Gold has traded between $1,252 and $1,263 so far today…as of 10:00 am Pacific, bullion is down $3 an ounce at $1,256…Silver is off 12 cents at $17.49…Copper has slipped a penny to $2.18…Crude Oil has retreated 67 cents to $50.68 after hitting a new 1-year high while the U.S. Dollar Index has surged two-thirds of a point to 97.55 (resistance band between 97 and 98)…
The new dichotomy between the Gold futures market and Gold ETP’s is fascinating…SPDR Gold Shares (GLD, NYSE) saw its reserves grow by more than 11 tonnes on Friday to their highest levels since early July 2013…this occurred despite Gold futures dropping nearly 5% for the week in their biggest weekly percentage decline in more than 3 years…
Bullish speculative interest in Gold dropped to its lowest point in 4 months according to the latest COT readings based on trading in the week ending last Tuesday, though contrarians will interpret that bullishly…
Speaking to reporters in Sydney, Australia, Chicago Fed President Charles Evans said today that he “could be fine” with raising U.S. interest rates in December, but that he would prefer to see how the economy and inflation progressed before deciding…Fed watching will continue throughout the week…FOMC minutes will be released tomorrow while Janet Yellen has a speech slated for Friday that could shed more light on the Fed’s next potential move…traders have priced in a 70% chance that the Fed will hike rates at a December 13–14 meeting, up from 66% early Friday, according to CME Group’s FedWatch tool…
The Indicator That’s Being Ignored
It’s important to point out that the Conference Board’s U.S. leading economic indicator (LEI) is approaching zero, a level that historically has separated mid-cycle slowdowns from recessions (perhaps that was one reason Bank of America Merrill Lynch warned clients last week of a potential recession in the U.S. as early as next year)…in the last 3 decades, the LEI bounced off the zero level on 4 occasions…in all 4 cases, a policy response was required to reverse the downtrend…strangely, the Fed is signaling that another rate hike is coming despite the fact the LEI is as weak as it is now…when annual growth in the LEI drops decisively below zero, the U.S. economy heads into a full-blown recession…
Oil Update
Global Oil supply could fall in line with demand more quickly if OPEC and Russia agree to a steep enough cut in production, but it’s unclear how rapidly this might happen, the International Energy Agency said today…Oil prices received a boost yesterday after Russian President Vladimir Putin said his country is ready to join a proposed cap on Oil output by OPEC members…
The IEA said global demand growth has continued to slow after hitting a 5-year high of 2.5 million bpd in the 3rd quarter of last year, to a 4-year low of 800,000 bpd in Q3 this year, due to “vanishing OECD growth and a marked deceleration in China”…
Philippine Government Says It Will Revoke Mining Company’s Newly-Issued Environmental Permit
Here’s a major lawsuit in the making, and another indication of the hostility mining companies are now facing in the Philippines – the country’s radical new government says it will cancel the environmental permit of a Nickel miner that just began operations this year…the issue with the mine is that it sits between Mount Hamiguitan, a UNESCO World Heritage Site, and Pujada Bay, a marine protected area, said Environment and Natural Resources Secretary Regina Lopez who calls its approval “madness”…
“The ECC (environmental compliance certificate) was reviewed and as far as I know it will be cancelled,” Lopez told Reuters…the ECC “should have never been given,” she declared…so a mining company goes through the drawn-out process of obtaining an ECC in the Philippines, only to have a new government revoke the permit…
In Today’s Morning Musings…
1. Alix Resources (AIX, TSX-V) doubles on Lithium news out of Mexico…
2. Orex Exploration (OX, TSX-V) completes $1.5 million financing to make Goldboro Gold Project “shovel ready” by the end of next year…
3. CRB chart demonstrates underlying strength in commodities…
4. Silver tries to regain its footing after last week’s big drop – key levels to watch…
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…
I guess minutes today should give some direction on the US dollar, so far earnings on companies in the us not looking so good.
Comment by Laddy — October 12, 2016 @ 5:01 am
The great irony, Laddy, is that the dollar is rising on the speculation of a rate hike, but as the dollar rises (as we’ve seen previously) this puts additional pressure on the economy which in turn constrains the Fed…
Comment by Jon - BMR — October 12, 2016 @ 7:48 am
yes jon, also with the sharp rise in the dollar gold has pretty much stayed calm, encouraging.us economy sits on a pinnacle,and its about to fall.
Comment by Laddy — October 12, 2016 @ 8:03 am