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Gold pushed to a new 3.5-month high today, reaching $1,265, on momentum and further weakness in the U.S. Dollar Index…as of 11:00 am Pacific, the yellow metal is now flat at $1,257 after reacting at its 200-day moving average (SMA) which is at least temporary stiff resistance…Silver is unchanged at $18.33…Copper is up a penny at $2.69 while Nickel has climbed 8 cents to $4.98…Crude Oil is 19 cents higher at $54.18 while the U.S. Dollar Index has slipped one-fifth of a point to 101.08…

Bets on higher Gold prices can be seen in data from the Commodity Futures Trading Commission, showing hedge funds and money managers holding the largest net long positions in COMEX Gold in nearly 3 months during the week ending February 21…

Russia increased its Gold reserves by 37 metric tons in January, according to Sputnik News (more reliable than CNN), which is equivalent to more than a million troy ounces…last month’s purchase comes after a pause in December when Russia did not buy any Gold…

Silver has posted 9 straight weekly gains, its best weekly streak since May 2006…a 9.6% drop in supply over a 36-month rate of decline in supply for the metal is the steepest production decline since the World Bureau of Metal Statistics began tracking such information in 1995…

The last time U.S. inflation rates were this high (2.5%) was back in 2012 when Barak Obama was in office while Gold was $1,800 per ounce…

Markets Brace For President Trump’s Speech

President Trump’s first budget will seek a sizable increase in military funding but won’t make changes to the largest future drivers of government spending: Social Security and Medicare…work to prepare the President’s first budget proposal, expected to be released in mid-March, ramped up last week following the February 16 confirmation of Mick Mulvaney as director of the Office of Management and Budget…Trump will preview some of the budget priorities in his speech to Congress tomorrow night and release a budget outline in mid-March after gathering information from federal agencies…

Markets also hope Trump will provide further details on his tax plans and other policy positions in tomorrow night’s speech…White House Press Secretary Sean Spicer said, “The address will particularly focus on public safety including defense, increased border security, taking care of veterans, and then economic opportunity including education, job training, health care reform, jobs and tax and regulatory reform.”

Odd’s ‘n Ends

Australian Gold output hit a 17-year high of 298 tonnes in 2016 as higher bullion prices drove mining companies to dig deeper, a sector survey released yesterday showed…a robust world Gold price and favourable foreign exchange rates for most of the year that boosted prices for local producers were the factors behind the increase, according to the survey by Australian mining consultancy Surbiton Associates…

Societe Generale sees continued robust demand for Palladium.  “The average Palladium loading on a Chinese gasoline car is set to grow again next year, as Chinese standards for light-duty gasoline vehicles are implemented nationally,” said Societe Generale analyst Robin Bhar.  “The demand outlook remains less compelling for Platinum due to its exposure to diesel technology, which remains under scrutiny from the emissions scandal.”

Billionaire investor Warren Buffet told CNBC this morning that U.S. stock prices are “on the cheap side” with interest rates at current levels…the chairman and CEO of Berkshire Hathaway said he put $20 billion into the market since just before the November U.S. elections…“We are not in a bubble territory” in the stock market, he said on “Squawk Box“…if rates were to spike, however, then the market would be more expensive, he added…

If the Canadian federal government were a business with a listing on the TSX, the stock would be in a nose dive…it was reported late last week that the Feds ran a budgetary shortfall of $14 billion over the first 9 months of the fiscal year, compared with a $3.2 billion surplus over the same period a year earlier…that’s what will happen when direct program spending jumps an astonishing 11.3%…the Liberals in Ottawa are spending money like drunken sailors, acting very differently in fact from the Liberals who were in power in the 1990’s…Canadian taxpayers, ultimately, will be ones who get screwed…

The Trudeau government is projecting a $25.1 billion deficit for 2016-17 as part of its plan to run several double-digit shortfalls over the coming years (those shortfalls, Canadians were assured during the election campaign, were not going to exceed $10 billion a year) in an effort to “lift” the economy…

Cobalt Chart Update

Cobalt prices are at multi-year highs, approaching $22 a pound U.S. with key resistance around $24 to $25, the late 2009-early 2010 high…note how the price spiked to more than $50 a pound in 2007 – who’s to say that can’t happen again, especially given today’s dynamics?…

In Today’s Morning Musings…

1. TSX Gold Index update – 6 straight down sessions while Gold climbs into the $1,260’s?…

2. The opportunity in Transition Metals (XTM, TSX-V)…

3. Checking in on Chibougamau…

4. Daniel’s Den – KOPN gets ready to heat up again…

Click here to receive, via email, BMR’s “Who’s Who” List of the Greater Cobalt Camp – the top dozen or so companies active in the district.

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