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1. Gold has traded in a tight range between $1,272 and $1,278 so far today…as of 7:00 am Pacific, the yellow metal is flat at $1,274…in overnight news, St. Louis Federal Reserve Bank President James Bullard, a voting member of the FOMC, said in a speech in Hong Kong that the U.S. central bank may need to lower interest rates if inflation remains at very low levels…the Fed would like to see annual U.S. inflation perk up to the 2% level…in another sign that global inflation remains very muted, or even problematic, Germany’s government has auctioned 10-year bonds (bunds) for an average yield of negative 0.07%, the lowest yield in almost 3 years…Silver is unchanged at 14.43…Copper (new 4-month low), Nickel and Zinc are all off slightly at $2.69, $5.42 and $1.23, respectively…Cobalt remains steady at $15.76…WTI has pulled back 70 cents to $62.43 after industry data showed an increase in U.S. Crude inventories…however, Oil markets remain tight amid supply cuts by producer group OPEC and allies such as Russia, and as political tension escalates in the Middle East…the U.S. Dollar Index is virtually unchanged at 98.07…Barrick Gold (ABX, TSX; GOLD, NYSE) continues its shopping spree in the mining sector, proposing to take over Acacia Mining (the shares it doesn’t already own) in an all stock deal…
2. As U.S.-China trade rhetoric heats up again, China is exploring more drastic action according to the South China Morning Post…while China is open to resuming trade talks, “government advisers are now highlighting the risk of sourcing critical supplies from an increasingly hostile United States…and are exploring ways for the country to cut its exposure to the U.S.,” the paper said, citing Chinese “researchers”…the article was titled, “Donald Trump’s trade war and Huawei ban push China to rethink economic ties with U.S.”…among various options, China is considering cutting Natural gas purchases from the U.S., the paper said…“The idea that China should buy large amounts of Natural gas from the U.S. must be revisited,” Wang Yongzhong, a senior fellow with the Chinese Academy of Social Sciences, a governmental think tank, told the Hong Kong-based newspaper…“China may have to cap U.S. supplies at 10 or 15% of its overseas purchases for the sake of supply chain security,” said Wang, who specializes in China’s energy supply security…“What if the (energy) supply (including both LNG and Crude Oil) is cut off suddenly, as we have seen in the Huawei case?”…China bought $6.3 billion (U.S.) worth of American Crude Oil and LNG in 2017, 3.6% of the country’s purchases of foreign energy products, the newspaper said, adding that China’s reliance on U.S. energy products is “limited”…that’s the problem for China as it exports far more products to the U.S. than it imports…
3. Glencore, facing challenges in Africa, is casting its eyes toward the Northern Ontario Cobalt Camp with the news yesterday that it has signed an MOU with First Cobalt (FCC, TSX-V) to supply Cobalt feedstock and financing to recommission the First Cobalt refinery…upon execution of definitive agreements, First Cobalt and Glencore will collaborate on final flowsheet design with a view to accelerating the restart of North America’s only primary Cobalt refinery, though many questions remain about the facility…Glencore intends to provide feedstock for the refinery which FCC says is expected to result in annual production of approximately 2,000 tonnes to 2,500 tonnes per annum of Cobalt in sulphate…Glencore will evaluate making a loan to finance the capital requirements to recommission the refinery and will enter into a tolling agreement with First Cobalt…the refinery could be operational in 18 months to 24 months and discussions are under way with provincial government officials to identify opportunities to streamline and accelerate the permit amendment process…FCC got a boost on the news yesterday and is unchanged at 17 cents in early trading today…
4. Enthusiast Gaming Holdings (EGLX, TSX-V), a top performer on the Venture this year, announced this morning that its network of video game enthusiasts has grown to 150 million total monthly visitors…Enthusiast’s platform is the fastest growing gaming network in North America and includes owned and operated gaming related websites and a network of YouTube channels…monthly visitors across the network has doubled since Enthusiast completed its going public transaction in October 2018 and has grown from 2 million monthly visitors since 2015…the increase validates the rapid growth of the gaming industry and further positions Enthusiast as a leader in the space…the significant growth and size of Enthusiast’s network has provided the company with a number of different revenue streams, including direct sales, revenue sharing and subscription models that diversifies the business and supports continued future growth…Menashe Kestenbaum, CEO of Enthusiast, commented, “Our consistent growth further validates our business model, as we continue to outperform visitor growth month over month. Our team continues providing innovative, rich content which attracts dedicated gamers. This content allows us to deepen our reach both vertically and horizontally across a number of sub-sectors within the gaming industry. In a relatively short period of time, we have managed to amass a network of over 150 million monthly visitors and now major brands are taking notice. In addition to our core revenue generating verticals of content, advertising, and events, the size of our network has provided a number of different revenue opportunities, that we believe will add sustainable, long-term value to our network moving forward”…
5. The Dow is off 40 points as of 7:00 am Pacific…in Toronto, the TSX has lost 87 points while the Venture – aiming for its 6th straight winning session – is up 1 point at 613.50, though volume remains relatively light…the Index is pushing up against its 50 and 100-day moving averages (SMA’s) which have converged around 615…48North Cannabis (NRTH, TSX-V), yesterday’s volume leader and big mover, has eased off 3 pennies at $1.14, though the chart has taken on a distinctly bullish tone…nearest key resistance is $1.25 (Fib.)…Probe Metals (PRB TSX-V) has cut 17.8 m @ 3.4 g/t Au at its Val d’Or East Project (infill drilling)…results from 55 drill holes totaling nearly 17,000 m also included a series of narrow high-grade intercepts…David Palmer, Probe President and CEO, stated, “Winter drill results continue to indicate a broad, robust Gold system along the Pascalis Gold trend. Work to date has greatly increased our understanding of the main controls on Gold deposition and in 2019 we plan to expand our exploration programs to target new areas where we are seeing strong potential for the discovery of additional Gold deposits”…Imperial Mining (IPG, TSX-V) has reported encouraging initial Scandium and Rare Earth (REE) results from the first 2 holes completed during its winter 2019 diamond drilling program at its Crater Lake Project in northeastern Quebec…partial TG zone results returned up to 48.2 m grading an impressive 385 g/t Scandium, including 8.8 m @ 528 g/t Scandium…elevated levels of total Rare Earth oxides plus Yttrium of up to 0.622% characterize the Scandium horizon…the entire Scandium mineralized package was found to be between 60 and 90 m in true thickness and is open at depth below 200 m down-dip and along strike…
6. Transition Metals (XTM, TSX-V) continues to be aggressive with the stock trading at its best levels since 2016…the company has staked 2 new properties, collectively covering 15,144 hectares, in the Wollaston basin Copper belt in Northern Saskatchewan…the Fannon and Tosi properties are located approximately 100 km south of Key Lake and about 30 and 85 km, respectively, southwest along trend with the company’s Janice Lake Property that is currently under option from the company to Forum Energy Metals (FMC, TSX-V) and subsequently to Rio Tinto Exploration Canada…the new claims were staked to cover known Copper showings and on-strike equivalents that are interpreted to have potential to host sedimentary-hosted Copper mineralization similar to that at Janice Lake…Transition President and CEO Scott McLean stated, “We view the Wollaston Basin as an important emerging Copper district. The good work of the Saskatchewan government identifying the potential of the belt led Transition to originally stake Janice Lake and initiate exploration in the belt. Recent drill results by Forum demonstrates the significant discovery opportunity which resulted in Rio Tinto’s new investment in the district. We look to further evaluating our new properties with the perspective of attracting new investment to the area”…
7. Gold prices are being manipulated on Chinese markets, according to Frank Holmes, Chief Investment Officer and CEO at U.S. Global Investors (www.usfunds.com), who was interviewed by Kitco News at Palisade Global’s Hard Asset Conference on Jekyll Island, Georgia…the market manipulation, or spoofing, occurs during Chinese holidays when trading is thin, according to Holmes…he explained a large number of contracts will be “flashed” on the markets with the intent to sell…“Immediately the market becomes fearful there is a big seller,” said Holmes…“(Traders) start hitting all their bids, and the price of Gold cascades down. It’s fraud. It’s miscommunication”…Holmes explained that Gold is being suppressed because authorities in China want to keep the metal at a price that is low in relation to the country’s currency…he added that the Chinese market is especially important to observe for traders and investors now that the global hub of Gold trading has shifted from London to China…“We’ve seen now that China has sort of become the epicenter of Gold trading. It moved from the London Fix to China, so now we have to be cognizant of those holidays,” Holmes said…
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Jon, what do you think would be the simplest way to overcome those chinese gold manipulations and give a little boost to the yellow metal? In a realistic scenario, how high could get gold before years end?
Comment by roychr — May 22, 2019 @ 9:11 pm
The only way to stop those Chinese gold manipulations that Frank Holmes is referring to is through regulatory action, roychr, or a stronger market that simply overpowers them…would be a great year for Gold if it could overcome resistance between $1,350 – $1,375 by year’s end and hit new highs…may need a Fed rate cut or a weaker dollar to do that…
Comment by Jon - BMR — May 23, 2019 @ 4:51 am