Gold has traded between $1,253 and $1,274 today…as of 1:00 pm Pacific, bullion is down $10 an ounce at $1,258…Silver has retreated 39 cents to $16.26…Copper is up a penny at $2.87…Nickel has slipped 6 cents to $4.63…Crude Oil has added 40 cents to $49.43 a barrel while the U.S. Dollar Index has rallied three-quarters of a point to 93.44…
Zinc led the base metals group today with a 1-cent gain to $1.27 a pound, getting a boost from another surge in Chinese steel prices and from investors who are still bullish about Zinc shortages…a rising U.S. dollar following this morning’s modestly better-than-expected jobs report put some pressure on the entire metals sector…
Chinese rebar steel futures jumped 4% to their highest in 4 years today, reflecting firm demand for the building material in the world’s top consumer…Zinc is often influenced by steel prices since its biggest use is for galvanizing steel…
Some unusual volatility in Cobalt prices which plunged to $22.90 the other day before zooming right back up to $26.54…Reuters reported yesterday that Asia’s top battery makers are tweaking the recipe for Lithium-ion batteries used to power electric cars and mobile phones – reducing the amount of Cobalt and adding more Nickel…with forecasts for electric vehicle (EV) battery demand to jump 20-fold over the decade to 2025, manufacturers are looking to cut back on more expensive components…Cobalt has more than doubled in price over the past year on strong demand and a supply shortage…
Crude Oil Update
Oil prices were supported by good news this morning on the U.S. jobs front and held their gains after Baker Hughes reported its weekly count of Oil rigs operating in the U.S. fell for the 2nd week in 3…the count ticked down by 1 Oil rig to 765…
Significantly, WTI has broken out of its downsloping channel pattern since the spring, pushing beyond strong resistance at $48 a barrel…next obvious target is $51.50…
Oil has recently been climbing a wall of worry with regard to global production…
While OPEC is leading cuts of 1.8 million bpd along with some non-members such as Russia, its July exports rose to a record high, according to a report by Thomson Reuters Oil Research…OPEC’s July’s exports of 26.11 million barrels per day (bpd) represented a rise of 370,000 bpd, with Nigeria accounting for most of that increase…a Reuters‘ survey also showed OPEC output at 2017 highs in July, led by Libyan gains…both Libya and Nigeria were exempt from OPEC’s output cut deal…
Output in Russia is also high…Rosneft, Russia’s largest Oil producer, said its Crude output grew by 11.1% year-on-year in the 2nd quarter…
In the United States, Oil production has hit 9.43 million bpd, the highest since August 2015 and up 12% from its most recent low in June of last year…
What A Week On Wall Street!
The S&P 500, despite its strength, has recorded its 72nd straight trading session without a gain of 1% or more – its longest such streak since early 2007…the implications of this kind of historical calm market that’s been the subject of much debate across Wall Street this year concerns many strategists who believe low volatility, while the market keeps hitting new highs, is the so-called calm before he storm…the last time the S&P posted a gain larger than 1% in a single trading session was on April 24, with an advance of 1.08%…
Dow 10-Year Monthly Chart
Below is a fresh long-term Dow chart from John with the Dow topping 22,000 this week for the first time…today the Dow posted its 8th straight record close, finishing up 67 points at 22,093…
Note the prolonged (unusual) overbought RSI(14) conditions on the 10-year monthly chart…this has continued for all of 2017 and obviously can’t last forever…however, the Dow likely has further to climb in 2017 as measured Fib. resistance is 23,000 – a reasonable target…
The 2017 party should continue for a while yet, thanks to momentum, corporate earnings and tax cut prospects…2018 could be different story, we’ll see…
Venture Seasonality Chart
August-September-October is the only consecutive 3-month period when the Venture has registered gains each month more than 50% of the time going back 2 decades…
The average return has been –0.6%, but bull market years have fared much better…
Consistently, though, nothing beats the returns for December, January and February, making the 1st half of December a great time to be a buyer in any year…
In today’s Morning Musings…
1. Garibaldi Resources (GGI, TSX-V) hits new 6-year high while its Nickel Mountain neighbor enjoys a record surge in volume…
2. Speculation will build on 45.4 m grading 2.5% Cu and 7.4% Zinc…
3. Daniel’s Den – Friday Footnotes – a rundown of a wild week!…
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Great day for both GGI and MTS, i am surprised we didn’t see a rally from ABN today
Comment by Sameer — August 4, 2017 @ 3:27 pm
Jon, Re your news about manufacturers seeking to reduce dependence on cobalt, will this have a negative effect on speculation on cobalt stocks like CSR?
Comment by dermo63 — August 4, 2017 @ 4:42 pm
Jon, the announcement from ABN regarding cancellation of stock options – how should we interpret that?
Comment by dermo63 — August 4, 2017 @ 4:50 pm
Doesn’t change the bullish dynamics for these Cobalt stocks at all, dermot63…supplies are tight and the demand side is going to remain very strong for quite some time to come…certain alternatives to Cobalt, if they come into play, could literally take years to emerge…it’s not like this is the first time this discussion has come up…there’s a tremendously exciting picture emerging in the northern Ontario Cobalt Camp and the Cobalt sector in general and that should build out powerfully over the next 12 months…
Popular Nickel, Manganese and Cobalt (NMC) Lithium-ion batteries typically employ a ratio of 60% Nickel to 20% Cobalt and 20% Manganese, or 6:2:2, according to South Korea’s SK Innovation which is aiming to change the composition of these cathode materials to 80% Nickel, 10% Cobalt and 10% Manganese…still as effective with more Nickel and less Cobalt and Manganese?…we’ll see…even if they can pull that off, doesn’t change the urgent need for Cobalt…
Comment by Jon - BMR — August 4, 2017 @ 4:57 pm
Forget about it, dermot63…inconsequential…housekeeping…meaningless!
Comment by Jon - BMR — August 4, 2017 @ 5:09 pm
Deveron – http://aheadoftheherd.com/Newsletter/2017/AOTH-With-DeveronUAS.htm
great read.. the pilot of this company really knows his mojo!!
Comment by Jeremy — August 5, 2017 @ 1:17 pm
Thanks for posting Glencore’s tweet stating:
“160kg of copper, 11kg of cobalt & 11kg of nickel. This is what’s needed for each #electriccar & we’re ready to help revolutionize our roads”
Comment by Jeremy — August 5, 2017 @ 1:59 pm
more deveron
https://www.youtube.com/watch?v=jBNHVVUw8sk&feature=youtu.be
Comment by Jeremy — August 5, 2017 @ 2:13 pm