"The history of Eureka lies in its future." - Lambert Molinelli, 1878

DISCLOSURE

The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO), McEwen Ming (MUX) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Thursday, July 2, 2009

Have a Happy Fourth Eureka!


Morning Miners!

It is 6:00 AM sharp. The ole Colonel will be on the road soon as many of you. Drive safely and The Report should be on the air later next week. Let me leave you with some good thoughts for the upcoming Independence Day holiday.

Last month we looked down the recovery highway with an article, Positive Signposts for Eureka County. For a week we dug around in the sage and found the following:

Commodity reflation
Stabilizing credit and equity markets
Low inflation for the next 6-12 months
Positive trend for gold and molybdenum prices
Solid reports from Barrick and General Moly

The Colonel has said that this summer/fall could be rough. There is a lot of glum news out there, today's jobs report is a good example. Nonfarm payrolls declined 467,000 in June, a much greater decline than the 350,000 economists expected. No one said the economic recovery would be easy but we are off the peaks at start of the year where we saw losses of 700,0000. Don't tell the poor soul that just lost his job that labor reports are a rear view mirror look at the economy, but they are.

In the next several months I expect the stock market, commodities and gold to all see downward corrections. Remember a "stable" market is one that goes down as well as up. We've had one heck of a run in metal and stock prices since March and it is time to see some downward movement. Stocks might correct 10% or maybe even 15% but I doubt we're headed back to the Devil's Triple Six (S&P 500 March intraday low, 666.79). Gold may drop in the mineshaft a bit and see the 800s again but don't despair, the trend is still up and positive for the year. I've made some predictions, I'm sticking to them and they say by the end of the year we should have the flat changed and be rolling down the highway again. You can revisit my predictions for gold and the S&P 500 in the Colonel's Beer Derby on the bottom right of this blog.

So don't worry, be happy and have a great Fourth of July. We've got a lot to be thankful for, let's walk the walk:

Oil is down $2.50 to $66.81 in early trading (August contract); Gold is down $10.7 to $930.6 (August contract); Silver is down 0.38 to $13.380 (September contract); Copper is down $0.0585 to $2.2720 (September contract); Molybdenum is down a thin flat washer to $10.57 from last week's $10.58.

The DOW is down on the jobs report 177.83 points to 8326.23; the S&P 500, down 20.46 points to 902.87. The miners are sad puppies today:

Barrick (ABX) $33.74 down 3.601%
Newmont (NEM) $41.15 down 2.44%
General Moly (Eureka Moly, LLC) (GMO) $2.15 down 4.87%
Freeport McMoran (FCX) $49.14 down 2.83% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are feeling the blues too (a "tell" for General Moly):

Nucor (NUE) $42.51 down 2.19% - domestic steel manufacturing
ArcelorMittal (MT) $31.80 down 4.10% - global steel producer
POSCO (PKX) $83.50 up 2.27%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is down 3.04% to $965,660.79.

Cheers,

Colonel Possum

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