebounded 147 points through the first 30 minutes of trading…U.S. markets suffered their worst day of the year yesterday on increased U.S.-China trade tensions…Canadian markets are back in action after a long holiday weekend…in Toronto, the TSX has retreated 142 points despite a big jump in the Gold Index which is now at 246, its highest level since October 2016…the beaten-down Canadian Marijuana Index has rebounded another 7 points to 446, thanks to positive guidance this morning from Aurora Cannabis (ACB, TSX)…the specialized team of the Ontario Securities Commission that is leading an investigation into medical cannabis producer CannTrust Holdings (TRST, TSX) is understood to be pursuing the matter as a “quasi-criminal” case, a type of proceeding that has the potential to lead to jail time depending on what, if any, charges are eventually brought and successfully prosecuted…it is early in the investigation, but it is moving quickly, according to a report this morning in the Financial Post…no conclusions have been drawn at this point and there are no formal allegations…the Venture is up 3 points at 599 as of 7:00 am Pacific with the Index briefly trading above 600 for the first time in more than 2 months…Defense Metals (DEFN, TSX-V) announced this morning that it has engaged APEX Geoscience to manage its previously announced Wicheeda Property diamond drill program in northern B.C., set to commence during this 1st half of August…the drill program is designed to further delineate, and potentially expand, the Wicheeda REE (rare earth element) carbonatite deposit leading to completion of an updated mineral resource estimate…Gold Standard Ventures (GSV, TSX) is launching a $6.9 million (U.S.) exploration and development program at its 100%-owned/controlled Railroad-Pinion Project on Nevada’s Carlin trend…district exploration will consist of approximately 11,000 m whereas step-out and development work at Dark Star and Pinion is expected to account for approximately 4,000 m…drilling with 2 core and 2 RC rigs starts this week…

6. Venture technical update:  The Venture has posted 3 straight weekly gains, closing Friday at a nearly 2-month high of 596…buy pressure has jumped quite dramatically on the short-term chart to the best levels in 3 months…the Index continues to trade above its EMA(8) and EMA(20) and both short-term exponential moving averages are rising, a trend that must continue for a while longer in order for this market to build the necessary strength and momentum to attack important resistance in the low 600’s including the still-declining 200-day SMA at 605…the “masses” won’t really start to catch on to this until later in the quarter but a bullish new phase in the Venture is now in its very early stages with the Index breaking out above the downtrend line it was trapped in for several months since its early 2019 high in March…in addition, RSI(14) has pushed to its best levels in several months (55%) while a bullish +DI/-DI cross has occurred in the ADX indicator on the short-term chart…Northwest B.C. may hold the key to an immediate/near-term Venture breakout through 600 as Garibaldi and other companies prepare to release drilling and exploration results/updates in the middle of an exceptionally busy summer…

7. The average Canadian family spent more last year on taxes than on housing, food and clothing combined, according to a new study…the report, released by the Fraser Institute, found that the typical family spent more than 44% of its income on taxes last year…basic necessities, such as groceries and housing, accounted for 36% of income…those numbers aren’t necessarily new…back in 2006, when the average family made $22,502 less, taxes accounted for 45% of the average family’s income…basic necessities were slightly less, at 34% of a family’s income…the report’s findings were calculated based on municipal, provincial and federal taxes, including vehicle taxes, property taxes, alcohol and tobacco taxes and sales taxes…income taxes accounted for the highest tax expenditure last year, at $12,242 for the average family, followed by payroll and health taxes at $7,475 and sales taxes at $5,839…tax me, I’m Canadian…

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  1. What’s going on with GEMC?

    Comment by Tycoon777 — August 6, 2019 @ 8:10 am

  2. And what’s going on with CCW? Too many good plays to have money tied up all spring and summer.

    Comment by Dan1 — August 6, 2019 @ 10:04 am

  3. Trying to reach Mitch at GEMC, Tycoon777…generating some excitement and success off the Nevada property should be a no-brainer…puzzled that they haven’t yet been able to execute on this, but maybe they have a master plan they intend to deliver on shortly…will find out…

    Comment by Jon - BMR — August 6, 2019 @ 10:06 am

  4. There’s been some some small insider buying on GEMC FWIW.

    Comment by Dan1 — August 6, 2019 @ 10:09 am

  5. If drilling at Burndy Ridge is going smoothly, I’d expect the first hole to be at target by now. 40 to 50 meters per day possible.

    Comment by Dan1 — August 6, 2019 @ 11:49 am

  6. Gold and silver ripping…

    Comment by flyinthruu — August 6, 2019 @ 7:09 pm

  7. Looks like CCW may be testing support levels again. Hopefully support holds.

    Comment by Danny — August 6, 2019 @ 7:16 pm

  8. ETR picks up more ground and some of butting up to Burgundy I think. Also had Lightfoot walking around the Ni showings BMR talked about a while back. Which target will they drill first?

    Comment by david — August 6, 2019 @ 7:28 pm

  9. Cobalt supply is about to get tighter…

    Glencore reportedly closing DRC copper-cobalt mine


    Comment by adrobyshev — August 6, 2019 @ 10:52 pm

  10. I’m certain we’re going to hear something from CCW literally any day now, Dan1, not unlike GGI and a couple of others as well…and I go back to what I have been saying repeatedly on both GGI and CCW…new highs coming on both…

    Comment by Jon - BMR — August 7, 2019 @ 3:49 am

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