4. The Canadian Association of Oilwell Drilling Contractors says the Canadian drilling fleet has shrunk from nearly 900 rigs in 2014 to 621 now, and will likely fall to less than 600 this year…some companies are moving rigs south of the border to chase brighter prospects in the United States…meanwhile, only 52% of the rigs in Canada’s fleet were active as of late January…climate change extremists in this country have no problem with Canada losing those good paying jobs with families getting hurt…
1. Gold has traded between $1,329 and $1,339 so far today…as of 7:00 am Pacific, bullion has added $4 an ounce to $1,336…Silver has recovered 23 cents to $16.80…Copper has jumped 5 cents to $3.23 while Nickel has surged 11 cents to $6.20…Zinc is up a penny at $1.62 while Cobalt remains steady at $36.40…Crude Oil is off 84 cents a barrel at $64.61 while the U.S. Dollar Index has rallied another one-fifth of a point to 89.44…China this week is expected to report solid growth in January trade, moderating inflation and renewed bank lending, but the timing of the long Lunar New Year holidays will make it difficult to determine clear trends for at least another month…
2. Inflows of Gold into physically backed exchange-traded products hit 32 tonnes in January after a lackluster 4th quarter when holdings rose by a modest 10 tonnes, according to Standard Chartered. “ETP inflows since the start of 2017 are at profitable levels; only if prices fall below $1,200/oz do almost 250 tonnes become loss-making, which is not our base-case scenario. Gold prices have stalled, but we think consolidation at lower levels bodes well for prices in the coming months, particularly as the recent move higher was not accompanied by broad investor interest,” Standard Chartered added…
3. The U.S. Treasury Department quietly released data last week estimating its 2018 borrowing needs would check in at $955 billion, then top $1 trillion in the next 2 fiscal years…those sums are considerably higher than the $519 billion in debt issued last year, and an upward revision to estimates released by the Treasury in late 2017…the federal government’s voracious financing needs come at a time when it’s already pulling in record levels of tax revenue, to the tune of $444 billion in October through November 2017…given broad-based tax cuts (corporate and individual) that have just been signed into law, and increasing interest rates, the immediate pressure on the U.S. budget will likely intensify…historically, there’s a close correlation between a trend of rising U.S. federal budget deficits and increasing Gold prices…President Trump is the self-described “King of Debt”, so we shouldn’t be surprised if the U.S. runs a string of trillion dollar deficits with Gold responding accordingly…
4. This should prove interesting – the federal Liberal government will introduce sweeping legislation this week to overhaul the environmental assessment system for major resource projects in Canada…let’s pray they get it right…this comes at a time when over $150 billion in resource projects in this country have been either slowed or sidelined altogether because of over-regulation and opposition from radical environmental, aboriginal and/or community groups…the downside is adding up, and Canadians may wake up one morning in the not-so-distant future and wonder what the hell they’ve done when they see a booming U.S. economy under Trump and a Canadian economy strangled by climate change extremism, high taxes and an onerous regulatory environment…meanwhile, the Oil-hating “save the planet” ideologues running the B.C. government are prepared (in their own words) to “employ every tool available…to stop the expansion of the (already federally approved) Kinder Morgan pipeline”, with illegal actions taken by the Green Monster last week that effectively violate Canada’s Constitution while sparking an angry response from even the left-wingers in Alberta...
5. Markets are under pressure through the first 30 minutes of trading but a reversal early this week is likely in the works…after a 666-point decline Friday, the Dow is off another 210 points as of 7:00 am Pacific…the most obvious catalyst for the more than 1,200-point drop in the Dow over the past week has been the spike in U.S. long-term bond yields which gathered momentum after a robust January jobs report showed the best wage growth since 2009…in Toronto, the TSX is down 103 points…Aurora Cannabis (ACB, TSX) has signed a deal to buy a minority stake in Alberta-based Liquor Stores N.A. Ltd., which plans to launch a brand of cannabis retail stores…under the deal, Aurora will acquire a 19.9% stake in the company for $103.5 million through a non-brokered private placement…Harvest Portfolios is about to launch Canada’s first blockchain ETF – Blockchain Technologies ETF…the Venture is down 10 more points at 801 in early trading but has bounced off its low of 790…watch for a potential hammer reversal somewhere within the strong support band that stretches from 770 (500-day SMA) to 800…the combination of cryptocurrency carnage and plunging cannabis shares has contributed to the Venture’s worst-ever start to the month of February, but the pattern is very similar to the one in early 2010 when the Index roared back after hitting an important low in early February…during bull market years, the Venture’s rising 500-day SMA has provided highly reliable support…an early stage Copper-Gold porphyry discovery that caused ML Gold (MLG, TSX-V) to more than double in value during January should gain increasing momentum this month leading into geophysics news, initial assays and more drilling…MLG is off a penny at 20 cents as of 7:00 am Pacific…
6. When recreational marijuana is legalized in Canada this summer, British Columbians won’t be able to buy it along with a six pack of beer…Global News reports that provincial Solicitor General Mike Farnworth is set to unveil a suite of rules and regulations for legal cannabis in B.C. later today…chief among them will be a ban on the sale of cannabis products alongside any alcohol products…in addition to the liquor store ban, Farnworth is set to announce that landlords will have the right to ban tenants from growing cannabis on their premises…the province has previously announced that marijuana will be sold in a mixture of privately owned and publicly owned outlets; it is now set to clarify that none of those outlets will be liquor stores…under the model, it would be possible for a stand-alone cannabis retail outlet to be established next door to a liquor store, but not within its doors…
7. Bitcoin fell below $8,000 for the 3rd time in 4 days today amid a broader sell-off in cryptocurrencies that has seen over $60 billion of valued erased from the market in 24 hours…Bitcoin is now trading around $7,500, it’s lowest price since mid-November…other major virtual currencies, including Etherum and Ripple, also fell sharply in the last 24 hours with the market capitalization of the entire cryptocurrency market plunging to $365.27 billion early this morning, according to data from Coinmarketcap.com…Financial News, a publication closely affiliated with the People’s Bank of China, reported today that the central bank will block all platforms related to cryptocurrency trading and the issuance of so-called initial coin offerings (ICOs)…previously it had stamped out domestic cryptocurrency exchanges but it extended its crackdown to foreign platforms, too…major banks are also starting to curb the use of their services to buy cryptocurrencies…major U.K. lender Lloyds Banking Group said today that it was stopping people buying cryptocurrencies using credit cards…the move follows U.S. banks J.P. Morgan, Bank of America and Citigroup who implemented the same policy last week…
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