BullMarketRun.ca

TSX Venture Exchange and Gold

The Venture behaved as expected last week, taking the path of least resistance to the early 2015 high of 708 and then beyond.  The Index didn’t turn shy at the sight of 708 and ripped through that level decisively on big volume Wednesday.  On Friday morning, the Venture came within 4 points of key resistance at 727 before backing off and finishing at 715 for a weekly gain of 22 points.

In today’s Week In Review And A Look Ahead…

1. Profit from the Venture’s incredible upsloping channel – what John’s latest chart tells us to expect…

2. Gold climbs $30 an ounce for the 2nd straight week – highly reliable chart shows us next key levels to watch…

3. Implications of the U.S. dollar going down the drain…

Click here to read the rest of today’s report, the Sunday Sizzler with more great picks, and all BMR exclusive content by taking advantage of our Spring Sizzler Subscription Special, or login with your username and password.

Gold has traded between $1,264 and $1,279 so far today…as of 9:00 am Pacific, bullion is flat at $1,270…Silver is also unchanged at $17.22…Copper is steady at $2.05…Crude Oil has dipped $1 a barrel to $49.54 while the U.S. Dollar Index has rallied one-quarter of a point to 94.41…

Holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, rose 0.71% to 887.38 tonnes yesterday, the highest since October 2013…year to date, all-ETF investment in Gold has risen by 12 million ounces to 52 million ounces…

Gold continues to benefit from multiple factors including negative yields across many parts of the globe…the 10-year Japanese government bond yield hit a record low of minus 0.155% today while British and German sovereign debt yields also fell to record lows on jitters ahead of Britain’s referendum on European Union membership later this month, as well as the ECB’s commencement of its corporate bond purchase program…

Jim Steel, chief commodities analyst at HSBC, observed: “As far as the geopolitical element, it’s certainly not a chicken little atmosphere.  I think there’s enough uncertainty facing the global economy and even some geopolitical tensions to keep buying the Gold market.”

“I think the key element more than any one geopolitical issue, even as much as the Fed holding off a spate of rate rises, is some economies moving into negative rates. That has been very good for Gold. When you look at when the Gold rally began it is very close to the issue of bonds with a negative yield.  If you look at all the economies that have a negative yield, they add up to a little over 27% of the world’s GDP.  Negative yields are a powerful cocktail for Gold. They eliminate the opportunity cost of owning Gold,” Steel concluded.

The Supernova About To “Explode”

Bond guru Bill Gross believes the growing global move toward negative yields will have dire consequences…in a tweet this morning from his firm, Janus Capital, Gross went back half a millennium to assert that the current situation with the world’s debt market is unprecedented and dangerous.  “Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day.” 

How soon that day will be, and how Gross tracked bond yields back to the 16th century, we’re not quite sure…but the fact remains, the trend toward negative yields has been accelerating rapidly and that can’t be viewed as a good thing – unless you’re invested in Gold…

Oil Update

Baker Hughes rig data comes out at 10:00 am Pacific, and investors will be paying close attention to those numbers…at $50 per barrel, analysts have expected to see a return of some drilling activity in the U.S., and last week’s data showed 9 Oil rigs were added…that makes a total of just 10 new rigs this year…

A drop in U.S. production, supply disruptions in Nigeria as well as strong overall demand for Oil, especially from refineries, have given WTI prices a strong bid and pushed them above $50 a barrel this week for the 1st time since July of last year…

The bear market in Crude Oil ended in mid-February at $26.05, just a few weeks after the Venture finally hit bottom at 466, and WTI prices are now at their highest level in nearly a year…as a result, the 200-day moving average (SMA) has reversed to the upside, confirming the change in the primary trend…a strong new support band now exists between $42 and $46, so any pullback is highly unlikely to dip below that area…

By early summer it’s reasonable to expect WTI to challenge resistance around $54 a barrel…risks are skewed to the upside, the opposite of the situation at this time last year…

In today’s Morning Musings…

1.  “More upside and potential than originally realized” in exploration at Cajueiro: Equitas Resources (EQT, TSX-V) CEO…

2.  Athabasca Nuclear becomes Clean Commodites (CLE, TSX-V)…

3.  More capital pours into Lithium sector – Nemaska Lithium (NMX, TSX-V) to raise $50 million…

4.  Gainey Capital (GNC, TSX-V) targets high-grade zones in early drilling at El Colomo in Mexico…

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, 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…

Gold has traded between $1,256 and $1,272 so far today…as of 9:30 am Pacific, bullion is up $8 an ounce at $1,270 after yesterday’s strong move back above its 50-day moving average (SMA)…Silver has added 22 cents to $17.23 after posting its biggest 1-day gain in 8 weeks yesterday…Copper is off 2 pennies at $2.07…Crude Oil has slipped 75 cents to $50.48 while the U.S. Dollar Index has rallied half a point 94.06 but that’s not holding back Gold…

Gold is trading at a 3-week high on prospects that central bank policies will continue to be accommodative, with the European Central Bank embarking on a corporate bond-buying program and investors betting that U.S. rates will stay lower for longer…the ECB plunged into the corporate bond market yesterday, buying the debt of some of the continent’s biggest companies…

Meanwhile, ECB President Mario Draghi issued a strong warning today, saying the euro zone is at risk of suffering lasting economic damage in the face of weak output and productivity…monetary policy alone cannot generate growth, he told an economic forum…Draghi is absolutely correct…the ECB doesn’t have a monopoly on dysfunctional governments, though…many countries and provincial/state jurisdictions around the world, including North America with the Obama-Trudeau-Wynne-Notley approach, are stifling growth and productivity through over-regulation, excessive personal and corporate taxation, and a general level of government involvement in economies that’s literally smothering the private sector…

Billionaire investor George Soros recently directed a series of “big, bearish investments” after a long break from trading, according to a report in the Wall Street Journal…Soros Fund Management, which handles around $30 billion for the Soros family, sold stocks and bought Gold and shares in Gold miners, amid a “gloomier” view of the global economic outlook and the potential for large market moves…in an interview by email with the news outlet, Soros noted particular concerns over capital flight from China, as well as how the mainland’s political milieu may prevent lasting reform…

Zinc Picks Up Steam

Zinc has climbed to its highest level in almost 11 months…Goldman Sachs has dubbed it the “bullish exception” among base metals amid a widening shortage…

Barrick Gold (ABX, TSX) Tops List For Major Producers With Lowest All-In-Sustaining Costs

Most Gold producers continued to reduce expenses in the 1st quarter with the all-in sustaining cost per ounce for the top 17 publicly listed Gold companies coming in at a weighted-average of $833 U.S. an ounce, according to a report from the mining consultancy SNL Metals & Mining…the lower costs came as Gold prices rose strongly in Q1, improving the profitability picture for producers…

Barrick Gold (ABX, TSX) had the quarter’s lowest AISC at $706 per ounce of Gold produced, which was $130 less than the group median of $836 per ounce, SNL said…Barrick primarily benefited from operating and capital-cost control initiatives, and from lower fuel prices and foreign-exchange gains…Northern Star Resources (NST, ASX) was next lowest with an AISC of $711 per ounce…this was a 5% decline from the previous quarter and a 30% drop from the year-ago quarter, mainly due to lower contracting, labor and supply rates that became effective January 1…Newcrest Mining (NCM, ASX), another Australian producer, achieved the third-lowest AISC at $723…

IAMGOLD (IMG, TSX) reported the highest AISC, compared with the 17 peers included in the study, at $1,084 per ounce of Gold sold…lower sales and an increase in sustaining capital were the culprits…other companies at the higher end of the AISC spectrum were Centerra Gold (CG, TSX) and Gold Fields (GFI, JSE) with AISC of $1,015 per ounce and $961 per ounce, respectively…

Gold 7-Month Daily Chart

Gold has responded bullishly after successfully testing a key support band between $1,200 and $1,220…the metal overcame resistance at its 50-day SMA yesterday, currently $1,249, and what’s critical now is whether the RSI(14) on this 7-month chart can push above a downtrend line…if it does, then +$1,300 Gold becomes a distinct near-term possibility…the ADX trend indicator has turned bullish again after bullion’s sell-off during the last half of May…

The fact the Venture is now hitting new 52-week highs suggests the greater probability is that Gold keeps moving higher…tomorrow’s trading to finish the week will be important…

In today’s Morning Musings…

1.  GoldQuest Mining (GQC, TSX-V) closes $5.7 million financing, increases upcoming drill program to 10,000 m

2.  Kootenay Silver (KTN, TSX-V) in perfect rhythm…

3.  Kitsault district getting more attention as Homestake Resource (HSR, TSX-V) and Dolly Varden (DV, TSX-V) strengthen on Hecla (HL, NYSE) land grab…

4.  How Equitas Resources (EQT, TSX-V) is creating a bigger opportunity at its newly-acquired Gold project in Brazil…

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, 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…

Gold has traded between $1,247 and $1,265 so far today…as of 9:45 am Pacific, bullion is up $17 an ounce at $1,260…Silver has jumped 63 cents to $16.97…Copper is flat at $2.07…Crude Oil, touching its highest level since July of last year, has surged 82 cents to $51.18 while the U.S. Dollar Index has fallen one-third of a point to 93.51…

Nervousness over Britain’s referendum on its EU membership on June 23 is one factor giving Gold a strong bid today, while expectations of a Fed rate hike in either June or July have dwindled substantially among mainstream investors with the greenback suffering as a result…

Commerzbank expects China’s central bank to continue purchasing Gold to diversify reserves, even though the People’s Bank of China did not do so last month for the first time since it started releasing data on a regular basis in the summer of the last year.  “We are confident that China will further top up its Gold reserves in future and that its reluctance to make any purchases in May was only temporary. After all, by international standards Gold accounts for only a very low proportion of China’s currency reserves.”

Global Growth Keeps Slowing – World Bank

The World Bank has trimmed its global GDP outlook due to sluggish growth in advanced economies, weak global trade and diminishing capital flows…the global economy is forecast to grow 2.4% this year instead of the 2.9% projected in January, the bank said in its June Gloal Economic Prospects report released today…the 2016 growth forecast for the U.S. was slashed to 1.9% from 2.7%…similarly, the projection for the next year was lowered to 2.2% from 2.4%…China is forecast to grow at 6.7% in 2016 and 6.5% next year…both figures were left unrevised…the World Bank observed that a gradual domestic re-balancing is underway, with robust growth in services and policy support measures mitigating the slowdown in industrial activity…

The Trump-Clinton Cage Match & Gold

Hillary Clinton claimed her place in history last night as America’s first female presumptive Presidential nominee, though the FBI Primary could yet derail her candidacy, but this is also the same woman who just last month, during a speech in Kentucky, referred to “my husband, who I will put in charge of revitalizing the economy ’cause he knows what he’s doing'”…good grief…she has already undermined the significance of her Democratic nomination, but by letting the man handle such an important job perhaps she’ll have the time to address national security issues and those critical 3:00 am phone calls like she did so well(?) as Obama’s Secretary of State…it’ll be fascinating to see how Clinton, uninspiring and pulled hard to the left by the Sanders’ campaign, fares in The Ultimate Cage Match with Donald Trump who KO’d 16 other strong Republican challengers…the blue collar billionaire should not be underestimated by anyone given his communication skills and the fact that the electorate is really yearning for something different and anti-establishment – the opposite, in other words, of what Clinton represents…keep in mind that Trump will not only have to overcome Hillary but BOB as well – Bill, Obama and Bernie…Gold wins either way this November, either through the world’s shock of Trump capturing the White House or another 4 years of bigger government and out-of-control U.S. debt…the greenback is in trouble…

Ontario:  Watch Your Wallets!

Ontario’s disastrous new “climate change action plan” is coming after your pocketbook and your lifestyle, if you’re a resident of that liberal stronghold…this social engineering scheme, officially being unveiled today by a government that has already proven itself to be incompetent on a host of issues, will cost up to $8.3 billion over the next 5 years according to information obtained by the Canadian Press – but Premier Justin Wynne ‘s initiative will save the planet, of course…the government has already admitted that the plan will add to monthly home heating bills (only $5 a month they claim) and the price of gasoline (an extra 4.3 cents a liter is your punishment for using that bad stuff)…

Companies Are Lining Up For This Invitation!

What a joke – Venezuela President Nicolas Maduro announced yesterday the creation of a ministry devoted just to mining as the failed socialist state, in total turmoil, attempts to develop untapped mineral resources to diversify away from the Oil industry which provides nearly all its foreign exchange.  “I announce the creation of the new ministry of popular power for ecological mining development,” Maduro proclaimed in his weekly program on state television, appointing Robert Mirabal to lead the ministry with a mandate to build international partnerships with foreign investors to boost Gold production…invading Venezuela would be a better idea…

In today’s Morning Musings…

1.  Equitas Resources (EQT, TSX-V) CEO interview as company announces major funding initiative for Brazil Gold Project…

2.  Eskay Mining (ESK, TSX-V) in “Elephant Country” next to Eskay Creek, KSM and Brucejack…

3.  Pure Energy (PE, TSX-V) update…

4.  Long-term CRB chart points to explosive 2nd half of 2016… 

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, 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…

Gold has traded between $1,234 and $1,245 so far today…as of 11:00 am Pacific, bullion is flat at $1,254…Silver is off 8 cents at $16.36…Copper has tumbled 6 cents to $2.07…Crude Oil, hitting a nearly 8-month high today, is up 37 cents at $50.06 while the U.S. Dollar Index has slid one-tenth of a point to 93.86…

China’s Gold reserves were unchanged at 58.14 million ounces at the end of May, from the end of April, according to a statement from the country’s central bank today…

Holdings in the world’s largest Gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, fell slightly to 881.15 tonnes yesterday but have increased 12.5 tonnes over the past week…

BMO Capital Markets remains bullish on Gold for the 2nd half of 2016, commenting that “pullbacks should be viewed as buying opportunities.  The underlying driver for our positive view on Gold prices remains safe-haven demand in an uncertain global economic environment. We believe focusing on the Fed alone is simplistic and only drives very near-term sentiment and volatility. We believe the potential impact of sluggish global growth on the U.S. economy should not be ignored. Despite the central banks in Europe, Japan and China recently lowering rates, money supply growth has stalled along with inflation. Global industrial output remains lackluster.”

Britons Leaning Toward “Brexit”?

Three new large-scale opinion polls by different companies published Sunday and yesterday showed the Vote Leave side with a lead of between 3 and 5 percentage points, pushing it beyond the margin of error for the first time in the closely fought campaign over the UK’s continued membership in the EU…the apparent surge in support for a so-called “Brexit” is due to a growing number of Britons seemingly swayed by the argument that their country needs to quit the EU in order to take back control of its borders and immigration policy, a theme that’s also resonating with American voters leading up to November’s U.S. elections…keep in mind, however, that British pollsters took a drubbing after last year’s general election where none predicted the eventual outcome which was a majority victory for David Cameron’s Conservatives…

Government Greed/Intimidation As Kyrgyzstan “Turns Up Heat” On Centerra Gold

The left always bemoans “corporate greed” on a global scale but it conveniently ignores government greed which is on great display in North America and throughout the world…the Central Asian state of Kyrgyzstan, dealing with a deteriorating economy, wants more from the prized Kumtor Gold mine and has been “turning up the heat” on Centerra Gold (and others) in recent weeks for a bigger slice of mining profits…this greed has also crossed all legal boundaries…in the past 5 weeks, the Canadian Gold miner and its investors have been attacked by Kyrgyzstan authorities on numerous fronts…Centerra was fined around $100 million for “environmental damage” by a court in Kyrgyzstan, another regulator filed a $230 million lawsuit against it while its local offices have also been raided…yesterday, Centerra announced that the Kyrgyz general prosecutor’s office has launched a criminal case over allegations that certain company managers abused their authority and engaged in commercial transactions that harmed the state…the company has initiated international arbitration proceedings to challenge the Kyrgyz Republic’s claims and actions, while it’s also evaluating the full range of additional options for dealing with the government’s over-reach…CG is under some additional selling pressure this morning, down 36 cents at $6.83 as of 11:00 am Pacific…

In today’s Morning Musings…

1.  Homestake Resource (HSR, TSX-V) has a big new neighbor…

2.  Lithium plays dominate the Venture volume leaders this morning…

3.  A 2-cent stock coming out of hibernation with a Quebec Gold play…

4. A Zinc junior worth having on one’s radar screen…

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, 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…

Gold has traded between $1,240 and $1,248 so far today…as of 9:30 am Pacific, bullion is down $3 an ounce at $1,240…Silver is off a nickel at $16.34…Copper is unchanged at $2.13…Crude Oil has climbed nearly $1 a barrel to $49.56 while the U.S. Dollar Index is down slightly at 94.06 after Friday’s bloodbath when data showed that the U.S. economy created the fewest number of jobs in more than 5-and-a-half years in May…the Dollar Index posted its worst single day drop in nearly 4 months…

Holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, rose 0.7% to 881.44 tonnes on Friday, the highest since October 2013…

Gold imports by India, which vies with China for top bullion consumer, tumbled for a 4th straight month…inbound purchases apparently dropped 51% to 31 metric tons in May from a year earlier…the country imported 22 tons in April…festival buying typically picks up in August…

Expectations for Federal Reserve rate hikes have fallen back to the levels of last month prior to Gold’s late May/early June sell-off, Commerzbank says, meaning the yellow metal may have room for further near-term gains after Friday’s big advance.  “According to Fed fund futures, the probability of a Fed rate hike in June is now just 4% and less than 30% in July,” Commerzbank noted.  “The probability of a rate hike by year’s end is envisaged as being just shy of 60%.  In other words, rate-hike expectations are essentially back at their mid-May level before the publication of the Fed (April) meeting minutes caused them to rise.  At that time, Gold was trading at $1,280 per troy ounce. Against this backdrop, Gold thus has further upside potential.”

Traders and investors will be looking for further clues on interest rates when Fed Chair Janet Yellen gives a speech, just getting underway now (9:30 am Pacific), at the World Affairs Council of Philadelphia…earlier today, Boston Fed President Eric Rosengren, a voting member, said the U.S. economy’s recent recovery (what recovery has there been????) has moved the Fed closer to raising rates, although May’s “disappointing” employment report might delay the timing of the next hike…it’s best to ignore anything that comes out of the mouths of Fed officials these days…

Crude Oil Update

Crude prices remain sensitive to any kind of supply disruption…Exxon Mobil this morning reported a pipeline failure and spill at its Torrance refinery near Los Angeles…that facility just recently resumed full operation following a 2015 explosion…meanwhile, continued attacks on Oil infrastructure in Nigeria have sent the country’s output to more than 20-year lows…so far, supply cuts like those in Nigeria or Libya have been met by rising output in the Middle East, particularly from Iran which has ramped up production since the end of international sanctions against it in January…

Rising prices have encouraged U.S. producers to cautiously increase activity…drillers added 9 Oil rigs in the week to June 3, raising the rig count to 325…that’s still well below the 642 at work a year earlier, however, according to the latest figures from Baker Hughes.  “While not enough to materially change the outlook for U.S. production…there are some early signs that rigs may be returning in the best acreage, namely the Permian Basin,” Morgan Stanley said…

U.S. Crude Oil production has fallen by 5.4% since January and by almost 10% since mid-2015 to 8.74 million barrels per day…

Meanwhile, global Oil demand is on the upswing as shown in this long-term forecast from the International Energy Agency…

Many prominent analysts, including British financials firm Standard Chartered’s chief economist, now see Oil climbing above $60 by the end of the summer, and that also jives with our own bullish CRB charts…Goldman Sachs also appears to have turned bullish, noting that global storage levels are heading into a deficit “much earlier than we expected”…

In today’s Morning Musings…

1.  Silver’s bullish path for 2016…

2.  Updated chart for Colorado Resources (CXO, TSX-V) which has hit levels not seen since September 2013…

3.  The Dominican Double Play…

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, 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…