By: Nicholas LePan, Senior Mining Reporter at GoldSeek - 8 February, 2019
It was back in September 2018 when America’s newest gold and silver producer, Northern Vertex (TSX-V: NEE) (US: NHVCF) announced commercial production, at its 100-per-cent owned Moss Mine located in Northwestern Arizona, just a couple of miles off the old route 66.
However, as any mine developer knows the past few years have been a challenge to secure financing on good terms to ensure a mine project keeps moving forward; a good opportunity for those with money, not so much for those looking for it.
Northern Vertex was no exception, by the time the company announced commercial production it had accumulated over US$20 million in debt to be paid back over a short two-year window. A heavy obligation for many new miners, especially for a start-up gold heap leach operation, which can sometimes take months to optimize its operation. In response to making the required heavy monthly payments , the company recently announced a $28-million (USD) refinancing to strengthen its balance sheet and pay off its creditors. Full Story
Whenever the next recession does arrive, what we know today is that it is unlikely to be a "normal" recession, by the standards of what most people have experienced in their lifetimes.
In this analysis we will compare and contrast the characteristics of an average recession based on 164 years of history, versus what has been experienced in the United States since the end of World War Two. For most of the modern era, we have experienced unusually short and infrequent recessions, specifically because of how Federal Reserve interventions have changed the business cycle. Full Story
But, since this is not likely a determination we will have to make until 2020, I think we all need to focus on the buying opportunity which will likely be setting up over the next few months, which will then point us up towards that larger degree target overhead. We are finally approaching a very critical time in the metals market. So, let’s keep our emotions in check, and stay focused on what the market is telling us. There is a lot of money to be made in the coming years in this complex. But, we need to keep everything in appropriate perspective. Full Story
Contrary to the official propaganda the economy must be in far worse shape than can be gleaned from the publicly available data if the Fed is willing to stop nudging rates higher a quarter of a point at a time and hint at the possibility of more money printing “if needed.” Remember, the Fed has access to much more detailed and accurate data than is made available to the public, including Wall Street. The Fed sees something in the numbers that sent them retreating abruptly and quickly from any attempt to tighten monetary policy. Full Story
China and the surrounding region has experienced many changes since USCOX opened in 1994, but we believe the region continues to hold further investment opportunities. Many Asian countries possess characteristics similar to the U.S. prior to the industrial revolution: a thriving, young workforce; migration from rural to urban areas; and shifting sentiment toward consumption.
On gold which is kind of the easiest because of the least industrial influence that's difficult enough to prognosticate about. You've got these two forces. On the one end I see rising inflationary pressures, that's a positive. I see at some point rates are going to go down as a discounting mechanism. The market seems to be giving a boost here to precious metals. Now with that said, I do think rates will move higher later this year. The main buyer in gold that I see these days is one that buys for diversification. When you have higher volatility cash flow gets discounted more. That means the risk assets, stock market in particular, is under pressure potentially but gold historically does well when the stock market doesn't do well. There are exceptions like the early 80's, bear market and that's when real interest rates went up to through the roof. But it is for diversification because gold is really one of the easiest diversifiers. Full Story
This means there are sixty-eight digital/make-believe COMEX ounces for each physical ounce that is alleged to back them. If the LBMA truly runs dry of physical palladium in the weeks/months ahead, the next available stash of physical supply is in New York, and as you just learned, the leverage on COMEX of digital to physical is 68:1. Even at a supposed position limit of just fifty contracts or 5,000 ounces, it won't take long to drain the COMEX, too, and then what do we have? Complete pricing scheme collapse.
Should this happen, how long will it take for the global hot money sharks to smell blood in the water? Similar to the "bond vigilantes" of a few years back, after a failure in the LBMA/COMEX palladium market, could a run on the similarly-structured gold or silver markets be far behind? Full Story
So what’s the takeaway from all this … firstly, gold has all the appearance of an early stage bull run - it mirrors what we have seen before. And secondly, not untypically it is the smart money which is getting in first.
It is tempting to declare the bull run in full flow and we see confirmation of this once gold has crossed the magical figure of $1360 as we wrote about recently - see here
At $1360 gold will have crested the horizon. The real question is whether one waits for confirmation of that, or one invests because you know as with all cycles, the sun will rise again. Full Story
By: The Sound Money Defense League - 6 February, 2019
A member of the U.S. House Financial Services Committee today pressed the Commodities Futures Trading Commission (CFTC) on its conspicuous failure to uncover the very silver market manipulation now being prosecuted by the U.S. Department of Justice.
In a probing letter dated February 5 to CFTC Chairman J. Christopher Giancarlo, Rep. Alex X. Mooney (R-WV) writes... Full Story
The final factor mentioned by Macleod is simply, “gold is massively under-owned in the west.” By 1980, institutional investors on average held 5% of their assets in gold. Currently the percentage allocation to gold (or fake gold like GLD) is well under 1%. All it would take for a massive price-set in gold and silver is for institutions to allocate 1-2% of their assets to gold. I believe eventually that allocation percentage will move back to 3-5%, which will drive the price of gold well over $2000/oz. Full Story
Something big is happening in the gold market right now, and nowhere is that more apparent than in central banks of emerging economies. Last year was a watershed in the size of official gold purchases, as banks added an incredible 651.5 tonnes (worth some $27.7 billion) to their holdings, according to the World Gold Council (WGC). Not only is this a remarkable 74 percent change from 2017, but it’s also the most on record going back to 1971, when President Richard Nixon brought a formal end to the gold standard. In the final quarter of 2018 alone, central banks purchased as much as 195 tonnes, the most for any quarter on record, according to leading precious metal research firm GFMS. Full Story
Since the Fed barely started rolling off its government treasuries before conceding surrender, we can reasonably conclude the Fed will be rolling them over for a long time to come. What remains to be seen is where we go from here. For now the market is breathing a massive sigh of relief from the peril it feared if the Fed continued to do what it had long promised, but belief in relief without the action of relief will likely give way to reality soon.
That the Fed has effectively hit the end of the road for its roll-off means it has fully (and likely permanently) monetized that much of the federal debt by its own admission. Full Story
From a gold investor’s standpoint, what’s particularly interesting is that it appears that foreign central banks are slowly but surely replacing their US Treasury bond holdings with gold bullion! This is likely putting pressure on the Fed to dial back its QT program and that could create an even bigger loss of confidence event. Full Story
A breakout at the top red line (the high at point 5 – $1 375) would almost certainly signal or confirm the bull market. This would be divergence from the 1980s pattern, and likely cause prices to rise really fast once the breakout is confirmed (when dealing with fractals, the biggest price movements occur when two fractals diverge – a breakout at the top red line is a divergence).
A breakdown at the bottom red line, could mean that prices will continue to follow the 1980s pattern, and go lower than $1000. Which would mean we will have to wait many years (even a decade) for the next gold bull market (very unlikely). Full Story
– Intellectuals are laying the groundwork for “a tower of debt higher than any ever seen in world history” – Alexandria Ocasio-Cortez (AOC) and Donald J Trump (DJT) will soon be on the same side by coming to love massive debt, “$2-trillion federal deficits,” ultra loose monetary policies and the debasement of the dollar – Beyond “good and evil” and moving to “dumb and dumber” monetary and economic policies may see dollar go the way of bolívars in Venezuela today Full Story
By: Keith Weiner, Monetary Metals - 4 February, 2019
So the logic goes, if the Fed stops hiking rates now, what room will it have to do something to help avert/mitigate the next crisis? It’s kind of like wearing your winter outerwear while sitting in a nice warm restaurant. When you walk out into the night, you will suddenly feel miserable and cold.
Well, it needs to be said: the Fed does not avert or mitigate crises—it causes them. If they don’t lose credibility for causing crises, then what risk to their credibility now? And, if they don’t lose credibility for claiming to avert and mitigate the crises they cause, then why should people suddenly see the Fed in a different light today?
We have said in the past, and we say it again today. You’ll know the Fed is losing credibility when people stop thinking that gold goes up. When they stop thinking of the dollar as the firm reference point, against which up and down are measured. Full Story
The Federal Open Market Committee (FOMC) released several decisions this week that could be positive for gold. As summarized by David Doyle at Macquarie Group, those changes are: being patient in market future adjustments and removing forward guidance on further rate hikes. The balance sheet normalization path is also flexible, and the Fed is willing to use the balance sheet if economic conditions warrant it. Brown Brother Harriman wrote that the Fed sent a clear signal to buy equities and sell the dollar, which is positive for gold. Full Story
By: Steve St. Angelo, SRSrocco Report - 4 February, 2019
Get ready for a new era of precious metals investor. That’s correct. Up until now, the primary buyer of gold and silver have been the older generation, 40-65+, but that will all change when the next financial crisis hits. The Millennials, or those in the 23-38 age group, have participated less in the stock market than previous generations. And, rightly so.
According to one study, Millennials preferred cash (30%) as their largest investment over stocks (23%). This should be no surprise as the older Millennials have experienced two market crashes, the dotcom NASDAQ crash and the 2008 market meltdown within a decade. Furthermore, the Millennials are likely very concerned and worried about the massive underlying debt and leverage in the system. Of course, it is probably true that most Millennials don’t understand the details of the financial markets, but have an excellent innate ability to recognize that SOMETHING IS SERIOUSLY WRONG. Full Story
By: Chris Waltzek, GoldSeek Radio - 3 February, 2019
The show kicks off with the current theme of mergers in the gold-mining industry suggesting further industry acquisitions in small gold-miners. Suppressed prices have minimized exploration and related mining operations, all to the benefit of stockholders.
China and other BRICS nations are stockpiling palladium amid a global shortage - the price recently reached parity with gold.
Similar to the epic palladium bull rally, silver also has a highly inelastic demand curve with thousands of industrial uses.
By: Richard Mills, Ahead of the herd - 3 February, 2019
But that’s not why we the people should own gold. Gold is insurance.
Gold gives all of us something that fiat paper money, or any other financial innovation, cannot deliver in times of the turmoil - escaping Nazi Germany, or buying food, medicine, water or even toilet paper in a crisis – like Venezuela is going through.
What do you do when your paper money is worthless? You sell, barter and trade your gold. Just like Maduro. Full Story
GATA consultant Robert Lambourne's report yesterday about the gold trading signified by the December financial statement of the Bank for International Settlements speculated that the bank's use of gold swaps might mean to recover gold for central banks that are inconveniently short in their official reserves.
In response to Lambourne's analysis, a prominent figure in the gold business in London and elsewhere who has followed GATA's work for many years wrote to your secretary/treasurer with his own account of the swap business and invited GATA to distribute it.
It confirms that central banks trade gold in large part to facilitate gold production by providing cheap financing for mines, to regulate and contain the price of the monetary metal, and thus to discourage increases in the price of all commodities. Full Story
Disclosures in the recent monthly statements of account published by the Bank for International Settlements show that the bank is still actively trading in gold swaps, which the bank uses to gain access to gold held by commercial banks.
There is not enough information in the monthly reports to calculate the exact amount of swaps. But based on December's statement, which was posted very late, only this week --
By: John Mauldin, Thoughts from the Frontline - 3 February, 2019
All Models Are Wrong, but Some Are Useful Starting Valuation Matters Empty Quarter Fun with Forecasting: Choosing Your Time Periods Late in the Cycle Removing Emotions Can It Get Any Better Than This? Puerto Rico, Dallas, Cleveland, Cleveland, Cleveland, and ??? Full Story
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