Gold has traded between $1,309 and $1,319 so far today…as of 10:00 am Pacific, bullion is down $5 an ounce at $1,311…Silver is off 29 cents at $18.86…Copper has retreated 2 cents to $2.18…Crude Oil is 25 cents higher at $48.49 while the U.S. Dollar Index has added one-tenth of a point to 95.69…
India’s Gold imports fell for a 9th straight month in September as weak retail demand and higher discounts prompted banks and refineries to cut overseas purchases according to provisional data released this morning by consultancy GFMS…India’s Gold imports in September are estimated at 30 tonnes, down 43% from a year ago…imports in the first 9 months of 2016 slumped 59% from the same period in 2015 to 268.9 tonnes…retail demand is expected to pick up in the coming weeks, however, as the country gears up for the wedding season as well as festivals such as Diwali and Dussehra when buying Gold is considered auspicious…much of India’s retail buying comes from rural areas which have also benefited from a good monsoon season…
October trading in equity markets could be interesting as history shows market volatility, as measured by the VIX (Volatility Index), has surged every October of a U.S. election year since 1992…
The “Quote of the Day” goes to Germany Economy Minister and Vice Chancellor Sigmar Gabriel who hit back at Deutsche Bank CEO John Cryan over the weekend for telling employees his bank was suffering from market speculation: “I didn’t know whether I should laugh or be furious that a bank which turned speculation into a business model now declares itself the victim of speculators,” Gabriel told reporters…
Mixed economic data this morning: U.S. construction spending fell in August for the second straight month to its lowest level in 8 months, an unexpected drop driven by weakness across public and private sectors…meanwhile, the ISM Manufacturing Index slightly exceeded expectations with a gain of 51.5 in September, up from a disappointing 49.4 in the prior month…”Jobs Friday” is coming up – won’t that be fun!…
Gold Seasonality Chart
Historically, going back 20 years, October is Gold’s second-worst month of the year with an average decline of 1.2%…the metal has pushed higher in October only one-third of the time over the last 2 decades…keep in mind, though, that March has also been a bad month for Gold but this year bullion bucked its historical trend in March with a strong performance…
Nickel Supply At Risk
About a tenth of the world’s Nickel supply is at risk after the Philippines widened a crackdown on miners, raising the chances of prices rallying by another 25% through 2017, according to UBS Group which had already billed the metal as one of its favoured commodities…
As we explored in detail last Wednesday, the Nickel market is reeling after the radical Philippine government threatened to close another 14 mines last week, pending responses to an “environmental audit”…of 41 operations reviewed – the majority of them Nickel-producing – about three-quarters have been halted or told they need to “get their acts together”…
That puts 55% of Philippine Nickel output, or 11% of global supply, at risk of exiting the market, according to UBS…shutdowns raise the chances of Nickel reaching $6 a pound, or $13,228 a metric ton, by the end of next year, analyst Daniel Morgan said on Friday…
“A supply cut of about 10% is a big cut in any commodity market,” he said. “In the short term, there is enough metal out there as a buffer for the next few months, so are the stainless-steel customers anxious? I would say not yet, but they will be in 2017. Our base case is heading toward $6 by the end of 2017 but there is every potential that a rally could go further.”
Oil Update
If there’s one overriding message from the Venture’s performance this year, it’s that commodity prices have bottomed and likely have a lot further to climb in this new cycle higher…from Oil to Gold to Nickel to Sugar, a broad range of commodities have “turned the corner” after a vicious bear market…
Last week’s OPEC agreement to work toward an official production cut at its November meeting is also a sign that the Saudis have changed tactics after deliberately pushing Oil lower starting in late 2014 in an effort to put the squeeze on competitors, including North American shale producers, and increase their own market share…
OPEC said it would cut output to between 32.5 million barrels per day (bpd) and 33 million bpd from about 33.5 million bpd, with details to be finalized at its November meeting…a Reuters’ survey Friday showed that OPEC pumped Crude in record amounts through September with last month’s output likely to reach 33.6 million bpd in from a revised 33.53 million bpd in August, its highest in recent history…
Can OPEC be disciplined enough to actually reduce production, especially if prices are trending higher?…
Will global growth pick up in 2017, as some are predicting, and give Oil demand a lift at the same time as the supply glut starts to shrink?…
Those are important fundamental questions that we’ll get answers to soon enough…
“OPEC has created its own Q4 risk to Oil prices,” stated Barclays in a recent note. “In raising expectations of a November deal to cut production, it also risks a steep price decline should it fail to achieve its goal of cutting output back to less than 33 million bpd.”
Our favorite leading indicator for Oil prices is the Venture which flashed all sorts of signals in September/October 2014 that big trouble was on the way in the Oil sector…everything changed in February of this year, however, when the Venture finally reversed and started a new bull market…Oil prices would soon follow, and it appears they have a lot further to go which is not really the consensus forecast…
There were surprises to the downside in 2014 and 2015, so why isn’t it reasonable to expect surprises to the upside – especially when there’s evidence pointing in that direction?…this morning, we have a valuable new chart on Oil that could help make you a lot of money in the months ahead…
Technically, we’ve been bullish on the direction of Oil since February when we first recommended the HOU (TSX), the double bull Crude ETF…from a fundamental perspective, as Daniel has outlined, the key point to grasp is that “Cheap Oil” is merely an illusion based on the concept of “energy in” vs. “energy out”…
In Today’s Morning Musings…
1. Cannabix Technologies (BLO, CSE) explodes to new 52-week high…
2. Pure Gold (PGM, TSX-V) hits 104 g/t Au over 3 m at Madsen, more than 2 km south of the Madsen No. 2 Shaft…
3. Walker River Resources (WRR, TSX-V) bucks today’s weakness in Gold stocks…
4. Updated Silver chart explains current trading and what to expect…
5. Daniel’s Den – reiterating TAG Oil, plus 6 potential triggers for Gold…
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…
what’s happening with DVR? its tanking big time.
Comment by Mmurphy — October 3, 2016 @ 9:23 am
GNC.v new year high today despite the price of gold.
Comment by Mmurphy — October 3, 2016 @ 9:37 am
Nothing wrong with the business, Mmurphy; just with such a low float, all it takes is one impatient investor like the Scotia seller this morning to dump 35,000 shares to take the stock down a dime…only 22,000 or so on the offer to 42.5…
Comment by Jon - BMR — October 3, 2016 @ 10:01 am
Bayhorse Silver: best Silver pick around!
See my post last Saturday. Stock is beginning to take of!
Comment by Tran — October 3, 2016 @ 10:32 am
Jon
is WRR now a confirmed break out, its at 11 cents this morning?
thanks
Comment by greg — October 3, 2016 @ 10:53 am
BHS is certainly looking interesting, Tran. It’ll be part of our report tomorrow.
Comment by Jon - BMR — October 3, 2016 @ 12:39 pm
Normally a confirmed breakout is after 2 consecutive closes above the resistance, Greg, but it’s best to check with the expert so I’ll turn it over to John on WRR.
Comment by Jon - BMR — October 3, 2016 @ 12:42 pm
Thanks Jon
Comment by Greg — October 3, 2016 @ 12:46 pm
What do you guys think of DEF and SSE. Do you see value in them?
Comment by Bert — October 3, 2016 @ 1:13 pm
Ske not as good as the first round, but at this point I think everyone looking for the glory hole stock, who knows where it is.
Comment by Laddy — October 3, 2016 @ 2:28 pm
CXO – Jon, around about the same time you mentioned CXO could be looking for a project in southern climates, this post: https://ceo.ca/cxo?7e0488dcfb2a on CEO.CA states, with a little more detail, something is coming down the pipe. The anonymous poster followed up a second time today saying there is more to the story.
Jon, can you add any additional information since you have a network of contacts from your recent trip to the Triangle.
Thanks in advance.
Comment by Vepper — October 3, 2016 @ 2:29 pm
BAYHORSE “BHS”..will become a silver producer VERY SOON also drilling their second silver zinc mine Bridiging The Gap at Idaho silver valley.
Be sure check out David Morgan’s indepth interview with CEO of BHS. This one is about to GAP ….imo.
Comment by Jeff — October 3, 2016 @ 3:57 pm
GOOD TO SEE WRR MOVE FINALLY!
Comment by STEVEN1 — October 3, 2016 @ 5:16 pm
Greg.
WRR needs to stay above 10c at the close on TUES. to be a confirmed B/O.
Comment by John - BMR — October 3, 2016 @ 5:21 pm
Thanks John
Hope it does
Comment by Greg — October 3, 2016 @ 6:02 pm
Looking at the charts you would almost think it was Friday and the us had come out with their inflated job numbers as usual, it’s grit your teeth and bare it time. Minipulation at work…
Comment by Laddy — October 3, 2016 @ 11:29 pm
Gold, maybe another country needing cash? Unbelievable!
Comment by Laddy — October 4, 2016 @ 4:51 am
BLO update this morning:
Mr. Kal Malhi reports
CANNABIX TECHNOLOGIES IS WELL-POSITIONED TO CAPITALIZE ON ANTICIPATED MARIJUANA LEGALIZATION IN CANADA AND UNITED STATES
Cannabix Technologies Inc. has provided an update. Later this fall, voters in California, Arizona, Nevada, Maine and Massachusetts will decide whether marijuana should be legalized for recreational use. The Canadian Liberal government also recently announced plans to introduce legislation legalizing marijuana in the spring of 2017. The Canadian government has set up a Task Force on Marijuana Legalization and Regulation, chaired by the Honourable Anne McLellan and spearheaded by Mr. Bill Blair, MP, current Parliamentary Secretary to the Minister of Justice, to consult with experts across the country to learn how to best legalize and regulate marijuana.
More recently in Canada, the Liberal government has just wrapped up a several month feedback program asking Canadians about their opinions on marijuana legalization and how the government should enforce laws against those who operate outside the legal limits, such as marijuana impaired driving.
With the pending legalization of marijuana, law enforcement agencies across North America and the world are grappling with the issue of marijuana impaired driving. Law enforcement has done a commendable job in enforcing alcohol impaired driving in North America and society has also come to frown on alcohol impaired driving. Alcohol impaired driving is enforced with sophisticated breathalyzers that collect evidence of impairment and criminal charges have a high likelihood of resulting in conviction.
Unlike alcohol impaired driving, society is still unsure of how to address marijuana impaired driving and many jurisdictions and law enforcement agencies are trying to determine how best to administer the issue of “drugged driving”.
In addition to marijuana impaired driving, employers are also concerned with employees that may be impaired by marijuana. These workplace issues could be particularly concerning when heavy machinery is involved and safety is paramount.
Cannabix Technologies Inc. is developing a point of care device that would be similar to alcohol breathalyzers and would be used at the roadside to collect evidence of marijuana impairment. This tool would also be useful in testing employees for on the job sobriety.
Cannabix Technologies’ Marijuana Breathalyzer
Cannabix Technologies has been a first mover and leader in the development of a marijuana breathalyzer. The company debuted its most recent beta prototype in July. With a Field Asymmetric Ion Mobility Spectrometry (FAIMS) mass spec setup, the company is developing a tool that would be capable of accurately detecting THC concentrations at levels found in breath samples.
Cannabix Technologies’ breathalyzer would determine whether someone has consumed THC within the two hours preceding the test. This test would be unlike saliva or urine testing which can result in positive tests days after consumption of THC. The Cannabix Breathalyzer would consequently provide a critical measure of “recency” to avoid implicating drivers that are no longer high.
Cannabix is in the final stages of completing its “Beta 2.0” device and expects to have a pilot test ready device for scientific trials for later this fall. The trial testing would be conducted to prove the accuracy and sensitivity of the Cannabix Breathalyzer, and the results would be used to apply for a court accepted device certification by the Minister of Justice in Canada and the National Highway and Traffic Safety Authority in the U.S.
Mr. Kal Malhi, President of Cannabix, stated, “Our generation is in the midst of a monumental shift in the legislation and societal views on marijuana use. Like the economic opportunity that alcohol legalization provided in the last century, impending marijuana legalization is providing an immense economic opportunity for investors in the marijuana sector.”
We seek Safe Harbor.
Comment by Jon - BMR — October 4, 2016 @ 5:17 am
I GUESS WERE GOING TO GO LOWER BEFORE WE GO HIGHER! TSX VENTURE….
Comment by STEVEN1 — October 4, 2016 @ 5:38 am
Nothing wrong with that, Steven1, it’s all part of the early stages of a bull market and it’s what allows the market to ultimately push to new highs…downside from here is quite limited…
Comment by Jon - BMR — October 4, 2016 @ 6:19 am
It IS concerning tho that the TSXV is down >2% and the TSX is only down 40 points.. if the V is a leading indicator well… this doesnt bode well..
where’s that crystal ball when you need it!
Comment by Jeremy — October 4, 2016 @ 6:26 am
After an 82% run, a 10% pullback (maybe even a bit more), is entirely acceptable, Jeremy, and it has happened in every bull market…all you can do is look at the various support levels and know the Venture will land at one of them and then reverse higher, perhaps very sharply…as far as the Venture being a leading indicator, you have to look at the primary trend, not just 1 day…
Comment by Jon - BMR — October 4, 2016 @ 8:45 am
Well Jon – that bounce or reversal beetr happen at the 100 day.. or we will see 600’s again…which will take the bull off the table for lots of people and put the venture back in the woodshed… once burned twice shy… now that would be twice burned!!
Comment by Jeremy — October 4, 2016 @ 9:23 am