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November 14, 2016

BMR Morning Market Musings…

Gold has traded between $1,211 and $1,229 so far today…as of 10:30 am Pacific, bullion is down $5 an ounce at $1,223…Silver has slipped 47 cents to $16.89…Copper is up a penny to $2.53…Nickel has jumped 9 cents to $5.12…Crude Oil is off 63 cents a barrel to $42.78 while the U.S. Dollar Index has soared two-thirds of a point to 99.89 after briefly topping 100….

SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, said its holdings fell 0.76% to 934.56 tonnes on Friday from 941.68 tonnes on Thursday…holdings have changed little (down just 5 tonnes or less than 1%) from 2 months ago when Gold was trading $100 an ounce higher in the $1,320’s

More than $1 trillion (U.S.) was wiped off the value of bonds around the world since last Tuesday’s historic U.S. election victory by Donald Trump whose policies are expected to boost spending and kick-start inflation…

The capitalization of a global bond market index slid by $450 billion (U.S.) on Thursday alone, a 4th day of declines that pushed the week’s total above $1 trillion for only the second time in 2 decades according to Bank of America Merrill Lynch data…losses continued in early trading today before reversing…meanwhile, global stocks have been the main beneficiary of the flight from bonds…yields on U.S. 30-year bonds, which are more sensitive than shorter maturities to the outlook for inflation, jumped the most last week since January 2009

trump-nov-8

The Trump “Thump” whacks global bond markets.

“It is very much the market building up expectation or pricing in his election campaign language,” stated Tai Hui, chief Asia market strategist at JPMorgan Asset Management, in an interview on CNBC’s ‘Squawk Box’.  “His bias in terms of policy from an economist’s standpoint is very much inflation, inflation, inflation.

“Infrastructure, deficit spending, protectionism, immigration reform; everything he’s mentioned so far is going to push prices higher in the U.S.,” Hui said. “If you block immigrants, or even illegal immigrants working in the states, wages will rise. If you think about trade policy, if you block Chinese exports to the U.S., prices will rise.”

Expectations that a Trump presidency will increase infrastructure spending is helping to boost optimism in the industrial metals complex as well as in U.S. equities, while safe-haven assets like U.S. bond yields and Gold continue to suffer…the prospect of rising U.S. budget deficits, however, should start to sink in soon with investors, and keep in mind that rising interest rates will only compound the federal deficit/debt problem…

The Federal Reserve now appears likely to hike rates at its meeting next month for only the second time in more than a decade…the best thing for the Gold market would be to get a rate hike over with…

Warning From China

Apple iPhones and other U.S. goods could suffer sales hits in China if President-elect Trump goes through with his “naive” plan of slapping a large import tariff on Chinese products, a state-backed newspaper warned yesterday…

“A batch of Boeing orders will be replaced by Airbus. U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the U.S.,” the Global Times article read…

Gold Fields & Silver Standard Eye Kirkland Lake Gold (KLG, TSX)

Gold Fields (GFI, NYSE) confirmed this morning that its wholly-owned subsidiary, Gold Fields Netherlands Services BV, has made 3 successive non-binding proposals jointly with Silver Standard Resources (SSO, TSX) to Kirkland Lake Gold (KLG, TSX) to acquire all of the outstanding shares of Kirkland Lake pursuant to a negotiated plan of arrangement for consideration consisting of cash and shares of Silver Standard or a combination thereof…its most recent proposal is valued at $1.44 billion CDN ($1.07 billion U.S.) in aggregate, nearly 50% above KLG’s current market value…

Gold Fields also confirmed that the Kirkland Lake board has advised that it determined that each of these joint proposals was not reasonably expected to result in a superior proposal relative to Kirkland Lake’s previously announced combination with Newmarket Gold (NMI, TSX) and that accordingly it would not be engaging in any discussions with Gold Fields or Silver Standard or providing them with due diligence access…

Kirkland Lake shareholders may find the Gold Fields/Silver Standard offer more intriguing than their board does…perhaps that’s why Kirkland management decided this morning to remind shareholders that there is only one transaction before them which is the business combination with Newmarket…shareholders must vote their proxies before 10:00 a.m. eastern time on November 23, 2016… 

KLG is up 62 cents at $8.66 as of 10:30 am Pacific

In Today’s Morning Musings

1. Venture and the TSX Gold Index reversing from morning lows…

2. Long-term Venture chart tells us to prepare for a HUGE upside move (soon)…

3Cannabix Technologies ready to “BLO” higher?…

4. Confirmed breakout above 1-year downsloping channel in Garibaldi Resources (GGI, TSX-V)…

5. Daniel’s Den the race is on for Copper in Ecuador…

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…

Comments (7)

7 Comments

  1. Blo, bth and Glh all should be ready to fly this week
    Glh is most undervalued weed play out there.
    Bth should have similar update as Blo shortly
    IMHO.

    Comment by Matt — November 14, 2016 @ 11:41 am

  2. DBV watch for news

    Comment by TheSkipper — November 14, 2016 @ 2:15 pm

  3. own them all Matt… I told my wife how depressed I was when all weed stock are up up up… and the 2 we own were both down.. fack!!!!!!!
    patience one said!! BLO will be a 10$ stock in due time.. check out tasr and the booze breath guys when they first hit the market…

    Comment by Jeremy — November 14, 2016 @ 3:00 pm

  4. I agree Jeremy. Glh has been a big disappointment too. I loaded on them based on management and branding strategy. They have similar revenue as Cgc and 12m in the bank. Glh is valued at 45m and Cgc 1b. Massive disconnect.

    Comment by Matt — November 14, 2016 @ 4:34 pm

  5. New Age Farms.. NF-cn brought to my attention a couple of days ago byJunior Gold Report. Apparently sets up legal grow opps… Anyone follow the company?? Crappy website IMO!!

    Comment by GregJ. — November 14, 2016 @ 4:40 pm

  6. stockcharts have added MTS.v to there database.

    Comment by kelly — November 14, 2016 @ 5:35 pm

  7. Matt – wife knows the CEO.. they are on the CSE not the TSX.. visibility – have asked Searle why the lack of stock performance etc… but at 45m valuation it can only go one way!!

    Comment by Jeremy — November 14, 2016 @ 8:08 pm

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