May « 2020 « BullMarketRun.ca

May 2, 2020

Daniel’s Den

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May 1, 2020

7 @ 7:00

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1. Spot Gold has traded between $1,692 and $1,670 so far today…as of 7:00 am Pacific the yellow metal is up $3 an ounce at $1,689…TD Securities remains upbeat on Gold despite recent weakness…Gold prices fell yesterday and again overnight before a rebound in the last few hours…TDS noted there was some end-of-month position squaring, with low liquidity hampering price action…“We suspect that we are in the early stages of a multi-year bull market and that, when the dust settles, investment demand will continue to flow to the yellow metal – the balance of risks remains to the upside for Gold“…Silver has retreated 6 cents to $14.86 while base metals are also off slightly with Copper, Nickel and Zinc trading at $2.31, $5.38 and 84 cents, respectively…on the Crude Oil front, the June WTI contract is up 53 cents at $19.37, extending the previous session’s advance, buoyed by a lower-than-expected gain in U.S. Crude inventories and the start of OPEC+ output cuts…White House economic adviser Larry Kudlow said today the Trump administration would focus on pro-growth measures and removing business barriers, as Congress deliberates the next massive coronavirus relief package…“So, we have our own set of asks, and we’ll probably come together in a few weeks, and resume the discussions, but our emphasis, I believe, is going to be on future growth incentives,” Kudlow said in an interview with Fox News…Texas, Alabama and other states relaxed stay-at-home measures today as the U.S. began a piecemeal reopening of its economy, while parts of Asia where the pandemic has waned moved closer to normalcy, though governments warned people to stay vigilant because of the risk of a resurgence…globally, reported Wuhan COVID-19 cases totalled more than 3.2 million and the “official” death toll exceeded 233,000, according to data from Johns Hopkins University…in Canada, all western provinces with the exception of socialist British Columbia have announced reopening plans after Alberta Premier Jason Kenney laid out his strategy yesterday…the NDP’s Vancouver-centric approach to the pandemic in B.C. is inflicting severe economic harm across the province, including of course the many areas where COVID-19 almost doesn’t even exist – it’s insanity, and the short-term and longer-term negative health affects of this strategy will far outweigh the negative health affects of COVID-19 itself…B.C’s topography, population distribution and open spaces are a natural advantage in deterring COVID-19, but the NDP hasn’t figured that out yet or simply chooses to ignore this fact…what the NDP has discovered, though, is that COVID-19 is an effective way for it to ramp up its socialist agenda (under the guise of a global pandemic)…less than 2,000 cases in total have been reported in the entire province (most of them in Metro Vancouver), and not a single person under the age of 40 in B.C. has died from COVID-19…the government’s “cure” has been much worse than the disease itself…

2. Trudeau’s secret deal: This now seems like ages ago, given all that has happened over the past couple of months, but do you remember when our “political leaders” twiddled their thumbs and allowed Canada’s economy to be held hostage in February by a group of anarchists sympathetic to the cause of the unelected “Wet’suwet’en hereditary chiefs“?…Justin Trudeau’s way of solving this issue was to cut a deal with this cast of characters (the “hereditary chiefs”) who are ideologically opposed to resource development in general and the natural gas pipeline in particular in British Columbia…no details of the memorandum, which was reached at the end of February in Smithers, have yet to be released to Canadians…last night it was announced that the MOU between the “hereditary chiefs” and the governments of Canada and B.C. that ended more than a month of blockades and solidarity protests around the country moved closer to ratification…in a joint statement, the 3 parties announced that the various Wet’suwet’en clans have completed their review of the MOU that was reached February 29 and the clans have given their support to sign the memorandum…the statement added there’s a lot of work ahead in the negotiation process, including how the 3 governments (Canada, B.C. and the “Wet’suwet’en) will work together…

3. Unintended consequences?…the Wall Street Journal reported this morning that the U.S. federal government’s $660 billion aid program for small businesses trying to cope with the pandemic threatens to leave hundreds of thousands of companies struggling to survive because of its limits on non-payroll expenses…the Paycheck Protection Program (PPP) requires that 75% of the funds go for employee salaries, and no more than 25% on rent, mortgage interest and utility payments…that is proving to be a deal breaker for many small businesses with modest payrolls and high rent costs, such as restaurants, salons and shops in expensive urban areas in particular…many of these businesses have been forced to close, and their owners said a more pressing need is for rent and other costs they must still pay…but to have their loans forgiven, the federal program requires the businesses to rehire workers they have already laid off and don’t currently need…

4. The Dow is off 432 points through the first 30 minutes of trading after posting its best month in 33 years…Apple (AAPL, NASDAQ) and Amazon (AMZN, NASDAQ) reported earnings that highlighted the impact the pandemic is having on the world’s biggest companies…Amazon announced record revenue but disappointed on profits as pandemic-related costs such as employee testing and higher wages added to expenses…Apple held off on providing guidance for the current quarter for the first time since late 2003…for its fiscal 2020 2nd quarter ended March 28, Apple posted revenue of $58.3 billion, an increase of 1% from the year-ago quarter, and quarterly earnings per diluted share of $2.55, up 4%…international sales accounted for 62% of the quarter’s revenue…equity markets in China, Hong Kong and across most of Europe were closed today for the May Day holiday…in Toronto, the TSX is down 227 points while the Venture has retreated 4 points to 468 after a 22% jump in April…the TSX Gold Index surged 91 points or 38.5% in April…Pretium Resources (PVG, TSX) is up in early trading after announcing that COVID-19 did not impact Q1 Gold production at Brucejack in the Eskay Camp…the company produced 82,888 ounces of Gold during the 1st quarter of 2020 and expects to achieve its 2020 Gold production guidance of 325,000 ounces to 365,000 ounces…with the expectation that Brucejack continues to operate within the current framework of the restrictions, production is planned to continue for 2020 at a rate of 3,800 tonnes per day with the average annual Gold grade ranging between 7.6 g/t and 8.5 g/t at an average Gold recovery of 97%…Pretium enjoyed another profitable quarter, with net earnings of 6.23 million (U.S.) in Q1, and the company remains on target to achieve free cash flow for 2020 in the range of $100 million to $170 million (U.S.)…2020 free cash flow forecast is based on an average Gold price of only $1,450 per ounce…

5. Balmoral Resources (BAR, TSX) has cut 308 g/t Au over 2.97 m, including 858 g/t over 1.06 m (A52-20-18) at its New Reaper discovery…the high-grade intercept, approximately 70 vertical meters below surface, occurs along the western margin of the Area 51 intrusion on the southern part of the company’s Fenelon property in Northwest Quebec…drill hole A52-20-18 was the westernmost hole of the winter 2020 drill program and is the westernmost hole drilled to date in Area 52 by the company…Wallbridge Mining’s (WM, TSX) high-grade Tabasco zone occurs along the eastern margin of the same intrusion on the adjacent Fenelon mine property…Balmoral’s Fenelon forms part of the company’s district-scale Detour Gold Trend Project in Quebec…Balmoral and Wallbridge announced on March 2 that they had entered into a definitive arrangement agreement pursuant to which Wallbridge will acquire Balmoral by way of a plan of arrangement..the proposed transaction would consolidate the Area 51 Gold system and create one of the best financed Gold exploration companies in Canada…the transaction would combine Wallbridge’s development-stage Fenelon Gold mine and recent high-grade Tabasco zone Gold discovery with Balmoral’s dominant land position along the Detour trend, which includes the Fenelon Property and nearby Gold and Nickel resource-stage assets at Martiniere and Grasset…Balmoral is up slightly on this morning’s news in early trading…

6. Where’s help for Canada’s Oil and gas sector?…one of Canada’s largest Oil sands producers says the industry needs support from Ottawa quickly to survive and emerge as a major contributor to the country’s economic revival in the months to come…“We have had significant discussions with both the Alberta government and the federal government about the need for incremental liquidity support,” Cenovus Energy (CVE, TSX) President and CEO Alex Pourbaix said on an earnings call Wednesday…“We’ve been hearing for weeks that support is coming. Weeks have passed and the industry is still waiting and particularly, the larger side of the industry,” he said…on March 25, Finance Minister Bill Morneau said help would be available in “hours, potentially days, to ensure there are credit opportunities particularly for the small- and mid-sized firms in that sector”…the federal government has not signalled whether additional help is coming to larger Oil and gas producers, but Alberta Premier Jason Kenney thinks the industry would require $20 billion in loan support…

7. The WGC said that ETF inflows in the 1st quarter were up more than 300% compared to inflows last year…in its Gold Demands Trends report issued this morning, the World Gold Council said that the dominant theme in the Gold market remains unprecedented investor demand for the yellow metal through exchange-traded funds…the report said that Gold-backed ETFs saw inflows of more than 298 tons in the first 3 months of the year, which pushed global holdings in these products to a record high of 3,185 tons…“The coronavirus outbreak, which swept the globe during the 1st quarter, was the single biggest factor influencing Gold demand. As the scale of the pandemic – and its potential economic impact – started to emerge, investors sought safe-haven assets”, the WGC stated...ETF demand, which hit its highest level in 4 years, helped drive prices to a nearly 8-year high…“Consequently, global Gold demand in value terms reached $55 billion (U.S.), the highest since Q2 2013,” the analysts said…a rush into ETFs is pretty much the 1 factor that drove Gold demand as key sectors saw significant declines…bullion investment in coins and bars in the 1st quarter, for example, fell to 241.6 tons, down 6% from the 1st quarter of 2019…however, it was a tale of 2 markets as Western demand for bullion coins hit a 3-year high of 76.9 tons, an increase of 36% from last year…while the Gold market continued to see demand growth, the market also saw a decline in supply…the WGC said that total Gold supply in the 1st quarter was 1,066.2 tons, down 4% compared to the same period last year…mine supply dropped 3% as many miners started shutting down production last month due to the pandemic…