Gold has traded between $1,214 and $1,228 so far today after successfully testing support again yesterday at $1,200…as of 9:15 am Pacific, bullion is up $17 an ounce at $1,225…Silver has added a dime to $15.26…Copper is off 2 pennies at $2.10…Crude Oil has fallen $1.66 a barrel to $31.73 while the U.S. Dollar Index is flat at 97.45…
After Friday’s extremely large announced Gold purchases into the two major U.S.-based Gold ETFs – SPDR Gold Shares (GLD) and the much smaller iShares Gold Trust (IAU) – 1-day increases of 19.3 tonnes and 4.0 tonnes, respectively – yesterday’s trading action in Gold in Asia to start the week was strange indeed…nonetheless, the yellow metal showed strong support yesterday and erased some of its losses before turning higher today…physical Gold purchases are rising in volume and that’s a very bullish sign…
India’s overseas Gold purchases are likely to hit a more than 2-year low in February, as rising prices and hopes for a cut in import taxes keep buyers away, industry sources say…India’s imports of the metal are expected to drop to 25 tonnes this month according to a median of estimates from several industry participants including bank dealers and traders…that would be about 67% below month-ago levels and the lowest since September 2013 when arrivals were hit by a government mandate to export a fifth of all Gold imports…jewellers and retail consumers have apparently been delaying purchases in the hope prices will correct and that India will cut its import duty by 4 percentage points in this month’s budget, according to a senior analyst at consultancy Thomson Reuters GFMS…
Harmony Gold Mining Co. and Acacia Mining Plc announced today that they’ve locked in profit margins at some of their African operations…Harmony, which gets 95% of its production from South Africa, hedged its local currency for a third of its annual production, while Acacia took out contracts known as zero-cost collars on 136,000 ounces of Gold from Buzwagi, a Tanzanian mine, at $1,150 an ounce to $1,290 an ounce…hedging can be a risky strategy if it’s not carried out at the proper time…Barrick Gold spent at least $5 billion in 2009 canceling contracts against the risk of prices declining while AngloGold Ashanti spent at least $2.6 billion getting out of such arrangements…
Oil Update
Speaking at a conference in Houston, OPEC Secretary-General Abdullah al-Badri said today that, if successful, a “freeze” on Crude Oil output could trigger other action but the days when the group was responsible for cutting production alone are over…he said last week’s tentative pact to freeze output at January levels, a deal reached among Saudi Arabia, Russia, Venezuela and Qatar, was just a start…investment bank Jefferies expects OPEC output to hit 32.6 million barrels per day (bpd) in the 2nd quarter, including higher Iranian output, with markets starting to rebalance by the 3rd quarter as production outside OPEC falls by 800,000 bpd this year….
WTIC 6-Month Daily Chart
There is a lot of negativity surrounding the outlook for Crude Oil, but the short-term chart is showing that the rally from the $26.05 low earlier this month may have further to go despite today’s sell pressure…
What’s interesting on John’s 6-month daily chart is the unconfirmed breakout above a downtrend line going back to November…we’re watching this closely as technical momentum could come into play here which has a chance of lifting prices about 20% from current levels…the 50-day moving average (SMA) is still declining but beginning to flatten out around $33…
In today’s Morning Musings…
1. Canopy Growth (CGC, TSX-V) breaks out above a symmetrical triangle…
2. Updated chart for Canasil Resources (CLZ, TSX-V) as fresh results confirm discovery at Sandra-Escobar…
3. Cordoba Minerals (CDB, TSX-V) jumps 50% over 9 sessions…
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…
Jon, do you prefer CLZ over REX? It seems they are trading 2 to 1 and have been since the initial announcement. CLZ had the biggest gain from the start bit it seems now they are trading in tandem. It’s true CLZ doesn’t have to put a copper into the drilling but REX also has the cash. I hold twice as many shares in CLZ then REX but wondering if they will continue to trade this way. After REX spends the required amount they will have 65% of the property but still doesn’t warrant a 2 to 1 share price difference in my opinion. What are your thoughts? I believe we will all do well if own one or both.
Comment by Dan1 — February 23, 2016 @ 11:03 am
Dan1, Rex of course will do well, but CLZ clearly benefits from the fact that they don’t have to finance anything short to medium term….liquidity has also been better in CLZ…for those reasons I prefer CLZ…
Comment by Jon - BMR — February 23, 2016 @ 11:50 am
I owned Orko Silver same CEO as Rex when it was bought out a number of years ago.
Comment by George — February 23, 2016 @ 1:08 pm
Jon – Have you noticed the offers build on GGI. there are six figures at every half penny level from .115 to .125. – I just don’t get it, you would think this thing is taking off. Also, the bids really dropped of WRR below with the offers increasing, it will be interesting to see if WRR is yet another sell on the news just like GGI did.
Comment by dave — February 23, 2016 @ 1:15 pm
Not only did they hit continuity across the 6 holes to date but also looks like they hit it on all holes. I really like the way things are shaping up. No wonder the drill will be spinning again next week.
Orex’s President, Gary Cope says, “The high-grade silver and thick drilling intercepts continue across the target area. Still to come are the results for 11 more holes from the Phase-I drilling program. All of holes drilled to date have hit the strataform host rock unit. Results will be released over the next several weeks.”
Comment by Dan1 — February 23, 2016 @ 1:24 pm
Dave, if you went just by the bids and offers one would not have jumped in on WRR at a nickel Feb. 2. Sometimes, on any stock, an increase in the offers can sometimes precede a very bullish move. It’s not the best indicator. Alternatively, a real imbalance the other way can be deceptive.
Comment by Jon - BMR — February 23, 2016 @ 1:29 pm
Hello Jon, a comment for improvement: I understand you don’t want external people to post here wildly so it doesn’t turn as a SH board, like it happen a few months ago. But what about permitting read only on the post? It could generate at least exposure on the stock we follow and contribute.
What you think?
Richard
Comment by rgiroux — February 23, 2016 @ 6:39 pm
Jon – the bids and offers did not look like that on Feb. 2.
Comment by dave — February 23, 2016 @ 7:41 pm
Appreciate the suggestion, Richard. The one issue with that, of course, is that it gives non-subscribers access to certain trading strategies/information for free, while most of our subscribers don’t even post. We’re always looking at various ideas for site enhancement, so we won’t rule anything out but we always want to put subscribers in the advantage.
Comment by Jon - BMR — February 23, 2016 @ 8:24 pm
huge bids on ABR but nobody wants to move .05 and hit the ask, is ENGLISH that bad?????????????
Comment by bcguy — February 24, 2016 @ 6:37 am
DBV ask 0.075… Here I am 0.15 average.
Comment by ConcernedCitizen — February 24, 2016 @ 6:48 am
Mining stocks racing upwards, DBV and GGI bleeding me dry!
Comment by ConcernedCitizen — February 24, 2016 @ 6:49 am
BCguy: Jon’s post from 10 December 2015 summarizes it well: “Seemingly against all odds, ABR aims to become the Little Engine That Could as it drills the Buckingham Graphite Property in Quebec with some interesting early apparent success (the stock has doubled from a penny over the last 9 sessions on total volume of more than 22 million shares). ABR is sort of the “poster child” for unloved junior exploration companies. If it actually succeeds, well…that would restore a lot of hope throughout the industry.”
Comment by rgiroux — February 24, 2016 @ 7:32 am