Tuesday, April 27, 2010
Stiff Britches Day for Metals & Miners
It is 6:08 AM. Let's pour the coffee in the thermos, hop in the F-250 and go for a ride in God's country. No use hanging around the break room, it's a stiff britches day for the metals and miners. Life has got so simple in the markets lately, just checkout the spot price for gold and copper. Like your grandma's thermometer and barometer, they will tell you what's in the weather without looking for clouds in the sky. If gold is heading south from $1150/oz and copper from $3.50/lb, you can bet Greece or Goldman Sachs or both are back in the news. Today its a double-header with more jitters coming from Europe on the Greek debt problem and Goldman Sach's luminaries preparing for today's Senate hearing. At least the volcano is behaving and folks are flying airplanes again. (Gold, Goldman, Greece & Eyjafjallajökull) Who said commodities trade on fundamentals anymore?
Here goes the euro down the mineshaft:
Here follows gold and copper...
And here is your standard article on days like this:
METALS-Copper at 1-wk low as Greek debt issues weigh (Michael Taylor, REUTERS London, 4/27/2010)
If you still think fundamentals matter, you may take some comfort from this Steel Business Briefing morning report:
"Steel consumption in the European Union is recovering and should continue rising in 2011, according to the latest forecast from the steel producers’ group Eurofer. Output of steel-consuming industries fell 19% last year, but should rise by 1.1% in 2010 and by 4.1% in 2011..." (Steel Business Briefing, 4/26/2010)
Or you might point out that molybdenum, a key alloy in the manufacture of steel, has been rock-steady for weeks in a tight $17-18/lb range close to the London Metal Exchange (LME) 15-month contract of $18.14/lb.
Or you might remind me that Newmont (NEM) just reported a crackerjack first quarter:
Newmont Generates First Quarter 2010 Operating Cash Flow of $728 million; Adjusted Net Income(1) of $408 million, up 105% from First Quarter 2009 (Press Release, 4/27/2010)
Or you and I might just go over to Spring Valley and see if we can get this pickup high-centered. Digging out in God's country is no fun but sure beats watching these markets bucakroo!
Let's walk the walk before we head out. Don't forget to pack the Handyman:
4-WD is OFF - cautious markets; the VIX or "fear index" is back in the 18s but well below 25; metals & miners are down with benchmark FCX back in the high seventies but above $75 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment (what's this?)
The YELLOW light is switched back on our fuel gauge with oil above $80
A ORANGE light is ON for possible adverse regulation/legislation: Mine Safety Violations, Miner's claim fee, Miner taxation, Cortez Hills, mercury emissions &
General Moly Mt. Hope Water Rights
Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)
NYMEX/COMEX: Oil is down $0.75 in early trading to $83.45 (June contract, most active); Gold is down $5.2 to $1148.8 (June contract, most active); Silver is down $0.167 to $18.700 (May contract); Copper is down $0.0645 to $3.4635 (May contract); Western Molybdenum Oxide sits at $17.75, LME moly 3-month seller's contract remains at $18.14
The DOW is up 7.26 points to 11212.29; the S&P 500 is down 1.23 to 1210.82. The miners are down:
Barrick (ABX) $40.30 down 0.40%
Newmont (NEM) $53.09 down 0.19%
US Gold (UXG) $3.19 unchanged
General Moly (Eureka Moly, LLC) (GMO) $3.69 down 6.11%
Thompson Creek (TC) $13.73 down 0.51%
Freeport-McMoRan (FCX) $78.04 down 2.94% (a bellwether mining stock spanning copper, gols & molybdenum)
The Steels are down, (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $42.47 down 1.03% - global steel producer
POSCO (PKX) $118.61 down 2.31% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is down 0.91% to $1,423,956.43 (what's this?).
Write Colonel Possum at email@example.com for answers to your questions or to request e-mail updates on the market
Headline photograph by Mariana Titus