Gold & Precious Metals

Gold And Silver Struggle As Sentiment Shifts

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Posted by Przemyslaw Radomski

on Thursday, 12 July 2018 11:21


In yesterday’s analysis, we discussed how meaningful gold and silver’s pre-market decline was given a relatively small move in the USD Index. The implications were quite bearish for the PM market, especially that we had just seen a target being reached in gold stocks. And because mining stocks had just underperformed gold for the first time in weeks. Yet, before the day was over, the USD, gold and silver had all reversed and erased most of their daily moves. Does it make the outlook bullish again? Is gold still likely to reach $1,300 shortly?

No. The USD Index indeed reversed its course, but the precious metals’ initial reaction shows how vulnerable they are with regard to the rallies in the USD Index. This is not the kind of reaction that one wants to see when keeping a long position. It’s the one that is preferred while holding a short one.

Let’s take a look at the charts for details.... CLICK for the complete article


Gold & Precious Metals

SWOT Analysis: Gold Stocks Outperform Bullion for Past Five Weeks

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Posted by Frank Holmes - US Global Investors

on Tuesday, 10 July 2018 07:52


·         The best performing metal this week was gold, up 0.14 percent. St Barbara produced a record-breaking 403,089 ounces, up 6 percent from the 2017 fiscal year, according to Bloomberg. This is the first time the company has exceeded 400,000 ounces in a year. Mining in higher grade zones of the South West Brank resulted in an average grade of 13.2 grams per ton of gold. At June 30, the total cash at bank and term deposits was A$344 million, up from A$262 million on March 31.

·         Top officials at the Chinese Central Bank gave their assurances on Tuesday that yuan devaluation would not be used as a weapon in the trade war despite speculation that the weakening currency is a deliberate attempt to gain an advantage over the United States. The yuan lost 3.7 percent over the past three weeks, making it the worst performing currency in Asia for the period. “Since the start of the week, everyone’s become a lot more nervous about what’s happening in China,” says currency and metals strategist Georgette Boele of ABN Amro. 

·         The yuan’s share in the Russian Central Bank’s foreign-exchange and gold assets almost tripled in the last three months, jumping from only 1 percent in the third quarter to 2.8 percent. “The rise in the share of yuan assets… reflects Russia’s intentions to diversify away from major currencies,” said emerging markets currency strategist Piotr Matys. Russian policymakers cited China’s economic success in the past year and the renminbi’s appreciation against the U.S. dollar to explain their decision to buy yuan.


·         The worst performing metal this week was platinum, down 1.02 percent as declining European diesel sales continue to weigh on demand.  Platinum is used to reduce emissions in diesel engines and that segment of the automobile market has fallen to 38 percent versus a year ago at 47 percent in wake of the VW emission rigging scandal. Gold imports to India dropped over 25 percent in June from a year earlier, reports Bloomberg. The rupee’s extended slump hit record lows last month, making overseas goods more expensive. Between the weaker rupee and changing attitudes among Millennials, Indian jewelers are struggling to gain new customers as young, urban professionals increasingly choose vacations, electronics and other luxuries over jewelry. India’s gold consumption has been declining since 2010 due to government crackdowns on “black money,” which moves outside the official economy and escapes taxation.

·         Centerra Gold’s Mount Milligan mine is facing a water shortage that could impact production. The company has requested the BC Environmental Assessment Office update its environmental assessment to allow for access to additional ground- and surface water sources through 2020. Without additional water, Centerra could see decreased output levels in quarter four of 2018.

·         Exchange-traded funds with a focus on commodities experienced outflows for the eighth straight week, reports Bloomberg. Precious metal funds also suffered from outflows, with SPDR Gold Shares experiencing the steepest loss at $686 million. However, VanEck Vectors Gold Miners added a net $178.2 million in a single trading session, increasing the fund’s assets by 2.1 percent, according to Bloomberg. This is the largest one-day increase since May 29 and the twelfth straight day of inflows.


·         As seen in the chart below, gold stocks have outperformed bullion for the past five weeks. In fact, the spread between the two shows outperformance of gold equities by over 500 points.   This increase in the value of the gold mining companies relative to gold is borne out by the money flows cited in the prior bullet point, in that money is coming out of precious metal funds and instead are buying the stocks of the companies that mine gold. Perhaps this rotation is anticipating the seasonal buying pattern in the yellow metal, which normally rises as the fall season approaches, but the stocks can perform much stronger than gold bullion itself.


·         Forecasts from Australia, the world’s second-largest producer of gold, expect the yellow metal to “perform well” in the second half of 2018, reports Bloomberg, namely due to political uncertainty and trade tensions. The Department of Industry, Innovation and Science said in its quarterly commodities outlook, “Any sustained overheating in the U.S. economy would likely see inflation rise and gold demand rise, as investors seek an inflation hedge.”

·         Commodity bull Goldman Sachs says the trade war between China and the U.S. will have an economic impact, but a “small” one, reports Bloomberg, particularly when it comes to the threat on raw materials. The investment bank forecasts a 10 percent return on commodities over 12 months as the dollar drops, and reiterated its bullish call on crude oil. In another bit of news this week, it seems that returns on U.S. Treasuries have turned Japanese investors sour on America. In reaction to Japan shedding Treasuries, investors there have plowed record amounts into U.S. stocks, corporate bonds and agency-backed securities, writes Bloomberg.


·         According to Bloomberg, the U.S. dollar could be the best place for global investors to find safety amidst a trade war and higher rates from the Federal Reserve.  “That’s because the conflict is unfolding alongside what could be an even more powerful dynamic: U.S. monetary-policy normalization,” the article continues. Demand for the dollar is rising higher, leaving gold (historically known as the safe-haven asset) to drown. In fact, the yellow metal is heading for the lowest close in a year.

·         U.S. authorities demanded documents related to possible corruption and money laundering from Glencore Plc this week, sending the stock down the most in two years. “The documents relate to the company’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present,” reports Bloomberg. Two days after the plunge in price, Glencore announced that it will spend up to $1 billion buying back its own shares before the end of the year. Some analysts say this buyback plan makes major acquisitions by Glencore less likely in the near future.

·         The Associated Press reported on Friday that some immigrant U.S. Army reservists and recruits who enlisted in the military with a promised path to citizenship are quietly and abruptly being discharged. Immigration attorney and retired Army Reserve lieutenant colonel Margaret Stock, who helped create the immigrant recruitment program, said she has been inundated over the past few days by recruits being discharged. “Immigrants have been serving in the Army since 1775,” Stock said. “We wouldn’t have won the revolution without immigrants. And we’re not going to win the global war on terrorism today without immigrants.”



Gold & Precious Metals

Rising Temperatures Can Fry The Economy

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Posted by Brian K Sullivan

on Friday, 29 June 2018 15:05

heat and productivity

Temperatures will soar across much of the U.S. the next few days, approaching 100 degrees Fahrenheit (38 Celsius) from Chicago to New York as the summer’s first heat wave takes hold and spurs electricity demand. Heat affects more than daily life, it also has a huge impact on business and economic output... CLICK to watch the video


Gold & Precious Metals

How a Wild Fox Helped Make One of the Greatest Silver Discoveries in History

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Posted by Sean Brodrick - Edelson Institute

on Tuesday, 19 June 2018 08:00

4 Lessons in Mining Never To Be Forgotten - R. Zurrer for Money Talks

The histories of North America’s rushes for gold and silver are filled with outrageous stories and larger-than-life characters. And here’s one you haven’t heard before: A massive silver rush, one that was started by a wild fox.

It’s an incredible tale ripped from the pages from history. But it holds lessons for today’s investors.

Let me tell you the tale, and you be the judge. It’s the story of how silver was discovered in Canada.

What Happened After the Gold Miners Struck It Rich and/or Went Home Busted

The story begins after the fabled gold rush in the Cariboo, when the gold miners struck it rich, went home busted, or both.

There’s some dispute about what happened next. But one fact everyone can agree on is that Canada’s big silver deposits weren’t discovered until 1903.

That’s when Fred LaRose, a blacksmith working at his forge in the far reaches of Northern Ontario, was being continually bothered by a fox.

Foxes aren’t rare in that part of Canada — they’re about as common as weasels, but with big fluffy tails and better publicists. Usually, though, foxes are smart enough to stay away from people. This darned fox kept coming close — too close.

Fred’s short temper flared hotter than the iron he was working … now he could see the fox’s beady eyes staring at him from a bush. He turned and hurled his hammer at the critter. He missed the fox and went to retrieve his hammer. Behind the bushes, he found his hammer alright. But he also found a glittering vein of ore thrusting right through the surface of the rock.

Fred didn’t know it was silver at first. He showed a sample to the owner of the Matabanick Hotel in Haileybury, telling him that the rock seemed to contain “some kind of damned metal.” The hotel owner then showed the rock to T.W. Gibson, the director of Canada’s Bureau of Mines. Gibson’s conclusion: The rock contained niccolite (nickel-rich ore).

As often happens in these stories, the experts were wrong.

Still, by 1903, nickel was worth something. So, Gibson forwarded the sample to Ontario’s official geologist, Willet Green Miller, who passed it along to Ontario’s assayer, A.G. Burrows. Burrows looked at the rock and pronounced it silver.

Miller trucked on out to Fred’s camp, saw that there were indeed big veins of ore and chunks of metal, just lying scattered around! It was promising enough that he came back with two assistants to do a full geological survey.

Miller wrote in his report of “pieces of native silver as big as stove lids or cannon balls lying on the ground, as well as cobalt bloom and niccolite.”

The cobalt captured his fancy. So, near the ore deposit, by the railroad line on the shore of Long Lake, he set up a sign reading: “Cobalt Station.”

And that’s how Canada’s silver town became known as Cobalt Station. Where the miner’s pick-ax struck, Cobalt Station sprang into existence out of the wilderness.

Screenshot 2018-06-19 07.49.22



Gold & Precious Metals

Silver Stocks: The Rally Gets Serious

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Posted by Morris Hubbartt - Super Force Signals

on Friday, 15 June 2018 07:05

Today's videos and charts (double click to enlarge):

SFS Key Charts & Video Update




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