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1. Gold has traded between $1,341 and $1,348 so far today…as of 7:00 am Pacific, bullion is off $3 an ounce at $1,343…yet another push to the upside faltered late yesterday with some bulls perhaps paring some length ahead of the Fed statement later today…one possibility for Gold is a temporary “sell on news” event if the Fed isn’t more dovish than expected…“A major driver of the Gold price rally since 4Q18 has been the Fed’s pivot from expecting rate hikes to expecting cuts,” stated Societe Generale in a note, though the firm could be underestimating other factors that have contributed significantly to Gold’s rise including record central bank demand…”We expect market participants to be disappointed by the Fed’s press conference. This would pressure Gold prices,” Societe Generale added…technically, Gold has a very strong new support band that begins at $1,313 and is clearly on a trajectory to reach $1,400…Silver is unchanged at $14.96…Copper and Nickel are pushing higher…Copper is up 3 pennies at $2.66 while Nickel has gained 6 cents to $5.43…Zinc is flat at $1.17…Crude Oil is off 53 cents at $53.37 but news is just out from the Energy Information Administration (EIA) that U.S. Crude inventories decreased by 3.1 million barrels last week…the EIA data was more bullish than previous supply data released yesterday from the American Petroleum Institute…the U.S. Dollar Index has dipped one-tenth of a point to 97.53…
2. Fed statement at 11:00 am Pacific, followed by a Jerome Powell news conference: The Fed is expected to clear the way for a July interest rate cut by downgrading its economic forecast, tweaking the language in its statement and reducing its interest rate forecasts…watch for the word “patient” to be removed from the Fed statement, signaling that the central bank is ready to move on interest rate cuts to help the U.S. economy make it through a period of possible slower growth and the potential impacts of trade tensions…Fed funds futures are pointing at odds of about 80% for a July cut and about 20% for a June cut…
3. Too little, too late from Trudeau: The Trans Mountain pipeline expansion finally got the go-ahead from Ottawa yesterday (it was easy to sense Trudeau’s reluctance), but the feds seem to have no real plan for construction…producers want to see shovels in the ground ASAP…however, the $9.3 billion pipeline still faces regulatory approvals and likely legal challenges…Moody’s commented, this adds up to “a tremendous amount of execution risk up until the Oil starts flowing”…meanwhile, news of the pipeline approval came as Spanish Oil giant Repsol announced it was cutting 30% of its staff in Canada, another sign of how the feds and others have damaged our international reputation and have chased investment away…Alberta Premier Jason Kenney stated yesterday, “This isn’t a victory to celebrate, it’s just another step in a process that has, frankly, taken too long. We’ll measure success not by today’s decision, but by the beginning of actual construction and, more importantly, by completion of the pipeline”…for Kenney, the question now becomes whether Trans Mountain will help Canada demonstrate to the world that it is a safe place to invest, create jobs and build infrastructure…“This is a test for whether Canada truly is an economic union where we can dream big and still do big things,” he correctly pointed out…meanwhile, the mainstream media continues to peddle the myth that the pipeline expansion is not supported by British Columbians…a new poll released yesterday suggests a strong majority of the province is in favor of the project…the poll, conducted last week by Ipsos on behalf of pro-development advocacy group Resource Works, found 60% of those surveyed support the expansion while only 29% oppose it (the 29% just happen to be more vocal, especially the radical fringe)…Ipsos senior vice-president Kyle Reid said while much of the rhetoric coming from B.C. may prove otherwise, this latest poll doesn’t actually show anything new…“Our polling, both for governments and industry along with other polls along the past couple of years, have all shown the same thing,” he said…what a great example of how incompetent career politicians have messed things up in Canada…
4. Lots of talk about Facebook’s (FB, NASDAQ) new digital currency, Libra, which was formally announced yesterday…Facebook is promising a secure blockchain-based payment system backed by hard assets and designed for mainstream users…the company named a series of big corporate partners, including financial services heavyweights Mastercard and PayPal and tech giants Uber and Spotify, that it said will help it create a “secure, scalable and reliable” crytocurrency…the Wall Street Journal reported in May the initiative involved the creation of a “stablecoin” – a digital asset backed by a basket of global currencies or other investments…Mark May, senior Internet analyst at Citigroup, took yesterday’s news as a bullish sign in terms of Facebook’s long-term prospects…“It’s very different from what we’ve seen with other cryptocurrencies. It’s meant to be quite stable, to reduce volatility. There are a lot of significant Fortune 100 companies that are part of the association that is going to be backing this. So, it does feel much less speculative and much more trying to build a real-life substitute asset here – currency – for remittance payments, for merchant transactions and the like. And it plays right into, I think, Facebook’s wheelhouse. They’re playing the long game here. This is not about trying to drive e-commerce transactions on day one. I think it’s about trying to build the community and really matching consumers with businesses in a different way than what’s existed in the past, and ultimately trying to close the loop with the ad business that Facebook has built its entire enterprise on. So, I think it is a watershed moment”…
5. Chibougamau Independent Mines (CBG, TSX-V), which has been a strong performer this year, announced this morning that drilling has started at its C-3 Copper/Gold zone, located east of Chibougamau, Quebec…the C-3 zone is a significant Copper/Gold discovery in the heart of the Chibougamau mining camp…the last 2 drill holes, as reported in news releases April 4 and April 22, returned significant mineralized intersections: BJ-19–17 cut 4.3% Cu, 3.7 g/t Au and 19.6 g/t Ag over a 22-m core length…BJ-19–18 intersected 7.7% Cu, 3.6 g/t Au and 33.3 g/t Ag over a 9-m core length…
6. The Dow is up 75 points through the first 30 minutes of trading…equity markets have already priced in a dovish shift by the Fed, with the S&P 500 index gaining 6% so far this month…in Toronto, the TSX has added 12 points while the Venture has backed off 1 point to 583…Midas Gold (MAX, TSX) has closed its previously announced bought deal financing, issuing 33.2 million shares at a price of 60 cents per share for gross proceeds of $19.9 million…net proceeds will be used to advance the feasibility study on, and permitting for, the redevelopment and restoration of the Stibnite Gold Project in Idaho…Sirona Biochem (SBM, TSX-V), a hot play this year, is the early price and volume leader on the Venture this morning after announcing that it has signed a non-binding term sheet with San Francisco-based, industry leading Rodan + Fields for the commercial sales of novel ingredient TFC-1067 (skin-lightening agent)…the term sheet covers all material terms and conditions of a definitive agreement and is expected to be signed in the 3rd quarter of 2019…
7. Saskatchewan Copper play: The Canadian arm of Rio Tinto (RETC) says it will commence a $3 million exploration program at the Janice Lake sedimentary hosted Copper project, music to the ears of Transition Metals (XTM, TSX-V) which optioned the property in February to Forum Energy (FMC, TSX-V)…Forum then brought in Rio Tinto…the initial program will consist of an airborne geophysical survey followed by drilling…Transition holds a 2% NSR on the property and is entitled to downstream milestone cash payments…Forum has also issued Transition 8 million shares which currently represents approximately 7.5% of Forum shares outstanding…Transition President and CEO Scott McLean stated, “Transition has long recognized the potential of the emerging Wollaston Basion Copper District which is exemplified by results from the Janice Lake Project and the significant investment RTEC will be making in the project. RTEC has nearly doubled the size of the property since executing the agreement with Forum, which has greatly expanded the extent of our royalty coverage”…Transition (43 million shares outstanding) closed at 19 cents yesterday and has multiple catalysts…Forum has over 100 million shares outstanding and closed at a nickel yesterday…
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so for my 2 cents , FMC appears to be the better play as drilling starts soon on Janice. Im kind of surprised that Masur has been as quiet as he has to date with this deal. Big plans for this season. if I understand correctly, these types of deposits can be quite large and uniform. Hopefully the VTEM shows them where to do some spaced out holes so that it can generate tonnage quickly
Comment by david — June 19, 2019 @ 9:24 am
Fed statement meets dovish expectations…let’s see what Powell has to say in news conference starting in 15 minutes at 2:30 pm EST…key things in this statement are the “dot plot” projections, lower inflation expectations (gives the Fed flexibility), GDP projections and the Fed removing the word “patient” from its arsenal when referring to future policy moves…likely ready for a rate cut next month…Gold responding well so far and the dollar is backing off…
Comment by Jon - BMR — June 19, 2019 @ 11:17 am