BullMarketRun.com

1. Gold has traded in a tight range between $1,317 and $1,322 so far today…as of 7:00 am Pacific, Gold is up $2 an ounce at $1,320…holdings of SPDG Gold Trust, the world’s largest Gold-backed ETF, fell 0.62% Friday to 857.64 tons, but large speculators upped their net bullish positioning in Gold futures last week according to the latest COT data…Silver has retreated 2 cents to $16.62…Copper and Zinc are off slightly at $3.11 and $1.38, respectively, but Nickel has jumped 11 cents to $6.46 while Cobalt has added 23 cents to $40.60…Crude Oil is 11 cents higher at $70.81 while the U.S. Dollar Index has shed one-fifth of a point to $92.28…the bond market is doing something it hasn’t done in over a decade – the spread between the 2-year and 10-year yields is at its lowest levels since 2007…traditionally, a flattening yield curve has signaled a looming recession, though the U.S. economy has been gathering steam recently thanks to tax cuts and regulatory rollbacks…focus of the marketplace this week will be on U.S. trade meetings with China that begin in the U.S. tomorrow, and a possible U.S. decision on the NAFTA trade agreement with Mexico…

2. Gold has shown great resilience around $1,300 in the face of a recent strengthening of the U.S. dollar and equity markets, but an anticipated $1 trillion U.S. deficit this year plus the prospect of firming inflation has likely made the $1,300 area the new floor for bullion…U.S. debt-to-GDP reached 104% in 2017, its highest level since 1946 when it hovered around 120%, while total U.S. debt has surpassed $21 trillion this year, a more than 120% increase from a decade ago…meanwhile, publicly-held U.S. debt-to-GDP – debt that the federal government owes to those outside the government – is 75% but is expected to double by 2047, pushed upward by a raft of recent government spending and stimulus programs…the non-partisan Congressional Budget Office reported that a continuation of the current  fiscal trajectory could take the current ratio up to 150% in 30 years, putting the U.S. in the same camp as Greece or Italy…according to the International Monetary Fund, the U.S. is the only advanced economy where debt-to-GDP is scheduled to increase in the next 5 years…

3. Last week’s count of active U.S. Oil rigs saw that number rise by 10 to 844 rigs – the highest figure since March 2015 and not surprising given WTI’s price above $70 a barrel…meanwhile, U.S. trading commitment data showed that hedge funds cut their combined net positioning on Brent Crude and WTI Crude to the most bearish levels in 8 weeks…the issue of sanctions on Iran, however, is certain to keep a firm bid under Crude and limit any potential downside…while Iran has given European nations a 2-month window in which to guarantee that the nuclear deal will remain intact, U.S. national security adviser John Bolton said yesterday that the U.S. is prepared to impose sanctions on European companies if their governments don’t heed President Trump’s demand to stop dealing with Iran…

4. The Dow has pushed 117 points higher through the first 30 minutes of trading with global markets also strong today on signs of improving U.S.-China trade relations…President Trump’s Sunday tweet urging the U.S. Commerce Department to get ZTE, a China-based telecoms giant, out from under sanctions that bar U.S. companies from supplying it components came just hours ahead of news that China’s vice premier, Liu He, is headed to Washington to discuss trade issues between the world’s two largest economies…the overture, which included a second tweet that things “will all work out”, marked a sudden shift in the U.S. stance for apparent strategic strategic reasons…in Toronto, the TSX has climbed 86 points and is aiming for its first close above 16,000 since January…marijuana stocks have heated up on the Aurora-MedReleaf deal and other developments…the Venture has pushed above important resistance in the mid-780’s and is up another 8 points to a new monthly high of 791 as of 7:00 am Pacific…Rio2 (RIO, TSX-V) and Atacama Pacific Gold (ATM, TSX-V) have announced a merger this morning to attempt to unlock the value of the Cerro Maricunga Project in Chile, one of the largest undeveloped oxide-associated Gold deposits in the world with a pit-constrained Proven and Probable reserve of 3.74 million ounces (294.4 Mt grading 0.40 g/t Au) at a 0.15 g/t Au cut-off grade….

5. The biggest pot deal yet – Aurora Cannabis (ACB, TSX) is acquiring MedReleaf (LEAF, TSX) in a friendly all-share transaction, confirming recent rumors…the deal is valued at approximately $3.2 billion or $29.44 per LEAF common share on a fully-diluted basis as it brings together 2 operators with a total production capacity of over 570,000 kg per year of cannabis through 9 facilities in Canada and 2 in Denmark…the companies say the deal makes sense as they have fully-aligned strategic visions and production philosophies, as well as complementary assets, distribution networks, products, and capabilities…the combined company will meet what Aurora and MedReleaf management teams consider to be the critical success factors in the marijuana sector to drive global growth – industry leading scale, low production costs, extensive distribution channels in Canada and internationally, proven execution and agility across the value chain, enhanced diversification, brand leadership, innovation and R&D excellence, and a robust capital markets profile…

6. Canopy Growth (WEED, TSX) is up more than $2.50 a share in early trading to $32.93 after a couple of announcements this morning…the company has applied to list on the New York Stock Exchange with NYSE trading in WEED expected to commence before the end of the month, while it has also entered into a non-binding agreement to purchase the remaining 33% stake of BC Tweed Joint Venture Inc. not currently owned by the company for $374 million in stock…the BC Tweed greenhouses represent a meaningful share of the entire Canadian production landscape with up to 3 million sq. feet of greenhouse growing capacity…since the formation of BC Tweed in October 2017, already over 1.7 million sq. feet have been licensed for production to meet to oncoming recreational cannabis demand across the country…

7. Jurisdictional risk has reared its ugly head again – Tanzania has revoked a retention license for an undeveloped Nickel project jointly owned by Barrick and Glencore…Africa’s 4th-largest Gold producer, Tanzania is seeking a bigger slice of the pie from its vast mineral resources by overhauling the fiscal and regulatory regime of its mining sector – in other words, they’ve put the screws to the industry but that’s clearly a wrong-headed strategy as investment dollars will leave in a hurry to countries that are more welcoming…Tanzanian President John Magufuli has sent shock-waves through the mining industry with a series of bizarre actions since his election in late 2015…since then, Barrick and Glencore have been actively searching for potential buyers of the Kabanga Project…the two miners have held the license for the project since 2009…Kabanga is estimated to have Inferred resources of 36.3 million tonnes grading 2.8% Nickel…

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