Monday, December 14, 2009
The Colonel Is On the Road Again
It is 6:25 AM and time to kick start a Monday on the road to the holidays. I'll be on the road too so the Report will be off the air for a few days. Here are some interesting news items this morning that point in the direction of a good close for 2009.
As December rolled in, the Dubai debt crisis sent gold down the shaft elevator (Dubai, A World Away?). Over the weekend, Dubai's government received $10 billion in financing from Abu Dhabi, which will pay part of the debt held by conglomerate Dubai World and its property unit, Nakheel. Dubai has authorized $4.1 billion toward paying Nakheel's Islamic bond obligations due today. Spot gold took a leg up on the news and sits at $1124 on the COMEX in early trading. The euro also strengthened as concerns about Dubai debt held by European banks waned. This is not the last of the sovereign debt story but a positive step.
General Moly (GMO) stock price took a wild ride Friday (Moly & POSCO Head Northh). The Colonel bought a few shares at $2.17 in the morning after positive price action from molybdenum, nickel and South Korean steel producer (and GMO investor) POSCO. Then some big party pooper sold a ton of shares mid morning creating the largest volume move since 9/10. Share price collapsed to $1.99 and thankfully buyers rushed in to close GMO at $2.04, the Colonel bought a few more shares at $2.05 on the updraft. This morning, GMO is heading north again leading the Eureka Miner's Grubstake with a 4% jump to $2.12. Overall, it looks like a good day for miners. I may be all wet but this looks a great price for General Moly if you believe in improving global steel demand and moly price for 2010.
Speaking of the Grubstake portfolio, the Report readers hold one integrated oil and one natural gas stock; Conocco Philips (COP) and EOG Resources(EOG). The natural-gas industry got a tremendous boost on the news that Exxon Mobil plans to acquire XTO Energy (XTO) for $31 billion in stock, plus the assumption of $10 billion in XTO's debt. This will increase Exxon's presence in an industry seen by many as producing the "transition fuel" to reduce oil dependence and bridge to future alternative energy sources. You have no doubt heard oil legend T. Boone Pickens pitch this idea on television ads. XTO has been one of his favorite plays and news of its acquisition has helped our own EOG investment jump 5% this morning. That's a natural gas Yee-ha!
Let's close on gold with another good article from Mineweb:
Weekend Top Story: Four digit gold "magical" for investment psychology (Mineweb, 12/14/2009)
Tocqueville fund manager John Hathaway gives us some of his interesting and balanced insights on what may lay ahead for gold next year.
So there, the Colonel leaves you with some thoughts to mull over until I run into you on Main Street!
Enough talk, let's walk the walk:
4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected (what's this?)
Yellow light is ON for possible adverse regulation/legislation: Cortez Hills & mercury emissions
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
Oil is up $0.01 in early trading to $71.966 (January contract, most active); Gold is up $4.4 to $1124.3 (February contract, most active); Silver is up $0.185 to $17.275 (March contract); Copper is up $0.0235 to $3.1565 (March contract); Molybdenum is ia staedy at $11.62.
The DOW is up 51.62 points to 10457.45; the S&P 500 is up 4.74 points to 1107.09. The miners are mixed:
Barrick (ABX) $39.70 up 0.30%
Newmont (NEM) $51.82 up 1.25%
General Moly (Eureka Moly, LLC) (GMO) $2.12 up 3.68%
Freeport McMoran (FCX) $77.65 up 1.09% (a bellwether mining stock spanning gold, copper & molybdenum)
The Steels are mixed, (a "tell" for General Moly):
Nucor (NUE) $42.37 up 0.28% - domestic steel manufacturing
ArcelorMittal (MT) $41.93 down 0.17% - global steel producer
POSCO (PKX) $127.69 up 0.76% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up a solid 1.14% to $1,257,757.56 (what is this?).
Photograph by Mariana Titus