"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, McEwen Mining (MUX) and General Moly (GMO). 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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