Gold has traded between $1,097 and $1,121 so far today…as of 9:00 am Pacific, bullion is up $4 an ounce at $1,108…Silver has added 3 pennies to $15.25…on fresh concerns out of China, Copper has tumbled 7 cents to $2.33 while Crude Oil is off $1.79 a barrel to $43.17…the U.S. Dollar Index is flat at 97.20, seemingly confused as to which way to turn today…
Currency Wars Heat Up – China Drives Down Yuan
What will China do next to try to stimulate its slowing economy?…last night, the People’s Bank of China devalued its tightly-controlled currency and allowed the yuan to suffer its biggest fall in over 2 decades, a drop of almost 2% against the U.S. dollar…the move came after China’s July exports fell 8.3% compared with a year ago…the country’s important export sector has clearly weakened and overall economic growth looks sluggish…
Beijing’s decision to keep the yuan stable against the U.S. dollar recently stood in contrast to the situation in Canada, Europe, Japan, Brazil, Turkey, South Africa and other emerging markets, which have used a combination of interest rate cuts and extraordinary monetary stimulus to weaken their currencies…now it can be argued that China has thrown in the towel and is joining the race to the bottom in currencies, and such a move may cause the Fed to think twice about a rate hike next month or even this year…interestingly, the U.S. Dollar initially went higher on a knee-jerk reaction last night to the news from China but the greenback then reversed on sober second thought before turning flat (see updated chart below)…
China’s currency devaluation has significant implications for the U.S. (great fodder as well for leading Republican Presidential candidate Donald Trump who certainly won’t mince any words over this) and other countries that trade with China as it puts their companies at a disadvantage…China is also exporting deflation, and that’s exactly what the U.S. and other jurisdictions don’t need right now…quite possibly this will put pressure on other central banks around the world to push down their own currencies to help their own exporters and to prevent destabilizing capital flows…
The devaluation of the yuan demonstrates increasing alarm among Chinese authorities with regard to the country’s economic slowdown, and that’s causing another broad sell-off in commodities today…of course with China being the world’s largest raw commodity importer, those commodities have also just become more expensive for China to import…another affect of the devaluation is that it will make it more expensive for Chinese financing vehicles to pay down their dollar denominated debt…
Gold has bucked the trend in commodities today but that’s in line with bullion’s general out-performance against the CRB Index since the Crash of 2008 as you can see in John’s long-term chart below…
Gold is seen more than ever as not just a commodity, but a currency, and it has been the world’s 2nd-best performing currency despite its 18% drop in U.S. dollar terms since July of last year…
As Frank Holmes, CEO and Chief Investment Officer for U.S. Global Investors commented in his Investor Weekly piece last weekend (www.usfunds.com), “Isn’t it funny that the Federal Reserve doesn’t keep other countries’ currencies, but it continues to hold Gold – and in larger amounts than any other central bank? China and Russia have two of the biggest Gold reserves in the world – and have added to them recently – but they don’t come close to the Fed’s holdings, even when combined. What’s more, the U.S. Treasury’s Office of the Comptroller of the Currency just classified Gold as money by placing Gold futures in the foreign exchange derivatives classification.
“Indeed, central banks all over the world continue to add to their gold reserves. If the metal were as valueless as a pet rock, as one op-ed recently claimed, why would they bother to do this?”
The NDP’s Insane Canadian Agenda – Major Curbs On Resource Development
The leader of a federal party in Canada should NEVER have to make the statement that, “We’re in favor of creating markets for our natural resources, we’re in favor of developing them.”
That should be a given…Canada has been proudly and successfully built on the discovery and extraction of resources…but NDP leader Thomas Mulcair felt compelled to make the above statement at a rally in downtown Vancouver yesterday…as if that was actually too much of a concession for a socialist to make, Mulcair of course had to add a major qualifier: “But (our emphasis), that has to be done sustainably,” he declared. “And sustainable development…is something that has to become very real.”
Mulcair talked about introducing “overarching sustainable development laws” because “Canada’s reputation is being hurt on the world stage, simply because we’ve been working consistently against the planet.”
What a pile of garbage and stupidity from the Official Leader of the Opposition who believes he deserves to be Prime Minister…when the Conservatives say Canada “Can’t Afford The NDP Party” – that’s more than just a catchy campaign slogan, it’s the truth…
If you think the resource industry in this country is hurting now because of low commodity prices, and the growing negative impact of the environmental lunatics now in control of the Alberta government, watch what happens if – God forbid – the NDP were to somehow sweep into power in Ottawa in October…that’s a nightmare scenario that hopefully will never come to fruition…
U.S. Dollar Index Updated Chart
This is a very important week for the U.S. Dollar Index after last Friday’s intra-day reversal following the jobs report…we’re looking at a chart here that’s teetering on the edge of a potential breakdown below short-term RSI(14) and price uptrend lines, and this is after the March-April double top and the head and shoulders…momentum is clearly waning (only a near-immediate reversal to the upside will change the picture) and the last 4 months of this year could be very different than the final 4 months of 2014 when the dollar was on a tear…
Our theory – a continued dovish Fed, no rate hike in 2015, and a sell-off in the greenback as a result…
Today’s Equity Markets
Asia
China’s Shanghai Composite finished essentially unchanged overnight after the previous day’s gain of nearly 5%…other Asian markets were modestly lower…
Europe
European markets sold off sharply today on the currency news out of China…
North America
The Dow is down 238 points as of 9:00 am Pacific as China’s currency devaluation has rattled investors…
There was mixed economic news this morning…U.S. wholesale inventories rose more than expected in June, the latest indication that the economy may have grown at a faster pace in the 2nd quarter than reported last month…
Meanwhile, U.S. worker productivity advanced at a modest pace this spring, reflecting only moderate economic growth despite steady hiring…the productivity of non-farm workers, measured as the output of goods and services per hour worked, increased at a less than expected 1.3% seasonally adjusted annual rate in Q2, the Labor Department reported this morning…from a year earlier, productivity was up only 0.3%…
In Toronto, the TSX has fallen 189 points while the Venture has slid 4 points to 579 as of 9:00 am Pacific…
Equitas Resources Corp. (EQT, TSX-V) Update
Presidents and CEO’s of most juniors are doing nothing but whining about how bad the markets are these days…that’s not the case with Equitas Resources‘ (EQT, TSX-V) Kyler Hardy who’s been on the road 50% of the time this year, working exceptionally hard to help assemble an all-star team at EQT and bring more awareness to the company’s very promising large-scale Garland Project in Labrador just 20 miles southeast of the Voisey’s Bay mine…crews have mobilized for final work on the ground prior to the start of initial drilling…investors are excited and for good reason…
The “secret” to EQT’s success in the market this year is really quite simple:
1. They identified a high-quality grassroots project with very strong upside potential 20 miles from an existing mine in a favorable jurisdiction;
2. They assembled a highly capable and proven management and technical team to move the project forward systematically;
3. They’re working extremely hard at all levels.
This is how discoveries are made…there are simply too many lazy companies on the Venture right now that just aren’t prepared to do the work that’s necessary to make things happen…
We’ve been excited about the opportunity in EQT since the spring given the individuals involved in this company, some important geological reinterpretations, and the very logical theory that Voisey’s Bay can’t be just a stand-alone deposit (mine) in this area despite previous failed attempts (marked by many miss-steps, we might add) at finding “Voisey’s Bay 2” or additional discoveries…
Hardy Interview
We caught up with EQT President Hardy on the phone last night – click on the arrow below to listen to comments regarding the above (we’ll have more with Hardy later this week)…
Click on the link below for Sunday’s overview we posted on EQT:
The Hunt For Voisey’s Bay 2 Intensifies
EQT Updated Chart
Equitas was the Venture’s volume leader yesterday, adding 2.5 cents to 13.5 cents on more than 3 million shares, and in early trading today it pushed as high as 16 cents…as of 9:00 am Pacific, EQT is up half a penny at 14 cents on total volume (all exchanges) of 2.6 million shares…
Technically, a confirmed breakout has certainly occurred above previous chart resistance at 10 cents, and the Fib. 15 cent level is now being tested…
TSX Gold Index – Rebound In Progress
The TSX Gold Index recently hit the bottom of a downsloping wedge and a rebound is clearly underway…note the substantial rallies that occurred following previous extreme RSI(14) oversold conditions…
The Gold Index is up 1 point at 128 as of 9:00 am Pacific…
Claude Resources Inc. (CRJ, TSX) Update
Canadian Gold producers in particular are looking attractive given the low Canadian dollar combined with weak Oil prices…keep an eye on Claude Resources (CRJ, TSX-V) which will be reporting Q2 financial results later this week (Thursday)…on July 7 CRJ reported, “Based on the record operating performance in the 1st half of 2015, the company has increased its annual Gold production guidance to 68,000 to 72,000 ounces from the Seabee Gold operation.”
We also love the fact this company’s operations are in Saskatchewan…
CRJ is up a penny at 66 cents as of 9:00 am Pacific…strong support from the rising 200-day moving average (SMA)…
NexGen Energy Ltd. (NXE, TSX-V) Update
Another high-quality opportunity on the exploration side is NexGen Energy (NXE, TSX-V) which we’ve been tracking closely this year…the company has made a significant high-grade Uranium discovery at depth in Saskatchewan’s Athabasca Basin with 5 drill rigs continuing to turn in the summer program…
Technically, NXE will take the path of least resistance between the dotted uptrend support line and the Fib. 83-cent level…there’s every reason to expect continued excellent results from Rook 1, so a summer breakout here is very possible…
NXE is unchanged at 78 cents as of 9:00 am Pacific…
Note: John holds a share position in EQT.
I swear if NDP gets into power (which it might considering not a lot of people like Harper and Trudeau is seen as an amateur)I am packing up my bags and leaving asap. That would be the final nail in the coffin for Canada.
Comment by chris — August 11, 2015 @ 9:02 am
Also, I said before that Yellen would raise interest rates in September. That is out of the question now that China has fired some pretty significant shots.
Comment by chris — August 11, 2015 @ 9:10 am
Greg J – Just got home and saw your post from yesterday. Wow, early retirement lucky you. I retired last September and wanted to make the trip in October. Too many things came up. I wanted to go this spring but health issues with me and my daughter stopped me right in my tracks. Yes I want to go so bad, but here is my situation. I retired because I knew that I was developing Desmin Myopathy in my legs. This is worsening by the month. I am to the point now that I know I could not do any mining by myself and gave up thinking of the trip. However, with another person who is able to do the work needed, I would be able to go and bring my expertise on finding the gold without wasting time. I had no idea someone wanted to join me. So now I have 2 questions for you. How is your health and would you be willing to dig in the trenches that I can’t do. Summer is not the time due to the heat. But say October would be good. Let me know your thoughts and we could communicate by private email. Thanks
Comment by dave — August 11, 2015 @ 10:12 am
Jon, its looking like the selling might be done on the venture, gold and silver in the green so far on a not so good market day. Many non-mining stocks dropping more. The shift is on, time for mining to make a rebound maybe.
EQT – good consolidation going on, maybe see .11 again for another opportunity to load more.
Comment by dave — August 11, 2015 @ 10:34 am
Gbb has come up with some alternative financing and went up a smidgen today. BMR what do you think the impact of receiving the C of A would have on the current share price? At 2 cents it is valuing its gold at 2 bucks an ounce, which for an actual producer (which arguably GBB would become upon issue of the long awaited C of A) would be unheard of. So what do you figure the gold would be valued at per ounce when that happened?
Comment by Mike — August 11, 2015 @ 12:22 pm
Jon. I noticed at the bottom of the article today that only John is a shareholder of EQT. Good opportunity to pick up EQT now that it dropped slightly today. I picked up a few more at the close today.
Comment by Dan — August 11, 2015 @ 1:21 pm
As far as GGI I tried to contact management the past two weeks but no response. Before the blockade I had no issue as Regoci would always reply to my emails. Just noticed on Stockhouse Tomogranite posted about his frustration with lack of communication with shareholders
Comment by Dan — August 11, 2015 @ 1:26 pm
Dave- [email protected]
Comment by Greg J. — August 11, 2015 @ 1:54 pm
Dave, picked up more shares of EQT today at 12 cents. Maybe I jumped too quick. But there have been many shares purchased the past couple of days a lot higher than 12 cents.
Comment by Dan — August 11, 2015 @ 2:23 pm
These guys don’t answer Gbb questions anymore mike… Just sayin
Comment by Marc — August 11, 2015 @ 2:45 pm
Dan and Dave seem like the EQT cheerleading squad… Hmmmmmmmmm Bert would have commented on that!!
Comment by Jeremy — August 11, 2015 @ 3:23 pm
EQT is looking very good, Dan. Reacted at .15 today which wasn’t surprising as that’s the next Fib. level, as John’s charts have pointed out, but there’s a lot of interest in this and it has all the ingredients to really fly IMHO over the next several weeks. The best-case scenario of course is a discovery hole. This is grassroots, they’re swinging for the fences on 10 to 14 initial holes, they could literally miss on every hole or hit a home run that could turn the entire market around. Given the high quality individuals involved, who understand Nickel sulphide systems and this area specifically, a decent chance for a discovery definitely exists. If they hit, watch them drill right thru the winter. I concur with Dave’s thoughts on where this will go as drilling begins, just on speculation.
Comment by Jon - BMR — August 11, 2015 @ 3:24 pm
Hey gang – Greg J, thanks I will get at you.
Jeremy, nice comment. If it was meant sarcastic (not sure it was), just wanted you to know that Bert and I exchanged emails and we talked daily before his passing. There is no doubt in my mind that he would have been a shareholder.
EQT had a good correction day Dan and it should drop further, I am thinking to .10. This was a forced correction. You will see why shortly.
I am hoping for .10 to gobble some more.
Comment by dave — August 11, 2015 @ 3:54 pm
Dan, it looks to me that Garibaldi has done no drilling anywhere during 2015. Maybe there is a blackout due to a deal of some sort in the making or maybe Regoci is avoiding investors because he has no news to tell us. IMO the IR company are being used as a shield between the company and the investors.
Comment by Tom UK — August 11, 2015 @ 4:01 pm
Greg – check your email.
Comment by dave — August 11, 2015 @ 4:15 pm
Oh , by the way Dan, I looked at every trade today. Without doing a calculated head count it looks like most of the shares in that high volume came through at .14, thus I doubt we will see single digits on EQT with this correction.
Comment by dave — August 11, 2015 @ 4:27 pm
Hope so Dave. I should have waited for a possible further drop before adding more shares.
Tom UK. I think we see something very soon on Mexico. Got a response from Steve finally. Funny, just after posting no response from GGI I get one. Wasn’t a detailed response but said we will be hearing something from Mexico.
Comment by Dan — August 11, 2015 @ 4:39 pm
Dave ….:) it was a sideways remark for sure… Bert and I also dialoged .. I have learned the art of sideways from him:) …. hard to think that he is gone.. at 78… but a good set of innings for him..
Glad u noticed:)
Comment by Jeremy — August 11, 2015 @ 6:07 pm
Also the NR from BLO is an indication to me that the alpha device doesnt work.. and they need the new relationship is NEEDED to proceed with the beta device… what am I missing?
Comment by Jeremy — August 11, 2015 @ 6:12 pm
Also the NR from BLO is an indication to me that the alpha device doesnt work.. and the new relationship is NEEDED to proceed with the beta device… what am I missing?
Comment by Jeremy — August 11, 2015 @ 6:12 pm
Like with any alpha prototype, Jeremy, there are refinements that have to be made, some bugs that need to be fixed. It seems many aspects of the prototype are coming along just fine – the critical stage they need to get to, as this morning’s news stated, is a reliability detection threshold that allows for medical grade and court accepted results at the roadside. To that end they are now trying to incorporate mass spectrometer technology with the hand-held unit.
As BLO stated: The current iteration of the alpha prototype is primarily used for testing purposes to help establish key features and define the direction of future component iterations by eliminating unnecessary features and design aspects early in the process. The alpha version of the Cannabix breathalyzer utilizes spit separation technology to avoid contamination of THC breath samples collected for analysis.
The important point is, BLO remains the leader in the development of a marijuana breathalyzer.
Comment by Jon - BMR — August 11, 2015 @ 6:59 pm
I have heard that there will likely be a news release from GGI after market close on Thursday. Just an update on Mexico I believe. I guess we will see.
Comment by Andrew — August 11, 2015 @ 7:11 pm
rip Bert We all miss you
Comment by brian — August 11, 2015 @ 7:17 pm
Jeremy, you’re welcome
Comment by dave — August 11, 2015 @ 8:26 pm
good morning bmr boys I bring you the latest press release from heron resources(her texch) dated august 11 2015 “HERON’S WOODLAWN ZINC-COPPER PROJECT FLY-THROUGH RELEASED” regards walter emond
Comment by walter emond — August 12, 2015 @ 12:32 am
Thx Jon… the alpha technology isnt good enuff I suspect because of the repeatability.. thus the Florida connection which is good to recognize and act on!! the spit separation is also the issue the other ‘2’ have been fighting with.. so I suspect the beta will be closer to the 6 months than the 3..
as long as they are continuing down the path is good.. realistically it will be longer than shorter in time..:)
the worst mistake they can make is continuing down the road of ‘we have to make this work’ … which it seems they are not because they understand the ramifications of the alpha results..
My comments were simply to suggest that the resulting timing of the beta will be probably next year and not this one…:)
ReRead the NR… the world wide patent access is key!!:) really wondering how long this path change delays the process..
Comment by Jeremy — August 12, 2015 @ 3:53 am
China fears send the dollar tumbling and commodities higher. thus the Canadian dollar is moving up. Glad to see it.
Comment by dave — August 12, 2015 @ 5:44 am
Dollar Index is breaking down, Dave…Fed rate hike has to be considered off the table for this year IMHO…that’s got to be considered bullish for Gold, and the Venture performs best when the greenback is in decline…
Comment by Jon - BMR — August 12, 2015 @ 5:50 am
Jon do you have something from the BC government about Sheslay !
Comment by Guy Delisle — August 12, 2015 @ 5:53 am
Yep, I saw the non mining start to dwindle down and started seeing more money start shifting couple weeks ago. This could really be fun when school starts back beginning of September and more money starts coming into the market.
Comment by dave — August 12, 2015 @ 6:01 am
Guy, as far as I’m concerned, DBV and GGI are more valuable than ever given the fact they have a Land Use Plan covering their projects, and of course multi-year permits. The government gave a message about Sheslay in its video on the Land Use Agreement. Hopefully we see a break in the “logjam” imminently. I’m confident we will, and then watch things take off again.
Comment by Jon - BMR — August 12, 2015 @ 6:34 am
Good morning Dave, I wanted to ask you if you have heard much from your guys about EQT – anything regarding that short position? Is it real or perhaps not? PP at .10? There is lots of chatter on other boards that is quite tiresome to read. Just want to get an honest opinion. Cheers
Comment by Paul — August 12, 2015 @ 6:35 am
Sorry – I also ask Jon and John that question too obviously…
Comment by Paul — August 12, 2015 @ 6:43 am
My understanding is one poster encouraged another to call Kyler himself about the short position, so I will tell you the same. My understanding is the short is there but maybe not to the tune of 3 mil. anymore. The chatter on SH is tiresome for sure. The bashers want ya to sell so they can get cheaper shares. I am sure you know how the game works. I can not comment on the PP at this time, I hope you understand, but you should be happy once it is announced which will be soon. There is a lot going on right now and the next 2 weeks will be interesting. I am confident part of the volume the last 2 days were the 5 mil. warrants being exercised which brings more money into the company, thus the drop yesterday and hopefully today. Yes, I would like to get some more at .10. My opinion through all of this is we see a share price around .18 to .21 when the drill starts turning. We are in the worst Venture cycle in some 10 to 15 years. There are some stocks bucking the trend and EQT is one of them. This is due in part to the story, management, and progress to date. It can only get better in my opinion.
Comment by dave — August 12, 2015 @ 7:14 am
Paul – I also wanted to point out that the CEO can make or break a company as Jon had pointed out. No, Kyler cannot dig up nickel if its not there, but he is one to make it happen if it is there. First, understand the CEO your dealing with, then look at the team behind him. The motto of the Government agency I worked for was “We lead, others follow”. This fits Kyler for sure. If you are a shareholder, I would say relax and just watch the developments the next couple weeks.
Comment by dave — August 12, 2015 @ 7:30 am
Thanks Dave, I will pick up some more too, if it drops to .10
Comment by Paul — August 12, 2015 @ 7:41 am
It has till Friday to drop to .10 IMHO.
Comment by dave — August 12, 2015 @ 7:52 am