Gold has traded between $1,350 and $1,369 so far today…as of 9:30 am Pacific, bullion is down $5 an ounce at $1,358…Silver is off 41 cents at $19.65…Copper has slid 3 pennies to $2.12…Crude Oil has reversed lower, tumbling $1.53 a barrel to $45.90 as government data showed a far weaker U.S. Crude inventory draw than an industry report released Tuesday suggested…meanwhile, the U.S. Dollar Index has gained one-fifth of a point to 96.22…
China, the world’s biggest producer and consumer of Gold, added about 500,000 ounces to central bank reserves in June (now at 58.6 million ounces) according to data on the central bank’s website, restarting monthly purchases to diversify holdings after taking a breather in May…the country has boosted its hoard in 11 out of the past 12 months after announcing a 57% increase since 2009…
Not surprisingly, sales of American Eagle Gold coins by the U.S. Mint during the first 6 months of 2016 are far ahead of the pace from the same period in 2015, Commerzbank points out: “This year has seen not only high inflows into Gold ETFs so far, but also strong coin sales. According to figures from the U.S. Mint, 501,000 ounces of Gold coins were sold in the U.S. in the first half of the year, which is 84% up on the same period last year,” the bank says. “As such, coin sales are clearly on track to significantly exceed last year’s total.”
The most important jobs number EVER! (lol) comes tomorrow when the Labor Department reports on June non-farm payrolls after last month’s horrendous statistics…this morning, a report from ADP and Moody’s showed that employment in the private sector rose modestly more than expected in June, led by gains in the small business sector…private sector jobs grew by 172,000, up 13,000 from what economists estimated…the May number was revised down to 168,000 from 173,000…the ADP report isn’t always a reliable indicator for the non-farm payrolls report that follows…
Mark Zandi, chief economist at Moody’s Analytics, said in a statement. “Job growth revived last month from its spring slump. Job growth remains healthy except in the energy and trade-sensitive manufacturing sectors. Large multinationals are struggling a bit, and Brexit won’t help, but small-and mid-sized companies continue to add strongly to payrolls.”
We’ll see what the Labor Department has to say tomorrow, and the wage growth numbers will be watched with keen interest as well…expectations of course are everything – according to a Reuters’ survey of economists, non-farm payrolls likely increased 175,000 last month (the May number was just 38,000) while the unemployment rate is forecast rising to 4.8% in June from an 8.5-year low of 4.7% in May…another jobs number below 100,000 will shake a lot of people up…
If Gold weakens tomorrow on the jobs report, which is possible, it’ll surely rebound fairly quickly as there’s little prospect of the Fed raising rates at all this year…so many factors are supporting bullion right now and they aren’t about to go away anytime soon…it’s also possible Gold could explode higher tomorrow if the jobs number is another disaster…
BHP Move Is Positive For Copper, Oil Outlooks
A geologist reminded us yesterday that BHP Billiton (BHP, NYSE), the world’s #1 mining company, recently announced that it has raised its annual exploration spending by 29%, allocating nearly all its $900 million budget to finding new Copper and Oil deposits which the miner has singled out as the key resources that will bolster its future growth…the budget increase comes despite the Melbourne-based mining giant’s decision to cut overall capital expenditures to $5 billion in the fiscal year that began July 1, compared to a peak of $25 billion in fiscal 2013. “We are investing at a time when most in our sector continue to reduce discretionary spend,” Laura Tyler, BHP’s head of geoscience, said in a statement…
Already the world’s second-biggest listed Copper miner, BHP will be looking for more of the red metal in Canada, the U.S., Chile, Peru and South Australia, and eyeing new partnerships to boost its growth pipeline…
UBS Raies Oil Price Forecast
UBS: “Oil demand growth remains robust…an historically high level of physical inventories… is no bar to a rising price if the direction of travel in market adjustment is supportive.”
In today’s Morning Musings…
1. Drilling begins at Kootenay Silver’s (KTN, TSX-V) La Negra high-grade Silver discovery…
2. The Little Engine (ABN) That Could!…
3. Bargain hunting as some profit-taking hits the Venture…
Plus more…click here if you’re a non-subscriber to receive 3 Top Picks For July, or login with your username and password to view the rest of today’s Morning Musings…
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Jon
wouldn’t you consider EQT to be very under valued at 15 cents if it is on track to produce 50k oz a yr of gold?
Comment by GREGH — July 7, 2016 @ 11:30 am
Well, they won’t be producing 50 K right away, Greg – one step at a time, but certainly from a long-term perspective, yes, very undervalued at .15 looking out into what may develop at Cajuiero and if Gold does what we think it’ll do over the next couple of years…I was referencing the immediate outlook (this quarter) from a chart perspective this morning and what hurdles are on the path to last year’s high.
Comment by Jon - BMR — July 7, 2016 @ 11:35 am
KTN – halted! Very interesting.
Comment by Vepper — July 7, 2016 @ 11:36 am
Yes, not sure what that would be about, Vepper – you’re right, interesting.
Comment by Jon - BMR — July 7, 2016 @ 11:39 am
Jon
are you concerned at all about a short term pull back in gold? the COT report shows the commercial traders at an all time record high short position of 312,000 contracts, before gold started its run back in January the commercial traders had a net short position of 5,000 contracts which was the lowest short position in 15 years, I think if investors are looking to get into new trades this short position needs to be addressed, of course it also depends on what companies you are looking to buy into, and of course the gold price could go higher before the commercials, JPMorgan et al pull the rug out from under the specs…just curious your thoughts on this
Comment by GREGH — July 7, 2016 @ 11:40 am
Not concerned at all, Greg, as the potential downside is very limited from current levels (maybe $50) and the Venture isn’t flashing any signals that there’s a pending problem in Gold. Just the opposite in fact. The main trend is the key to focus on, and buy the dips.
Comment by Jon - BMR — July 7, 2016 @ 11:46 am
KTN – News out. stockwatch.com/News/Item.aspx?bid=Z-C%3aKTN-2388216&symbol=KTN®ion=C
As suspected, now with a financing out of the way this will have room to move up from here.
Comment by Vepper — July 7, 2016 @ 11:48 am
Looks good, another $4 million doesn’t hurt. And it puts a further floor under the price at 40 cents.
Comment by Jon - BMR — July 7, 2016 @ 11:52 am
National tragedy in Dallas tonight – 11 police officers shot, at least 4 killed in a planned, coordinated attack/ambush, 60 rounds fired. Specifically targeted by snipers during a protest, bomb(s) may have been planted as well. No suspects in custody yet. What’s this world coming to? Believe it or not, there are probably some in radical Black Lives Matter movement who are cheering tonight – sick. The demonization of police officers by certain politicians and irresponsible media have contributed to this.
Comment by Jon - BMR — July 7, 2016 @ 7:41 pm
Another jobs report surprise……287,000, more than 100,000 above estimate. Gold falls back on knee-jerk reaction, but not sure if anything will stop Gold at this point.
Comment by Jon - BMR — July 8, 2016 @ 4:33 am
And job’s report of last month was revised lower to 11,000 (from 38,000). Who still believes these numbers…??
Comment by rgiroux — July 8, 2016 @ 4:55 am
Well, if you analyze all the data, rgiroux, even if it’s skewed in some way, there’s no question the U.S. economy is slowing as average monthly jobs numbers are quite a bit lower than they were in 2015 and 2014…I suspect today’s report will be revised lower next month…Gold sold off in knee-jerk fashion as soon as the number came out, but is now higher on the day…there is NOTHING stopping Gold right now, nothing…if the bears thought they could trip Gold up with a strong jobs number this morning, they’ve been proven wrong…
Comment by Jon - BMR — July 8, 2016 @ 5:19 am
Jon: that’s what I meant, they can put any number and then revise it down in the following months.
Comment by rgiroux — July 8, 2016 @ 5:22 am
They always do, rgiroux…so just how reliable is this morning’s number? You raise a valid point…I think Gold is seeing through all the crap from governments and central banks and not believing anything they say or having any confidence in what they’re doing…even “the most qualified person ever to run for President”, according to Obama, has proven this week (by the director of the FBI) to be a liar who was been incredibly careless and reckless and negligent with the most sensitive classified security information of the United States of America…where are things going? Buy Gold and Gold stocks (for safety if nothing else).
Comment by Jon - BMR — July 8, 2016 @ 5:24 am
Nothing will change, keep buying gold and gold stocks, you will benefit.
Comment by Laddy — July 8, 2016 @ 5:26 am
Secova Metals (SEK): wondering if their drilling and field work is advancing as planned this summer. Anyone has some info? Bids are building…
Comment by rgiroux — July 8, 2016 @ 5:39 am
SEK – I talked with the President a few days ago. The silent PP was about ready to go to the exchange. drilling to begin right after the ok from exchange. So any day here.
Comment by dave — July 8, 2016 @ 5:56 am
SEK – just checked it. Wow, bids are building and trading good from the start.
Comment by dave — July 8, 2016 @ 5:59 am
Wrr volumes picking up!!
Comment by Matt — July 8, 2016 @ 6:05 am
Yes, coming to life…deserves to be higher based on the property and results to date, but Michel has a habit of tripping over his own feet…
Comment by Jon - BMR — July 8, 2016 @ 6:12 am
John: on 2 May, you indicated you held a share position in SEK. Is it still the case? Would you have an updated chart for us?
Comment by rgiroux — July 8, 2016 @ 6:13 am
GTG – nice hit on assays
Comment by dave — July 8, 2016 @ 6:34 am
I lived on Vancouver Island for many years, Dave – I don’t exactly consider it for its prospective Gold deposits (and there are too many tree huggers there), but they have some nice sample numbers to promote…
Comment by Jon - BMR — July 8, 2016 @ 6:46 am
I hear ya Jon, GGI – looks like rbc is done dumping, little at a time here
Comment by dave — July 8, 2016 @ 7:05 am
Jeremy – SIE – anon keeps selling and it keeps building bids. hmmmmm – My friend is in that one. I get 20% of anything I make for him. $1 at a time.
Comment by dave — July 8, 2016 @ 7:08 am
Could be a big week next week for the Heart of Gold Camp, Dave…will explain more in our Sunday report…
Comment by Jon - BMR — July 8, 2016 @ 7:08 am
VGN stronger today….new 52 Wk high…could see DVR trading very soon.
Comment by John - BMR — July 8, 2016 @ 7:15 am
Heard a rumor on IMI. It was halted for a couple years and just resumed trading. Don’t know the validity to the rumor, but if its true, that 8 mil market cap will be much higher in about a week or two.
Comment by dave — July 8, 2016 @ 8:16 am
Jon, you have the contacts up there. maybe see if you can do some sniffing around on IMI. I don’t want to say on the board what I am hearing, maybe you can come up with something and see what you can find out on this one. It has very strong support now at .07, with weak resistance only to .09 – L2 looks really good here and the bids at .07 have grown this morning. If what I am hearing is true, say good bye honey. Easy double.
Comment by dave — July 8, 2016 @ 8:24 am
Going to be a big week coming up! CXO drill results imminent.
Comment by Mmurphy — July 8, 2016 @ 8:53 am
Followed by an analysts/brokers’ visit…the eye candy will be too hard to resist, I can guarantee it…
Comment by Jon - BMR — July 8, 2016 @ 8:58 am
You bet Jon. I suspect they will increase the meters as well, should have the 5000m drilled off easily by the end of July.
Comment by Mmurphy — July 8, 2016 @ 9:24 am
ABN – I’m anticipating a potential breakout next week.
Comment by Jon - BMR — July 8, 2016 @ 9:29 am
Ahhhh – Anon buying CXO
Comment by dave — July 8, 2016 @ 9:36 am