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Gold has traded between $1,273 and $1,287 so far today…as of 8:15 am Pacific, bullion is down $4 an ounce at $1,275…Silver is off 4 cents at $17.31…Copper has retreated a nickel to $2.17…Crude Oil has surged $1.09 a barrel to $44.87 while the U.S. Dollar Index has rallied another half point to 93.78…resistance at previous 94 support…
Assets in SPDR Gold Trust rose 0.07% to 825.54 tonnes yesterday, their highest in more than 2 years…
A weaker-than-expected U.S. non-farm payrolls number tomorrow would put an abrupt end to the rally this week in the U.S. dollar which has prevented Gold from conquering the $1,300 level…an increase in payrolls of less than 200,000 with the unemployment rate above 5% would likely be considered weak, further curtailing Fed tightening expectations…the ADP report yesterday showed private employers hired the fewest workers in 3 years in April…
Republican presumptive nominee Donald Trump, who should not be underestimated as he goes after Hillary Clinton this fall (unless she’s indicted), told CNBC this morning that he’s for low interest rates unless inflation perks up…calling himself the “King of Debt” in his business dealings, he warned that the $19 trillion national debt would be troublesome if the cost of borrowing increases…
Fort McMurray Wildfire
Our prayers go out to the tens of thousands of people affected by the devastating wildfire in Fort McMurray that has forced the evacuation of all 88,000 residents and burned down 1,600 structures…with many evacuees having fled north for accommodations at Alberta’s Oilsands fields, production at several facilities has been disrupted…the exact decline in output is uncertain but significant…
Suncor, Royal Dutch Shell, Syncrude, Husky, and Connacher Oil and Gas have all announced partial to complete production shutdowns to focus on housing evacuated employees and residents, and to move resources to protecting the community…
Losses from the devastating wildfire are already estimated at $1 billion and will likely set records for the country, according to insurance industry experts…the evacuations themselves may also increase costs…the Insurance Bureau of Canada said most policies will cover living expenses for policyholders who are forced by the government to evacuate….
Albertans are resilient – they will rebuild Fort McMurray…
Oil Update
Events in Fort McMurray are yet another example of what has turned out to be a key feature in the Oil market this year – a pattern of unexpected supply disruptions supporting prices…the difference today compared with a year ago is that the market is starting to price in supply disruptions, and that has bullish implications for the balance of 2016…
Libya’s already crippled Oil production is at risk of further decline from a stand-off between rival eastern and western political factions…other high-risk countries are Venezuela, Iraq, Nigeria and Algeria…
Meanwhile, U.S. production continues to fall, with the latest official figures showing a decline by over 8% since mid-2015 to 8.8 million bpd…
Tesla’s Model 3 And The Lithium Market
Tesla Motors (TSLA, NASDAQ) posted quarterly results yesterday that generally met Wall Street’s expectations and gave a bullish outlook for vehicle production on the strength of demand for its upcoming Model 3…the electric automaker reported a Q1 loss of 57 cents per share on $1.6 billion in revenue…
Tesla’s Model 3
“The overwhelming demand for Model 3 confirms that compelling all-electric vehicles have mass-market appeal,” Tesla said in its shareholder letter…Tesla reported 1st-quarter deliveries of 14,810 vehicles, nearly in line with the figure announced in April…it expects 2nd-quarter deliveries of about 17,000 vehicles, below analysts’ forecasts for nearly 19,500, according to StreetAccount…
Lithium – Heart & Soul Of Energy Revolution
Lithium is very much the heart and soul of the energy revolution…the Model 3, all by itself, will have a huge impact on Lithium demand, which is already threatening to make supply impossible without exploration and production of new resources…at the end of the day, Tesla’s “huge step towards a better future” achieved by fast-tracking “the transition to sustainable transportation” comes down to Lithium…this helps explain the huge interest in Lithium stocks and what’s happening in Nevada, the staging ground for a U.S. Lithium boom that will feed the manufacturing beasts for everything from EV’s, battery gigafactories, powerwalls and energy storage solutions to the long and growing list of consumer electronics that we use every day…
Today we begin an interview series with Brian Paes-Braga, founder and CEO of Lithium X Energy (LIX, TSX-V), an individual whose skill and passion for entrepreneurship was played out at a boutique brokerage firm in Vancouver in recent years where he excelled in all aspects of the venture capital business…
Paes-Braga launched Lithium X late last year along with heavyweights Frank Giustra and Paul Matysek…this is an “A” team by any measure, so it’s no surprise that the stock has climbed as much as 7-fold from where it started at the end of last November…
In today’s Morning Musings…
1. Part 1 of our interview series with Lithium X CEO Brian Paes-Braga, and a fresh “where to now” LIX chart from John…
2. Richmont Mines (RIC, TSX) delivers more high-grade from its exploration drill program at the Island Gold mine…
3. Updated Venture and Canadian dollar charts…
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Gold moves higher and dollar drops as non-farm payrolls come in well below expectations – 160,000…Goldman Sachs was calling for a gain of 240,000…
Comment by Jon - BMR — May 6, 2016 @ 4:34 am
VVN…….on the lithium train. Starting to come back to life!!!!
Comment by GregJ. — May 6, 2016 @ 5:27 am
CXO….looks like the last chance for the 30s!!!!!!
Comment by John - BMR — May 6, 2016 @ 6:00 am
We have an updated CXO chart this morning—-the chart plus the announced $4 million PP…there’s only one word for that, it’s 3 letters and starts with “B” and ends with “Y”. You heard it here first. There’s an old saying and it’s very true—-follow the money. $4 million is being put on the table here, and that also gives CXO an even bigger war chest to tackle KSP.
Comment by Jon - BMR — May 6, 2016 @ 6:03 am
2.5’s are going quickly on OX, big volume. We’ll show latest chart in Morning Musings.
Comment by Jon - BMR — May 6, 2016 @ 6:54 am
thanks for the heads-up, was able to grab 120K at 2.5… I looked at some of the press releases, and was pleasantly surprised to see Jean-Pierre Landry as part of the team since Dec 2015. I worked (remotely) with him back in 1994-95 at the Noranda Mines, in the engineering group. Smart and dedicate guy.
Comment by rgiroux — May 6, 2016 @ 7:52 am
We’ve made note of OX previously, rgiroux, given the chart patterns and the overall increase in volume in recent months…something does appear to be up. It’s also the Venture volume leader this morning.
Comment by Jon - BMR — May 6, 2016 @ 8:06 am
I meant: thanks for the heads-up on the volume picking up.
Comment by rgiroux — May 6, 2016 @ 8:45 am
Volume is a great indicator, rgiroux…we’ll explain what could be triggering OX in Morning Musings shortly…
Comment by Jon - BMR — May 6, 2016 @ 8:57 am
GregJ/Jon, I saw that Vvn lithium news. What are ur thoughts? Back down to 3 cents today
Comment by Sameer — May 6, 2016 @ 10:30 am
VVN is not a company I’d be investing in, Sameer.
Comment by Jon - BMR — May 6, 2016 @ 10:46 am