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1. Spot Gold has traded between $1,709 and $1,693 so far today…as of 7:00 am Pacific the yellow metal has retreated another $9 an ounce to $1,700…in a fresh report, commodity analysts at Citi say that they see Gold prices averaging $1,715 an ounce in the 2nd half of 2020, increasing to an average of $1,925 next year…Spot Silver, leading all metals with a gain of nearly 14% so far this month, has pulled back 15 cents to $16.93…Silver should benefit from optimism about increased industrial demand as economies reopen following the Wuhan COVID-19 pandemic at the same time the metal also draws investment demand from those worried about a 2nd wave of the virus, said Rohit Savant, director of research with CPM Group…“It does stand to benefit at this point from both of those expectations,” he said in an interview with Kitco News…“There is still a lot of uncertainty about how things are going to shake out. That’s helping Silver at this point”…base metals are under mild pressure this morning…Copper is off 3 pennies at $2.38, Nickel has fallen 15 cents to $5.47 while Zinc is 2 cents lower at 86 cents…Crude Oil has surrendered 76 cents a barrel, trading at $33.59, while the U.S. Dollar Index has rebounded one-fifth of a point to 99.13…Wall Street is cheering signs that the White House and Congress are considering more measures to blunt the impact of historic levels of unemployment on the economy…the Trump administration is examining proposals to provide cash incentives to encourage unemployed Americans to return to work…meanwhile, European authorities are also preparing step up stimulus measures, with the European Central Bank likely boosting its bond-buying programs and top officials working toward an agreement on a major recovery fund…while the number of new COVID-19 cases slows in some parts of the U.S., a surge in infections in South America is causing alarm…the Americas have become the new center of the pandemic, with more than 2.4 million reported cases and more than 143,000 deaths…Brazil, Peru and Chile are being particularly hard hit…meanwhile, New Zealand reached a milestone in its battle against the pandemic today…for the first time since the total lockdown in March, there are no patients in hospitals in New Zealand being treated for COVID-19…the Trump administration is weighing sanctions on Chinese firms and officials over the situation in Hong Kong…President Trump is expected to make an announcement about the administration’s response to China’s actions by the end of this week…police in Hong Kong fired pepper pellets and made 300 arrests as thousands of people took to the streets today to voice anger over national security legislation proposed by China that has raised fresh international alarm over freedoms in the city…
2. China’s Communist dictatorship has issued a new warning to Canada about further “damage” to relations between the 2 countries – just before a British Columbia judge releases a decision on an extradition hearing for Huawei executive Meng Wanzhou…Canada must “release Ms. Meng and ensure her safe return to China at an early date to avoid more damage caused to China-Canada relations,” Chinese Foreign Ministry spokesman Zhao Lijian declared yesterday…the Supreme Court of British Columbia expects to release its decision later today after an initial hearing in the extradition case against Ms. Meng – 542 days after she was detained at the Vancouver airport at the request of U.S. prosecutors…that enraged China and was followed by a series of punitive measures against Canadian citizens and trade with Canada…meanwhile, the Trudeau government says it’s reviewing a Chinese mining company’s proposed $207 million buyout of Toronto-based TMAC Resources (TMAC, TSX) under the Investment Canada Act…Shandong Gold Mining, a Chinese state-owned enterprise that’s listed on the Shanghai Stock Exchange, announced earlier this month it would purchase TMAC which operates a mine near Cambridge Bay in Nanavut that has been beset by operational challenges…however, especially after what we’ve seen in recent months, we don’t need to allow more Canadian resources to come under the control of the Communist Party of China…whether the Trudeau government has the courage to overturn that proposed buyout remains to be seen…
3. The International Energy Agency (IEA) believes the coronavirus pandemic has paved the way for the largest decline of global energy investment in history, with spending set to plummet in every major sector this year…in the group’s annual World Energy Investment report, published today, the IEA said that the unparalleled decline in worldwide energy investment had been “staggering in both its scale and swiftness”…it warned the economic impact of the public health crisis could have “serious” implications for energy security and clean energy transitions…“The historic plunge in global energy investment is deeply troubling for many reasons,” Fatih Birol, executive director at the IEA, said in a statement…“It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers,” he continued…“The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems”…at the start of 2020, the IEA said global energy investment was on pace for growth of around 2%, reflecting the largest annual rise in spending in 6 years…but, after the Wuhan COVID-19 crisis brought large swathes of the world economy to a halt in a matter of months, the IEA said it now expects global investment to tumble by 20% compared to last year…a combination of falling demand, lower energy prices and a rise in cases of non-payment of bills means that energy revenues going to governments and industry are set to fall by “well over” $1 trillion in 2020…Oil accounts for most of this decline, the group continued, adding that, for the first time, global spending on Oil was set to fall below the amount spent on electricity…
4. The Newfoundland and Labrador government wants Ottawa to “step up” its financial support for the province’s beleaguered energy sector, or risk losing it to other countries with more attractive incentives…Premier Dwight Ball and Natural Resources Minister Siobhan Coady joined a host of Oil and gas industry players yesterday for a public plea asking the Trudeau government to listen to the province and stop dragging its heels on earlier promises…investment is already fleeing Newfoundland’s offshore sector, Ball warned…with Norway readying to open up more rounds of offshore exploration, it’ll be tough to persuade offshore players to stay in the province without federal support – particularly given that “Norway will have such attractive incentives to draw them there”…Norway’s $1.1-trillion (U.S.) sovereign wealth fund, which is divesting from several Canadian Oil and gas companies, is forging ahead with the expansion of its own offshore drilling sector…in Newfoundland, the sector wants federal investments to expand offshore exploration in a similar way – not likely, though, given the anti-Oil and gas mentality that drives the Trudeau government…
5. Stark warning from Parliamentary Budget Officer as Trudeau’s deficit keeps growing: Parliament’s spending watchdog, Yves Giroux, nows says Canada’s estimated deficit for the year has likely risen to about $260 billion, leaving the government with little fiscal firepower to stimulate an economic rebound…Giroux previously estimated the federal deficit at $252.1 billion this fiscal year on account of a sharp increase in spending on emergency aid and a subsequent drop in economic activity related to the Wuhan COVID-19 pandemic…speaking to the Senate finance committee yesterday, Giroux said the government has added about $7.6 billion in spending since his last report, pushing the potential deficit ever deeper…Giroux said emergency aid would have to eventually sunset “otherwise we’ll be looking at a level of taxation that’s not been seen for generations in this country”…
6. The Dow has climbed another 239 points in early trading as it starts to gain traction above 25,000…the Mortgage Bankers Association has reported a 6th straight weekly rise in mortgage applications with new home sales in April topping estimates, another reason for encouragement on Wall Street…stocks have rebounded dramatically off their March lows, while consumer sentiment is hovering near the lowest level in nearly a decade…the divergence is one of many realities investors are struggling to reconcile…the spread between the monthly percentage change of the S&P 500 and the University of Michigan’s consumer sentiment survey climbed to 32 percentage points last month, the widest-ever gulf in data going back to 1978, according to Dow Jones Market Data…pizza sales are booming during the pandemic…Domino’s Pizza (DPZ, NYSE) said yesterday that its U.S. same-story sales climbed 14% during the first 2 months of its 2nd quarter…the pizza chain reported U.S. same-store sales growth of 20.9% from April 20 to May 17…during the previous 4 weeks, its domestic same-store sales rose 7.1%…“We are seeing a tailwind as consumer behavior across the restaurant industry has shifted toward delivery and carryout, though we are not sure whether this trend will continue for the remainder of the second quarter or how long this tailwind may last,” CEO Ritch Allison said in a statement…Bank of Montreal (BMO, TSX, NYSE) has reported quarterly profit below analysts’ estimates as it set aside more money to cover potential loan losses stemming from the pandemic…Canadian banks are expecting to book higher loan losses this year and the next as government lockdown measures ravage economies and household incomes…they also expect a hit from a plunge in Oil prices…BMO set aside $1.12 billion for future loan losses, vastly higher than $176 million a year earlier…in Toronto, the TSX is off 41 points in early trading…the TSX Gold Index, which fell 18 points last week, is down another 15 points so far this week with a further decline this morning…this very normal correction, another opportunity, comes after a massive advance in April…the Venture has slipped 2 points to 536 where it has strong support at its EMA-8…Clean Air (AIR, TSX-V) has announced a $5 million flow-through financing at 50 cents a share through Paradigm Capital, rather odd timing considering what was recently raised ($15 million) and the strong momentum in the stock since it made its debut on the Venture last Friday…the surprise flow-through PP has polluted the AIR a little bit this morning with the stock off 2.5 cents at 43.5 cents on lighter volume as of 7:00 am Pacific, but the outlook for this new play remains very positive nonetheless…Ascot Resources (AOT, TSX-V) has arranged a $25 million bought deal financing at 85 cents a share (hard dollars) through a syndicate led by Desjardins Capital Markets and Stifel GMP…
7. Swiss trade data confirm the view that Gold demand from key Asian nations remains weak but “robust” demand from exchange-traded funds is making up for this…data this week from the Swiss Federal Customs Administration show that Switzerland exported 131.8 metric tons of Gold in April, the most since August, said Commerzbank analyst Carsten Fritsch…“The lion’s share went to the U.S., where a new record figure of 111.7 tons was achieved,” he added…“By contrast, exports to Asia collapsed almost completely”…no Gold was shipped to China for the 2nd straight month, while just one kilogram went to Hong Kong and 500 kilograms to India, Fritsch said…“The record-high exports to the U.S. are probably due mainly to the robust demand for gold ETFs,’ Fritsch continued…“According to the World Gold Council, it was the Gold ETFs listed in the U.S. that profited most of all from this in April. Shipments of Gold to the Comex warehouses is likely to be another factor given that Swiss Gold refineries were able to resume production in early April after a 2-week interruption. In April alone, the Comex holdings more than doubled to a good 20 million ounces”…
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