Check back later today for Daniel’s Den, and visit the BMR comments section throughout the day for updates and helpful information.
1. Gold has traded between $1,334 and $1,348 so far today, bouncing back from its lows after fresh weakness in the greenback…as of 7:00 am Pacific, bullion is up $6 an ounce at $1,346…Silver has added 9 cents to $17.25…on the base metal front, Nickel has eased off 13 cents to $6.13 after climbing as high as $6.32…Copper has slipped 2 pennies to $3.18…Zinc is unchanged at $1.63 while Cobalt is steady at $36.40, just slightly below its best level in almost a decade…metals markets should draw some bullish conclusions from President Trump’s State-of-the-Union address tonight when he will focus on economic growth and discuss a $1.5 trillion infrastructure improvement plan, “the next leg of the stool in our economic agenda,” according to White House economic advisor Gary Cohn in an interview on CNBC this morning…Crude Oil has retreated $1.27 a barrel to $64.29 while the U.S. Dollar Index has fallen one-third of a point to 89.03 as the Fed begins its 2-day meeting, the final one with Janet Yellen at the helm…
2. There’s speculation that India’s government will announce an import tax cut in its annual budget Thursday…such a move could boost India’s Gold demand and provide additional support to global prices…the bullion industry has been urging a tax reduction to combat smuggling, which has increased since India raised the import duty to 10% in August 2013 to narrow its current account deficit…“We are expecting a 2 to 4% reduction in the import duty,” Saurabh Gadgil, vice president of the Indian Bullion Jewellers Association (IBJA), told Reuters…
3. More good news for Gold…as the U.S. Congress limps toward the likely passage next week of another stopgap spending bill to avert a government shutdown, a Washington think tank now estimates the federal budget deficit is on track to surpass $1 trillion in 2019…if it does, it would be the first time since 2012 the U.S. economy will have to support a deficit so large…the Committee for a Responsible Federal Budget, a Washington fiscal watchdog, also stated that if current policies continue, the deficit could top a record setting $2 trillion by 2027…historically, Gold has performed very well during periods when the deficit trend is accelerating…
4. The Democratic Republic of Congo’s Senate has approved legislation that includes major hikes in both taxes and royalties on metals under reforms fiercely opposed by the mining industry…a commission representing both houses of parliament meets later this week to smooth out divergences so that the two chambers adopt an identical document before it’s sent to President Joseph Kabila for his signature…the Congo’s move to double taxes on Cobalt (more than half of the world’s Cobalt production comes from that country) will further inhibit investment in a metal experiencing a boom due to its use in cellphones and electric vehicles. “This revised mine code will hurt investments in a significant way,” said John Nkono, the secretary-general of the mine industry group Chamber of Mines, in an interview with the Wall Street Journal. “Government has ignored our advice on almost every aspect including on royalties and tax rates…it is total chaos.” Investors will increasingly look to other areas of the world for potential Cobalt supply such as the northern Ontario Cobalt Camp where multiple companies are active, including CSR which will soon be officially changing its name to “Canada Cobalt Works“…
5. The euro zone grew at its fastest rate in a decade in 2017, according to Eurostat data released this morning…the GDP of the single currency area expanded by 2.5% in the calendar year, the most rapid rate of growth since a 3.4% expansion in 2007, the year before the global financial crisis…the euro zone is in the midst of a broad cyclical expansion after years of economic stagnation and rolling crises, fueled by recovering confidence and monetary stimulus from the European Central Bank…businesses are indicating that new orders continue to increase, so it seems to be a safe bet that the euro zone economy will continue to perform well in the months ahead…that will help underpin commodity prices…
6. U.S. equity markets are suffering their second straight triple digit loss…the Wall Street Journal reported this morning that Apple is slashing planned production of the iPhone X for the 3-month period ending March 31, in a sign of weaker-than-expected demand…according to the report, Apple plans to make about 20 million iPhone X handsets in the 1st quarter, down from roughly 40 million initially planned…in Toronto, the TSX has slipped 116 points through the first 30 minutes of trading while the Venture has tumbled 18 points to 861…the 850 breakout point serves as very strong support…one bright spot in early trading is National Action Cannabis (NAC, TSX-V) which has hit another new high of $1.18…Skeena Resources (SKE, TSX-V) released results this morning from the final 12 holes of its 62-hole underground drill program completed during Q4 at its Snip Project in the Eskay Camp…highlights included 44.1 g/t Au over 1.5 m in UG17–051…in addition, UG17–059 intersected 8.1 g/t Au over 8 m including 14.9 g/t over 3.32 m, 50 m down-dip of previously reported drill hole UG17–062 which intersected two separate zones in the Upper Twin including 91.6 g/t over 3.8 m…a Phase 2 underground drill program is expected to commence next month and will focus on further defining the Twin, Upper Twin and 412 zones as well as exploring the newly defined 200 Footwall targets…Blind Creek Resources (BCK, TSX-V) has filed a NI-43–101 technical report for its 100%-owned Engineer Gold mine property near Atlin…the report provides the basis for Blind Creek’s recently announced planned spin-out of that asset which would provide BCK shareholders with 1 Engineer Gold share for every 2 BCK shares held as of the yet-to-be-announced date of record…Blink Creek would then focus on its Blende Property, the largest carbonate hosted Zinc-Lead deposit in the Yukon and one of the largest undeveloped Zinc-Lead deposits in Western Canada…
7. The Ontario government’s war on small business has drawn the attention of the marijuana sector…Aphria (APH, TSX) has calculated the province’s 21% minimum-pay jump from $11.60 to $14 an hour would add another $600,000 to its overall wage costs each year. “If this increase had been in effect in the current quarter, the company’s ‘all-in’ cost of sales of dried cannabis per gram would have increased by approximately $0.12 per gram,” the Leamington, Ontario-based company reported in its latest financials…that’s an increase of nearly 6% from its all-in cost of $2.13 a gram during the quarter ended in November…Aphria said in its MDA that when the provincial minimum wage goes up again to $15 on January 1, 2019, it expects overall company wages to go up by another $300,000 a year…Newstrike Resources (HIP, TSX-V) said it’s also feeling the financial pressure…the province is hampered by both relatively high labor costs and electricity costs…
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Hi Jon/John: Any chance you will be able to post an updated chart for GGI. Would be nice to see how we are situated in this time of quiet. Would like to be able to confirm support levels. Thanks very much
Foz
Comment by Foz1971 — January 30, 2018 @ 7:56 am
Can anyone explain the massive drop in AIS? I am sure we will see this stock rocket to new highs sometime this year but presently it has been punished mercilessly from a high of $1.40 down now to the 73 cent range. It doesn’t make any sense?
Comment by Raffi14 — January 30, 2018 @ 8:32 am
Has everything to do, Raffi, with the free-trading paper from last fall’s financing at 20 cents…that’s what is putting pressure on the stock…the initial tranche is several million shares (exclusive of management)…they will need to drive volume to clean this up and that’s why it’s important to get to drill turning as quickly as possible, which is what they say is about to happen…
Comment by Jon - BMR — January 30, 2018 @ 8:45 am
Hi BMR, I think you mentioned you were going to talk to Frank if the Canadian government is working harder to revitalize the Cobalt Camp – just curious if that happened? Canadian government should absolutely be taken advantage of the situation developing in Congo…
Comment by flyinthruu — January 30, 2018 @ 8:46 am
There are numerous players working hard to accelerate development of the northern Ontario Cobalt Camp, flyinthru, and the significance of the area was underscored recently when CBS Evening News paid a visit for a feature piece…we’ll be returning there shortly…events in Congo make alternative supply that much more attractive…in Canada, we had a great example in 2007 of what happens when governments jack up royalties – Alberta quickly lost a lot of business to Saskatchewan in the Oil sector, and that was on a royalty jump of only 20%…the Congo is doubling taxes and royalties and carrying out other “reforms” to “give the people” their “fair share”…
Comment by Jon - BMR — January 30, 2018 @ 8:51 am
Thanks Jon. Quite an intriguing and significant macro development.
Comment by flyinthruu — January 30, 2018 @ 8:55 am
Today I am awash in RED! Great day to watch for the dips and go shopping…
Comment by PatrickLamane — January 30, 2018 @ 10:38 am
Jon
what is going on in your opinion with the markets, all stocks seem to be down today, doesn’t matter what sector, AIS, BLOC, GGI, CSR. Hope this is short lived.
thanks
Comment by gregh — January 30, 2018 @ 11:21 am
any chance GGI will find a home and place the 2.7MM FT shrs that come free trading very soon, rather than have EMD, our old pals, drip or hammer them into the mkt for days or weeks? they don’t give a whoop about what may be happening on the property, so I don’t expect them to hold and then they have the 1/2 wts to get rid of as well.
Comment by david — January 30, 2018 @ 12:39 pm
Yes it is a red day! Chin up, put on a smile and go shopping. Beautiful day on Vancouver Island today, feels like spring. Picked up some CSR in the .30’s and some AIS in the .60’s. Paper could push AIS down some more but seems good value to start picking here. Be nice to see the Dow recover some into the close. That being said, it really does need to cool off for a bit and clean up some excess, ditto for S&P and Nasdaq.
Comment by DBReese — January 30, 2018 @ 12:43 pm
Yes…me too? red is definitely not my favourite color!
Comment by Ciara — January 30, 2018 @ 2:25 pm
Fell right through technical support on AIS. Guess it’s one to just put away and let sit for a long while…
Comment by Matt — January 30, 2018 @ 2:30 pm
David, the GGI flow-through shares from last fall are all gone – they already found a home. That’s how those actors operate. The 4-month hold doesn’t exist for their creative traders. They probably wish they could get some more but this time, a big NO from Regoci, I am sure…
Comment by Jon - BMR — January 30, 2018 @ 3:45 pm
Very normal behavior within a bull market, Greg; one actually has to look fwd to days like today and the pullback we’ve had the last 2 sessions. We’ll see a turnaround before the end of the week, perhaps as early as tomorrow. 17-month resistance at 850 makes that level particularly strong support now.
Comment by Jon - BMR — January 30, 2018 @ 3:54 pm
Jon, any chance of getting an updated chart for GGI?
Comment by pole — January 30, 2018 @ 4:03 pm
I was shopping today as well. As the saying goes, buy when there is blood in the streets. When the Main Street media starts buying, sell. That’s what happened to cryptal and blockchain a couple weeks ago. The bottom is close on those stocks as well and I see a turn around soon in the markets. Will be shopping again tomorrow looking for bargains.
Comment by Dan1 — January 30, 2018 @ 5:21 pm
I often wonder if you are just trying to reassure those of us that are panicking now, or if this is in fact normal, positive and short lasting behaviour. IMR has almost no volume, are we aware of any near term catalysts that might bring some volume? It seems stuck between 12-14c.
Comment by Lady — January 30, 2018 @ 5:25 pm
https://www.sensorsmag.com/components/smart-grid-sensor-market-getting-cagey
TPS-C mentioned with some big names
BMR found another gem
Comment by Silverhook — January 30, 2018 @ 5:46 pm
Just put in my vote for CSR name change. Whew hew!
Comment by Shaun — January 30, 2018 @ 6:01 pm
GGI + FT – GREAT ! thx
Comment by david — January 30, 2018 @ 6:01 pm
AIS is a steal at this price, matter of fact there are some amazing buys out there on the dip… I for one will be buying hard for the next round or leg up!!! Come on shoppers! Get out there and average up or even a bit down, this will not last long!
Comment by PatrickLamane — January 30, 2018 @ 6:56 pm
Yeah just wish I would have waited on AIS bought more at US.90 cents last week when I thought it was on sale, never saw this coming, makes me gun shy now..
Comment by gregh — January 30, 2018 @ 7:42 pm
CEM looks ready to roll again. EMA8 and EMA20 just about across the 50.
Comment by DBReese — January 30, 2018 @ 9:18 pm
I just limped in and was pretty stunned to see what everyone else had already seen …. AIS down under .70 !!! Tomorrow’s month end, so we should expect to see even lower prices across the Board and at some point a recovery. I too thought the .90’s were a great point to add and now there’s 7 hours to find some green ……. Farmer T
Comment by farmer — January 30, 2018 @ 11:25 pm
Jon
are you concerned about BLOC at all, where is the bottom?
thanks
Comment by Gregh — January 31, 2018 @ 8:17 am
Greg, not at all…keep in mind there’s a 1-for-1 spin-out on BLOC coming up, so the drop in price isn’t a true reflection of the total value if you’re more than just a day trader…company raised $43 million at $2.55 last month, lots of cash…
Comment by Jon - BMR — January 31, 2018 @ 10:05 am
Thanks Jon, just way down from where I bought it, but all of block chain and crypto is down right now in correction mode.
Comment by gregh — January 31, 2018 @ 11:57 am