Gold has traded between $1,176 and $1,193 so far, as bullion briefly moved into a resistance band starting at $1,190 and quickly reacted before bouncing back…as of 9:15 am Pacific, bullion is up $4 an ounce at $1,188…Silver is up 2 cents at $16.15…Copper has added a penny to $2.41…Crude Oil is off more than $1 a barrel to $45.33 while the U.S. Dollar Index has rallied one-quarter of a point to 94.20…the greenback’s overall technical condition continues to deteriorate, however…
Gold has confirmed a breakout above $1,160, new support, and now we’ll see if it can also remain at or above the 200-day moving average (SMA), currently $1,176…a strong band of resistance exists between $1,190 and $1,210, as John’s chart showed last night, followed by an even bigger hurdle around $1,225 – currently the top of a downsloping flag that has restrained Gold for the past 2-and-a-half years (Gold has consistently moved between support at the bottom of that flag and resistance at the top)…
The rally in the U.S. Dollar Index today (it’s off from its morning high) is nothing to get excited about – no different than any other bounce we’ve seen in recent months within a broader trend that is clearly negative…one of the big advantages for Gold, commodities and the Venture over the next several months, in general, will be a restrained U.S. Dollar Index thanks to a reversal in technical conditions from what existed at this time last year…
U.S. consumer prices recorded their biggest drop in 8 months in September as the cost of gasoline fell, but there was a slight pick-up in underlying inflation (the core CPI) according to the Labor Department today…the Consumer Price Index fell 0.2% last month after slipping 0.1% in August…however, in the 12 months through September, the core CPI increased 1.9%, the largest jump since July 2014, after rising 1.8% in August…the Fed tracks the personal consumption expenditures price index which is running well below the core CPI, and PCE inflation hasn’t hit the central bank’s 2% target in more than 3 years…
In a separate report today, the Labor Department found Americans’ inflation-adjusted weekly wages fell 0.2% in September…that’s not good news for the Fed, either…from a year earlier, real average weekly earnings are up 2.2%…
U.S. Debt Limit Draws Closer
Treasury Secretary Jack Lew said today that the U.S. debt limit will be exhausted November 3, a couple of days before previously estimated. “At that point, we expect Treasury would be left with less than $30 billion to meet all of the nation’s commitments – an amount far short of net expenditures on certain days, which can be as high as $60 billion,” Lew said in a letter. “Operating the United States government with no borrowing authority, and with only the cash on hand on a given day, would be profoundly irresponsible. As I wrote previously, we anticipate that a remaining cash balance of less than $30 billion would be depleted quickly,” he said.
The debt ceiling debate of course sets up another major potential showdown in Congress, just one more reason why the current economic/political environment for the Fed just isn’t conducive to initiating the first rate hike in nearly a decade…
Crude Oil Update
There are conflicting views on where Oil is headed…Goldman Sachs Group said in a note to clients last week that the recent Oil price rally isn’t supported by current supply-and-demand data. “We expect this rally to reverse and reiterate our forecast for lower prices for longer,” the bank’s analysts wrote…
Last week’s price rise, about 10%, was initiated by the large drop in U.S. Oil rigs in early October…U.S. Oil-directed rigs fell to a 5-year low of 614 a few weeks ago, according to Baker Hughes, and then to 605 on Friday…
Geopolitical developments also contributed to last week’s price jump, with market participants rebuilding an Oil-price risk premium attached to potential production outages in the Middle East…fighting in Syria (and Russia’s intervention there), plus attacks by ISIS on production facilities in northern Iraq – all of this has raised the risk of potential supply disruptions…
In emerging Asia, where economic concerns have risen, Oil demand has been resilient…in China and India, it rose by around 7% in August from a year earlier…however, some investors believe global demand is unlikely to offset increases in supply…the International Energy Agency (IEA) said earlier this week that it expects global demand growth of 1.2 million barrels a day next year, down from 1.8 million barrels a day this year…
WTIC 6-Month Daily Chart
This 6-month daily chart shows Crude trading between a gently rising 50-day moving average (SMA), currently $44.74, and a 200-day SMA that’s flattening out at $51…WTIC’s recent rally stopped right at the 200-day…a breakout above that important SMA, and its reversal to the upside SMA, would give WTIC fresh momentum…on the downside, a break below the September low of $43.21 would be bearish…
Today’s Equity Markets
Asia
China’s Shanghai Composite jumped more than 2% overnight to close at 3338…Japan’s Nikkei also had a good day, climbing back above 18000…
Europe
European markers finished solidly in the green today, generally more than 1% higher…
North America
The Dow is up 48 points as of 9:15 am Pacific…in Toronto, the TSX has lost 87 points while the Venture has pulled back 2 points to 555…
In today’s Morning Musings…
1. If you think Canada’s going to go down a slippery slope Monday and elect a Pothead for a PM, we have a stock for you…
2. What the TSX Gold Index needs to do to really bust out…
3. An update on the bullish HGU…
4. The one Canadian Gold producer every investor should own…
Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…
Jeff – EQT – sorry for delay getting back with you. I have tons going on here in Atlanta. The rumor about a joint venture is just that, a rumor. Or, lets just say nothing has been confirmed to me about it. Be careful what you read on SH, and you should already know this. Also, although I do not know for sure, I am having my doubts at this time that the PP is over subscribed. I am happy with who took down the first tranche, but it is obvious Hardy is either being careful who he lets in or he is having some difficulty filling it. Which of the 2 apply, I don’t know. I have not heard anything in a while but will try to find something out. As for the drilling, it is tight lipped, I highly doubt we see a leak.The size of trades are key here right now as to whether any thing is getting out from the camp. It is rare to hit on the first hole and this is not a mystery. Have they moved on to a second hole, I don’t think anybody really knows. Wish I could give you more.
Comment by dave — October 15, 2015 @ 10:00 am
Jon, did Regoci give any indication he would put out another NR that drilling has started? I think we will get one and progress on the first hole as it will be well on the way if not finished by the time the NR.
Comment by Dan1 — October 15, 2015 @ 10:15 am
Dave so your saying that wasn’t you that posted that comment on SH?? Whew, good to know as I was getting worried thinking that it was you!!
Thanks for clarifying!!
Go Jays Go!!!
Comment by Jeff — October 15, 2015 @ 11:06 am
Having been a junior mining company insider previously I can say from first hand experience that some companies say PP’s are oversubscribed in an attempt to create excitement to encourage participation.In other words creating a sense of everyone wanting it sometimes has the effect of making the phone ring with people also wanting in. Not saying this is the case with EQT but it does happen. We also never worried about closing a PP before news if there was anything to release. As long as the price was at teh proper level when the PP was priced and announced that was all that mattered. I have even witnessed one unethical firm actaully bring their price down by shorting it, announce a PP and within a couple of days bring the share price back to the original market value which was over 50% higher then what the PP was priced at. The PP was never repriced and closed without a hitch with the insiders making out like a bandit. With regards to EQT I would have to agree with Dave on keeping an eye out for big volume trades. If substantial news good or bad leaks out, anyone trading on this info usually will do so quickly and in large amounts wanting to trade before the public is aware.
Just some of my past observations and personal experience.
Comment by Jamie — October 15, 2015 @ 11:26 am
By the way that 7th inning last night was the wildest inning of baseball I have ever witnessed in my life…wow!
Comment by Jamie — October 15, 2015 @ 11:27 am
eqt – in this environment, what major would offer a deal prior to seeing a hole? and as for rumours, EQT webheads seem to have some big ideas like when Friedland was taking a big piece of the pie. All great stuff for volume!
Comment by david — October 15, 2015 @ 11:33 am
Jamie – that was a good post on EQT. There is no way Hardy would want a joint venture in this situation. He wants for him, his company members, and his shareholders to have the whole pie. Lets hope it comes with whip cream on top. I rarely post or even go to SH so anything you see is most likely not me. (I love rhymes).
David – I agree on your post #5.
Comment by dave — October 15, 2015 @ 3:33 pm
EQT- added to my position at the low for the day .175, will try to hit tomorrow’s low as well.
Have lots of dry powder and lots of patience.
Comment by murf — October 15, 2015 @ 3:40 pm
I think GGI will want to drill few hundred meters and see what the core look like before releasing any important data.
Comment by Martin — October 15, 2015 @ 6:50 pm
It’s pretty obvious when you’re into the “good stuff” in the Sheslay district, Martin. I don’t think GGI will be shy about releasing visuals when they know they’re “in it”. That’s what would also really ramp up the speculation aspect of this play. Checked with sources in Telegraph Creek tonight – GGI is just about ready to commence drilling. We should be hearing something very soon. District drill hole success ratio around 70%. The odds of a significant hit here are unusually high for a grassroots project.
Comment by Jon - BMR — October 15, 2015 @ 7:07 pm
New map up tonight on GGI site. Discovery holes? Insight, anyone?
garibaldiresources.com/i/maps/Grizzly/GGI-Grizzly-Central123.pdf
Comment by Max — October 15, 2015 @ 7:14 pm
Nice, Jon, this is exactly where you thought they would drill on the edge of mag low!
Comment by Martin — October 15, 2015 @ 7:41 pm
Why don’t they just drill straight down the top of the heat engine. It’s amazing how they get a heavy drill rig up a mountain like that and send guys up to drill and there are no comforts of life. I wonder if anyone has ever been attacked by a bear. And here we are in all the comforts of our homes watching the Cubs and Blue Jays, making $$$$$$$$$$$$$$.
Ah, this was meant to be a little funny.
Comment by dave — October 15, 2015 @ 7:54 pm
They are looking for high grade stuff Dave, usually found below the water table. Up to 10% cu can be found. They have found trace of bornite in this area witch is associate with high grade copper.
Comment by Martin — October 15, 2015 @ 8:12 pm
Okay, great, Martin, we have more to work with. This is nice as now we have confirmation of the drilling strategy. Regoci is not doing any fancy/risky geological experimentation here. He’s going for the sure hit early, and I’ll explain why and how.
The anomalies are north-south trending. If you look at the map, they are drilling “across the trend”, in the immediate vicinity of strong geophysical signatures including mag highs, flanked by geochemical anomalies. That’s the classic set-up in the district for a stellar hole. This is in the “Area 3” part that we noted on the GGI map – we’ll include that again in our Morning Musings. What’s fascinating about “Area 3” is the MASSIVE “ocean of blue” (mag lows) immediately to the west that begins adjacent to the “heat engine”, the Kaketsa pluton.
From west to east – the heat engine, the intense mag lows, then the “island” (Area 3) of subdued to moderate to high mag responses (perhaps with some high IP chargeability as well, we don’t know that yet) and geochem, completely surrounded on all sides by mag lows, especially to the west. Has something very special been cooked up here? Quite possibly. Any geo would say this is an outstanding target area.
Limited outcrop in Area 3 confirms Stuhini volcanics with showings of chalcopyrite and trace bornite, so all the ingredients for a discovery. To answer Dave’s question, with a “fertile” pluton like Kaketsa (a “heat engine), geology 101 states that the deposits will be found adjacent to it. In major porphyry districts around the world, that’s what you see. The underground plumbing system here must be amazing and has impacted a very wide area.
Regoci understands the market. He knows the importance of making an early discovery here, of getting right into the heart of some strong mineralization. He has a lot of cards to play at the Grizzly – but he knows that an early hit will put this project on the fast track.
Comment by Jon - BMR — October 15, 2015 @ 8:33 pm
These holes will bring The Sheslay District to a new level of comprehension.
Comment by Martin — October 15, 2015 @ 8:52 pm
The sooner the better , ggi and dbv have a long way to go just to get to their old highs .
Comment by Les — October 15, 2015 @ 9:26 pm
Dave, if they do get attacked by a bear at the GGI camp, you can assured it will be a Grizzly Bear…no pun intended of course.
Go Jays Go…
Comment by Jeff — October 15, 2015 @ 9:37 pm
For sure, Go Jays Go…
As for GGI, Grizzly hunting starts now.
Comment by Jon - BMR — October 15, 2015 @ 10:01 pm
Thanks for your insight on the drilling strategy Jon.
There are 7 holes identified on the map and my guess is that they will be no longer than 300m. Assuming a cost of $200/m that means that this initial drill plan will cost around $420k. The drill plan will therefore evolve with further holes depending on what comes out of the first 7 holes. Maybe they will move to another target or drill deeper on the first one?
Comment by Tom UK — October 16, 2015 @ 1:24 am
Martin – if they find 10% copper, I’ll be dancing on my roof.
Go Cubs Go
Comment by dave — October 16, 2015 @ 5:10 am