The surge in General Moly (GMO) share price yesterday remains surprising to me given that Moly oxide price hasn't moved in nearly a month from $7.94 per pound. The jump was nonetheless noteworthy with over one million shares trading at nearly six times the average 90-day volume. The high for yesterday was $0.4394 per share with a close at $0.4350. Today, prices shot up to $0.5270 but quickly collapsed to trade at $0.38 - let's see where GMO closes today, anything above $0.37 would be encouraging from my view [Update: GMO closed at $0.38, game on].
Why the jump? There was an Annual Meeting this week but I didn't see any big surprises in their press release. Perhaps more importantly, General Moly will tell why they are optimistic about the future next Thursday (June 15):
General Moly Presents at Marcum Microcap Conference in New York (Press Release, 6/5/2017)
The press release provides this teaser:
In his presentation, Mr. Hansen [General Moly CEO] will provide an overview of the Company and its major assets in Nevada, the Mt. Hope Project, one of the largest and highest grade primary molybdenum deposits in the world, and the previously mined Liberty Project. He will also discuss the unsustainability of current low molybdenum prices amidst improving long-term fundamentals in the molybdenum market, including rising steel consumption from a stabilized oil industry, growing liquid natural gas market and China's unprecedented infrastructure expansion.
Maybe a stronger Chinese yuan (see above) and GMO jump in share price are seeing something I'm not. It would be great to be surprised again by more momentum next week.
Best of luck to the General Moly team.
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 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. Gold in yen has consistently trended higher.
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 were stabilizing near historically less extreme levels which proved a healthy sign. However, the gold-to-oil ratio is once again headed north above a comfortable range of variation. Gold valuations relative to copper are elevated but not alarming.
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. There is solid support at the $1,250-level.
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
Here's a new chart to watch. Click on the image for a larger size:
Colonel Possum & Mariana