BullMarketRun.ca

Gold has traded between $1,275 and $1,295 so far today…as of 10:00 am Pacific, bullion is up $17 an ounce at $1,295…Silver has jumped 20 cents to $17.50…Copper is up a penny at $2.19…Crude Oil is 43 cents higher at $44.75 while the U.S. Dollar Index has declined one-tenth of a point to 93.68 after approaching resistance at 94 overnight…

Gold strengthened this morning on a significantly weaker-than-expected U.S. non-farm payrolls number of 160,000 for April…this was well below consensus estimates of around 200,000 and was also the weakest gain since September…the unemployment rate, obtained from a separate survey of U.S. households, held steady at 5%…on the bright side, wages rose during the month, with average hourly earnings up 8 cents an hour, representing a 2.5% annualized gain…

April is historically the strongest month for non-farm payrolls which makes this morning’s headline miss look even worse by comparison…

More bluster from the Fed backbenches yesterday – St. Louis Fed President James Bullard, an FOMC voting member, said that the Fed could raise rates at its June meeting if the economic data calls for it…not a chance…the reality is the U.S. economy (thanks to excessive regulation and taxes) is sputtering as evidenced by very weak Q1 growth and this morning’s jobs report…meanwhile, inflation continues to underperform, we’re into a volatile political environment with U.S. elections just 6 months away (Crooked Hillary could also get indicted), and Britons will be voting in a referendum in late June (1 week after the next Fed meeting) on whether to remain in the EU…this is simply not the kind of environment that’s conducive to rate hikes…

Goldman Sachs, which continues to insist the Fed will carry out 3 rate hikes this year, made another bad call with today’s jobs report when they forecast a robust number of 240,000…they were off by a whopping 80,000…

Commodity Strength

Citigroup was the bank that was ahead of the game back in 2012 when the commodity sector really started to weaken…now, in contrast to the outlook from Goldman Sachs, Citigroup believes a weaker U.S. dollar and China’s stabilizing economy means commodities have indeed turned the corner…

Investors have poured $18.3 billion into global exchange-traded funds backed by raw materials this year, data compiled by Bloomberg show…assets invested in commodity hedge funds, ETFs and passive indexes have reached $315 billion, the highest since May 2015, Citigroup said in an April report…for now, investors are betting with Citigroup…since mid-March, hedge funds and other money managers have more than tripled their combined net-long holdings across 18 commodities to 1.09 million futures and options contracts, according to U.S. government data…

“The flow of investor money back into commodities has happened much more quickly than we thought it would,” David Wilson, a London-based analyst at Citigroup, told Bloomberg.  “Instead of just short-covering, you’ve seen it move on to the long side as well, partly on the fact that China is stimulating somewhat. Can you still be over-bearish commodities? It doesn’t really make sense.”

Oil Update

The shutdown of energy facilities in northern Alberta accelerated yesterday, taking offline about 1 million barrels – close to 40% – of the province’s daily Oilsands production, as a wildfire that started near Fort McMurray spread south to new producing areas…

Meanwhile, Oil companies poured their resources into the firefighting effort – from sheltering evacuees to helping with medical emergencies…

Adding to the temporary supply outage in Canada is an ongoing decline in U.S. Oil output which has fallen by 800,000 bpd since mid-2015 as producers succumb to a route that saw prices tumble more than 70% between mid-2014 and early 2016…the drop in North American output, combined with disruptions in Latin America, is eating into the global supply overhang…

Bo Copley:  Hillary Clinton’s Nightmare As She Pursues Her War On Coal & Fossil Fuels

Bo Copley is quickly becoming famous in America…he’s an unemployed West Virginia Coal miner and a man of deep faith, and he challenged Democratic front-runner Hillary Clinton the other day in Williamson, West Virginia, at a community roundtable…Clinton had earlier asserted, while scarcely able to contain her glee, that “we’re going to put a lot of Coal miners and Coal companies out of business” while out on the campaign trail…this was music to the ears of America’s Left, and the movement’s many Canadian followers…

What sort of individual, running for the highest office in the land, would take pleasure in attacking an industry like that and putting Americans like Bo Copley out of work?…Clinton, such a flawed establishment candidate she couldn’t even beat socialist Bernie Sanders in Indiana this week, has fully embraced “climate change” fanaticism but took a well-deserved rebuke from Copley whose plight appears to have resonated among many American blue collar workers…in one of the more intense interactions Clinton has had on the campaign trail, Copley – growing emotional at times – pressed Clinton for her past statement and asked her, “How you can say you are going to put a lot of Coal miners out of jobs and then come in here and tell us how you are going to be our friends?”…Clinton dug herself into an even deeper hole by saying her words were taken out of context, but clearly they were not…Hillary and the truth don’t exactly align very well…

What a fascinating 6 months we’re about to witness in U.S. politics, and the outcome is likely going to have a major impact on the greenback, Gold and the broader markets…

In today’s Morning Musings…

1.  Tracking the explosive TSX Gold Index…

2.  Superb week for Colorado Resources (CXO, TSX-V) as company beefs up war chest to tackle KSP Property…

3.  Part 2 of our interview series with Lithium X Energy (LIX, TSX-V) CEO Brian Paes-Braga – learn more about the Clayton Valley…

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, or login with your username and password to view the rest of today’s Morning Musings… 

SAVE 25% with a risk-free subscription (as little as $1 per day) as you gain full access to this and other exclusive BMR content and features including our upcoming new Top Opportunities List…