"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.

Friday, January 8, 2010

Unemployment Holds at 10%, Gold & Dollar Dance

Morning Miners!

It is 6:10 AM. Scott dropped off a can of his new 2010 TGIF coffee, he thought we might need it for the monthly jobs report. There are no data regarded by economists to be more important than the Labor Department's labor statistics. It is the barometer for economic revival domestically, will someday trigger a Fed decision to raise interest rates and is closely watched abroad to gauge global recovery.

Today's report is a real mind bender. The good news is that the November numbers were revised to show the U.S. economy added jobs for the first time since the recession began two years earlier; the bad news is that the December payroll numbers are worse than forecast:

"Nonfarm payrolls fell by 85,000 last month, compared with a revised 4,000 gain in November, the Labor Department said Friday. Economists surveyed by Dow Jones Newswires had expected a payroll decrease of just 10,000. The November figure originally showed an 11,000 drop in payrolls.

The unemployment rate, calculated using a survey of households as opposed to companies, remained at 10% in December, the same level as the previous month. Economists had forecast the jobless rate would edge higher to 10.1%." (WSJ, 1/8/2009)

Global response? Spot gold on the London Exchange jumped $19 in minutes to $1139 and then retreated. Since gold sold off prior to the report, the day-to-day change is less dramatic. When gold jumped, the dollar dropped; then gold flopped and the dollar hopped - their old familiar dance. The broader markets are down but not by much, The German DAX is only off fractionally. Nobody said this recovery is going to be easy or fast pardner.

Here are charts of spot gold and the U.S. Dollar (UUP). The rise in the dollar corresponds to the fall in gold (EST vs London time):

In local news, a hearing was conducted by District Judge Dan L. Papez on the Eureka Moly LLC water rights issue in Kobeh Valley. The State Engineer’s March 26th, 2009 granting of water rights to Eureka Moly was appealed by the County and some community members. Legal arguments were heard yesterday from both sides and the judge said he will review the case carefully. This may take approximately 60 days.

You may be interested to know that two new Exchange Traded Funds (ETF) will be made available so that the individual investor can participate in the platinum and palladium markets. The Eureka Miner's Grubstake portfolio holds ETFs in gold (GLD) and silver (SLV). Here's the link to more information:

US platinum, palladium ETFs to start trade Friday

Enough talk, let's walk the walk:

4-WD is OFF - the VIX or "fear index" remains below 25; smoother road market conditions expected to continue (what's this?)

Yellow light is ON for our fuel gauge with oil above $80

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 $0.34 in early trading to $82.32 (February contract, most active); Gold is down $5.2 to $1128.5 (February contract, most active); Silver is up $0.020 to $18.365 (March contract); Copper is down $0.0070 to $3.4200 (March contract); Molybdenum is steady at $13.50.

The DOW is down 30.76 points to 10576.10; the S&P 500 is down 1.70 points to 1139.99. The miners are mixed:

Barrick (ABX) $40.83 down 0.83%
Newmont (NEM) $48.68 down 1.24%
General Moly (Eureka Moly, LLC) (GMO) $2.56 up 3.64%
Thompson Creek (TC) $14.02 up 1.89%
Freeport McMoran (FCX) $85.72 up 0.09% (a bellwether mining stock spanning gold, copper & molybdenum)

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

ArcelorMittal (MT) $47.81 down 0.50% - global steel producer
POSCO (PKX) $135.15 up 0.48% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 0.20% to $1,354,442.67 (what is this?).


Colonel Possum

Headline Photograph by Mariana Titus

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