*** BREAKING NEWS***
Since the analysis below, Comex gold has slipped further to an intraday low of $1,190.3 per ounce - it may go lower before the close...
*** Local Mining News ***
MIDWAY ADVANCES CONSTRUCTION AND MINING BEGINS AT PAN GOLD PROJECT, NEVADA (Press release, 9/15/2014)
MIDWAY GOLD FILES TECHNICAL REPORT FOR UPDATED RESOURCE AT SPRING VALLEY PROJECT, NEVADA (Press release, 9/9/2014)
Latest Nevada Gas Prices (click this link)
My latest column in Kitco News:
Oil, Copper & Gold on a Slippery Slope (Kitco News, August 25, 2014)
My latest column in the Fall 2014 Edition of the Mining Quarterly:
C.C. Goodwin, the Early Mines of Eureka (Fall 2014 Edition: online pages 76-83; printed pages 70-77)
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 (see note below):
COMEX Gold price = $1,192.2/oz (December contract most active)
COMEX Silver = $16.830/oz (Dec)
COMEX Copper = $3.0010/lb (Dec)
NYMEX WTI crude = $89.55/bbl (Nov)
ICE Brent crude = $91.67/bbl (Nov)
Eureka Miner’s Gold Value Index© (GVI) = 90.33 (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) = $1,102.8/oz
COMEX - VAGP = +89.4/oz; gold is trading at a premium to key commodities
As of 9:26 AM PDT:
Barrick Gold (ABX) = $14.19 down 3.47%
Newmont Mining (NEM) = $22.67 down 2.62%
Midway Gold (MDW) = $1.08 down 1.82%
General Moly (GMO) = $0.7394 down 0.08%
Timberline Resources (TLR) = $0.07 up 2.78%
The Labor Department announced at 5:30 AM (PDT) that 238,000 nonfarm payroll jobs were added in September against economist's expectations of 215,000; previous months were revised upwardly too. Even more surprising, the headline unemployment rate fell to 5.9% - a number we haven't seen since July 2008! The increases were broad based across many sectors, even construction which added 18,000. The most inclusive and least reported measure of unemployment, called U6, dropped to 12.2% - not bad when we remember this was close to 20% during darker days (U6 includes the lazy bum son on the couch who's been living with mom and dad since college and has a $100,00 college loan to repay).
Good employment numbers pump more fuel to the racing U.S. dollar. Of course, dollarized commodities take it on the chin. Comex copper closed at $2.9985 per pound yesterday and is barely keeping its redhead above $3 in morning trading, presently $3.0010. Nymex light crude fell below $90 and is now trading at $89.68 per barrel - look for gas prices to fall further:
Latest Nevada Gas Prices (click this link)
And gold? The poor fallen hero hit the $1,200 per ounce level when I did my first analysis for Kitco News this morning. By the time that was done the yellow metal was at $1,192 - I threw all the analysis away and wrote my editor in Chicago (see full report below) with a wag at next week's gold price sans analysis - $1,185 per ounce? $1,180 is the key support level from last December's lows - will it hold?
There is a fairly simple way to view the ascendancy of the U.S. dollar and decline of gold price.
Presently, our central bank is moving in an opposite direction to those in Europe and Japan. Chairman Yellen is putting the brakes on monetary accommodation (albeit very gently) - the third phase of quantitative easing (printing money to buy bonds) ends this month and there are hints that the Fed funds rate will rise sooner than later (perhaps mid-2015). More "very good" employment reports are likely to accelerate this process.
By contrast, Europe is just beginning their peculiar approach to easing and Japan has been expanding their balance sheet at a tsunami pace for some time. In the currency world, the euro is falling dramatically (1.2514 low this morning) and the yen continues to weaken (punching through 110 this week, sitting just below that level now at 109.645). These distressed global reserve currencies propel the U.S. dollar higher.
Market anticipation of low inflation, rising interest rate environment (i.e. the Federal Reserve tightening) and soaring U.S. dollar are kryptonite to the super-metal price strength gold enjoyed in late-2011 when the Lustrous One flew over $1,900 tall buildings.
Today we find our metallic hero is back in the phone booth without a cape...
10/03/2014 (10:19 AM CDT)
Q. Where do you see gold’s price headed next week, up, down or unchanged?
A. Down. My target price is $1,185 per ounce.
In lieu of lengthy analysis this morning this is what I emailed to Kitco Global Editor Debbie Carlson:
I give up - did a load of analysis after the good jobs report when comex gold was $1,200.3 now its $1,192.2...threw it all away.
Big question is whether the $1,180 will hold. I'll say yes but we may bust that level before years-end.
So right now (could change in a few minutes but this is it!):
Down. Target $1,185.
No attachment - ha!
Cheers - Colonel