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1. Gold has traded between $1,229 and $1,240 so far today…as of 7:00 am Pacific, bullion is off $3 an ounce at $1,230…holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, rose 0.24% to 24,101,732.54 ounces yesterday, the highest since early September…technically, Gold is still trying to confirm a breakout above critical resistance at $1,230…Silver has shed 4 cents to $14.61…Copper, Nickel and Cobalt are flat at $2.81, $5.50 and $27.56, respectively, while Zinc has retreated 2 pennies to $1.21…Crude Oil has gained 27 cents to $67.09 while the U.S. Dollar Index is up another one-fifth of a point to 96.57…
2. With the Fed planning several more rate hikes through 2019, a strategy that has started to spook the equity markets, the U.S. economy has expanded at a 2.9% annual rate since April 2017, according to the Commerce Department’s tabulations of the nation’s GDP…that growth rate is faster than the 2.2% annual growth rate between mid-2009, when the expansion started, and April 2017, but inflation isn’t a major threat unless Oil prices push significantly higher and remain there…a higher greenback is also helping to keep inflation in check…interestingly, faster government spending has accounted for nearly half of the GDP acceleration since the spring of 2017, according to a Wall Street Journal analysis…defense has shifted from contracting at a 2.1% annual rate between June 2009 and March 2017, to growing at a 2.9% rate since April 2017…the turnaround has added one-fifth of 1 percentage point on average to the nation’s overall economic growth rate, according to Commerce Department figures…
3. The bad news for New Gold (NGD, TSX) is out of the way, and now new CEO Renaud Adams can focus on a major turnaround commencing this quarter…NGD is up 11 cents at $1.01 as of 7:00 am Pacific…”The 3rd quarter included many positive changes for New Gold that will help reposition the company as a leading, Canadian-focused intermediate Gold producer,” stated Adams in yesterday’s Q3 report… “We strengthened the technical experience of the Board and senior executive team and announced the sale of the Mesquite mine, which improves our cash position, secures the liquidity to complete the ramp-up of Rainy River, and allows us to focus exclusively on our two producing assets, Rainy River and New Afton, and unlocking value for our Blackwater project. The 4th quarter will be a pivotal quarter for New Gold as we advance a short-term operational plan at Rainy River to reposition this core operation for long-term success. We are confident that additional productivity improvements will be realized during the 4th quarter. Our New Afton Mine continues to deliver solid and consistent results, and we are currently evaluating alternative scenarios to advance the development of the C-zone beginning in early 2019. We will launch exploration programs at both assets as we seek to achieve organic growth opportunities by expanding our resource base,” Adams concluded…
4. Another exploration “hit” in British Columbia: Drilling into a new extension of the Canyon Creek skarn zone at Sun Metals‘ (SUNM, TSX-V) Stardust Project in north-central British Columbia has returned the thickest and richest mineralization ever intersected at the property…Sun Metals believes that drilling is successfully tracking a major mineralizing fluid pathway toward the heart of the high-grade system…diamond drill hole 18-SD-421 intersected 36.50 m grading 3.9% Copper, 4.5 g/t Au and 84.6 g/t Ag…this includes higher-grade intervals of 5.5 m @ 6.3% Cu, 7 g/t Au and 202.1 g/t Ag, and a 2nd interval of 6.8 m grading 8.5% Cu, 11.2 g/t Au and 162 g/t Ag…downhole from this intercept, drilling intersected another zone of skarn alteration with visible sulphide mineralization…assays from the lower section of the mineralized skarn extension are pending…“These kinds of grades, coupled with the multiple repeated mineralization stages readily seen in core, suggest we’re on a major mineralization fluid pathway. The textures suggest we’re still pretty distal, so there should be plenty of room to follow this high-grade skarn back towards the source of the system,” said Dr. Peter Megaw, chair of Sun Metals‘ technical advisory committee…SUNM opened strongly this morning, jumping 7.5 cents to 23.5 cents on total volume (all exchanges) of nearly 2 million shares before the stock was halted by regulators pending “clarification” of news…
5. Canada Cobalt (CCW, TSX-V) is rebounding this morning after a knee-jerk “sell on news” event yesterday, driven by the late day broader market sell-off and trigger happy day traders who made the same mistake with GT Gold (GTT, TSX-V) August 8 and September 4, only to see that stock soar by multiples later on…in the case of Canada Cobalt, yesterday’s big clue overlooked by the day traders was the sensational Cobalt-Silver waste pile results at the bottom of the news release that instead highlighted what appears to be an important grassroots drilling discovery (different deposit type) east of the mine (very significant in itself and a major “bonus”)…a large sample from the waste pile – material discarded by Agnico Eagle during its mining in the 1980’s – returned head grades of 0.39% Cobalt and nearly 60 ounces per tonne Silver, in addition to a Cobalt concentrate grade of 8.25%…the Asians in talks with CCW will love those numbers…the Re-2OX process, of course, takes the concentrate, removes the arsenic, and produces a battery grade Cobalt sulphate product…for a randomly selected waste pile sample to deliver 0.39% Cobalt is outstanding…in the richest areas on the first level of the Castle mine, a drill hole through a vein structure with visible Cobalt could easily return 5 to 10 times the grades that First Cobalt (FCC, TSX-V) reported yesterday from its flagship Idaho Cobalt Project – 8 m @ 0.45% Co within a broader interval of 27.8 m grading 0.27% (FCC gained on the news, by the way, and currently commands a market cap of $85 million)…Canada Cobalt investors have been patiently waiting for drilling results from underground vein structures…yesterday, they got a huge “heads-up” that CCW next week will likely report the best Cobalt results the Northern Ontario Cobalt Camp has ever seen…
6. The Dow has recovered 208 points through the first 30 minutes of trading after yesterday’s horrendous session…entering today, the Dow had lost 7.1% this month and is on track for its biggest monthly loss since May 2010 (that proved to be a great buying opportunity)…the S&P 500 is down 8.9% in October, through yesterday, and is headed for its biggest 1-month decline since February 2009 (another great buying opportunity)…the NASDAQ has shed 11.7% and is on pace for its worst monthly performance since October 2008 (another great buying opportunity)…in Toronto, the TSX is up 67 points after its worst single-day performance in more than 3 years yesterday…the Venture has added 5 points to 647…
7. Interest rate hikes will be costly: Canadian debt holders, especially millennials, will see their savings and discretionary spending under pressure as the Bank of Canada continues to hike interest rates, according to an Environics Analytics study…yesterday, Canada’s central bank raised interest rates by a quarter point, marking the 5th time it has done so since the summer of 2017…Canadian interest rates have remained relatively low since the global recession in 2008 as the bank attempted to stimulate the economy…but now the bank is more optimistic about the economy, pointing to the USMCA trade deal signed with the U.S. and Mexico at the end of September…not everyone shares the central bank’s view…shockingly, BOC Governor Stephen Poloz actually stated yesterday that the Canadian economy is “close” to its full potential…rising interest rates will mean that mortgage and non-mortgage debt-holders “are starting to feel the pinch,” Environics research concluded…when the 2018 hikes are taken into consideration, the average Canadian household will be hit with what amounts to be an additional annual bill for $1,715…
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