Gold has traded between $1,246 and $1,260 so far today…as of 8:45 am Pacific, bullion is down $4 an ounce at $1,254…Silver is off 7 cents to $17.39…Copper has slipped another penny to $2.12…Crude Oil has retreated 52 cents to $49.92 while the U.S. Dollar Index has jumped one-third of a point to 97.96…
Holdings of SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, rose another 0.28% to 961.57 tonnes yesterday…holdings have actually increased this month despite Gold’s 5% drop…
Demand for Gold in India, the world’s second-largest consumer, has picked up with the start of the festive season as expected…Gold discounts in India narrowed to the smallest level in nearly 9 months as a key Hindu festival, Dussehra, boosted retail demand at a time when prices have become much more attractive, slightly below 30,000 rupees per 10 grams…India celebrates the Diwali festival at the end of the month, so demand should remain strong through the balance of October…
Meanwhile, demand in top-consumer China reportedly rose after the week-long National Day holidays and premiums today were quoted around $4 an ounce against the international benchmark…
U.S. Economic Data + More Fedspeak
The University of Michigan’s Consumer Sentiment Index dropped to 87.9 this month, hitting its lowest level since September 2015…economists were expecting a reading of 92…this will likely lower GDP estimates for Q4…
In other numbers released this morning, U.S. retail sales rose 0.6% in September, matching expectations, but core sales grew by just 2.5% y/o/y, the slowest pace of gain since November 2015…meanwhile, the Labor Department said its PPI for final demand increased 0.3% last month after being unchanged in August…
Fed Chair Janet Yellen is scheduled to speak at a conference starting at 10:30 am Pacific…Boston Fed President Eric Rosengren, an FOMC member who has been hawkish recently, was interviewed by CNBC this morning and said it’s time for another interest rate hike as the economy is close to reaching both full employment and the Fed’s 2% inflation target…
China Watch
Stronger-than-expected Chinese inflation data released today eased some concerns about the health of the world’s 2nd-biggest economy…September producer prices in China rose for the first time in nearly 5 years, while consumer inflation also beat expectations, setting a positive tone for global equity markets to finish the week…
Canada’s Growing Deficit Problem
TD Bank is predicting the federal government’s deficit this fiscal year will be about $5 billion higher than the Liberal government predicted in its March budget…the bank says based on its calculations, the deficit is on track to hit $34 billion this year – a shocking turn of events after the Liberals a year ago actually inherited a small surplus and campaigned on running “modest” annual deficits of no more than $10 billion before balancing the budget again by the 4th year of their term…
TD says the higher-than-expected deficit would soak up the $6 billion annual cushion and then some that the government built in to its finances to protect against unforeseen events…over a 5-year span, the cumulative deficit is likely to be $16.5 billion higher than estimated in the last budget…
So Canada is back to structural deficits again in this new era of 1970’s-style Big Government…prepare for more tax hikes on top of the “hidden” one that came when the amount Canadians can contribute to their tax-free savings accounts on an annual basis was sharply reduced…
In Today’s Morning Musings…
1. Technical signals suggest the last half of October could be much better for the Venture…
2. Garibaldi Resources (GGI, TSX-V) finds large, distinctive massive sulphide signature south of historic E&L Ni-Cu-Au deposit…
3. Morumbi Resources (MOC, TSX-V) completes $19.5 million financing for acquisition of producing Zinc mine…
4. Why Pure Gold Mining (PGM, TSX-V) is up 500% this year and should continue its climb…
5. Daniel’s Den…update on one of our favorite Oil plays, TAG Oil (TAO, TSX), and why Globex Mines (GMX, TSX) might be in need of a shakeup…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
Hoping this is the first of many exciting news releases from GGI.You were right Jon when you stated “silence is golden and patience is a virtue”. Very happy that I hung on and did not lose the faith with GGI. Looking forward to your weekend analysis of the E&L Deposit Jon.
Comment by pole — October 14, 2016 @ 10:09 am
WRR has had an exceptional run since September! 14 close! Have you got any update on this Jon? Also, what do you think of ABN financing at 7.5 now? it was 30 plus not very long ago??
Comment by STEVEN1 — October 14, 2016 @ 7:27 pm
How low is Abn going to fall? What’s up with the financing at 7.5 cents? Is this going to be dead money for a while? Seems like everything I touch turns to dust. Sp plummets then is dead money for long periods. Dbv, Ggi, Abn, etc…
Comment by Sameer — October 15, 2016 @ 5:06 am
sameer, I feel for ya buddy. Don’t like to see anyone on dead money.
AMY – timing is everything. I honestly had no idea a NR was coming out on Friday. For those involved. Yes the price retreated. But with it we continue to have a beautiful bullish flag triangle which is setting up for the bigger run. It should not break below .10. If it does, then the triangle is broken. But I don’t see this happenning. The news was great news and it tells us that we can expect great news on the final study to be released shortly. Looking forward to it.
There are 2 more I am watching. PMA and EXO.
PMA – this stock is setting up in a beautiful chart pattern with .045 being the bottom. If they close the deal with Sound energy at the end of the year, this stock is gone. In the meantime, I am keeping my eye on it for another run up before the end of the year. The RSI is hovering around 50 and the rest of the TA is negative at the moment. The heaviest resistance level is .06 and the strongest support level is .03. I DO NOT OWN YET.
EXO – Partnered with Samsung. Retreated to a 38% Fib. at .07, bouncing off the 20sma. It had a heck of a run on the news and has a lot of attention. I DO NOT OWN YET, but a friend of mine does have a position at .095
Comment by dave — October 15, 2016 @ 6:17 am
The outlook for ABN is as positive as ever, Sameer, especially with the financing. Yes, I would have liked to have seen them take advantage of the higher prices above 20 cents to pull the trigger on a financing at that point, but the overall market correction that suddenly started in August may have impacted those plans.
In any event, you’ll notice that this PP at 7.5 cents is in hard dollars only and funds in part are dedicated to “new property investigation” – we have been speculating all along that ABN will come up with a really good winter project, and this financing will help secure that. Their Forrest Kerr project is top notch and that’s going to drive a lot of excitement in 2017. We certainly haven’t seen the highs in ABN yet, so this is going to be a fabulous play for the next year (it’s just getting going). Even with the PP, the market cap is slightly under $3 million at the moment. That’s peanuts and provides a lot of upside.
Technically, ABN is also very oversold…you make money in the market when you buy good plays in oversold conditions and sell them into strength when they’re overbought…very simple strategy but too many investors struggle with that concept.
With regard to GGI, it’s obviously “game on” now. We’ll elaborate in our Sunday Sizzler.
Comment by Jon - BMR — October 15, 2016 @ 7:20 am
Just wondering if ABN would get hit during tax loss season?
Comment by STEVEN1 — October 15, 2016 @ 8:29 am
Jon
What is your honest opinion on buying these penny mining stocks at this time of the year before tax loss selling season and winter setting in?. Don’t you think it would be wise to wait until tax loss selling really kicks in, even the good plays could get hit and have better entry points.. your thoughts.
thanks
Comment by greg — October 15, 2016 @ 9:39 am
You have to look at history, Greg. You’re thinking of “tax-loss” selling in the context of just the recent past, the 5-year bear market period from 2011 to 2015.
Tax-loss selling during Venture bull market years has proven to be very muted. During those years since 2003, the Venture has actually risen quite substantially from the end of September to year-end, with little in the way of tax-loss selling. Go back and look at those years on the charts.
The Venture has been consolidating in a healthy fashion since mid-August and there’s no reason it won’t close the year higher than where it is now. Downside is limited to the low 700’s, but that wouldn’t be from “tax-loss” selling.
There are reasons why the Venture could suddenly turn higher anytime over the next 2 months, despite the “tax loss” season. The market could also remain choppy until mid-December before taking off sharply higher at that point. Having said that, the wisest strategy now is to focus on quality stocks that have the best technical strength and don’t have boatloads of paper coming at them from financings done during the spring and summer when the “taps” unthawed and opened up again for many companies. That paper has to be digested, and that puts pressure on stock prices.
Best-case scenario for Gold bugs is a Democratic sweep in November of the White House and Congress, exactly what occurred in 2008. That could fuel a huge Gold move in 2017, which would obviously impact the Venture November-December.
Comment by Jon - BMR — October 15, 2016 @ 9:57 am
Jon
Hopefully any level of subscriber can access your GGI property sizzler report; if it is delayed a day or two for lower levels of subscription is fine as well. After all it has been your reports that have convinced many to invest in GGI – very frustrating to date to put it mildly.
Murray
Comment by pinny1952 — October 15, 2016 @ 11:56 am
Thanks Jon
Comment by Greg — October 15, 2016 @ 4:59 pm