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Gold has traded between $1,268 and $1,280 so far today…as of 9:30 am Pacific, bullion is up $6 an ounce at $1,271…Silver has jumped 21 cents to $17.31…Copper is up a penny to $2.14…Crude Oil has surged $1.30 a barrel to $45.96 while the U.S. Dollar has backed off from resistance around 94.50 and is down half a point to 93.81…

A little bit of back-peddling by Goldman Sachs yesterday, though unbelievably they still remain bearish overall on Gold…the bank has raised its forecasts for the yellow metal while scaling back its expectations of Fed rate hikes over the next year…Goldman Sachs has increased its 3, 6 and 12-month forecasts to $1,200, $1,180 and $1,150 per ounce from $1,100, $1,050 and $1,000, respectively, in a report from analysts including the well-known Jeffrey Currie.  “While the upside risks to Gold pricing appear relatively limited from here (oh, really?), we see a number of catalysts for Gold prices to moderate, including a more hawkish Fed and ultimately U.S. policy rate divergence, corresponding with gradual dollar appreciation over the next 3–12 months,” the analysts said…

Over at JPMorgan, there’s some different sentiment regarding Gold – JPMorgan Private Bank’s Solita Marcelli on CNBC yesterday:  “We’re recommending our clients to position for a new and very long bull market for Gold…$1,400 is very much in the cards this year.”  The firm’s global head of fixed income, currencies and commodities reasoned that, with so many negative interest rate policies around the world, Gold will continue to be bought as an alternative currency…and, with expectations that investors will seek to hedge against the resulting volatility, Marcelli believes that Gold will remain attractive in a world where bonds and U.S. rates may cease to be the main risk-off asset.  “Central Banks may consider diversifying their reserves (as they anticipate) negative rates on existing holdings,” said Marcelli, when discussing the commodity as a safe-haven trade. “Gold is a great portfolio hedge in an environment where the world government bonds are yielding at historically low levels.”

Gold + India:  What’s Really Happening?

India’s Gold imports could hit a record high this year amid widespread smuggling to sidestep government levies on overseas shipments, Australia and New Zealand Bank, Asia’s biggest shipper of physical Gold, said today…the forecast by the bank’s head of precious metals, John Levin, runs counter to tallies that show Gold imports in decline in the world’s second-biggest bullion market after China…Levin said he expects 15% of India’s Gold this year to be “smuggled in” or arrive via “other unofficial channels” to beat a 10% levy imposed by the government…Levin also said more semi-refined Gold, known as Gold dore, was being imported from overseas mining companies because of a lower government levy (the import duty on Gold dore is 8.5%).  “You could see a record amount of Gold going into India this year,” Levin said, “A lot through unofficial channels and a lot of it going in as semi-refined Gold.”

Oil Update

Oil futures turned sharply positive this morning after the U.S. government reported a surprise decline in Crude inventories…the Energy Information Administration reported U.S. commercial Crude stockpiles fell by 3.4 million barrels to 540 million in the previous week…

In a sign of an ongoing aggressive fight for market share, Iran has set its June official selling prices for heavier Crude grades it sells to Asia at the biggest discounts to Saudi and Iraqi Oil since 2007–2008…

Meanwhile, worries about supply disruptions resurfaced today after Shell announced the closure of a key Nigerian pipeline…this disruption to output will likely push Nigeria’s production to its lowest in more than 2 decades…production declines and disruptions in Alberta, Latin America, Asia and elsewhere in Africa have also acted as a support to prices this week…

Oilsands companies around Fort McMurray began to restart operations yesterday after the out-of-control wildfire forced a week-long shutdown…provincial and industry officials said production in much of the region should ramp up soon…

Suncor Energy (SU, TSX) CEO Steve Williams:  “I lived in Fort McMurray, my children went to school in Fort McMurray and the resilience of that community is something to be very proud of.   That’s what you’re going to see in this next phase as we start to pull together to get industry moving, to rebuild the community, and you’ll see all of us standing very much shoulder to shoulder.” 

In today’s Morning Musings…

1.  Part 8 of our interview series with Colorado Resources‘ (CXO, TSX-V) President & CEO Adam Travis…

2. Another gem in the Golden Triangle’s “Heart of Gold“ Camp…

3. Pure Energy (PE, TSX-V) tries to regain energy after yesterday’s stumble…

4. Canadian dollar and TSX chart updates…

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… 

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