BMR Morning Market Musings…

Gold has traded between $1,245 and $1,258 so far today…as of 9:30 am Pacific, bullion is up $4 an ounce at $1,254…Silver, which has hit an 11-month high, is up another 20 cents at $17.12 after yesterday’s big move…Copper is a penny higher at $2.23…Crude Oil was lower in early trading but has since reversed and is now up 67 cents at $41.75 while the U.S. Dollar Index has added one-fifth of a point to 94.30 after briefly dipping below 94…

Gold rallied sharply yesterday as weak U.S. housing data, on top of other soft economic data last week, further dented the likelihood of U.S. interest rate hikes in the foreseeable future.  “The Gold rally is most under threat from the resurgence in investor risk appetite,” HSBC observed today. “The move in stocks to fresh 2016 highs, if the run continues, may rob Gold of some of the oxygen it needs to continue to rally.”  However, potential equity strength may pose less risk to the Gold rally than in previous periods of stock market gains as the U.S. dollar remains under pressure thanks to a dovish Fed – very different dynamics than were at play from mid-2014 to December 2015…

Commerzbank:  “Silver is currently much stronger than Gold.  The Gold-Silver ratio has dropped to below 74, its lowest level since early November. It was still over 80 at the beginning of last week. Unlike Gold, Silver saw further inflows into its ETFs.  The iShares Silver Trust, the world’s largest Silver ETF, reported inflows of 44.4 tonnes.  By contrast, Gold ETFs posted an outflow of 8.5 tonnes Tuesday.”

There’s another wind at Silver’s back: miners are producing less of it…more on Silver (“Silver Shines”), including an updated chart, in today’s Morning Musings for subscribers…

ECB Meets Tomorrow

The European Central Bank is back in the spotlight tomorrow – how that may impact Gold and the U.S. dollar will be interesting to see…no major policy changes are expected but market attention could drill down on ECB head Mario Draghi if there’s any pullback from him on recent rhetoric expressing the chance for additional monetary policy loosening for the region…

Canada Joins The World In Piling On Debt In The Name Of  “Stimulus” 

A new report from Canada’s parliamentary budget watchdog confirms that the Trudeau government inherited a surplus before plunging federal finances deep into red ink…the Parliamentary Budget Officer’s economic and fiscal outlook, released yesterday, also estimates the government’s decision to return the eligibility for Old Age Security to 65 from a planned Conservative increase to 67 will cost the treasury (taxpayers) more than $11 billion a year beginning in 2029–30…the PBO also questions the government’s projection that budget measures will create or maintain 100,000 jobs by 2017–18, instead forecasting the creation of 60,000 jobs…

As we’ve stated all along, the Trudeau government isn’t “investing in Canadians” as it’s cleverly trying to claim – it’s really investing in itself, creating a bigger government (just like in the province of Ontario and some other jurisdictions) that will overspend, overregulate, and ultimately extend the tax burden for everyone in this country…this is the 1970’s all over again under the previous Trudeau…today’s younger generation obviously doesn’t read history…that reckless strategy, pursued by liberals in both Canada and the U.S., was proven wrong and it will fail again now…all the more reason to own Gold…

Mulroney Blasts Trudeau’s Handling Of Pipelines

Former Canadian Prime Minister Brian Mulroney also contributed to Canada’s debt problem but at least he got this right in a speech yesterday at a private event held by the Business Council of Canada, as reported in today’s National Post by John Ivison:  Murloney said the regulatory process governing pipeline approval is being “gamed” by people who want to disrupt any Oilsands development, and urged Trudeau to spearhead a “concerted and coherent strategy” to build energy infrastructure.

Mulroney:  “Despite all that you may have heard or read, the age of fossil fuels is not about to end any time soon. In fact, the International Energy Agency estimates that demand for Oil, Coal and Gas will increase steadily into 2040.  Heavily subsidized “renewables” will also increase but will still be a small part of the total. That is the reality of the world we are in.

“The biggest challenge in Canada today is uncertainty,” Mulroney continued.  “The resource sector has hugely capital-intensive projects with a long life. But these projects cannot go forward if they become captives of seemingly endless processes and reviews. Public policy has a critical role to play in reducing some of that uncertainty and promoting the Canadian resource sector in emerging markets. Your voices need to be heard in this debate.

“We cannot allow our regulatory regime to be gamed by those who simply want to disrupt any form of development. There are clear lessons from history on this tendency.”

In today’s Morning Musings…

1.  Pure Energy (PE, TSX-V) pushes through another Fib. level (updated chart)…

2.  The dynamics that will power the Iskut River Gold Camp…

3.  A look at a strong non-resource play…

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