"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, May 26, 2017

Gold 4-Week High $1,268; Terror, China & Falling Oil Bolster the Yellow Metal


Mr. LIZZ-ard
Lone Mountain, Eureka, Nevada

Friday, May 26, 2017 AM

Morning Miners,

Comex gold heads into the Memorial Day weekend near 4-week highs* at $1,265.1 per ounce. Underpinned by some unpleasant global events, gold should move even higher next week. Comex copper is resilient at $2.5695 per pound, just slightly down from last Friday. Moly oxide remains unchanged at $7.94 per pound after its big jump two weeks ago.

My input to the Kitco News Weekly Gold Report:

My vote is up. Target gold price $1,280 per ounce. Target Silver price $17.5 per ounce.

Gold crosses the finish line for the week sprinting ahead of major currencies and key commodities with market participants in a "risk-off" mood ahead of global holidays including our own Memorial Day. There was certainly enough to bolster the yellow metal with a Moody's debt downgrade of China, the world's second largest economy; terror in the U.K. and oil prices taking a near 8% tumble yesterday.

The stuff that makes gold shine.

One miss for the Lustrous One was comparative performance relative to domestic stocks. With the VIX returned to single digits yesterday, the S&P 500 posted new all-time highs.

Gold is trading at 4-week highs for the week up 1% or more in U.S. dollars, euro and Japanese yen. It's gains compared to commodities are even more impressive: up 2% against the broader Bloomberg commodity Index and nearly 4% versus falling oil [see chart below].

I believe it likely that gold will visit $1,280 next week following the bullish trend in place this 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. Continuing low volatility suggests the yuan remains a currency yawn.  This morning, the yuan is steady trading at 6.8539 USD/CNY (1-month volatility** is 0.20%).

Have a great Memorial Day weekend!

* Today's high (so far) is $1,268 per ounce; May 1st Comex gold touched $1,272,4

** by comparison the euro & yen 1-month volatilites are  1.27% & 0.89% respectively.

Weekly Summary  for May 26, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:


My commentary in the the Spring 2017 Mining Quarterly:


Online Edition (pages 44-46): Spring 2017 Mining Quarterly

McEwen Mining (MUX) $2.73 per share (AM)


General Moly (GMO) $0.2801 per share (AM); Moly oxide (LME) $7.94 per pound

An unofficial source told me today that a much anticipated Nevada Supreme Court decision regarding water rights has been moved from April 4th to May 1st.



The Big Picture (click for panoramic view)
Lone Mountain, Eureka, Nevada

Gold Price Outlook 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 evolving U.S. trade policies, political or geo-political 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 was somewhat worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen) but has since stabilized..

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 is a healthy sign. 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.

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 new chart to watch. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio to watch 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 March 15, 2017. We must stay above the December low (0.4973)! Currently this AM the AUSP is 0.5239, fairly resilient given that S&P 500 set new all-time highs yesterday,

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted

Friday, May 19, 2017

Gold Visits $1,265; Weak Dollar Boosts Metals


Exploring the Ordovician
View from Lone Mountain, Eureka, Nevada

Friday, May 19, 2017 AM

Morning Miners,

Gold ends the week off yesterday's high of $1,265 per ounce trading at $1,254.7. The yellow metal may see some downward pressure next week. Comex copper is getting a nice bounce from Thursday's sell-off; presently at $2.5655 per pound. Moly oxide remains at $7.94 per pound after its big jump last week.

My input to the Kitco News Weekly Gold Report:

My vote is down. Target gold price $1,240 per ounce. Target Silver price $16.6 per ounce.

One has to be impressed by the rally in commodities this morning and their relation to gold.

After a week of political turmoil in the White House that brought Comex gold to $1,265 per ounce, there is a sense that the appointment of a Special Counsel for the Russia investigation and the President's trip abroad will bring market [near-term] stability and diminish enthusiasm for the safe haven trade.

Commodities are now responding to positive economic news for the U.S. and Europe and a beaten U.S. dollar returned to pre-election levels*. 

[Metals are recovering well too. Comex copper is up 3.2% this morning from yesterday's low trading at $2.5655 per pound or $5,656 per tonne. Staying above the $5,500-level is key]

Even though broader Bloomberg Commodity Index is at late-April levels today, gold maintains gains for the week compared to rising copper, recovering U.S. stock markets and the Japanese yen. Gold has lost some ground to Nymex oil, now above $50 per barrel, and a strengthening euro [see above chart]. Given this backdrop, it is likely that the yellow metal will return to the $1,240 per ounce level next week.

* On U.S. election day, the U.S. Dollar Index (DXY) had a low of 97.55 and then it peaked above 103 in early January. This morning's DXY is a lower still 97.24.

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. Aggressive liquidity tightening by the People's Bank of China (PBOC) has eased, stabilizing the yuan below 7 USD/CNY. Recent low volatility suggests the yuan remains a currency yawn.  This morning, the yuan is steady trading at 6.8870 USD/CNY (1-month volatility** is 0.10%).

Have a great weekend!

** by comparison the euro & yen 1-month volatilites are  1.00% & 1.18% respectively.

Weekly Summary updated for May 19, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:


My commentary in the the Spring 2017 Mining Quarterly:


Online Edition (pages 44-46): Spring 2017 Mining Quarterly

McEwen Mining (MUX) $2.895 per share (AM)


General Moly (GMO) $0.2895 per share (AM); Moly oxide (LME) $7.94 per pound

An unofficial source told me today that a much anticipated Nevada Supreme Court decision regarding water rights has been moved from April 4th to May 1st.



Fossils from 470 million years ago...or so
Lone Mountain, Eureka, Nevada

Gold Price Outlook 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 evolving U.S. trade policies, political or geo-political 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 was somewhat worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen) but has since stabilized..

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 is a healthy sign. 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.

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 new chart to watch. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio to watch 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 March 15, 2017. We must stay above the December low (0.4973)! Currently this AM the AUSP is 0.5283, a welcome uptick on recent stock market weakness.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted

Friday, May 12, 2017

Gold Bump on U.S. Retail Sales; Moly Oxide Surges Higher 15%


Headframe, Lone Mountain
Eureka, Nevada

Friday, May 12, 2017 AM

Morning Miners,

Gold ends the week higher but may see some downward pressure next week. This morning's Comex price is $1,230.9 per ounce; copper $2.5135 per pound. Hey, check out the moly oxide jump to $7.94 per pound (see below).


My vote is down. Target gold price $1,220 per ounce. Target Silver price $16.3 per ounce.

Although gold got a bump this morning on weaker-than-expected retail sales* in the U.S., next week is likely to bring downward pressure on gold returning it to the $1,220 per ounce level.

Some of the drivers that have brought the yellow metal higher are moderating: political uncertainty in Europe has eased with the defeat of Le Pen in France, commodity markets have stabilized after last week's selloff and the S&P 500 Volatility Index (VIX) has recently dipped to single-digit lows.

Although Chinese equity markets have retreated on leverage tightening, the yuan has become the yawn with exceptionally low volatility. The latter suggests stability coupled with a better-than expected GDP for Q1 (6.9% vs. 6.5% target) - an environment not supportive of the safe haven trade there.**

For the week, gold outpaced the euro, yen and copper but lost ground to dramatically rebounding oil prices [see Weekly Summary Chart].

* Retail sales 0.4% reported versus 0.6% expected; core sales 0.3%,expected 0.5%

**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. Aggressive liquidity tightening by the People's Bank of China (PBOC) has eased, stabilizing the yuan below 7 USD/CNY. Recent low volatility suggests the yuan remains a currency yawn.  This morning, the yuan has strengthened slightly trading at 6.8775 USD/CNY (1-month volatility* is 0.11%).

Have a great weekend!

* by comparison the euro & yen 1-month volatilites are  0,99% & 1.67% respectively.

Weekly Summary updated for May 12, 2017 AM  (something new!)


(click on table for larger size)

My latest column in Kitco News, Montreal:


My commentary in the the Spring 2017 Mining Quarterly:


Online Edition (pages 44-46): Spring 2017 Mining Quarterly

McEwen Mining (MUX) $2.70 per share (AM)


General Moly (GMO) $0.32 per share (AM); Moly oxide (LME) $7.94 per pound

An unofficial source told me today that a much anticipated Nevada Supreme Court decision regarding water rights has been moved from April 4th to May 1st.



Down Below, Lone Mountain
Eureka, Nevada

Moly Oxide Surges Higher 15%

Moly Oxide prices finally got some giddy-up go after being at $6.92 per pound since last fall. For the week, molybdenum is up 15% at $7.94 per pound - need to get above $10 per pound but this move is encouraging.

General Moly (GMO) $0.32 per share (AM)

Gold Price Outlook 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 evolving U.S. trade policies or geo-political 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 was somewhat worrisome that gold in euro terms broke below uptrend support March 9 and then again after French elections (i.e. defeat of Le Pen).

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 is a healthy sign. Geo-political events and concerns about the timing and efficacy of the new administration's policies have restored glitter to gold in 2017.

Gold near my low-range of $1,180 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 just released 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 new chart to watch. Click on the image for a larger size:


Gold-to-S&P 500 Ratio

An important gold ratio to watch 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 again March 15, 2017. We must stay above the December bottom (0.4973)! Currently this AM the AUSP is 0.5150 a very mild uptick of higher lows for 2017.

Cheers,

Colonel Possum & Mariana

Photos by Mariana Titus if not otherwise noted