Gold has traded between $1,318 and $1,343 so far today on this “Jackson Hole Friday”…as of 9:30 am Pacific, bullion is flat at $1,322…Silver is up a dime at $18.60…Copper is unchanged at $2.09…Crude Oil is off slightly at $47.29 while the U.S. Dollar Index has jumped nearly half a point to 95.22…
Holdings of SPDR Gold Trust, the world’s largest Gold-backed ETF, fell 0.19% to 956.59 tonnes yesterday…
Russia and Kazakhstan continued to boost their Gold reserves in July, data from the International Monetary Fund showed yesterday…meanwhile, top consumer China’s net Gold imports via main conduit Hong Kong rose 28.6% last month…
The “seller” who stopped the Gold market several times over the course of the past several weeks at the $1,350-$1,355 level remains, said Dennis Gartman in his Thursday newsletter. “We are more and more convinced that seller is the Venezuelan government and further because the economic conditions there are deteriorating as quickly and as badly as they are, that ‘seller’ has no choice but to lower its target,” he explained…
Fed Remains In A Hole As Ma Yellen Delivers Speech From Jackson Hole
In a much-anticipated speech this morning at the central bank’s annual Jackson Hole summit, Fed Chair Janet Yellen voiced optimism about the economy and an expectation that interest rate hikes are ahead…of course that’s exactly what she said so vociferously last December, and we all know what the result has been (not 1 rate hike yet in 2016 after as many as 4 were predicted)…
The FOMC “continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives,” Yellen said in prepared remarks…more pointedly, she added, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”
The Fed has had a spotty record at gauging economic trends, and Yellen’s words this morning came from staring again at the rear view mirror…the upcoming U.S. elections, in our view, are also likely to deliver fresh uncertainty around the economy (before and immediately after November 8) and this will further handcuff the Fed and prevent it from implementing another rate hike until at least December – perhaps well beyond…
Fischer Raises Possibility Of 2 Near-Term Rate Hikes
Gold strengthened into the $1,340’s immediately after Yellen’s speech, but then bullion and equity markets quickly reversed after Fed Vice-Chair Stanely Fischer commented in an interview that Yellen’s words were consistent with a possible September rate hike and that investors should prepare for the possibility of 2 rate hikes before year-end…that spooked the markets, though it shouldn’t have…why do traders keep taking words from Fed officials as gospel and why doesn’t the mainstream media challenge them?…
Fed’s Bullard: “I’m Agnostic On Exactly When We Do That”
Earlier this morning, prior to Yellen’s speech, St. Louis Federal Reserve President James Bullard, an FOMC voting member this year, told CNBC that the September Fed meeting might be a good time to raise interest rates – or it might not be!..
Bullard has said he favors a single hike in the Fed funds overnight lending rate to 0.63% and a hold for about 2-and-a-half years…the current rate, bumped up for the first time in more than 9 year sin December, ranges from 0.25% to 0.50%…
“I’m agnostic on exactly when we do that,” Bullard said on “Squawk Box”…he said he’d like to hike rates for the 2nd time in 10 years on good economic news. “If we got to a meeting and we felt things were looking stronger, that might be a good time to do that.”
Now that’s conviction!…
The Bottom Line
Nothing has really changed today – the Fed remains all over the map with inconsistent messaging, and words that are never backed with action…it seems quite likely they are simply confused…
The bullish case for Gold continues as strong as ever, no matter what the Fed does, actually…they are behind the curve and have lost enormous credibility this year…
Did You Know?
Only 3 U.S. states have set aside enough money to fully pay retirement benefits owed to current and futures retirees: South Dakota (107% of liabilities), Oregon (104%) and Wisconsin (103%), according to a new analysis from The Pew Cheritable Trusts…
State pension fund debts have been growing since 2000, after falling in the preceding decades…the last time they were fully funded was the late 1990’s when a stock market boom generated returns that left them with a surplus of funds to pay benefits…
Overall, U.S. state pension funds are looking at a $1 trillion shortfall in what they owe workers in benefits…
Iron Ore & Coal To Cool Off, Says Citibank
Iron Ore, dubbed by Citigroup as one of the hot commodities of 2016, looks set to cool off…prices may soon sag as supply rises and steel demand fades, the bank said, adding to a chorus of forecasters who are calling time on an unexpected rally…the raw material will average $51 a metric ton in the final quarter and $45 in 2017 under the base-case scenario, analysts led by Ed Morse said in a report earlier this week…that compares with Metal Bulletin’s 62% content price of $61.75 a dry ton and a year-to-date average of $53.64…
“Believe it or not Iron Ore and Coal are the hot commodities of 2016,” the bank said in the note, advising that investors “fade them as commodities stumble to rebalance.” It added, “Don’t expect the strength to last. Structurally the world remains oversupplied with relatively low-cost material.”
Canada’s Self-Inflicted Damage To Its Oil Sector
As Alberta struggles with its most devastating recession ever, aided by a far left, economically illiterate government filled with “climate change” fanatics, a new study highlights why different climate change policy choices made by Canada and the U.S. point to continued hardship for Canada’s top Oil producing province…
“This is a concern for Canada’s large Oil and gas sector, which competes globally for investment and export markets,” stated a newly released report from IHS Energy. “Unilateral climate policy adds cost that could move investment, activity, and associated emissions from Canada to regions with less-stringent policies, with little or no net reduction in global emissions.”
The unfortunate fact is that certain Canadian governments have implemented policies and procedures that are going to prevent this country from reaping the full economic benefits of any Oil price increase in the years ahead…
The Alberta government’s fiscal update this week said energy investment is forecast to be about half 2014 levels, and non-energy investment is also in decline as the Oil patch recession spread to housing, retail activity, labour markets and manufacturing…
Canada and the U.S. have similar GHG reduction targets – a 30% reduction by 2030 in Canada and a 26–28% cut by 2025 in the U.S., over 2005 levels…
However, keep in the mind that the U.S. was the world’s 2nd-largest emitter in 2013, responsible for 15.9% of global emissions, while Canada was the 8th largest with 1.7% of world emissions…also, Canada is a major Oil exporter, while the U.S. is an Oil importer despite growth in its own Oil production…
In 2015, about one-third of Canada’s total GHG emissions were covered by some form of provincial carbon pricing…additional initiatives mean up to two-thirds of Canada’s emissions will be covered by carbon prices in 2017, the report says…meanwhile, only 7% of U.S. emissions are subject to a carbon price…
To top it off, Alberta is pursuing unilateral initiatives penalizing its Oil sands industry (all in the name of “saving the planet”), such as putting a cap on emissions, while there are no such constraints south of the border…
Governments in Canada are going to do such a great job “saving the planet” and “stimulating the economy” with reckless spending and taxation schemes, they are going to destroy this country’s wealth in the process…just give them a few more years…
In Today’s Morning Musings…
1. This week’s Venture volatility further underscores the case for a bullish September…
2. An 8.5-cent stock to accumulate NOW…
3. Northern Shield Resources (NRN, TSX-V) mobilizes for drilling at Huckleberry…
4. Almadex Minerals’ (AMZ, TSX-V) discovery bodes well for September drama at El Cobre…
5. Daniel’s Den – TAG – you’re it!…
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…
