BullMarketRun.com

1. Gold has traded between $1,494 and $1,509 so far today…as of 7:00 am Pacific, bullion is up $9 an ounce at $1,504…the Fed’s minutes from its July policy meeting are due tomorrow with investors also keeping a close eye on the central bank’s Jackson Hole seminar and this weekend’s Group of 7 summit…inflows into Gold ETFs are being greatly eclipsed by the inflows into Silver ETFs…the Silver ETFs tracked by Bloomberg increased their holdings by 687 tons last week alone, with holdings surging “from one record high to the next,” Commerzbank noted…Silver has climbed 25 cents to $17.09 and could be starting a trend of outperformance vs. Gold through the balance of 2019…nearest Fib. resistance for Silver is in the $17.20’s – that’s the key area to watch…Nickel has added another 5 cents to $7.29 while Copper and Zinc are both down slightly at $2.59 and $1.01, respectively…Crude Oil has slipped 91 cents a barrel to $55.30 while the U.S. Dollar Index is up slightly at 98.41…traders see about an 83.8% chance of a 25 basis-point interest rate cut by the Fed in September and a 10% chance of a 50 basis-point cut…SNC-Lavalin (SNC, TSX) has been reduced to junk status by S&P Global Ratings, the latest blow for the Canadian engineering firm at the centre of a controversy that’s ensnared Prime Minister Trudeau…S&P cut the Montreal-based company’s credit rating by 1 level to BB+, the highest non-investment grade rating, according to a statement yesterday…the downgrade reflects SNC’s significant losses on lump-sum turnkey projects which it plans to exit when its current backlog is complete…does this come as surprise?…as Canadians prepare for an October election, a union (Unifor) representing 12,000 journalists and media workers in Canada has announced that it will run an aggressive anti-Conservative campaign asking voters to “think twice about supporting the Scheer agenda”…media bias in Canada is rampant…Statistics Canada reported this morning that manufacturing sales across the country fell 1.2% to $58 billion in June, led lower by a drop in the petroleum, coal and food sectors…sales were down in 16 of 21 industries…the only consolation is that those numbers weren’t quite as bad as expected…

2. Interesting data from JP Morgan’s quant guru regarding last Wednesday’s sell-off on Wall Street that the mainstream media was making such a fuss about…the unusual single-session moves in stocks and yields were merely driven by technical flows in an environment of poor liquidity, according to Marko Kolanovic, the bank’s global head of macro quantitative and derivatives strategy…“Despite fundamental risks, recent equity and bond moves were mostly technically-driven,” Kolanovic said in a note to clients this morning…“More than half of equity moves were driven by systematic rather than fundamental trading”…the strategist estimated that last Wednesday’s stock meltdown resulted from $75 billion in algorithmic selling…about half of it came from index option delta and gamma hedging, 20% from trend-following strategies, 15% from volatility targeting strategies and the remaining 15% from other products…he added that more than half of the move in interest rates, including the brief inversion of the 2–10 yield curve, was caused by “technical drivers” like hedging by banks…Kolanovic, who has a Ph.D. in theoretical physics, has correctly called some big market moves up and down the last 2 years, gaining him a following on Wall Street…he’s predicting that equities will continue their comeback from last week’s sell-off…

3. Unlike other base metals, demand for Nickel from the top consumer China has not dampened during the ongoing trade standoff with the United States…prices have been insulated from any weakness due to a variety of dynamics, from developments in Indonesia to a buoyant outlook from the stainless steel industry…significant stock accumulation by Chinese companies to supplement their own output is reflected in LME inventories as well…stocks at LME warehouses have plummeted to their lowest level since January 2013 with inventories shedding about 70% since they peaked in mid-2015 near the bottom of the bear cycle…Nickel’s bull market started in early 2016…meanwhile, in Indonesia, authorities are contemplating whether to move forward a ban on exports of unprocessed ore originally scheduled to begin in January 2022…this move is expected to exacerbate a supply shortage…as per government data, Indonesia now has 13 operating smelters with an operational capacity of 24.52 million tonnes that mostly produce Nickel pig iron…also, 22 more Nickel miners are being developed with an additional capacity of 46.33 million tonnes…China is investing heavily in that country…almost 70% of global Nickel is used for making stainless steel and most of it in China….demand for Nickel from the electric vehicle revolution is going to be a game-changer for the metal next decade…

6. Aben Resources (ABN, TSX-V) is under mild pressure in early trading after uninspiring initial results from ongoing 2019 drilling at its Forrest Kerr Project in the Eskay Camp…drill hole FK19–50, testing the downward extension of a mineralized horizon discovered in 2 drill holes last year, cut 11.6 g/t Au over 1 m within a broader interval of 61.7 m grading 0.46 g/t Au…meanwhile, FK19–46, drilled oblique to the main mineralized corridor at North Boundary to test for continuity of mineralization between recently discovered mineralization and historic high-grade Gold mineralization reported by Noranda in 1991, returned 12.4 g/t Au between 203 and 204 m with an overall average of 0.12 g/t Au over its entire length of 500.5 m…they need to do better…Aben has nonetheless decided to expand its budget for the program and intends to continue drilling into September…5000+m has now been completed in 10 holes, with numerous sample shipments now in the laboratory…

7. How could Canada do this to itself?…the Canadian energy sector is sinking to unprecedented depths, as an exodus of investors and foreign companies from the Oil patch continues, though Prime Minister Trudeau boasts about how he “stands up for Canadian jobs” (in his home province of Quebec) in trying to defend his actions in the SNC-Lavalin scandal…the downside in the Oil and gas sector in this country has accelerated dramatically in recent years under the anti-fossil fuel Trudeau regime, and multiple exploration and production companies have recently seen their stocks completely dislodge from Crude Oil prices and sink to record lows…the gap between Canadian energy stocks and Oil prices, based on the ratio of the S&P/TSX Capped Energy Index to WTI, has now widened to its largest ever, according to Bloomberg…“It’s just been a bloodbath, especially this year,” said Christopher Blumas at GlobeInvest Capital Management told the Globe and Mail…“There’s only so much pain people can take before they have to cut their losses”… without significant progress on expanding pipeline capacity, Oil and gas stocks could continue to be “dead money” for years, Blumas said…since 2014, the index comprising the Canadian energy industry has declined by 73%…the list of exploration and production companies hitting record-low share prices last week included ARC Resources, Baytex, TORC, Kelt Exploration, NuVista, Athabasca Oil and Pengrowth…to a significant extent, this is Canada’s self-inflicted wound due to politicians consumed by climate change extremism – an effective strategy for “progressives” to redesign an economy where government plays a much bigger role in our lives (the Democrats’ proposed “Green New Deal” in the U.S. says it all)…the more power a government accumulates, the more dangerous it becomes…results of “progressive” policies in terms of economic growth during the Trudeau reign have been poor, in sharp contrast to the performance of the Trump economy…

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