"The history of Eureka lies in its future." - Lambert Molinelli, 1878

DISCLOSURE

The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO), McEwen Ming (MUX) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Friday, August 18, 2017

Gold Breaks $1,300; Cu Keeps Pace with Au Rally - What Next?


Rhyolite Faces in Forgotten Places
Eureka, Nevada

Friday, August 18, 2017 AM

Morning Miners,

Yet another strong week for gold. It broke the elusive $1,300-level this morning on a new set of concerns now that North Korea tensions have receded. Terror in Europe, disappointing corporate earning and post-Charlottesville fallout underpin this week's rally.

December Comex gold is presently trading at $1,304.6 per ounce after hitting $1,306.9 earlier in the day.

Although other commodities have been left in the dust this week, the red metal kept pace with the yellow leader on its way to challenge the key-$3 per pound-level. September Comex copper is now trading at $2.9370 per pound. Thursday copper came close to $3 by scoring an intraday $2.9825. Copper has been in an uptrend of higher-lows since early-May - slow but increasingly bullish.

"Synchronous global recovery" continues to push hopes for improving raw material demand buffeted by geopolitical tensions, terror and turmoil in Washington. 

Alas, LME Moly Oxide misses all the excitement still languishing at $7.26 per pound. This is disappointingly short of $8 after climbing to $7.94 for much of May. 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,310 per ounce. Target Silver price $17.2 per ounce.

Another lustrous week for gold as the yellow metal again posts broad gains in value compared to currencies, commodities and equities. Comex gold broke the key-$1,300 level to touch $1,306.9 per ounce this morning - prices not seen since last April. The drivers are the tragic terrorist attack in Barcelona, weaker-than-expected corporate earnings and controversy swirling around President Trump post-Charlottesville.

I believe momentum will carry into next week with Comex gold likely to breach $1,310 per ounce. Silver will shine at $17.2 per ounce.

Investors also poured into the Japanese yen for a safe haven play but gold gained 0.5% on the yen for the week. Gold rose above 1,100 €/oz, another key-level and 1.6% gain on the euro. It is bullish for gold when it performs this well against major currencies.

Most importantly, Gold is building its edge on falling U.S stocks. The S&P 500 is nearing its 100-day average after being above that mark since the U.S. election. Gold gained 1.5% on the S&P 500 with the gold-to-S&P 500 ratio sustaining an upward trend since early July. This is a very bullish performance against stocks that were recently posting all-time highs [see Chart to Watch, below].

Comex copper advanced with gold this week towards $3 per pound, nearly neck-and-neck. The yellow metal gained of 2% against the broader Bloomberg Commodity Index (BCOM).

For the moment, North Korea tensions have lowered but have the potential to rise again. The upcoming U.S. debt debate could also be another bullish driver for gold. Have a relaxing weekend!

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for most of 2017 and continues to strengthen. Volatility is lower than other major currencies.  This morning, the yuan is trading only slightly weaker than last week at 6.6665 USD/CNY (1-month volatility* 0.47%).

Have a great weekend!

* by comparison the euro & yen 1-month volatilites are  1.46% & 1.30%% respectively; Comex gold 1-month volatility is an elevated 2.12%.

Weekly Summary  for August 18, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:

My commentary in the Summer 2017 Mining Quarterly:

Bottoms Up! (6/8/2017. Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

McEwen Mining (MUX) $2.335 per share


General Moly (GMO) $0.3913 per share; Moly oxide (LME) $7.26 per pound



Marcum Microcap Conference  (Press Release, 6/16/2017)




Summer 2017 Mining Quarterly - It Rocks!

Summer 2017 Mining Quarterly

[SPECIAL NOTE: Marianne Kobak McKown will no longer be with the Elko Daily Free Press. She was hired as the executive director of the Committee Against Domestic Violence starting July 1. She will be missed by this report and the mining community, the best of luck on her new journey!

Suzanne Featherston is the new editor of the Mining Quarterly - the best to Suzanne!]

Marianne Kobak McKown has done an excellent job again bringing a new Mining Quaterly in time for summer. It has a new size format with glossy pages that really make images pop! There are great stories and updates on Goldstrike/Cortez, Florida Canyon, RheoMinerals, Newmont and McEwen Mining's Gold Bar Project north of Eureka.

Veteran Adella Harding has several columns on the rise in Nevada gold production and mining claims as well as new exploration. My column on commodity prices also discusses good news on mining employment nationally and updates from Barrick and Newmont locally:

Bottoms Up! (6/8/2017, Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

Hats off to Marianne, Adella and crew!

Gold Price Outlook: Second-Half 2017

Gold started the year nicely and should remain in my latest revised range of $1,200 to $1,400 per ounce*. Average gold price for 2017 is expected to print above $1,200 per ounce with an outside chance to see $1,400 given an adverse outcome for the upcoming debt limit debate, President Trump's agenda or geopolitical shocks (e.g., North Korea, Syria).

Gold has gained ground on the embattled euro and yen. Post-election, gold in euro and yen terms is up and safely above 2013 lows (chart below). It is worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen), and headed lower on the prospects of the ECB taking a more hawkish stance on monetary policy. It has had a nice rally following President Trump's "fire and fury" comments. Gold in yen has mostly trended higher since the U.S. election.

An important gold ratio to watch is gold-to-S&P500 or AUSP (see "Chart to Watch" below).

Gold ratios relative to copper and oil are stabilizing near historically less extreme levels which proves a healthy sign. Gold valuations relative to copper are elevated but stable..

Political and geo-political events together with concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017. A fall below $1,230 is very bearish; prices above $1,260, bullish; above $1,300, very bullish.

Gold below $1,200 per ounce-level is a tempting "buy."

(please do your own research, markets can turn on you faster than a feral cat!)

* My pre-election October range for gold price was $1,240 to $1,320 per ounce, Winter 2016 Edition of the Mining Quarterly:

 Storms Never Last: Positive News for Gold, Oil & Copper

My commentary in the Spring 2017 Mining Quarterly reaffirms an average price above $1,200 per ounce with a potential run at $1,400:


Click on the image for a larger size:


Gold in euro & yen terms with good margin above 2013 lows

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed yet again July 7, 2017 (0.4989). We must stay above the December low (0.4973)! Currently this AM the AUSP is a strong 0.5378, sustaining a bullish breakout above the July low and now above the middle of its range bound meander for 2017.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.

Friday, August 11, 2017

Gold $1,298 on North Korea & Low Inflation Data; Good News for General Moly (GMO)


180,000 tons of mining history
Eureka Consolidated Slag, Eureka, Nevada

Friday, August 11, 2017 AM

Morning Miners,

It's hard to imagine a better week for gold in recent months. It came close to the $1,300-level on North Korean tensions and this mornings' weaker-than-expected inflation data*. The latter may seem confusing since the yellow metal is often thought to be an inflation hedge. The present market logic is that lowered inflation expectations may delay the U.S. Federal Reserve's next interest rate hike - a pause considered bullish for gold.

Comex gold is presently trading at $1,292.2 per ounce after hitting $1,298.1 earlier in the day.

Gold was off to the races after President's "fire and fury" remarks on Tuesday, August 8th. Interestingly, the base metal complex continued to rally that same day. Copper posted prices not seen since late-2014. Other metals joined the surge with zinc scoring a new high for the year and aluminum scaling a two-and-a-half-year peak. The ratio of copper-to-gold prices rose to mid-2015 levels shortly after the President’s remarks. The yellow metal’s move was sound but outpaced by its red metal companion that day. Very curious.

Comex copper is trading down a bit from its highs this week at $2.9080 per pound.

"Synchronous global recovery" continues to push hopes for improving raw material demand.  

Unfortunately, LME Moly Oxide missed the metal rally again still languishing at $7.26 per pound disappointingly short of $8 after climbing to $7.94 for much of May.

However, General Moly (GMO) negotiated a reprieve with their AMER partner from the $8 per pound constraint for securing Tranche 2 funding for Mt. Hope. The new scoop:


Bruce D. Hansen, Chief Executive Officer, said,

We appreciate our mutually beneficial partnership with AMER in building long-term value for General Moly and all of our shareholders. The renewed commitment AMER has made to General Moly and the Mt. Hope Project reinforces General Moly's competitive position and leverage in a rising molybdenum price environment. AMER's agreement to purchase additional General Moly common stock through the Amended Investment Agreement by accelerating the Tranche 2 and Tranche 3 purchases provides additional funding to the Company. The purchases, together with our current cash, are projected to fund our current business activities and working capital for more than two years at the current cash burn of $1.5 million per quarter for corporate and the Liberty Project expenses.

Phew, a lot happened Tuesday, August 8th!

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,300 per ounce. Target Silver price $17.1 per ounce.

A lustrous week for gold as the yellow metal posts broad gains in value compared to currencies, commodities and equities. Up more than 2% for the week, Comex gold nearly touched $1,300 this morning spurred on by weaker-than-expected inflation data and a continued ratcheting of tensions over North Korea.

Investors also poured into the Japanese yen for a safe haven play but gold gained nearly 1.0% on the yen. Recently struggling in euro terms, gold bounced to 1,095 €/oz. It is very bullish for gold when it performs this well against major currencies.

Almost puzzling, base metals had a good week too with strong gains for copper, zinc and aluminum. But even as copper advances towards $3 per pound, gold has outpaced the red metal and posts a respectable weekly gain of 2% against the broader Bloomberg Commodity Index (BCOM).

I believe gold's good fortunes will extend into next week closing above $1,300 per ounce. Silver will also gain some shine at $17.1 per ounce. Let's hope this North Korea situation sorts out.

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for most of 2017 and continues to strengthen. Volatility is lower than other major currencies.  This morning, the yuan is trading stronger than last week at 6.6605 USD/CNY (1-month volatility** 0.50%).

Have a great weekend!

*   CPI in July was up 0.1% versus 0.2% expected. Annualized inflation is now 1.7%.
** by comparison the euro & yen 1-month volatilites are  1.17% & 0.97% respectively.

Weekly Summary  for August 11, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:

My commentary in the Summer 2017 Mining Quarterly:

Bottoms Up! (6/8/2017. Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

McEwen Mining (MUX) $2.57 per share


General Moly (GMO) $0.45 per share; Moly oxide (LME) $7.26 per pound


Marcum Microcap Conference  (Press Release, 6/16/2017)




Summer 2017 Mining Quarterly - It Rocks!

Summer 2017 Mining Quarterly

[SPECIAL NOTE: Marianne Kobak McKown will no longer be with the Elko Daily Free Press. She was hired as the executive director of the Committee Against Domestic Violence starting July 1. She will be missed by this report and the mining community, the best of luck on her new journey!

Suzanne Featherston is the new editor of the Mining Quarterly - the best to Suzanne!]

Marianne Kobak McKown has done an excellent job again bringing a new Mining Quaterly in time for summer. It has a new size format with glossy pages that really make images pop! There are great stories and updates on Goldstrike/Cortez, Florida Canyon, RheoMinerals, Newmont and McEwen Mining's Gold Bar Project north of Eureka.

Veteran Adella Harding has several columns on the rise in Nevada gold production and mining claims as well as new exploration. My column on commodity prices also discusses good news on mining employment nationally and updates from Barrick and Newmont locally:

Bottoms Up! (6/8/2017, Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

Hats off to Marianne, Adella and crew!

Gold Price Outlook: Second-Half 2017

Gold started the year nicely and should remain in my latest revised range of $1,200 to $1,400 per ounce*. Average gold price for 2017 is expected to print above $1,200 per ounce with an outside chance to see $1,400 given an adverse outcome for the upcoming debt limit debate or geopolitical shocks (e.g., North Korea, Syria).

Gold has gained ground on the embattled euro and yen. Post-election, gold in euro and yen terms is up and safely above 2013 lows (chart below). It is worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen), and headed lower on the prospects of the ECB taking a more hawkish stance on monetary policy. It has had a nice pop following President Trump's "fire and fury" comments. Gold in yen has mostly trended higher since the U.S. election.

An important gold ratio to watch is gold-to-S&P500 or AUSP (see "Chart to Watch" below).

Gold ratios relative to copper and oil are stabilizing near historically less extreme levels which proves a healthy sign. Gold valuations relative to copper are elevated but stable..

Political and geo-political events together with concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017. A fall below $1,230 is very bearish; prices above $1,260, bullish.

Gold below $1,200 per ounce-level is a tempting "buy."

(please do your own research, markets can turn on you faster than a feral cat!)

* My pre-election October range for gold price was $1,240 to $1,320 per ounce, Winter 2016 Edition of the Mining Quarterly:

 Storms Never Last: Positive News for Gold, Oil & Copper

My commentary in the Spring 2017 Mining Quarterly reaffirms an average price above $1,200 per ounce with a potential run at $1,400:


Click on the image for a larger size:


Gold in euro & yen terms with good margin above 2013 lows

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed yet again July 7, 2017 (0.4989). We must stay above the December low (0.4973)! Currently this AM the AUSP is 0.5289, a bullish breakout above the July low and now at the middle of its range bound meander for 2017.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.

Friday, August 4, 2017

Strong Jobs Report, Comex Gold $1,262; The Dog Days of August Are Upon Us


Headframe Repose
Lone Mountain, Eureka, Nevada

Friday, August 4, 2017 AM

Morning Miners,

The Dog Days of August are upon us and hopefully offer some respite from all the global and domestic craziness of the last several weeks. An upbeat U.S. jobs report this morning is something to fell good about. 209,000 jobs were added for July versus an expectation of 182,00 and the headline unemployment remains at a very low 4.3%. Average hourly wages got a nice bump too of 0.3% holding the year-over-year number at 2.5% - might be a good time to ask the boss for a raise.

Importantly, any lower-than-expected boost in wages would signal persistent low inflation - have we turned the corner? Raised inflation expectations and a tighter labor market will likely move the Fed to raise rates and perhaps begin a reduction of their $4.5 trillion balance sheet. The Fed selling, instead of buying, bonds is called "quantitative tightening" or QT in contrast to recent years of buying bonds (quantitative easing or QE). There is a 45% chance that the Fed will bump rates another quarter percent in December. Higher rates in combination with QT are headwinds for gold price. Comex gold is presently trading at $1,268.4 per ounce [UPDATE: at posting, 8:53 a.m. Eureka time, Comex gold is $1,262.5].

Although retreating a bit today on a stronger dollar, Comex copper has had a terrific rally since July trading currently at $2.88 per pound or $6,349 per tonne. This report had identified $6,200 as a bullish level for copper so we're grazing in green pasture. There is a new buzzword in the market community, "synchronous global recovery." If true and not just an aberration of  recent dollar weakness, metal prices could see a brighter future.

Unfortunately, LME Moly Oxide has missed all this bubbly enthusiasm and remains at $7.26 per pound disappointingly short of $8 after climbing to $7.94 for much of May. $8 per pound is a key level for General Moly (GMO) to secure additional funding for Mt. Hope from AMER. 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is down. Target gold price $1,260 per ounce. Target Silver price $16.3 per ounce.

The Dog Days of August are upon us.

A better-than-expected Labor Department report this morning has blunted the soaring euro and brought life to the embattled U.S. dollar. After touching a 13-month low earlier this week, a recovering dollar index (.DXY) will continue to put pressure on gold and other metals next week*. Evidence for this is a positive correlation of gold with key commodities which mostly enjoyed the recent dollar decline.

Although gold is holding value against most commodities, it has worryingly lost ground to both the euro and Japanese yen this week. I expect it likely that the post-election trend higher for gold in yen terms will resume and gold in euro will stabilize around 1,075 €/oz.

Reorganization of the White House under chief of staff John Kelly and seeming pause in geo-political tensions removes some of the uncertainty that has buoyed gold lately. I believe gold will find short-term equilibrium at the $1,260-level next week.

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for most of 2017 and continues to strengthen. Volatility is lower than other major currencies.  This morning, the yuan is trading stronger than last week at 6.7238 USD/CNY (1-month volatility** 0.44%).

Have a great weekend!

*   U.S. Dollar Index or DXY plumbed 92.55 Wednesday; The DXY is presently trading at 93.65, a healthy 1.2% bounce from the Wednesday low.
** by comparison the euro & yen 1-month volatilites are  1.44% & 1.17% respectively.

Weekly Summary  for August 4, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:

My commentary in the Summer 2017 Mining Quarterly:

Bottoms Up! (6/8/2017. Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

McEwen Mining (MUX) $2.57 per share


General Moly (GMO) $0.45 per share; Moly oxide (LME) $7.26 per pound


Marcum Microcap Conference  (Press Release, 6/16/2017)




Summer 2017 Mining Quarterly - It Rocks!

Summer 2017 Mining Quarterly

[SPECIAL NOTE: Marianne Kobak McKown will no longer be with the Elko Daily Free Press. She was hired as the executive director of the Committee Against Domestic Violence starting July 1. She will be missed by this report and the mining community, the best of luck on her new journey!

Suzanne Featherston is the new editor of the Mining Quarterly - the best to Suzanne!]

Marianne Kobak McKown has done an excellent job again bringing a new Mining Quaterly in time for summer. It has a new size format with glossy pages that really make images pop! There are great stories and updates on Goldstrike/Cortez, Florida Canyon, RheoMinerals, Newmont and McEwen Mining's Gold Bar Project north of Eureka.

Veteran Adella Harding has several columns on the rise in Nevada gold production and mining claims as well as new exploration. My column on commodity prices also discusses good news on mining employment nationally and updates from Barrick and Newmont locally:

Bottoms Up! (6/8/2017, Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

Hats off to Marianne, Adella and crew!

Gold Price Outlook: Second-Half 2017

Gold started the year nicely and should remain in my revised range of $1,180 to $1,320 per ounce*. Average gold price for 2017 is expected to print above $1,200 per ounce with an outside chance to see $1,400 given an adverse outcome for  upcoming debt limit debate, White House controversies, political or geo-political shocks (e.g., North Korea, Syria).

There is a sobering possibility of a serious gold correction later this year if you believe some of the observations and interest rate projections of bond guru Jeffrey Gundlach of DoubleLine Capital. Here's my analysis on why this may be the case:

The Gundlach Conundrum: $1,000 Gold by Year's End? (Kitco News, June 21,2017)

Gold has gained ground on the embattled euro and yen. Post-election, gold in euro and yen terms is up and safely above 2013 lows (chart below). It is worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen), and headed lower on the prospects of the ECB taking a more hawkish stance on monetary policy. It has since stabilized. Gold in yen has mostly trended higher since the U.S. election.

An important gold ratio to watch is gold-to-S&P500 or AUSP (see "Chart to Watch" below).

Gold ratios relative to copper and oil are stabilizing near historically less extreme levels which proves a healthy sign. Gold valuations relative to copper are elevated but stable..

Political and geo-political events together with concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017 although that is being tested lately. A fall below $1,230 is very bearish; prices above $1,260, bullish.

Gold below $1,200 per ounce-level is, however, a tempting "buy."

(please do your own research, markets can turn on you faster than a feral cat!)

* My pre-election October range for gold price was $1,240 to $1,320 per ounce, Winter 2016 Edition of the Mining Quarterly:

 Storms Never Last: Positive News for Gold, Oil & Copper

My commentary in the Spring 2017 Mining Quarterly reaffirms an average price above $1,200 per ounce with a potential run at $1,400:


Click on the image for a larger size:


Gold in euro & yen terms with good margin above 2013 lows

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed yet again July 7, 2017 (0.4989). We must stay above the December low (0.4973)! Currently this AM the AUSP is 0.5116 still recovering from the July low and slightly below the middle of its range bound meander for 2017.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted.

Friday, July 28, 2017

Gold $1,270 on NK Missile, Russian Expulsions & GDP But Copper Steals The Show


Shelter from the Storm
Lone Mountain, Eureka, Nevada

Friday, July 28, 2017 AM

Morning Miners,

One of those weeks where the stars align for metals. Is it just more falling U.S. dollar? The euro is strengthening to levels not seen since 2014, the Japanese yen became more precious moments ago when a North Korean missile plopped into their shipping lanes and a weaker-than-expected GDP report this morning dampens fears of rapidly rising interest rates - all forces that move the dollar down in value. But copper made new year-to-date highs this morning far in excess of the dollar's depreciation. Currently trading at $2.8790 per pound, it is up more nearly 6% for the week. Oil (WTI) has climbed almost 8%. 

This is more than just a weak dollar story*. Most base metals are up too with stronger outlooks for global demand and renewed investment interest in raw materials. To put this in perspective, this report flagged $6,200 per tonne ($2.81 per pound) as a bullish level several months ago; we're at $6,350 this morning. Comex gold (December contract) popped to $1,276.7 per ounce on the North Korea news. Not all bad, pardner...prices that is.

Unfortunately, LME Moly Oxide still remains at $7.26 per pound disappointingly short of $8 after climbing to $7.94 for much of May. $8 per pound is a key level for General Moly (GMO) to secure additional funding for Mt. Hope from AMER. 

Here's how I saw the weekly price action as told to the Kitco News Weekly Gold Survey:

My vote is up. Target gold price $1,280 per ounce. Target Silver price $16.8 per ounce.

One can only be impressed by copper's new highs for the year, a weekly gain of nearly 6%. The euro is on fire too reaching levels this morning not seen since December 2014. Although gold's advance is less impressive compared to these rising stars it is not far behind. Importantly, the yellow metal reaching the $1,270-level today outpaces the S&P 500 for the week by nearly 1% - a stock index that made an all-time record Wednesday.

A slightly weaker than expected domestic GDP this morning adds further support to a dovish take on the Fed's future rate hikes trajectory. This is bullish for gold allied by White House turmoil and uncertainty created by the early morning collapse of the ACA repeal. The Russian ouster of hundreds of U.S. staff in response to tighter sanctions adds a new geopolitical dimension.The combination of these drivers should bring the yellow metal to the $1,280-level next week [Note: shortly after this input was submitted, North Korea fired a missile into the Sea of Japan giving gold a further boost higher].

Additional Note:

The fate of the Chinese yuan remains a key tell for gold and copper - a material drop in valuation could boost gold and depress copper prices. The yuan has stabilized below 7 USD/CNY for most of 2017 and continues to strengthen. Volatility is lower than other major currencies.  This morning, the yuan is trading stronger than last week at 6.7382 USD/CNY (1-month volatility** 0.324%).

Have a great weekend!

*   U.S. Dollar Index or DXY currently at 93.38; by comparison, April, 24, 2016 the DXY plumbed 93.08
** by comparison the euro & yen 1-month volatilites are  1.00% & 0.87% respectively.

Weekly Summary  for July 28, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:

My commentary in the Summer 2017 Mining Quarterly:

Bottoms Up! (6/8/2017. Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

McEwen Mining (MUX) $2.57 per share


General Moly (GMO) $0.45 per share; Moly oxide (LME) $7.26 per pound


Marcum Microcap Conference  (Press Release, 6/16/2017)




Summer 2017 Mining Quarterly - It Rocks!

Summer 2017 Mining Quarterly

[SPECIAL NOTE: Marianne Kobak McKown will no longer be with the Elko Daily Free Press. She was hired as the executive director of the Committee Against Domestic Violence starting July 1. She will be missed by this report and the mining community, the best of luck on her new journey!

Suzanne Featherston is the new editor of the Mining Quarterly - the best to Suzanne!]

Marianne Kobak McKown has done an excellent job again bringing a new Mining Quaterly in time for summer. It has a new size format with glossy pages that really make images pop! There are great stories and updates on Goldstrike/Cortez, Florida Canyon, RheoMinerals, Newmont and McEwen Mining's Gold Bar Project north of Eureka.

Veteran Adella Harding has several columns on the rise in Nevada gold production and mining claims as well as new exploration. My column on commodity prices also discusses good news on mining employment nationally and updates from Barrick and Newmont locally:

Bottoms Up! (6/8/2017, Elko Daily Free Press)

Online Edition (pages 77-80): Summer 2017 Mining Quarterly

Hats off to Marianne, Adella and crew!

Gold Price Outlook: Second-Half 2017

Gold started the year nicely and should remain in my revised range of $1,180 to $1,320 per ounce*. Average gold price for 2017 is expected to print above $1,200 per ounce with an outside chance to see $1,400 given an adverse outcome for  upcoming debt limit debate, White House controversies, political or geo-political shocks (e.g., North Korea, Syria).

There is a sobering possibility of a serious gold correction later this year if you believe some of the observations and interest rate projections of bond guru Jeffrey Gundlach of DoubleLine Capital. Here's my analysis on why this may be the case:

The Gundlach Conundrum: $1,000 Gold by Year's End? (Kitco News, June 21,2017)

Gold has gained ground on the embattled euro and yen. Post-election, gold in euro and yen terms is up and safely above 2013 lows (chart below). It is worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen), and headed lower on the prospects of the ECB taking a more hawkish stance on monetary policy. It has since stabilized with more dovish comments by Mario Draghi last week . Gold in yen has mostly trended higher since the U.S. election.

An important gold ratio to watch is gold-to-S&P500 or AUSP (see "Chart to Watch" below).

Gold ratios relative to copper and oil are stabilizing near historically less extreme levels which proves a healthy sign. Gold valuations relative to copper are elevated but stable..

Political and geo-political events together with concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017 although that is being tested lately. A fall below $1,230 is very bearish; prices above $1,260, bullish.

Gold below $1,200 per ounce-level is, however, a tempting "buy."

(please do your own research, markets can turn on you faster than a feral cat!)

* My pre-election October range for gold price was $1,240 to $1,320 per ounce, Winter 2016 Edition of the Mining Quarterly:

 Storms Never Last: Positive News for Gold, Oil & Copper

My commentary in the Spring 2017 Mining Quarterly reaffirms an average price above $1,200 per ounce with a potential run at $1,400:


Click on the image for a larger size:


Gold in euro & yen terms with good margin above 2013 lows

Chart to Watch

Here's a chart to watch for 2017. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio is gold-to-S&P500 or AUSP. The ratio bottomed in early-December of 2015 and reversed to a bullish trend, peaking February 11, 2016. It bottomed again December 20, 2016 trended higher but then bearishly bottomed yet again July 7, 2017 (0.4989). We must stay above the December low (0.4973)! Currently this AM the AUSP is 0.5143 recovering from the July low and moving toward the middle of its range bound meander for 2017.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted