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1. Spot Gold has traded between $1,727 and $1,703 so far today…as of 7:00 am Pacific the yellow metal has retreated $21 an ounce to $1,705 after a much better than expected U.S. private jobs report for May…in addition, data from the Institute for Supply Management showed the U.S. services sector contracted less than expected, rebounding from an 11-year trough…Gold demand in India was still “at rock bottom” in May, according to Commerzbank…Gold imports were a mere 1.4 metric tons last month…this was a 99% decline from the 133.6 tons imported in the same month a year ago…data already showed that April imports ground to a virtual halt…“The suspension of international flights and the nationwide lockdown to contain coronavirus are still visibly taking their toll, in other words,” said Commerzbank analyst Carsten Fritsch…“Whether the pent-up demand will be released later in the year is questionable, to say the least. At present, nobody can predict what will happen to consumer behavior in India once the lockdown is lifted. Even if weddings are possible again in the autumn, the record-high local prices are likely to ensure that less Gold jewelry is given as gifts”…because of weak Asian demand, the Gold market has been relying on exchange-traded-fund inflows, which continued again yesterday, Fritsch commented…Spot Silver has retreated 45 cents to $17.65…base metals are steady with Copper, Nickel and Zinc at $2.47, $5.75 and 91 cents, respectively…Crude Oil is up slightly at $36.88 while the U.S. Dollar Index, under technical pressure, has retreated another one-fifth of a point to 97.62…mass demonstrations across the U.S. gave way to a night of relative calm, in contrast with the destruction of recent nights…Democratic New York Governor Andrew Cuomo lashed out at hopeless Mayor Bill DeBlasio, also a Democrat, in an extraordinary news conference yesterday…“You have 38,000 NYPD people, it is the largest police department in the United States of America. Use 38,000 people and protect property. Use the police, protect property and people. Look at the videos, it was a disgrace”, Cuomo said in reference to the embattled mayor…
2. U.S. companies trimmed a much less than expected 2.76 million workers in May, according to a report this morning from ADP…the total was well below the 8.75 million consensus estimate from economists…the reason for the wide disparity was not immediately clear, though ADP said its May number was supported by a steep drop in the level of continuing jobless claims, or from people who have been receiving unemployment benefits for at least 2 weeks…May’s count also marked a precipitous drop-off from the 19.6 million plunge in April, an estimate that was revised from the initially reported 20.2 million…“The good news is I think the recession is over, the COVID-19 recession is over, barring another 2nd wave, a major 2nd wave, or real serious policy errors,” said Mark Zandi, chief economist at Moody’s Analytics, which puts the private payrolls report together with ADP…the bad news, he added, is that “the recovery will be a slog until there’s a vaccine or therapy that’s distributed and adopted widely”…the ADP report serves as a precursor to the monthly non-farm payrolls report in 2 days from the Labor Department…economists expect that Friday’s figure, which includes government workers, will show a decline of 8.33 million that would push the unemployment rate up to 19.5% from April’s 14.7%…
3. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said yesterday during a question and answer session with the Journal of the American Medical Association that 100 million doses of a vaccine for COVID-19 could be ready by year-end, an aggressive timeline that would beat many earlier predictions for when a vaccine might be available…however, he cautioned that an initial vaccine, or vaccines, may not actually work, and he also worries about any potential vaccine’s “durability”…“If COVID-19 acts like other coronaviruses, it likely isn’t going to be a long duration of immunity,” he stated…“When you look at the history of coronaviruses, the common coronaviruses that cause the common cold, the reports in the literature are that the durability of immunity that’s protective ranges from 3 to 6 months to almost always less than a year. That’s not a lot of durability and protection”…there are currently 10 vaccines in human clinical trials worldwide, according to the World Health Organization…whether Americans will jump to take a vaccine is another story…an Associated Press-NORC Centre for Public Affairs Research poll last week found 49% said they would definitely get vaccinated while 31% were not sure and 20% said they would not, citing possible side affects…
4. Yet another sign consumers are ready to put COVID-19 behind them – 113,224 new light vehicles sold in Canada in May, a 147% jump over April’s sales, according to a report by DesRosiers Automotive Consultants…still, May 2020 car sales were down considerably compared to the same period last year…“It’s a measure of the strange times in which we find ourselves in that a market decline of only 44% can seem like a positive sign. However, following the estimated 74.6% decline in April – which sent Canadian new light vehicle sales levels back in time to roughly the early 1950’s – May’s year-over-year decline can evoke a touch of cautious optimism as the first tentative shoots of recovery spring up from a badly damaged marketplace,” the consultants said in a statement…
5. The Dow is up 230 points as of 7:00 am Pacific…stocks poised to benefit from the economy reopening are up broadly this morning…in Toronto, the TSX has jumped 168 points but the Gold Index has come under renewed pressure, down 8 points at 311…very strong support on this healthy pullback exists at the key 280 breakout level…the Venture has eased off 2 points to 558…record volume is coming into inexpensive Stewart Gold Camp play Auramex Resource (AUX, TSX-V), sporting a market cap of just $3 million at 5.5 cents, though it’s flagship and drill ready Georgia River mine has favorable comparisons to Scottie Resources’ (SCOT, TSX-V) Scottie Gold mine in the same district…SCOT commands a current market cap of approximately $30 million…Sun Metals (SUNM, TSX-V) is planning to begin its field program at Stardust, the company’s 100%-owned high-grade Copper-Gold Project located in north-central British Columbia, in mid-June, with drill crews mobilized soon after…the $3.8 million 2020 exploration program is fully funded and is planned to include diamond drilling with up to 3 drill rigs, as well as borehole electromagnetic geophysical surveys (BHEM) and continued geological studies…SUNM plunged sharply from a high above 60 cents last year but could be poised for a rebound this summer…
6. Non-profit anti-mining groups are using COVID-19 as another excuse to attack Canada’s mining sector: A new report by an international coalition of non-profit groups have sharply criticized the mining industry for supposedly “spreading the coronavirus into remote communities, both in Canada and abroad”…the report, titled ‘Voices on the Ground’ and published today, accuses mining companies from all over the world of prioritizing profit over worker safety by continuing to operate during the pandemic, and failing to take adequate safety precautions after outbreaks were discovered, sometimes with fatal results…“We said from the beginning that any mine operating at full capacity is presenting risks to workers,” said Kirsten Francescone, Latin American coordinator of MiningWatch Canada, one of the radical non-profit groups that authored the report…Francescone added, “It’s not just workers at risk … it’s communities that have no access to any kind of medicare or resources, where people have pre-existing conditions. We’re talking about already vulnerable populations”…Francescone claims there are 69 mines globally with “outbreaks”, of which one-third are operated by companies with headquarters in Canada…she called it “emblematic” of a lack of leadership in the Canadian mining industry…
7. Some investors are placing bets that the stock market could have a massive sell-off following November’s U.S. elections, and some analysts say it’s because of the fear of Democrats winning the Presidency and both houses of Congress (a highly unlikely scenario in our view, but the threat can’t be totally dismissed)…the price of puts, or options that predict a negative outcome, for the S&P 500 have been rising in price for November into December…analysts say it’s early in the year for those types of trades around the November 3 election…“Obviously, it’s early. However what the options market was beginning to indicate …was the potential for a clean sweep in November,” said Quincy Krosby, chief market strategist at Prudential Financial…analysts at BCA Research say the stock market is underestimating how negative a Biden victory would be for investing…“If the Democrats gain control of the Senate alongside a Biden victory, as our Geopolitical Strategy Service projects, financial markets may have to begin discounting a future materially less friendly regulatory and tax policy”…
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AUX is halted… a PP??
Comment by Jeremy — June 4, 2020 @ 5:57 am