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My latest column in Kitco News:
Oil, Copper & Gold Reunite - What Next? (Kitco News, July 7, 2014)
My latest column in the Mining Quarterly:
What is the Commodity Value of Gold? (p. 99-1010 online, p. 94-95, MQ Summer Edition 2014)
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 = $1,318.1/oz (August contract most active)
COMEX Silver = $21.115/oz (Sept)
COMEX Copper = $3.2630/lb (Sept)
NYMEX WTI crude = $103.79/bbl (Aug)
ICE Brent crude = $110.75/bbl (Sept)
Eureka Miner’s Gold Value Index© (GVI) = 85.30 (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) = $1,291.2/oz
COMEX - VAGP = +26.94/oz; gold is trading at a declining premium to key commodities
As of 9:30 AM PDT:
Barrick Gold (ABX) = $18.41 up 0.38%
Newmont Mining (NEM) = $25.12 down 0.95%
Midway Gold (MDW) = $0.88 down 1.68%
General Moly (GMO) = $1.14 down 2.56%
Timberline Resources (TLR) = $0.12 up 4.35%
At 5:30 AM early market watchers were greeted by the monthly Labor Department numbers.
"Happy Jobs Thursday!" exclaimed an excited CNBC Business News reporter. The all important monthly nonfarm payroll report was a good one, released a day early to make room for the Fourth of July: 288,000 new jobs above the expected 215,000 and a drop in unemployment to 6.1% from last month's 6.3%.
The U-6 employment rate fell another tenth to 12.1%. The U-6 is rarely in the news but includes not only people without work seeking full-time employment (the above 6.1% U-3 rate), but also counts "marginally attached workers and those working part-time for economic reasons." That's everyone except the family dog.
U-6 used to be 17-18% if my memory serves me so we have come a long way but have a lot further to go. At least participation rate, although still low, is stabilizing - domestic recovery is truly underway.
Market reaction? The DOW crested 17,000 in morning trading and the S&P 500 is off off to setting new records currently scoring 1,984.88. And, you guessed it; gold down, dollar up. One nice surprise is new found copper strength even with a rising dollar. My thoughts in this week's Kitco Gold Survey (full report is included further down):
Although gold has held value for the week, this morning’s strong nonfarm payroll report erased most premium gained on building geo-political tensions in the Middle East. The weekly Comex intraday high touched $1,334.9 but gold is now trading at $1,318.1, a few dollars below last Friday’s close.
The metallic hero for the week is copper gaining 3% to trade above $3.25 per pound on hopes of a stronger than expected domestic recovery and stabilizing conditions in China. The red metal has gained considerable value compared to gold and falling oil prices. Gold has now lost most premium to copper trading very close to a fair value of 400 pounds per ounce.
It's hard to be a bear in gold country but the ole Colonel still sees more downside to go for the yellow metal:
For the short term, persistent trouble in Iraq, Ukraine and now Israel will likely maintain the yellow metal above the key $1,300-level. Longer term I remain bearish on gold forecasting $1,100 to 1,180 per ounce territory by year-end. Lacking geo-political lift, gold’s fortunes are likely grim until inflation expectations materially rise and real interest rates fall.
Economic recovery and a strong U.S. dollar are still good news and a great way to start the July Fourth break - have a good'un!
Kitco Gold Survey