Gold 3-Month Daily Chart
Gold has traded between $1,087 and $1,094 on this U.S. holiday…as of 10:15 am Pacific, bullion is flat at 1,089…Silver is up 3 cents at $13.94…Copper had added 2 cents to $1.98…Crude Oil, after 10% declines each of the past 2 weeks, is off another 48 cents at $28.94 while the U.S. Dollar Index has gained one-fifth of a point to 99.10…
Investors added to holdings in Gold exchange-traded products for the 6th time in 7 days Friday…assets rose 4.4 metric tons to 1,489.1 tons, the highest level since the start of December, according to data compiled by Bloomberg…
Gold output has peaked in this commodities cycle, according to mining industry leaders and analysts who say few big projects will reach the point of production amid current prices…the lack of new assets and declining output at existing mines is expected to curb the metal’s supply, a glimmer of hope for an industry coming to terms with a rush of investment when prices were far higher…Kelvin Dushnisky, President of Barrick Gold (ABX, TSX), said: “Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term Gold price outlook.”
China Watch
China will release GDP figures for the 4th quarter of 2015 tomorrow, along with industrial output data, amid rising concerns about the health of the country’s economy, which in turn has reverberated through global markets…China’s economy grew 6.9% in real terms in the first 3 quarters, official data show (if you believe the numbers)…that’s in line with the government’s full-year target of “around 7%” but would be the slowest full-year growth since 1990…
Meanwhile, China’s foreign-exchange reserves posted their biggest monthly drop on record in December, reaching their lowest level in nearly 3 years as capital flows out of the world’s second-largest economy accelerated…
U.S. Recession Odds Increasing?
The chances of a recession in the U.S. are at their highest levels since the fall of 2011, according to the most recent CNBC Fed Survey…the survey also showed recession fears rising for the 6th straight time among respondents, and are now sitting at 28.8%…one fairly reliable recession indicator, the spread between the 2-year and 10-year bonds has weakened to about its lowest level since the last recession…but it tends to signal recession at zero…so at 118 basis points, it’s softer, but the alarm bells aren’t going off just yet…while U.S. manufacturing is contracting and corporate profits are weakening, the consumer is still relatively strong and consumer spending accounts for about 70% of economic growth…
However, a recession in the U.S. has occurred about every 5 years, on average, since the end of WWII…it has been 7 years since the last one…
Is The World Now Really A “Safer Place”?
U.S. Secretary of State John Kerry, among others, declared over the weekend how “the world is now a safer place” after international inspectors “confirmed” that Iran had completed the necessary steps in a deal to restrict its nuclear program…however, the Islamic Republic, which just recently violated a United Nations ban by conducting precision-guided ballistic missile tests capable of delivering a nuclear warhead (this is a regime that simply can’t be trusted), now has a very dangerous weapon in its hands thanks to the West – tens of billions of dollars in cash that it can now access to pursue its destabilizing agenda in the Middle East…
Some investors got a little spooked when Gold sold off last Thursday to about $1,070 intra-day…this was no more than a “head fake”, just like the Dow’s 228-point gain that day…
Importantly, Gold is well-positioned to trend higher based on John’s very reliable 2.5-year weekly chart (updated Saturday) and this short-term 3-month daily…we also know that bullion is in an inverse relationship at the moment with the equity markets – if the primary trend for the Dow, the S&P 500, the NASDAQ, the TSX, the Shanghai, etc., is down, which we interpret it to be right now as explained in our Saturday post, then Gold is headed in the other direction to the upside…this, of course, has implications for quality Gold stocks which creates an “island of safety” for savvy investors…
Gold has formed a classic “cup with handle” pattern the last few months…you can’t ignore this kind of a signal…the handle is supported by the $1,070 Fib. level and Gold’s 50-day moving average (SMA), currently $1,077, which has flattened out and appears ready to reverse to the upside…
Watch for a breakout above the handle and the top of the cup ($1,109), with first major resistance at $1,150…during last week’s pullback, Gold’s RSI(14) tested new support at 50% (previous resistance) and formed a bullish “W”…Gold is going higher which is why we’re sticking with our long recommendation on the HGU while remaining bullish on certain producers, near-producers and the very best exploration plays…
Crude Oil Update
Oil prices hit a new 12+ year low this morning but OPEC is optimistic the market will start to rebalance itself later this year as weak prices take their toll on production outside the cartel. “After 7 straight years of phenomenal non-OPEC supply growth, often greater than 2 million barrels a day, 2016 is set to see output decline as the effects of deep capex cuts start to feed through,” the producer group said in its closely-watched monthly report…
Though OPEC acknowledges more than 2 million barrels a day of new projects are still planned to go ahead this year, the organization still expects non-OPEC output to fall by almost 700,000 barrels a day in 2016 as the effects of lower capital spending are felt…the U.S. is expected to see the biggest decline in production, with output forecast to fall by nearly 400,000 barrels a day, but OPEC said places like Canada, the North Sea, Latin America and parts of Asia are also particularly vulnerable, with all projects in Canada now below cash cost…
The Oil market is bracing for additional Iranian exports after the lifting of sanctions (nuclear deal) against the country over the weekend…following the sanctions lift, Iran ordered a 500,000 barrels per day increase, according to a report, but it’s believed the country will require significant foreign investment and technology to repair and build out its production potential…
GGI – Of course we are frustrated as I now need 70 percent gain to get back to 0.17 from current level which is 0.10 – 0.105
Comment by 02charoc — January 18, 2016 @ 10:46 am
GGI – this is assuming news is good and well taken by market. Otherwise(and obviously hoping not) if it goes down then well…
Comment by 02charoc — January 18, 2016 @ 10:54 am
I bought GGI and DBV at 0.15 both have disappointed me thus far. Unbelievable that GGI got dumped down to 0.10… I’ll eat crow, good call Dave.
Comment by ConcernedCitizen — January 18, 2016 @ 11:03 am
That shows you, 02charoc, why it’s so important to accumulate during periods of weakness (on any stock) as others did on GGI between a nickel and the 10-12 cent breakout area…unfortunately, during periods of weakness, many investors are fearful and do exactly the opposite of what they should do——-and they wait too long before establishing their entry point…they chase later at higher prices…it’s important that we take emotions out of our trading…
Comment by Jon - BMR — January 18, 2016 @ 11:08 am
….and there is our .10
Does anyone know if the drill is still on site?….or did it get moved
Comment by weatheritout — January 18, 2016 @ 11:23 am
Well Jon, unfortunately I was not a member when it was trading at those levels but I was accumulating on those immediate action buys recommendations at 0.14 to 0.16, so I am rather confused at your comments above regarding chasing.
Comment by George — January 18, 2016 @ 11:23 am
wow…we are getting spanked
Have a good one folks
Comment by weatheritout — January 18, 2016 @ 11:25 am
Well Jon, unfortunately I was not a member when it was trading at those levels but I was accumulating on those immediate action buys recommendations at 0.14 to 0.16, so I am rather confused at your comments above regarding chasing.
Comment by 02charoc — January 18, 2016 @ 11:43 am
GGI – Prime example of a company not updating investors when assays are not delivered when expected. Everyone knows that it normally don’t take this long for 3 holes to be tested unless there are other reasons for the delay. An update should have been released.
Comment by Dan1 — January 18, 2016 @ 12:02 pm
Jon, you seem to have access to Regoci. How about you pass on our displeasure? When I mean displeasure I don’t mean the delay, but why the delays and why no update after stating they were eagerly waiting the results which were expected shortly.
Comment by Dan1 — January 18, 2016 @ 12:16 pm
yes a little frustrated that ggi has come down a bit,reason i’m frustrated is that at this point i can’t grab more at this level,,darnit!
Comment by tombc — January 18, 2016 @ 12:24 pm
Thank you CC, but I’m sad your down when you could have been buying here or waited for news.
Comment by dave — January 18, 2016 @ 12:30 pm
tombc – why can’t you grab more at this level.
Comment by dave — January 18, 2016 @ 12:31 pm
Dan – just my opinion and Jon may step in and agree. The market conditions the way they are the last 2 weeks, an update would not change the chart. We need steller drill results, good enough to get some investors attention.
Comment by dave — January 18, 2016 @ 12:33 pm
just in case anyone is curious. .10 is weak support on GGI and .08 is very strong support.
Comment by dave — January 18, 2016 @ 12:34 pm
more funds on the way dave,but i managed a little just now,lol.
Comment by tombc — January 18, 2016 @ 12:47 pm
Well that sure makes the chart look ugly
Comment by weatheritout — January 18, 2016 @ 12:57 pm
Peeps… the market as we have known them are not the markets we have now… the NR’s of the future will have to be standout to get any attention.. also means that peeps arent going to buy either..
NHC is a perfect example… great earnings and guidance and potential.. nada.. and since the venture is trying to figure out what to do to survive the confidence level for retail investors just keeps getting hammered
and all are exhausted and frustrated and broke…
so what other outcome would you expect…. right now…. from any stock…
its busted… not sure what the fix is or how to fix things.. but the retail money isnt there…
Comment by Jeremy — January 18, 2016 @ 1:00 pm
….and I know it’s a hammer right on the 200 day moving average but it still looks ugly to me
Comment by weatheritout — January 18, 2016 @ 1:03 pm
weather – technically, needed .11 on GGI for a hammer.
Jeremy – I know how to fix mine. Ecuador Feb. 2 land in Quito 2:05 pm.
Comment by dave — January 18, 2016 @ 1:19 pm
I don’t buy market conditions the blame for all declines. If that was the case then EQT should have went down as well. It was actually up.
Comment by Dan1 — January 18, 2016 @ 1:28 pm
tombc – good job, lets hope it works out for all. In the meantime if NHC hits around 2.95 we looking at a triple bottom. Also, another big down day on EHT tomorrow could bode well for a bounce, maybe make enough to buy a bottle. Higher than normal volume on STT last 2 days.
Comment by dave — January 18, 2016 @ 1:46 pm
Well said Jeremy on post #18. She’s broke and there ain’t no way to fix it. I wouldn’t be surprised if we see 450pts at some point this year.
Comment by Tony T — January 18, 2016 @ 2:19 pm
I bought a little more GGI to-day. I have bought from .08 cents upto and including .17cents and I am not worried (too much) because the secret of this deposit is its potential huge size and some high grade. The institutions are concerned with how much moola there is to be made, also the larger companies watching the situation. If all works out the way we want it, then the stock will, over time, reflect that.
Comment by charleybarley — January 18, 2016 @ 2:40 pm
dave, regarding post #14. You are right that an update would not change the chart and there is no doubt that it will take really good results to get investor attention in this market but that’s not the point. When a company says in a release that it expects results shortly and then 6 weeks later there is nothing, I think it’s just good customer relations to indicate why in an update otherwise people start expecting the worst and the share price deteriorates even further. Just my opinion.
Comment by Danny — January 18, 2016 @ 3:43 pm
Ggi and dbv are the wrr and gbb of 6 months ago. Lots of hype and no results to show except losses
Comment by Matt — January 18, 2016 @ 4:34 pm
GGI – Assay results WILL be announced just before the Vancouver Roundup Jan 25-28!!!
Comment by Jeff — January 18, 2016 @ 6:36 pm
Tony -23 … and then Matt – 26 … we are all despondent… thus it is broke… Armageddon is upon us…
the mindset has to change… the only way that will happen is a return to a rising trend… but how?? not sure.. but until it happens 450 may be a pipe dream in 6 months.. the V could easily be at 200…
Dave has the right idea – Ecuador!!
Comment by Jeremy — January 18, 2016 @ 6:46 pm
I mentioned not long ago… it will hit 10 cents… I am not surprise if it goes down another 20%…. 0.08….. DBV, another one to follow… 0.08 cents… the two twins.
Comment by Theodore — January 18, 2016 @ 7:37 pm
27. GGI…
Comment by Theodore — January 18, 2016 @ 7:37 pm
Wow, ggi hit 9.5 cents intraday and closed down 9% on the highest volume in a month of trading. Nasty. I feel sorry for those that heeded the call and bought between 14 and 16.
Comment by Treb — January 18, 2016 @ 8:12 pm
Valid point Danny.
Comment by dave — January 18, 2016 @ 9:08 pm
I don’t know why people are getting so frustrated with the lack of news from GGI. The reason for the delay was mentioned on this board 2 weeks ago. GGI have an IR company, so rather than whinge, moan and snipe here, pick up the phone guys.
Comment by Tom UK — January 18, 2016 @ 9:08 pm
Where did you heard that Jeff?
Comment by Martin — January 19, 2016 @ 5:36 am
Martin – from my Vancouver broker who’s says its a very common procedure that companies do when they are close to making a press release – they want to time it with the Roundup to get the most attention to their company. Makes sense to me but what the hell do I know eh?
Comment by Jeff — January 19, 2016 @ 6:09 am
Theodore Re: Post #29
You are wrong to loop DBV in with GGI
No comparison at all
You will see…mark my words
And unlike GGI…DBV has never been hyped
My opinion
Comment by Blue beryl — January 19, 2016 @ 7:30 am
If its true that GGI had to have the labs do extra assays that should have been in a news release. The status of the drill should have been in a news release. Hey investors……there is a delay due to having samples re-assayed but the drill is still on site and ready to go. Good communication.
There are two things that GGI is going to need to have in their next news release….
1. good results
2. that the drill program has already started again or is imminent to start
If they state they need another month in order to decide where to drill again……yawn….market sell off
Comment by weatheritout — January 19, 2016 @ 8:14 am
#35. re: GGI. Curious though, does it make sense to time it with the conference when they are not on the agenda or do not have a booth at the event? Nonetheless, I think they release late this week or first thing next week.
Comment by Foz1971 — January 19, 2016 @ 8:24 am
I always thought GGI was going to be an exhibitor at the show. Kinda odd that they would not have signed up if they felt they had an awesome story to tell. Hmmmmmmm…. I sure hope they come through on this.
Comment by weatheritout — January 19, 2016 @ 8:32 am
DBV- Another 50,000 this morning at a cheap price you will see that soon !
Comment by Guy Delisle — January 19, 2016 @ 8:33 am
GGI – there are many reasons to hold off on a NR about a core (or cores), and you can go to the exchange and ask if necessary. ie ABZ held off on news of a diamond in the core for a while, allowing them to get more land etc. I don’t know that this is applicable here, but there are a # of reasons, you can hold back, good and bad. Its not uncommon to Not get the results back in order, to have them redone, whatever. its annoying to us, the armchair quarterbacks, but it’s part of the process. As for spending $$ on a booth, sometimes its just as effective to have a hotel room and invite the shakers up. A booth is just part of the cost for humping your wares at these shows. It would be way more impressive to be able to get 10 minutes of podium time if they are ready to yak it up
Comment by david — January 19, 2016 @ 8:49 am
david, that’s a good post. You make a lot of good points.
Comment by Danny — January 19, 2016 @ 3:44 pm