"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, October 5, 2010

Gold, Silver & Copper New Highs - Silver Outlook High-tech

*** BREAKING NEWS *** More new highs:

COMEX gold $1342.90/oz 15:15:00 ET, 10/5/2010 (December contract, most active), new record
COMEX Silver $22.920/oz 14:35:00 ET, 10/5/2010 (December contract, most active), 30-year high
COMEX Copper $3.745/lb 10:30:00 ET, 10/5/2010 (December contract, most active), 26-month high (7/18/2008)

Morning Miners!

It is 5:48 AM. Grab a cup and get ready for another record breaker day. If you're an early riser you may have seen Ruby's custom Pete parked down by Country Roads this morning. She's proud as can be of her new ride. Someone asked why she has a sleeper on a day-haul truck. Ruby Tuesday winked, "It's a nice hideout from them blasted grandkids!"

Now don't come a'knocking...

Gold, Silver and Copper Hit New Highs

It looks like another gold rush this morning. Gold & silver got a nice bounce on the London spot market around midnight (PT) and moved up along with copper to set new highs on the COMEX just a short while ago:

COMEX gold $1322.00/oz 10:15:00 ET, 10/5/2010 (December contract, most active), new record
COMEX Silver $22.170/oz 11:00:00 ET, 10/5/2010 (December contract, most active), 30-year high
COMEX Copper $3.7220/lb 09:45:00 ET, 10/5/2010 (December contract, most active), 26-month high (7/18/2008)

Our friends in London caught the copper move,

Copper Advances Before U.S. Service-Industries Report; Tin Gains to Record (Yi Tian and Anna Stablum, London Bloomberg News, 10/5/2010)

and a good background piece on silver posted yesterday:

Silver May Gain Into 2011 on Investor, Industry Use, Deutsche Bank Says
(Nicholas Larkin, edited by Claudia Carpenter, London Bloomberg News, 10/4/2010)

Silver Outlook: Safe Haven and Hi-tech

As reported by Bloomberg, Daniel Brebner of Deutsche Bank AG believes silver may see $26.50/oz in 2011 after rock star performance this year. Silver benefits as a safe haven precious metal play but also has many industrial uses in a recovering economy.

This report has covered the importance of silver in future battery technologies for the emerging electrified transportation story and continued application in portable devices. Silver-zinc batteries have a higher energy per volume ratio than lithium-ion and close to lithium-ion in energy per weight. The Report has covered the hi-tech future of silver in recent blogs:

A Silver Lining for the Silver State, 11/16/2009

What's in a Battery for Eureka County?, 11/23/2009

Looks like we've got a good day for the miners too, buckaroos.

Daily Market Roundup

Enough talk, let's walk the walk:

The Eureka Miner's Index(EMI) is above-par at 266.46, up from yesterday's 245,81 and a long way from the 6/7/10 low of 50.7. Today's number is above the lower trend level of 253.30 and very comfortably above support at 186.51. The 1-month moving average is 223.45. The new 2010 record high for the EMI is 274.66 set Friday, 9/24/2010. Remember an EMI greater than 100 is good times (or at least better times) for the metals & miners relevant to Eureka County.

Eureka Outlook Dashboard

4-WD is OFF - improving roads in the marketplace; The VIX or "fear index" is below 25; metals & miners are on firm timber with bellwether Freeport-McMoRan (FCX) in the high-$80s above its 200-day average of $74.59 (our new warning level, 10/01 update); 10-year Treasurys are safely below 4% preserving a low-interest rate environment but there is still some deflationary caution now that we are sub-3%.

The YELLOW light is turned back on for Commodity Reflation. Although copper is trading above $3/lb, the 10-yr T-Note is below 3.00%

The GREEN light is turned on for Stable Markets with the VIX below the 30 level (what's this?)

The YELLOW light is turned on for Inflation/Deflation Watch as the Federal Reserve resumes buying back Treasurys and the 10-yr T-Note remains below 3.00%

The GREEN light is turned back on for Investor Confidence as investment returns to the equity markets but the bond markets still signal trouble ahead

The YELLOW light is turned 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, U.S. House committee debates miner workplace safety bill

Otherwise, all lights are green on the Eureka Outlook Dashboard (upper right, what's this?)

Commodity Market Morning Update

NYMEX/COMEX: Oil is up $0.84 in early trading at $82.31 (November contract, most active); Gold is up $16.0 to $1332.8 (December contract, most active); Silver is up $0.327 to $22.365 (December contract, most active); Copper is up $0.0605 to $3.7245 (December contract, most active)

Western Molybdenum Oxide is $15.00; European Molybdenum Oxide is $14.95; LME moly 3-month seller's contract is $15.42, LME cash seller is $15.15

Stock Market Morning Update

The DOW is up 113.41 points to 10864.68; the S&P 500 is up 14.82 to 1151.85. Miners are rocking:

Barrick (ABX) $47.07 up 2.37%
Newmont (NEM) $64.53 up 2.85%
US Gold (UXG) $5.06 up 2.64%
General Moly (Eureka Moly, LLC) (GMO) $3.60 up 1.12%
Thompson Creek (TC) $10.79 up 1.60%
Freeport-McMoRan (FCX) $89.23 up 2.29% (a bellwether mining stock spanning copper, gold & molybdenum)

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

ArcelorMittal (MT) $32.71 up 1.84% - global steel producer
POSCO (PKX) $117.65 up 1.98% - South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is is up 1.78% to $1,538,045.01 (what's this?).


Colonel Possum

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

Headline photograph by Mariana Titus

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