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Gold has traded between $1,261 and $1,286 so far today…as of 9:30 am Pacific, bullion is down $25 an ounce at $1,263…Silver is off 49 cents at $16.95…Copper has shed a nickel to $2.14…Crude Oil has slipped $1.14 a barrel to $43.52 while the U.S. Dollar Index is up one-tenth of a point at 94.07…it faces stiff resistance at 94.50…

Billionaire investor Stan Druckenmiller continues to load up on Gold, according to a Bloomberg report…at the Sohn Investment Conference in New York last week, he said the bull market in stocks has “exhausted itself” due to excessive borrowing from the future, adding that Gold is his largest currency allocation. “We refer to Gold as a currency, not a metal,” Druckenmiller said…

Bart Melek, head of commodity strategy at TD Securities, explained that the Gold market doesn’t look over-extended compared to the beginning of previous bull markets…however, the rally remains dependent on the Federal Reserve and interest rates, he added.  “While Gold looks overbought on numerous metrics, spec positioning looks similar to what it was back at the end of 2005/early 2006, before a large rally started,” he said. “If the Fed is more restrictive than traders currently expect, Gold is due for a big correction.”

According to Bloomberg, India’s government has collected 2.8 tonnes by 105 depositors of Gold so far under its Gold Monetization Scheme (GMS)…the program, which has been in place for 6 months, is intended to mobilize idle Gold held by households and institutions of India to facilitate its use for productive purposes…

Meanwhile, a softening in Gold prices could spur Indian Gold demand for a festival this week and weddings this month…the world’s 2nd-biggest user of the precious metal has seen a surge in local prices to the highest in 2 years, deterring normal seasonal buying patterns…

China’s Gold reserves stood at 58.14 million fine troy ounces at the end of April, up from 57.79 million fine troy ounces at the end of March, the central bank has reported…

Gold-U.S. Dollar Comparative

This 36-year Gold-U.S. Dollar Index comparative chart shows a topping pattern in the Dollar Index in 2015 that was similar to what occurred in Gold in 2011–2012…

The greenback’s sharp rise in the early 80’s was followed by a vicious slide…same thing happened after the run-up between 1996 and early 2002…the record run over such a short period from mid-2014 to December 2015 could easily be followed by another major plunge – it’ll be interesting to see how this plays out…

Gold is showing every sign of being in a new bull market, and that typically spells trouble for the U.S. dollar…

Fort McMurray Fire & Oil Update

Thanks to cooler temperatures, hundreds of firefighters are thankfully starting to get a grip on the massive wildfire in northern Alberta that led to the evacuation of the more than 80,000 residents of Fort McMurray…by the grace of God, no one has been killed by this inferno…many homes and businesses have been destroyed while Oilsands production has been curtailed by about 40%…

The Fort McMurray wildfire will likely become the costliest catastrophe in the country’s history with insurance losses potentially reaching $10 billion…Bank of Montreal cut its 2nd-quarter GDP estimate for the Canadian economy to zero from 1.5%, citing “severe disruptions to Oil production” due to the fires…BMO said the estimate was a placeholder, dependent on receiving more information on the scope of the disaster…

Some eco-freaks on social media and elsewhere keep blaming this fire on “climate change”- should we be surprised?…of course Green Party leader Elizabeth May drew that link almost instantly last week, and Fort McMurray residents will not soon forget the tweet from former provincial NDP candidate Tom Moffatt who called the fires “karmic” and used the hash tag “Feel the Bern” to mock the town before delivering a half-hearted apology…

The Oil-haters out there are forgetting something, however, as Kevin Libin pointed out in a Financial Post column:

“Oil didn’t just fuel the cars, trucks and buses that spirited nearly 100,000 people safely away from deadly smoke and flames. It powers firefighting aircraft working to control the blaze. It whisks first responders to the most urgent emergencies. Oil also happens to be the reason for the work camps near Fort McMurray where thousands have found shelter. Oil funded and fuelled the transport planes, furnished by the Oil companies that own them, used to shuttle Fort McMurray residents to family support networks in Calgary and Edmonton. The Oil industry’s obsessive safety culture, drilled into Fort Mac’s workers, no doubt made a crucial difference in residents making it out in such a timely and healthy condition. Oil even made possible the plastic bottles of water being donated to the shelters. Keep that in mind the next time environmentalists demand an end to the bottled-water industry.”

Where is our Prime Minister in this disaster?…if a city in Quebec had burned to the ground, would he still be sitting on the sidelines?…

A 5-year-old Ontario did his part to help Fort McMurray over the weekend…CTV News reported how Alexander Tuck spent Saturday afternoon running a lemonade stand with his mother, Danielle, to collect donations for the Canadian Red Cross relief effort for Fort McMurray…the two set up the stand outside a local shopping center in Whitby, about 55 km northeast of Toronto, and Tuck’s efforts raised nearly $2,600..

In today’s Morning Musings…

1.  Updated charts for Silver (short-term and long-term)…

2.  Equitas Resources (EQT, TSX-V) forgets the KISS principle…

3.  Eskay Creek (ESK, TSX-V) gets full title to the SIB Property, immediately adjacent to the past producing Eskay Creek mine…

Plus more…click here to take advantage of our Spring Sizzler Subscription Special in effect for a limited time only, or login with your username and password to view the rest of today’s Morning Musings… 

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