Gold has traded between $1,331 and $1,344 so far today…as of 10:30 am Pacific, bullion is up $5 an ounce at $1,340 after yesterday’s big jump following the Fed’s decision not to raise interest rates…Silver is 17 cents higher at $19.98…Copper has jumped 4 cents to $2.18…Crude Oil is $1.11 higher at $46.41 while the U.S. Dollar Index has fallen one-fifth of a point to 95.29…
Holdings of SPDR Gold Trust, the world’s largest Gold-backed exchanged-traded fund, rose 0.60% to 944.39 tonnes yesterday…
Spending on Gold exploration in July and August was up sharply from a year ago, says SNL Metals and Mining Research…the consultancy reports that spending totaled $986.5 million, compared to $324 million in the same period last year…drilling activity in Canada accounted for 39% of all significant Gold results announced between July 1 and September 8, with a further 29% hosted by the Asia-Pacific region…
The Fed’s Very Wobbly Interest Rate “Table”
The rate hike that was on the “table” again last month, what happened to it this time?…
Stocks and commodities are cheering the fact that Ma Yellen has kept the liquidity tap on, while the Bank of Japan unveiled a new scheme yesterday (“yield curve control”) aimed at boosting the Japanese economy and winning the battle against deflationary pressures…highly accommodative monetary policies continue, unabated, in the U.S., Asia and Europe…the era of cheap money has further to run…
It’s amazing that the Fed still expects to initiate a rate hike in 2016, and that the market is pricing in a better than 50–50 chance that just the 2nd rate increase in more than a decade will occur in December, after all that we’ve been through this year…in December 2015, the central bank told the market to expect 4 rate hikes in 2016…astute investors gave the Fed the finger, questioning its assumptions, and aggressively accumulated Gold…bullion investors got it right…
At last week’s Precious Metals Summit in Colorado, Rob McEwen stated quite plainly, “The big argument against Gold used to be its storage cost. Right now, it’s costing you money to store your cash.”
From a technical perspective, Gold’s immediate challenge is to overcome its 50-day moving average (SMA) at $1,336…
Of particular significance yesterday was the volume behind Gold’s $20 move – the highest since the Brexit vote…the $1,290 to $1,320 support band held over the summer, so it’s reasonable to expect a Q4 run to the next measured Fib. resistance level which is $1,427…how soon this unfolds remains to be seen…
Silver has outperformed Gold this week, and that’s what one would expect in the breakout scenario we outlined in our piece last night…Silver has already pushed above its 50-day SMA in the $19.60’s…its biggest near-term hurdle is resistance just below $21…when that is cleared, there is little in Silver’s way until the mid-$20’s…
Will Gold and Silver get “spooked” again by sudden new hawkish rhetoric from Fed officials, particularly the 3 who dissented yesterday?…they could but shouldn’t, given the Fed’s pattern of all talk and no action…
Oil Update
The U.S. Energy Information Administration yesterday reported a 6.2 million barrel drop in Crude Oil inventories last week, the second biggest drop in a year…the drawdown, along with a more benign outlook for U.S. monetary policy, overshadowed news that Russian Oil output hit a new record above 11 million barrels per day this week and that Libya had exported its first Oil cargo since at least 2014 from the port of Ras Lanuf…
Next week, the world’s largest producers will gather in Algiers to discuss ways to stabilize the Oil market, including a potential freeze in output, which is already at, or near, record highs in countries such as Russia and Saudi Arabia…
Venture 4-Month Daily Chart
For proper context, we refer readers to our important piece earlier this month – “September, Q4 and Venture Bull Markets“…
The Venture, which held quite steady in August despite the sharp pullback in the TSX Gold Index, has continued to lead the broader equity markets and commodities to the upside this month – a classic signature of Venture bull markets…
The Venture’s short-term chart shows how momentum has picked up significantly entering the final 7 trading days of the month, but tomorrow will be a key day…
- Sell pressure (CMF), dominant since the 3rd week of August, has transitioned into weak buy pressure;
- The Index has climbed back above its EMA(8) and EMA(20), and both have turned higher;
- RSI(14) has held support around 50% and is climbing;
- ADX indicator shows “neutral trend” at the moment but +DI is gaining strength and has pushed above -DI.
Historically, the Venture has performed exceptionally well in September and in Q4 during bull market years going back to 2003…the average gain from the August close to the end of December is almost 30%, additional compelling evidence that the Venture has an excellent chance to challenge its next measured Fib. resistance at 978 by the end of 2016…
A strong close to the week tomorrow would reinforce the probability of a very good finish to the month…
In Today’s Morning Musings…
1. Colorado, Serengeti take hits on news…
2. What a “bellwether” stock is saying about the Gold market…
3. Kootenay Silver (KTN, TSX-V) update…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
Van Sun says natives not keen on Amarc exploring Ike
2016-09-21 04:00 PT – In the News
The Vancouver Sun reports in its Wednesday edition that Amarc Resources is exploring above the tree line on a mountain in the southern Interior deemed a “no-go zone” for exploration by communities of the Tsilhqot’in First Nation. The Sun’s Derrick Penner writes that the property is being spoken of in glowing terms for resembling the mineralization that formed the basis of Teck Resources’ Highland Valley copper mine. The property known as Ike is also in the last place that the Tsilhqot’in communities want a mine. It is above the watersheds of the Taseko and Chilcotin rivers and not that far from Fish Lake where the band fought Taseko Mines’ proposals for a large copper mine. “This Ike [exploration], we’re not going to agree to,” said Chief Roger William of the Xeni Gwet’in First Nation. “Fish Lake, Teztan Biny, was a sensitive area. This is as sensitive, even more because it’s more above the Taseko Lakes and all our fish [and] salmon runs.” The mineral discovery lies in an area the Tsilhqot’in has declared a tribal park that they call Dasiqox. Amarc executive chairman, Bob Dickinson, said of the Ike property’s long-term potential in a 2015 Northern Miner item, saying, “It doesn’t get any better.”
Comment by Mmurphy — September 22, 2016 @ 10:19 am
Guys I like your newsletter but…
Nice try to pass this off as sell on news for CXO-Colorado Resources and SIR-Serengeti Resources – they were actually very disapointing results. Between 1 and 2 grams per tonne over a reasonable distance. This would require 14 to 28 tonnes to produce one ounce of gold – can’t make money that way. You guys are good at claiming gems. I would like to see less charts, more BVPS-Book Value per Share, profitable or close to profitable operations. And mostly a follow-through on your picks – the good with the bad.
Just my two shares worth.
And BTW – some of us readers are left-wingers politically who have no stomach for the American war machine or unbridled capitalism. The environment should not be an after-thought.
Comment by JoeMichel — September 22, 2016 @ 12:29 pm
CXO and the market. Many commented yesterday and I just wanted to throw my 2 cents in here. Yes, december will look like a good month to enter after tax selling. We are seeing a lot of stocks that are sell on the news again as opposed to the other way around. April through July were fabulous months and the easy money was made. Unfortunitly I missed it as I was galvanting around the world. But there is something else to consider now. The overhang that all of these stocks have from their PP’s. Many warrants are or will be free trading now.
There will be opportunities this year, but it will be the cheap ones that have recently done their PP’s and are just starting to get their programs going. The easy money has been made on the others and the pickings will be less the rest of the year. Some of them are on the BMR list and I wont give them away as I am trying to position. The second inning is about to begin. There is money to be made, but it would be wise to get the new crop about to emerge.
Comment by dave — September 22, 2016 @ 1:15 pm
JoeMichel…. thanks for another perspective. Sometimes I get tired of the anti Obama rants, I am not a big fan of Obama but he did inherit a huge mess from the Republicans (ie credit crisis).
Charts on juniors are unpredictable at the best of times, especially things like support levels. It seems like CXO has broken through support many times lately. I tend to look for sudden increases in volume/accumulation after a stock has been basing at low levels. The most risk is when you chase a stock that is in an uptrend and everyone is bullish. I don’t mind the charts here but I am always skeptical on charts for juniors.
Seasonality is also very important, I think there will be an incredible opportunity in a couple months. And how much lower can CLE go? Bid of .075 at the close?? Keep some powder dry, what I thought are good bargains are going to get better.
Comment by Danny — September 22, 2016 @ 3:12 pm
Thanks Danny for your insight and feedback!
Comment by JoeMichel — September 22, 2016 @ 6:10 pm
Charts are necessary and accurate until a fundamental steps in its way, CXO as example. I make my living off of charts. People saying they don’t work on jr’s is just plain foolish, I have 25 years in the business to prove otherwise. They work until a bad fundamental aspect steps in their way, hence the most risk is when you chase high at the uptrend, Danny you are correct there. When CXO passed .50, it was time to sell and wait for the assays, then go back in if assays caused it to run. I have preached this from day one here 5 years ago. Don’t be holding near assay time, very dangerous. As for Obama, yes he inherited a mess only to make the mess 4 times worse in just his term alone. Many americans are leaving the country due to its state right now, a very precarious one. Don’t know if trump can turn it around. Yes, I said trump. Hillary is toast.
Comment by dave — September 23, 2016 @ 4:33 am
BLO looking strong this morning, trying to break out above .26 resistance.
GoDaddy has been experiencing widespread issues with their server this morning which are being worked on, hence connections to site could be slow at times until this is resolved, and Morning Musings will be delayed as a result.
Comment by Jon - BMR — September 23, 2016 @ 6:16 am
trump – based on technical data, he may be toast. an article in the Globe yesterday detailed why he’s not likely to get the #’s he needs to get to 270 seats. strictly technical . we’ll see. neither is a good choice, but America doesn’t need to stoop as low as Trump wants to go, or add $5.3T to the debt over 10 years (vs Hil’s $200B) that he has proposed. what a mess
Comment by david — September 23, 2016 @ 7:39 am
Both candidates are terrible and either one will make a bigger mess than Obama has already made.
Comment by Sameer — September 23, 2016 @ 7:58 am
Just a quick note that GoDaddy has finally fixed its widespread server problems and Morning Musings will be posted around 11:30 am Pacific…it has been months since they’ve had any issues, so GoDaddy can be forgiven for this morning’s glitches…we apologize for the inconvenience…
Comment by Jon - BMR — September 23, 2016 @ 10:15 am
oh, maybe that’s why gold and the $ are not doing what their suppose to do,what the heck is going on here? had me fooled,jeepers…..
Comment by Laddy — September 23, 2016 @ 10:30 am