Gold has traded between $1,260 and $1,273 so far today…as of 9:45 am Pacific, bullion is up $8 an ounce at $1,269…Silver is 3 cents higher at $17.62…Copper is flat at $2.11…Crude Oil has surged $1.49 a barrel to $51.78 on a larger than expected Crude draw, while the U.S. Dollar Index is unchanged at 97.89…
Holdings in global exchange-traded funds backed by Gold rose to 2,053 metric tons yesterday, the highest since June 2013…
Gold prices in India swung to a premium for the first time in 9 months today as jewellers and dealers in the world’s No. 2 consumer of the metal ramped up purchases ahead of major festivals…dealers were charging up to $2 an ounce over official domestic prices, the first time premiums have been seen since mid-January, according to Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation…
Gold will rise to $1,347 an ounce during the next year, according to a poll of attendees after the London Bullion Market Association’s annual conference in Singapore this week…that’s a great sign – they’re not overly bullish…attendees were most excited about Silver which they see climbing to about $21 an ounce in 2017…more than 700 delegates, representing 34 countries, attended the 2016 conference, the LBMA reported…
The Fed releases its Beige Book at 11:00 am Pacific with key officials also speaking today…meanwhile, the German government sold 30-year bonds (bunds) today for an average yield of 0.65%…that’s above the 0.45% fetched in late July…world government bond yields have been on the rise recently as the perception that price inflation is creeping back into the world economic picture…
BHP Billiton (BHP, NYSE) Upbeat On Commodities
BHP Billiton (BHP, NYSE), the world’s largest mining company, sees early signs that commodity markets are rebalancing, with Oil and Natural Gas best placed to deliver gains into 2018…
“Fundamentals suggest both Oil and gas markets will improve over the next 12 to 18 months,” CEO Andrew Mackenzie said today in the company’s first-quarter production report. “Iron Ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near-term.”
BHP joins Rio Tinto Group (RIO, NYSE) in expressing increased optimism on the outlook for commodities amid continued strong demand in China, the top consumer…raw materials will probably see a broad-based recovery in 2017 after an expected strong performance in the final quarter of this year on improving demand, according to Barclays…
China Reports Steady Growth
China’s economy grew by 6.7% in the 3rd quarter, year-on-year, which was in line with market expectations…the figure was also the same as Q2…China also reported its retail sales increased by 10.7% in September from a year earlier, also matching estimates…industrial production was up 6.1% in September, year-on-year, which was a miss to the downside…overall, however, the numbers were deemed to be upbeat…
Oil Update
U.S. Crude hit a more than 1-year high today after government data showed that Crude stockpiles declined for 6th time in 7 weeks, as refinery activity fell and the country imported less product…
Meanwhile, China’s Crude output fell 9.8% to 3.89 million barrels per day (bpd), near its lowest in 6 years in the 2nd-biggest year-on-year decline on record…
“The fall in Chinese Crude Oil production is probably attributable to the low price level, which makes parts of production unprofitable. This makes it all the harder to understand why OPEC is talking prices up with its current debate about production cuts, and is thus helping precisely those Oil producers it would ideally like to force out of the market,” Commerzbank observed…
Saudi energy minister Khalid al-Falih said today that “he’s happy to see more rigs coming back” and that Oil markets were at the end of a considerable downturn as fundamentals were improving and supply and demand were rebalancing…he called on non-OPEC producers to help stabilize the market, saying their role was as critical as that of OPEC members…
“Market forces are clearly working after a testing period of sub-$30 Oil prices…Oil demand is expanding at a healthy rate despite slower global growth,” he said…
The energy minister added that by freezing production or slightly reducing it, OPEC wants to signal to the market that it would like to see lower inventories and more investment…
Saudi Debt Offering
The Saudis are also in the midst of their first foray into the international bond market as the books get set to close on what could be a monster $15-$20 billion deal, so the recent pick-up in Oil prices has been timely…the debt offering is expected to debut this week and is a key part of the kingdom’s economic reform plan as it would give Saudi Arabia a sovereign benchmark that would help it open its capital market for future offerings, such as corporate issues…Saudi officials met with investors in New York yesterday…according to the price talk, the Saudi 5-year note would tentatively come to market with a yield 160 basis points above the U.S. 5-year Treasury note…the 10-year would tentatively be set at 185 bps above the U.S. 10-year, and the 30-year would be 235 bps above the U.S. long bond…
In Today’s Morning Musings…
1. A real 450% return on ETF’s – we’ll show you how…
2. Technical strength builds in Venture and TSX Gold Index…
3. Cannabix Technologies’ (BLO, CSE) update…
4. Daniel’s Den – update on 4 “major league” optionality plays with resources…
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…
India, one of the world’s top Gold consumers, experienced one of its bleakest years on record for Gold demand in 2016 as shipments into the country reportedly dropped by 46% last month – totaling just 56.9 tonnes, as compared to the 106 tonnes Indian buyers brought in during December 2015…according to data compiled by Bloomberg, Gold imports totaled 570.8 tonnes in 2016, down 44% from 2015…
