Timing & trends

Faber: Physical Gold Storage Costs, The Fed & Economic Figures

Posted by Marc Faber - Gloom Boom & Doom Report - Gloom Boom & Doom Report

on Tuesday, 26 April 2016 14:22

Faber expects the Fed to backpedal with the new rate hike policy, with the announcement of a new wave of monetary expansion this year, QE 4.

Policymakers are pushing on a string – monetary expansion is far less affective with each installment. Although the equities indexes are being buoyed by a few key shares, the majority of stocks are in bear market territory.

Dr. Faber questions the veracity of official US economic figures, noting a high likelihood of a recession in early 2016 despite official indications to the contrary.

After years of stagnation, gold shares are outperforming most sectors, as their relative value encourages wise investors to allocate funds into the XAU. Dr. Faber recently added to his gold position, using weakness as an opportunity to procure sound money at a discount. The storage cost for physical gold bullion is low making the yellow metal an ideal asset to outperform other commodities amid a 2016 rebound rally. 

This and more in this 1 hour 18 minute interview.

also:

Silver is on Fire

 


UnknownMarc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.

The Secret Behind Soaring Oil Prices

Posted by Daniel Jones - Avaring Capital Advisors

on Tuesday, 26 April 2016 14:14

9866571-14613656548876643 originSummary

  • Oil prices soared this past week, driven by a number of factors but particularly impacted by falling domestic production.
  • Some categories of petroleum products managed to increase, but the overall picture is showing signs of improvement.
  • Add to this strong demand and a continued fall in the U.S. rig count and investors have a lot of reasons to be happy at the moment.

Right now, there are some things that are certainly negative concerning oil, such as the failed Doha meeting and rising crude stocks. However, when you look at a report like this, which shows that some categories of petroleum products are falling, that output is dropping, that demand for products is strong year over year, and that the rig count is still very low, it’s hard not to be more bullish than bearish regarding oil in the long run.

….for the full analysis go HERE

related:

The Oil/Dollar Dance – and What Might Come Next

“This Is The Longest Uninterrupted Selling Streak In History” – Smart Money Sells Stocks For Record 13 Consecutive Weeks

Posted by ZeroHedge

on Tuesday, 26 April 2016 14:02

One week ago we were surprised to learn that no matter what the market was doing, whether it was going up, down or sideways, Bank of America’s “smart money” (institutional, private and hedge funds) clients, simply refused to buy anything, and in fact had continued to sell stocks for a near-record 12 consecutive weeks.  In fact, the selling continued despite what we said, namely that “at this point it was about time for the selling to stock, if purely statistically, otherwise said “smart money” would be sending the clearest signal yet that the market rally from the February lows is nothing but a huge gift to sell into.”

One week later we were absolutely convinced that finally the selling would end. It has not.

client net buys bofa 0

….read more HERE

related:

How Long Before the Financial System Fails?

LiTHIUM X Is Not Alone – Profiling This Marketplace Darling and Others in the Sweet Spot

Posted by Streetwise Reports

on Tuesday, 26 April 2016 2:20

After several years of bear markets for miners, many mining equities have lept upward in the last few months. LiTHIUM X Energy ranks among the leaders of the pack, up many-fold. Barry Allan, vice chair of mining at Mackie Research, and Research Analyst Ryan Hanley put out a report in March for the PDAC convention, highlighting a number of promising mining companies. In this interview with The Gold Report, Allan and Hanley profile a handful of those companies, including LiTHIUM X.

LIXChart4-25-16

LiTHIUM X Energy 6-month Chart

The Gold Report: Barry and Ryan, in March, you attended the Prospectors & Developers Association of Canada (PDAC) convention, the largest mining gathering in the world. What is your main takeaway?

 

Barry Allan: Probably the biggest takeaway this year was while attendance was down marginally, the quality of the companies in attendance was very, very good. It wasn’t this frenetic activity of a bunch of people running around looking for meetings, as there were better quality companies in attendance and making presentations. I guess it is characteristic, to be fair, of what we’d expect to see in a bear market, that the good always survive, that the good always continue to make discoveries and move assets farther down the track. I think that’s exactly what PDAC was telling us this year. 

TGR: You prepared a report for PDAC highlighting more than a dozen companies, not all of which are on your coverage list, that you believe have great potential. Would you discuss a few of these companies?

BA: What Ryan and I were attempting to do here was to profile some companies that were unique and caught our eye. Not all, as you say, were under coverage, but they were companies that we had some knowledge about and we found intriguing and interesting. 

TGR: Which company would you like to start with? 

Ryan Hanley: Red Eagle Mining Corp. (RD:TSX.V). I looked at its project a couple of years ago while I was in Colombia. We decided to point it out because it’s one of the first major projects that has been able to actually get through the permitting phase in Colombia. There are a couple of reasons for this. One is that Red Eagle has done a good job on the community side and has its social license. It has communicated well with all of the stakeholders in the region. It also doesn’t have the artisanal mining problems that some of the other players in the area do, at least not to the same extent, which has made the permitting process a little easier. In addition, Red Eagle’s project is an underground operation; it’s not looking at constructing a large-scale open pit. 

Screen Shot 2016-04-25 at 7.10.07 PMRed Eagle now has everything in hand, including project finance, which I think is worthy of quite a bit of attention. It also is a pretty attractive deposit, a little bit over 5 grams/tonne (5 g/t) and a little over 400,000 ounces gold. There is quite a bit of exploration potential there as the deposit remains open down-dip and to the east, as well as offers a few satellite targets. We thought Red Eagle was one to definitely keep our eyes on because of how well it has been advanced, how it is fully funded and how it has exploration potential. 

TGR: What is another company on your list?

RH: Rye Patch Gold Corp. (RPM:TSX.V; RPMGF:OTCQX), which is in Nevada. The main thing that caught my eye is it has a 3.4% net smelter royalty on Coeur Mining Inc.’s (CDM:TSX; CDE:NYSE) Rochester mine. Given where commodity prices are today, that has given Rye Patch about $4–5 million a year in revenue, which it can then use across its exploration projects. Rye Patch’s main project, Lincoln Hill, is right next to the Rochester mine. It’s scoped out as a small-scale operation, only about $30 million to build. It has an attractive internal rate of return because while it is low grade, it does have a low strip ratio, so the economics hold up in today’s gold price environment. 

Screen Shot 2016-04-25 at 7.10.15 PMAdditionally, Rye Patch has several other exploration properties that are starting to look more interesting, including some in the Cortez Trend. Garden Gate Pass looks like it falls along strike of Barrick Gold Corp.’s (ABX:TSX; ABX:NYSE) recent Goldrush discovery, which is a little more than 8 million ounces (8 Moz) at 11.5 g/t. Being along strike of that makes Garden Gate Pass a pretty important exploration target, as is the Patty project, a joint venture with Rye Patch, Barrick and McEwen Mining Inc. (MUX:TSX; MUX:NYSE) in roughly the same area. Rye Patch is following all of these recent discoveries of high grade along the Cortez Trend, in addition to the project that it already has. 

BA: We also profiled a company called Dalradian Resources Inc. (DNA:TSX), which is based in Ireland; it had caught our eye because of grade and good execution. This underground deposit is running in the 10 g/t area, looking like it has something north of 3 Moz gold in resources. It is test mining these high-grade, narrow-vein systems to prove up the grade. Dalradian is high grade, is approaching its mine development very smartly and doing what we think is a good quality job. So that caught our eye. 

We selected LiTHIUM X Energy Corp. (LIX:TSX.V) out of interest in the lithium space and because of the people who were behind it, including Executive Chairman Paul Matysek. The company has assembled brine lithium properties in Argentina and has taken a fairly significant exploration bet on properties in the only producing area in Nevada. We saw some good people here getting a company organized and good sponsorship that would make sure the capital was there to advance the project further. It has, as time wore on, been certainly a darling of the marketplace and has shown some very spectacular equity returns. We would say it still is a bit speculative at this point, but it definitely has executed very well.

TGR: Do you think its Nevada location is giving it that extra push, given Tesla Motors Inc. (TSLA:NASDAQ) and its Gigafactory?

BA: That’s certainly part of it. LiTHIUM X is not alone in trying to leverage the Clayton Valley for lithium production. What is more significant is the company expressed a clear intent that it was in the market to acquire such an asset, and it has subsequently executed on acquiring that. So what may have started off as an idea has quickly transformed into good exploration both in Nevada and Argentina. I think it’s both of these together that has really taken the stock to where it is. 

TGR: Since you released your PDAC report, two of the companies you profiled, Adventure Gold Inc. (AGE:TSX.V) and Probe Metals Inc. (PRB:TSX.V), have announced a merger.

BA: Those were two that we were fairly close to. We felt both Adventure and Probe were very good quality exploration plays run by very good quality people. We were not surprised that they have combined themselves into a common company. Their methodologies are very similar; one is more Quebec based than the other, but both are very good explorationists with good properties to go exploring and with cash. What Probe brought to the table was $20 million in cash, and Adventure brought good people and good properties.

TGR: Do you have any parting thoughts for our readers?

BA: Most of the equities we profiled in the PDAC report are much higher now than where they were in March. I think it’s testimonial to the fact that the feeling in the mining industry is much better than it has been in a good long while, and that’s getting expressed even at the junior level. 

TGR: Barry and Ryan, thank you for your time.

Barry Allan is vice chair, mining group and senior mining analyst at Mackie Research Capital, and has been with the firm since 1997. He was named to Zack’s Investment Research’s Top 10 5-Star Analyst list in 2015, ranking No. 1 in North America for precious metals and No. 3 across every sector in North America. Allan has worked in the mining sector for over 30 years, serving as an exploration geologist before becoming a gold and precious metals mining analyst with CIBC, Gordon Capital, BZW and Prudential Bache. He holds Bachelor of Science degree in geology and a Master of Business Administration from Dalhousie University.

Ryan Hanley is a research analyst with Mackie Research Capital, covering the precious metals space, with a focus on junior and intermediate producers, and the mining services space, with a focus on mineral drillers. Hanley joined Mackie in 2010 and prior to becoming a research analyst in March 2012, he spent two years working as a research associate covering the precious metals sector. Hanley holds a Bachelor of Art from McMaster University in Hamilton, Ontario.

Read what other experts are saying about:

1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Red Eagle Mining Corp. and Rye Patch Gold Corp. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 
3) Barry Allan: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview. 
4) Ryan Hanley: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
5) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent. 
6) The interview 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.
7) 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 families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

 

The Oil/Dollar Dance – and What Might Come Next

Posted by Mike Larsen - Money and Markets

on Monday, 25 April 2016 16:18

Of all the crazy market action in the 2007-09 housing meltdown and Great Recession, you know what stands out the most? The fact crude oil prices rocketed to all-time highs.

Between January 2007 and July 2008, crude oil prices almost tripled from $51 a barrel to $147 a barrel. This happened even though the stock market was plunging … the housing market was imploding … banks and brokers were tumbling toward failure … and the global economy was slipping into its worst recession in decades.

Why would that happen? How did that make any sense from a rational standpoint? Well, consider what happened to the U.S. DOLLAR during that same time.

The DXY, or U.S. Dollar Index, tracks the performance of the greenback against a basket of six foreign currencies. The euro has the highest weight at just under 58%, followed by the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.

As you can see in this chart, the DXY started falling off the table at the beginning of 2007. It ultimately tanked from around 85.50 to 71.40. That was the lowest level for the DXY since it was created in 1973.


image1s
Click image for larger view

 

Sure enough, the move in crude oil is a veritable mirror image. It’s worth noting that other “contra-dollar investments” like gold also took off like a rocket. The yellow metal jumped in price by around $400 an ounce to more than $1,000 an ounce.

That brings me to today. We’ve just seen the failure of the Doha production talks. Iran is jacking up production, threatening a Saudi response. The U.S. is still churning out millions of barrels per day more oil than it did a few years ago (though down from the peak). The latest data suggests the U.S. economy is stumbling badly.

Yet oil just rallied more than 60% off its low in the mid-$20s. And perhaps not coincidentally, the DXY has been wilting right alongside — falling from around 100 in December to 94 this week. It now sits on the edge of a potentially serious breakdown, with some currencies like the Japanese yen really on fire against the buck.

Now I’m not saying the dollar and crude have to move in lockstep again. But it’s worth noting that gold is on fire this year, surging just like it did back in 2007-08. And even though some pundits on Wall Street might tell you otherwise, I don’t think a surge in crude would be bullish for stocks overall.

It sure wasn’t last time, as you know. Stocks imploded in 2007 and 2008. The surge in oil also helped push a struggling U.S. economy even deeper into recession by driving the cost of things like gasoline through the roof.

So if I had to sum up my thoughts, I’d put them this way:

  1. The dollar looks increasingly vulnerable here. I’ve been long the Japanese yen, and one of my other favorite “safety” currencies, in a couple of my services. They could really explode in value if the dollar falls off the table.

    So watch the critical 93 level on DXY to see if that technical support gives way. In the meantime, click here if you want to know what to buy and why in an era of weaker U.S. growth and a major credit market turn.

  2. Crude could jump if that happens. But if it does so because of the dollar tanking … and the dollar is tanking because the U.S. economy is tumbling toward recession … that sure doesn’t sound like a recipe for higher stock prices.

    The only companies that would likely prosper would be my safe yielding, lower-volatility, less economically sensitive gems. Again, you can click here to watch “The Unseen Hand” — and find out how to get specific recommendations.

  3. One of the best plays would be gold and gold miners. You don’t get the high level of economic/recession risk that oil comes with. But you do get protection against a plunge in the buck, insane monetary policy worldwide, and a blow out in risk spreads or stock market decline.

    If you’re looking for more specific suggestions not just from me, but from a trio of noted gold experts, whom I’ve been working closely with — then consider the Money, Metals, & Mining Cruise. It’s scheduled to sail July 10-17, 2016, on board the Crystal Serenity from Anchorage to Vancouver. You can find out more information here, or by calling 800-797-9519 and asking for the special cruise rates that apply.

Bottom line: It’s a mad world out there. But clues to today’s market moves may be found from thelast major market and economic bust.

Until next time,

Mike Larson

Mike Larson

Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.

P.S. Here’s the secret that savvy insiders know and that can make YOU very rich, very quickly: In the past, every time oil prices have fallen this low, this fast … without exception … they have rebounded with a speed and force that leaves investors stunned. And investors who had the foresight to gobble up select oil and energy stocks at rock bottom prices, made vast fortunes virtually overnight. In other words: This is a rare opportunity to make a lot of money … very, very quickly. Click here to learn how to take advantage of this opportunity before time runs out!

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