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February 8, 2016

BMR Morning Market Musings…

Gold has traded between $1,163 and $1,200 so far today…as of 7:30 am Pacific, bullion is up $20 an ounce at $1,193….Silver has jumped 33 cents to $15.34…Copper is off a penny at $2.09…Crude Oil has slipped 97 cents to $29.92 while the U.S. Dollar Index is flat at 97.06

Year of the MonkeyAs China ushers in the Year of the Monkey – a holiday that tends to bring about heightened Gold demand – the Royal Mint announced that it has sold out of its 2016 Lunar New Year one-ounce Gold and silver coins. “This is the first time that the Royal Mint’s bullion business has sold out of coins from its Lunar Shengxiào Collection and highlights the growing ambition of the business,” the mint said in a news release Friday…

Mining stocks – the market’s punching bag of 2015 – have been the darlings of 2016 with a bounce in commodity prices driving the rally…even Iron Ore, which slid a whopping 40% in 2015, is up 14% since mid-January…Copper, which hit its lowest level since early 2009 in mid-January, has rallied more than 8%…

There are indications that demand could pick up in China, despite official annual growth at 6.9% in 2015 being the slowest in a quarter-century…in December, China posted a 26% annual rise in imports of unfinished Copper and products, the 2nd-highest monthly figure on record, if one can believe the figures from the Chinese customs authority…

According to The Wall Street Journal, traders for the past year have said a new breed of Chinese hedge funds have been making huge wagers that commodities will fall, pulling prices lower…the short commodity trade worked well for them in 2015…this year could be a different story…

Interestingly, the Venture has significantly outperformed the broader equity markets over the last couple of months, and even going back to the beginning of Q4…that’s a clear change in the longer-term trend since early 2011, and clearly suggests that Gold and perhaps commodities in general may surprise a lot of investors in 2016 for reasons we can’t fully understand at the moment…

Iran wants to recover tens of billions of dollars it is owed by India and other buyers of its Oil in euros and is billing new Crude sales in euros, too, looking to reduce its dependence on the U.S. dollar following last month’s sanctions relief…Iran has pushed for years to have the euro replace the dollar as the currency for international Oil trade…in 2007, Tehran failed to persuade OPEC members to switch away from the dollar…that day may yet come…

Euro 2-Year Weekly Chart

Speaking of the euro, the currency has broken out above a downtrend line going back to 2014 and its 200-day moving average (SMA) is reversing to the upside, another indication the greenback’s worst single day performance in 7 years last Wednesday was no aberration…the euro formed a double bottom in 2015 and Gold is leading it to the upside…

Euro Feb 8

In today’s Morning Musings

1.  Lake Shore Gold (LSG, TSX) climbs even higher on a $945 million all-share buyout from Tahoe Resources (THO, TSX)…

2.  Gold Standard Ventures (GSV, TSX-V) hauls in another $12.6 million from a 2nd major, hits new 2+ year high…

3.  NexGen Energy (NXE, TSX-V) threatens to break out…

4.  Garibaldi Resources (GGI, TSX-V) firms up on potential discovery news and high-grade Mexico plays…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…

Comments (29)

29 Comments

  1. CLIVE MAUND ARTICLE LINK: clivemaund.com/gmu.php?art_id=68&date=2016-02-06

    Comment by STEVEN99 — February 8, 2016 @ 8:14 am

  2. Good read Steven99
    Thanks

    Comment by GREGH — February 8, 2016 @ 9:07 am

  3. GGI is trying to break out….assays close at hand.

    Comment by weatheritout — February 8, 2016 @ 9:12 am

  4. Extraordinary – very unusual or remarkable

    synonyms: remarkable, exceptional, amazing, astonishing, astounding, sensational, stunning, incredible, unbelievable, phenomenal

    That’s quite the choice of words for the potential in BC…..lets hope they don’t let us down

    Comment by weatheritout — February 8, 2016 @ 9:24 am

  5. GGI-The results must be in hand and being reviewed. The interest is certainly there today. Just what is in that black unit.

    Comment by Dan1 — February 8, 2016 @ 10:31 am

  6. How about that , the Venture is up another .45% to 510. Most likely on gold exploration stocks. The market needs a really good exploration find to rekindle the Venture.

    Comment by Lester — February 8, 2016 @ 10:34 am

  7. We are getting closer to the GGI halt if the discovery is unique and extraordinary.

    Comment by Dan1 — February 8, 2016 @ 11:37 am

  8. GGI – not much on the ask all the way to 15 cents.

    Comment by Dan1 — February 8, 2016 @ 12:25 pm

  9. Something is up with KSK as well. Almost 2 million traded so far today.

    Comment by Dan1 — February 8, 2016 @ 12:27 pm

  10. Jon will you be posting your HGD trade in realtime if and when you decide to take a position?

    Comment by Treb — February 8, 2016 @ 12:58 pm

  11. Yes, Treb, we were watching it closely today of course. There are a multitude of factors we’re taking into account to nail down the precise timing.

    Comment by Jon - BMR — February 8, 2016 @ 1:19 pm

  12. Great Jon, thanks.

    Comment by Treb — February 8, 2016 @ 1:58 pm

  13. I believe it was Dave’s quote ” Never sell on a Monday”. Well GGI had a pretty good day and now we need confirmation of a major discovery.

    Comment by Dan1 — February 8, 2016 @ 2:10 pm

  14. Part of the message I received via email on Friday Feb 5th was “Positioned to Seize the “POWER” of High-Grade Opportunities in B.C. and Mexico. High-Grade in B.C so one thing we do know is what ever they have at Grizzly, it is high-grade. That gives me comfort that it’s not low grade and it’s not small given the drill spacing so far.

    Comment by Dan1 — February 8, 2016 @ 2:46 pm

  15. I’ve been slowly picking up shares on GGI…as much as I have called it out on its delays…I really do believe on its potential. My position is probably the largest I have owned on any individual stock

    Comment by weatheritout — February 8, 2016 @ 3:47 pm

  16. Weatheritout – I’ve been biting my nails for a few months now on GGI. Holding quite a few shares. Hopefully the news is as good or better than we have hoped for and anticipated and that the markets fels the same.

    Comment by 02charoc — February 8, 2016 @ 4:26 pm

  17. O2charoc…let’s hope that our patience is rewarded !!!!

    Comment by weatheritout — February 8, 2016 @ 6:28 pm

  18. AIX halted this morning pre-market… More lithium results from Sonora, Mexico (next to Bacanora)?

    Comment by rgiroux — February 9, 2016 @ 7:27 am

  19. GGI – lets hope that day the news is released is a positive day in the market like yesterday.

    Comment by 02charoc — February 9, 2016 @ 7:40 am

  20. Good luck to all the GGI holders out there! Still waiting to hear something from DBV…I hope we get a sniff of something soon, I realize stuff is going on behind the scenes but this is getting a bit frustrating.

    Comment by ChetBaker — February 9, 2016 @ 8:19 am

  21. AIX: Feb 9 (Reuters)

    LIT and AIX consolidate their alliance in sonora Mexico. They entered into a binding joint venture to explore and develop projected extensions of the giant sonora Lithium clay deposit located in Mexico.

    News release from ASX

    asx.com.au/asxpdf/20160209/pdf/434xljnnw3sfc9.pdf

    Jon: any comment on this?

    Comment by rgiroux — February 9, 2016 @ 8:36 am

  22. GGI- Someone found it necessary to dump 74,000 shares at 0.115?

    Comment by 02charoc — February 9, 2016 @ 9:12 am

  23. GGI – dumped down to 11.5 – only 5k at 11.5, and someone wanted em up again to 13.5, it will be nice when “imminent” is old news!

    Comment by david — February 9, 2016 @ 10:17 am

  24. Personally, I would not touch AIX. CEO hmmmm.

    I thought oil was dead in Canada, especially around the oil sands, williston basin area. Look at SMI goooooo.

    Comment by dave — February 9, 2016 @ 10:32 am

  25. Just a quick note, some delays this morning due to travel…Morning Musings should be posted around 11:45 am Pacific.

    Comment by BMR — February 9, 2016 @ 11:01 am

  26. SMI – light oil – easier to sell. every O+G major is not replacing what they drill. sooner we get a pipeline, responsibly, across Canada, the better IMO. Then the oilsands wont be so reliant on shipping via pipelines/railcars to the US refineries, which is killing them. Someone is buying the oilsands processed oil now, and the sooner Can can tap the world mkts, the better. Venezula was doing a gold swap, probably because oil is not cutting it for them. Saudis ran a MASSIVE deficit last year, and recently decided to lower the price for China , again! Kinda like gold at $300 in ’97!

    Comment by david — February 9, 2016 @ 11:26 am

  27. Dave: I know what you mean. I am in AIX since a few years, and got left holding the bag… However, this project and joint venture is very different from the past.

    Comment by rgiroux — February 9, 2016 @ 11:30 am

  28. What’s the story with the CEO of AIX and ABR?

    Comment by 02charoc — February 9, 2016 @ 11:58 am

  29. 02Charoc: I don’t play the CEO bashing stuff. Let’s say that he under-delivered in the Sheslay area… But again, what he accomplished in a “relatively” short period of time in Sanora is interesting. I am holding since there is no point to take the loss given hope in this Lithium project.

    Comment by rgiroux — February 9, 2016 @ 1:57 pm

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