*** GENERAL MOLY NEWS ***
General Moly to Attend the John Tumazos Very Independent Research Metals & Mining Conference (10/10/2013)
General Moly Announces Implementation of Cost Reduction Program While Actively Pursuing Mt. Hope Financing (9/09/2013)
The latest General Moly briefing on the status of the Mt. Hope molybdenum project (with Webcast): General Moly - John Tumazos Very Independent Independent Research Conference (10/16/2013)
See earlier March 22 and March 29 reports for a full chronology of the $665 million Hanlong loan suspension.
Latest Nevada Gas Prices (click this link)
My latest Kitco commentary: Copper & Gold – The Long Ride from Lehman Brothers (10/08/2013)
Paintings by Mariana Titus, The Three Anas & The Three Moon Anas, are presently at Lafitte Guest House & Gallery, New Orleans
Friday's AM prices used for this morning's analysis:
COMEX Gold price = $1,315.4/oz (December contract most active)
COMEX Silver = $21.945/oz (December)
COMEX Copper = $3.3035/lb (December)
NYMEX WTI crude = $101.07/bbl (October)
ICE Brent crude = $109.52/bbl (November)
Eureka Miner’s Gold Value Index© (GVI) = 84.10 (gold value is trading at a small premium to oil and copper)
Value Adjusted Gold Price© (VAGP) = $1,306.9/oz
COMEX - VAGP = +$8.46/oz; gold is trading at a premium to key commodities.
General Moly (GMO) = $1.75 up 2.94%
Barrick Gold (ABX) = $18.50 unchanged
Newmont Mining (NEM) = $26.95 down 0.41%
S&P 500 = 1.739.6 up 0.37%
What a week! Last minute resolution of the recent U.S. debt debacle Wednesday has brought equities to new all-time highs and given gold a much needed bounce above $1,300 per ounce. Gold strength and U.S. dollar weakness may very well reflect that a second round of calamitous political wrangling awaits us early next year - stock markets appear less concerned.
The devil is always in the details. Although gold is presently trading 4% above last Friday's closing price, on Wednesday it had its weakest performance relative to the S&P 500 since July. The yellow metal fared better against key commodities, recovering lost ground to both oil and copper but is still in deep bear country in terms of the U.S. dollar price and relative valuations (see my input to the weekly Kitco Gold Survey below).
As explained in the survey input, gold rallies are probably capped around the $1,380 per ounce level and the yellow metal could go a lot lower from here. A pickup in Asia gold buying should put a floor in somewhere below $1,300 per ounce but I see more downside next year possibly testing the June low.
The Gartman Gold Bet
On July 22, Dennis Gartman of the renowned Gartman Letter accepted this wager from the ole Colonel:
I'll bet you a chunk of gold-bearing slag from Eureka's 1890s mining heydays (photo attached) for a cup of Virginia Beach sand that gold will test June's low ($1,179.4) before breaking May's high ($1,488.5)
Here's a picture of Mr. Gartman's prize if he wins:
By the way, don't get too excited about that 150,000 tons of slag at the north end of town - my gold content estimate is an average less than 0.0004 troy ounce per ton. Most of the gold from the Eureka smelters probably left town as trace quantities in lead and silver bullion many, many moons ago.
It's hard to bet against the Commodity King and for the sake of our local economy I hope I'm wrong - it's just hard to argue with the data! My latest Kitco commentary, Copper & Gold – The Long Ride from Lehman Brothers, is a 5-year retrospective on copper and gold prices which both saw record highs and punishing lows during that turbulent time. It appears we are entering a time of less volatile metal prices that should return to the good old laws of supply and demand as global monetary easing begins to pull back next year. So far the red metal has proved resilient but gold may need to see $1,100 per ounce territory before sustainable price recovery is possible.
Aside from gold's travails, miners have been enjoying better times lately. Copper giant and bellwether miner Freeport-McMoran (FCX) has enjoyed a 7-market-day rally, heading to higher prices even through the darkest days of the debt ceiling debate. This is an important miner to watch because Freeport produces prodigious quantities of gold and molybdenum in addition to the red metal. Even though gold may have its challenges, many market experts (including Dennis Gartman) are predicting a pickup ion the steel industry which should favor higher moly prices.
A Journey in Space and Time
In September, we wrapped up an eight-part summer series on Mt. Hope. You can access the series with the links in the column to your right. We'll be back with a second series on Mt. Hope later this year or next. The second road trip is longer (110 miles) and will include ranches of early settlers, a second portion of the Pony Express Trail and a challenging section of the old Eureka-Palisade Railroad. The photos today are from near the Tonkin Ranch - one of the many early Damele family ranches we will visit.
Loop # 1 (65 miles) was a fun trip - I hope you enjoyed the Mt. Hope journey in space and time and look forward to the next trip too!
Spot moly oxide prices remain stabilized above the $9 per pound-level. Here are the latest numbers compliments of moly benchmark miner Thompson Creek (TC):
Metals Week Weekly Average: US$9.42 as of October 11, 2013 (updated weekly)
Ryan's Notes Average: US$9.50 as of October 15, 2013 (updated twice weekly)
The London Metal Exchange (LME) futures contracts are just below spot prices on the 3-month contract. Remember that this is a thinly traded futures market and contract prices may reflect developments in Europe more than the global spot price averages above.
3-month seller's contract $20,700 per metric ton ($9.389 per pound)
15-month seller's contract $21,500 per metric ton ($9.7523 per pound)
The Colonel's Gold, Silver & Copper Prices for Next Week
Here is my weekly input to the Kitco Weekly Gold Survey:
Photos by Mariana Titus
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Paintings by Mariana Titus, The Three Anas, are presently at Lafitte Guest House & Gallery, New Orleans
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