Check back later this morning for today’s BMR Morning Market Musings.
1. Gold’s attempt to recover into the $1,230’s has failed so far today but bargain hunters can be expected to soon jump in…bullion climbed as high as $1,236 before being knocked back down to the upper $1,220’s following release of a better than expected U.S. jobs report…as of 7:00 am Pacific, bullion is off $1 an ounce at $1,227…we’ll have an updated chart in today’s Morning Musings…U.S. job creation in April bounced back from a disappointing March…non-farm payrolls grew by 211,000 while the unemployment rate fell to 4.4%…the consensus estimate was for payroll growth of 185,000 and the headline jobs rate to tick up one-tenth to 4.6%…over the past 3 months, job gains have averaged 174,000…meanwhile, average hourly earnings in April rose 7 cents to $26.19 from March…this morning’s numbers will add to the already strong belief that the central bank will hike its benchmark interest rate at its meeting next month which could be a trigger for a summer rebound in bullion given Gold’s reaction to previous rate hikes…
2. Oil prices are up 30 cents to $45.82 per barrel as of 7:00 am Pacific following yesterday’s sharp sell-off and additional weakness overnight as WTI dipped to $43.76 on forced margin calls and computer trading, its lowest price since November 15…WTI has broken a year-long uptrend line on the daily chart with $43 now the nearest support…Saudi Arabia’s OPEC Governor Adeeb Al-Aama told Reuters this morning that OPEC and non-OPEC nations were close to agreeing on an extension of December’s production cuts at meetings scheduled late this month, “but the length of the extension is not firm yet”…there have been no major headlines pushing prices below key technical levels, though a disappointing report on U.S. Crude stockpiles and news of higher output in Libya have weighed on market sentiment this week…the general consensus is that OPEC needs to do more if it wants to rebalance the market…meanwhile, U.S. production continues to ramp up…
3. The drop in Oil and other commodities sent the CRB Index yesterday to the bottom (177) of a horizontal channel in place since April 2016…the Index has hovered between 177 and 197 during that time…part of the current weakness in the CRB can be attributed to concerns that Chinese regulators will curb borrowing for infrastructure projects…the CRB is up a point at 178 as of 7:00 am Pacific and is certainly in a technical position for a near-term rebound…
4. The Venture, coming off its worst session of the year yesterday, has edged up 1 point to 775 through the first 30 minutes of trading and will try to reclaim 780 support today…however, 770 marks the top of a 2nd band of strong support that continues to the rising 300-day moving average (SMA) in the 750’s…stocks that have bucked the trend this week include PyroGenesis Canada (PYR, TSX-V), Castle Silver Resources (CSR, TSX-V), Deveron UAS (DVR, CSE), Jaxon Minerals (JAX, TSX-V), Aura Silver Resources (AUU, TSX-V) and Scandium International (SCY, TSX, see below)…the TSX has climbed 62 points in early trading while the Dow is off 22 points…
5. Most polls, if they are to be believed, show the socialist, anti-resource B.C. NDP with a narrowing lead entering next Tuesday’s critical B.C. election…NDP leader John Horgan, even more radical than the last NDP Premier in the 1990’s who drove the province into the economic sewer, has promised to “use every tool in the toolbox” to stop the TransMountain Pipeline Project which is scheduled to start construction in September…the threat shows how twisted the B.C. NDP is – the federally regulated $7.4 billion expansion of the Alberta-to-Burnaby Oil line has received the required approvals from the National Energy Board and from Justin Trudeau’s federal Liberal government…the deal of course has also been blessed by B.C. Premier Christy Clark, after it met her 5 conditions, and included a revenue sharing component worth up to $1 billion over 20 years, an unprecedented concession by Kinder Morgan…if elected, the B.C. NDP will once again pulverize the B.C. resource sector as it did when it was last in power in the 1990’s, creating a massive outflow of financial and human capital…one advantage for the Liberal free enterprise coalition is that a Mainstreet poll for Postmedia clearly shows that the Liberals are comfortably in the lead among the very large pool of ethnic Chinese voters in the province, 9 out of 10 of whom live in Metro Vancouver and tend to be financially well off and socially conservative…the Liberals also have a more organized and efficient “ground game” than the NDP in terms of getting out the vote, and the ground game can often be critical as that’s what pushed President Trump over the top in the key swing state of Florida…
6. Scandium International Mining (SCY, TSX) announced this morning that it has been granted a mining lease for the Nyngan Scandium Project in New South Wales, Australia…the mining lease represents the final major approval required from the NSW Government to begin construction on the project after a 7-year effort on this project by SCY…Nyngan is slated to be the world’s first primary Scandium mine…SCY is trading strongly on the news, up 6 cents on 42.5 cents through the first 30 minutes of trading…
7. Almaden Minerals (AMM, TSX-V) has entered into a bought deal with Sprott Capital Partners and Cormark Securities for a $15 million private placement at $1.75 per unit with a half warrant good for 3 years at a price of $2.45 per share…the deal is expected to close by June 1 and Almaden will use the proceeds to advance its Tuligtic Project through continued engineering, permitting activities and exploration drilling…Tuligtic covers the Ixtaca Gold-Silver deposit, one of Mexico’s premier precious metal deposits (acquired by staking) with robust economics including a 41% after-tax IRR based on a pre-feasibility study released last month…AMM is up a nickel at $1.91 as of 7:00 am Pacific…
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Jon, volume increasing for VGN and bids are picking up. Is it finally getting noticed?
Comment by Danny — May 5, 2017 @ 8:40 am
Yes, Danny, huge upside for DVR and that’s definitely going to bring VGN along with it given its big share position…now that DVR is really well-funded, substantial cost savings accrue for VGN…DVR is on auto pilot now and that means VGN can also focus attention on new opportunities…
Comment by Jon - BMR — May 5, 2017 @ 10:51 am