7 @ 7:00 « BullMarketRun.com

July 4, 2018

7 @ 7:00

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1. Happy 4th of July to our American friends!…Gold prices rose to a 1-week high today, rebounding from a new yearly low touched in the previous session, as the greenback weakened against the yen…as of 7:00 am Pacific, bullion is up $4 an ounce at $1,256…it has traded as low as $1,254 and as high as $1,262…Silver is up a nickel at $16.05…base metals are under mild pressure with Copper, Nickel and Zinc at $2.91, $6.39 and $1.27, respectively…Crude Oil has eased off 28 cents to $73.86…WTI is well supported as an Oil outage at Syncrude Canada’s facility in Fort McMurray, looming U.S. sanctions on Iranian Crude exports, force majeure in Libya and unplanned pipeline outages in Nigeria are offsetting rising output by OPEC…the U.S. Dollar Index continues to encounter stiff resistance at 95 and is currently off one-tenth of a point at 94.51…China’s central bank has moved to calm jittery financial markets after the yuan dropped to its lowest level in almost a year as trade anxieties deepened…Friday is the U.S. government’s deadline to implement $34 billion in tariffs on imported Chinese goods…the Chinese government has threatened to retaliate in kind on the same day…economists at UBS Group AG said the first round of U.S. tariffs likely would have only a limited impact on China’s $11 trillion economy…if the conflict escalates to include $200 billion of Chinese exports and global trade slows, they estimate that would shave half a percentage point from China’s GDP growth, which last year was 6.9%…

2. The Financial Times reports that the London Metal Exchange (LME) is intensifying its scrutiny of companies that source their Cobalt from mines in the Congo, amid growing fears over the use of child labor in the electric car supply chain…the LME, the world’s largest metal exchange, will require all companies that get at least 25% of their metal from small-scale mines in the DRC to undergo a professional audit starting in January, 2019…the move comes after concerns last year that the exchange had allowed a Chinese company to sell untraceable supplies of the metal…more than 60% of the world’s Cobalt comes from the DRC, and it’s estimated that up to 20% is hand-mined by small-scale miners…much of this metal is sold at local markets before being sent to China to be refined into battery materials…

3. The TSX posted a Q2 gain of 5.9%, its best quarter since the end of 2013…the benchmark will end the year just above 17,000, according to the average of 10 estimates compiled by Bloomberg…that’s marginally ahead of the level that was predicted in January but still lags the 8.3% predicted for the S&P 500, according to a Bloomberg survey…“The primary driver of our overweight allocation to Canada is the energy space, because energy stocks have lagged the underlying commodity price significantly and we think we’re going to see a catch-up there,” said Candice Bangsund, portfolio manager for global asset allocation at Fiera Capital, who helps manage $136 billion and recently raised her year-end target to 17,300 from 16,900…the energy sector lagged in Q1 but surged 15% in Q2, its best quarterly gain in 9 years…MEG Energy (MEG, TSX) was the top-performing TSX stock in the 2nd quarter, soaring 141%…

4. U.S. equity markets are closed today as Americans celebrate Independence Day…new orders for U.S.-made goods unexpectedly rose in May, pointing to a strengthening manufacturing sector as the American economy fires on all cylinders…the most important data this week will be Friday’s jobs report…trading in Canada today is lighter than usual due to the U.S. holiday…in Toronto, the TSX is up 31 points through the first 30 minutes while the Venture has backed off 2 points to 738…GT Gold (GTT, TSX-V) has crossed the $1 level for the first time this year as drilling continues at the company’s Saddle South high-grade Gold discovery in northwest British Columbia…2 rigs are stepping out east and west of the 2017 discovery zone…Canada Cobalt (CCW, TSX-V), still trailing district peer First Cobalt (FCC, TSX-V) by more than $100 million in market cap, has hit a new high of 80 cents in early trading…CCW is on the verge of becoming the first company in the Northern Ontario Cobalt Camp to produce a Cobalt sulphate product from its own material and through a proprietary process (Re-2OX) at SGS Lakefield…meanwhile, underground drilling continues to target high-grade Cobalt left behind by Agnico Eagle which focused exclusively on high-grade Silver when it was mining Castle’s 11 levels in the 1980’s…National Access Cannabis (META, TSX-V) has pulled back slightly in early trading after jumping to a nearly 4-month high of $1.12 yesterday on news…Datametrex AI’s (DM, TSX-V) Ronin Blockchain has entered into a binding Letter of Intent with Cluny Capital,a capital pool company, to combine the businesses of the two companies…the proposed transaction will result in a reverse takeover of Cluny by Ronin and its shareholders, constituting Cluny’s qualifying transaction…following completion of the proposed transaction, and assuming the maximum private placement of $3.75 million is achieved (25 million Ronin shares @ 15 cents), the current shareholders of Cluny will hold approximately 5.7% of the common shares of the resulting Issuer, Datametrex will hold approximately 78.9%, and subscribers in the Ronin private placement will hold approximately 15.4%…DM is up a penny on the news at 8.5 cents as of 7:00 am Pacific…

5. Advanced Gold stocks have been performing much better than bullion over the past several months – a positive sign for Gold prices during the 2nd half of the year – and this morning Pure Gold Mining (PGM, TSX-V) got a lift on a buy recommendation from Mackie research analyst Stuart McDougall…with the Feasibility Study underway for a proposed restart of the Madsen underground mine in the Red Lake District, there is “plenty of upside to be had” with Pure Gold, according to McDougall: “PGM is a few months away from completing a definitive Feasibility Study…this, combined with the deposit’s relatively high grades and what we view as solid exploration success, ranks the company as one the better exploration and development stories we have looked at”…

6. Analysts at Bank of America Merrill Lynch (BAML) yesterday reiterated their forecast for Gold prices to average the 4th quarter around $1,400 an ounce…at the same time, the bank sees Silver prices averaging $17.50 in the final 3 months of 2018…BAML said in its report that growing geopolitical tensions, escalating global trade wars and rising inflation pressures will remain supportive of the precious metals…“We note that the business cycle is maturing and the ongoing uncertainty around trade is not helping at this junction,” the analysts said in their report. “At the same time, inflation has been picking up (shorting Treasuries is one of the most crowded trades), a combination which may ultimately bring Gold buyers back into the market”…

7. The Vancouver Sun reported this morning that First Nations from British Columbia and Alberta are expected to meet later this month in Vancouver to discuss the possibility of purchasing a stake in the Trans Mountain pipeline…the meeting on July 25 at the Vancouver Convention Centre is to be hosted by the Fort McKay and Mikisew Cree First Nations, according to Fort McKay First Nation Chief Jim Boucher…the two entrepreneurial Alberta First Nations publicly stated an interest in an ownership share of the project following the announcement in May the federal government was purchasing the existing Trans Mountain pipeline and its expansion project for $4.5 billion…last year, Fort McKay and the Mikisew raised $545 million through a bond issue to acquire a 49% stake in Suncor’s (SU, TSX) Oil sands storage facilities…a total of 43 First Nation communities had signed benefit agreements with Kinder Morgan (KML, TSX) valued at $400 million…