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Gold has traded between $1,326 and $1,345 so far today, getting a boost from more weaker than expected U.S. economic data…as of 9:30 am Pacific, bullion is up $16 an ounce at $1,343…Silver has shot up 34 cents to $19.85…Copper is flat at $2.09…Crude Oil has backed off 7 cents to $44.39 while the U.S. Dollar Index has been slammed, down more than three-quarters of a point to 94.92…the dollar bulls keep making the same mistakes (again and again and again)…
The Venture was up 54% for 2016 through last Friday vs. a 39% gain in Silver this year and a 25% advance in Gold…if that hasn’t been quite enough to scare off the dollar bulls, wait ’til they see what’s waiting for them just around the corner!…
Good contrarian sign – shifting interest rate expectations caused hedge funds to dump their bullish bets in Gold and Silver to a more than 2-month low in the week ending last Tuesday, according to the latest trade data from the Commodity Futures Trading Commission…
Despite Gold and Silver stocks being up over 100% in 2016, Sean Williams at Motley Fool says they can still be considered “value stocks”, particularly relative to the S&P 500…his analysis is based on price-to-cash flow per share ratio (P/CFPS)…currently, the S&P 500 is valued at 8.7 times P/CFPS (and generally speaking it is often between 10 and 20). “However, if you look at Gold and Silver stocks, you’ll find substantially cheaper alternatives on a price-to-cash flow per share basis,” Williams continues. “Especially after this last correction. In many instances, you can find mid-to-high, single-digit P/CFPS among Gold and Silver miners.”
Australia’s central bank held interest rates steady today, a month after cutting to a record low of 1.5%, and left open the question of further easing as the country gets ready to toast 25 years without a recession…
No change in European Central Bank (ECB) policy is expected on Thursday, but President Draghi’s news conference could provide insight to whether the ECB is considering any additional easing for the future…
Negative Interest Rates Until 2021?
ISM Non-Manufacturing Index Tumbles
The Institute of Supply Management reported this morning that its non-manufacturing index fell to 51.4 in August, well below expectations of 55 (the July reading was 55.5)…does anyone still believe the Fed will raise rates in a couple of weeks?…apparently, some Wall Street traders have been conned so good by the Fed, they still do…
Gold’s “Trump” Card
CNN (the Clinton News Network) must have had a hard time digesting this information this morning – a new CNN/ORC Poll shows a big change in the U.S. Presidential race with Donald Trump now leading Hillary Clinton by 2 points (45% to 43%) after Clinton was in the lead by a wide margin immediately following the Democratic Convention…
Libertarian Gary Johnson is at 7% among likely voters while the Green Party’s Jill Stein has just 2% support… independents are giving Trump a major boost – 49% say they’d vote for him while just 29% of independent voters back Clinton…
“Groupthink mentality”, always a red flag, has been assuming that this election is in the bag for Clinton…a much more uncertain outcome, in our estimation, will be yet another factor that will prevent the Fed from raising rates prior to the election…the prospect of a Trump victory should also be Gold-bullish (and dollar bearish) given the increased uncertainty it would create, politically and economically, particularly on the international stage…
Enbridge Acquires Spectra To Create North America’s Premier Energy Infrastructure Company
Enbridge (ENB, TSX), Canada’s largest pipeline company, said today it would buy Spectra Energy (SE, NYSE) in an all-stock deal valued at about $37 billion ($28 billion U.S.) to create the largest North American energy infrastructure company…Enbridge’s biggest-ever deal comes as the company has been steadily expanding its North American pipeline network, which carries the bulk of Canadian Crude Oil to the United States…
Oil Update
Saudi Arabia and Russia agreed yesterday to “cooperate” in world Oil markets, whatever that means, prompting a temporary jump in prices…however, the rally stalled after Saudi Energy Minister Khalid al-Falih said there was no need to freeze output for now (of course not, the Saudis are pumping Oil faster than rabbits can make bunnies)…
While the Saudi minister played down the prospect of imminent action, his Russian counterpart Alexander Novak said he was open to ideas on what cut-off period to use if countries chose to freeze output and even said production cuts may be discussed…Novak said the agreement was an “historical moment” between OPEC and non-members, and that the plan was to support the “stability of the Oil market…ensuring a stable level of investment in the long term”.
OPEC and non-OPEC producers such as Russia will hold informal talks in Algeria September 26-28, though many observers are skeptical that any kind a deal will materialize…
OPEC members pumped record crude in August…OPEC’s production increased by 40,000 barrels per day in August to 33.5 million barrels per day, setting a fresh output record, according to OilPrice.com…the unexpected increase from July’s record levels continues to jeopardize the stabilization of Crude prices, and suggests that the global Crude market remains oversupplied…however, spare capacity among OPEC members, especially Saudi Arabia, continues to decline…
In Today’s Morning Musings…
1. Gold and Silver shine as more U.S. economic data disappoints and the Dollar takes a dive…
2. Updated Venture and Silver charts you’ll love!…
3. Updates on some of today’s major movers and a few stocks that are about to move…
4. Daniel’s Den – print money and buy Gold stocks!…
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ah, September.
Comment by Daniel — September 6, 2016 @ 9:41 am
CNN.. Clinton News Network!!! who came up with that one? Hilarious!!
Comment by GregJ. — September 6, 2016 @ 10:25 am
Tough call in the US election. I have no idea who I would vote for if I was an American, I am no fan of Hillary Clinton but Donald Trump??
The US networks are so biased, CNN likes Clinton, FOX hates Clinton but loves Trump, so obvious.
Comment by Danny — September 6, 2016 @ 11:09 am
Danny, it’s Trump’s election to lose at this point – he’s the change candidate and Hillary represents the status quo (advantage Trump in the Year of the Insurgent)…for investors, Gold will move higher no matter who wins, but I believe the “Trump surprise” will give Gold an added dynamic and will further confuse the Fed – meaning ZERO chance of a rate hike anytime soon (Gold is seeing that now), and probably not ’til next year…but what if there’s a recession in 2017?…easy answer – negative interest rates! Yes, the U.S. media has become politicized, but CNN.com in particular wins that prize IMHO…
Comment by Jon - BMR — September 6, 2016 @ 11:40 am
No doubt a Trump win will confuse a lot of things and like you said likely good for gold. I give the prize to Fox as Sean Hannity is about the most politicized commentator I have ever seen.
What I like about Trump: doesn’t owe anybody anything, financed his own campaign, not beholden to the big corporations or power brokers
What I don’t like about Trump: probably the most immature politician I have ever seen run for such a big office. Totally unpredictable. It will be interesting if nothing else. Is he really going to build a wall??
Comment by Danny — September 6, 2016 @ 11:59 am
Nice results from Marathon Gold (MOZ, TSX) today from its Valentine Lake deposit in central Newfoundland…wide intervals of good grades for up to 70 m down dip of previous drilling…closed up 6 cents at 81 cents today…may have a chart tomorrow…
Comment by Jon - BMR — September 6, 2016 @ 12:30 pm
having had a clown + a bully for mayor,rob ford, trump for pres, is nothing but an elevated and more damaging mess from my armchair view. change is one thing. still undoing the mess ford left as ‘mayor’. Clinton is a liar and that goes way back. what an awful coin toss
Comment by david — September 7, 2016 @ 7:33 am