Gold has traded between $1,320 and $1,331 so far today…as of 9:30 am Pacific, bullion is down $6 an ounce at $1,322…Silver is off 22 cents at $18.81…Copper is flat at $2.09…Crude Oil is 18 cents higher at $46.06 while the U.S. Dollar Index is off nearly one-tenth of a point to 95.19…
Fed speakers will dominate today’s market headlines as investors continue to evaluate the possibility of a rate hike at next week’s meeting, though the media’s obsession with this issue is becoming tiresome (no matter what happens September 21, the “Big Picture” doesn’t change)…coming up at about 10:15 am Pacific, Fed dove Lael Brainard is scheduled to give a speech at the Chicago Council on Global Affairs with the topic expected to be about the economic outlook/monetary policy implications…if Brainard, a close ally of Yellen, sounds hawkish, then the speculation regarding a potential rate hike will heat up even more…Brainard’s speech was not announced until Friday, a surprise that unnerved the markets on an already shaky day…
This morning, at an event in Atlanta, Regional Fed President Dennis Lockhart, a voting FOMC member, said he would encourage a “serious discussion” of a rate increase next week. “In its fundamentals, the economy seems to be chugging along, not stalling out,” he said. “I see full-year growth in 2016 coming in a little below 2%, just shy of the growth rate we’ve seen, on average, over the 7-plus years of recovery.”
After today, Fed officials can’t give speeches (communications blackout) until after the September 20–21 FOMC gathering – thank goodness!…
Don’t Fear A Rate Hike!
Since the Brexit referendum, the Gold price has averaged around $1,339 an ounce, just slightly above current levels…the game between the bulls and the bears ahead of the upcoming Fed meeting is still being played out…for those who fear a rate hike, remember what happened after the Fed increased rates for the first time in a decade last December – with the news out of the way, Gold quickly turned higher and the greenback headed lower, setting up a powerful new Gold and Venture bull market starting in early 2016…the Fed has very few, if any, rate hikes left in its arsenal before the next recession sets in when they may be forced to adopt negative interest rates…continue to accumulate Gold stocks!…
Odds ‘n Ends
Hedge funds and money managers hiked their net long position in COMEX Gold contracts to a 9-week high in the week ending September 6, and they also raised a bullish stance in Silver, according to the latest COT data…meanwhile, SPDR Gold Trust said its holdings fell 1.12% to 939.94 tonnes on Friday…
Klondex Jumps On True North Announcement
Good news this morning from two of our favorite Gold producers…Klondex Mines (KDX, TSX) has made a positive production decision at its underground True North Gold mine in Manitoba…initial annual production will be between 45,000 to 60,000 Au oz with all-in sustaining costs of $950 to $1,050 CDN…annual capital expenditures will be $15 million to $25 million…
Meanwhile, Richmont Mines (RIC, TSX) has made a positive revision to its 2016 operational guidance estimates driven by significantly better-than-expected performance from the Island Gold mine in northern Ontario…company-wide 2016 Gold production guidance has increased to between 98,000 and 106,000 ounces, from 87,000 to 97,000 ounces, supported by a substantial jump in output from the Island Gold mine…in addition, all-in-sustaining costs have dropped to between $1,230 and $1,335 CDN per ounce from $1,275 to $1,390 CDN…
Richmont’s Island Gold mine is exceeding production estimates for 2016.
Nevsun Introduces Dividend Reinvestment Plan
Nevsun Resources (NSU, TSX) announced this morning that it intends to introduce a dividend reinvestment plan (DRIP)…the DRIP will allow shareholders to reinvest their cash dividends into additional common shares, and at a discount to the market place…participation in the DRIP will be optional and will not affect shareholders’ cash dividends unless they elect to participate in the DRIP….Nevsun has a strong balance sheet, no debt and pays a peer leading quarterly dividend…
Oil Update
OPEC today estimated that Oil output in 2017 from its non-cartel rivals would grow more quickly than it originally estimated, pointing to a larger surplus than previously forecast…
U.S. Crude drillers have added more rigs for a 10th straight week which suggests that certain producers can operate profitably around current levels…
Energy was the best performing sector in the markets last week, increasing by 1.5% vs. an overall decrease of nearly 2% for the S&P 500, thanks to Saudi-Russian cooperation and a large drawdown in stockpiles of U.S. Crude…
Chesapeake Energy (CHK, NYSE), which has taken dramatic action recently to get its capital structure into better shape for the future, was the best-performing energy stock for the week, increasing 22%…
Harvest Natural Resources (HNR, NYSE), our special situation buy recommendation September 1 at 61 cents, has climbed another 10 cents this morning to 75 cents on volume of more than 700,000 shares…
How Was Your Weekend?
Probably a lot better than Hillary Clinton’s…two indelible Hillary images were seared into American voters’ minds between Friday night and Sunday morning – a “basket of deplorables” (Hillary’s characterization of at least 50 million Americans) and a wobbly Presidential candidate being whisked away by her handlers and stumbling into a van wearing just one shoe after a “medical” episode that cut short her visit to a 9/11 ceremony (her doctors now say she has pneumonia)…both images may change how November 8th turns out and that in turn may have a big impact on the markets…
Hillary’s “basket of deplorables” was a reference to “half of Donald Trump’s supporters” which essentially means at least 50 million Americans – “the racist, sexist, xenophobic, Islamophobic – you name it”, Clinton told members of the LGBT community at a campaign fundraiser (the insult, nor surprisingly, has kicked off a “deplorables” merchandise boom for Trump supporters)…
Clinton later gave a half-apology for her remarks that disparaged a wide swath of hard-working, warm-hearted and patriotic Americans, but the damage was done…it was also an example of Hillary using her own intolerance, her own bigotry, to garner support from a group of people who have had to endure intolerance for centuries (ironically, many individuals in the LGBT audience cheered and applauded Clinton’s “basket of deplorables” remarks but the mainstream media didn’t want to touch that hypocrisy)…
Meanwhile, Hillary’s “fainting” episode yesterday has rekindled debate about just how healthy she really is, and her unfortunate “stumble” was an appropriate symbol of a possible turning point in her campaign…
Markets will start paying serious attention to the election after the first debate September 26, but Hillary is losing momentum and there’s no known playbook to defeat Trump as 16 other Republican candidates discovered during the primaries – no matter how negative they got or how much money they spent…
In Today’s Morning Musings…
1. Another way to evaluate Gold producers…
2. Updated charts for Silver, the TSX Oil & Gas Index, and the Venture…
3. Daniel’s Den – cheap Oil is an illusion based on energy “in” vs. energy “out”…
Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…
Who could’ve guessed it! Fed Squeezes in 1 last speaker to tone down rhetoric prior to decision day. Friday starting to look like it never even happened?
Bonds aren’t buying it yet,
Comment by Daniel — September 12, 2016 @ 10:08 am
The Fed is even afraid of its own shadow, it won’t have the courage to hike rates. I would argue the odds of a rate hike this month are less than the odds of the next rate move being down. Venture reversing off the morning low of 802.
Comment by Jon - BMR — September 12, 2016 @ 10:17 am
Agreed, there sure was a heck of a lot of ahh’s and ahum’s in that interview, wow!!
Comment by Laddy — September 12, 2016 @ 10:25 am
You need to wonder if Ma Yellen got so upset at her Fed friends sounding so hawkish last week, at the last minute on Friday decided to schedule her close ally Brainard for a speech this morning to put out the fires???? The markets Friday interpreted that surprise announcement differently and therefore plunged further after Rosengren’s early speech…the last word goes to Brainard as there’s now a communications blackout until the meeting on the 20th-21st…follow the Gold bulls, not the dollar bulls…I predict the Fed won’t hike next week but Yellen may agree to slightly more aggressive language to appease the hawks, which will simply reinforce the “Fed Who Cried Wolf” narrative…no Fed meeting in October, no likelihood of a hike a few days before the election in November, and certainly no hike in December if there’s an election surprise…
A central bank that has lost credibility can’t be a good thing, unless of course you’re invested in Gold and Silver…
Comment by Jon - BMR — September 12, 2016 @ 10:41 am
Daniel – agree about cheap oil running out – good concept the in/out ratio.
The one thing I see throwing a wrench in the concept is a technological breakthrough, especially as the price of oil rises.
Thoughout time there have been breakthroughs – whether its the loom, light bulb or the internal combustion engine – things always change. Won’t happen overnight but there will a change somewhere along the line.
FYI
https://m.youtube.com/watch?v=V39Tf9nEqBk
Comment by Mmurphy — September 12, 2016 @ 11:32 am
More leverage for Clean Commodities, with an additional 260 sq. km in the Athabasca basin. Ground is in close proximity to Canalaska’s West Athabasca Diamond Project where a De Beers’ drill program is now under way.
Mr. Ryan Kalt reports
CLEAN COMMODITIES CORP. INCREASES TENURE HOLDINGS IN SASKATCHEWAN’S ATHABASCA BASIN
Clean Commodities Corp. has expanded its tenure holdings in Saskatchewan’s Athabasca basin, the region in which the corporation holds a 50-per-cent interest in its Preston uranium project (approximately $4.7-million of exploration invested to date since project acquisition in 2013) and a 100-per-cent interest in its Athabasca diamond project (acquired in summer 2016).
The new Athabasca basin mineral tenure is represented by a 100-per-cent interest in six mineral tenure claims (MC00005021, MC00005022, MC00005023, MC00005024, MC00005025 and MC00005026). Combined, the acquired tenure consists of approximately 26,041 hectares (approximately 64,323 acres). The first exploration work assessment period for this new tenure is late August, 2018.
The area involving the acquired tenure has historically been held by other exploration companies searching primarily for uranium. However, the newly acquired tenure is also in close proximity to the continuing diamond exploration drill program under way by CanAlaska Uranium Ltd. and De Beers Canada Inc. (see CanAlaska Uranium news release dated Sept. 9, 2016).
The corporation has assigned this new tenure to its Athabasca diamond project and the mineral claims were granted by the government of Saskatchewan on Aug. 29, 2016. The new mineral claims were acquired directly by the corporation through staking and are royalty free.
We seek Safe Harbor.
Comment by Jon - BMR — September 12, 2016 @ 1:07 pm
From NuLegacy (NUG, TSX-V) this morning, 1.8 km NW of Iceberg deposit:
NuLegacy Gold Corp.’s assay results from hole AV-02 confirm the Avocado induced polarization/resistivity anomaly hosts a Carlin-type gold deposit. This is the second Carlin-type gold deposit (Iceberg being the first) discovered within NuLegacy’s 100% owned 38 sq. mile Cortez-trend property (the Red Hill project) in Nevada.
Hole AV-02, located 1,750 meters north-west of the Iceberg gold deposit, has discovered a massive bloom of gold grading 0.26 g/t over 199.7 meters (655 feet) including 24 and 35 meter intervals of 0.5-gram material, and 10 and 13 meter intervals of better than 1.0-gram material (details in table below). The gold mineralization is continuous from a depth of 415 meters to the bottom of the hole at 615 meters (200 m interval). Plan map link – http://nulegacygold.com/i/pdf/ppt/2016-09-06/2016-09-NUGPPT-page-30.pdf
Comment by Jon - BMR — September 13, 2016 @ 5:28 am
Bonterra (BTR,TSX-V) looking strong in early trading today, appears to finally be gaining traction above .40.
Comment by Jon - BMR — September 13, 2016 @ 5:57 am
HVU looking great
Comment by omega — September 13, 2016 @ 6:15 am
Some big questions to be answered in next io days or so on a number of stocks. For example CXO, are they still drilling, assay results needed,are the two sites connected, do they need more money, snow is very near can they drill during winter etc. etc.
Comment by charleybarley — September 13, 2016 @ 7:30 am