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July 12, 2016

BMR Morning Market Musings…

Gold has traded between $1,330 and $1,358 so far today…as of 10:00 am Pacific, bullion is down $23 an ounce at $1,332…Silver has slipped 20 cents to $120.06…Copper is going in the opposite direction, jumping 6 cents to $2.21…Crude Oil has surged $1.83 a barrel to $46.59 while the U.S. Dollar Index is down one-fifth of a point to 96.34

Gold is under some mild pressure today on profit-taking as cash pours into global stocks…the S&P 500 and Dow both hit new record highs today, Asian stocks hit 2-and-a-half month highs overnight, while European shares posted a 4th straight day of gains on hopes of more stimulus from global policymakers…

China suffered a major defeat today as an international court rebuked its claims on distant waters that contain the world’s busiest shipping lanes and declared some of its expansionary tactics illegal…a tribunal at the Permanent Court of Arbitration in The Hague, Netherlands, issued the ruling in a dispute between China and the Philippines…analysts believe the decision, and the responses of both countries and others, could mark one of the most significant geopolitical events in years (potentially Gold-bullish)…

Nickel On The Rise

Goldman Sachs is predicting a surge in Nickel prices during the 2nd half of this year, driven by probable supply cuts in the Philippines, the biggest ore producer…the new Philippine government has put mines on notice that ventures falling short of environmental and welfare standards will be shut down and has ordered an audit of operations, driving prices to the highest in 8 months…Goldman Sachs has raised its full-year average price by 15%.  “The results of the audit will be critical to the outlook for Nickel,” Goldman analysts including Jeff Currie and Max Layton wrote, noting there appears to be no readily available alternative source of ore for China, the biggest producer and consumer…

Nickel, which dipped below $3.50 per pound early this year, is up 16 cents at $4.71 as of 10:00 am Pacific

Crude Oil Update

OPEC has cut its forecast for world economic growth this year (to 3.0% from 3.1%), citing increased uncertainty following Britain’s vote to leave the EU…in its first 2017 forecast, the cartel says the pace of Oil demand growth would slip…

Crude Oil prices are rebounding today off a 2-month low yesterday, a retreat we put into perspective this morning with an updated chart…

Saudi Energy Minister Khalid al-Falih said today that the Oil industry needs a price above $50 per barrel to sustain investment but added that downward pressure would prevail because of an inventory glut.  “We need a price higher than $50 to achieve balance in Oil markets in the long- term,” Falih told German business daily Handelsblatt.  “But there are still excess stocks on the market – hundreds of millions of barrels of surplus oil. It will take a long time to reduce this inventory overhang,” he said.  “Market conditions will help remove overall excess Oil stocks in 2017.”

Oil Drilling

WTIC 8-Month Daily Chart

We do see a potentially big opportunity coming up in Crude Oil, given the pullback that started recently, but for now some bearish technicals are restraining the price and may cause WTI to test the nearest support at $43…buy pressure (CMF), dominant for most of the period since from March through June, has transitioned into weak sell pressure…

Note the RSI(14) downtrend line…what has been occurring since early last month is a healthy unwinding of temporarily overbought conditions that prevailed from March into June, so a test of the strong RSI(14) support at 30% can’t be ruled out…confirmation of the price turnaround should come when the RSI(14) breaks through its resistance at the downtrend line…

It’s a good time to be planning for a long position in the double bull HOU on the TSX, but not just yet…we’ll continue to monitor…all 4 of our ETF trades have been winning ones this year including the HOU earlier in the year which we closed out for a short-term profit of 40%…

WTIC July 12

“Policeman” – In Honor Today Of The Slain Dallas Police Officers

Back in 1970, the great Paul Harvey did one of his best pieces ever – “Policeman”.  There couldn’t be a more appropriate day than today to post this video and narration from Harvey as a memorial service is held in Dallas to celebrate the lives and service of Brent Thompson, Patrick Zamarripa, Michael Krol, Lorne Ahrens and Michael Smith who were all shot and killed in last Thursday’s ambush in downtown Dallas while they were protecting the rights of citizens to protest.

Click on the arrow to view this heartwarming 2-minute tribute to law enforcement, our brave men and women in uniform, who unfortunately have come under unfair attack (verbally and physically) due to an agenda-driven rhetorical war on police.

In today’s Morning Musings…

1. Updated S&P 500 chart paints an interesting picture for the rest of this year…

2. Phase 3 drill program commences at Sandra Escobar high-grade Silver discovery in Durango State…

3. Richmont Mines (RIC, TSX) on track to exceed guidance for 2016

4. The implied value of Columbus Gold (CGT, TSX)…

Plus more…click here if you’re a non-subscriber to receive 3 Top Picks for the rest of July, or login with your username and password to view the rest of today’s Morning Musings… 

SAVE 25% with a risk-free subscription (as little as $1 per day) as you gain full access to this and other exclusive BMR content…

5 Comments

  1. Wow what happened to CXO at the end of the day?

    Comment by Dan1 — July 12, 2016 @ 12:24 pm

  2. Very light volume, Dan1…fell a nickel in the last 30 minutes on just 35,000 shares. Sort of a reflection of the overall day. I’m not reading anything into it other than that. CXO can shoot right back up even faster.

    Comment by Jon - BMR — July 12, 2016 @ 12:45 pm

  3. Several juniors were off 5+ cents at the close. gold price.

    Comment by Mmurphy — July 12, 2016 @ 1:40 pm

  4. just curious Jon: is the ticker at the top all the stocks you are following? or?

    Comment by STEVEN1 — July 12, 2016 @ 7:29 pm

  5. ggi heads to king.

    Comment by Laddy — July 13, 2016 @ 6:44 am

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