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1. Gold has traded between $1,287 and $1,297 so far today…as of 7:00 am Pacific, the yellow metal is up $1 an ounce at $1,293…yesterday’s intra-day reversal may prove significant…not surprisingly, large speculators scaled back their bullish positioning in Gold futures during the most recent reporting week for data compiled by the Commodity Futures Trading Commission…bullish bets are now at the lowest level in more than 2 years, but that should be interpreted as a positive sign for Gold…meanwhile, global ETF holdings of Gold have climbed to 75.18 million ounces which is almost a 2 million ounce increase since the end of March when bullion was trading well above $1,300…Silver has added 4 pennies to $16.52…Nickel is up another 3 cents to $6.67…Copper is also looking strong, up another 5 cents at $3.15…Zinc is off slightly at $1.39 while Cobalt is flat at $41.28…on the Oil front, WTIC is unchanged at $72.35 while the U.S. Dollar Index has retreated slightly to 93.49 after reacting at 94 resistance yesterday…

2. Nickel was the best performing major commodity last week, rising nearly 5%…trend-following funds chased prices higher and Goldman Sachs delivered a ringing endorsement of electric vehicles at a time when inventories in exchange warehouses from London to Shanghai slid to the lowest levels in several years…LME stocks are hovering near a 4-year low while those of Shanghai are at a 30-month low…tighter supply is reinforced by the latest numbers from the International Nickel Study Group which showed that the global Nickel market deficit widened to 15,700 tonnes in March from a revised deficit of 6,600 tonnes in the previous month…for the first 3 months of 2018, the deficit was just over 39,000 tonnes…meanwhile, Nickel ore imports by China more than doubled to 6.6 million tonnes in the 1st quarter of 2018 over a year ago…technically, bulls continue to have a lock on the Nickel market which is clearly in a new long-term bull cycle…

3. A “Perfect Storm” has arrived for Oil given strong global demand, supply disruptions and dwindling inventories…the U.S. government has imposed new sanctions on Venezuela following Sunday’s sham re-election of President Nicolas Maduro, a move that will likely further curb the country’s Oil output which is already at its lowest in decades…meanwhile, the U.S. will aim to “crush” Iran with economic and military pressure unless it changes its behavior in the Middle East, Secretary of State Mike Pompeo said yesterday…Pompeo, unveiling the Trump administration’s new policy on the rogue regime after President Trump pulled out of the Iran nuclear deal, said the U.S. will work to counter Tehran’s activities, curb its influence in the Middle East and make sure that it never gains a nuclear weapon.  “Sanctions are going back in full effect, and new ones are coming,” Pompeo said, speaking at the Heritage Foundation…Pompeo said he will also be working with the Defense Department and allies to push back on Iran…

4. The fiscal outlook for the United States “is not good,” according to Goldman Sachs, and could pose a threat to the country’s economic security during the next recession (imagine how Gold prices would react?)…according to forecasts from the bank’s chief economist, the federal deficit will increase from $825 billion (or 4.1% of GDP) to $1.25 trillion (5.5% of GDP) by 2021…and by 2028, the bank expects the number to balloon to $2.05 trillion (7% of GDP).  “An expanding deficit and debt level is likely to put upward pressure on interest rates, expanding the deficit further,” Jan Hatzius, Goldman’s chief economist, wrote Sunday.  “While we do not believe that the U.S. faces a risk to its ability to borrow or repay, the rising debt level could nevertheless have consequences long before debt sustainability becomes a major obstacle.”  According to estimates by Goldman Sachs, there’s a direct correlation between an increasing budget deficit and rising 10-year Treasury yields when the economy is at or beyond full employment, as it appears to be currently…

5. The Dow has edged up slightly as of 7:00 am Pacific after eclipsing 25,000 yesterday for the first time since March…China said today that it’ll cut tariffs on some auto parts and vehicles beginning July 1…S&P 500 companies showered Wall Street with at least $178 billion of stock buybacks during the first 3 months of 2018…that’s a 34% bump from last year and tops the prior record of $172 billion set in 2007, just prior to the start of the Great Recession….Apple (AAPL, NASDAQ) rewarded shareholders with $22.8 billion in buybacks, the most of any company in any quarter in history…total S&P 500 shareholder payouts – buybacks plus dividends – for the past 12 months could top $1 trillion for the first time ever…in Toronto, the TSX is up 47 points after its first weekly close above 16,000 since January, while the Venture has gained 3 points to 790…marijuana stocks, looking bullish technically, continue to firm…Aurora Cannabis (ACB, TSX) is acquiring an initial 9.14% ownership interest in CTT Pharmaceutical Holdings by way of a non-brokered private placement in the form of a $1 million (U.S.) 5% convertible debenture…the agreement includes an issuance of warrants enabling Aurora to increase ownership to 42.5%…exploration drilling by Arizona Mining (AZM, TSX) continues to confirm high-grade extensions to major areas of mineralization identified in the updated Hermosa Project PEA, including an area of potentially significant Copper which is open to the north and south…the Copper-rich zone is characterized by coarse-grained chalcopyrite disseminated within massive sphalerite/galena…drill hole HDS-516 assayed 160 feet (48.8 m) grading 7.3% combined Zinc-Lead, 6 ounces per ton Silver and 1.6% Copper…it was a vertical step-out hole that targeted Taylor Deeps Sulfide (TDS) mineralization and intercepted several mineralized horizons within the TDS…meanwhile, HDS-525, an angled step-out drill hole also targeting TDS mineralization, returned 30.5 feet (9.3 m) grading 10.8% combined Zinc-Lead, 6.7 opt Silver and 2.9% Copper…

6. The mining sector is looking forward to change in Ontario after voters head to the polls June 7, but simply putting a different face on socialism (Andrea Horvath rather than Kathleen Wynne) obviously isn’t the change it’s looking for…the NDP is rising in the polls, closing the gap with Doug Ford’s Conservatives, but of course the NDP in the early 1990’s ran the province’s economy into the ditch during the only time they have ever held power in the province…25 years later, their math is just as bad…over the weekend, the New Democrats admitted to a $1.4 billion annual costing mistake in their election platform as it was discovered that they counted a $700 million yearly reserve fund as revenue as opposed to an expense.  “People want to have the kind of leadership that isn’t afraid to be honest about making a mistake like this,” Horwath explained…no, people want to have the kind of political leadership that doesn’t make Grade 5 math mistakes and saddles its citizens with enormous debt and crippling taxes, with nothing to show for it…meanwhile, out west, Alberta Premier Rachel Notley has decided to skip this week’s Western Premiers’ Conference…now she just has to muster the courage to turn off the taps to British Columbia.  “It would be surreal and exceptionally tone deaf for anyone to think we could politely discuss pharmacare and cannabis when one of the players is hard at work trying to choke the economic lifeblood of the province and the country,” Notley tweeted over the weekend, in reference of course to the Green Monster’s illegal and unconstitutional obstruction of the Kinder Morgan pipeline expansion…the feds, meanwhile, are still dithering, all talk and no action as the second Trudeau National Energy Program in the last 40 years handcuffs the country’s Oil patch and disproportionately hurts Western Canada…

7. Over the long-term, the main driver for Gold prices is the expansion of wealth, according to Juan Carlos Artigas, director of investment research at the World Gold Council.  “When you look at the Gold market, and in particular try to understand the drivers of Gold over the long run, wealth and economic expansion are really, really important and they drive fiscal demand,” Artigas told Kitco News on the sidelines of the Mines & Metals Conference in New York….Artigas added that higher interest rates may not necessarily mean lower Gold prices, as is the consensus among many analysts.  “Historically, higher interest rates do not necessarily result in falling Gold price, because interest rates would need to be really high in real terms, at least 2.5% real, for them to properly start creating pressure.  Wealth and economic expansion often happen in rising rate environments, so you have that counter balance.”

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