November 21, 2018
November 20, 2018
November 19, 2018
7 @ 7:00
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1. Gold has traded between $1,218 and $1,224 so far today…as of 7:00 am Pacific, bullion is flat at $1,221…Silver is off a penny at $14.38…Copper is up 2 pennies at $2.83…Nickel is 4 cents lower at $5.09 while Zinc is unchanged at $1.21…Cobalt is also steady at $24.95…Crude Oil has slipped 97 cents a barrel to $55.49 while the U.S. Dollar Index has retreated one-tenth of a point to 96.37…there will be fresh data on housing, durable goods and consumer sentiment during this shortened Thanksgiving trading week in the United States…Goldman Sachs now predicts 2.5% and 2.2% U.S. growth in the first 2 quarters of 2019, respectively, but then just 1.8% and 1.6% real GDP growth in the final 2 quarters of the year…“We expect tighter financial conditions and a fading fiscal stimulus to be the key drivers of the deceleration,” wrote the bank’s chief economist, Jan Hatzius…but Goldman believes the U.S. will skirt a recession next year…Bitcoin has tumbled to a new 13-month low with the biggest cryptocurrency now slightly below $5,100…Bitcoin, and other lesser coins including Ethereum and XRP, endured a sell-off last week, with some blaming fears that a “hard fork” in Bitcoin cash, where the smaller coin that split into 2 separate currencies, could destabilize others…
2. Differences between the world’s 2 biggest economies were on full display at the Asia-Pacific Economic Cooperation summit over the weekend, resulting in the group’s failure to agree on a joint communique for the first time in its history…deep divisions between the United States and China over trade and investment stymied cooperation…meanwhile, competition between the United States and China over the Pacific was also thrown into focus with the United States and its Western allies launching a coordinated response to China’s Belt and Road Program…the outcome of the APEC meeting would normally be viewed as a bearish indicator for Copper, given escalating trade tensions are likely to have a negative impact over the medium to longer term for the industrial metal…however, in recent weeks there are signs that the Copper market is starting to shrug off political concerns and focus more on supply and demand fundamentals…
3. Why Silver continues to languish: Following a drop of 1.5% in 2017, total Silver supply in 2018 is forecast to rise by 0.3% to 998.4 million ounces, according to GFMS…the increase is due to growth in mine supply, which is expected to grow to 865.5 million ounces from 852.1 million a year ago, thereby reversing a 2-year decline…scrap supply is likely to ease by 1%, according to the GFMS report…meanwhile, global physical demand is expected to contract by 3% to 963 million ounces in 2018, compared to 992.8 million a year ago…this would be the 3rd consecutive decline…bar and coin demand will be the primary driver, contracting 12.2% to 124.8 million ounces…Silver also isn’t getting as much help now from the photovoltaic sector where demand has contracted on the back of an increasingly more challenging global environment, GFMS said…“This has been particularly driven by government interventions at the two largest economies of the world. Despite imposed import restrictions by President Trump, it is particularly changes in China that are setting the tone for slower growth. The Chinese government introduced legislation to reduce solar subsidies in order to slow growth after new installations significantly exceeded its 13th 5-year plan budget”…
4. A sign of the times: A complaint has been filed in U.S. District Court for the District of Idaho against the U.S. Forest Service by 2 radical environmental groups in connection with Otis Gold’s (OOO, TSX-V) recently approved Kilgore Project plan of operation (see August 23, 2018, news release)….Otis says it’ll communicate any developments in connection with this matter as they become available…in the interim, the company will continue ongoing development activities at Kilgore under the current approved Decision Notice issued by the USFS…Otis President and CEO, Craig Lindsay, stated: “Otis is committed to conducting its exploration activities in an environmentally sound manner and meeting all requirements under its approved Plan of Operation. Our permit was issued after an exhaustive process that included the preparation of an Environmental Assessment and various public consultations. Additionally, for many years we have actively engaged with various community groups and individuals to address and mitigate any concerns, and will continue to engage and consult in this process as we move forward”…earlier this year, a group with the hashtag #Kill the Kilgore Project Before It Kills Our Grizzlies, declared, “We shouldn’t let foreign Gold companies take away our loyalty to the wild. We shouldn’t let foreign mining interests dictate our priorities…let’s tell the Forest Service that we would rather share with Canada the safe travel of our grizzlies than the destructive extraction of our Gold“…
5. The Dow is extending last week’s losses, off 118 points as of 7:00 am Pacific…in Toronto, the TSX is 27 points lower while the Venture has slipped 3 points to 621…Radisson Mining (RDS, TSX-V) announced this morning that drill hole OB-18–84 cut 2 significant intervals of high-grade mineralization at its O’Brien Gold Project along the Larder Lake-Cadillac break, halfway between Rouyn-Noranda and Val d’Or…OB-18–84 intersected 37.5 g/t Au over 12.8 m (420 m to 432.8 m) and 8.7 g/t Au over 12.2 m (399 m to 411.2 m) where several high-grade Gold intercepts were previously obtained…the stock was halted pre-market and opened at 7:00 am Pacific up 2.5 cents at 15 cents…in Northwest B.C., Dolly Varden (DV, TSX-V) has cut 30.4 m true thickness grading 302.2 g/t Ag in the Kitsol zone, 1.5 km northwest of the Torbrit mine…in the Dolly Varden mine area, below the historic workings, hole DV18–142 yielded 2 zones – the lower of which is base metal rich and contained 7.85 m grading 71.2 g/t Ag, 5.4% Pb and 3.9% Zn, for a Silver equivalent of 532.6 g/t…Gary Cope, President & CEO, says; “The Kitsol Zone represents a promising high-grade Silver target on the property. It is outside of the 2015 resource estimate block model. In addition, base metals in the lower projection of the Dolly Varden mine area are becoming a significant part of the Dolly Varden story”…
6. Disappointing additional results from Aben Resources (ABN, TSX-V) from the North Boundary zone of its Forrest Kerr Project…the best they could come up with out of 15 more holes was 1.2 g/t over 21 m…President and CEO Jim Pettit tried to put the best spin on the situation: “The 2018 season has been a geologic and technical success in terms of what we have accomplished this year. We started out with a 5,000-m drill program and expanded it to 10,000 m after success with the drill. We raised $5.2 million and an additional $1.7 million from the exercise of warrants. Logistically, we adapted quickly and efficiently on the fly and actually substantially reduced our overall cost of drilling per meter. We have identified the Boundary Zone as a very large, robust environment for Gold mineralization and discovery. We have 9 more holes to report on from this season and we look forward to compiling all the data available to us generated from this 2018 drilling program as well as new geochemical and geophysical analysis. It is also important to note we have the funds in the treasury for the 2019 exploration and drill program”…
7. The Globe and Mail reported this morning that weed research is catching up on lost time as legalization expands both financing and access to the controversial plant…owing to a myriad of legal challenges that had prevented scientists from getting marijuana, the end of prohibition has expanded interest in cannabis research and development…scientists are now pursuing goals ranging from saving millions of dollars in production costs, to creating precision-designed strains of cannabis capable of producing specific effects, to using elements of the cannabis plant to advance cancer research…as marijuana cultivation becomes commodified, growers are investing huge sums to gain any edge that might help maintain their product margins…Canopy Growth (WEED, TSX), for example, nearly doubled its research and development spending from $810 million in its 2017 fiscal year to $1.5-billion in 2018…“This whole area is really decades, if not centuries, behind when you look at some of the work that needs to happen on the scientific side,” said Organigram Holding (OGI, TSX-V) boss Greg Engel…with pot research restrictions now largely gone, cannabis-related academia has turned vogue…
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November 18, 2018
The Week In Review And A Look Ahead!
The overdone rout in Oil prices has a Silver lining…
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November 17, 2018
November 16, 2018
7 @ 7:00
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1. Gold has traded between $1,214 and $1,226 so far today…as of 7:00 am Pacific, bullion is up $10 an ounce at $1,226…Silver has gained 9 cents to $14.36…Nickel leads base metals this morning, adding 9 cents to $5.18…Copper and Zinc are up slightly at $2.82 and $1.21, respectively, while Cobalt has surged $1.81 a pound to $24.95…the Philippines’ environment ministry says 9 suspended mines will be allowed to resume operations if they rectify previous violations of environmental regulations, a move that could boost the country’s Nickel output next year…Philippine Nickel ore output, 2nd highest in the world behind Indonesia, fell 10% in the 1st half of 2018 from a year earlier to 9.43 million tonnes…Oil is building on yesterday’s rebound with traders betting that significant supply cuts will come from OPEC’s meeting on December 6…WTI is up $1.03 a barrel to $57.49 but is still headed for its 6th straight weekly loss…CNBC reported this morning that Saudi Arabia is slashing shipments of Crude to the United States, a move that appears calibrated to boost prices…the U.S. Dollar Index has fallen two-thirds of a point to 96.43…Goldman Sachs told CNBC this morning that the recent correction in stocks reveals that investors expect a bigger global slowdown than official data imply…Peter Oppenheimer, Goldman’s chief global equity strategist, said that the volume of selling suggested forecasts of a distinct global slowdown…“If we benchmark the way equities have moved against macro variables, we think they have now overshot the current slowdown and are implying a much further slowdown from here,” Oppenheimer told CNBC’s Street Signs…Goldman illustrated the anomaly in a note last week that showed the MSCI World index slipping below its usual correlation to global manufacturing data…
2. The Federal Reserve is close to the point of being “neutral” on interest rates and should predicate further increases on economic data, the central bank’s vice chairman said this morning on CNBC…recent appointee Richard Clarida stated that nearly 3 years of increases have brought the Fed’s short-term interest rate near where it is neither restrictive nor stimulative, a key consideration when considering the future path of monetary policy. “As you move in the range of policy that by some estimates is close to neutral, then with the economy doing well it’s appropriate to sort of shift the emphasis toward being more data dependent,” Clarida said during a “Squawk Box” interview, his first public comments since being confirmed in September…
3. Copper is set to end the week nearly 2% higher as signs of supply tightness supported prices, but worries about the outcome of U.S.-China trade tensions limited gains…nonetheless, Copper for November delivery has risen more than 3% this month, compared with a big drop in Crude prices…the divergence is notable because many investors trade Oil and Copper in the same basket of commodities…supply shortages are also powering Zinc towards its biggest weekly gain since September…meanwhile, Palladium – the only precious metal on track to post a gain in 2018 – hit another new record high yesterday…the surge in Palladium, used as an emissions-reducing auto catalyst for vehicles, reflected speculative buying driven by expectations of increased demand in a tight market…Palladium is up $7 an ounce at $1,148 as of 7:00 am Pacific…
4. Canada’s heavy-Oil benchmark tumbled to a near-record low yesterday, the latest spate of bad news from the Oil patch as Canadian producers struggle to ship product…the spot price for Western Canadian Select fell to a dismal $13.46 (U.S.) a barrel, down $2.29 from Wednesday’s close…it was the lowest closing price for WCS in Bloomberg data that goes back to May, 2008…yesterday’s drop in WCS occurred on a day when U.S. and international benchmark pricing for Oil rose…U.S. West Texas Intermediate (WTI) Crude futures gained 21 cents to settle at $56.46 a barrel, further widening the differential between WCS and WTI…Canadian Oil prices have plummeted in recent months amid a pipeline bottleneck that has led to higher inventories and forced producers to export an increasing amount of Crude by rail and truck…of course the climate change extremists don’t care if that creates more of a “carbon footprint” – they just want Canada to stop taking Oil out of the ground…
5. The Canadian Oil patch is losing patience with the country’s lack of support for the industry…the plunge in global Crude prices in recent weeks is being exacerbated in Canada by a lack of pipeline capacity, sending the country’s Oil prices to a record discount to the U.S. and energy stocks reeling…gas producers can’t even catch a break…while U.S. gas has surged about 19% in the past week amid an expected cold stretch, Canadian prices have actually dropped 14%…“Globally, we’ve politicized energy so much,” Darren Gee, CEO Peyto Exploration & Development,a Calgary-based gas producer, told Bloomberg…environmental and regulatory concerns have added an “entire layer of risk that people just don’t know how to assess…the federal government has absolutely no interest in having the TransMountain pipeline expansion built or expanding this basin,” Gee added…meanwhile, an analyst with one of the largest foreign holders of Canadian energy stocks, Capital Group Cos., warned in a letter to Prime Minister Justin Trudeau recently that investors and companies will continue to avoid the Canadian energy sector unless more is done to improve market access…Canada’s main energy index is down 11% over the past 12 months compared with just a 3.4% drop for U.S. energy stocks…
6. Tech stocks are under mild pressure in early trading today but the Dow is unchanged as of 7:00 am Pacific…in Toronto, the TSX is 16 points lower…over the past 4 months, the energy sector within the S&P/TSX Composite Index has plummeted 17%, proving to be the biggest drag on the Canadian stock market over that period…the decline continued even through a series of good earnings releases, underscoring how confidence in federal government policy toward the sector has eroded significantly…the Venture is is aiming for back-to-back winning sessions after a decline of as much as 58 points or 8.7% over just 5 sessions…Sokoman Iron (SIC, TSX-V) was halted pre-market, pending news…the company commenced a 10,000-m Phase 2 drill program at its promising Moosehead Project in Newfoundland early last month…
7. The CEO of Aurora Cannabis says that Ontario and British Columbia “shat the bed” when rolling out their retail models for recreational cannabis, and that the only provinces that “got it right” were Alberta and “perhaps Saskatchewan…I would say Ontario shat the bed the worst,” Terry Booth told a panel session at the Marijuana Business Conference, also known as MJ Biz Con, in Las Vegas yesterday…Booth’s comments, at times laced with profanity, were met with a mix of laughter and shock by the audience, who were attending the session titled “Canada: Assessing the First Month of Recreational Sales”…Canada has struggled to meet demand for recreational weed, with some licensed producers pointing the blame at the distribution methods employed by certain provinces, and provinces saying that they did not receive enough product from producers…Booth said Edmonton-based Aurora had lived up to its obligations but suggested that problems with the rollout were holding the company back…
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