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1. Gold has traded between $1,585 and $1,594 so far today as it closes in on $1,600…as of 7:00 am Pacific the yellow metal is up $9 an ounce at $1,590…Silver has jumped 16 cents to $17.92…both Gold and Silver are looking increasingly bullish from a technical perspective as they start to push through key resistance on short-term charts…Palladium has jumped another $23 an ounce to $2,424 while Rhodium has shot up $200 an ounce to $10,500…base metals are off slightly with Copper, Nickel and Zinc at $2.59, $5.85 and 96 cents, respectively…the U.S. Dollar Index continues to shine, up more than one-third of a point to 99.40 while Crude Oil has retreated 92 cents to $51.13…investment professionals now see China’s $12.2 trillion economy rising an average of just 5.2% over the next 3 years, according to the Bank of America Global Research Fund Manager Survey for February…while that’s a level that much of the developed world would envy, it’s well off China’s average quarterly gain of 6.6% over the previous 3 years and well below the 10.6% gain of a decade ago…it’s also the weakest outlook since September 2015…
2. Chinese officials are celebrating a drop in the number of new coronavirus infections and deaths, though the World Health Organization warned against complacency as global health authorities continue to battle the virus…China’s National Health Commission today reported 1,886 new confirmed coronavirus cases in mainland China yesterday, the first time the daily tally has fallen below 2,000 since the beginning of the month…the daily number of confirmed cases outside Hubei province, the epicenter of the outbreak, also fell to below 100 for the first time this month, while the number of new deaths across mainland China – 98 yesterday, all but 5 of them in Hubei – fell to less than 100 for the first time in nearly a week…of course we have to assume that China’s communist government is providing accurate numbers…the debate over whether the coronavirus has peaked has consumed health authorities and policy makers over the past week…across China, some policies have called for tighter controls to contain the spread of the virus, while others are designed to pave the way for a return to normalcy as the economic toll of the outbreak intensifies…
3. The optics aren’t good for Canada: President Trump is focused like a laser beam on the U.S. economy, a shining light in a rather gloomy world…meanwhile, as Canadian infrastructure came under attack by anarchists and eco-terrorists (not “land defenders”), Prime Minister Trudeau was galavanting around the globe last week to promote his failing globalist agenda in an attempt to win Canada a useless seat on the useless UN Security Council…he even cozied up to the rogue regime of Iran, warmly embracing Iranian foreign minister Foreign Minister Mohammad Javad Zarif at the 56th Munich Security Conference on Friday (video that Iran happily used for propaganda purposes)…back home where he belongs, Trudeau now says his government is committed to finding a “quick and peaceful” resolution to the blockades that have shut down swaths of the country’s rail system and temporarily blocked bridges and highways…those who are determined to “shut down” Canada surely sense the weakness in this country’s political leadership…in fact, there is a massive leadership vacuum…even “Conservative” Ontario Premier Doug Ford, all hat and no cattle as they would say out west, has hardly said a word about the disruptions that have carried on for more than a week…the national interest has no defender and the rule of law simply doesn’t exist…who’s even standing up for the democratically elected First Nation bands in northern British Columbia, all of whom support the Coastal GasLink pipeline?…every day the rail stoppages continue, the loss to the Canadian economy is staggering…with very rare exceptions (Jason Kenney in Alberta, for example), this country’s political leadership is an unmitigated disaster…
4. Palladium has quickly built on last week’s sharp gains, climbing more than $100 an ounce already this week to break above a bullish symmetrical triangle on the short-term chart…next measured Fib. resistance is near $2,800…the Palladium market was in a supply/demand deficit of more than 1 million ounces in 2019, and the shortage is expected to be even worse in 2020, according to Johnson Matthey in a report issued yesterday…analysts generally have cited strong auto-catalyst demand that is causing a continuing wide supply deficit…“The Palladium market deficit widened to over 1 million ounces in 2019, as combined primary and secondary supplies grew only modestly, while auto-catalyst demand surged higher on the back of new (emissions) legislation in China and more stringent testing regimes in Europe,” Johnson Matthey noted…the company said that average Palladium loadings rose by 14% in gasoline-powered cars…this drove automotive demand for Palladium to a record high of 9.7 million ounces, despite lower auto production in most regional car markets…all forms of Palladium demand amounted to 11.5 million ounces in 2019, up from 10.2 million in 2018, Johnson Matthey said…mine production eased to 6.89 million ounces from 7 million, hurt by lower shipments from Russia…however, recycling climbed to 3.42 million ounces from 3.12 million…investment demand remained negative, although the pace of liquidations slowed considerably from the previous several years…some 700,000 ounces of Palladium were in ETF vaults at the start of 2019, down from a peak of nearly 3 million in 2015…by August, the total fell to 590,000 before some moderate ETF buying in the final quarter of 2019, leaving them at around 660,000 ounces at the end of the year…imagine if ETF buying were to accelerate…“The Palladium deficit is likely to deepen in 2020, as an increasing number of Chinese and European vehicles meet China 6 and Euro 6d legislation, respectively,” Johnson Matthey added…“This is expected to drive up global average loadings on gasoline catalysts and could lift world automotive demand above 10 million ounces”…
5. Silvercrest Metals (SIL, TSX) is pushing higher in early trading after this morning’s confirmation of a new discovery at its Las Chispas Project in Sonora, Mexico – the Babi Norte southeast faulted extension named the “Area 200 zone”…expansion drilling has significantly increased the strike length of the Babi Norte Vein from 1.2 km as previously announced on February 25 to over 2 km…39 drill holes in this area have established an initial high-grade footprint of 500 m x 125 m…drill results from these 39 holes in Area 200 show an average estimated true width of 1.5 m with a weighted average grade of 16.1 g/t Au and 2,166 g/t Ag, or 3,375 g/t AgEq…Area 200 is not included in the current resource estimate….with this discovery, the Babi Norte Vein becomes the highest-grade vein currently known on the property…Babi Norte now has a total of 274 drill holes, including Area 200, which will be part of the updated resource and initial reserve estimate for the Feasibility Study to be released around the middle of this year…the cut-off date for drill data to be included in the FS is the end of this month…CEO Eric Fier remarked, “Since the high-grade discovery in January, 2018, of the Babicanora vein, Area 51 zone, the Silvercrest technical team has been systematically testing out its theory of the nature of multiples for the potential to discover parallel high-grade precious metal veins and zones similar to Area 51. With the high-grade discoveries of Las Chispas vein, Area 118, in November, 2019, and now the Babi Norte vein, Area 200, this work has proven effective. Area 200, approximately 500 m in strike length, is now considered the highest-grade discovery to date at Las Chispas and, combined with the remaining 1.5-km strike length of the vein, is the longest mineralized vein in the district, surpassing the Babicanora vein. Area 200 is proximal to the Santa Rosa decline, suggesting it could be easily accessed with minimal underground development”…SIL is up $1.31 at $10.08 as of 7:00 am Pacific…
6. The Dow has fallen 89 points through the first 30 minutes of trading…Apple (AAPL, NASDAQ) is under pressure after the company said the fallout from the coronavirus will cause it to miss its sales targets this quarter, sending shockwaves across tech stocks globally…meanwhile, Walmart reported fiscal 4th-quarter earnings this morning that fell short of analysts’ estimates…the retailer saw weak demand for toys, apparel and video games during the holiday season..in Toronto, the TSX is up 20 points with the Gold Index gaining 3 points to 264…exploration and production companies in the S&P/TSX Composite Index are collectively trading 70% below their 2014 peak…a resurgence in the Canadian energy sector is still nowhere in sight, leading more and more investors at home and abroad to the conclusion that the Oil patch is investable given Trudeau’s National Energy Program 2.0 (capital will always flow to where it’s wanted, and it’s increasingly flowing from Canada to the U.S.)…the Venture is up 3 points at 573…heavy volume in 1911 Gold (AUMB, TSX-V) in early trading on a major cross…it’s an attractive Gold junior we’ve been highlighting…AUMB is up a penny-and-a-half at 36.5 cents as of 7:00 am Pacific…Amex Exploration (AMX, TSX) has added 7 cents to $1.86 following last week’s new high-grade Gold discovery at depth at the Perron Property near Rouyn-Noranda…the stock confirmed a fresh breakout above $1.60 with a 27-cent gain last week…Palladium One (PDM, TSX-V) announced this morning that drilling will commence next week at its Palladium project in Finland…PDM is up a penny at 16 cents…other Palladium plays to keep an eye on include Canadian Palladium (BULL, CSE) and Transition Metals (XTM, TSX-V)…Sixth Wave Innovations (SIXW, CSE), which made its debut on the CSE with impressive volume and price action last week, has a major partner to crow about – the company announced last Thursday that Sumitomo Corporation of Americas is acting as sales representative for its IXOS®-Au product line…Sumitomo will introduce and promote IXOS® to its extensive customer base in the Gold mining industry and receive a 5% commission on applicable sales…Sumitomo completed a rigorous analysis and assessment of Sixth Wave’s disruptive IXOS® molecular imprinted nanotechnology used for Gold extraction, and is also interested in future Sixth Wave technological advancements for the extraction of other metals and contaminants associated with mining activities…SIXW raised nearly $14 million at 75 cents with no warrants…
7. As young adults from Generation Z start to carve out their career paths, they should not overlook the mining industry…there are 79,680 positions that will need to be filled in the mining field in Canada over the next decade, according to The Mining Association of Canada recently released annual report…a retirement wave is coming to the mining sector in the next decade which will see 25% of the industry’s current workforce retire by the year 2030, which represents around 57,000 positions…“The mining industry, both in Canada and abroad, faces a number of human resources challenges. The 2020 edition of the Canadian Mining Labour Market Outlook estimates that the Canadian mining industry will need to hire 79,680 new workers over the next decade to 2030. These new hires are required to replace retirees and fill new positions to meet baseline production targets”…on top of the retirement problem, the Canadian mining industry is facing an increasing brain drain when it comes to skilled workers…“Companies in other countries are actively recruiting Canadian graduates and workers, making retention challenging and recruitment highly competitive,” the report pointed out…
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