Weekly Summary for July 21, 2017 AM (something new!)
Summer 2017 Mining Quarterly
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 this 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; a return to $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
Here's a chart to watch for 2017. Click on the image for a larger size:
Colonel Possum & Mariana