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1. Gold has traded between $1,318 and $1,327 so far today after a Fed ‘U-Turn’ yesterday on monetary policy…as of 7:00 am Pacific, bullion is up $3 an ounce at $1,323 as it attempts to confirm a breakout above resistance at $1,313 to close the month…Silver is also breaking out, up 9 cents at $16.13 as it successfully clears $15.75…base metals are closing January on a bullish note as well…Copper is 2 cents higher at $2.78…Nickel has added another 4 pennies to $5.58 while Zinc has climbed 2 cents to $1.23…Crude Oil has gained 57 cents to $54.80 while the U.S. Dollar Index is flat at 95.40…the Fed has no intention of raising rates again until at least the 2nd half of the year, but the next rate move could actually be down (as futures markets are speculating) based on yesterday’s policy statement and Jerome Powell news conference…“The traditional case for rate increases is to protect the economy from risks that arise when rates are too low for too long, particularly the risk of too-high inflation,” Powell stated…“Over the past few months, that risk appears to have diminished. Inflation readings have been muted, and the recent drop in Oil prices is likely to push headline inflation lower still in coming months”…Powell also emphasized that growth has slowed in some major foreign economies, particularly China and Europe…significantly, he also now concedes that the reduction in the Fed balance sheet is no longer on “auto pilot” as he remarked late last year…the normalization of the size of the portfolio will be completed sooner, and with a larger balance sheet, than in previous estimates as the Fed now evaluates the appropriate timing for the end of its balance sheet runoff…music to the ears of Gold bugs…
2. Global Gold demand rose 4% in 2018, driven by the greatest amount of central-bank buying in half a century, the World Gold Council said today in its quarterly report…Gold demand last year climbed to 4,345.1 tonnes from 4,159.9 in 2017…15% of this demand came from central banks, which collectively bought 651.5 tonnes of Gold, the report said…the central bank tally was 2nd-highest total on record, the WGC said…further, net purchases were the most since the U.S. ended dollar convertibility to Gold in 1971…a larger number of central banks purchased the yellow metal than in recent years as they sought diversification in their reserves…meanwhile, Gold-backed ETFs posted an inflow for the year of 68.9 tonnes, reversing from what at one time was an outflow, as 4th-quarter inflows totalled 112.4 tonnes…still, the year-on-year increase was 67% less than the one in 2017…
3. The use of trains to carry Crude is surging after dropping in recent years amid concerns about safety, as drillers in parts of North America produce more Oil than area pipelines can accommodate…an average of 718,000 barrels of Crude a day traversed America’s railways as of October, the latest data available, an 88% increase from a year earlier, according to the U.S. Energy Information Administration…much of the recent Oil train growth is due to record shipments from Canada, where pipeline expansion projects have stalled amid environmental opposition, legal delays and anti-Oil governments in B.C. and Ottawa…Crude-by-rail shipments also have ticked up from North Dakota’s Bakken region and the Permian Basin of West Texas and New Mexico, according to energy-monitoring firm Genscape…the Crude-by-rail comeback is expected to last through late this year in the Permian, and longer in North Dakota and Canada, as companies struggle to lay new pipe as quickly as drillers are getting Oil out of the ground…shipping Oil by train is more expensive (also less safe and less environmentally friendly) than sending it through a pipeline…according to energy investment bank Tudor, Pickering, Holt & Co., it costs about $20 (U.S.) a barrel to send Oil by rail from Canada to the U.S. Gulf Coast, compared with about $12.50 by pipeline…
4. The Green Monster has maintained its razor thin advantage in the B.C. legislature after the NDP scored a by-election victory in Nanaimo last night, an NDP stronghold going back half a century…however, it speaks volumes about the West Coast and Canada in general when a socialist politician with zero private sector experience (Sheila Malcolmson) defeats an attractive candidate like Tony Harris (a non-politician) who has been a successful businessman with deep family roots in the local community for decades…the far-left Malcomlson stated in her victory speech, “We are standing up and protecting the coast, we are defending against the risk of expanded Oil tankers. We are protecting from Oil spills and we are protecting jobs doing it”…how Malcolmson could think the NDP is “protecting jobs” by killing pipeline projects and chasing away companies like TransCanada (TRP, TSX) is hard to fathom, but that’s today’s Radical Left…
5. Gary Grabowski, who was district geologist for Ontario’s Ministry of Northern Development and Mines for 35 years, continues to keep a close eye on events in Northern Ontario and likes what he’s seeing in the Gowganda region where Canada Cobalt (CCW, TSX-V) is drilling into a Gold system in a grassroots discovery east of its Castle mine, while iMetal Resources (IMR, TSX-V) is now mobilizing for drilling at its property to the west of CCW and contiguous to a 4-million ounce deposit now owned by Pan American Silver (PAAS, TSX)…despite bitter cold temperatures, iMetal has mobilized crews for first-ever drilling at Zone 1 South at its Gowganda West Property…Zone 1 South, where recent channel sampling returned Gold values in conglomerate as high as 39.3 g/t, is just 500 m from Pan American’s Juby deposit…“Zone 1 South is hosted by lithologies such as jasper-bearing conglomerate and green carbonate altered mafic volcanic rocks similar to the rocks observed in the Kirkland Lake camp,” Grabowski stated in an IMR news release this morning…“This drill program will be very interesting and could identify a new high-grade Gold system that is parallel to the Juby deposit”…Gowganda West has never been previously drilled…extensive clear-cutting from a major logging operation has been a game-changer, exposing highly mineralized outcrops over a broad area…
6. The Dow has retreated 138 points through the first 30 minutes of trading after yesterday’s Fed-driven surge…Facebook (FB, NASDAQ) has reported revenue that beat Wall Street estimates, showing the largest social-media company’s advertising business is weathering scrutiny over a series of privacy scandals…the company reported Q4 sales of $16.91 billion (U.S.), ahead of the $16.4 billion analysts expected…earnings also topped expectations…the TSX is up 28 points as of 7:00 am Pacific while the Venture is 2 points higher at 617…Orca Gold (ORG, TSX-V) just delivered a series of impressive drill results, highlighted by 41 m @ 7.9 g/t Au and 7 m at 13.03 g/t Au from under-explored high-grade targets (Liseiwi and Galat Sufar South) at its Block 14 Gold Project in Sudan…these results are post-Feasibility Study and make the project more attractive than ever…President Hugh Stuart stated, “Our geological understanding of the mineralization at GSS continues to grow. There is a higher-grade core to the deposit that allows us to produce over 220,000 per year in the first 7 years of the mine life. We are now targeting plunging high-grade structures within this core towards increasing the overall grade of GSS. These latest drill results are the first from this initiative. At Liseiwi we continue to intersect and confirm high grades. These new results suggest the real potential of developing a second high-grade satellite resource complementing the Wadi Doum deposit”…ORG closed yesterday at 41 cents, just above its rising 1,000-day moving average (SMA)…
7. Khiron Life Sciences (KHRN, TSX-V) has jumped again this morning as it tests nearest Fib. resistance in the high $2.60’s as our latest chart had indicated it would…yesterday, Khiron announced the signing of a binding letter of intent with Dixie Brands to establish a 50/50 joint venture to introduce a full line of cannabis-infused products to the Latin American market…Dixie will also manufacture and distribute Khiron’s Kuida brand of cannabidiol (CBD)-based cosmeceuticals in the U.S., targeting the growing Hispanic population…completion of the JV is subject to Venture approval…by combining Dixie’s market-ready portfolio of cannabis-infused products with Khiron’s established footprint throughout Latin America, the companies aim to capture first-mover advantage and establish leadership in one of the world’s fastest-growing cannabis markets…the agreement also creates a framework for the development of new products and brands tailored to Latin America, allowing Dixie and Khiron to take full advantage of opportunities resulting from cannabis legalization throughout the region…KHRN is up 25 cents at $2.60 through the first 30 minutes of trading…
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