BMR Morning Market Musings…

Gold has traded between $1,317 and $1,330 so far today ahead of a fresh statement from the Fed…as of 8:00 am Pacific, bullion is up $6 an ounce at $1,326…Silver has jumped 36 cents to $19.96…Copper has slipped 4 pennies to $2.19…Crude Oil is down 85 cents a barrel to $42.07 while the U.S. Dollar Index has added one-fifth of a point to 97.33…

The Fed is almost sure to keep interest rates unchanged today, but as always the market will be focusing on the central bank’s language and hints of future action – knowing full well, of course, that whatever the Fed says today must be viewed skeptically given its track record under Janet Yellen…the Fed seems certain of only one thing – its uncertainty…

Holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, fell almost half a percent to 954.24 tonnes yesterday…

GFMS Thomson Reuters released its 2nd quarter Gold Survey and Outlook report yesterday, upgrading its average Gold price for 2016 to $1,279 an ounce, up from the previous forecast of $1,184 an ounce (watch for another hike by early Q4)…the report noted how Gold prices are being driven by renewed western investment demand, particularly through Gold-backed exchange-traded funds…ETF demand in the 1st half of the year set a record with global Gold reserves increasing by 568 tonnes…

“The revision is a mark to market of the impressive gains that Gold has posted so far this year, and reflecting the changed sentiment stemming from increased uncertainty from economic and political outlooks,” the analysts said in the report…

China’s Gold Production Flattening? 

A report suggests that China’s Gold production may have hit a plateau, which presumably would mean more future imports by the country which would be Gold supportive, according to HSBC…analysts cite an article in the Shanghai Securities News quoting the China Gold Association as saying that production in the country may be flattening…the association reported domestic Gold production at 229.1 tonnes in the first half of this year, up just 0.2% from the same period a year earlier…

Tone Deaf On Terrorism

If you pretend a problem doesn’t exist, maybe it’ll just go away!…a PolitiFact analysis has confirmed that none of the speakers at the Democratic National Convention on Monday’s opening day uttered the words “ISIS”, “Islamic”, “terror”, “terrorist”, or “terrorism”…that stands in stark contrast, of course, to the first day of the Republican National Convention that focused very much on issues of national security and radical Islamic terrorism…

Abe Doubles Down

Like an investor doubling down on a stock that’s dropped in half, Japanese Prime Minister Shinzo Abe is reportedly set to unveil a massive stimulus package of about 28 trillion yen ($265 billion U.S.) in an effort to prop up Japan’s struggling economy (“helicopter” money, loan programs, subsidies, etc.) as if all the earlier “stimulus” just wasn’t enough…if 28 trillion yen proves to be the final number, it far exceeds initial estimates of around 20 trillion yen…the Japanese currency weakened in the wake of the reports, and that lit another fire under the stock market…meanwhile, Japan’s central bank begins a 2-day policy session tomorrow…local business daily Nikkei reported that BOJ officials were looking at multiple stimulus proposals including cutting interest rates beyond the current level of negative 0.1%, buying more Japanese bonds on top of the current 80 trillion yen annually, or expanding purchases of other assets such as exchange-traded-funds…none of this has a good “feel” to it…Japan is obviously in trouble and Abe isn’t going to fix the problem…buy Gold…

Tesla Motors Inc. (TSLA, NASDAQ) Update

Tesla’s (TSLA, NASDAQ) upcoming Model 3 car could generate $20 billion in revenue per year and an annual gross profit of about $5 billion, Chief Executive Elon Musk told reporters at a news conference yesterday at the company’s “gigafactory” facility in the Nevada desert…Musk also said that the company’s stationary battery packs, named the Powerwall and Powerpack – designed to store power for homes and commercial buildings, respectively – would be “as big as the car business, long-term…the growth in stationary storage is really under-appreciated.  That is a super-exponential growth rate.” 

Tesla’s massive manufacturing facility, located outside Sparks, Nevada, will total around 10 million sq. feet when completed…about 1.9 million sq. feet have been finished so far…Musk said the full-sized gigafactory would ultimately be able to produce enough batteries to support up to 1.5 million cars – about 3 times the number of cars he originally expected the factory to support when running at full capacity…

Tesla will release its 2nd quarter results a week from today (August 3)…the company said earlier this month that its deliveries for the quarter fell short of its forecasts…analysts will be looking for signs that the company is containing its costs and slowing its cash burn…