Tuesday, December 7, 2010
Au, Ag & Cu New Records - GMO, UXG & ABX Surge
It is 6:03 AM. Grab a record breaking cup and let's see what Sweet Ruby T has on her lo-boy trailer for Pearl Harbor Day...
Gold, Silver & Copper set new records
Nothing like extending the Bush tax cuts to rally the animal spirits in the marketplace. Gold, silver and copper all set new records this morning as oil bounced above $90/bbl:
COMEX Gold $1432.5/oz 08:25:00 ET 12/7/2010, February contract most active
COMEX Silver $30.75/oz 08:25:00 ET 12/7/2010, March contract most active
COMEX Copper $4.132/lb 08:45:00 ET 12/7/2010, March contract most active
General Moly Soars
The ole Colonel will update you as soon as I find out more about what happened at yesterday's water application hearing for General Moly (GMO). As you may recall the State Engineer set December 6 as the date for protests to the Company's water applications to be heard. Following the hearing, the State Engineer will issue a ruling with respect to these applications. The markets must have sensed something positive because GMO stock took off like a brush fire at 10:31 a.m. (ET) bouncing nearly 9% from $5.65 to an intraday high of $6.15 by 1:18 p.m.(ET). GMO closed the day at a respectable $5.86/share.
The markets are now open and General Moly has taken another run at the $6 fence for a morning high of $6.09. Presently GMO is trading in $5.98 pasture.
By the by, while I was on the road last month General Moly released an excellent 2-part video on their present Mt. Hope plans and related community involvement. A faithful reader directed me to the YouTube links:
General Moly Mt. Hope Project (Part I - 10:39 minutes)
General Moly Mt. Hope Project (Part II - 14:42 minutes)
Don't be surprised to see yourself in the mix!
Gold Miners post new 52-week highs
The rapid rise in gold prices has certainly helped our gold miners reach new 1-year highs. Barrick (ABX) and junior miner U.S. Gold (UXG) have both set 52-week highs in early trading today besting yesterday's performance. Newmont (NEM) has tried but fallen short of capping the 52-week high set in late September. For the record books:
Barrick (ABX) 52-week high $55.72 12/7/2010
Newmont (NEM) 52-week high $65.50 9/22/2010 (today's high $64.05)
U.S. Gold (UXG) 52-week high $7.87 12/7/2010
With all this record setting the Eureka Miner's Index(EMI) has also flown to higher mountain tops perching at a lofty 739.1 (see below).
More Followup on Copper's Mystery Buyer
Last Thursday (Rustler's Moon) we discovered that someone is holding an enormous quantity of the London Metal Exchange's red metal stockpile. The Wall Street Journal broke the story, Reuters carried a followup article and last night the Wall Street Journal reported the mystery buyer has been revealed by London's Daily Telegraph newspaper:
Big Bank Sitting On A Big Pile Of Copper (CAROLYN CUI And DAN FITZPATRICK, WSJ, 12/6/2010)
Apparently J.P. Morgan Chase & Co. purchased more than $1 billion of copper for clients, accounting for more than 50% of all the metal stored in official London warehouses. This has at least exaggerated an impending supply shortage of copper. Although there is nothing technically nefarious going on here, it does emphasize the role of big players in the metals markets and reminds us how commodities have emerged over the past several years as an alternative "asset class" for investment.
Copper giant Freeport-McMoran (FCX) doesn't seem to care about who's hoarding copper, setting another 52-week high in early trading today at a nose bleed $114.24. Remember when FCX was sub-$60 this July? Freeport is important to the Eureka Miner's Index since it represents not only a benchmark for copper mining but also includes gold and molybdenum in its portfolio.
Daily Market Roundup
Enough talk, let's walk the walk:
Eureka Miner's Index (EMI)
The Eureka Miner's Index(EMI) sets yet another new record today besting its performance last Friday. The EMI is above-par at 739.13, up from yesterday's 625.10 and Friday's record 682.00. The 1-month moving average is 504.37. The 2010 record high for the EMI will now be 739.13 set 12/7/2010; the low was set 6/7/2010 at 50.7 exactly six months ago. An EMI greater than 100 signals better times for the metals & miners relevant to Eureka County, the EMI reversed its downward trend last Friday.
Eureka Outlook Dashboard
4-WD is OFF - Animal spirit conditions in the marketplace; The VIX or "fear index" is below 25; bellwether Freeport-McMoRan (FCX) is in the low-$100s above its 200-day average of $79.39 (our new warning level, 12/06 update); 10-year Treasurys are safely below 4% preserving a low-interest rate environment.
The GREEN light is turned back on for Commodity Reflation with copper trading comfortably above $3.50/lb
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 Watch as the Federal Reserve resumes buying Treasurys (aka QE2)
The GREEN light is turned back on for Investor Confidence as investment returns to the equity markets
The ORANGE light is turned on our Fuel Gauge with oil above $90
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 $0.75 in early trading at $90.13 (January contract, most active); Gold is up $12.2 to $1428.3 (February contract, most active); Silver is up $0.850 to $30.585 (March contract, most active); Copper is up $0.1070 to $4.1150 (March contract, most active)
Western Molybdenum Oxide is $15.75; European Molybdenum Oxide is $16.05; LME moly 3-month seller's contract is $15.87, LME cash seller is $15.64
Stock Market Morning Update
The DOW is up 81.62 points to 11443.81; the S&P 500 is up 10.18 to 1233.30. Miners are mostly happy but the big golds are pulling back:
Barrick (ABX) $54.79 down 0.07%
Newmont (NEM) $62.93 down 0.82%
US Gold (UXG) $7.71 up 2.25%
General Moly (Eureka Moly, LLC) (GMO) $5.96 up 1.71%
Thompson Creek (TC) $13.74 up 0.29%
Freeport-McMoRan (FCX) $113.34 up 3.13% (a bellwether mining stock spanning copper, gold & molybdenum)
The Steels are smiling (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $36.57 up 3.19% - global steel producer
POSCO (PKX) $105.68 up 1.67% - South Korean integrated steel producer
The Eureka Miner's Grubstake Portfolio is is up 1.40% to $1,898,792.27 (what's this?).
Write Colonel Possum at firstname.lastname@example.org for answers to your questions or to request e-mail updates on the market
Headline photograph by Mariana Titus