Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information
1. Gold has traded between $1,191 and $1,212 so far today…as of 7:00 am Pacific, bullion is down $11 an ounce at $1,196…“There are already signs that Gold fundamentals are starting to change with the dollar weakening over the past week, Chinese and Indian Gold purchases rebounding, and Turkish central bank holdings stabilizing,” Goldman Sachs commented…“From here, we continue to expect gradually higher Gold prices on the back of renewed EM demand. However, against this, we are already seeing a later-cycle U.S. economy with higher interest rates increasing the contango (negative carry) in Gold“…Silver is off 2 pennies at $14.29…Crude Oil has shot up 76 cents a barrel to $71.08 while the U.S. Dollar Index is unchanged at 93.92…the greenback, however, has lost significant momentum recently and technically seems destined to come under increasing pressure over the next several weeks which would be bullish for the commodity sector…
2. Base metals are strong today to cap off their best week in quite a while after the U.S. and China announced fresh tariffs that were less severe than some investors had feared…the U.S. 10% tariff on $200 billion of Chinese imports starting September 24 (Monday) was a more measured response than the immediate 25% duty some had expected, and Copper prices actually extended gains after China responded that it would retaliate with 5%-10% tariffs on $60 billion of U.S. goods…as of 7:00 am Pacific, Copper is up another 10 cents at $2.83, Nickel is 20 cents higher at $5.88 while Zinc has added a penny to $1.11…Copper inventories in London Metal Exchange-registered warehouses dropped 20,000 metric tons over the past week, taking the total inventory withdrawal to more than 80,000 in the 3rd quarter so far, according to ING Bank…Cobalt remains steady at $28.46…
3. Goldman Sachs looks for Gold prices to be at $1,250 an ounce in 3 months and $1,325 a year from now, the investment bank said in a research report late yesterday…the updated 3, 6 and 12-month forecasts average around $100 lower compared to the bank’s previous outlook as the Gold market has been caught in a downtrend the last several months…Goldman described the recent investment environment as similar to the late 1990’s, when a boom in technology stocks meant no fear in so-called risk markets in developed nations, while there was a financial crisis in emerging-market countries…softening emerging-market economic growth and the strong U.S. dollar simultaneously hurt household savings in EM nations, a key metric for Gold demand…as Gold prices fell, there was a significant decline in ETF demand in developed nations, which Goldman estimated was responsible for around $60 per ounce of the drop in prices since April…softer physical Gold demand, driven primarily by emerging-market nations, accounted for about $80 of the decline, the bank added…
4. Oil prices continue to strengthen ahead of a Sunday meeting of OPEC and other large Crude exporters that will focus on production increases as U.S. sanctions restrict Iranian exports…OPEC and its allies are scheduled to gather in Algeria to discuss how to allocate higher supply to offset the shortage of Iranian supplies…however, the meeting is unlikely to be able to change production policy…such a move would require OPEC to hold what it calls an “extraordinary meeting”, which is not on the agenda…International benchmark Brent Crude for November delivery is close to 4-year highs, trading just below $80 a barrel, as investors bet that OPEC will be unable to compensate fully for the loss of Oil from Iran, the cartel’s 3rd-biggest producer…
5. Speaking of Oil, and how Canada isn’t fully benefiting from firming prices due to government incompetence, Justin Trudeau and the Federal Liberals’ pipeline regulatory merry-go-round continues with no end in sight…the federal cabinet has ordered the National Energy Board to return with a new recommendation within 22 weeks on whether the pipeline expansion should proceed after taking a look at the environmental impact of more than 3 dozen Oil tankers shipping diluted bitumen through the Burrard Inlet every month (of course this has been studied at length already)…an unelected, left-leaning and micro-managing Federal Court of Appeal last month quashed the approval the NEB and the cabinet gave the project in 2016, citing improper consultation with Indigenous communities and a lack of review of the marine shipping issue…Natural Resources Minister Amarjeet Sohi made the announcement regarding the nearly 6-month timeline for the NEB this morning in Halifax where Canada is hosting environment and energy ministers at a G7 summit meeting on the now predictable Canadian themes of “Climate Change, Oceans and Clean Energy”…Sohi, obsessed with gender issues like his colleagues in cabinet, actually stated this prior to the meeting: “Canada is leading by example to address the issue of gender equality in the G7 energy agenda. We will continue to engage key private sector and public sector leaders on this important issue and take actions to improve gender equality, particularly in the energy sector. We want to influence current and future leaders of Canadian industry to commit to meaningful action in the area of gender equality”…this is the same government that mentioned the word “gender” more than 150 times in its February budget but failed to mention the word “pipeline” even once…that says it all…
6. The Dow and S&P 500 have hit new all-time highs again this morning…as of 7:00 am Pacific, the Dow has climbed 67 points…in Toronto, the TSX is 33 points higher…Royal Nickel (RNX, TSX) has added 3 cents to 45.5 cents, its best level since early 2016, after news that Eric Sprott has added 561,000 shares of the company at an average price of 43 cents to lift his overall holdings to 10.1%…the Venture is off a point at 719…as investors await Nickel Mountain news from Garibaldi Resources (GGI, TSX-V), GGI neighbor Metallis Resources (MTS, TSX-V) reports that it’s gearing up for drilling at Thunder North, contiguous to the Eskay Camp’s first Nickel-Copper-rich sulphide system…a final round of geophysics is being completed over the Thunder North target area in order to prioritize Nickel sulphide drill targets after a highly encouraging VTEM survey earlier in the season…the textures and compositions of the gabbros at Thunder North support the presence of mafic intrusive magmatism in the Hazelton stratigraphy along the western margin of the Eskay Rift…meanwhile, current drilling at MTS‘ Kirkham Property has apparently intersected visually impressive Copper mineralization at the Cole and Nina targets, never previously drilled, below Thunder North and Thunder South in a Gold-Copper environment…Cannabix Technologies (BLO, CSE) continues to gain fresh technical momentum, pushing past the $2 level for the first time since July…Khiron Life Sciences (KHRN, TSX-V) has enjoyed a strong week, drawing attention for its “first-mover” advantage in Colombia…Cannabis investor Canopy Rivers (RIV, TSX-V), the venture arm of industry giant Canopy Growth (WEED, TSX; CGC, NYSE), went public yesterday in a debut that gave it a market capitalization of about $1.6 billion, more than double its valuation prior to the listing…Canopy Rivers listed on the Venture through a reverse takeover of a shell company…the stock ended the day at $8.75 and is up another 25 cents at $9.00 after the first 30 minutes of trading this morning…the public offering was oversubscribed by more than 3 times…
7. CIBC’s dominance in electronic trading puts the broker at the forefront of trading for 3 of the 5 biggest cannabis firms: Canopy, Aphria and Cronos…Bloomberg says that about 23% of gross volume of Canadian trades in Canopy, for instance, were handled by CIBC World Markets this year, compared with almost 14% with TD Securities…CIBC is 2nd in overall pot stocks trading volume because it is the main Canadian bank-owned brokerage serving market-makers…TD Securities, however, leads trading for most of the large marijuana firms, including Emerald Health Therapeutics, CannTrust Holdings and Supreme Cannabis…many are on a list of 18 cannabis stocks the firm’s investment advisers use for recommending to clients…TD allows advisers to recommend only those cannabis companies listed on the TSX or the Venture and that “have no prohibited U.S. touchpoints,” TD said in a statement to Bloomberg…TD Securities accounts for 25% of gross trading volume of institutional block trades for the industry this year, compared with a 9.7% share for Instinet and 9.4% for RBC Capital Markets…
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Comment by flyinthruu — September 21, 2018 @ 12:08 pm
Good afternoon gents, a little bit of an anti climactic day, but still positive nonetheless.
I was wondering about your thoughts on CCW? Do you still hold a position?
Thanks guys
Comment by Phil — September 21, 2018 @ 1:30 pm
I have more CCW than ever, Phil, and John and Daniel continue with their holdings as well, Phil…great week for CCW as it found a low as it needed to do on its technical retracement, and bounced back for a nice gain this week…I suspect we’ll see further strength going into month-end…
Comment by Jon - BMR — September 21, 2018 @ 1:37 pm
Hi Jon, have you added to GGi position or you fully maxed out there already?
Comment by flyinthruu — September 21, 2018 @ 1:39 pm
All loaded up and excited about what the coming days and weeks are going to bring, flyinthru…
Comment by Jon - BMR — September 21, 2018 @ 3:54 pm