Gold has traded between $1,203 and $1,217 so far today…as of 10:00 am Pacific, bullion is off $10 an ounce at $1,206…Silver is 11 cents lower at $16.53…Copper has retreated 3 pennies to $2.46…Crude Oil is up slightly at $45.53 while the U.S. Dollar Index has jumped one-third of a point to 101.33…
Recent outflows in global Gold exchange-traded funds have now exceeded all of the inflows since July, according to Commerzbank…global ETF Gold holdings fell again yesterday after a number of big daily outflows lately, including one of 13.6 tonnes Tuesday and two of roughly 16 tonnes at the end of last week…
Gold, unlike some other metals, is not yet responding to potential inflation down the road, meaning longs do need patience…another factor that could help bullion is the likelihood of a jump in the U.S. budget deficit…the greenback has momentum on its side, constraining Gold, leading up to the December 13–14 FOMC meeting when the central bank is expected to hike rates for only the 2nd time in more than a decade…expect a “sell on news” event in the greenback when the Fed finally pulls the trigger (or just before)…
Ivanhoe Mines (IVN, TSX) and its joint venture partner, Zijin Mining Group Co., have signed a landmark agreement that confirms the support and desire of the government of the Democratic Republic of the Congo to be a prominent partner in the development of the high-grade Kamoa-Kakula Copper Project…the agreement transfers an additional 15% interest in Kamoa-Kakula to the DRC government, increasing its total stake in the project to 20%…Ivanhoe and Zijin each hold an indirect 39.6% interest…
“This is a historically significant event for the people of the Democratic Republic of Congo,” stated Robert Friedland, Ivanhoe Executive Chairman. “We now are united as partners committed to working closely together toward our shared objective of ensuring that the major Copper discoveries we have made at Kamoa and Kakula during the past 8 years can be predictably, efficiently and expeditiously developed into a world-scale mining venture with a lifespan of multiple generations.”
IVN is down slightly this morning at $2.03 but its chart and prospects look strong entering 2017…
Dollar Index 1-Year Daily Chart
The U.S. Dollar Index has made a big move since the U.S. elections, pushing once again into overbought RSI(14) conditions on this 1-year chart while measured Fib. resistance at 101.30 is being challenged…the high dollar is not helpful to a U.S. economic recovery and it’s also a counterweight to the Fed’s hope of seeing inflation gain traction above 2%… the dollar may not cool off until news of a likely rate hike next month is out of the way…
Dollar Index Long-Term Chart
When examining this long-term monthly Dollar Index chart, one wonders what’s going to prevent the greenback from surging higher during 2017 given the recent U.S. magnitude 9.0 political earthquake…a major breakout has been confirmed above a long-term downtrend line while RSI(14) has formed a bullish “W” and is accelerating to the upside…
Quite possibly, 2017 could prove to be the most consequential tax policy year in the United States since the Second World War…that has some analysts musing that the Dollar Index as a result could easily climb another 10% over the next 12 months…a wave of inversions due to foreign companies suddenly wanting to have their headquarters in the U.S would certainly put upward pressure on the greenback…
Expectations are high among many investors now that U.S. growth will ramp up under the suite of new policies that will soon be ushered in by President-elect Trump and a Republican-controlled Congress…while those initiatives are a welcomed departure from years of policies that have suffocated U.S. growth, forcing the Fed to maintain record-low interest rates for an extended period, it’s important to note that the effect won’t be instant and the full impact may not be felt for a couple of years…however, the market is a forward-looking machine and it’ll be anticipating higher growth and a pick-up in inflation despite a stronger dollar…
While there’s typically an inverse relationship between the dollar and Gold, there have been times over the past few decades when bullion and the greenback have moved higher together (1982, 2001, 2005, and periods during 2009 to 2011 are good examples)…significantly, most of those were years in which a worsening trend in U.S. annual budget deficits materialized…that’s a theme that could play out in 2017…
In Today’s Morning Musings…
1. A nice HIT with this play before Christmas…
2. Volatility continues in cannabis stocks – fresh look at Canopy Growth (CGC, TSX)…
3. Accumulate this one in the “sweet zone”…
4. The world is looking up – Kopin (KOPN, NASDAQ) hits a 2016 high…
5. Daniel’s Den – Jack Stoch pulls off a deal Trump would be proud of…
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…
Jon: you indicate that Gold will rally after announcement, however, alot of people are indicating that Gold will goto 1050$ before lifting up again which may also be many months away? Please share your thoughts.
Comment by STEVEN1 — November 18, 2016 @ 12:06 pm
MJ stocks could have a rough week next week. Washington post says Donald Trump wants to nominate Sen. Jeff Sessions as Attorney General.
He is opposed to the weed legislation.
Comment by dave — November 18, 2016 @ 1:26 pm
HIT… well I believe that they have been so very misrepresented here…. I really am flabbergasted by the slanted reporting of the people here.
am truly amazed….. really cant believe it..
time for a shower….
Comment by Jeremy — November 18, 2016 @ 3:38 pm
The coming rate hike, Steven1, has been mostly baked into the market already. That negativity toward Gold you just indicated sounds a lot like what we were hearing last year around this time immediately prior to the first rate hike. A lot of pundits were calling for Gold to drop below $1,000, maybe $900. Of course what occurred was a near-term complete reversal to the upside, and a powerful one at that. Historically, Gold likes inflation and U.S. budget deficits that are trending higher. Trump policies will spark both. For now, currency/Gold markets have been concentrating since the election on adjusting to the now high probability of a rate hike next month, and money coming out of bonds has been flowing into equities. Other factors positive to Gold will come into more focus after the Fed meeting. Venture is holding its own in the face of dollar strength and Gold weakness, so there’s really no indication from the Venture that Gold is going to fall completely out of bed. We’ve been in a corrective phase since Q3 for both, and the next wave up isn’t far off.
Comment by Jon - BMR — November 18, 2016 @ 4:19 pm
Daniel
Great stuff keep it coming!
Comment by GREGH — November 18, 2016 @ 8:26 pm
Well .. my experiment failed. I tried to get some heat going with a derogatory post re HIT to generate some emotion etc..
failed miserably!!!
thx for letting the post stand Jon:)
So HIT is on its last legs cash wise.. if Best Buy doesnt deliver they will have to get more dough and at 5-10 cents.. well dilution etc.
Product looks good, patent protected, a bit expensive but .. it is a $800 iPhone!!
If everyone went into their best buy store and ask how they are selling????
Comment by Jeremy — November 19, 2016 @ 11:42 am
Jeremy – everyone has you pegged is all, lol.
I read a post where someone went into best buy today and bought one at 50% off. I understand they were in a pharmacy too. Maybe not a big market with otterbox out there but at .08, its ok I guess. The after market buying by #19 was interesting.
Comment by dave — November 20, 2016 @ 5:13 pm
Dave … no they dont!
Comment by Patricia — November 20, 2016 @ 8:02 pm
HIT – short covering recorded afterhours is something I havent seen for a bit
NRN – men with shovels should be digging out the drill rig from its drill pad at Sequoi this week, if its not done already
Comment by david — November 21, 2016 @ 6:17 am