China Loves Buicks...Good News for Mining?

Morning Miners!

It is 6:44 am, the coffee is hot and life is good in the Great Basin! Before I do a market roundup, the ole Colonel wants to remind you that Patrick Ball is coming to the Opera House May 15th. This is a great show, I've seen it before and plan to be at the door with my sweetheart at 6:30 pm sharp to buy tickets. Checkout the "Eureka Opera House" link on the right of this page for more details.

I try to find nuggets in world news that help us understand the big picture for mining in the months ahead. There are two good ones this morning. Surprisingly, General Motors reported record sales in China for March, up 24.6%. Too bad they can't do that in the good ole U.S.A.! This is interpreted as a resurgence of confidence in China's economic outlook by the Chinese.

Item two is the long awaited Alcoa earnings report for the first quarter of this year. As expected, everything is lousy with low aluminum prices and collapsing global demand hitting their bottom line. On a positive note:

"Alcoa's president and chief executive officer, Klaus Kleinfeld, said his industry could be on the verge of improving, noting that there are "both near-term and long-term catalysts" that should help improve the aluminum business. For one thing, "current stimulus programs that target infrastructure and energy efficiency will create a demand" for aluminum, he said." (WSJ, 4/8/09)

Kleinfeld went on to say that improvements in China were key to this outlook. The markets liked that, Alcoa (AA) is up more than a percent to $7.869 (Hey, they could have easily been down 10% in this environment!).

These news items and the recent price action in copper say something positive for improving global demand and that's good for mining. I rest my case.

Enough talk, let's walk the walk:

Oil is still below $50 and headed lower at $48.37; the dollar ("Dixie" or .DXY) is flat at 85.347 and the commodity index (.CRB) is down slightly, 0.61%.

Gold is up $1.6 to $884.9 (June contract); Silver is up $0.045 to $12.225; Copper is just under 2-bucks at $1.9960; Molybdenum remains steady at $8.20.

The DOW is up 40 points to 7,829.38; the S&P 500, up 5.42 points to 820.97. Miners have their visors down:

Barrick (ABX) $28.65 down 1.62%
Newmont (NEM) $41.40 down 2.86%
General Moly (GMO) $1.16 down 0.85%
Quadra (QUA.T) C$5.37 down 2.89%
Freeport McMoran (FCX) $40.18 down 2.85% (a bellwether mining stock spanning gold, copper & molybdenum)

Sunshine for Sunday buckaroos,

Cheers,

Colonel Possum