Gold has traded between $1,232 and $1,257 so far today…as of 6:45 am Pacific, Gold is up $21 an ounce at $1,253…Silver has surged 73 cents to $16.93…heavy buying of Silver was reported in Shanghai today, lifting prices to a 10-month high…Copper is up 2 pennies to $2.22…Crude Oil is 58 cents higher at $40.36 as an Oil workers’ strike in Kuwait temporarily cuts in half that country’s daily production…the U.S. Dollar Index, meanwhile, is down nearly half a point to 94.07…
The Shanghai Gold Exchange, which facilitates the biggest trade in bullion in the world in terms of the physical commodity, today introduced a yuan-denominated Gold benchmark as the country took an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market…China is not the only nation seeking to wrestle long-standing financial mechanisms away from the United States…what we’re going to see is an acceleration of a de-dollarization move by China, Russia and other nations that will impact not only Gold but Oil and other commodities…
Money managers have upped their collective bullish position in Gold futures to the highest level in 4 years, based on weekly positioning data from the Commodity Futures Trading Commission…that would normally be viewed as bearish, but what’s “normal” these days?…both the TSX Gold Index and the Venture have been saying Gold is headed higher as we showed in charts yesterday…
Fed’s Rosengren Sounds Off Again
The Federal Reserve is set to hike interest rates more rapidly than investors currently expect, a top Fed official said yesterday, again pushing back on what he said was investors’ too pessimistic view of the U.S. economy and monetary policy…it was the second time in as many weeks that Boston Fed President Eric Rosengren warned that futures markets, which see only one modest rate hike in each of the next few years, are off the mark…he said U.S. inflation was now “much closer” to the Fed’s goal (really?), downplayed weak growth in the 1st quarter (Obama did the same), and said the economy is “fundamentally sound” (Gold buyers may have a different opinion)…Rosengren is a voter on policy this year and is also regarded as one of the Fed’s “doves”…
Oil Update
Thousands of Kuwaiti Oil workers downed tools for a 3rd day today to protest against planned public sector pay reform, reportedly cutting Crude output to 1.5 million barrels per day – a little more than half of Kuwait’s average output of 2.8 million bpd in March…this Oil disruption is expected to be brief but it is helping a market that was disappointed by the outcome of the meeting in Doah…
WTIC 6-Month Daily Chart
Crude has built a strong support band in the mid-to-upper $30’s which is perhaps one reason the Saudis felt they could walk away from the producer meeting in Doah over the weekend without an agreement to freeze production…the market is also already looking toward the 2nd half of the year when the current supply-demand gap in Crude is expected to narrow significantly…
What’s also narrowing is the gap between Crude’s still-declining 200-day moving average (SMA), currently $41, and its rising 50-day SMA, now at $36.23…this has already happened in Gold and Silver, but a “Golden Cross” can be expected to form on the Crude chart by the summer and that’s going to lead to higher prices…the technical and fundamentals will both be more bullishly aligned for WTI during the 2nd half of 2016, and that’s going to provide some fresh new energy for the Venture as well…
In today’s Morning Musings…
1. Updated charts for 2 Lithium plays including Ashburton Ventures (ABR, TSX-V)…
2. A graphite play on the move…
3. Cannabix Technologies‘ (BLO, CSE) update…
Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only…
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AIX news out:
– Signing of a definitive agreement between AIX and LIT to explore and develop the Electra project whereby LIT will earn a 49% interest in the Electra project through the issuance to AIX of 1,000,000 fully paid ordinary LIT shares. 1,000,0000 partly paid LIT contributing shares paid to 0.001 Australian cent each (24.99 Australian cents unpaid), and expenditures of $400,000. LIT has a further option to increase its interest in the Electra project to 65% through the issuance to AIX of 1,500,000 fully paid ordinary LIT shares, expenditures of $1,500,000 and a cash payment of $250,000;
– An exploration budget for the Electra project has been approved by LIT, securing the financing for the upcoming Phase 1 Electra work program, with work to begin in early May;
– Also included in the definitive agreement is the right for AIX to be granted a 10% interest in any novel lithium extraction technologies (“LET”) used or developed in relation to the Project properties (Tecolote and Tule Concessions) and/or the Sonora Project currently owned by Bacanora Minerals Ltd. and REM, whether patented or not patented.
Comment by rgiroux — April 19, 2016 @ 6:34 am
Jon,SRJ has traded 3/4 of their outstanding shares in 6 days and not moved up a cent in a hot lithium market.
Is it just a matter of time before it takes off or is that not a good sign.My viewpoint would be that a solid base is in place and it has to move up hard from here.
The geos are supposedly on the property.All the other companies in that area have skyrocketed.Why wouldn’t the stock move along with others?
Comment by robinandthe7hoods — April 19, 2016 @ 7:23 am
Robin, I purchased shares in SJR yesterday. Lets see what happens this week. I think it will have a nice pop.
Comment by Jane — April 19, 2016 @ 9:21 am
GGI – it certainly has that feel that a NR is coming but hopefully Regoci doesn’t do the after market close again. It’s getting old and nobody cares.
Comment by Dan1 — April 19, 2016 @ 10:21 am
Dan1, the blessing that is on the way here with GGI, and other companies in the Iskut Gold camp led by CXO, is going to go beyond what anyone on this board can currently imagine. We’ll get into that with Adam Travis in our interview. As far as GGI goes, the news that could be coming for it (besides Rambo and Grizzly) might be more ground in this camp, we’ll see. By itself, the King Property packs plenty of power as drilling in the late 1980’s outlined a Gold vein open in all directions over a length of 150 m that averaged 1 ounce per tonne with some narrow intersections up to 3 ounces per tonne. In addition, you have areas on the King of high-grade Silver-Lead-Zinc, as GGI has sampled, and various other Gold targets and Copper and porphyry targets, that haven’t been properly tested. Shortly after the Eskay Creek boom in 1989, exploration in the district came to a screeching halt due to the government change in B.C., which was then followed by the Bre-X scandal and the commodities slump. There is so much that hasn’t been followed up on, and since 1989 about 75% of the ice and snow have melted away, opening up new areas of exploration interest through exposures at surface. It’s a geologist’s dream and with $1 billion in new infrastructure recently – power, roads, bridges. That all helps explain the Seabridge takeover of SGG today, plus there’s more (Colorado’s findings at KSP and a critical 2014 B.C. Geological Survey report for the general area) which we’ll get into. Most investors aren’t on to this yet – first-movers will cash in hugely this summer. CXO, GGI, others will all see new multi-year highs from this IMHO.
Comment by Jon - BMR — April 19, 2016 @ 11:18 am
Jon
do you think that Seabridge would make an offer or try and buy CXO before they drill later this summer? Did Adam Travis discuss this in your interview?
thanks
Comment by GREGH — April 19, 2016 @ 1:07 pm
Hi Gregh, that’s an interesting question but note Seabridge’s comment in today’s news release re: their “transaction test of immediately increasing our gold resource ownership per share.” Outside of the optioned ground to Colorado, SGG has 43-101 resources that meet Seabridge’s criteria….they got SGG cheap and IMHO, the real driver for this takeover now was KSP and we’ll get into that as the week progresses. I have a theory with regard to what’s next and we’ll share that with subscribers in the morning. I cannot emphasize enough how big this whole area is going to become — will be increasingly evident over the next week, act accordingly.
Some key points:
1. Features the world’s highest grade undeveloped gold project (Brucejack, commercial production starts next year)
2. Features the world’s largest concentration of Gold and Copper at KSM (P&P reserves 38 million ounces Gold, 200 million ounces Silver, 10 billion tonnes Copper) and with both provincial and federal environmental approvals
3. Features one of the world’s richest-ever mined ore deposits (Eskay Creek)
4. Features the past producing Snip (1 million ounces at 1 ounce per tonne)
5. $1 billion hydroelectric project has now vastly improved infrastructure
6. Features the “climate change” dividend – massive new areas of impressive surface mineralization is now visible to geologists due to ice and snow melt (receding glaciers)
7. BC Geological Survey report from 2014 – broader understanding of district geology, ground north of Iskut River is on the same belt of rocks as Eskay Creek-KSM-Pretium
8. Colorado’s field work the last 2 seasons, and historical research, has opened eyes – read their Feb. 29 NR
9. Netolitzky jumps in March 23 with Snip option from Barrick; GGI April 12 re: King and area; much more to come from various players plus CXO’s drilling and other drilling.
In this kind of a market, and the kind of market we’re going to have over the summer into the fall, the Iskut Gold Camp is going to be hugely explosive.
Comment by Jon - BMR — April 19, 2016 @ 2:16 pm
Interesting comment Jon in that the Iskut gold camp companies can go beyond what we could imagine. I remember when Colorado went over $1.50 per share back in May of 2013. Is that what you might be referring to in how high the shares might actually climb to.
Comment by pole — April 19, 2016 @ 4:39 pm
Pole, this has NexGen-style possibilities in terms of market cap potential for CXO. Those with strong technical geological knowledge see a great chance for a substantial high-grade deposit(s) at KSP – keep in mind that remarkable gold-in-soil anomaly averaging about 1.3 g/t Au over an area 1000 m x 1500 m found by CXO. Shallow drlling at Inel Zone 25+ years ago shows high-grade veins similar to Snip and Valley of the Kings. That was a big part of the calculation for Seabridge today in acquiring SGG. This is when it is so critical for investors to have vision and discernment in sizing up how this could play out for CXO and others in this camp. Anyone who experienced 1989 will understand what I mean. This is also not 2013, Pole. We are in a new bull market, the nature of which could make investors’ heads spin by this summer. Perfect Storm. Plant the seeds now if you haven’t already for a bountiful harvest.
Comment by Jon - BMR — April 19, 2016 @ 5:47 pm
Thanks for that Jon.Could be a very exciting summer at Iskut.
Comment by pole — April 19, 2016 @ 6:29 pm
re: point 9. I remember 1989 well. I was working in Whistler as a waiter and saw all the Vancouver broker’s come up on weekends and blow their money. Peter Brown and co. of Canarim (now Canaccord) used to hold court at Umberto’s. Those were heady days and I could feel the euphoria. I knew very little of the markets back then but I remember the names: Calpine, Gulf International, Skyline, Prime and all the other Pezim juniors.
If we go full circle on this 25 years or later with CXO etc., it will be truly amazing and even if ultimately there is no mine, the $$ made on this area play will spill over to other companies and fuel the venture. There’s a biography on Murray Pezim called “The Pez”, that I encourage anyone to read if they have an interest in the old VSE days.
Comment by mdashca — April 19, 2016 @ 8:11 pm
Jon, you were going to share your takeover theory with subscribers this morning?
Comment by Dan1 — April 20, 2016 @ 5:12 am
Yes, Dan1, we have more to add this morning…and tomorrow…and the next day – this has serious legs to it. What a blessing we are in for.
Comment by Jon - BMR — April 20, 2016 @ 5:17 am
Interesting move announced by Gold Standard (GSV, TSX-V) this morning, making an investment into Battle Mountain Gold (BMG, TSX-V)…
Comment by Jon - BMR — April 20, 2016 @ 5:29 am
Jon, do you think CXR is overbought? Think it will pull back a little before the next move up?
Comment by Dan1 — April 20, 2016 @ 5:45 am
There were a few orders for GGI this morning at 10 cents but that darn wall at 10.5 and 11 cents is the killer.
Comment by Dan1 — April 20, 2016 @ 5:52 am
It’s risky in this kind of a market, Dan1, to a play a short-term trading strategy with a situation like CXO…we’ve seen quite a few other plays, even though they would be considered technically overbought, just keep rising – CDB being a classic example…the scenario that is unfolding in the Iskut River Gold Camp is exceptional by every measure and there are going to be factors that come into play that will prove incredibly explosive for CXO and other companies in the area.
Comment by Jon - BMR — April 20, 2016 @ 5:56 am
You won’t worry about that “wall” when you see this morning’s new chart, Dan1. It’s actually very bullish to see that because when “walls” are conquered, you know what follows…
Comment by Jon - BMR — April 20, 2016 @ 5:59 am
If we see SGG trading above the take out offer then that may mean a bidding war ensues. That would only mean one thing for CXO
Comment by Dan1 — April 20, 2016 @ 6:03 am
One cannot rule out the possibility of something happening there, Dan1, because SEA got SGG on the cheap. In any event, this whole area is going to light up.
Comment by Jon - BMR — April 20, 2016 @ 6:45 am
Jon
Read this morning that if the dollar breaks below 94 we should back up the truck on gold and gold stocks , your thoughts on this please?
Thanks
Comment by GREGH — April 20, 2016 @ 7:47 am
Gregh, you bring up a good point regarding the dollar as it’s really on the cliff now, though it rallied today from below 94. There is strong chart support at 94 and base support below that at 92.50 as John’s charts have shown, and this could hold for a while yet with some rallies that are sold into. Personally, I think it’s just a matter of time before that support does collapse. Could be very soon, but certainly at some point within a few months IMHO. Gold will strengthen on a Dollar Index breakdown below 94, and really take off if the Index plunges below 92.50.
Comment by Jon - BMR — April 20, 2016 @ 11:43 am
Jon
there are some who keep predicting that gold and gold stocks are due for a breather with how far they have ran so far this year, if the dollar does rally and head back up to say 97-98 do you think that will be the catalyst? I’m sort of hoping for some type of sell off so I can get better prices on some of the producers that I missed out on earlier… your thoughts please…
Comment by GREG — April 20, 2016 @ 1:25 pm
Greg, those who have kept predicting that Gold and Gold stocks are due for a breather haven’t been following the Venture very closely or the behavior of the TSX Gold Index or even Gold itself, in terms of the technical patterns. As John’s charts have shown, there needs to be a breakdown of some sort in the Venture’s EMA(8) and/or EMA(20) before we can expect to see any kind of a pullback….still no sign of that which is why we have remained bullish all this time…..we’ll have an updated Venture chart in the AM…..as far as the Dollar Index goes, 95-96 is the tops on any near-term rally…….a first wave like we’ve seen to date in the Venture and Gold stocks, which started in late January/early February, doesn’t typically end (temporarily) until we see something rather dramatic….
Comment by Jon - BMR — April 20, 2016 @ 1:47 pm
Jon- still following HBK..?? A lot of shares trading hands in the last few days!!!TIA..
Comment by GregJ. — April 20, 2016 @ 3:21 pm
HBK was a great stock to be in during 2013 and 2014, Greg, until its chart pattern broke down in late 2014…and that coincided with some problems for them at their Swamp Point aggregate project. To me it looks like a while yet before this one can start to gain traction again, and the technicals are still not favorable. Much better opportunities than this one right now.
Comment by Jon - BMR — April 21, 2016 @ 3:38 am
Jon- Thanks!! Gotta say… I’ve been flipping the “pennies” for a couple decades, and over the years i’ve been a subscriber to many, many, of the so called”gurus”.. You guys are absolutely unique and # 1…
Comment by GregJ. — April 21, 2016 @ 4:30 am