*** Local Mining News ***
Timberline’s Plan of Compliance Accepted by NYSE MKT (Press release, 3/25/2014)
African Barrick seeks new name after partially splitting from Canadian parent (Mining News, March 19,2014)
Timberline and Wolfpack Gold to Merge (Press Release, March 13, 2014)
Latest Nevada Gas Prices (click this link)
My latest Kitco commentary:
Oil, Copper & Gold Transmit a Distress Signal (Kitco News, Mar. 18, 2014)
My latest column in the Mining Quarterly:
Major McCoy and the Rebellious Ores of Eureka (p. 83-87 online, MQ Spring Edition 2014)
Or in the Elko Daily Free Press: Major McCoy and the rebellious ores of Eureka: How one man helped a small Nevada mining town boom (March 18)
Paintings by Mariana Titus, The Three Anas & The Three Moon Anas, are presently at Lafitte Guest House & Gallery, New Orleans
Mariana's fine art prints are featured in Fine Art America: Mariana Titus
Friday's AM prices used for this morning's early analysis:
COMEX Gold price = $1,299.0/oz (June contract most active)
COMEX Silver = $20.090/oz (May)
COMEX Copper = $3.0535/lb (May)
NYMEX WTI crude = $101.21/bbl (May)
ICE Brent crude = $106.67/bbl (May)
Eureka Miner’s Gold Value Index© (GVI) = 88.38 (gold value relative to a basket of commodities that include oil, copper and silver; 100 is a high gold value)
Value Adjusted Gold Price© (VAGP) = $1,228.0/oz
COMEX - VAGP = +70.96/oz; gold is trading at a premium to key commodities (bullish implication - "bottom is in for gold"; bearish caution: premium is diminishing)
As of 9:15AM PDT (percentages are from yesterday's closing prices; parentheses are a comparison to last Friday's morning price):
Barrick Gold (ABX) = $18.70 up 1.91% (Last Friday AM $18.26)
Newmont Mining (NEM) = $24.42 up 1.33% ($23.77)
Midway Gold (MDW) = $0.9997 up 1.96% (unchanged) ($1.05)
General Moly (GMO) = $0.9299 down 1.18% ($1.05 )
Timberline Resources (TLR) = $0.153 up 2.00% ($0.155 )
Today started out just fine with the Labor Department's monthly jobs report (input to the weekly Kitco Gold Survey, see below):
This morning’s non-farm payroll report has something for everyone. Job growth at 192,000 fell short of the 200,000 expectation giving a boost to both Federal Reserve doves and metal prices which respond positively to hints of continued monetary accommodation. However, the closeness of the jobs number buoyed by modest upward revisions to previous months surged the S&P 500 to new all-time highs at the open as equity bulls divine slow but steady domestic growth from the data. Comex gold briefly broke the key $1,300 per ounce level and is presently trading near that number. Reduced anxiety about Federal Reserve tightening and simmering geo-political tensions in the Ukraine should support a further advance for the yellow metal. My gold target for next week is therefore up, likely stalling at $1,320 per ounce technical resistance.
Since I did my early morning analysis, Comex gold is up a bit more at $1,304.8 per ounce and the S&P 500 has lost some sizzzle dropping back from yesterday's close by 0.6% to trade at 1,877.75. The early all-time record nearly broke 1,900 at 1,897.28 - simply amazing [PM update: The S&P 500 lost a lot of sizzle as the trading day wore on closing at 1,865.09; Comex gold closed at a resilient $1,303.5 per ounce].
[This analysis was featured in today's Kitco Weekly Outlook: Gold Traders To Keep Eyeing U.S. Economy, Russia For Next Direction (April 4, 2014 3:10PM, Allen Sykora, Kitco News)]
Looking back one year...
I thought it would be fun to look at the labor report reaction one year ago less a day. On April 5, 2013 the expectation was also 200,000 new jobs but reality delivered a meager 88,000. On that dire note, The Eureka Miner observed:
OK, what are the positives? The Federal Reserve will no doubt continue their present quantitative easing program (aka QE3) to prop up the U.S. stock markets and put a floor under commodity prices, including metals. Scary reports generally boost gold prices making an absolutely horrible week for gold just a horrible week as I explain in my weekly input to the Kitco Gold Survey below. Copper prices that were falling through the floor yesterday (intraday Comex low of $3.306 per pound) are trading presently at $3.3465. The S&P 500 fell to 1,539.8 shortly after the open but has since crawled up to 1,541.39. Earlier in the week the S&P made an all-time closing high of 1,570.25 - shucks, we're only down 1.8% on a bum report!
A year later, U.S. employment recovery is not stellar but fairly decent. The morning employment rate is unchanged at 6.7%; a year ago it was 7.6%. A sample of last April's CNBC Business News post-report comments:
"A punch to the gut!"
"A puzzler for the Fed!"
"A tough report..."
"Massive decline in retail..."
"Struggling to find anything good!"
"It's all about the sequester!"
"No it's not!"
Hmm, the rhetoric has at least tamed down a bit nowadays.
QE3 is still with us. Although now tapering off, monetary easing continues to provide some floor to metal prices. It is encouraging that Comex copper has recovered above $3 to trade at $3.0535 per pound this morning but discouraging when compared to the April 5, 2013 price of $3.3465. Champagne corks would be hitting the Jackson House ceiling if gold prices were $1,540 today - last year that number made "an absolutely horrible week for gold just a horrible week." So it goes.
One thing consistently bullish is rising U.S. stock markets. They were punching out new highs then and are still punching out new highs. When will these brave equities be punched out? Who knows? Only the wildest-eyed bulls were predicting S&P 500 at 1,900 in 2014 - we're almost there, pardner, and it's only April.
Take some heart, things really are getting better even if you don't believe in stock market exuberance or find little joy in recent metal prices. Here's a positive thought from the Wall Street Journal today:
All of March's gains came from the private sector, bringing non-government employment to a new milestone. Private payrolls reached 116.09 million last month, surpassing the former high of 115.98 million reached in January 2008. "The private sector lost 8.8 million jobs during the labor market downturn and has gained 8.9 million since the employment low in February 2010," said Bureau of Labor Statistics Commissioner Erica Groshen. (WSJ, April 4, 2012)
May 21, 2013, the ole Colonel turned bearish on gold prices. On January 15, I turned bullish and remain so.
It's not a return to gold's heydays of recent years but I believe the lows are in.
I don't think any gold miners will complain if prices hover around $1,350 per ounce and that is certainly in the cards for 2014. An improving U.S. economy and China achieving (albeit lower) 7% GDP this year should keep copper prices above $3 per pound with or without QE3.
There's a growing ray of light over Gold Country, Nevada.
Keep the faith, pardner!
Kitco Gold Survey
My weekly input to the Kitco Gold Survey: