*** Local Mining News ***
MIDWAY FORECASTS CAPITAL REDUCTIONS PAN PROJECT (Press Release, April 24, 2014)
The Liu Han trial:
Xinhua Insight: China ends first trials of tycoon-led gang (China English News, 2014-04-19 21:28:36)
Alleged mafia leader denies all charges (Ecns.cn 2014-04-18 09:03Xinhua)
Hanlong founder Liu Han denies murder of rivals in China (SCOTT MURDOCH, THE AUSTRALIAN APRIL 18, 2014 6:23PM)
A background column was posted in the Wall Street Journal April 14th by James Areddy:
Mining Tycoon's Trial Reverberates in Central China (By JAMES T. AREDDY, April 14, 2014 11:16 a.m. ET)
Several folks in Eureka including this report were interviewed by Mr. Areddy for his 2012 column about Mt. Hope and Liu Han, In Nevada, a Chinese King of the Hill. Defendant Liu Han and his Hanlong Group had agreed to finance a large portion of the Mt. Hope Molybdenum Project.
General Moly: 3 Different Insiders Have Purchased Shares This Month (Markus Aarnio, Seeking Alpha, 4/17/2014)
The Liberty Starter Pit Project (Press release, 4/8/2014)
Latest Nevada Gas Prices (click this link)
My latest Kitco commentary:
Gold's Wild Ride - Up and Away? (Kitco News, Apr. 14, 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 = $1,282.8/oz (June contract most active)
COMEX Silver = $19.105/oz (May)
COMEX Copper = $3.0335/lb (May)
NYMEX WTI crude = $99.37/bbl (May)
ICE Brent crude = $108.11/bbl (June)
Eureka Miner’s Gold Value Index© (GVI) = 89.62 (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) = $1,196.0/oz
COMEX - VAGP = +86.78/oz; gold is trading at a premium to key commodities (bullish implication - "bottom is in for gold")
As of 9:24AM PDT (percentages are from yesterday's closing prices; parentheses are a comparison to last Friday's morning price):
Barrick Gold (ABX) = $17.39 up 1.64% (Last Friday AM $17.57)
Newmont Mining (NEM) = $24.78 up 1.02% ($26.09)
Midway Gold (MDW) = $0.8673 up 0.84% ($0.0.8551)
General Moly (GMO) = $1.15 up 5.50% ($1.13)
Timberline Resources (TLR) = $0.15 down 5.00% ($0.1615)
How about some good news? According to the morning report from the U.S. Labor Department, the U.S. labor market created 288,000 jobs in April. Economists estimated 215,000 so the actual number was a pleasant surprise - a CNBC Business News commentator called it a "blowout jobs report." It is reassuring that 10,000 of those jobs came from the mining sector, mostly in support services. The unemployment rate also tumbled to a surprisingly low 6.3% from 6.7% although some of that decrease was due to a lower participation rate (i.e. more people are giving up looking for a job and leaving the labor market altogether).
Additionally, the Labor Department revised March’s employment numbers to 203,000 jobs up from the original figure of 192,000. February was revised up to 222,000 jobs from 197,000. This reaffirmed the economic recovery is on tract and that it is unlikely that the Federal Reserve will slow the taper of their current bond buying program - a bearish outcome for gold price
Gold price reports are tricky to write when early morning prices are overcome by mid-morning events. This week, the ole Colonel returned to a more bearish outlook on the yellow metal after crossing the fence to bull pasture January 14. As I wrote about the reasons for my switch, Russia requested a United Nations Security Council emergency meeting. That request combined with a President Obama/German Chancellor Merkel press conference pushed Comex gold price from $1,282 per ounce to over the $1,300-level. Markets awaited a U.S./European joint statement to decisively counter Russia's mischief in the Ukraine.
Here's the chart, Eastern Daylight Time:
The press conference fell short of a Chruchillian "We will fight on the beaches..." speech; something less than the finest hour for a coordinated Western leadership response to naked aggression. Nonetheless, gold continues to hover around $1,300 - a Russia/Ukraine safety net for the lustrous metal.
Other than such geo-political moves, my outlook is now bearish for the remainder of 2014:
Last week’s metaphor remains intact: gold price is a slowly leaking tire saved only by bursts of pressure from escalating but sporadic tensions in the Ukraine. Today’s blowout jobs report has erased any expectation that the Federal Reserve will slow the taper of their bond buying program. As an investment bellwether, the SPDR gold ETF plumbed its lowest inventory level since January 2009 – both very bearish outcomes.
Furthermore, physical demand from the world’s largest consumers continues to disappoint. The Akshaya Tritiya festival has failed to stir much demand in India given continued high gold import duty and uncertainty about the outcome of ongoing elections. The yuan made a new high this week against the U.S. dollar (USD/CNY) supporting another headwind to lackluster Chinese consumption.
My gold target for next week follows the 7-week downtrend to $1,276 per ounce:(input to the weekly Kitco Gold Survey, see full report below).
Kitco Gold Survey