BullMarketRun.com

1. Gold has traded between $1,431 and $1,443 so far today…as of 7:00 am Pacific, bullion is off $2 an ounce to $1,443 after yesterday’s Trump-fed surge…Silver has pulled back 16 cents to $16.14…Copper has fallen 5 cents to $2.61 on China jitters…Nickel is down slightly at $6.55 while Zinc has lost 3 pennies to $1.06…the U.S. Dollar Index has retreated one-fifth of a point to 98.20 after failing to conquer the 99 level…Crude Oil prices tumbled almost 8% yesterday, their biggest drop since February 2015, after President Trump announced new tariffs on Chinese imports, stoking fears that the trade dispute between the 2 countries will drag on indefinitely and negatively impact global growth…in a series of tweets, just 24 hours after a Fed policy statement and the first interest rate cut by the FOMC in more than a decade, Trump announced another round of tariffs on the roughly $300 billion of Chinese goods that had not already been targeted by American levies…the charge will take effect from September 1…the move breaks a truce in the trade battle between Washington and Beijing, with investors fearful it could further disrupt global supply chains…the tariff threat caught financial markets by surprise, in large part because negotiators for the 2 sides had just completed 2 days of talks in China with more meetings planned for September, but it was a classic Trump leverage play and seems to tie in with his strategy – successful so far – of keeping Oil prices at modest levels and maintaining pressure on the Federal Reserve to further ease monetary policy…meanwhile, Trump’s actions are forcing China to ramp up stimulus in order to shield its economy from additional harm…these are very bullish dynamics for the Gold market…about 75% of investors are now wagering on at least 2 more rate cuts in the Fed’s final 3 meetings of the year following Trump’s latest tariff move…U.S. consumer sentiment held steady in July near historically high levels while expectations improved in the later part of the month as a strong labor market helped to offset worries about slower global growth and trade tensions…the University of Michigan’s final sentiment index held at 98.4, matching the preliminary reading and up slightly from 98.2 in June, data showed this morning…the gauge of expectations improved slightly to 90.5, the best since September…

2. “Gold’s advance appears to have among the strongest foundations,” Bloomberg Intelligence senior commodity strategist Mike McGlone says in his latest commodity outlook…“Gold prices should continue to advance.  Fed easing is a tailwind. The Gold bull run is projected to continue this year as Gold’s mission is to revisit its resistance at $1,700 an ounce, last seen in 2013.  A potential increase in hedge fund positions supports our view that Gold’s initial mission is revisiting resistance near 2013’s peak at $1,700 an ounce.  Hedge funds’ net-long futures positions are a bit extended, but indicate that Gold is in the early days of a bull market.  Gold prices appear on a similar launchpad as 2001 when the Fed began an easing cycle.  The greatest bull market of this millennium so far began about the time of that first rate cut, following an extended Gold-price downdraft and rally in the dollar. Fast forward and the first expected rate cut in 11 years comes on the back of the trade-weighted broad dollar near its historic high from 2002 and spot Gold about 25% below its 2013 peak”…

3. Escalating trade tensions between Washington and Beijing cost China its position as the U.S.’s top trading partner in the 1st half of the year, as exports and imports between the two largest economies fell sharply…U.S. imports from China fell 12% in the first 6 months of 2019 from a year earlier, while exports fell 19%, the Commerce Department said this morning in a monthly trade report…the total value of bilateral goods trade with China, $271.04 billion in the 1st half of the year, fell short of that with both Canada and Mexico for the first time since 2005…the decline in U.S. imports from China has been more than offset by growth in purchases from other countries…U.S. imports from Vietnam, which attracted low-wage manufacturing from China even before Trump’s tariffs, surged 33% in the 1st half of the year…U.S. purchases from Japan, South Korea, Mexico and Europe also rose in the period…

4. The Trump economy keeps churning out jobs while wages also continue to increase, in stark contrast to the Trudeau economy but of course the approaches are much different (one approach is growth oriented, the other is not)…U.S. payroll growth rose in line with expectations in July and the unemployment rate remained at 3.7% amid a sharp jump in the size of the labor force to its highest level ever…the Labor Department reported this morning that non-farm payrolls increased 164,000 during the month, just 1,000 below the 165,000 Dow Jones forecast that also matched the average monthly gain for the year…wages also continued to increase, with the 3.2% year-over-year gain topping expectations by one-tenth of a percentage point…economists had expected the unemployment rate to drop to 3.6%, which would have tied a 50-year low, but an influx of 370,000 new workers to the labor force brought the participation rate up to 63%, its highest since March…the total labor force of 163.4 million is a new record…ironically, while Trump’s critics accuse the President of being “racist”, statistics clearly show that minorities are benefitting more under Trump than they did under Obama in terms of jobs and wage growth – a fact that drives the loony left crazy…

5. More liberal judicial activism affects mining industry: A U.S. federal judge, appointed by Obama in 2013, has ordered Hudbay Minerals (HBM, TSX) to cancel plans to build a massive Copper mine in Arizona…Hudbay spent more than a decade securing approvals for its Rosemont mine, and cleared what appeared to be the last major hurdle with the issuance of a water permit in March…however, Judge James Soto of the U.S. District Court for Arizona has ruled that the U.S. Forest Service had erred when it issued a key permit for the mine in 2017…Rosemont is located in Arizona’s Coronado National Forest in the Santa Rita Mountains, southeast of Tuscon…the deposit was supposed to go into production in late 2022 and would have been the 3rd-biggest Copper mine in the United States with average yearly production of 112,000 tonnes…the project is key to Hudbay’s plans as production at some of its other properties tails off over the next few years…over an 11-year period, Hudbay spent more than $100 million and attended multiple public hearings on Rosemont, fielding tens of thousands of public comments, and conducted 1,000 impact studies…in a statement, Hudbay says it will appeal what it characterized as an “unprecedented” decision by the court…“This is a crucial victory for jaguars and other wildlife that call the Santa Ritas home,” said Randy Serraglio of the Center for Biological Diversity, one of the groups that filed cases seeking to stop the mine…“The judge’s ruling protects important springs and streams from being destroyed.  We’ll move forward with everything we’ve got to keep protecting this southern Arizona jewel from this toxic mine”…of course, every mine is “toxic” according to environmental extremists…Hudbay’s route to overturn the decision will take considerable time in the courts (perhaps years), an overhang for the stock that could expose the company to an opportunistic takeover…

6. The Dow is down 153 points through the first 30 minutes of trading…in Toronto, the TSX is 43 points lower as Canadian markets enter a long holiday weekend…the bullish Gold Index is off 1 point at 237 after surging more than 11 points yesterday, once again demonstrating exceptional support in the upper 220’s…Pretium Resources (PVG, TSX) is pushing higher in early trading after posting its 8th consecutive quarter of positive adjusted earnings thanks to 90,761 ounces of Gold produced at Brucejack in the Eskay Camp in the 2nd quarter at a mill feed grade of 8.9 g/t Au…AISC (all-in-sustaning costs) of $940 (U.S.) per ounce of Gold sold is on track to achieve 2019 guidance…“The robust economics of our Brucejack mine allowed us to eliminate $65 million of debt in the first half of 2019, strengthening our balance sheet and advancing our debt repayment goals as we continue to target debt reduction of $140 million this year,” stated President and CEO Joseph Ovsenek…“We are successfully ramping up production and made additional progress since the first quarter of the year.  We expect this positive trajectory to continue, to deliver higher grade and tonnes through the remainder of the year and to meet our guidance”…as expected, the Ontario Securities Commission has opened an investigation into CannTrust Holdings (TRST, TSX)…OSC spokesman Kristen Rose said the Joint Serious Offences Team, a partnership among the OSC, the RCMP’s Financial Crime Program and the Ontario Provincial Police Anti-Rackets Branch, is conducting the investigation…CannTrust (TRST, TSX) which disclosed the OSC probe yesterday, is already under investigation by Health Canada for growing thousands of kilograms of pot in unlicensed rooms in its greenhouse facility in Pelham, Ont., in late 2018 and early 2019…CannTrust has halted all sales pending the outcome of the investigation…Health Canada needs to make an example out of CannTrust and yank its license…the Venture is up 2 points at 594…traditionally, we’re rapidly approaching a seasonal period of strength for the Venture which typically begins soon after the August holiday…

7. Aphria (APH, TSX) has posted its first profitable quarter since the legalization of recreational cannabis, driven largely by revenue from its German distributing partner CC Pharma and significantly higher volumes of cannabis sales in Canada’s adult-use market…for its 4th quarter, which ended May 31, Aphria generated net revenue of $128.6 million – an increase of 75% from the previous quarter – while net income and adjusted EBITDA were both in positive territory at $15.8 million and $0.2 million, respectively…the Leamington, Ontario-based company also exceeded most analysts’ expectations on a key indicator – the quantity of cannabis sold on the Canadian market…for the quarter, Aphria sold 5,574 kilograms of cannabis, generating $28.6 million…in its previous quarter – largely considered a disappointing one – it sold just 2,636 kilograms of cannabis in both the recreational and medical markets, generating $15.4 million in revenue…as in the previous quarter, the bulk of the company’s revenue – $99.2 million – came from its distribution partnerships abroad, specifically with CC Pharma in Germany, which distributes pharmaceutical products including medical cannabis (some of which is supplied by Aphria) to 13,000 pharmacies across continental Europe…Aphria acquired CC Pharma for approximately $60 million in January this year…APH is giving the cannabis sector a much needed lift today, up nearly $2 a share to $8.87 as of 7:00 am Pacific…

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