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1. Gold has traded between $1,214 and $1,226 so far today…as of 7:00 am Pacific, bullion is up $10 an ounce at $1,226…Silver has gained 9 cents to $14.36…Nickel leads base metals this morning, adding 9 cents to $5.18…Copper and Zinc are up slightly at $2.82 and $1.21, respectively, while Cobalt has surged $1.81 a pound to $24.95…the Philippines’ environment ministry says 9 suspended mines will be allowed to resume operations if they rectify previous violations of environmental regulations, a move that could boost the country’s Nickel output next year…Philippine Nickel ore output, 2nd highest in the world behind Indonesia, fell 10% in the 1st half of 2018 from a year earlier to 9.43 million tonnes…Oil is building on yesterday’s rebound with traders betting that significant supply cuts will come from OPEC’s meeting on December 6…WTI is up $1.03 a barrel to $57.49 but is still headed for its 6th straight weekly loss…CNBC reported this morning that Saudi Arabia is slashing shipments of Crude to the United States, a move that appears calibrated to boost prices…the U.S. Dollar Index has fallen two-thirds of a point to 96.43…Goldman Sachs told CNBC this morning that the recent correction in stocks reveals that investors expect a bigger global slowdown than official data imply…Peter Oppenheimer, Goldman’s chief global equity strategist, said that the volume of selling suggested forecasts of a distinct global slowdown…“If we benchmark the way equities have moved against macro variables, we think they have now overshot the current slowdown and are implying a much further slowdown from here,” Oppenheimer told CNBC’s Street Signs…Goldman illustrated the anomaly in a note last week that showed the MSCI World index slipping below its usual correlation to global manufacturing data…
2. The Federal Reserve is close to the point of being “neutral” on interest rates and should predicate further increases on economic data, the central bank’s vice chairman said this morning on CNBC…recent appointee Richard Clarida stated that nearly 3 years of increases have brought the Fed’s short-term interest rate near where it is neither restrictive nor stimulative, a key consideration when considering the future path of monetary policy. “As you move in the range of policy that by some estimates is close to neutral, then with the economy doing well it’s appropriate to sort of shift the emphasis toward being more data dependent,” Clarida said during a “Squawk Box” interview, his first public comments since being confirmed in September…
3. Copper is set to end the week nearly 2% higher as signs of supply tightness supported prices, but worries about the outcome of U.S.-China trade tensions limited gains…nonetheless, Copper for November delivery has risen more than 3% this month, compared with a big drop in Crude prices…the divergence is notable because many investors trade Oil and Copper in the same basket of commodities…supply shortages are also powering Zinc towards its biggest weekly gain since September…meanwhile, Palladium – the only precious metal on track to post a gain in 2018 – hit another new record high yesterday…the surge in Palladium, used as an emissions-reducing auto catalyst for vehicles, reflected speculative buying driven by expectations of increased demand in a tight market…Palladium is up $7 an ounce at $1,148 as of 7:00 am Pacific…
4. Canada’s heavy-Oil benchmark tumbled to a near-record low yesterday, the latest spate of bad news from the Oil patch as Canadian producers struggle to ship product…the spot price for Western Canadian Select fell to a dismal $13.46 (U.S.) a barrel, down $2.29 from Wednesday’s close…it was the lowest closing price for WCS in Bloomberg data that goes back to May, 2008…yesterday’s drop in WCS occurred on a day when U.S. and international benchmark pricing for Oil rose…U.S. West Texas Intermediate (WTI) Crude futures gained 21 cents to settle at $56.46 a barrel, further widening the differential between WCS and WTI…Canadian Oil prices have plummeted in recent months amid a pipeline bottleneck that has led to higher inventories and forced producers to export an increasing amount of Crude by rail and truck…of course the climate change extremists don’t care if that creates more of a “carbon footprint” – they just want Canada to stop taking Oil out of the ground…
5. The Canadian Oil patch is losing patience with the country’s lack of support for the industry…the plunge in global Crude prices in recent weeks is being exacerbated in Canada by a lack of pipeline capacity, sending the country’s Oil prices to a record discount to the U.S. and energy stocks reeling…gas producers can’t even catch a break…while U.S. gas has surged about 19% in the past week amid an expected cold stretch, Canadian prices have actually dropped 14%…“Globally, we’ve politicized energy so much,” Darren Gee, CEO Peyto Exploration & Development,a Calgary-based gas producer, told Bloomberg…environmental and regulatory concerns have added an “entire layer of risk that people just don’t know how to assess…the federal government has absolutely no interest in having the TransMountain pipeline expansion built or expanding this basin,” Gee added…meanwhile, an analyst with one of the largest foreign holders of Canadian energy stocks, Capital Group Cos., warned in a letter to Prime Minister Justin Trudeau recently that investors and companies will continue to avoid the Canadian energy sector unless more is done to improve market access…Canada’s main energy index is down 11% over the past 12 months compared with just a 3.4% drop for U.S. energy stocks…
6. Tech stocks are under mild pressure in early trading today but the Dow is unchanged as of 7:00 am Pacific…in Toronto, the TSX is 16 points lower…over the past 4 months, the energy sector within the S&P/TSX Composite Index has plummeted 17%, proving to be the biggest drag on the Canadian stock market over that period…the decline continued even through a series of good earnings releases, underscoring how confidence in federal government policy toward the sector has eroded significantly…the Venture is is aiming for back-to-back winning sessions after a decline of as much as 58 points or 8.7% over just 5 sessions…Sokoman Iron (SIC, TSX-V) was halted pre-market, pending news…the company commenced a 10,000-m Phase 2 drill program at its promising Moosehead Project in Newfoundland early last month…
7. The CEO of Aurora Cannabis says that Ontario and British Columbia “shat the bed” when rolling out their retail models for recreational cannabis, and that the only provinces that “got it right” were Alberta and “perhaps Saskatchewan…I would say Ontario shat the bed the worst,” Terry Booth told a panel session at the Marijuana Business Conference, also known as MJ Biz Con, in Las Vegas yesterday…Booth’s comments, at times laced with profanity, were met with a mix of laughter and shock by the audience, who were attending the session titled “Canada: Assessing the First Month of Recreational Sales”…Canada has struggled to meet demand for recreational weed, with some licensed producers pointing the blame at the distribution methods employed by certain provinces, and provinces saying that they did not receive enough product from producers…Booth said Edmonton-based Aurora had lived up to its obligations but suggested that problems with the rollout were holding the company back…
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Hi Jon/ John.. are you guys following or investing in SIC at all? Another nice hole there for sure. 24 meters of 33.5 g/t gold. I am thinking this should be enough to get it rolling higher over the next few weeks. But it’s a finicky market out there… I know all about it.
Comment by Ed — November 17, 2018 @ 9:40 pm