Check back later today for an additional post and visit the BMR comments section throughout the day for updates and helpful information.
1. Gold has traded between $1,307 and $1,318 so far today…as of 7:00 am Pacific, bullion is off $4 an ounce at $1,314…Silver is flat at $16.34…Copper is unchanged at $3.11 while Nickel has slipped 7 cents to $5.91…Cobalt has hit another new decade high of $36.74 while Crude Oil is relatively unchanged at $61.75…the U.S. Dollar is flat at 90.24…renewed growth in emerging markets will help drive Gold prices higher, according to commodity analysts from Goldman Sachs who have significantly boosted their forecast for the yellow metal…in a report issued today, the global investment bank said that in 3 months, it sees Gold prices pushing to $1,350 an ounce, rallying to $1,375 by the summer and $1,450 an ounce by next year…the revisions are up substantially from the bank’s previous forecasts of $1,225, $1,200 and $1,225, respectively…
2. This will be bullish for Gold – trillion dollar U.S. budget deficits will be the norm again in Washington after Republicans have failed yet again while in power to restrain government spending, let alone reduce it as they had promised in the lead-up to the November 2016 elections…the spending deal reached by congressional leaders yesterday marks an end to the budget austerity Republicans sought to advance in Washington in 2011 during the Obama era…back then, Republicans negotiated a series of automatic curbs on defense and domestic discretionary spending with Obama that, along with a growing economy and ultra-low interest rates, helped bring down deficits…now, party leaders have made a U-turn…in December, President Trump signed into law tax cuts of $1.5 trillion over a decade, and congressional leaders yesterday agreed with Democrats to boost federal spending by nearly $300 billion over 2 years from what was already in train…deficits tend to increase during downturns and get pared back as an expansion advances…this cycle of rising deficits late in the expansion, similar to the situation in Canada, thus marks a twist from typical events…fiscal stimulus at a time when central banks are in tightening mode…how it will end is anyone’s guess, but probably not well…
3. Should this come as any surprise?…environmental activists (Oil-hating globalist climate change extremists) and others in Quebec have started buying B.C. wine in what they call a statement of solidarity with the West Coast…this, of course, comes after Alberta Premier Rachel Notley said her province has banned wine imports from its western neighbor due to B.C.’s illegal and unconstitutional action to thwart the already approved Kinder Morgan pipeline expansion…the Quebec campaign, which has rallied around the hashtag #QClovesBCwine, began Tuesday, the same day that Notley announced that the Alberta Gaming and Liquor Commission (AGLC) would put an “immediate halt on the import of B.C. wine into Alberta.” The next measure Notley should seriously consider is to cut off B.C.’s supply of Alberta refined products by pumping the Trans Mountain pipeline exclusively with diluted bitumen (in other words, stop the flow of gasoline and diesel which would jack up B.C. gas prices while limiting damage to Alberta)…Trans Mountain is the only pipeline in North America that carries both refined product and Crude Oil in a process known as “batching”, sort of like a series of rail cars carrying different products moving in a sequence along the 1,150-km pipeline…
4. Tesla (TSLA, NASDAQ) soothed some investor concerns yesterday by delivering Q4 results that beat analyst expectations, reiterating that it’s on track to reach its latest Model 3 production goals while slowing its white hot cash burn rate…Tesla expects to meet its goal of producing 5,000 Model 3 cars a week by the end of the 2nd quarter (the original plan was to reach that target by the end of 2017)…once it reaches its 5,000 per week target, Tesla’s next focus will be on hitting its planned 25% gross margin…producing the Model 3, a sedan that starts at $35,000, on a mass market scale is widely considered crucial to the company’s ambition of becoming a major automaker…hopes that it will hit this target are considered one of the primary factors that have pushed Tesla’s share price far above those of its much larger and profitable U.S. competitors, Ford and GM…
5. The Dow is down 135 points through the first 30 minutes of trading after its biggest single-day reversal in 2 years yesterday…the benchmark 10-year U.S. note yield nearly surpassed a 4-year high of 2.885% this morning, a level that helped trigger a global sell-off in equity markets on Monday…the rise in yields and sharp moves in obscure volatility funds that use leverage have contributed significantly to the market’s recent pullback and the volatility spike…Twitter shares are up about 20% after the social media company reported a net profit for the first time and returned to revenue growth…the TSX, still trying to work its way out of very oversold conditions, is up 15 points while the Venture has added 3 points to 834 as of 7:00 am Pacific…Cornerstone Metals (CCC, TSX-V) has completed a 20-hole, 1,600-m infill diamond drilling program at its Carlin Vanadium Project in Nevada – one of the North America’s largest and richest known primary deposits of Vanadium…“Another planned milestone has been reached with the completion of this drill program, with the next milestone targets in sight,” said Cornerstone President and CEO Paul Cowley. “Once all assays are disseminated, we will adjust the geological model as needed and move toward producing an updated mineral resource estimate. We are advancing briskly toward positive results for this extraordinary project”…Kings Bay Resources (KBG, TSX-V) appears to be throwing in the towel on mineral exploration to venture into the marijuana sector…the company stated this morning that “despite some encouraging results and a great deal of potential still to be explored on the large Lynx Lake Copper-Cobalt Property…Kings Bay is considering other business ventures…it has considered becoming involved in one of the industries which has recently become a great focus for certain capital markets: cannabis. The reason for the company’s interest in the cannabis industry is because opportunities are being presented to the company as a result of the involvement of certain of the company’s directors in successful, publicly listed cannabis companies”…if they can’t succeed at mineral exploration, why should investors believe they can make a pot company work?…
6. Sign of the times: Canaccord Genuity Group (CF, TSX) posted record revenue and a $37-million profit – its best in 7 years – in the quarter that ended in December, thanks to the interest in pot stocks…revenues from its life sciences investment banking group, which handles the marijuana sector, soared and, at 32%, now comprise the largest share of the dealer’s investment banking and advisory revenues in fiscal 2018…CEO Dan Daviau says he’s confident the jump in business will continue…in the past month alone, Canaccord bankers advised Aurora Cannabis (ACB, TSX) on a $1.2-billion takeover bid for CanniMed Therapeutics (CMED, TSX), and advised Nuuvera (NUU, TSX-V) on a $826-million takeover offer from Aphria (APH, TSX)…revenues on those deals have yet to be booked…Canaccord has also been behind many financings in the cannabis sector ahead of the coming federal legalization of recreational marijuana…
7. The Mother of all Drill Programs: Osisko Mining (OSK, TSX) reported this morning that as of the end of January, the company has completed 518,000 m of the planned 800,000 m of drilling at its Windfall Lake Project in Quebec to complement the original 180,000 m drilled at Windfall by previous operators…Osisko’s initial resource for Windfall is scheduled to be released in early May, a delay of 6 weeks from the previous Q1 2018 estimated completion, due to the slower than anticipated turnaround of assay data (with so much drilling, labs from around the world are being used)…Osisko plans to have a Preliminary Economic Assessment completed in June for the Windfall deposit subsequent to the release of the initial resource estimate…meanwhile, Osisko’s 2018 exploration budget for the Windfall/Lynx deposits, Urban Barry and Quevillon project areas totals approximately $100 million…this budget includes resource estimation work, resource-oriented drilling, exploration ramp and underground bulk sampling of known mineralized zones, metallurgical work, permitting, PEA and feasibility studies, exploration drilling proximal to Windfall and Lynx, and exploration drilling on the greater Urban Barry and Quevillon properties…the Windfall Lake Gold deposit is currently one of the highest-grade resource-stage Gold projects in Canada with the previous operator having defined 748,000 ounces in the Indicated category (2,762,000 tonnes at 8.42 g/t Au) and 860,000 ounces in the Inferred category (3,512,000 tonnes at 7.62 g/t Au)…OSK has been languishing near a 52-week low just above $3 in the immediate vicinity of its rising 500-day moving average (SMA)…
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