NEW FORMAT for 2012
The Eureka Miner's Market Report has a new format. Three daily reports, "Mining", "Gold & Silver" and "Copper & Molybdenum" consolidate key morning market information for metals and mining relevant to Eureka County and surrounding areas with new expanded detail on moly prices.
The "Daily Market Roundup" also includes an "Oil Watch" and "Debt Crisis Watch" to monitor the impacts of global events on oil and fuel prices and the unfolding debt crises here and in Europe. Finally, "Stock Market Morning Update" provides the latest on the broader markets as well as the Eureka Miner's Million Dollar Grubstake Portfolio.
My Latest International Business Times commentary: Gold and Silver “Together Again” (12/05/2011)
My latest Kitco commentary:
What does CRS© tell us about Gold, Copper & Oil? (11/28/2011)
This morning's...
COMEX Gold price = $1,612.0/oz (February contract most active)
Eureka Miner’s Gold Value Index© (GVI) = 91.52 (declining gold value trend)
Value Adjusted Gold Price© (VAGP) = $1,471.7/oz
COMEX - VAGP = $140.3/oz; gold is trading at a premium to key commodities; the gold-to-copper ratio continues to exceed recession levels but is trending down
Wōdnesdæg
Morning Miners!
It is 8:02 AM. Have a cup of Busy Hump Day. Why is the in-basket so full in January? This morning it has some great news on the top and a little less good news underneath. Starting with the latter, Old Miner Woden is filling the Colonel's ears with "I told you so" as Europe takes some of the steam out of yesterday's market optimism.
Concerns over liquidity among euro-zone banks re-emerged overnight as deposits at the European Central Bank reached a fresh all-time high yesterday. This means that European banks are more willing to park money at the ECB than lend to other banks - not a happy. In addition, Spanish bond yields are on the rise again. Woden is tickled because at least gold got a bid suggesting that some of its safe-haven allure is returning to the lustrous metal. COMEX gold is up $11.5/oz at $1,612.0/oz.
OK, now the great news (not that a bounce in gold is all bad)...
General Moly Appointment & Mt. Hope Hires; Pennington COO
At 5:33 AM this morning, I got a press release announcing that General Moly (GMO)has appointed Robert I. Pennington as Chief Operating Officer. The ole Colonel is partial to engineers and I can't think of a better man than Bob for the job.
GMO also announced the hiring of Bernard (Bernie) Pacheco as Mt. Hope project Controller and Fred Zumwalt as Mt. Hope Mill Manager, effective January 1, 2012. Shortly after the press release a faithful follower of this report e-mailed me, "...very good promotion and the two guys coming in seem like seasoned vets." I couldn't agree more. Here's the whole scoop:
General Moly Appoints Robert I. Pennington as Chief Operating Officer, Hires Mt. Hope Project Controller and Mill Manager (Press Release, 1/4/2012)
Bruce D. Hansen, Chief Executive Officer, said:
I would like to congratulate Bob on his promotion to Chief Operating Officer. Bob works extremely hard for this Company and will be key to the successful construction and development of Mt. Hope. Additionally, I would like to welcome Bernie and Fred to General Moly. I am excited that the quality of the Mt. Hope project continues to attract some of the most experienced mining professionals from around the globe to join our small, but growing team. Both Bernie's and Fred's substantial industry experience will be invaluable in the construction and ramp-up of the Mt. Hope project.
10-4!
Daily Market Roundup
Mining Report
This morning's mining stocks...
Barrick (ABX) $47.84 up 0.69%
Newmont (NEM) $61.42 down 1.06%
US Gold (UXG) $3.63 down 2.42%
General Moly (Eureka Moly, LLC) (GMO) $3.12 down 2.50%
Thompson Creek (TC) $7.16 down 0.83%
Freeport-McMoRan (FCX) $39.06 down 1.11% (a bellwether mining stock spanning copper, gold & molybdenum)
Quadra FNX (TSE:QUX) $14.92 down 0.72%
Timberline Resources (TLR) $0.58 up 1.75%
The Steels (a "tell" for General Moly & Thompson Creek):
ArcelorMittal (MT) $19.23 down 2.73% - global steel producer
POSCO (PKX) $84.53 down 0.27% - South Korean integrated steel producer
The Eureka Miner's Index© (EMI) is below-par at 86.01, down from last report's 88.29 and below the 1-month moving average of 81.00. The new record low for 2010-2011 was set Oct. 4, 2011 at 22.88. The 1-month average is currently below the 100-level.
The EMI gives us the market temperature for the factors that have the greatest impact on mining in Eureka County. The record 2010-2011 high for the EMI is 816.78 set 01/04/2011; the low was set 10/4/2011 at 22.88. An EMI of 100 is the boundary between hot and cold markets for the metals & miners.
Gold & Silver Report
This morning's...
COMEX gold is up $11.5/oz at $1,612.0/oz (February contract, most active)
COMEX silver is down $0.167/oz at $29.405/oz (March contract, most active)
The gold-to-silver ratio (Au:Ag) is 54.821 oz/oz
Silver 1-month CRS© is 2.36% (bullish level); improving stability (Ag bullish)
The Eureka Miner’s Gold Value Index© (GVI) is below-par at 91.52, up from last report's 91.40 and below its 1-month average of 94.40. The new record high for 2010-2011 is 109.97 set on Oct. 4, 2011.
The Value Adjusted Gold Price© (VAGP) is $1,471.7/oz which is $140.3/oz below the current COMEX gold price.
The GVI gauges the value of gold in relation to oil, copper and silver independent of currency. These three commodities were chosen for relative value comparison because 1) oil derivatives are a common cost element for all miners, 2) copper has proven to be a reliable proxy for global growth and 3) silver is a precious and industrial metal that now competes with gold for investment and as a hedge against fiat currencies.
The Value Adjusted Gold Price (VAGP) is a level that supports current oil, copper & oil prices based on historical commodity norms. If the daily COMEX price is less than the VAGP, then gold is undervalued; if above, overvalued.
Copper & Molybdenum Report
COMEX copper is down $0.0360/lb at $3.4925/lb (March contract, most active)
The gold-to-copper ratio is 458.00 lb/oz; ratios in excess of 400 lb/oz are considered "recession levels" (Cu bearish) but the ratio is trending down (Cu bullish).
Copper 1-month CRS© is 2.36% (bullish level); weak convergence (Cu neutral)
The latest molybdenum oxide spot and futures prices:
Metals Week Average:
US$13.45
As of January 2, 2012
(updated weekly)
Ryan's Notes Average:
US$13.40
As of December 30, 2011
(updated twice weekly)
European Molybdenum Oxide (Bloomberg average price, updated Wednesday & Friday):
US$13.71/lb
London metal Exchange (LME) molybdenum 3-month seller's contract:
US$13.61/lb (US$30,000/metric ton)
Daily Oil Watch
Latest Nevada Fuel Prices (click this link)
On February 1st we identified North Sea Brent crude oil as a good barometer for the crises in the Middle East and North Africa (MENA). The next conflict could be in the Persian Gulf. Brent remains above $100/bbl with a narrowing spread with the North American benchmark, Western Texas Intermediate or "Texas light sweet crude", traded on the NYMEX.
Here are the key front-month contracts this morning:
NYMEX light sweet crude $103.34
ICE North Sea Brent crude $113.28
Spread (ICE- NYMEX) = $9.94 (last report, $8.83)
Here are the April contracts* with a narrower spread:
NYMEX light sweet crude $103.64
ICE North Sea Brent crude $112.36
Spread (ICE- NYMEX) = $8.72 (last report, $7.37)
* NYMEX futures contracts have rolled forward, we now show February and April for a 2-month look-ahead
NYMEX WTI 1-month CRS© is 3.56%; neutral level; stalled convergence (Oil neutral)
Prices are off their crisis highs and we have $110+ Brent and $100+ NYMEX in April favoring high oil prices throughout the winter and spring.
Daily Debt Crisis Watch
July 26th we introduced the Debt Crisis Index (DCI). The DCI is computed in the mornings and at the market close Friday in much the same way we do the EMI and GVI indices. Today, the DCI has a value of 113.4 down from last report's 106.2. A level above 200 is time for serious concern. We are now well below that level.
Global sovereign debt issues have been an overhang on markets for many, many months starting with the Dubai crisis in late November, 2009 and spreading to the euro-zone in 2010-2011 and continuing into 2012.
Stock Market Morning Update
The DOW is down 42.00 points to 12,355.38; the S&P 500 is down 6.39 points at 1270.67
The Eureka Miner's Grubstake Portfolio is down 0.94% at $1,391,573.07 (what's this?).
Cheers,
Colonel Possum
Headline photo by Mariana Titus
Write Colonel Possum at colonelpossum@gmail.com for answers to your questions or to request e-mail updates on the market
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