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1. Spot Gold has traded between $1,702 and $1,655 so far today…as of 7:00 am Pacific the yellow metal is off its overnight lows, now trading down just $9 an ounce at $1,687…strong support is coming from investment demand…inflows of Gold and Silver into global ETFs remain robust, according to a report this morning from Commerzbank…Gold ETFs accumulated another 11 metric tons of metal yesterday, including a large inflow by SPDR Gold Shares…this comes on top of the 112 tons that had already gone into these ETFs so far this month as of the end of last week…Silver has slipped 54 cents to $14.69…base metals are under modest pressure with Copper, Nickel and Zinc at $2.27, $5.51 and 86 cents, respectively…the plunge continues in Crude Oil (see below)…June WTI futures are down $5.47 a barrel or nearly 30% at $14.96…the world is awash in Oil, due to lockdowns across the globe, and storage has become a major problem…on the bright side, Edward Morse, Citigroup global commodities head who predicted last month that Oil prices could turn negative, says Oil could rebound sharply by the end of the year to $50 a barrel…the U.S. Dollar Index is up more than one-tenth of a point at 100.10…Airlines for America, a lobbying group that includes American, Delta, United Southwest and other large U.S. carriers, said as of April 15 that U.S. airlines had idled more than 2,700 planes, more than 44% of their fleet…Vice President Mike Pence, who spoke at length about the importance of coronavirus testing yesterday, will be touring the GE Healthcare facility near Madison, Wisconsin, later this morning and will also engage in a round table discussion about the pandemic…UNESCO estimates that 1.6 billion children around the world have been impacted by school closures…nearly every country, according to the report, has closed all of its schools to contain the spread of the Wuhan COVID-19 virus…however, the U.S., Canada, Russia and Australia have not issued nationwide mandates, and left it up to local governments to choose whether or not to close schools…many schools across the globe have turned to remote lessons…online learning has allowed children to keep up their education from home, but it’s come with a handful of other problems…educators fear that students without Internet access or necessary equipment could be set back while classes are virtual, and in some countries, millions of students rely on their schools for free meals…
2. A virus in the Oil market: The crash in global Oil prices deepened today as pain spread to currencies of major exporters and shares in energy producers…Brent Crude futures, the international benchmark for Oil markets, has dropped about 20% to $20.43 a barrel this morning, its lowest level since 2002…the decline came a day after the price of West Texas Intermediate, the U.S. Crude benchmark, dropped below zero for the first time in history (the May contract which expires today after closing yesterday at minus $37.63 a barrel)…the convulsions in Oil markets underlined the huge hit that widespread government-imposed lockdowns designed to stall the spread of the Wuhan virus have dealt to Oil demand…with producers unable to shut wells fast enough, and OPEC and G-20 production cuts not due to take effect until early May, traders say that the world is essentially running out of space to store Oil…the negative impact of the carnage in Oil will spread far and wide, directly and indirectly impacting hundreds of millions of people across many parts of the globe…North American producers are getting crushed as a flood of Oil is expected to keep prices depressed for longer…RBC Capital Markets expects U.S. shale production to plummet to 1.5 million barrels per day…Alberta’s Oilsands are also being hit particularly hard…for now the Russians and Saudis appear to be winning the market share war…President Trump this morning ordered Energy Secretary Dan Brouillette and Treasury Secretary Steven Mnuchin to put together a plan to get funding ASAP to the struggling U.S. Oil and gas industry…Trump tweeted moments ago, “We will never let the great U.S. Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!”…what is Canada doing?…the coalition of 84 environmental groups that lobbied the Trudeau government late last month want the industry to disappear so we can supposedly “save the planet” and all have a “beautiful green future”…
3. America begins to reopen: The governors of Georgia, Tennessee and South Carolina have announced new plans to bring their states’ economies closer to full force amid signs the Wuhan COVID-19 outbreak has slowed significantly in those areas…Georgia Gov. Brian Kemp says certain businesses, including gyms and hair salons, can reopen beginning this Friday…meanwhile, Tennessee Gov. Bill Lee confirmed his state’s stay-at-home order, previously extended to April 30, will end that day…and, South Carolina Gov. Henry McMaster said businesses previously deemed nonessential – department stores, flea markets, florists, bookstores and music shops – could reopen their doors…U.S. Attorney General William Barr said this morning that some state governors’ efforts to fight the pandemic “infringes on a fundamental right” of American citizens…Barr said in an interview on “Th Hugh Hewitt Show” that governments in the U.S. need to “do a better job” of ensuring coronavirus restrictions are “properly targeted” and do not unnecessarily infringe on constitutional rights…he added that currently the country is facing “unprecedented burdens on civil liberties”…
4. Premier Doug Ford says Ontario is preparing for the “gradual” reopening of the economy as new modelling shows the province has likely reached its peak in the Wuhan COVID-19 pandemic, even as the situation in long-term care homes continues to worsen…Ford said yesterday that his jobs and recovery committee, made up of key cabinet ministers, has started to develop a framework for a “gradual, measured and safe” reopening of the province, while cautioning that physical distancing and self-isolation measures must remain in place for weeks if not longer…“Absolutely in no way is this fight over,” Ford said…“We aren’t there yet. But we want to make sure we give people hope”…new projections, released by provincial health officials, say Ontario is now expected to have fewer than 20,000 cases of the virus, substantially lower than the 80,000 projected by previous models…more than 60% of the province’s deaths have been in long-term care (the numbers do not include group homes or retirement homes)…new research from the University of Toronto, based on Ontario statistics, has found that nursing-home residents over the age of 69 were 13 times more likely to die of COVID-19 than people in the same age group living elsewhere in the province…
5. An ambitious new plan to radically increase the number of coronavirus tests in the United States would see up to 30 million people screened each week and cost up to $100 billion to implement, a private foundation said today…but that pricey effort for what one expert called “the largest public health testing in history” is necessary to stem the $300 billion to $400 billion in American economic losses each month as a result of the pandemic, the Rockefeller Foundation said…it added that the sooner coronavirus tests become much more widely available, the quicker the U.S. economy can start getting back to normal…“We do have the capacity to do that, and we’ve got the resources to do that,” said Dr. Michael Pellini, managing partner of health venture firm Section 32 and board member of the Personalized Medicine Coalition, who contributed to the foundation’s new plan…“Yes, it’s ambitious, but at this point we’ve got to do it,” Pellini said…“We have to fix testing in this country to enable our workforce to be deployed once again”…the plan comes amid calls by numerous experts and CEO’s to boost coronavirus testing to make sure businesses and social events can reopen safely without sparking 2nd and 3rd waves of virus outbreaks…Amazon (AMZN, NASDAQ) CEO Jeff Bezos, in a note to shareholders last week, wrote, “Regular testing on a global scale, across all industries, would both help keep people safe and help get the economy back up and running”…
6. The Dow has fallen another 372 points as of 7:00 am Pacific after yesterday’s drop…in Toronto, the TSX has dipped 95 points through the first 30 minutes of trading…Gold producers will benefit significantly from ultra-low Oil prices…the Gold Index dipped at the open to 306 but has since rebounded to 313, down 1 point…the Venture has retreated 7 points to 438…GFG Resources (GFG, TSX-V) has a significant new investor – Alamos Gold (AGI, TSX, NYSE) is taking the majority of a non-brokered private placement announced this morning that will raise $5 million for GFG…Alamos has mines close to GFG’s Pen Project where the junior recently made a new grassroots drilling discovery with 71.3 g/t Au over 8.5 m, including 511 g/t over 1.15 m, at a vertical depth of approximately 50 m…“We are excited to welcome Alamos as our strategic partner,” stated Brian Skanderbeg, President and CEO of GFG…“Alamos‘ commitment and investment in our team and projects validates our belief in the prospectivity of our land position and allows us to take a more aggressive approach. Following the closing of the financing, we look forward to outlining an aggressive drill program that we anticipate beginning in the 3rd quarter”…GFG is up a penny-and-a-half to 20 cents on the news…SilverCrest Metals (SIL, TSX) has raised another $27 million through a private placement with SSR Mining (SSRM, TSX), a current SilverCrest investor, that then sold its $7.50 shares to Eric Sprott at $7.65…SilverCrest closed a $100 million financing last week…VSBLTY Groupe Technologies (VSBY, CSE) and Photon-X, developer of sensor technologies that enable biometric verification, document security, CGI motion imaging and photo mapping, announced this morning that they have arranged a collaboration to develop advanced camera applications to help screen for persons who may be infected with COVID-19 as they enter buildings…the 2 firms are collaborating to develop a multi-sensor camera capability specifically for security and smart buildings applications…Photon-X object recognition and analytics combined with VSBLTY facial recognition will provide an advanced screening tool for facilities to identify and validate that someone with a high temperature is about to enter a building…
7. A new bullish call for Gold has been issued by TD Securities, targeting $1,900 an ounce Gold in just 3 months “in anticipation of continued growth in investment demand amid massive and prolonged unconventional central bank stimulus”…TD Securities head of global strategy Bart Melek and commodity strategist Daniel Ghali explained, “The Fed’s latest QE program is now the largest on record. Of course, there is a well-known relationship between QE and lower real rates, such that it ultimately suppresses real rates by lifting inflation expectations at a faster pace than nominal rates. The Fed and other central banks are likely to keep their uber-easy policies in place for far longer than anticipated, following a decade of below-target inflation and a newfound interest in asymmetric inflation targeting. Despite the bullish outlook, dry-powder analysis suggests only a modest bullish tilt, while CTA positioning remains subdued given their vol-targeting nature. Consensus analyst forecasts remain below spot prices, despite positive sentiment, strengthening the argument that the market is underestimating the potential impact on Gold. We expect investment demand to rise as liquidity returns”…
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Comment by david — April 21, 2020 @ 9:04 am
Bank of America raised its 18-month target price to $3,000 an ounce.
Comment by Daniel — April 21, 2020 @ 9:54 am
HOU NAV is at 37 cents… anyone have any guidance as to the trading amount tomorrow???
Comment by Jeremy — April 21, 2020 @ 2:36 pm