In a healthy retracement, bullion fell into the top range of the $1,150 to $1,200 support band this morning before buyers quickly stepped in and prices firmed up…as of 10:15 am Pacific, Gold is flat at $1,209 in the midst of some “backing and filling”…Silver is down 3 cents at $15.30 (updated charts in today’s Morning Musings)…Copper is unchanged at $2.06…Crude Oil is off 35 cents at $29.03 while the U.S. Dollar Index has climbed one-third of a point to 96.91…
Gold’s weekly gains have accelerated over the past month (from $9 to $20 to $55 to $65 an ounce) with the metal doing something very significant from a technical standpoint – it has finally pushed through critical resistance at the top of a long-term downsloping flag that developed during the bear market that intensified during 2012 and 2013…the breakout point was around $1,200, so a vigorous re-test of that area as potential new support is normal and healthy…in general, a very strong band of support begins at $1,150, just above the now-rising 200-day moving average (SMA)…an unwinding of temporarily overbought conditions has been occurring since Friday…
Goldman Sachs’ commodity analysts appear to be ignoring the charts across a broad array of markets…hefty stock market plunges this year have not been justified, they argue, and they’re also urging clients to short Gold which has found favor during the first 6 weeks of a turbulent 2016 (in a way that is different than the beginning of last year)…
“Systemic risks from Oil, China and negative rates are very unlikely,” a team at the bank, led by Jeffrey Currie and Max Layton, said late yesterday. “Banks have ample liquidity to maintain funding against higher capitalization, the negative macro impacts from low Oil prices have likely already played out and are not systemic while the spillovers from China are limited and the U.S. is far from recession.”
Okay, so everything’s good, according to Goldman Sachs – let’s see what they have to say 6 months from now when the “spillover” from China, for one, could turn into a tsunami…banks there are not in good shape, the economy isn’t expanding at the rate the government says it is, deflation problems are accelerating, and equity market risks remain high…add this to a host of problems around the globe, and that’s why Gold has been the best performing asset so far in 2016…it’s telling us something…
Crude Oil Update
A rather feeble attempt by OPEC and non-OPEC members today to give Oil prices a lift…4 of the world’s largest producers have agreed to freeze output at January levels if other major exporters join the pact…this is far from a production cut, and who’s to say one or more of those countries won’t cheat if indeed some sort of a “pact” comes to fruition?…
Qatari energy minister Mohammad bin Saleh al-Sada told a news conference that the step would help to stabilize the Oil market…we’re not so sure…the market may view this as a very weak attempt to improve a huge supply/demand balance, akin to bringing a pea-shooter to a gun fight…
Fundamentals in the Crude market remain grim with daily supplies grossly outpacing demand…record-high North American Crude inventories are set to surge even further in the coming months, potentially putting further downward pressure on global Oil prices even as OPEC leaders muse about a possible production deal that would buttress the market…commercial storage facilities in the U.S. hold record amounts of Crude – inventories are sitting at more than 500 million barrels, up 20% from already elevated levels in February 2015…stocks at Cushing, Okla. – the key hub where the price of West Texas intermediate is set – hit 65 million barrels this month, 50% higher than last year and rapidly approaching the current 73-million-barrel capacity…
The number of rigs in operation continue to fall at a much more rapid rate than stubborn U.S. production, dropping 30 to 541 last week in the U.S., down from 1,358 a year ago, according to Bakers Hughes…in Canada, the number of rigs in operation fell to 222 from 380 at this time last year…
UBC Rejects Radical Student/Faculty Anti-Fossil Fuel Proposal
The University of British Columbia’s board of governors has rejected a proposal by faculty and students to sell off investments related to Oil, Gas and Coal, marking the latest blow for a ridiculous national movement to rid university endowments of their involvement in fossil-fuel industries which built this country and contribute so significantly to our prosperity…instead, the board voted yesterday to put $10-million toward a new fund that would invest in low-carbon ventures, which will be set apart from the more than $1.4-billion the school currently has in endowments…
In today’s Morning Musings…
1. How Gold has started what could become a very powerful “Wave 5” advance over the couple of years…
2. The next key hurdle for Silver before $18…
3. How to gain exposure to an exciting Canadian drone/technology deal (before it starts trading) at just a nickel…
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…
What’s this about DBV having discovered a gold trench and stuff and breaking out after the PDAC?
Comment by ConcernedCitizen — February 16, 2016 @ 1:29 pm
Jon, thanks for the update on Greencastle. I bought some a couple months ago between .05 and .07 knowing full well that patience would be required. They have an excellent balance sheet and I see very little risk here. I like low risk plays. That’s me on the bid at .055 as I would be happy to acquire more at these prices. I can wait on this one. The money is made in the buying.
Comment by Danny — February 16, 2016 @ 3:42 pm
Notes from the DBV conference call. —–They found a 75m trench 350m south of H-24. A soil sample at the bottom of the trench showed that it is mineralized right on the surface, which should have a huge effect on the evaluation of the project.
Farshad was quite excited about the trench which was dug by someone prior to DBV taking over the property.
Comment by Lester — February 16, 2016 @ 6:47 pm
Thanks Lester. Not sure what else Farshad can reveal at the PDAC that’s gonna cause DBV to break out, ‘cept for high grade gold drill results from that trench or elsewhere.
Comment by ConcernedCitizen — February 16, 2016 @ 11:13 pm
What’s wrong with GGI anyway. It seems they haven’t learned that the best time to put out NR is early in the week, not Thursday or Friday.
Comment by Dan1 — February 17, 2016 @ 7:01 am
Are we still expecting GGI gold and silver news this week?
Comment by ConcernedCitizen — February 17, 2016 @ 7:26 am
GGI – There has been a lot of talk about news this week in Mexico and great results and the Grizzly news was fantastic buy misunderstood and ….. I am quite frankly tired of hearing about this stock I own and seem to be stuck in… There seems to be no end in sight, probably no news this week on Mexico and there is probably wont do anyhting because no one seems to know about this stock….but I was aggressively buying it at much higher levels.
Comment by George — February 17, 2016 @ 8:26 am
Getting a bit tired of Regoci’s approach. While it’s good to be mythological in moving forward, it’s not good to be as slow as he is. I also know that it’s his geological team he has to consult with but the buck stops with him. Before we know it the gold and silver rally will be slowing and GGI will be late for the party. My rant for today.
Comment by Dan1 — February 17, 2016 @ 8:37 am
CC – Another item Farshad talked about was a coming NR with regards to the drilling equipment and bringing the costs down . So far we have not had any NR explanation , he might be timing it with the PDAC event .
Comment by Lester — February 17, 2016 @ 9:41 am
George , most investors that have invested in stocks listed on the Venture Exchange are feeling the same frustration . The Venture has dropped more than 50% since last year and people are reluctant to put money into small caps , but that looks to be changing as the bottom may be in.
Comment by Lester — February 17, 2016 @ 9:51 am
Re:GGI
I own a bunch of this stock but like I said last week when they released the Redults from the Grizzly this is dead money in my opinion for a while Regoci could care less about the shareholders he is arrogant and does not care what anyone thinks or says that’s why I ranted earlier this week about BMR taking him to task BMR is the one that brought GGI to everyone’s attention maybe Regoci will listen to BMR , but BMR needs to let him know we are not happy
Comment by GREGH — February 17, 2016 @ 10:08 am
Re GGI
Whoever is watching this stock must not be too excited either a whopping 24k shares traded so far today….
Comment by GREGH — February 17, 2016 @ 10:10 am
GREGH , the GGI pump was done for the $800,000 , it’s back to work wherever Regoce decides.
Comment by Lester — February 17, 2016 @ 10:56 am