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


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) 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.

Tuesday, January 26, 2010

Chinese Theater, Gold & Silver

Morning Miners!

It is 6:08 AM, grab a cup and let's checkout what's playing at the Global Investor Theater. Every season has a favorite play. Last Fall it was the Dubai Credit Crisis Follies which opened in late November. That drama was about a Middle East country that built the tallest building on earth then couldn't pay for it (Dubai, A World Away?). It sent gold tumbling and investors worrying about the overhang of sovereign debt in other parts of the world. This was quickly followed by a Greek tragedy for the Christmas season about a euro-zone member country that blew its national treasure on an Olympics Game it couldn't afford just before a great financial crisis. Investors worried even more, gold tumbled further and everyone prayed the New Year shows would be more uplifting.

The first New Year play opened at the Theater of China and featured a very rich uncle who showered money on his minions, grew his kingdom swiftly and even lent money to a profligate neighbor across a great ocean. With a sudden change of heart, the uncle pulled his purse strings tight causing a great outcry from his people and worry for his neighbor. This play is still in Act I and some investors are heading for the exits. Can't we have a nice light comedy once in a great while?

Let's see what the Wall Street Journal has to say this morning about the latest Chinese theater:

"A return to risk aversion amid renewed concerns about potential Chinese tightening of monetary policy has left gold futures on the defensive along with other commodities and stock-index futures early Tuesday." (WSJ, 1/26/2010)

Whoa, that's a polite review. Maybe Act II has some happy parts; gold tripped but is pulling back up:

Silver nose dived but now swims for the surface:

The copper rally is broken, nuts:

Hang in their buckaroos, it looks like Barrick (ABX), Newmont (NEM) and US Gold (UXG) are among the few miners not in the red. Maybe they know how this lousy play turns out.

The Colonel isn't waiting for intermission, let's walk the walk:

4-WD is ON - the VIX or "fear index" is bobbing around 25, rougher markets are 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 down $0.52 in early trading to $74.74 (March contract, most active); Gold is down $0.7 to $1096.4 (February contract, most active); Silver is down $0.550 to $16.595 (March contract); Copper is down $0.0480 to $3.3345 (March contract); Molybdenum is steady at $15.50

The DOW is up 32.88 points to 10229.74; the S&P 500 is up 0.55 points to 1097.33. The miners are mixed:

Barrick (ABX) $36.42 up 1.05%
Newmont (NEM) $44.35 up 0.50%
US Gold UXG) $2.37 unchanged
General Moly (Eureka Moly, LLC) (GMO) $2.59 down 2.73%
Thompson Creek (TC) $12.31 down 2.15%
Freeport McMoRan (FCX) $72.63 down 2.64% (a bellwether mining stock spanning gold, copper & molybdenum)

The Steels are down, (a "tell" for General Moly & Thompson Creek):

ArcelorMittal (MT) $41.22 down 3.01% - global steel producer
POSCO (PKX) $121.27 down 3.55% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 1.35% to $1,238,215.49 (what is this?).


Colonel Possum

Headline Photograph by Mariana Titus

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