August 11, 2016
August 10, 2016
BMR Morning Market Musings…
Gold has traded between $1,342 and $1,358 so far today…as of 9:30 am Pacific, bullion is up $4 an ounce at $1,345…Silver has jumped 36 cents to $20.16…Copper has added 2 pennies to $2.18…Crude Oil has retreated 70 cents to $42.07 while the U.S. Dollar Index has tumbled half a point to 95.67…
Holdings of SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, fell for a 2nd straight day yesterday…they slipped 0.12% to 972.62 tonnes from Monday…
Spot Palladium has soared more than 5% today to a 14-month high of $743 as bets on lower prices were reversed in thin conditions after the metal broke above key chart levels…a wave of short covering was likely triggered after the metal broke above $700 an ounce, and again at last week’s 14-month peak at $723 an ounce…Palladium, used in catalytic converters in cars, climbed nearly 20% last month in its biggest 1-month rise in 8-and-a-half years…Platinum is also strong today, up more than 2%…
In a sign that there is still keen uncertainty and deflationary worries in the world marketplace, German 10-year government bond (bund) yields fell into record-low negative territory today, fetching an average yield of -0.9%, amid good demand…UK and Chinese government 10-year bond yields have also hit record lows but remain in positive territory…
Gold’s “Perfect Storm”
Diego Parrilla, precious metals specialist and co-author of “The Energy World Is Flat“, says a “perfect storm” has formed in Gold as the limits are being tested in global monetary policy, credit markets and the boundaries of fiat currencies…in a commentary Monday in the Financial Times, Parilla stated: “Quantitative easing and negative interest rates have been game changers and have dramatically distorted the valuation of government bonds, breaking the theoretical ceiling in prices, squeezing shorts and underweight positions, and feeding what, in my view, is one of the largest financial bubbles in history.”
America’s Productivity Problem
Much worse than expected U.S. productivity levels have had a dampening affect on last Friday’s robust jobs number from the Labor Department, and that has contributed to weakness in the dollar and strength in Gold today as investors see even less chance of a Fed rate hike later this year…
Productivity in Q2 unexpectedly fell 0.5%, according to the Labor Department in a report released yesterday…economists surveyed by MarketWatch had forecast a 0.3% gain in productivity during the quarter…productivity is down 0.4% from a year earlier, the first year-over-year decline since the 2nd quarter of 2013…
Why is productivity important?…it measures how much an employee produces in an hour of work…higher productivity is regarded as the key to a rising standard of living over time because it tends to lead to higher pay for workers and larger profits for companies…
Continued low productivity growth likely means that businesses aren’t boosting capital spending to increase output at a time when another input to the production process – labor – is becoming more scarce and more expensive…
Heading into the 2nd quarter of 2016, quarter-on-quarter productivity growth had averaged just 0.7% over the past 4 readings, well shy of its long-run average of 2.2%…
According to Bank of America Merrill Lynch analysts, the manifold headwinds on productivity growth (a mass retirement of the most experienced workers, a prolonged period of rising Oil prices before a sharp retreat, the slow integration of new innovative technologies into the production process, and above all, soft business investment) means policy rates will stay even lower throughout this cycle than the subdued levels monetary policymakers think they’ll eventually reach over the long haul…
Oil Update
Top Oil exporter Saudi Arabia boosted its output to a record high in July, it told OPEC, in a sign that key members remain focused on market share rather than tackling a supply glut by curbing production…the kingdom pumped 10.67 million barrels per day in July, according to figures it provided to OPEC which published them in a monthly report today…total OPEC production was up 46,000 bpd to 33.11 million bpd…
OPEC kept its forecast for world Oil demand growth unchanged at 1.15 million bpd for 2017…the producer group revised its outlook for 2016 global growth, increasing it to 1.22 million bpd…
The U.S. Energy Information Administration added to the market’s unease yesterday when it forecast a smaller decline in U.S. Crude Oil production in 2016 than it projected a month ago as drilling activity picks up…the agency now expects U.S. Oil output to fall by 700,000 barrels per day (bpd) this year to 8.73 million bpd, compared with the 820,000-bpd drop it previously forecast…
RBC: “Overbearishness” In Oil
Oil markets have been prone to over-bearishness of late with supply fears returning to the market largely “overdone”, according to the latest analysis by RBC Capital Markets…
Helima Croft, RBC’s head of commodity strategy, and commodity strategists Michael Tran and Christopher Louney, stated: “The Oil market recently has found itself in a sort of bear trap. Even as we march closer to the point where the daily global supply overhang turns to a deficit, a deluge of bearish headlines has kept the market on its heels,” Croft and her colleagues noted, adding that they “believe that the most significant bearish risks are overdone or have already been largely priced in.”
The behavior of the Venture backs up the RBC analysis…
In Today’s Morning Musings…
1. Probe Metals (PRB, TSX-V) starts major drill program at promising Val d’Or East Gold Project…
2. History repeats itself with MX Gold (MXL, TSX-V)…
3. Daniel’s Den – the U.S. earnings “recession”, and some juniors to watch…
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.
August 9, 2016
Channeling T. Boone Of The 1980’s, Daniel Goes Hostile On 2 Stocks!
BMR Morning Market Musings…
Gold has traded between $1,330 and $1,343 so far today…as of 11:15 am Pacific, bullion is up $6 an ounce at $1,341…Silver has gained a dime to $19.78…Copper is down a penny to $2.16…Crude Oil is off 30 cents at $42.72…later today, the latest round of U.S. Crude inventory reports will be in focus when the American Petroleum Institute is due to release its update ahead of the government’s report tomorrow…analysts in a Reuters‘ poll forecast that U.S. Crude stockpiles fell by 1 million barrels last week…the U.S. Dollar Index is down one-fifth of a point to 96.17…
The largest outflow in a month – 6.5 tonnes – occurred yesterday in New York-listed SPDR Gold Shares…some healthy profit-taking after a powerful stretch of inflows…
CME Group’s Fed Watch tool showed traders see almost a 50-50 chance of a U.S. rate hike by December, up from 30% before Friday’s jobs report…that’s 50% more faith in the Fed’s courage than the central bank deserves…
Mining and energy stocks have propelled Canada (based on the S&P/TSX Composite Index) to the 2nd-best performance among developed markets this year, trailing only New Zealand, fueled by a new bull market in Gold and other commodities (the Financial Post calls it a “rally” in Gold and commodities, which only proves that the masses still have their eyes closed and haven’t even stepped up to the plate yet)…the Canadian equity benchmark is up 14% so far in 2016, rebounding from a slump last year that was the worst for the TSX since the 2008 financial crisis…the price-earnings ratio for the TSX is now 23.5, about 15% higher than the PE ratio for the S&P 500 Index…
IAMGOLD (IMG, TSX) has tumbled 10% this morning after arranging a bought deal financing to haul in $200 million, as announced after the close yesterday…the company plans to use the cash to reduce debt and fund internal growth projects…
Following yesterday’s close, royalty and streaming company Franco-Nevada (FNV, TSX, NYSE) reported Q2 net income of $42.3 million or 24 cents per share which topped the consensus estimate of analysts…Franco-Nevada achieved records of 112,787 Gold-equivalent ounces and $150.9 million in revenue for the quarter…the company also declared a quarterly dividend of 22 cents per share to be paid on September 29 to shareholders of record on September 15. “With record GEO and revenue results, we are now expecting to be close to the top end of our previously provided guidance ranges for 2016,” stated CEO David Harquail…
Will Venezuela Honor Deal With Canadian Gold Company?
Gold Reserve (GRZ, TSX-V) jumped nearly $1 a share yesterday and is up another 25 cents this morning to $6.97 after yesterday’s news that the company has executed a settlement agreement with the socialist government of Venezuela which includes payment of the massive arbitral award granted in favour of GRZ by the International Centre for Settlement of Investment Disputes in respect of the Brisas Project…
Problem is, what are the odds that this hideous regime will actually hand over the money (can they even come up with it? – socialism has turned that country into a financial basket case and it’s now trying to grapple with a massive humanitarian crisis)…
Venezuela is “required” to pay Gold Reserve the award, which amounts to $770 million U.S., in two instalments – $600 million (U.S.) on or before October 31 and the remaining $170 million on or before December 31, 2016…Venezuela will also acquire the company’s technical mining data for $240 million in 4 quarterly instalments of $50 million beginning October 31 with a 5th and final instalment of $40 million due on or before October 31, 2017…the two sides will also form a joint venture to develop the Brias-Cristinas Gold Project which is expected to cost $2.1 billion…if you like the odds of Venezuela adhering to the deal, which we don’t, then you’ll find GRZ’s current market cap of just over $500 million to be very attractive…
In Today’s Morning Musings…
1. Northern Shield (NRN, TSX-V) pushes higher following VTEM results that bolster potential of Labrador Trough project…
2. More eyes on Colorado Resources (CXO, TSX-V) after more high-grade hits at Inel…
3. Strategic Metals (SMD, TSX-V) launches drilling at Hartless Joe, announces minimum 5,000 m program covering 3 properties…
4. Almadex Minerals (AMZ, TSX-V) gets aggressive at El Cobre after important hit on latest drill hole…
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.
A Fascinating Look Behind The Scenes At Colorado’s KSP
CXO Chief Geoscientist Dr. Jim Oliver at KSP (BMR photo).
Two-thirds of all drill holes released so far have returned significant near-surface intercepts at Colorado Resources‘ (CXO, TSX-V) emerging new deposit in the Golden Triangle’s Heart of Gold Camp, including 25.7 m grading 9.2 g/t Au in INDDH16–29 – a high-grade interval that also featured 5.3 ounces per tonne Gold over 1 m – but it’s the impressive pace of drilling with just 1 rig that’s allowing Colorado to capture majority ownership of this project from Seabridge Gold (SEA, TSX) far ahead of schedule.
In what could prove to be another “game changer”, drilling has now moved 2 km south of the Inel zone to the Khyber zone to test a 500 m x 1,500 m Gold-in-soil anomaly averaging better than half a gram per tonne. If the volcanic-sediment contact at the Khyber zone returns mineralized intersections comparable to Inel, then CXO is sitting on something much bigger than most observers had previously imagined.
The Heart of Gold Camp is rugged country, but the rewards from persistence and efficiency on the ground can be extraordinary given that this is one of the most mineralized parts of the entire planet as evidenced by the past producing Eskay Creek and Snip mines, Seabridge’s KSM Project and of course Pretium Resources‘ (PVG, TSX) Valley of the Kings where one of the world’s highest-grade Gold mines (Brucejack) is slated for commercial production beginning next year. Recent infrastructure improvements in this region are remarkable, sparked by the Altagas hydroelectric projects that have created, among other benefits, a 300-person camp and a staging area for the Colorado team within a short distance of KSP.
This morning we have the first excerpt of a fascinating interview with Brian Butterworth, President of Hy-Tech Drilling (and a geologist very familiar with the area) who provdes investors with valuable insight into what it takes to achieve such superb production levels at KSP, giving Colorado the opportunity to secure majority ownership of this project much more quickly than originally anticipated.
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August 8, 2016
Father-Son Gold Hunting Team Makes Another Discovery! AMZ Up 58%
On June 29th BMR published: Father-Son Gold Hunting Team Keeps Winning in Mexico, And They Can Win For You!
Today, this dynamic duo notched a big win for shareholders with an impressive drill hole at the Norte zone of the company’s El Cobre Cu-Au Porphyry Project in Veracruz, Mexico. Norte is 1 of 4 porphyry systems defined at El Cobre through coincident magnetics, IP and soil anomalies over a strike length of 4 km.
Click here to super-charge your trading profits by accessing all BMR content, including the rest of this article, with a Pro, Gold or Basic subscription, or login with your username and password.
BMR Morning Market Musings…
Gold has traded between $1,329 and $1,339 so far today…as of 9:30 am Pacific, bullion is up $2 an ounce at $1,337…Silver has gained 9 cents to $19.75…Copper has added a penny to $2.17…Crude Oil has jumped $1.20 a barrel to $43.00 while the U.S. Dollar Index has climbed more than one-tenth of a point to 96.42…
Citi Research pointed out today that since 2015, after all non-farm payroll Fridays on which Gold has declined, cumulative returns in the yellow metal 3 days out have averaged less than negative one-third of 1% (-0.3%)…based on that, it’s reasonable to expect Gold to regain its footing this week…
Spooky: 666 Rate Cuts
666 is the number of the “beast” (Revelation 13:1, 17-18), and according to Reuters it’s also the number of times central banks around the world have cut interest rates since the collapse of Lehman Brothers in 2008…some 55 central banks have also eased policy since the beginning of last year, the latest being the Bank of England, which halved rates to a record low of 0.25% last Thursday and pledged to pump up to 170 billion pounds into the Brexit-hit UK economy…no BoE rate hike is priced in for 4 years and UK bond yields have slumped to record lows, depressing yields and flattening yield curves around the world…
Following the U.S. Q2 GDP shock, markets no longer expect the Fed to raise rates this year, despite the upbeat 255,000 payrolls jump in July as reported by the Labor Department on Friday (mind you, that report was really just a mirage as we explain further this morning)…
China Trims Back On Gold Purchases
China, the world’s biggest producer and consumer of Gold, cut bullion purchases in July as prices soared to the highest level since 2014 after the UK voted to leave the European Union…the People’s Bank of China increased holdings by 170,000 ounces to 58.79 million ounces, or about 1,829 metric tons, according to the central bank…that was the smallest addition since it began disclosing monthly purchases about a year ago, save for May when it bought nothing…China announced last year that its hoard had jumped 57% since 2009…
While China has the 5th-biggest stash by country, its holdings make up only 2.3% of total reserves, compared with 76% in the U.S. and 70% in Germany, according to the World Gold Council…
Disappointing Chinese Trade Data (More “Stimulus” Coming!)
Chinese imports and exports once again fell more than expected in July, building a picture of slowing growth in the world’s No. 2 economy…exports were down 4.4% on the year, while dollar-denominated imports tumbled 12.5%, government customs figures showed…the figures compared with a Bloomberg forecast for contraction of 3.5% and 7%, respectively, and with declines of 4.8% for exports and 8.4% for imports in June, when the trade data had also undershot forecasts…
Crude Oil Update
OPEC will hold informal talks at an energy conference in September, the cartel’s President said today, as Oil-producing nations worry over a recent downturn in the Crude market…Mohammed bin Saleh al-Sada, Qatar’s energy minister who is serving as OPEC’s President this year, sounded a positive note about the Crude Oil market, saying demand was expected to be strong in the 2nd half of 2016 while the global supply of petroleum would weaken…
China’s July fuel exports rose over 50% from a year earlier to a monthly record 4.57 million tonnes, official data showed today, as easing demand growth and a surplus in refined products pushed refiners to increase shipments overseas…
The number of Oil rigs drilling in the U.S. rose for the 6th consecutive week to 381…
Meanwhile, hedge funds last week cut their net longs on Brent Crude to their lowest since January while investors are holding their smallest bullish exposure to U.S. Crude Oil since February – good signs that an Oil price recovery may start to gain traction…
In Today’s Morning Musings…
1. Northern Shield (NRN, TSX-V) jumps on Labrador Trough results (CLE surrounds them, also pushing higher)…
2. Richmont Mines (RIC, TSX) continues to please as Q2 financials are released…
3. The funny story of the trading symbol that wasn’t…
4. Daniel’s Den – Obama’s jobs mirage…
Plus more…click here to read the rest of today’s Morning Musings, and all BMR exclusive content, or login with your username and password.
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