My latest Kitco News commentary:
Is Gold Still on a Slippery Slope? (Nov. 24, 2014)
*** Local Mining News ***
MIDWAY RECEIVES FIRST BANK FUNDS FOR PAN GOLD PROJECT (Press release, 12/1/2014)
*** UPDATE ***
The washout in commodities continued after the morning brief (below). The Goldman Sachs Commodity Index notched a new 52-week low; oil,copper, gold & silver continued their downward descent:
Closing prices (intraday low):
S&PGSCIES 274.09 (273.50)
Nymex oil (WTI) $66.15 ($65.69) per barrel
Comex copper $2.8460 ($2.8435) per pound
Comex gold $1,175.5 ($1,163.9) per ounce
Comex silver $15.556 ($15.410) per ounce
At least gas prices are expected to go lower too!
Latest Nevada gasoline prices
The OPEC decision to not cut production to counter falling oil prices has sent a shock wave through commodity markets. Nymex WTI touched $67.75 per barrel; Brent crude dropped as far as $71. The gooey declines quickly spilled over to the metal complex. Comex silver tested $15.80 per ounce and Comex copper dipped briefly to $2.8515 per pound passing easily through its March low - Ouch!
Encouragingly, the fall in gold prices was not nearly as spectacular falling no further than to $1,175 per ounce (see discussion below and Kitco News Weekly Gold Survey).
Beleaguered mining stocks got a real wallop. Big gold miners Newmont (NEM) and Barrick Gold (ABX) fell to $12.02 and $18.62 (chart below) . Midway (MDW) is just below $0.74 down 6.2% in morning trade. Benchmark Moly miner Thompson Creek (TC) and General Moly (GMO) are both feeling pain falling 3.85% and 5.07% respectively.
Most ominously, benchmark miner and copper giant Freeport-McMoRan (FCX) dropped a full 8.86%. Freeport has recently taken on oil interests to diversify so is feeling double-pain following the OPEC decision.
Look for my column on gold outlook for 2015 in the upcoming Winter Edition of the Mining Quarterly.
Up. Next week's target price $1,190 per ounce.
What a contrast in markets this morning.
The S&P 500 made a new intraday high against a backdrop of an OPEC-induced collapse in oil price spilling over to declining metal complex. The bond market is reacting with lower yields and an ever-flatter yield curve as the U.S. dollar surges against both euro and yen.
Although Comex gold is being pulled lower by commodity declines and a stronger dollar, it is only down 1.6% for the year in mid-morning trading. Importantly the yellow metal is positioned ever stronger relative to silver and industrial commodities copper and oil. As shown in the first chart, gold value is up 20% compared to Comex silver, 17% versus Comex copper and nearly 40% versus Nymex oil (WTI).
This resilience may bring gold closer to the upper boundary of the "value wedge" as illustrated in the second chart: my target is $1,190 per ounce for next week. If lower oil prices lead to geopolitical instability (e.g., collapsing Russian economy), gold could rally significantly. Without additional catalyst, gold could fall with commodities to a range between $950 to $1,170 per ounce in the first quarter of next year.
Have a great Thanksgiving weekend!
Cheers - Colonel
Headline photo by Mariana Titus