Better than expected manufacturing PMI bullish for GBPUSD
UK manufacturing sector contraction slowed in October according to Markit’s Manufacturing PMI readings. Will the GBPUSD rise?
The price chart on 1-hour timeframe shows GBPUSD: H1 is trading sideways. The price is falling toward the 200-period moving average MA(200) which is level. And the RSI oscillator is at 50 level and has not reached the overbought zone. There is no trend yet formed, traders have to decide when it would be a best time to enter the market.
The reasons behind this opinion are presented in a CIBC report.
In an Oct. 24 research note, analyst Anita Soni reported that CIBC expects Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) “to deliver on growth in 2020, continue to generate strong free cash flow and potentially further increase its dividend.”
This view, Soni explained, is based on the gold producer reporting an earnings per share (EPS) beat, increasing its dividend, re-generating free cash flow, increasing its 2019 production guidance for the second time and trimming its 2020 production guidance, all in Q3/19.
Soni reviewed each contributing factor.
Agnico Eagle reported an adjusted EPS for Q3/19 of $0.36, above CIBC’s $0.29 estimate and consensus’ $0.27 expectation. Strong production and revenues of more than $19 million along with lower depreciation led to the beat.
Because in Q3/19 Agnico Eagle generated free cash flow again after a time of intensive capital outlay, the company boosted its quarterly dividend 40%, to $0.175 per share from $0.125, Soni highlighted. During that growth period, Agnico Eagle maintained a strong balance sheet.
As for production, the gold company also surpassed expectations in Q3/19, achieving 477,000 ounces, noted Soni, against CIBC’s forecast of 463,000 ounces. Based on this and year-to-date performance, Agnico Eagle increased its full-year 2019 production guidance for the second time, to 1.771.78 million ounces (1.771.78 Moz).
Contrarily, the producer cut its full-year 2020 production guidance due to “adverse weather conditions at Amaruq, which delayed dewatering and impacted development,” Soni explained. Agnico Eagle’s new target is 1.92 Moz.
In Q3/19, cash costs were as anticipated, coming in at $653 per ounce versus CIBC’s $646. The all-in sustaining cost was lower than expected at $903 per ounce, compared to the bank’s $941 projection.
Regarding future capex, the Canadian producer increased it for the second time, to $790 million from $750 million, due to the situation at Amaruq, Soni indicated. Also, Agnico Eagle may speed up the phase 2 expansion at Meliadine, which would cost $9 million. In view of these circumstances, CIBC now models a total capex for 2019 of $788 million.
CIBC has an Outperformer rating and a US$71 per share target price on Agnico Eagle, whose current share price is around US$59.31.
Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Agnico Eagle Mines, a company mentioned in this article.
Disclosures from CIBC, Anico Eagle Mines Ltd., October 24, 2019
Analyst Certification: Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.
Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.
In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.
Important Disclosure Footnotes for Agnico Eagle Mines Ltd. (AEM)
CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Agnico Eagle Mines Limited in the next 3 months. CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1% or more of a class of equity securities issued by Agnico Eagle Mines Limited.
You might be surprised to find out how many ways there are to discover reversals.
In fact, there is an entire forex trading style dedicated entirely to using reversals to get in and out of the market.
So, let’s go over the most important things to know about reversals, and how we as FX traders can make the most out of them.
By definition, reversals are quite simple. It’s when the market goes in the opposite direction it was going before.
The trick, of course, is to figure them out either as or immediately after they’ve happened. And that can be a bit tricky, because…
Retracement or Reversal?
The forex market tends to move up and down even as it trends in a particular direction. For example, if it’s going up, there will be bits where it will retrace downwards, before returning to an upwards trend.
Therefore, the real trick isn’t so much seeing that the market has turned around, but rather to figure out if it’s just a retracement or an actual reversal.
Then, from a strategic point of view, how much does that matter?
This is where different timeframes come into play. A retracement on the daily chart, for example, will appear as a reversal on the hourly chart. So, one man’s retracement can be another’s reversal, and vice versa.
Identification
So, it isn’t that we want to figure out when there is a retracement to ignore it; but rather we want to know which is which, and incorporate each into our forex trading strategy.
So, what’s the difference?
A retracement usually happens after a large price move. It’s short-lived and ends faster than the prior price move. There is no change in the fundamentals (it’s a technical move) and the buy/sell balance is in favor of the trend leading up to the retracement.
A reversal can happen at any time. It’s longer-lived and can outlast the prior price move. Very often the fundamentals change, and in fact, it’s frequently caused by the change in fundamentals. The buy/sell balance is against the trend leading up to the reversal.
Fibonacci is Popular for a Reason
The most popular way to identify retracements in forex trading is to use Fibonacci levels. These are “natural” points to which the market returns during a retracement. This also helps you identify a reversal if the market breaks through these levels.
We often use Fibonacci in conjunction with pivot points.
Pivot points are calculated by the prior period’s price action and are used by both range and breakout FX traders to set their take profit, stop loss and even open trades. Consequently, they are stronger points the market will have trouble getting through.
A third way to identify potential areas for a reversal is trend lines and long-term SMAs. This is because FX traders will concentrate their orders around these areas, and will make it harder for the market to go through.
The Bounce and Go
Trend reversals are usually down to changes in fundamentals more than technicals. However, if the market is stuck at a certain point, it can make it easier for the fundamentals to change price action.
Often, the market will come to a level, bounce off, and then either return to its prior trend (retracement, then breakthrough) or keep moving in the new direction (reversal).
While technical analysis can be useful in helping you identify price action that is consistent with a reversal, on a basic level, the best way to know when a reversal could happen is to track the economic calendar and see if fundamental data for your currency pair has changed.
October’s strong US jobs report has offered market players some hope after another volatile week filled with trade concerns and Brexit uncertainty.
This optimism is being reflected in the Dollar Index which has pushed above 97.40 while US stocks are blasting higher as of writing. In a positive development, the United States added another 128,000 jobs in October, well above the 85,000 forecasts while average hourly earnings rose 3%. Although the unemployment rate ticked up from 3.5% to 3.6%, it still remains near a five-decade low. Another bright spot came from the strong revisions in the prior data, which showed 95,000 jobs were created in August and September.
While today’s report could temper expectations over the Federal Reserve cutting interest rates in December, the central bank’s decision remains heavily influenced by US-China trade developments.
Gold to end week on a positive note
It has been a rollercoaster trading week for Gold as investors juggled with various market themes influencing sentiment and risk appetite.
Market optimism over the United States and China finding a middle ground on trade coupled with rising stock markets initially dented appetite for Gold during the early parts of the trading week. However, risk aversion made on return mid-week following reports of China expressing doubts about a “comprehensive, long term” trade deal with the United States. Gold was also boosted by the Fed’s decision to cut interest rate for the third time in 2019, with prices jumping roughly 1.30% against the Dollar since the start of the week. Although bulls remain in the driving seat, the medium to longer term outlook remains dictated by US-China trade developments and global sentiment.
Taking a look at the technicals, Gold is bullish on the daily charts. A weekly close above $1510 should encourage an incline towards $1515 and $1525, respectively.
Commodity spotlight – Oil
It has not been the best trading week for Oil prices thanks to renewed trade uncertainty and global growth fears. Reports of U.S crude production soaring nearly 600,000 barrels per day in August to a record 12.4 million is also compounding to oil’s woes. Given how the dynamics influencing oil remain demand-side factors, the commodity is set to decline further amid global growth concerns.
Focusing on the technical picture, WTI oil has shed roughly 4% since the start of the week with prices trading around $54.40 as of writing. Sustained weakness below $54.00 should encourage a decline towards $52.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
The yellow metal is ending the week firmly in the green, as of writing.
Weakness in USD has created further demand for gold. Prices had been subdued earlier in the week due to improved risk sentiment in response to encouraging headlines around ongoing US-China trade talks.
On Monday, Trump sparked a 100 point rally in the SPX500. This came as a result of comments to reporters that a deal was ahead of schedule and likely to come sooner than expected. As a result of the surge in equities prices, gold came under some pressure as safe-haven flows dried up.
However, into the middle of the week, focus shifted to the Fed’s October FOMC meeting.
Expectations were for the Fed to cut rates again heading into the meeting. In line with the consistent deterioration in economic readings since the last meeting, the market was pricing a rate cut as a near certainty.
The Fed did, indeed, follow through. They implemented a .25% rate cut, as expected. USD softened in response to increased support for the cut, which saw 8 members voting in favor, up from 7 at the September meeting.
However, despite the cut, the third this year, the chances of a further cut in December have decreased. The Fed noted that it will now take time to assess incoming data and developing external factors (trade war) before any further adjustments. Given that it seems as though the US and China will sign a trade deal in the coming months, the likelihood of further rate cuts appears reduced at this point.
Nevertheless, USD remains weaker currently, keeping gold price bid into the end of the week.
Today’s US employment reports pose the potential for further USD weakness if we see any weaker-than-expected readings. Labor market growth has been stalling over recent months and a miss at this stage could exacerbate the USD unwind, leading gold higher.
Technical Perspective
Gold prices are once again attempting to break out above the top of the falling wedge pattern which has framed the correction from recent highs. The key level to watch in the short term is the 1522.75 level. This is a major long-term pivot for gold. Above here, focus will be on a move back up to the recent 1554.69 level.
The recent 1481.93 level has formed interim support. While above here, a further push to the upside is still in the outlook. However, If we break below, the focus will shift to the 1436.19 level next and the 1392.28 level beyond that.
Silver
Silver prices have been higher across the week also, tracking the moves in gold.
The silver market has been a strong beneficiary of the weakness in USD. However, it has also benefitted from the surge in equities prices, particularly in industrial stocks.
While safe-haven flows will be negatively impacted by positive news on the trade talks, silver should see some of the downside offset. This is due to increased industrial demand from a rebound in world trade should the US and China proceed with signing a deal.
Technical Perspective
Silver prices have risen off the 17.3408 support and have broken above the upper trend line of the bull flag pattern which has formed on the pullback from recent highs. While above 17.3408, the focus remains on a further move higher with the 18.6397 the next topside level to watch.
However, If prices break down below the current support, the next major support level is down at 16.2130. This also holds the retest of the broken long term bearish trend line. To the topside, the 18.6397 level remains the key marker to break.
The highlights of this Canadian company’s cornerstone asset are outlined in an Echelon Wealth Partners report.
In an Oct. 23 research note, analyst Ryan Walker reported that his firm Echelon Wealth Partners added Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX) to its Watch List after meeting with the company’s management at the recent Precious Metals Summit.
Lion One’s flagship asset is Tuvatu, the alkaline high-grade gold project on Fiji’s Viti Levu island. The current existing resource consists of diluted Indicated resources of 1.1 million tons at 8.46 grams per ton (8.46 g/t) gold, based on a 3 g/t cutoff grade. The Inferred resource totals 1.5 million tons at 9.7 g/t, or 468,000 ounces.
“Importantly,” Walker pointed out, “about 80% of the existing resource is within just 200 meters (200m) of surface. Yet past drilling was done primarily within 300m from surface and only a small fraction went below 400m down.
Accordingly, the Canadian exploration company, earlier this year, launched a four-hole drill program to test for deep feeders to Tuvatu’s existing high-grade resource.
Also noteworthy is that a preliminary economic assessment of Tuvatu, completed in 2015, showed robust economics, noted Walker. The report outlined an underground mine producing a total of 352,931 ounces of 11.31 g/t gold over the first seven years. The payback period was estimated to be 1.1 years.
This scenario would result in a post-tax net present value 5% of US$150 million and an internal rate of return (IRR) of 79% at a US$1,500 per ounce gold price. “We note the still robust 33% after-tax IRR even at $1,000 per ounce gold,” Walker commented.
Further, Tuvatu is fully permitted for development, construction and mining by the Fiji government, and Lion One has a 21-year surface lease agreement at the project with local landowners and the iTaukei Land Trust.
Lion One’s stock is currently trading at CA$0.90 per share.
Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Lion One. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from Echelon Wealth Partners, Lion One, October 23, 2019
Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.
I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
Important Disclosures: Is this an issuer related or industry related publication? Issuer.
Does the Analyst or any member of the Analysts household have a financial interest in the securities of the subject issuer? No
The name of any partner, director, officer, employee or agent of the Dealer Member who is an officer, director or employee of the issuer, or who serves in any advisory capacity to the issuer. No
Does Echelon Wealth Partners Inc. or the Analyst have any actual material conflicts of interest with the issuer? No
Does Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer? No
During the last 12 months, has Echelon Wealth Partners Inc. provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering, or private placement of securities of this issuer? No
During the last 12 months, has Echelon Wealth Partners Inc. received compensation for having provided investment banking or related services to this Issuer? No
Has the Analyst had an onsite visit with the Issuer within the last 12 months? No
Has the Analyst or any Partner, Director or Officer been compensated for travel expenses incurred as a result of an onsite visit with the Issuer within the last 12 months? No
Has the Analyst received any compensation from the subject company in the past 12 months? No
Is Echelon Wealth Partners Inc. a market maker in the issuers securities at the date of this report? No
In conversation with Brien Lundin of the Gold Newsletter and the organizer of the New Orleans Investment Conference, Maurice Jackson of Proven and Probable explores the geopolitical, financial, practical and social issues surrounding investment in the precious metals.
Maurice Jackson: Joining us for conversation is Brien Lundin, the president of Jefferson Financial, and he is the host of the world’s greatest investment eventI’m speaking of the New Orleans Investment Conference.
Brien Lundin: Great to be with you as always, Maurice.
Maurice Jackson: Delighted to have you on today to discuss the current state of precious metals and some opportunities in the junior mining space. Mr. Lundin, what are your thoughts on the current precious metal prices right now?
Brien Lundin: Well, gold is going through somewhat of a correction; I guess it’s safe to say it should be going lower. The technicals are actually a head-and-shoulders formation pointing toward the lower $1400s in terms of price. The fundamentals have moved from the investors being focused on the big monetary issues to them being focused on the daily parade of headlines. We haven’t really had those drivers that we had earlier in the summer and the price should be going lower, but it isn’t.
We are going sideways basically now. We’ve had gold get hit by a number of headlines that should be bearish. We had a Brexit deal announced last week. We had a ceasefire in Syria announced, we had the makings of at least a phase one trade deal with China. We had some thoughts at least, although the numbers didn’t bear it out, that perhaps with all of this good news . . . the Federal Reserve may be less willing to cut rates at its meeting at the end of the month.
All of these things came up really one after another, virtually at the same time. The gold price barely budged; in fact, it had a couple of days last week where it actually advanced nicely. It’s interesting to me [that] instead of a decline or a real full-blown correction, what we’re seeing is more of a sideways consolidation action. Volatility is dropping; we’re trading in kind of a flag or pennant formation that would imply a breakout one way or the other upcoming. I guess that argues on if you’re an investor and you’re wondering where gold is going to go, you would look at the headlines and say where is the surprise likely to come?
Are we going to have a big, positive surprise? Or are we going to have somewhat of a negative surprise down the road? And I think you should invest accordingly. I think the good news, or potential good news, has already been somewhat baked into the cake for gold, and yet it hasn’t budged, so I’m very encouraged by this. I was looking forward to trade down into the end of the year, but literally over the last day or so, and looking at its trading pattern, I’ve become much more positive and could see another upside breakout in the coming weeks.
Maurice Jackson: Now, how do the aforementioned topics affect the price of silver?
Brien Lundin: The same way. Basically, in any kind of an established trend for gold, silver is going to follow gold, and it’s going to move more in that direction. It’s an un-expiring option on gold. It’s much more volatile than gold, but it moves for the same reasons. I have always said that investors should completely ignore the supposed industrial usages for silver. If something’s driving gold or, as I like to put it, if you like gold, you have to love silver. It’s going to move in the same direction for the same reasons, but more extremely in that direction.
Maurice Jackson: Let’s address some catalysts that have your attention at the moment domestically, that could have an effect on the precious metal prices. What has your attention and why?
Brien Lundin: Well, I think the longer-term factor is the debt and all the issues that arise from that. And not just the U.S., but every major developed economy has amassed debt that is too great to be managed by either tax cuts, economic growth or tax rises, tax hikes, spending cuts or economic growth. The only solution left is the same one that’s been used throughout history, and that’s depreciation of the currency. What we’ve seen are a number of cycles over the past, really 50 years, literally as long as Gold Newsletter has been around.
We’ve seen that central bankers, once they become untethered to the gold price, have been able to spend without any near-term repercussions, and what they’ve done is exactly that. Whenever there’s been any kind of an economic downturn, they’ve lowered interest rates and they’ve provided liquidity to the markets. But, with each successive cycle, each successive downturn, they’ve needed to apply greater and greater doses of this medicineto the point now where interest rates, we would have said were zero-bound, but we know they’re not zero-bound. They’re actually in the negatives zone now, and now they’re coming out with papers from the Federal Reserve staff and economists showing how negative rates could actually be used in the U.S. and be beneficial.
It seems to me a matter of time before we have negative rates, even in the U.S., and hearkening back or speaking back to that debt issue. The problem with that is that the debt is so large now we can never have normal interest rates again because we couldn’t afford to service those debts. Rates have to be not only low, they have to be historically low, and lower than the rate of inflation. In other words, you have to depreciate the currency at a faster rate than you have to pay off the debt. The interest rates, the nominal rates, have to be lower than the price of inflation. In other words, we have to have negative real rates going forward, and that’s tremendously bullish for gold and of course silver, as well.
Maurice Jackson: Sticking domestically here, regarding President Trump and impeachment, should we factor that into the gold price in any type of consideration?
Brien Lundin: I’m not a big believer in geopolitical factors driving gold. I don’t think as an investor you can bet on that because these things erupt, and then they go away, and you’ll never be able to actually play them. Only the most nimble traders will ever be able to play them to any good effect, and they don’t drive the metals over the long term. The thing that creates a secular bull market in the metals and the associated equities is a long-term period of monetary debasement or worries over monetary debasement, and it’s monetary factors that drive the longer-term bull markets.
With all of that said, however, President Trump creates a kind of background level of nervousness around the world that I do think has led to some degree of allocation toward the metals from large portfolios around the world. And I think that’s created a background and undercurrent of buying. All of these little issues create that background noise of concern and geopolitical nervousness in the world that tends to foster greater gold buyingwhether it’s logical or not. But again, I do think the fundamental issues of monetary issues are the things that really virtually guarantee much higher gold prices down the road and virtually guarantee a new multiyear bull market in gold.
Maurice Jackson: Now, germane precious metal prices. How do you see the dollar responding?
Brien Lundin: Well, these geopolitical issues, interestingly, tend to support the dollar and they tend to support gold as well. You think of gold and the dollar as being contracyclical because gold is priced in dollars. When the dollar rises, gold naturally falls, and vice versa. There have been occasions when they are positively correlated, when they move in the same direction. And usually that’s created by some type of a geopolitical crisis or a very large, very worrisome monetary or financial crisis.
In other words, the dollar can act as a safe haven and, of course, gold does as well. When there are factors or situations that create safe havens, or investors look for safe havens, they can go into both. And I think that’s what’s happening right now. We’re having a period where the dollar and gold are positively correlated, where we have some dollar strength and some strength in gold, at least on a session-by-session basis. That said, over the last month or so, the dollar has been trending lower. It seems to have leveled out a bit, but that great strength we saw about four or five weeks ago is abated a bit.
Maurice Jackson: Now before we leave the precious metals, I’d like to just ask you, in regard to the platinum group metals (PGMs), do you see those prices responding the same as gold and silver?
Brien Lundin: Yeah, I do. I think the trend is upward for the PGMs, but not for the same reasons. I don’t think [those] metals really are more industrial than they are monetary, despite the long history of being regarded as having some monetary application. I think the real issue for them is fundamental industrial usages. And there was a situation, particularly in palladium, where investors tended to look at the electric vehicle market in the growth of that sector and disregard their PGMs, which are used in catalytic converters for internal combustion engines. They kind of forgot that internal combustion engines are going to be around for decades longer, and significantly, and that’s actually a growing segment with China’s growth in other developing nations. They disregarded that demand situation, and they overlooked the fact that there were some fundamental supply issues as well.
No one that I’ve been able to look at or find was able to predict that tremendous run in palladium. But since it’s happened, I’ve looked at that market a bit and gotten some feedback from the big palladium miners out there, and PGM miners out there. They’re very bullish on the metals and they’re being very aggressive on looking for new deposits in countries that are exploiting new deposits. That’s an exciting area. I think in the junior mining space there aren’t that many companies in the area. We’ve recommended a couple of them, and Gold Newsletter and I think they’re great options right now.
Maurice Jackson: Speaking of the junior mining space as a whole, what are your thoughts on it?
Brien Lundin: Well, it was barely getting started as far as responding to the rally and the metals, and then it kind of faded back. Nothing’s really [been] moving over the last few weeks. The discovery stories [are] the only stories in that sector for the past four or five months. I do think we need a sustained move in the underlying metals to re-energize that sector. I think there’s going to be some big bargains in December. As we get to the height, or the end, of the tax-selling season and the thin holiday markets, I think they’re going to be some real bargains there that investors should start raising cash for right now to take advantage of. January, February timeframe is typically very good for the metals and the miners, and the opportunity to pick up some of these juniors at bargain levels is about to face us right now.
Maurice Jackson: Are there any companies that you can share with us that present a unique value proposition to the market?
I do like silver plays. I like Aftermath Silver Ltd. (AAG:TSX.V). It’s come a long way. It’s about doubled or tripled in price since we recommended it in Gold Newsletter a few months ago. The market cap is, I believe, only around $6 or $7 million right now, and I think it has a long way to go as they developed the two deposits they’ve acquired.
I just added Precipitate Gold Corp. (PRG:TSX.V) back to our recommended list. It’s a longstanding recommendation in Gold Newsletter that we let go a year or so ago, but it’s got a new project in the Dominican Republic that it’s actually going to draw very soon. There’s some very exciting targets, I like that one.
Great Bear Resources Ltd. (GBR:TSX.V; GTBDF:OTCQX) has been a big story for us. We were one of the first newsletters to recommend that company about a year and a half agoactually, about two years ago now. It rose to a high about 28 times our recommended level. Of course, we recommended that investors take profits along the way, and we had it as a hold at its peak levels, but it’s come back a little bit. The story has transitioned from one of a very high-grade, deep-seated Red Lake play, to one where you have large-scale bulk tonnage added onto that play. The market really has not weathered that transition well and is still looking for those boomer, high-grade intersections from Great Bear. I think they’re going to get that from the new area play, the LP fault, but I do think the bigger play, the bulk tonnage play, will really surprise people when the resource estimates finally come out. I’ve actually moved Great Bear back to a buy after a recent price decline.
I like a couple of exploration slash development plays. Goldplay Exploration Ltd. (GPLY:TSX.V; GLYXF:OTCQB) is a company I like a lot. I do not own it, and I do own Aftermath Silver, Precipitate and Great Bear. I like GoldPlay but do not own it yet.
I also like Revival Gold Inc. (RVG:TSX.V). It’s a wonderful exploration and development as they build large-scale resources at their project in Idaho. I do not own Revival yet.
Now they have a tremendous joint venture deal that they signed in the Goodpaster district in Alaska, surrounding the Pogo mine. What’s interesting about that is that Millrock, and its CEO Greg Beischer, are about as religious about the joint venture model as anyone can be, but like this project so much, they were prepared to drill it themselves. If you know the company as well as I do, and for as long as I have, that says an awful lot about what they think about this project. But they signed a tremendous joint venture deal with an Australian company and will get, I think, $5 million of exploration right off the bat on this project. It’s a tremendous deal that they signed and that’s a very exciting company, and I think top pick among the prospect generators.
Maurice Jackson: That joint venture is Northern Cobalt (N27:ASX), out of Australia and it’s going to be worth about $20 million in capital for exploration. So kudos to Mr. Beischer and the Millrock team there.
Switching gears, the New Orleans Investment Conference will be conducted November 14 in beautiful downtown New Orleans. Mr. Lundin, tell us about the world’s greatest investment event. Who are some of the featured speakers and the discussion topics?
Brien Lundin: The thing about the New Orleans Conferenceit was the first retail investment event in the world really. [It was] started in 1974 by Jim Blanchard and we’ve been carrying the torch on it for many years now, and this is our 45th anniversary. Some of the giants of modern world history have graced our stage, from Lady Margaret Thatcher, Ayn Rand, Milton Friedman, Alan Greenspannow the list just goes on and on and on. We’ve always focused a good bit on the geopolitical issues and the big economic issues, and then kind of dove down to the various sectors, and always with somewhat of a focus on the metals in the mining sectors as well.
Well, this year we are still presenting some great views on geopolitics and economics, but I wanted to have an even greater focus on some specific areas, particularly metals and mining, that I thought were really outstanding speculative opportunities and areas that our investors are really interested in. From the geopolitical and economic ends, we have Danielle DiMartino Booth speaking; Dennis Gartman; Doug Casey, who really is great on everything; Kevin D. Williamson, a very controversial commentator and writer for National Review; Peter Schiff on the economic end; Peter Boockvar; Stephen Moore of the Heritage Foundation, who was put out for the Federal Reserve Board by Trump and had to withdraw his name because he was probably right to free market for the rest of the world.
That’s on the economic end. We also have most of the top experts in metals and mining out there. That includes of course Doug Casey; we have David Morgan; we have Mickey Fulp; Marianne and Pamela Aiden; Nick Hodge; Mike Larson; Peter Schiff again; Rick Rule; Sean Broderick; myself; Tom Klein. The list goes on and on: Gwen Preston, Lobo Tiggre (aka Louis James). Grant Williams is a great addition to our roster. We’re also focusing on other areas like artificial intelligence, cannabis, crypto, some of the exciting, trendy, new speculative markets that are developing. We have an array of top experts in those areas as well.
Maurice Jackson: Now, for someone new to the conference, what can you tell us about the attendees?
Brien Lundin: Well, they’re smart people. . .they self-identify as being very smart, very successful investors because they’re paying money to travel to New Orleans for four or five days to listen to top experts from our stage, and not sales pitches. We do have a great exhibit hall. We have great breakout sessions where investors and attendees can visit with companies and hear their presentations. But every word from every presentation from our main stage is objective, independent, from top experts that we pay to come in. This is the kind of advice you really don’t find at other investment events, and I think when people come to our event, they realize how special and unique it is. They get a feeling for that intellectual energythe kind of ambience that we have where you’re surrounded by a lot of very smart people who are willing frankly to share their ideas, and their strategies, and their successes, and the things they’re hearing, and the investments they like.
That is one of, if not the top benefit of, our event. I mean our speakers are world-renowned, the tops of any investment event out there. But you get, I think, as much, if not more, information and camaraderie and real fun talking to our fellow attendees in this atmosphere that we create, which is kind of bringing the best of New Orleans into the conference. We have great food and drink, we have great entertainment, we have great speakers and attendees because they come from all over the world to be at this event. You know that they’re smart, you know that they’re successful and that they’re information hungry. We provide lots of information, lots of intelligencelots of actionable intelligence that frankly has created more money for more people than any other event in the world.
Maurice Jackson: Ladies and gentlemen, the intellectual capital and networking opportunities at the New Orleans Investment Conference are simply remarkable. I’m still corresponding and benefiting from relationships I established for my first year in attendance, and I’m proud to say that this is my fourth year in a row for attendance. If you do not have your tickets, here’s what I need you to do. Visit our website, provenandprobable.com, and halfway down the homepage, on the right-hand [side] you’ll see an image for the New Orleans Investment Conference. Simply click on the image and you will be taken directly to the registration page. Before we close, Mr. Lundin, please introduce us to Jefferson Financial.
Brien Lundin: Well, Jefferson Financial is basically the company that owns and publishes Gold Newsletter, which is also the world’s oldest precious metals advisory. Also started by Jim Blanchard back in 1971, literally on the day that Nixon closed the Gold Window, Jim started Gold Newsletter to advocate for the return of private gold ownership to American citizens. He was successful in that and that’s why he had the first New Orleans Investment Conference in 1974to teach investors, U.S. investors, how to buy gold. Both have been going great guns ever since. They’re the oldest and most respected entities of their type in the market, and our goal is to serve our subscribers and investors and attendees, and that’s what we work hard to do every day of the year.
Maurice Jackson: Now you publish the Gold Newsletter. How can someone receive updates on a regular basis?
Brien Lundin: Very easily. At Goldnewsletter.com, you can get a free sample issue. You can buy a single issue, [or] you can subscribe for a year to the basic Gold Newsletter. We also have an alert service that’s a higher dollar value. We also have a free report on the website, the investor’s guide to gold and silver. It’s an objective report that I wrote to teach investors about every aspect of the sector, every way to invest in precious metals, from physical to options to the equities. It also describes how to analyze a junior mining stock. It also lists the best newsletter writers out there, people I know that are independent, objective and successful, and it also has all of the investment events out thereincluding the New Orleans Conference, but also the other events [on] the circuit that can provide good information for people exploring the sector.
Maurice Jackson: Before you make your next bullion purchase, make sure you call me. I’m a licensed representative for Miles Franklin Precious Metals Investments where we provided a number of options to expand your precious metals portfolio from physical delivery, offshore depositories, precious metal IRAs, and private blockchain. Distributed ledger technology. Call me directly at (855) 505-1900 or you may e-mail [email protected].
Finally, please subscribe to provenandprobable.com,where we provide mining insights and bullion sales. You can’t beat the price; subscription is free. Brien Lundin of Jefferson Financial, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
Disclosure: 1) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Millrock Resources, Great Bear Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Group Ten Metals is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Great Bear Resources. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Aftermath. Please click here for more information. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Aftermath Silver, Millrock, Goldplay and Revival Gold, companies mentioned in this article.
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Bob Moriarty of 321 Gold discusses how recent Fed actions are affecting the markets, as well as what a gold explorer’s recent NI 43-101 reports means.
I just hate it when I have to admit that I was dead wrong about something as important as calling for a major crash in October. Perhaps a little whining would make it go down easier.
Something very bad comes this way. Right out of the blue the Fed began to dump bundles of crisp $100 bills onto a financial fire in the middle of September when the overnight rate shot to 10% with no warning. What was termed a temporary injection of cash into the REPO market has turned into a flood that looks to last a lot longer than forty days and forty nights. With an attempt to show some levity Chairman Powell insists they are not initiating QE infinity but for those of us who can add and subtract, we know it’s bull. It looks and sounds a lot more like the end of the financial system. If it relates to a bank with a symbol of DB, it will be the end of the financial system.
So there is no crash but what is hidden behind the curtain is probably far worse. So I was sorta right. Gold and silver had mild responses to the flow of funds but the Fed has pumped new hot air into the stock market which looks a lot more like a corpse than a healthy market.
One day soon the metals will reflect the Fed’s balance sheet going ballistic. I’d still like to see a correction in both gold and silver as we slide into the Tax Loss Silly Season expecting shares of juniors to take a dump into mid-December. I suspect there will be a lot of low hanging fruit dangling for the next six weeks just waiting for a well cashed up investor to pluck some nice assets.
Maple Gold Mines Ltd. (MGM:TSX.V; MGMLF:OTCQB; M3G:FSE) comes to mind. I wrote about them a month ago and said you could buy gold for $3 an ounce and that seemed cheap to me. As they promised, they have issued a new 43-101 that counts fewer ounces but of much higher quality. So now at today’s prices, you would have to pay $6 an ounce for quality ounces in one of the best jurisdictions in the world. I don’t see how that can be anything other than a great deal. I took the opportunity to pluck some shares myself in the open market. When the gold juniors and the metals react to QE Forever and a Day, the leverage Maple offers is superb.
I suspect the shares are cheap because investors are bored with the stock after years of little action. I believe that will change soon and $6 an ounce for gold will be a distant memory. Certainly “Bitcon” and weed stocks have sucked off a lot of the speculative money from the resource sector. But as I have said a lot of times, if you buy cheap and sell dear you can make a lot of money. Maple Gold is cheap.
Maple is an advertiser. I own shares and naturally that makes me biased.
Maple Gold Mines MGM-V $0.09 (Oct. 30, 2019) MGMLF-OTCBB 237.4 million shares Maple Gold website.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
Disclosure: 1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Maple Gold Mines. Maple Gold Mines is a former advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector. 2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
US corn export expectations are down. Will the corn prices continue declining?
US corn exports are off to a disappointing start. Unshipped corn sales for 2019-20 are at about 300 million bushels compared to over 500 million for 2018-19, According to US Department of Agriculture. Experts attribute it to the slow US harvest, and increased competition from big supplies out of Brazil. Expectations of lower export demand are bearish for corn prices.
On the daily timeframe the CORN: D1 bounced off the 200-day moving average MA(200) which is level.
The Parabolic indicator gives a sell signal.
The Donchian channel indicates downtrend bias: it is narrowing down.
The MACD indicator gives a bearish signal: it is above the signal line and the gap is narrowing.
The RSI oscillator is falling but has not reached the oversold zone.
We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 388.4. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the last fractal high at 406.6. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (406.6) without reaching the order (388.4), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
After finishing two descending impulses, EURUSD has reached the closest correctional target at 1.1130. Possibly, the pair may form one more descending wave towards 1.1122 and then start a new growth to reach 1.1189. in fact, the market is expected to form the fifth ascending wave. The key predicted target is at 1.1236.
GBPUSD, “Great Britain Pound vs US Dollar”
GBPUSD is moving upwards. Possibly, the pair may extend the current wave towards the target at 1.3028. Today, the price may reach 1.2985 and then start another decline towards 1.2920. Later, the market may resume trading upwards to reach the above-mentioned target.
USDCHF, “US Dollar vs Swiss Franc”
After breaking the consolidation range downwards at 0.9862, USDCHF is falling towards 1.9842. Today, the pair may reach this level and then form one more ascending structure towards 0.9865, at least. After that, the instrument may start a new decline with the target at 0.9813.
USDJPY, “US Dollar vs Japanese Yen”
USDJPY has completed the descending impulse with the first target at 107.90. Possibly, today the pair may correct this impulse towards 108.56 and then fall to break 107.80. Later, the market may continue trading downwards with the target at 106.75.
AUDUSD, “Australian Dollar vs US Dollar”
AUDUSD has completed the correction at 0.6883; right now, it is moving upwards. Possibly, the pair may reach 0.6925 and then form a new descending structure towards 0.6903. After that, the instrument may start another growth with the target at 0.6970.
USDRUB, “US Dollar vs Russian Ruble”
USDRUB is moving upwards to return the upside border of the range. Possibly, the pair may break 64.13 and then continue the correction with the short-term target at 64.53.
USDCAD, “US Dollar vs Canadian Dollar”
USDCAD is falling towards 1,3100. Possibly, today the pair may reach this level and then start a new growth with the target at 1.3185.
XAUUSD, “Gold vs US Dollar”
After breaking the consolidation range to the upside, Gold has reached 1514.00. Today, the pair may fall towards 1496.60 and then start a new correction with the target at 1505.33.
BRENT
Brent is consolidating around 60.00. Possibly, today the pair may form one more ascending structure towards 60.38 and then resume trading downwards to reach 59.33 to complete the correction. Later, the market may start a new growth with the first target at 60.85.
BTCUSD, “Bitcoin vs US Dollar”
BTCUSD has expanded the consolidation range towards 9390.00; right now, it is moving downwards. Possibly, the pair may reach 8700.0 and then resume moving upwards with the target at 9700.00.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
