Gold has traded between $1,330 and $1,341 so far today…as of 9:45 am Pacific, bullion is down $6 an ounce at $1,332…Silver is off 25 cents at $19.32…Copper has slipped a penny to $2.10…Crude Oil has fallen $1.40 a barrel to $46.22 while the U.S. Dollar Index has jumped half a point to 95.43 on more Fed rhetoric…
Gold is lower for a 3rd straight day but the metal is still up 0.5% for the week, holding on to nearly half the sharp gains it made on Tuesday after downbeat U.S. data fueled talk that the Federal Reserve will hold off raising rates at its policy meeting later this month…
Holdings of SPDR Gold Shares fell 0.13% to 950.62 tons yesterday, but that’s still near 3-year highs reported in mid-August…
Gold demand in Asia remained subdued this week as higher prices kept buyers at bay, but upcoming festivals following a very good monsoon in India may stimulate appetite for the metal…
The Fed-inspired selling in Gold stocks today, and across the broader markets, is a wonderful gift to end the week!…the Fed is simply the gift that keeps on giving, but only if you interpret their bafflegab in the right way…
Dollar bulls are suckers for Fedspeak – do the opposite of what the dollar bulls do!…
More Fedspeak
Dow futures quickly took a turn negative this morning after Boston Fed President Eric Rosengren, a voting member of the Fed policy committee this year, said the risks facing the economy are more in balance, allowing for the U.S. central bank to resume gradual rate hikes. “My personal view, based on data that we have received to date, is that a reasonable case can be made for continuing to pursue a gradual normalization of monetary policy,” Rosengren said in a breakfast speech to the South Shore Chamber of Commerce in Quincy, Massachusetts…while he admitted there are “downside” risks from global weakness, he added there are offsetting upside risks that the economy might overheat, and that includes “the possibility of growing imbalances in some asset classes.” (that may have spooked some folks this morning, but how many times have we heard versions of that from Fed officials over the years?)
It truly is hard to imagine how the U.S. economy could possibly “overheat” anytime soon, especially considering that it will struggle to post 2% GDP growth for 2016 and inflation remains muted…
Other notable comments from Rosengren’s speech: “I don’t think recessions happen because it’s been a long time…but because of policy mistakes. Right now it is hard to see us raising rates too rapidly.” He added that the probability of a U.S. recession at the moment is “quite low.”
The Dollar Index immediately turned immediately higher after Rosengren’s comments, though Gold (interestingly) has moved very little (astute Gold traders aren’t buying this)…Rosengren’s comments have boosted expectations of a Fed rate hike in September…CME 30-day Fund Futures are now pricing in a 27% chance, up from 18% yesterday…how is it that certain investors can make the same mistake regarding the Fed over and over again, or is selling being driven by computers with no discernment?…
Meanwhile, Fed Governor Daniel Tarullo, also a voting member, told CNBC in an interview within the last couple of hours that he wants to see more evidence of sustained inflation before considering a rate increase…but he added he can’t rule out a hike this year…
The reality is, it doesn’t matter what the Fed does at its next meeting – Gold will be significantly higher by month-end for a host of reasons, and the Venture’s behavior backs that up…
“Public Administration” – Canada’s Single Biggest Jobs Contributor In August
Employment in Canada rebounded in August with a 26,200 gain in jobs (in line with expectations) after losing an almost equal amount of positions in the previous month…the headline number sounds good, but CBCNews.ca of course neglected to mention that the single-biggest contributor to that growth was the public sector which expanded by 16,300 positions (probably included some CBC jobs as well)…employment rose in Quebec, Newfoundland and Labrador, while it declined in New Brunswick…there was little change in the other provinces…the overall unemployment rate edged up 0.1 percentage points to 7% in August which reflected an increase in the number of people actively looking for work…
S&P 500 Adds Real Estate Sector
Real estate becomes its own sector in the S&P 500 after today, bringing the broad market index up to 11 divisions…the move primarily impacts real estate investment trusts (REITs), moving 28 issues with nearly $600 billion in market cap out of the financial sector and into the new real estate heading…the decision came primarily because officials at S&P Dow Jones Indices believe the industry has become large enough that it should be split from the broader financials that include commercial and investment banks, insurers, brokerages and exchanges…the new sector is expected to account for just over 3% of the total index…financials, which currently about for about 13.1% of the S&P 500, likely will drop below 12%…
Did You Know?…
Eight of the last 11 U.S. recessions have coincided with the first year of a Presidential term, and since 1920, recessions during a new President’s first year have been 3 times as common as in other periods…Citigroup, in a new report, also points out that there has been a tendency for Republican Presidents to be elected close to business cycle peaks and Democrats more often come in when the economy is depressed and set to recover (a notable exception being the election of Ronald Reagan in 1980)…
Meanwhile, over the 40 days through Wednesday, the S&P 500’s highest and lowest closes have been just 1.75% apart – the first time that has ever happened in the history of the S&P, which goes back to 1928, according to data from Bespoke Investment Group (a sure sign that volatility is going to intensify)…
WTIC 15-Month Weekly Chart
Crude Oil is under some pressure today after a big jump yesterday, but this 15-month weekly chart from John speaks volumes about Crude’s primary direction which is UP…
This is a classic bullish inverted head and shoulders pattern…RSI(14) has been bouncing along 50% support during formation of the right shoulder while the CMF indicates that money has been flowing profusely into Oil since April…
Investors take note: There’s a lot of money to be made in Oil stocks over the next 12 months (some have already moved up significantly), and we have one this morning for subscribers that’s sure to participate…
In Today’s Morning Musings…
1. The 4-cent junior with 730,000 ounces of Gold and a strong PEA…
2. The “comeback” Oil stock that should be in every speculator’s portfolio…
3. Probe Metals (PRB, TSX-V) bucks the trend again today among Gold stocks, what’s happening with PRB?…
4. IDM Mining (IDM, TSX-V) arranges $5 million financing for Red Mountain…
5. Zeolite, the marijuana breathalyzer stock, and the powerful advisor recruited by Nevada Energy (BFF, TSX-V)…
6. Daniel’s Den – Harvest Oil & Gas update, stock jumps as much as 30% today – plus revisiting a high-grade mine in Quebec…
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…
Vepper! Hear you’re in the market for “dividend stocks”. Assume stocks yielding above 6% are candidates to cut the dividends. Happy to provide more info upon request. Permian Basin Royalty 8%. Plains All American Pipeline 9%. Statoil 7%. BP Prudhoe Bay Trust 11%. Weyerhaeuser 4%. Procter and Gamble 3%. Hannon Armstrong 5%. Potash Corp 6%. Nevsun 4%.
Comment by Daniel — September 9, 2016 @ 9:18 am
The only “data” that really matters (S&P 500) is down big today! Mr. Market is cranky — throwing tantrum — because Super Mario didn’t promise more QE yesterday. Will Fed Heads have their kiddie gloves on by Monday? Or Sunday Night?
Comment by Daniel — September 9, 2016 @ 10:14 am
Daniel, Yes, time to diversify my portfolio and get some monthly income from dividends. I will start my research on those. Preferable north of 6% yield and a Canadian Company is what I am looking for. Thanks very much for narrowing things down a bit and for the information.
Comment by vepper — September 9, 2016 @ 11:30 am
C.GPC is about to leave the station…should be able to get 15c next week.
Comment by John - BMR — September 9, 2016 @ 11:35 am
Jon, with Ian Bliss speaking at the Precious Metals Summit in Colorado next week, one may expect some fresh data before next weeks conference. If not, then he will only be able to speak about what all investors already know – The current rock assays/texture and VTEM data and that the drill is turning at Huckleberry. The $500,000 placement this week though may be slated for Sequoi drilling.
Comment by Dan1 — September 10, 2016 @ 9:23 am
Hi Dan1, sounds right to me. Definitely the $500,000 would be earmarked for Sequoi drilling, which is a good sign. Minor pullback in NRN Friday in sympathy with the broader markets but the chart shows strong support as well as RSI(2) at extreme oversold, a level not seen since beginning of year. Much the same applies to neighbor CLE.
Comment by Jon - BMR — September 10, 2016 @ 11:07 am
A few mj companies have been highlighted over the past year on the site. I am curious if anyone has thoughts on golden leaf holdings. Quarterly they have the same revenues as Cgc. They sell in Oregon and Washington so have massive upside potential yet their market cap is 10x cheaper than Cgc.
Comment by Matt — September 10, 2016 @ 11:52 am
Jon: any worries about Friday’s selloff???
Comment by STEVEN1 — September 10, 2016 @ 8:01 pm
Not at all, Steven1.
Comment by Jon - BMR — September 10, 2016 @ 9:02 pm
1.Matt – Golden Leaf is run by Don Robertson former ceo of Mars Canada.. my wife worked for that company and if you believe that you bet on the jockey and not the horse then GLF is a good investment. their earnings are there.. and their manufacturing/edibles will be a good start once the various states approve maryjane including canada…
they arent that well known yet either…
Comment by Jeremy — September 11, 2016 @ 7:11 am