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1. Gold has traded between $1,280 and $1,292 so far today as the yellow metal comes under some minor pressure while base metal prices firm up…as of 7:00 am Pacific, Gold is down $8 an ounce at $1,283…Silver is 13 cents lower at $15.38…Silver has strong support at $15 while the next key breakout point is $15.75…Copper is up a penny at $2.70…Nickel has jumped 8 cents to $5.27 while Zinc is 2 cents higher at $1.17…Crude Oil has gained 39 cents to $52.46 while the U.S. Dollar Index has added one-quarter of a point to 96.25…manufacturing data released by the Fed this morning showed the sector’s biggest gain in 10 months in December…those numbers were boosted by strong production in motor vehicles and other goods…consumer sentiment, however, dipped to its lowest level since October 2016 as stock market gyrations weighed on the economic outlook…the University of Michigan’s consumer sentiment survey slipped to a reading of 90.7 in early January, below expectations and down from 98.3 in December…
2. Progress on the U.S.-China trade front: China has offered a 6-year boost in imports during its ongoing talks with the U.S., according to news reports this morning…Chinese officials made the offer during negotiations in Beijing earlier this month, according to Bloomberg…China would increase its annual import of U.S. goods by a combined value of over $1 trillion…the proposal to buy more U.S. goods through 2024 is apparently pegged to President Trump’s hopes of being re-elected in 2020…the U.S. had a trade deficit of $323 billion with China in 2018…this potential deal would aim to reduce that annual trade difference to $0 by 2024…
3. If the central banks around the world “catch the ‘Gold bug” and continue to increase their official Gold purchases, it could push bullion past $1,400 an ounce by 2020, according to TD Securities…“Strong official sector Gold purchases open up the possibility that prices can move significantly above our projected $1,400/oz target in late 2020,” wrote well-respected analyst Bart Melek, the head of global strategy for TD Securities, in a report published yesterday…the Canadian bank is already fairly bullish on Gold, expecting the metal to end the year at $1,350 an ounce and then rise to $1,400 in 2020…“We expect range-bound trading in the near-term, as the greenback consolidates at somewhat lower levels, U.S. monetary policy remains ambiguous, albeit more dovish than before, and China/EM economic and currency risks still loom,” Melek said…“The same factors that have weighed on the yellow metal for much of last year, and that will keep Gold in a range-bound trading pattern for now, are slowly dissipating, which should lift prices near $1,400/oz into 2020“…there is evidence that central banks are stepping up their bullion purchases, TD pointed out…“Central bank Gold holdings have grown by a dramatic 13% (roughly 3,900 tonnes) since the lows recorded back in 2009 and are expected to grow by another 800 tonnes over the next 2 years,” Melek wrote…“In addition to continued purchases by Russia, Turkey, Kazakhstan and India, now includes China – the yellow metal could well move above our positive projections”…
4. Results from drill hole #78 from Blue Moon Zinc (MOON, TSX-V) this morning demonstrate that the historic Blue Moon VMS deposit has a high-grade core that thickens at depth with important values in Copper, Gold and Silver to go along with Zinc (30.3% Zinc over 9 m, and 9.5% Zn within a broader 36.5 m core length)…hole 78 was drilled into a previously untouched area of the Main Zone with grades exceeding the Inferred resource grade on a Zinc equivalent basis by more than 50%…with historic work that produced very high recoveries thanks to clean metallurgy, potential economics of the deposit are better than ever with the discovery of the best grades yet in massive sulphides…Blue Moon’s 2018 drilling also demonstrates that the massive sulphide lenses are now traceable for approximately 3,000 feet or 900 m along plunge and remain open to surface and depth…Phase 2 follow-up drilling is planned to commence shortly and that should keep the stock very active in the weeks ahead…with a market cap of only about $7 million, and the best-ever drill results at this advanced property from the first drilling in 3 decades, MOON is well positioned to push higher after weak hands use today’s news as a liquidity event…
5. The Dow is up 112 points through the first 30 minutes of trading…equity markets have responded well to the Bloomberg report that Beijing has put forward a plan to eliminate its trade surplus with the United States…in Toronto, the TSX is up 74 points while the Venture has added 3 points to 597…Sandstorm Gold (SSL, TSX) has acquired a 0.9% net smelter return royalty on precious metals produced from the Fruta del Norte Gold Project in Ecuador, which is currently under construction by Lundin Gold (LUG, TSX)…the NSR was acquired from a private 3rd party for $32.75 million (U.S.) in cash and covers more than 644 sq. km including all 30 mining concessions held by Lundin Gold…the Fruta del Norte Mineral reserve contains 5 million ounces of Gold in 17.8 million tonnes of ore with an average grade of 8.7 g/t as of September, 2018, ranking it amongst the highest-grade Gold projects in the world…
6. Tesla (TSLA, NASDAQ) is planning to cut full time staff by 7% – about 3,400 employees – even as it seeks to ramp up production of its mass market Model 3 saloon after “the most challenging” year in the electric carmaker’s history….in a blog post this morning, Elon Musk said the group had “no choice” but to cut staff numbers…he said the company faced “an extremely difficult challenge” in making its products cost-competitive, with plans to lower the price of the Model 3 “as we need to reach more customers who can afford our vehicles”…Musk said preliminary, unaudited results for the 4th quarter indicated that the company had made a profit, but lower than the 4% achieved in the previous quarter…he added that “with great difficulty, effort and some luck”, Tesla would target “a tiny profit” on the back of shipments of higher-priced Model 3s to Europe and Asia…
7. The African Union says there are serious doubts over the results of December’s DRC presidential election and has called on the country’s constitutional court to halt plans to rule on the outcome…the shock announcement late yesterday followed a statement earlier in the day from a smaller group of heads of state from southern Africa that had expressed support for Congo’s electoral process and warned other foreign governments against intervening…the unprecedented action from the African Union follows a Financial Times analysis of leaked polling data earlier this week that pointed to huge electoral fraud…according to that analysis, opposition leader Martin Fayulu was the clear winner of last month’s vote while Felix Tshisekedi, the rival opposition candidate who was declared the victor, should have finished a distant second…“The Heads of State and Government attending the meeting concluded that there were serious doubts on the conformity of the provisional results, as proclaimed by the National Independent Electoral Commission, with the votes cast,” the AU statement said…“Accordingly, the Heads of State and Government called for the suspension of the proclamation of the final results of the elections”…
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