"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.

Monday, June 7, 2010

Copper Tumbles to 8-Month Lows


Morning Miners!

It is 5:29 AM. Keep the coffee pot going for me, I've got an early morning meeting. Here's a quick look at the markets before the ole Colonel heads out.

If there is just one thing I want to check lately it is spot copper prices. They held valiantly at the key $3/lb level as late as last Thursday then fell solidly into bear country Friday (4-month lows). This morning plumbs a new depth (8-month lows) although there is some movement off the bottom at $2.7861:



This is not a good sign for metals & miners although we may see a small relief rally for the sector later today. Here's a Reuters article that pretty well sums up the situation as the euro plummets further to $1.1955 on more euro-woes:

Copper hits eight month-low as eurozone fears mount
(Reuters, 6/7/2010)

Our molybdenum summary for last week shows some further weakness in European moly oxide notching down to $15.00/lb - nuts!

Western Moly Oxide (FeMo65) remains at $16.00/lb (the price reported by Infomine and tracked by Base Metals on the General Moly Website)

Moly Oxide, Europe (Mo Drummed Molydbic Oxide EU) falls to $15.00/lb (the price reported in the Metals Bulletin)

LME Futures Contracts

LME cash seller moves to $16.78

3-Month (Buyer) $35,500/metric ton $16.10/lb
3-Month (Seller) $37,500/metric ton $17.01/lb

15-Month (Buyer) $35,500/metric ton $16.10/lb
15-Month (Seller)$37,500/metric ton $17.01/lb

Here is a chart of the LME 3-month contract (seller) from the February launch to the present:



Enough talk, let's walk the walk:

4-WD is ON - rough roads in the marketplace; The VIX or "fear index" moves to the mid-30s, still above our 25 level threshold; metals & miners remain on shaky timber with benchmark FCX falling to low $60s well below its 200-day average of $75 (our new warning level), 10-year Treasurys are safely below 4% preserving a low-interest rate environment

The YELLOW light is turned on for Commodity Reflation with copper trading below $3/lb

The YELLOW light remains on for Stable Markets with the VIX above the 30 level (what's this?)

The YELLOW light remains on for Investor Confidence with the possibility of a greater than 10% correction in the broader markets

The GREEN light remains turned on our Fuel Gauge with oil below $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 $0.07 in early trading to $71.44 (July contract, most active); Gold is down $3.2 to $1214.5 (August contract, most active); Silver is up $0.0.81 to $17.380 (July contract); Copper is down $0.0420 to $2.7775 (July contract)

Western Molybdenum Oxide is at $16.00; LME moly 3-month seller's contract remains at $17.01, LME cash seller moves to $16.78

The DOW is up 22.52 points to 9,954.49; the S&P 500 is up 2,80 to 1067.68. The miners are down:

Barrick (ABX) $41.20 down 0.53%
Newmont (NEM) $53.34 down 0.70%
US Gold (UXG) $3.73 down 0.75%
General Moly (Eureka Moly, LLC) (GMO) $3.38 unchanged
Thompson Creek (TC) $8.87 unchanged
Freeport-McMoRan (FCX) $61.59 down 1.94% (a bellwether mining stock spanning copper, gols & molybdenum)

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

ArcelorMittal (MT) $27.03 down 1.71% - global steel producer
POSCO (PKX) $90.77 down 0.48% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is down 0.50% to $1,267,454.69 (what's this?).

Cheers,

Colonel Possum

Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market

Headline and series photographs by Mariana Titus

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