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May 26, 2016

BMR Morning Market Musings…

Gold, trying to snap a 6-session losing skid – its longest since last November – is down $5 an ounce at $1,219 as of 9:45 am Pacific…Silver is unchanged at $16.29…Copper has added a penny to $2.13…Crude Oil is flat at $49.55 while the U.S. Dollar Index has retreated one-tenth of a point to 95.31

China, the world’s biggest Gold consumer, reduced imports from Hong Kong for the 1st time in 3 months as investors were lured by growing returns in the property market…net purchases fell to 56 metric tons in April from 64.1 tons in March, and compared with 46.6 tons a year earlier, according to data from the Hong Kong Census and Statistics Department compiled by Bloomberg

Gold dropped under the radar as ‘hot money’ investors hunted for high-yielding investments that can pay off in the short-term,” Bloomberg quoted Liu Xu, a trader at a Beijing-based private asset management company…

China (10.9 tonnes) and Russia (16.2 tonnes) both added to their official reserves in April…Venezuela, meanwhile, continues to be an aggressive seller but still has more than 200 tonnes of Gold on hand…

More problems for Hillary Clinton as she becomes an increasingly easy target for Donald Trump…a State Department Inspector General report yesterday said the former Secretary of State failed to follow the rules or inform key department staff regarding her use of a private email server…the 78-page report, which was provided to lawmakers, accused Clinton of flouting federal records rules and cybersecurity guidelines with her exclusive use of personal email for government business while serving in President Obama’s cabinet…the State Department audit comes as the FBI is thought to be nearing the final phases of its own investigation into Clinton’s email use as Secretary of State…

The Bank of Canada left interest rates unchanged at 0.50% following yesterday’s monetary policy meeting…however, the central bank highlighted continued economic weakness (“business investment and intentions remain disappointing”) as a result of the devastating wildfire in northern Alberta.  “Fire-related destruction and the associated halt to Oil production will cut about 1.25 percentage points off real GDP growth in the 2nd quarter,” the bank stated in a preliminary assessment of the Fort McMurray wildfire…

Oil Update

U.S. Crude prices briefly topped the $50 level for the 1st time in 7 months this morning before pulling back slightly…a Chevron source said today that the company’s activities in Nigeria had been “grounded” by a militant attack, worsening a situation that had already restricted the supply of hundreds of thousands of barrels in that country…meanwhile, the announcement of an upcoming meeting of OPEC countries (June 2) in Vienna to discuss the Oil market was essentially shrugged off by investors as there appears to be little chance of an OPEC production freeze…

In today’s Morning Musings…

1. Repentance from Quebec’s Ministry of the Environment as a long-awaited certificate of authorization for mining at Granada is finally awarded to Gold Bullion Development (GBB, TSX-V)…

2. Doubleview Capital (DBV, TSX-V) obtains a court injunction against Chad Day and others after last summer’s dramatic dust-up at the Hat…

3Updates on CRE, PRG and ABR

4. Fresh Venture chart – wow!…

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12 Comments

  1. Well they sure sold the news on GBB ….

    Comment by Jeremy — May 26, 2016 @ 12:15 pm

  2. Jon/John. What is your outlook for nickel?

    Comment by tony t — May 26, 2016 @ 12:16 pm

  3. Of course, Jeremy, the CA is great to finally see but not a major surprise event…however, it does underpin the stock going fwd so the balance of the year looks very positive…

    Comment by Jon - BMR — May 26, 2016 @ 12:19 pm

  4. We’ve seen the lows in Nickel, Tony t, IMHO….how quickly it gains traction is hard to say and will depend a lot on China, but certainly the CRB and the Venture are telling us that Nickel should be in an uptrend through the balance of this year…trading at good support now around $3.80…

    Comment by Jon - BMR — May 26, 2016 @ 2:08 pm

  5. understood Jon… just a sell the news event.. but the number of shares that were bought is encouraging…. makes some sense on the runup as well…
    once the next step is done then we are good.. just worried about the financing and a rollback.. 350K shares and needing money doesnt jive well..
    hope springs eternal

    Comment by Jeremy — May 26, 2016 @ 3:13 pm

  6. Question Jon/John: Now that DBV has indicated they will be commencing drilling again shortly, from where will the money to continue come from. What little money they had left in the kitty from last year must have been soaked up funding this injunction and the high priced lawyers that go along with it. At least it was nice to see the share price in a positive mode today along with the volume, sure seems like some one knows something, what do you think?

    Comment by simone — May 26, 2016 @ 4:34 pm

  7. If I were to put myself in the shoes of a financier, Simone, DBV is much more attractive with the assurance that they’re going to be able to drill uninterrupted. If you’re financing a drill program, the last thing you want to see is the program shut down halfway thru because of a blockade – that’s a lot of money wasted. Investors like certainty. There won’t be any problem in my view for DBV to raise the funds they need to in order to get back to drilling as the court order gives them that certainty, backed up further by their drill permits of course and the Land Use Plan.

    Comment by Jon - BMR — May 26, 2016 @ 5:01 pm

  8. Thank you Jon.

    Comment by tony t — May 26, 2016 @ 6:35 pm

  9. I guess gold will take a little beating till noon tomorrow, then who knows which way, up, down, I’ll just take a line from trump, this is all rigged!!!

    Comment by Laddy — May 26, 2016 @ 6:51 pm

  10. Thanks for your prompt reply regarding DBV Jon.

    Comment by simone — May 26, 2016 @ 8:59 pm

  11. The best clue that Gold is going to ultimately march right back up, Laddy, is that the Venture is essentially ignoring Gold’s drop and in fact is higher for May despite bullion’s worst month since November and weakness in other metals as well (can’t hold Gold down for long any more than Trump right now). The Venture is a reliable leading indicator.

    Those who are nervous about Gold at the moment aren’t looking at the Venture and discerning what they should.

    Comment by Jon - BMR — May 27, 2016 @ 2:05 am

  12. Yes your right Jon, early evening it spiked down 8 to 9 bucks but bounced back an hour later, someone dumped a lot, the venture holding great dispite all the rate talk,, lots of big names behind gold, encouraging.

    Comment by Laddy — May 27, 2016 @ 4:27 am

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