Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information…
1. Gold has traded between $1,225 and $1,234 so far today after hitting a stop-sign yesterday at $1,240…as of 7:00 am Pacific, bullion is unchanged at $1,230 with equity markets stabilizing after yesterday’s roller coaster session when the Dow dropped by more than 500 points in early trading…Gold pushed above its 100-day moving average (SMA) yesterday for the first time in 6 months but still needs to confirm a breakout above critical resistance at $1,230 in order for technical momentum to accelerate…Silver is flat at $14.71…Copper is a penny higher at $2.82…Nickel and Cobalt are steady at $5.58 and $27.56, respectively, while Zinc has added another penny to $1.24…Zinc prices touched a 3-week high yesterday, aided by concerns over supply shortages while an improving technical picture provided encouragement for buyers…the metal used to galvanize steel has risen 18% from a 22-month low in August, outperforming other industrial metals…on-warrant Zinc stocks in LME-registered warehouses (metal available to the market) have fallen below 100,000 tonnes from almost 240,000 tonnes in August and are close to 10-year lows…meanwhile, the premium for cash Zinc over the 3-month LME contract, at $53, remains close to Monday’s $63 one-year high, signalling that supply of nearby metal is struggling to meet demand…Crude Oil is 37 cents higher at $66.80 while the U.S. Dollar Index has jumped nearly half a point to 96.37…President Trump, concerned about higher interest rates and a strengthening dollar, has taken another shot at the Federal Reserve in an interview with The Wall Street Journal, directly accusing Fed Chairman Jerome Powell of endangering the U.S. economy by continuing to raise interest rates…“I’m just saying this: I’m very unhappy with the Fed because Obama had zero interest rates,” Trump told the Journal. “Every time we do something great, he raises the interest rates”…the President said Powell “almost looks like he’s happy raising interest rates,” but declined to elaborate…new U.S. home sales released this morning tumbled 5.5% in September…however, the flash U.S. manufacturing and service sector PMI’s for October exceeded expectations…
2. Canada’s largest Oil and gas companies begin reporting results tomorrow at a time when discounts for Western Canada Select Crude recently set a record of $50 (U.S.) per barrel relative to the West Texas Intermediate benchmark…AltaCorp Capital data shows the differential between WCS and WTI averaged $42.32 per barrel at the beginning of this week which is still abnormally large…even Canadian light Oil production is trading at a wide discount to WTI, with the Edmonton Par blend averaging around $26 U.S. per barrel less than the U.S. benchmark on Monday…it’s all a reflection of political incompetence, climate change extremism and Canada’s inability to increase pipeline capacity…“The recent blowout in Canadian heavy and light Oil (differentials) is causing immense heartburn across the industry and is the big driver of share price performance,” wrote CIBC World Markets analyst Jon Morrison, Trevor Bolland and Daniel Chan in a research note, adding that they’ll be watching to see if some Canadian producers curtail production as a result…Canadian energy stocks are down 14% since July…
3. Despite Justin Trudeau doubling down on his pledge to impose a jobs and investment killing carbon tax scheme across the country, even in the face of stiff opposition from several provinces, Bank of Canada Governor Stephen Poloz has hiked interest rates again today…Canada’s new trade deal with the U.S. and Mexico (not yet ratified by Congress) eliminates one major risk to the economy in the eyes of the so-called experts…this is the 3rd increase this year and the 5th since the central bank began raising rates in 2017…the decision is accompanied by new forecasts that show an improving economic outlook…“The Canadian economy continues to operate close to its potential (our emphasis, really???) and the composition of growth is more balanced,” the central bank said in this morning’s statement, adding that interest rates must continue to edge higher…however, it’s also apparent to other observers that while interest rates are on the rise in both Canada and the United States, the two countries’ are moving in opposite directions federally in terms of economic policy with President Trump making the U.S. much more competitive with broad-based tax cuts and regulatory rollbacks…Canada is now at a major disadvantage vs. its #1 trading partner which is sucking investment out of the country at alarming levels…mind you, we have become world leaders at growing and sell pot…
4. Equity markets got spooked yesterday by Caterpillar (CAT, NYSE) which faces mounting concerns (perhaps overblown) about China and global demand…Caterpillar boosted its full-year profit outlook twice in the first 2 quarters of this year but failed to do so yesterday while also warning about rising manufacturing costs, in part due to a strengthening dollar…traders hit the sell button…Caterpillar set a new 52-week low and has lost about a third of its value since January…the company, viewed as a bellwether for cyclicals, is among the nearly 400 of the S&P 500 stocks that are already in a correction, meaning a loss of 10% or more…the industrials sector, to which it belongs, is also in a correction, along with materials, consumer discretionary, financials and energy…however, Caterpillar retained its 2018 adjusted profit forecast of $11 (U.S.) to $12 (U.S.) a share, saying nothing material had changed since the last revision in July…just days ago, China posted its weakest economic growth since the global financial crisis, and the International Monetary Fund cut its global growth outlook for 2018 and 2019…Caterpillar says it expects the Chinese market to remain healthy, leading to a 40% annual increase in industry sales for standard full-size excavators this year…
5. Royal Nickel (RNX, TSX) had record quarterly Gold production of 31,360 mined Gold ounces in the 3rd quarter of 2018, a 199% increase vs. Q3 2017 production and a 135% increase vs. Q2 2018…Gold production for the first 9 months of 2018 totaled 58,460 ounces compared to 24,305 for the comparable prior year period…the large increase in high-grade specimen and coarse Gold production led to a 198% improvement in the mined grade for the quarter to 6.7 g/t, as compared to 2.24 g/t in Q3 2017 and a 112% increase vs. Q2 2018…Mark Selby, President and CEO of Royal Nickel, commented, “Clearly, the highlight of the 3rd quarter was the significant high-grade Gold discovery at the Beta Hunt Mine. As a result of the Father’s Day Vein discovery, the company will be in a substantial net cash position to fully fund our upcoming activities. With the arrival of the first drill at site during the past week, exploration activities will begin to ramp up as part of an aggressive exploration campaign. The technical team is continuing to advance their work on understanding the sediment structures in the mine which have the potential for additional high grade coarse Gold“…Selby continued, “We are also pleased to announce the final Gold content estimates for the large specimen stones, which would rank them among the largest ever found. The “King Henry” specimen stone, at 1,402 ounces, would rank amongst the largest Gold specimens in existence. With multiple large scale and spectacular specimens coming from a single area, we believe the Father’s Day Vein may rank among the richest and most prolific Gold veins ever found”…
6. The Dow is essentially unchanged as of 7:00 am Pacific after yesterday’s volatile session…in Toronto, the TSX has retreated 44 points while the Venture has rebounded 7 points to 658 after touching support in the high 630’s yesterday…Marathon Gold (MOZ, TSX) has intersected multiple intervals of en echelon stacked QTP veining with moderate and high-grade Gold grades at open-pit depths in both the footwall and hangingwall margins of the main mineralized corridor of its Marathon deposit in Newfoundland…drill holes MA-18–309, MA-18–312, MA-18–313, MA-18–319 and MA-18–324, drilled down along both the footwall and hanging wall margins of the mineralized corridor, effectively widened the mineralized corridor…they will help decrease the strip ratio for the open-pit and will contribute to the re-classification of Inferred material into the Measured and Indicated category for the next resource update…this morning’s assays were highlighted by 5.8 g/t Au over 16 m, 5.3 g/t Au over 16 m and 6.3 g/t Au over 11 m…
7. Corvus Gold (KOR, TSX), one of the top-performing Gold stocks this year, has expanded its district-wide land package by approximately 14% and now controls 100% of 123 sq. km in Nevada’s Bullfrog mining district…the new 15.2 sq. km land package was staked as open ground (is everyone else asleep at the switch?) and covers several new target areas along a major structural zone connecting the historic Bullfrog mine area with the newly discovered North Bullfrog deposits…the bulk of the new ground is located immediately east of AngloGold Ashanti’s (ANG, JSE) new western claim block and covers targets of similar age to neighbouring deposits…Corvus Gold now possesses a commanding land position throughout the greater Bullfrog Mining District with large exploration areas and numerous priority targets covering all 3 known major Gold events…
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