Check back later this morning for Daniel’s Den (BMR Morning Market Musings returns soon) and other potential posts today.
1. Gold has traded between $1,226 and $1,232 so far today…as of 7:00 am Pacific, bullion is up $5 an ounce at $1,230…a weekly close in the $1,230’s would certainly be a bullish sign going into the final half of May, but critical for Gold this week was bouncing off key support at $1,215…commodity traders will be keeping an eye on a host of Chinese macro releases due over the weekend…meanwhile, traders are expecting a 100% probability of an interest rate increase next month, according to CME Group’s FedWatch prior to fresh economic data released this morning…a rate hike June 14 has the potential to ignite a summer rally in the metal…
2. U.S. consumer sentiment for May, reported just moments ago, slightly exceeded expectations with the University of Michigan’s Consumer Sentiment Index rising to 97.7…that’s up from 97 in April and shows that the “Trump Bump” continues, much to the bewilderment of the mainstream media…meanwhile, the Commerce Department announced retail sales increased 0.4% in April from March…that was below expectations of 0.6%; however, sales had ticked up just 0.1% in March and fell in February…the increase suggests consumers may spur faster growth in the quarter of April through June after the economy just barely expanded in the first 3 months of 2017 despite a surge in consumer and business sentiment…
3. Net length in open Crude Oil futures positions is at its lowest level since November 2016 which sets the stage for further gains in Crude ahead of OPEC’s meetings later this month when the cartel and certain non-OPEC countries are expected to extend production cuts implemented at the beginning of this year…Crude has rebounded this week, thanks in part to the expectation of bullish news in a couple of weeks regarding the extension of production cuts while the latest U.S. inventory report has also helped…meanwhile, Norwegian consultancy Rystad Energy, commenting on how U.S. Oil production has gained “significant momentum“, predicts that U.S. Lower 48 (all states excluding Alaska and Hawaii) Oil production is set to expand by an additional 390,000 bpd from May 2017 to December 2017, assuming a WTI price of $50 per barrel…WTI is hovering just below near-term resistance at $48 this morning…
4. Commodity corruption: The Wall Street Journal reported this morning that money from state-run Chinese companies was used to help finance the buildup of a massive Aluminum stockpile that has crisscrossed the globe, depressed prices and sparked a U.S. criminal investigation…any such involvement by these state-run entities has the potential to strain relations between the U.S. and China as the latter is clearly undercutting global competition by giving government assistance to its commodity companies…Aluminum is among several commodities that the Trump administration has singled out for potential protectionist policies against cheap Chinese imports…the stockpile in question involves nearly a million tons of Aluminum products from China that began accumulating outside a factory in a Mexican desert and was later transferred to Vietnam…WSJ tied the cache to Chinese billionaire Liu Zhongtian and his China Zhongwang Holdings Ltd. Aluminum company…his apparent goal, American competitors allege in federal complaints, was to disguise the origin of the metal, which could have faced U.S. tariffs as high as 374%…he was planning for retirement in Switzerland by shifting assets out of China where citizens can move only a limited amount of money out of the country…
5. The Venture is set to snap a 3-week losing skid which shaved 53 points or 6.3% off the Index in a mini-correction that closely mirrored the weakness in March…further evidence of strong support in the 780’s with the Venture up 3 points at 791 as of 7:00 am Pacific, 21 points above the weekly intra-day low during B.C. election day on Tuesday…the TSX has added 21 points in early trading with the Gold Index set to post a very strong week, currently up 6% from last Friday’s close…Markham, Ontario-based Real Matters Inc. closed its initial public offering of $156.7 million yesterday, the largest technology IPO on the Toronto Stock Exchange in a decade and only the 3rd tech company since 2014 to raise more than $100 million in its IPO. ..90% of the company’s business comes from the United States where it is a leading player in the network management services platform sector for the mortgage and insurance industries…
6. Transition Metals‘ (XTM, TSX-V) Canadian Gold Miner Corp., not yet publicly listed, has closed a private placement totalling $817,250 by way of the issuance of 5,294,998 units, each consisting of a common share and common share purchase warrant exercisable for 3 years at 25 cents per share at a price of 15 cents per unit, and the issuance of 115,000 flow-through eligible shares at a price of 20 cents….concurrent with the financing, Canadian Gold Miner has entered into a finder’s fee agreement with Gravitas Securities Inc., whereby Gravitas will endeavour to assist the company to complete additional flow-through financing of up to $1-million this spring…the planned use of proceeds includes drilling of the high-grade Bjorkman showing (Feb. 8, 2017, XTM news release) as well as a robust exploration program on Canadian Gold Miner’s South Kirkland project area…
7. Klondex Mines (KDX, TSX) has provided an updated mineral reserve estimate for its True North Gold mine in Manitoba…total Proven and Probable mineral reserve (underground) is 147,900 ounces, an increase of 25% from the prior estimate…the new figure is based on 7,877 drill holes totaling a whopping 1,504,878 m…this includes 131 drill holes totaling 18,065 m completed by Klondex since June 30, 2016. Brian Morris, Senior VP Exploration, stated: “This updated mineral reserve estimate is another milestone in the ramp-up of True North. As expected, the system is beginning to unveil its real potential as we continue to see robust grades and widths at depth as well as up-dip mineralization in the 710/711 zones. We continue to make good progress ramping up the mine at True North with infrastructure being put in place. We expect production to be weighted to the 2nd half of the year and remain on track to meet our annual production guidance.”
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