Gold has traded between $1,057 and $1,069 so far today…as of 9:45 am Pacific, bullion is up $5 an ounce at $1,065 as the FOMC begins a 2-day meeting after which it’s expected to announce a quarter point hike in the Fed funds rate…Silver has added 13 cents to $13.78…Copper is off 4 cents at $2.07…Crude Oil has rebounded $1.22 a barrel to $37.53 while the U.S. Dollar Index has climbed half a point to 98.21…
Money managers and hedge funds remain very bearish toward Gold, cutting back only modestly (5%) on short positions in the metal after breaking records for 2 consecutive weeks, according to the latest trade data from the Commodity Futures Trading Commission (CFTC)…analysts at Commerzbank agreed that pessimism continues to dominate the Gold market, though this can be a bullish contrarian indicator…
“Market participants are eagerly waiting to see what happens at the U.S. Federal Reserve’s meeting on Wednesday. As the Fed Fund Futures show, a rate hike is now fully priced in. Market participants are likely to be more interested in hearing the Fed’s plans for its future monetary policy. If the first rate hike happens on Wednesday, one major uncertainty will fall away that has been weighing on the Gold price in recent weeks,” the bank noted…
BMO Capitals Markets on tomorrow’s big day: “The rate hike won’t be a shocker, but we still expect a slight, knee-jerk decline in precious metal prices. However, we also believe there could be some buying interest on the back of tomorrow’s release – some pent-up demand, perhaps short covering.”
More Data For The Fed To Ponder
Underlying inflation pressures rose in November even as renewed weakness in gasoline prices kept overall U.S. consumer prices in check…the Labor Department reported this morning that its so-called core Consumer Price Index, which excludes food and energy, increased 0.2% last month – the 3rd straight month that the core CPI increased by 0.2%…in the 12 months through November, the core CPI picked up to 2.0%, the largest gain since May 2014…
The Fed, however, more closely follows the price index of personal consumption expenditures, which is running at 0.2% in the year through October, and just 1.3% excluding food and energy…that’s well below the Fed’s preferred 2% target…if the PCE number doesn’t track higher next year, the Fed may have to be more restrained in terms of the pace of rate hikes…at the moment, markets expect the Fed to hike interest rates as many as 3 more times in 2016 according to the latest CNBC Fed Survey…and most of those respondents believe that would be bad for stocks, housing and the economy…as a result, the 42 respondents, including money managers, economists and strategists, have boosted the probability of a recession in the next year to 23%, the 5th-straight increase and the highest level since 2012…
CRB Index
The battered CRB Index, which is closely watched for signs of product inflation, is at levels last seen in 1973…generally, the index is made up of 40% of food stuff, 40% energy, and 20% metals and other commodities such as lumber…every now and then the commodities change, but the index remains and can be used as a history lesson…it has dropped a whopping 63.1% from its high in 2008 – its biggest drop ever…
Unnatural Moves In Natural Gas
Natural gas prices plunged to a 14-year low yesterday as the warmest start to winter on record in the U.S. has weakened demand for the heating fuel…this is yet another blow to struggling energy companies…yesterday’s 4.8% decline brought year-to-date losses to 34%, making natural gas the 3rd-worst-performing commodity so far in 2015…on an inflation-adjusted basis, yesterday’s settlement price for natural gas was the lowest since February 1992 and was within 10 cents of the inflation-adjusted record low from January 1992 of $1.80 per million BTUs…
Kinder Morgan Makes Pitch Before National Energy Board
This week in Calgary, Kinder Morgan Canada stands before the National Energy Board to present its final argument for tripling the capacity of its Trans Mountain pipeline that terminates in Metro Vancouver…there is plenty at stake for western Canadians who care about quality projects running through their provinces and local communities…it’s not only about jobs and investment from a $5.4 billion U.S. project…all Canadians stand to benefit from the lasting legacy of energy infrastructure…
In today’s Morning Musings…
1. Rick Rule on the Venture: “The Index is weighted down by the zombies…the higher quality issues have bottomed as a whole.”
2. Nemaska Lithium (NMX, TSX-V) gears up for another challenge of Fib. resistance…
3. Continued encouraging drill results from high-purity quartz play in Quebec…
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…
Strength in the us buck today is not helping either Jon, but I think that’s going to change as the week goes on, curious, you’re trip up north before or after the holidays?
Comment by Tombc — December 15, 2015 @ 10:56 am
must be something good at garland Athabasca Nuclear acquires five additional claim blocks at garland.
Comment by kelly — December 15, 2015 @ 12:52 pm
Kelly- interesting that they already have 67,000 acres,
and wanted to pick up another 5000, must be good reason
as you say…. this wait for EQT results hmmmm
Comment by Bob — December 15, 2015 @ 1:31 pm
Wonder why EQT was dumped on the bid most the day today? Hope that’s not an indication of poor assay results leaked. Closed @10.5.
My LTE.C holding up very nicely. Going to be a market darling next year. Hope everyone has done some research over the past few weeks. It’s a revenue and growth play if your into that…..
Comment by BigRig — December 15, 2015 @ 2:41 pm
I’m hearing out of Vancouver that EQT assay results will be out tomorrow at the opening.
GLTA!!
Comment by Jeff — December 15, 2015 @ 7:25 pm
I’m more curious about “Plan B”, Jeff. I’m just not expecting much of significance from Garland on this first round as we’ve been stating for a while, given a range of factors including the very conservative news release October 20 which really took the wind out of the sails of the stock. It was almost as if they knew then they hadn’t hit what they were hoping to, but keep in mind that Garland is still very, very early stage in an untested district, and does hold strong long-term potential.
However, I do expect something exciting regarding Plan “B”, rather quickly, which we’ve been speculating about, and that’s why we’ve stuck with EQT. Any weakness tomorrow, if results are out and poor, should be an opportunity – so keep that in mind.
Comment by Jon - BMR — December 15, 2015 @ 7:49 pm
I hope that GGI at least has good assay results an news soon to balance out what I’ve lost on eqt.
Comment by George — December 15, 2015 @ 7:55 pm
George, the big difference between the two, besides current levels of diversification of course, is that one is in a proven district (with 90+ drill holes), and the other (Garland) isn’t (1 hole previously), though geologists have noted similarities in structures to Voisey’s Bay 30 km to northwest which by definition makes Garland an attractive exploration target. And of course GGI has been confident enough to provide visuals and core photos, and they used an XRF. So two quite different scenarios with the odds favoring Grizzly Central.
EQT knew even before drilling Garland that they would have to diversify with a second project or initiative, so that’s what has our curiosity at the moment. Hardy is very creative – I expect something quite compelling – and it will need to be compelling given the amount of paper that’s officially free-trading around the middle of next month. That’s a major issue Hardy really needs to address with something that has some serious sizzle.
Comment by Jon - BMR — December 15, 2015 @ 8:15 pm
what do you think Jon, update this week, result next week, Just before Chirstmas, than president message. some of those core are spectacular. Really like this video https://m.youtube.com/watch?v=cLcCu6w7Bzw on low sulfidation around minute 19:30 to 23:00.
Comment by Martin — December 15, 2015 @ 9:37 pm
That seems very possible to me, Martin…Regoci has a lot to draw on to finish the year on a strong note which he is determined to do…
Comment by Jon - BMR — December 15, 2015 @ 9:52 pm
Grizzly central is a treasury box ?
Comment by Martin — December 15, 2015 @ 9:55 pm
Very low levels of trading on GGI the last couple of days. I guess everyone has taken whatever position they want and are waiting for results.
Even if results don’t come until new year, I’m sure Regoci will give us an update on drilling. They have to spend whatever FT funding there is in the next couple of weeks.
La Patilla results are well overdue IMO.
Comment by Tom UK — December 16, 2015 @ 12:52 am
Quite low levels of trading across the entire board on most issues, Tom, but that’s typical pre-Fed and I expect a pick-up tomorrow following the Fed decision later today (2 pm Pacific) and Yellen’s news conference (2:30 pm Pacific). Expect a rate hike, the question is how many could there be next year? The market will be closely watching the language and the tone.
If there’s any knee-jerk selling on Gold, I’d expect it to be brief.
Contrary to popular belief, stocks have generally responded well after the start of a rate hike cycle, and Gold has fared just fine, too. With no rate hike in nearly a decade, a generation of traders have failed to look at and understand the history of Gold during an environment of rising rates. We’ll elaborate on that this morning.
Comment by Jon - BMR — December 16, 2015 @ 3:46 am
Am I the only one who thinks the fed won’t raise today? I think yellen and the fed are full of crap and they are bluffing. Either way I think it is positive for gold. Either they lose credibility or this overhang is out of the way.
Comment by Sameer — December 16, 2015 @ 5:42 am
You’re probably right, on all fronts, Sameer. The Fed will hike today because Yellen will lose all credibility if she doesn’t. But the path forward is going to be challenging for the Fed. Also, this widespread belief that Gold doesn’t trade well during a Fed rate hike cycle is an absolute myth as we’ll demonstrate this morning. There are a whole generation of traders who have never experienced a tightening cycle, and they’re making assumptions based on mainstream media statements that simply contradict the facts.
It’s definitely time to be loading up on Gold stocks.
Comment by Jon - BMR — December 16, 2015 @ 5:48 am
How does one interpret EQT news????
Comment by Patricia — December 16, 2015 @ 5:51 am
Pretty much as expected, Patricia…they’re gaining some insight into Garland but they didn’t drill into any massive sulfides on this first round, so a strike-out in terms of numbers but they have gained some valuable info to guide them going fwd…again, what I’m more curious about now is “Plan B” – I’m sure they have one, and it’ll probably come quickly…you’ll have some knee-jerk selling here, but that will also open some opportunities…
Comment by Jon - BMR — December 16, 2015 @ 5:57 am
they wiffed, only got a whiff of Ni, from an area that was already drilled 20 years ago
Comment by david — December 16, 2015 @ 6:03 am
EQT- too much promotion behind it and it didn’t deliver…..I’m not surprised. Nice of them to deliver the bad news right during tax loss selling season.
Comment by DDD4 — December 16, 2015 @ 6:10 am
eqt – bargains galore at 5 cents soon
Comment by david — December 16, 2015 @ 6:14 am
EQT going to where it deserves for over promoting and under delivering….this isn’t the market to do that in!
Comment by DDD4 — December 16, 2015 @ 6:18 am
Pgx bid at 15
Comment by Martin — December 16, 2015 @ 6:19 am
EQT- a quick flip opportunity coming imo.
Comment by DDD4 — December 16, 2015 @ 6:20 am
PGX has been firming up recently, Martin, which is interesting.
Comment by Jon - BMR — December 16, 2015 @ 6:23 am
Jon, plan B as you say. Do you think it will be significant enough to change the face of the company?
Comment by Dan1 — December 16, 2015 @ 6:28 am
Hardy is quite creative and determined, and strongly invested in EQT, so I anticipate – based on that – that “Plan B” would have quite a significant dynamic to it, Dan1. Nice wall of buying to absorb the knee-jerk selling.
Comment by Jon - BMR — December 16, 2015 @ 6:31 am
eqt – zimtu + EQT insiders big chance to buy some stock outta the mkt to show their enthusiasm for the future
Comment by david — December 16, 2015 @ 6:33 am
Jon, do you think that Plan B will start in the spring or are they drilling through the winter??
Comment by Jeff — December 16, 2015 @ 6:41 am
PGX 0.15 bid
GGI 0.135 bid
DBV 0.085 bid
Feels bad being a DBV long right now.
EQT is junk.
Comment by ConcernedCitizen — December 16, 2015 @ 6:46 am
There was no indication in this morning’s news, Jeff, that EQT will be drilling thru the winter. Obviously Hardy needs something very quick as he has the issue of the flow-thru paper in mid-January, so I suspect we’ll see “Plan B” with EQT very quickly. Don’t forget, they raised quite a bit of money – they’ve got some power.
In the meantime, Gold’s up $15 an ounce as we go into a rate hike.
Comment by Jon - BMR — December 16, 2015 @ 6:50 am
I am loaded with FTR.
Comment by Martin — December 16, 2015 @ 7:03 am
The Star is quite à Property, the have the goods, ( 1/4 of kaketsa, copper Creek, etc…
Comment by Martin — December 16, 2015 @ 7:30 am
Ok. Let’s forget about eqt. Cmon GGI. I hope GGI has the goods and wil , releasing them soon. We need a hit here.
Comment by George — December 16, 2015 @ 7:50 am
NPH on the move today
Comment by Sameer — December 16, 2015 @ 8:18 am
Jon,what about GGI’s Flow-Through paper?
Comment by robinandthe7hoods — December 16, 2015 @ 8:31 am
That was all cleaned up quite a while ago, robinandthe7hoods, and it was only 6 million. The Sprott overhang (10 million) and the FT are all gone.
Comment by Jon - BMR — December 16, 2015 @ 8:34 am
Great,thanks for the response.
Comment by robinandthe7hoods — December 16, 2015 @ 8:38 am
NPH way overbought at this price.But,nice to see it recovering.Once it settles down,it’ll begin forming a cup’n’handle,then look for the big move early next year.Jmo.
Comment by robinandthe7hoods — December 16, 2015 @ 8:41 am
FED decision later. Could they possibly raise by say 0.1% instead of the usual quarter percent changes. It would show that they are doing something (save face) but not actually affect the economy too much.
Any word from Dave on EQT news? He made 18 posts in one day some while back when there was no news so a comment now would be interesting. Personally I avoided the most obvious pump and dump (not by BMR team I may add) I’ve seen in a long time, but it would appear several here were taken in by it.
Comment by Tom UK — December 16, 2015 @ 8:45 am
Not if you got out of eqt at resistance, like I did and bmr suggested, venture is rebounding, ggi is our next chance to get the v going, we’ll see after today, looking good so far.
Comment by Tombc — December 16, 2015 @ 8:56 am
Gold is looking good, Venture could be rebounding pretty much on cue, depending on what the Fed decides later this morning…closing above 500 by Friday will be important.
Comment by Jon - BMR — December 16, 2015 @ 8:58 am
Whats happening with DBV?! I’m a little surprised that they didn’t hit the ground running and already started to drill. You can’t tell me they didn’t have some time on their hands during the Chad Day mess to get their ducks in a row in anticipation of a resolution.
Comment by Steve A. — December 16, 2015 @ 9:23 am
DBV will be fine, Steve…it’s not like they were doing nothing during the Chad Day fiasco…they took advantage of that time by significantly advancing their understanding of the Hat system and geology…now that they’re back on the property, preparing to resume drilling, the 1st quarter of next year should be much more active…
Comment by Jon - BMR — December 16, 2015 @ 10:06 am
PGX. In the last four weeks the CEO has purchased 60,000 @0.07 and 75,000 @ 0.08 so an easy double for him.
Comment by Robert — December 16, 2015 @ 10:19 am
Steve, they don’t have any cash to drill. They are cutting cores and sending them to the labs for assays. Hopefully these will be the best results so far from the Hat so that Farshad can raise cash and get to drilling early next year.
Comment by Tom UK — December 16, 2015 @ 10:28 am
DBV will be drilling early in the new year. Like Jon mentioned they have been busy interpreting data and geology and are very well prepared for the next round of drilling. Patience will pay off imo.
Comment by DDD4 — December 16, 2015 @ 10:29 am
Fed rate hike, finally….25 basis points. Markets will be paying close attention to Yellen’s comments in news conference starting in 25 minutes (2:30 pm eastern).
Comment by Jon - BMR — December 16, 2015 @ 11:04 am