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Gold has traded between $1,261 and $1,269 so far today…as of 9:30 am Pacific, bullion is down $1 an ounce at $1,264…Silver has shed 6 cents to $17.43…Copper is flat at 2.10…Crude Oil is unchanged at $50.63 while the U.S. Dollar Index continues its surge, up half a point at 98.77…next resistance is 100…the U.S. economy this year suffered the affects of a high dollar in 2015, so expect more of the same next year…ironically, as the Fed plays its game with the markets on interest rates, and tries to rescue its credibility, it’s driving up the value of the greenback due to speculation which in turn is importing deflation (counter to Fed goals) and making American exports more expensive…combine that with many Americans, including businesses, suffering from the rising costs of Obamacare, plus excessive taxation and over-regulation, and you have an economy that’s sputtering and performing far below its potential…

The Chinese yuan hit a 6-year low against the U.S. dollar today, which prompted some concerns about flight of capital from the yuan into other currencies…meanwhile, Bank of Japan governor Kuroda said today the central bank will continue its “extremely accommodative, expansionary monetary policy”…

Gold is on track for its first weekly gain in 4 weeks on steady physical buying from Asia (China and India) and exchange-traded funds…holdings of SPDG Gold Trust rose another 0.31% to 970.18 tonnes yesterday…holdings are now up 2.3% this month despite a 5% drop in prices…

Continued ETF buying shows the strong investment demand for Gold and this could allow the metal to remain above the low $1,240’s where it plunged to earlier this month, despite the rising greenback…

Inflows into global commodity exchange-traded products continued in September, with precious metals the key driving force…Barclays reported today that overall commodity ETPs posted a modest inflow of $1.7 billion last month…although lower than the year-to-date monthly average of $3.9 billion, this nevertheless means that commodities ETPs collectively have seen inflows every single month so far in 2016, “Precious metals remained the driving force behind ETPs inflows, bringing in $1.64 billion, while ETPs linked to other sectors saw only $0.1 billion of inflows,” the bank says…

BHP Bullish On Nickel 

BHP Billiton (BHP, NYSE), the world’s largest mining company, sees the Nickel market swinging into deficit because of supply threats in the Philippines and growing demand from electric vehicles and stainless steel…

“There are signs that this year could be finally the turning point for Nickel with many expecting the market to be in deficit and so starting the much needed re-balancing process,” Eduard Haegel, asset president of BHP’s Nickel West unit, said at a conference in Perth yesterday. “The welcome return to balance over the next few years should see further recovery in Nickel prices.”

Nickel has rebounded more than a third from a decade+ low in February this year…prices have been buoyed as the market awaits the final results from a nationwide audit in the Philippines, the world’s largest producer, which was ordered by President Rodrigo Duterte to ensure producers aren’t “flouting” environmental rules…the truth is, Duterte and his government have a decidedly anti-mining ideology and the industry there will likely never be the same under his party’s rule…

“The current situation in the Philippines where mines representing around half of the country’s annual Nickel output are facing potential suspension could hasten this by disrupting more supply,” Haegel said, referring to the market rebalancing…there’s a high level of uncertainty surrounding the changes, he told reporters after his presentation…

The Philippines accounts for about a quarter of global mined Nickel supply, with most cargoes going to China…banks including Goldman Sachs Group have expressed concern that the closures will crimp output and push up prices…Nickel traded at $10,290 a metric ton yesterday compared with the February low of $7,550…

Indonesia used to be the biggest supplier of Nickel ore to China before it banned shipments in 2014 to build a domestic smelting industry…the country is considering changes to export rules with a decision expected in weeks…the government recently hinted that it will likely keep a ban on raw Nickel ore and bauxite sales after earlier suggesting the moratorium may be eased…

Demand for Nickel is being driven by stainless steel use in China and by Lithium-ion battery makers for electric vehicles…overall Chinese consumption will remain critical in determining the extent of Nickel’s strength next year…the availability of a cheaper substitute, Nickel pig iron, from smelters in Indonesia coming online could reduce Chinese demand for more expensive refined Nickel…it’ll also be important to keep an eye on the Chinese housing sector which significantly impacts steel production…

Oil Update

Russia has reiterated its commitment to joining a producers’ output freeze to stem a two-year slide in prices…Energy Minister Alexander Novak said today that an Oil output freeze agreement was necessary to prop up prices and that he would make proposals to his Saudi Arabian counterpart this weekend…

OPEC will hold a meeting on November 30 to find common ground on capping Oil production…the cartel is expected to work out how each member country will contribute to a freeze at the gathering…

“The near-term fundamentals in the oil market have turned positive. Demand is stabilizing, OPEC production has peaked (and will fall if cuts are implemented), and global inventory declines imply that the market is more balanced than many believe,” Neil Beveridge of Bernstein Energy said in a note to clients…

Bigger Government And “Stimulus Spending” = Growth???

Not surprisingly, a structural deficit problem has emerged in Canada – one the mainstream media is mostly ignoring of course…

A slipping Canadian economy, highlighted by another downgraded Bank of Canada forecast, could add billions of dollars to the federal deficit, as Finance Minister Bill Morneau is cautioning that the government’s November 1 fiscal update will show economic challenges have been greater than expected…the Bank of Canada now forecasts real GDP to grow just 1.1% in 2016, down from a July projection of 1.3%…for 2017, the bank projects the economy to grow 2%, down from its previous estimate of 2.2%, but what if that estimate also falls short?…

The federal budget projected a deficit of $29.4 billion in 2016-17 (based on a $6 billion contingency in case of slower-than-expected growth), after the Liberals took over a surplus in late 2015…

A TD Economics report released last week projected the federal deficit will reach around $34 billion in the current 2016-17 fiscal year – close to $5 billion higher than forecast in the March budget…

Derek Burleton, deputy chief economist with TD Bank Financial Group, said their data suggest it’s clear “deficits are going to be higher” than initially forecast…

As it turns out, Prime Minister Justin Trudeau will not be able to spend Canada rich by going into massive public debt to “stimulate” the economy…that just doesn’t work, but millions of Canadians (especially younger ones) believe it does…”stimulus spending” is crafty liberal language for bigger government which only leads to higher taxation, and not just more taxes for the so-called “rich”…

The situation is the United States is no different…growth is anemic at a time when the Federal Reserve is in a “tightening” mindset simply to save its credibility…a Hillary Clinton administration would attempt to grow government and spend its way to an elusive new American prosperity, rather than attacking an over-regulated, over-taxed system and doing all that’s necessary to unleash the power of the private sector…the result could be a U.S. recession and ballooning deficits and debt, a perfect recipe for much higher Gold prices…

In Today’s Morning Musings…

1. A 5-bagger over the next 10 months…

2. Gold in Canadian dollars – strong case for another big leg up!…

3. TSX breakout looming – is the Venture next?…

4. Daniel’s Den – the IP leader in wearable technology, and two top-tier undeveloped Gold projects…

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…