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December 5, 2019

7 @ 7:00

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

1. Gold has traded between $1,472 and $1,479 so far today…as of 7:00 am Pacific, the yellow metal is up $2 an ounce at $1,476…Silver has added 6 cents to $16.88…the $1,440’s remain a major support area for Gold while nearest key resistance is around $1,490 where the declining 50-day moving average (SMA) coincides with the top of what’s interpreted to be a bullish downsloping wedge on our short-term chart…provisional estimates indicate India’s Gold imports rose to a 5-month high in November and the local market swung to a premium…“For now, the physical market is providing a sufficient cushion against the downside, and we believe the macro environment presents upside risk to prices in 2020,” stated Standard Chartered…Nickel has rebounded 12 cents to $6.08…Copper is steady at $2.65…Zinc is off a penny at $1.02 while Cobalt remains unchanged at $16.10…Crude Oil has jumped another 47 cents a barrel to $58.90OPEC members are meeting today and tomorrow and are expected to agree on deeper output cuts in an effort to prop up prices and prevent a glut next year…the Dollar Index has lost one-quarter of a point to 97.42…China’s official spokespeople are keeping quiet on trade talks with the U.S. amid growing uncertainty on when a Phase 1 agreement can even be reached…“China believes if both sides reach a Phase 1 agreement, relevant tariffs must be lowered,” Gao Feng, Ministry of Commerce spokesman, said today, according to a CNBC translation of his Mandarin-language remarks…the comments reiterated the position Beijing has expressed in the last few weeks, since both countries indicated a rollback of tariffs would be part of a so-called Phase 1 agreement…

2. Record highs in U.S. equity markets and renewed strength in the U.S. dollar weighed on Gold and led to ETF funds posting broad-based outflows last month, according to the latest data from the World Gold Council (WGC)…in its monthly ETF report, the WGC said that the Gold market saw $1.3 billion in outflows across all regions in November…but it’s not all bad news for the precious metal as holdings are still up significantly on the year…“Overall, global Gold-backed assets under management grew 35% this year as a result of increased investment demand and price appreciation,” the WGC said in its report…looking at the regional breakdown, North American funds saw the biggest outflows of 17.3 tons valued at valued at $731 million due to a strong U.S. dollar and equities at their best levels since June…meanwhile, European funds, led by U.K.-listed ETFs, had outflows of 13.3 tons valued at $538 million…the WGC noted that investor sentiment shifted in November as the deadline for the U.K. to leave the European Union was pushed to 2020…in Asia, the regional markets saw outflows of 2.1 tons valued at $119 million…the WGC noted that the outflows came as Gold prices fell 3.4% from October’s highs…however, even with November’s decline, prices are up 14% for the year…the WGC is optimistic that ETF demand will remain strong through 2020“Uncertainty surrounding 2020 Fed expectations, together with increased bullish market sentiment, is set to impact Gold’s price performance”

3. Gold miners look set to extend a deal spree into 2020 after notching transactions worth a record $30.5 billion this year, eclipsing the previous M&A binge when bullion prices peaked nearly a decade ago…led by top producers Newmont Goldcorp (NGT, TSX; NEM, NYSE) and Barrick Gold (ABX, TSX; GOLD, NYSE), miners are bulking up to replace dwindling reserves and win back investors who in recent years shunned the sector because of disappointing returns…this year has seen a whopping 348 deals worth more than $30.5 billion, including net debt, according to Refinitiv Eikon data…that’s up from $10.8 billion last year and surpasses a previous high of $25.7 billion set in 2010, the data show…Gold topped $1,900 per ounce in 2011, more than $400 higher than it is now, but the yellow metal has also hit new record highs this year in multiple currencies…nonetheless, the 2011 Gold boom prompted buyers to overspend on acquisitions, leading to billions in impairments when prices crashed in subsequent years…this time, acquirers are being more cautious as the premiums linked to recent sector transactions are far below those paid in the previous price boom…

4. Amex Exploration (AMX, TSX) has cut 41.3 g/t Au over 4.1 m in drill hole PEG-19104including 202.8 g/t Au over 0.80 m, in the Upper Gratien Zone at its Perron Project near Rouyn-Noranda…this intercept occurs at a shallow depth of about 65 vertical m…the Upper Gratien is an emerging new zone which has returned higher-grade intercepts than previously identified, indicating the potential of multiple high-grade lenses within the overall large (1+ km) kilometre) Gratien Gold system…meanwhile, drilling continues to define and expand mineralization at the Eastern Gold Zone (EGZ) where intercepts reported this morning included 2.8 g/t Au over 12.3 m (including 23.06 g/t over 0.70 m) in PE-19105 at a vertical depth of about 325 m, and 4.8 g/t Au over 4.2 m (including 26.2 g/t over 0.70) in PE-19109 (including 26.2 g/t over 0.70 m) at a vertical depth of about 325 m…Kelly Malcolm, VP-Exploration of Amex, commented, “I am very pleased with the high-grade intercept in the Upper Gratien zone, which is the strongest mineralization, on a metal factor basis, that has been identified in that zone to date.  The possibility of a multitude of high-grade lenses within the broader kilometre-long Gratien system is encouraging when contemplating either open-pit or underground mining scenarios.  The Eastern Gold zone also continues to intersect meaningful intervals in both the HGZ and Denise zone which continue to define and expand the system.  We are awaiting assays on a number of additional drill holes, many of which encountered visible Gold…the 3rd drill, which is scheduled to arrive on January 6, will be dedicated to the regional exploration program comprising approximately 20,000 m, of the 100,000 m drill program, targeting additional high-grade Gold mineralization in the underexplored portions of the highly prospective Beaupre rhyolite block…in addition, the company recently completed a 600-line-km survey of high-resolution drone magnetics at a very tight line spacing of 25 m, flown at a low altitude…AMX is up 2 pennies at $1.37 in early trading…technically, the stock has broken out above important resistance in the $1.20’s

5. The Dow is off slightly (33 points) points through the first 30 minutes of trading…in Toronto, the TSX has lost 61 points…the Gold Index, threatening to break out above 250, is up half a point at 247.32…the Venture has posted gains in 9 out of the last 11 sessions, unusual for this time of year and indicative of what could be a powerful finish to December and a strong start to 2020…the Venture is currently off 1 point at 539White Gold (WGO, TSX-V) announced this morning that it has staked 3 strategic claim blocks (Kodiak, Kirkman and Tea), totalling 689 claims, contiguous to its White Gold Property, Newmont Goldcorp’s Coffee Project and Western Copper and Gold’s Casino Project, all located in the prolific White Gold district in Yukon…the claims bring the company’s expansive land package to 21,207 quartz claims across 33 properties, totalling over 422,730 hectares, representing over 40% of the White Gold District…Eskay Mining (ESK, TSX-V) was halted pre-market, pending news…

6. Using a high-tech custom-built downhole camera that went to a vertical depth of more than 420 m, Canada Cobalt (CCW, TSX-V) geologists have a bull’s eye target to immediately build out a high-grade Silver discovery at Castle East just 1 km from the 40-million ounce Siscoe mine and 2 other past producers in the prolific Gowganda Camp…drilling has commenced at CCW’s newly-named “Robinson Zone” where an initial series of wedge holes is designed to pierce the high-grade structure at several different points above and below a spectacular native Silver discovery intercept of 1,194 oz/ton over 0.45 m within a 3.1 m core length grading 189 oz/ton…a new hole will then be drilled from surface to intercept the interpreted shoot higher up in the system…1,194 oz/ton Silver over 0.45 m and 189 oz/ton over 3.1 m doesn’t exist in isolation,” explained Doug Robinson, considered the Northern Ontario Silver-Cobalt Camp’s leading authority on the Nipissing Diabase, “and it’s the type of ore-grade intercept that built the other 3 mines less than 2 km to the west.  There’s a major vent in this area and a network of branching veins.  The downhole camera was the smartest way to go back on the 2011 drill hole, and this technology worked beautifully.  There’s now an understanding of the vein orientation and that de-risks the opportunity,” Robinson concluded…this drilling news has legs to it and can be expected to strengthen CCW’s uptrend going into Christmas…meanwhile, the company has repriced to 45 cents per Canada Cobalt share (from 34 cents) the share portion of its proposed acquisition of privately-held PolyMet Resources…the deal is expected to close shortly and will vertically integrate CCW with multiple revenue streams from its new headquarters in the historic mining community of Cobalt…

7. CPM Group has issued an intermediate-term (2-3 year) Silver buy recommendation to investors…this call has been long in the making…the last time CPM issued a recommendation on Silver was more than 8 years ago in May 2011 when prices reached $48.19 and CPM advised to sell…“The Silver market is at a critical vertex at present,” CPM Group’s Vice President in charge of research Rohit Savant said earlier this week…CPM has waited until now for a variety of reasons known to our clients.  For one, the market has not supported strongly higher prices over the past few years.  As a result, prices have not moved sharply off their 20152016 lows,” CPM managing partner Jeffrey Christian stated…

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  1. Mmmk, seems a little strange esk was halted for that news?? Alrighty then!!

    Comment by Laddy — December 5, 2019 @ 2:32 pm

  2. Beyond strange, Laddy, but that’s ESK…perhaps they think that’s the only way they can grab the market’s attention – wrong way to do it…

    Comment by Jon - BMR — December 5, 2019 @ 5:03 pm

  3. Jon. Why didn’t CCW put in that they have poured 71 lbs of silver in their NR?

    Comment by Don — December 5, 2019 @ 8:07 pm

  4. My guess, Don, is that their pouring of Silver would be far more effective as a separate NR, especially after PolyMet officially closes…there are many moving parts with CCW at the moment – wouldn’t make sense to bury something good in a NR…

    Comment by Jon - BMR — December 6, 2019 @ 4:28 am

  5. And everyone thought I was nuts when I said that the government was painting a rosy picture BEFORE the ELECTION , and, there you go! Suspicious anyone?

    Comment by Laddy — December 6, 2019 @ 6:26 am

  6. A tale of 2 countries, Laddy, each going in a different direction…266,000 U.S. jobs created in November, 71,000 Canadian jobs lost in November…wow…Trump was actually happy to see Trudeau get re-elected because Trudeau keeps driving jobs and investment dollars south…

    Comment by Jon - BMR — December 6, 2019 @ 6:41 am

  7. And now Poloz announced he’s stepping down,, everyone who thinks trump is an idiot, THINK AGAIN, at the last g7, trump did say that Trudeau is weak and dishonest, well, like him or hate him but trump is right .this is what left wing radical governments do, is LIE AND WANT TO CONTROL YOU. that’s why he legalized pot, so you smoke more and notice less.

    Comment by Laddy — December 6, 2019 @ 7:43 am

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