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Gold has traded between $1,324 and $1,341 so far today…as of 10:30 am Pacific, bullion is down $11 an ounce at $1,326…Silver is off 23 cents to $18.55…Copper has slid 4 pennies to $2.09…Crude Oil has fallen $1.40 a barrel to $46.70 on an unexpected jump in inventories, while the U.S. Dollar Index has added one-fifth of a point to 94.77…

Commerzbank on Gold, which makes sense to us:  “Apart from this short-term factor (Fed), the environment for Gold and Silver remains positive.  The monetary policy pursued by the major central banks is and will for the foreseeable future remain ultra-expansionary. Even a 25-basis-point rate hike by the Fed would do little to change this. Around the world, bonds worth $12 trillion are meanwhile showing negative yields – something that has never happened before to this extent. Then there are the numerous political and geopolitical uncertainties, so any falls in the prices of Gold and Silver should prove short-lived.”

Recent hawkish comments from Fed policymakers have raised investors’ expectations that Yellen might adopt a less cautious tone on rates when she speaks at Jackson Hole Friday morning, and that’s a reason the TSX Gold Index has declined in 9 out of the last 10 sessions and below its 50-day moving average (SMA) for the first time since the late spring…the total decline (so far) has been 13.7%…the current swoon is similar to the drop in May under similar circumstances (bullish rhetoric from Fed officials) that totaled 14% and represented a tremendous buying opportunity in Gold shares…RSI(2) is at oversold levels on the Gold Index not seen at any point since late 2015 during Gold’s bottom…inexperienced, fearful investors are throwing high-quality Gold producers and exploration stocks overboard at precisely the wrong time, but that’s what makes a market…the next couple of trading sessions should prove extremely interesting…

According to the CME FedWatch tool, markets are pricing in a 21% chance (way too high) of a rate increase in September, and a 50% chance (also too high) of one in December…

Even in the very unlikely event the Fed were to hike rates next month, Gold would almost certainly push strongly to the upside afterward (just like it did in December, counter to what the so-called experts were predicting)…Daniel expands on this in today’s Daniel’s Den…

So what’s to fear?…

Tax Me, I’m Canadian!

The Fraser Institute is out with a new study that has found taxes, and not basic necessities like food, clothing, and housing, make up the largest expense for the average Canadian household…it found the average family paid over $34,000 in taxes of all sorts last year, including what it calls “hidden” business taxes that are passed along in the price of goods and services purchased…

That’s 42% of the average family income – going straight to governments…by comparison, the family paid almost 38% for food, clothing, and housing…

Alberta – Another Example Of The Perils of Socialism

Wow – Alberta, once the bastion of capitalism, economic opportunity and good governance, has fallen down the slippery slope of Big Government and socialism, as predicted…if millennials so enamored with Bernie Sanders, who has also pulled the Democratic Party even further to the left, would like an example of a North American jurisdiction that is going downhill faster than the speed of light through the types of policies that he and his ilk shamelessly peddle, look no further than Alberta…liberals (the former PC’s under Allison Redford) quietly started the process, and now the socialists under current Premier Rachel Notley have driven the nail into the coffin – they have turned this once dynamic engine of Canadian growth into “Albertastan”…a have-not province!…

Red ink was everywhere in the government’s first-quarter fiscal update for 2016-2017 yesterday with the province’s projected deficit expected to swell to $10.9 billion, despite higher than expected revenues due mostly to an uptick in Oil prices – how ironic…the NDP has also benefited from the largesse of the Liberals in Ottawa, with transfers nearly $650 million higher than forecast, but money is going out faster than it’s coming in…

And isn’t it interesting how Oil royalties in Albertastan are up but corporate tax revenues have plummeted by a staggering $900 million, contributing to the wider than anticipated deficit…astute economists warned the naïve NDP that hiking corporate taxes by 20% would give companies an incentive to relocate profits outside of Alberta to lower-taxed jurisdictions, and that’s exactly what has occurred – along with other negative impacts that have hurt, and will continue to degrade, investment and jobs…

With corporate taxes falling and spending going up and up and up, with no end in sight, Albertastan’s NDP is now accumulating larger per capita deficits than Ontario’s Liberals did in their worst debt-binging days of the last recession…scary!…Alberastan’s per-person budget deficit for 2016-17 is projected to be about $2,557 per person…adjusted for inflation ($2,290 in 2009 dollars), that’s still approximately 55% larger than Ontario’s deficit in 2009-10…

The NDP is spending like drunken sailors while tangling the province up in red tape, the same NDP approach that in neighboring British Columbia in the 1990’s created a huge outflow of human and investment capital from B.C. into Alberta (now the outflow is in the other direction – Christy Clark was even bragging recently about the number of Albertans coming to B.C. for jobs)…the Oil downturn that started in late 2014 would have hurt any government in power in Alberta, but the fact is the NDP made the situation far worse by hiking taxes, increasing spending and generally making the province a less friendly place in which to do business…

B.C. is a resource-rich province with many projects in development…it will benefit immensely from capital shifts (people and dollars) from Alberta…remember that!…so too will Saskatchewan where Brad Wall’s Conservatives are in stark contrast to the NDP clowns in Albertastan…

Alberta And Climate Change Fanaticism

Meanwhile, as Albertastan’s NDP rushes ahead with implementation of its “Climate Change Plan”, a new study provides another measure of its massive cost…

A proposed cap on Oil sands emissions would leave Oil worth hundreds of billions of dollars in the ground (why not, when we can simply continue importing Crude from hideous regimes in the Middle East who keep breeding Islamic terrorists?) while doing little to reduce global greenhouse gases…

According to the Fraser Institute study by Ken Green and Taylor Jackson, How Alberta’s Carbon Emission Cap Will Reduce Oil Sands Growth, the provincial government’s proposed cap of 100 megatonnes of emissions annually for the Oil sands sector would reduce its production potential by more than 3 billion barrels between 2025 and 2040, costing the Canadian economy more than $250 billion in lost production and resulting in a “meager” 0.035% reduction in global greenhouse gas emissions by 2040…

That’s right, a 0.035% reduction in global greenhouse gas emissions by 2040 at a cost to the Canadian economy of $250 billion – now isn’t that “progressive”!…

How can a government be trusted with a “Climate Change Plan” when its economic policies are so disastrous, the province’s #1 exports have become jobs and investment…

Quite simply, Alberta is yet another unfortunate example of how incompetent governments – calling themselves “progressive” – can quickly destroy wealth…investors beware…

Gold In Canadian Dollars

Gold in loonie terms remains on track to test measured Fib. resistance just below $1,900 by year-end  – yesterday it closed at $1,738, and this morning the metal has dropped a little more below its 50-day SMA…any dips below that SMA have proven to be excellent buying opportunities, and this time will be no exception in our view…

RSI(14) is a modest 59% – support has held at the 50% level throughout the entire year…

At some point we do expect the RSI(14) to reach well into overbought territory above 70% – that will be the time to lock in profits in preparation for a potential major correction…

In Today’s Morning Musings…

1. BMR investigation reveals promising overlooked area on Aben Resources‘ (ABN, TSX-V) Forrest Kerr Project…

2. A long-term Richmont Mines‘ (RIC, TSX) chart provides perspective on current dip in Gold stocks…

3. Daniel’s Den – games in the Gold market, and if only the Fed would be so kind to hike in September!…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…