Archive for Commodities & Metals – Page 2

Gold Hits Our $1300 Price Target – What Next?

By TheTechnicalTraders.com

Early trading on January 4, 2019, saw Gold reach just above $1300 per ounce – confirming our price target from our research and posts on November 24, 2018.  The importance of this move cannot be under-estimated.  Traders and investors need to understand the recent rally in the metals markets are attempting to alert us that FEAR is starting to re-enter the market and that 2019 could start the year off with some extended volatility.

Our research has shown that Gold will likely rotate between $1270~1315 over the next 30~60 days before attempting to begin another rally.  Our next upside price target is near $1500.  We will continue to post articles to help everyone understand when and how this move will happen.  We expect Gold to rotate near the $1300 level for at least another 30 days before attempting another price rally.

Pay attention to the Support Zone on this Daily Gold chart and understand that price rotation is very healthy for the metals markets at this point.  A reprieve in this recent Gold rally would allow the start of 2019 to prompt a moderate rally in the US stock market as well as allow a continued capital shift to take place.  As capital re-enters the global equities markets, investors will be seeking the best investment opportunities and safest environments for their capital.  Our belief is that the US stock market will become the top-tier solution for many of these investments.

 

This Weekly Gold chart shows our Adaptive Fibonacci price modeling system and why price rotation is important at this time.  The highlighted GREEN Fibonacci price target levels on the right side of this chart are projecting upside price objectives for the move that started near mid-November.  We can see that $1325 (or so) is the highest target level and that $1273 to $1288 are the lower levels.  This suggests that we have already reached the upper resistance range and a mild price rotation would allow for the price to establish a new fractal low rotation that would establish NEW upside Fibonacci price targets.  In other words, we much have some price rotation to support the next leg higher in the Metals markets

 

If you’ve been following our research and comments on the past 90+ days.  You’ll already know that we’ve nailed many of these market moves.  The SPY, Natural Gas, Oil, Gold, Small Caps and so many more.  We’ve been calling for a massive price bottom in the US stock market since well before the November 6th US Elections.  Our proprietary predictive modeling systems called the huge moves in Oil, Natural Gas, Gold/Silver, and many others.  If you were not profiting from these moves, then you need to visit www.TheTechnicalTraders.com to learn how we can help you in 2019.  Our memberships are very inexpensive and the support we provide you is incredible for skilled traders.  Want a team to help you create success in 2019, then visit TheTechnicalTraders.com and get started creating success.

Chris Vermeulen

 

Coverage Resumed on Global Gold Major Facing ‘New Era’

By The Gold Report

Source: Streetwise Reports   01/04/2019

A CIBC report highlighted why investors should take a new look at this senior mining company with holdings on five continents.

In a Jan. 2 research note, analyst Anita Soni reported CIBC resumed coverage of Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) with an Outperformer rating and a US$17 per share price target as it is “a new era for a new Barrick.”

Soni added, “There remains a 26% return to our price target at current multiples and the potential for further upside opportunity with delivery of the strategic plan.”

CIBC’s current target price and rating compare to its previous US$14.50 target price and Neutral rating on the miner. Barrick’s current share price is about US$13.05.

The new Barrick, having merged with Randgold, Soni noted, owns five of the world’s Top-10 tier 1 gold assets along with sizable land positions in established gold districts. The senior mining company’s portfolio consists of 21 mines and six projects in North America, South America, Africa, Australia and Asia. These assets present “significant opportunities for production growth, asset rationalization, operational improvement and optimization through exploration additions and mineral resources management,” Soni indicated. The company’s management team is “known for delivering industry-leading returns for investors.”

All of the above, along with CEO Mark Bristow’s strict method of evaluating new projects, afford investors in the name the chance to yield a premium multiple, Soni concluded.

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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.

Disclosures from CIBC, Barrick Gold Corp., January 2, 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 Barrick Gold Corp. (GOLD)

· CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Barrick Gold Corporation in the next 3 months.

( Companies Mentioned: ABX:TSX; GOLD:NYSE,
)

Cobalt Company to Acquire Co-Owner of Nickel-Cobalt Mine

The Energy Report

Source: Streetwise Reports   01/04/2019

A Canaccord Genuity report explores the highlights of the deal, noting the company remains the “premier investment deal” in the space.

Cobalt 27 Capital Corp. (KBLT:TSX.V; CBLLF:OTC; 27O:FSE) entered into a definitive agreement to acquire Highlands Pacific Ltd., which owns an 8.56% interest in the operating Ramu nickel-cobalt mine in Papua New Guinea, Canaccord Genuity analyst Eric Zaunscherb reported in a Jan. 2 research note.

Zaunscherb noted that while the transaction means Cobalt 27 will have its “thirst slaked” for growth in battery materials exposure via a stream on Highlands’ copper and nickel from Ramu, it will result in “waters muddied.”

Specifically, by buying Highlands outright versus acquiring streams on its nickel (Ni) and copper (Co) production, Cobalt 27 will now have greater exposure to the two metals at 62% of the cost—600,000 pounds of Co and 6.4 million pounds of Ni as opposed to 45,000 pounds of Co and 2.25 million pounds of Ni. However, the company will gain added operational and capital risk to its asset portfolio.

The analyst presented several key points about the proposed Cobalt 27-Highlands transaction. One is that Ramu seems to have reached steady production, now at 3,300 tons of copper and 34,000 tons of nickel per year, and that a US$1.5 billion expansion in one to two years is under consideration.

Another salient point is that Highlands currently indirectly owns 8.56% of Ramu, and local stakeholders own 6.44%. “Both may increase their ownership of Ramu to 11.3% and 8.7%, respectively, by repaying construction and development loans,” Zaunscherb stated. The remaining 85% of Ramu is owned by MCC, a Chinese mining group majority owned by the US$9 billion China Metallurgical Group Corp.

Third, Cobalt 27 agreed to acquire all issued ordinary shares of Highlands that it or PanAust, a subsidiary of a Chinese state-owned operation, does not already own. “Base consideration is AU$0.105 per share in cash, which represents a 30% premium to Highlands’ 20-day volume-weighted average price,” the analyst noted.

Fourth, Highlands will try to buy back 128 million of its shares owned by PanAust. In exchange, PanAust will be given ownership of Highlands’ interest in a different project along with US$0.3 million in cash.

Finally, the Cobalt 27-Highlands deal is expected to close in Q2/19.

Canaccord Genuity maintains its Speculative Buy rating and CA$15.50 per share target price on Cobalt 27, whose stock is currently trading at around CA$3.80 per share. “We continue to view the company as the premier investment vehicle for exposure to battery materials in the burgeoning electric vehicle theme,” Zaunscherb concluded.

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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 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.

Disclosures from Canaccord Genuity, Cobalt 27 Capital Corp., Flash Update, January 2, 2019

Analyst Certification: Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research.

Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Required Company-Specific Disclosures (as of date of this publication):

Cobalt 27 Capital Corp. currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to Cobalt 27 Capital Corp.

In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from Cobalt 27 Capital Corp.

In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or co-manager of a public offering of securities of Cobalt 27 Capital Corp. or any publicly disclosed offer of securities of Cobalt 27 Capital Corp. or in any related derivatives.

Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Critical Elements Corporation in the next three months.

Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from Cobalt 27 Capital Corp. in the next three months.

Disclosures are available here.

( Companies Mentioned: KBLT:TSX.V; CBLLF:OTC; 27O:FSE,
)

BRENT Analysis: OPEC + Decision on Cutting Production Entered into Force

By IFCMarkets

OPEC + Decision on Cutting Production Entered into Force

The decision of OPEC and independent producers to reduce oil production came into force. Will it lead to Brent quotes growth?

Under the OPEC agreement, the total reduction in oil production should be 1.2 million barrels per day. Of these, the OPEC share is 800 thousand barrels per day, and another 400 thousand must be provided by independent producers. In December, the production of the cartel has already decreased to 460 thousand barrels per day. Mainly due to this, last week, commercial oil reserves in the United States decreased by 4.5 million barrels. This numbers were announced by the independent American Petroleum Institute. According to official information from the Energy Information Administration, oil reserves in the US have grown. The next weekly records, that will be released on Wednesday, can significantly affect the dynamics of oil quotations. Another important influencing factor may be the outcome of the US-China trade negotiations, that will be held during January 7-8, 2019 in Beijing. The reduction of the intensity in mutual trade war can revive the global economy and increase the demand for oil.

Brent

On the daily timeframe, Brent: D1 has broken the downtrend resistance line upwards and adjusts upwards. Further growth of quotations is possible in the event of a reduction in world production and in case of an increase in demand.

  • Parabolic indicator shows a signal to increase.
  • The Bollinger bands have expanded, indicating a high volatility.
  • The RSI indicator is above the 50 mark. It has formed a divergence to increase.
  • The MACD indicator shows a signal to increase.

We do not rule out a bullish move if Brent exceeds its last maximum and 1st Fibonacci level: 59. This level can be used as an entry point. The initial risk limit is possibly below the last lower fractal, the minimum since August 2017 and the Parabolic signal: 50. After opening a pending order, move stop following the signals of Bollinger and Parabolic to the next fractal minimum. Thus, we change the potential profit / loss ratio to our advantage. After making a deal, the most cautious traders can switch to a four-hour chart and set a stop loss by moving it in the market direction. If the price overcomes the stop level (50) without activating the order (59), it is recommended to delete the pending order: internal changes occur in the market that were not taken into consideration.

Technical Analysis Summary

Position Buy
Buy stop Above 59
Stop loss Below 50

Market Analysis provided by IFCMarkets

A Golden (Long-Term) Opportunity

By Dan Steinbock

As global jitters are escalating with economic uncertainty and market volatility, gold looks more attractive. But there’s a big difference between its short- and longer-term prospects.

Those analysts who believe that fear has made a comeback argue that gold is benefiting as equities slide and investors are increasingly concerned about the economic prospects of the U.S., China, Europe and Japan. Yet, even at $1,290, gold still remains more than 30% behind its all-time high of $1,898 in September 2011 amid the U.S. debt-limit crisis.

Although U.S. dollar has not strengthened as much as anticipated, the Fed’s rising rates have contributed to the fall in gold prices. In this view, a reversal may be unlikely because the investor assumption is that the Fed will continue to normalize, though perhaps slower than anticipated.

In the postwar era, such tightening meant a strengthening U.S. economy and a stronger dollar. But at the time, American economy was not haunted by budget and trade deficits or a debt burden. Today, it suffers from both twin deficits and a massive $22 trillion sovereign debt burden.

In this view, the Fed’s normalization may not herald increasing stability, but contribute to instability and mixed signals in the U.S. economy. In that case, rising international uncertainty and volatility is likely to support an upward gold trajectory in the longer term.

Uneasy markets – and gold

Following the burst of the asset bubble in the U.S.(2008), Europe’s debt crisis (2010) and the U.S. debt-limit crisis (2011), markets plunged and gold soared until it peaked at almost $1,900 in September 2011. In the course of the past eight years, these fundamentals have not improved.

As central bankers in major advanced economies resorted to ultra-low interest rates and rounds of quantitative easing, markets tanked along with the oil prices, whereas gold soared. That period prevailed as long as central banks pushed cheap money and bought their multibillion dollar assets, while major advanced economies supported their ailing economies with large fiscal stimulus packages. It was great for gold but bad for equities.

The great reversal began with the Fed’s tightening in 2015, which boosted markets and strengthened the dollar, but penalized gold and oil, which both tanked. This phase accelerated significantly even before the Trump era with the expectation of the new administration’s deregulation, privatization and liberalization. Markets soared, gold lingered.

However, as Trump’s agenda became constrained by the Mueller investigation and investors grew concerned about tariff threats that became effective last summer, the mood became more volatile and the sentiment more uncertain. Today, Dow Jones remains more than 13% below its October peak (Figure).

Figure The Post-Crisis Decade: Gold and Equities, 2008-Present

Market forces behind upward trajectory

After its all-time high, gold has been seen largely as a weak asset until 2016, when it began to bounce, along with the Fed rate hikes. While it has advanced to $1,290, lingering uncertainty has resulted in fluctuations, which have effectively penalized further gains, yet prevented new plunges.

Market consensus tends to offer habitual reasons for gold’s upward trajectory. First, market volatility and economic uncertainty are back. Even Trump’s erratic tweets favor gold as a hedge against volatility, which boosts gold prices. And equity market volatility, as measured by the VIX, has tripled in just two months, after a long period of perceived calm.

Second, when a solid asset loses almost a third of its value, as gold did between 2011 and 2016, it becomes more cost-efficient. Gold’s average return is now more attractive.

Third, there’s the dollar story. Historically, a rapidly-strengthening dollar, typically boosted by rate hikes, has undermined gold’s gains. However, as the dollar has stabilized since early summer, downward constraints do not work as much against gold.

Finally, gold tends to be constrained by rising real rates (interest rates minus inflation). Since rising rates raise the opportunity costs of an asset that does not generate income, gold was expected to languish as the Fed would hike rates. But if real 10-year yields have peaked, as some argue, real rates may no longer pose a critical constraint to gold’s advances.

Secular strength in long-term

In the long-term, the picture may look different, however. It is the thriving U.S. economy and markets that keeps gold down. But have American fundamentals improved since 2011 debt-limit crisis? After all, today U.S. sovereign debt is twice as large as in 2011. And, according to CAPE (cyclically-adjusted PE ratio), equity valuations are almost twice as high as the historical norm – even amid the government shutdown.

Moreover, U.S. economy is no longer the key driver of global growth prospects; China and other large emerging economies are.

In long term, secular stagnation is set to broaden across the major advanced economies, which cannot be disguised by hyper-aggressive monetary policies, such as ultra-low rates, quantitative easing, or overpriced markets.

That’s one reason why several large emerging economies, which today fuel most of global growth prospects, and major oil exporters, are intrigued by the idea of re-coupling gold with a multilateral currency basket to avoid excessive exposure to U.S. denominated energy and commodity markets.

As China-supported One Belt One Road (OBOR) initiatives advance, U.S. dollar is being effectively sidelined by the yuan and other emerging-country currencies. Moreover, over time the OBOR is also likely to have a substantial impact on the gold market as it takes place in regions rich in mining resources and accounts for a vital share of global gold supply and demand.

Furthermore, there have been interesting shifts in gold reserves. While advanced economies, such as the U.S. and Germany, still own most global gold reserves, the U.S. has increased its gold holdings in the past decade only marginally, while Germany has been forced to cut its reserves. In contrast, China has tripled its reserves, while Russia has nearly quintupled its gold (after dumping billions of U.S. Treasuries), despite rounds of sanctions.

As some 90 percent of the physical demand for gold comes from outside the U.S., mainly from large emerging economies that are also fueling global growth prospects, gold is on the right side of the future.

(Based on an investor briefing on gold prospects amid new international uncertainty)

About the Author:

Dr Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and EU Centre (Singapore). For more, see http://www.differencegroup.net/ 

 

 

Natural Gas Through our $3.20 Target – What Next?

By TheTechnicalTraders.com

Our research team has been nailing the markets moves with our proprietary price modeling tools.  Our December 12, 2018 call that Natural Gas would collapse nearly 30% after reaching a price peak was a very bold call.  Who would have thought that predictive price modeling could be so accurate and could identify a move like this – or call for what is expected to happen next?

Back when Natural Gas breached the $4.60~4.80 range, our ADL predictive modeling system was suggesting a massive price anomaly was setting up.  These types of triggers are becoming more common as volatility in the general markets increases.  The ADL system suggested that a massive -30% downside price move would happen before the end of February 2019.

Now, as that trade has completed and our targets have been reached, we are alerting our followers that Natural Gas should begin to consolidate between $2.80 and $3.30 before attempting to rocket back above $4.00 near April or May 2019.  Read our original analysis of Natural Gas to learn why these moves provide an incredible opportunity for traders and visit TheTechnicalTraders.com to read up on our early 2019 market predictions.

Join our other members in making 2019 an incredibly successful year.  We believe 2019 will provide exceptional opportunities for skilled traders and we’ll be happy to share our proprietary research and analysis with you as a member of Technical Traders Ltd. You really don’t want to miss these moves and this incredible opportunity.  Think about it, one trade like this with a -30% selloff followed by a 24% price rally could make your entire year.  Imagine being able to find trades like this every week or month for success.  Visit TheTechnicalTraders.com and get ready to make 2019 a fantastic year of success no matter if we have a bull market or bear market.

Chris Vermeulen

 

Investors Keep Explorer’s Gold Project Advancing But More Slowly

By The Gold Report

Source: Streetwise Reports   01/03/2019

A BMO Capital Markets report discussed the firm’s recent financing and changes to the development plan for its Nunavut asset.

In a Dec. 21, 2018, research note, BMO Capital Markets analyst Andrew Kaip reported that Sabina Gold & Silver Corp. (SBB:TSX; RXC:FSE; SGSVF:OTCPK) will use proceeds from its recent CA$28.1 million bought deal financing to advance its Back River project and for general corporate expenses. BMO resumed coverage on this name after the financing restriction period ended.

Kaip relayed that the “offering looks to have been well received” with the initial CA$20 million target increasing to $25.3 million and Zhaojin International Mining, to maintain its 9.7% interest, investing an additional CA$2.8 million. The financing was done at CA$1.20 per share with 23.4 million shares issued, representing 8% dilution on a fully diluted basis.

The financing amount plus existing cash and cash equivalents at the end of Q3/18 minus the company’s estimated Q4/18 expenditures of CA$20 million should leave Sabina with a total of $47 million on the balance sheet at year-end 2018, wrote Kaip.

BMO revised its forecasted 2019 capital outlay for Sabina to CA$35–40 million from its previous estimate of US$120 million, Kaip indicated. This is due to the explorer having to take a more “staged development approach to Back River” because of the fact “the window for procurement and a larger sealift in 2019 has now passed.”

This slower approach, Kaip explained, means the company has added 12 months to its development schedule, with the start of production now slated for 2022. It also means a bit more capital will be needed; BMO now estimates that to be CA$462 million versus CA$450 million. The delay, however, is positive, Kaip wrote, because it will allow Sabina “to complete detailed engineering and lock down key construction contracts with more certainty.”

Kaip noted this change drops BMO’s estimated net present value 5% on Sabina by 13%, or to CA$1.45 per share. Even at this share price, the stock is “attractively priced relative to peers.” Thus, BMO maintains its Outperform rating and its CA$2.50 per share target price on Sabina, whose current share price is CA$1.25 per share.

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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 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.

Disclosures from BMO Capital Markets, Sabina Gold & Silver, December 21, 2018

IMPORTANT DISCLOSURES

Analyst’s Certification
I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosures
Disclosure 1: BMO Capital Markets has undertaken an underwriting liability with respect to Sabina Gold & Silver within the past 12 months.
Disclosure 2: BMO Capital Markets has provided investment banking services with respect to Sabina Gold & Silver within the past 12 months.
Disclosure 3: BMO Capital Markets has managed or co-managed a public offering of securities with respect to Sabina Gold & Silver within the past 12 months.
Disclosure 4: BMO Capital Markets or an affiliate has received compensation for investment banking services from Sabina Gold & Silver within the past 12 months.
Disclosure 6A: Sabina Gold & Silver is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: A) Investment Banking Services.

For Important Disclosures on the stocks discussed in this report, please click here.

( Companies Mentioned: SBB:TSX; RXC:FSE; SGSVF:OTCPK,
)

Nevsun Goes; Yields of Almost 10% Are Available with Other Stocks

By The Gold Report

Source: Adrian Day for Streetwise Reports   01/02/2019

Money manager Adrian Day offers some final words on Nevsun and advice on good dividend-paying stocks for the New Year.

Nevsun Resources Ltd. (NSU, NY, 4.39) has been purchased by Zijin Mining of China, which received over 89% of the total shares outstanding voting in favor of the acquisition. Our sell on Nevsun would have filled at $4.39, for a gain of 64%. (Our first tranche was sold for a gain of 1,387%.)

If you tendered your shares, the cash will be delivered to the depository within three business days (and should be in accounts a day or two later). If you did not tender and have not sold, Zijin’s offer is being extended by 10 days, so you can tender and receive the CA$6 per share price; if you tender during the extension, the funds will be delivered within three days after the end of the extension. There is very little difference between the CA$6 and current $4.39 in New York. So you can sell—Wednesday to push the tax gain into next year—or tender.

Yields of Almost 10% of Solid Companies
Both of the business development companies on our list—Ares Capital Corp. (ARCC:NASDAQ) (15.61) and Gladstone Investment Corp. (GAIN:NASDAQ) (9.30)—saw stocks down sharply on misplaced concerns about higher interest rates. As discussed previously, the vast majority of the companies’ loans are at floating rates, while their debt is mostly at fixed rates, meaning rising interest rates actually widen the spread. It becomes a concern only when higher rates start to affect the ability of the portfolio companies, to which they have lent, to repay loans. That is not a significant concern at present.

Ares, selling below NAV and with a current, fully covered yield of 9.99%, and Gladstone, at a 24% discount to NAV, with a monthly yield of 8.8%, and supplemental distributions bring it to almost 10%, are both strong buys.

Kingsmen Creatives Ltd. (KMEN:SI) (0.50) announced a new collaboration with Hasbro to bring toys—from the Transformers to My Little Ponies—to life with Toybox, a “multi-brand life carnival” in Asia, commencing in February in Singapore. The contract is another example of how Kingsmen is the partner of choice in Asia. With a single-digit p/e, 5% yield and strong balance sheet, Kingsmen is a buy.

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Nevsun Resources, Gladstone Investment and Ares Capital. 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: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Nevsun Resources, Ares Capital, Gladstone Investment and Kingsmen Creatives. I determined which companies would be included in this article based on my research and understanding of the sector.
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5) From time to time, Streetwise Reports 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 (including members of their household) own securities of Nevsun Resources, a company mentioned in this article.

( Companies Mentioned: ARCC:NASDAQ,
GAIN: NASDAQ,
5MZ:SI,
NSU:TSX; NSU:NYSE.MKT,
)

Oil Is At The Mercy Of Financial Markets

By OilPrice.com

Oil prices regained more ground on Wednesday, pushed higher after equity markets rebounded from an initial selloff at the start of 2019 trading.

The price gains are not entirely convincing. WTI and Brent posted strong gains, each up more than 3 percent by midday in New York, but come largely after U.S. equity markets shook off an earlier bout of pessimism.

In fact, the trajectory and health of the global economy has moved to the top of the list in terms of variables exerting influence on oil prices. On any given day, stock prices offer a clue into investor sentiment in this regard. “Energy markets are following lockstep with what the equity markets are doing here, and I think that’s going to continue to be the case,” Brian LaRose at ICAP Technical Analysis, told Reuters.

There were not a ton of new indicators to offer further insight into what to expect in early 2019. The most recent piece of data came from China’s factory activity, which showed a contraction in December for the first time in two years – not exactly a positive signal.

“The manufacturing survey data out of China this week is particularly negative for crude oil, as it goes to the heart of the key demand center for the market,” said John Kilduff, a partner at Again Capital Management, according to Reuters.

On the other hand, just a few days ago, President Trump and Chinese President Xi Jingping apparently had a lengthy phone conversation in which they made progress on the trade front. Xi told Trump in a that he had “hopes that both teams can meet each other halfway and reach an agreement beneficial to both countries and the world as early as possible,” according to Xinhua. Trump followed that up in a tweet, stating that a “deal is moving along very well,” one that covers all subjects. “Big progress being made!” Trump said.

A thaw in the trade war could relieve one of the global economy’s major headwinds for 2019.

Oil traders also took heart in news that Saudi Arabia is following through on major oil export reductions. In December, Saudi Arabia slashed oil exports by roughly 500,000 bpd, according to Bloomberg. However, it could be some time before these cuts show up in the inventory data.

“Inventory draws as a result of cuts by OPEC+ may not be so easily visible for a while but avoiding a steep inventory increase in H1 2019 is what the market needs to see,” Bjarne Schieldrop, chief commodities analyst at SEB, said in a statement. There will be a several-month lag before the OPEC+ cuts start to be felt by the market. Oil producers have to first lower output, then there will be a corresponding effect on inventories.

However, the cuts may not be large enough to induce large reductions in storage levels. Instead, inventories may merely “stabilise,” Schieldrop said. On top of that, the IEA reports OECD inventory data on a two-month lag, so data for January won’t be available until March. However, one month’s worth of data may not tell us much, so the market may have to wait until April or May to get a sense of how the OPEC+ cuts are affecting the global supply balance.

Still, the cuts could put a floor beneath oil prices. “A bottoming for the oil price during Q1 2019 seems like a fair bet with higher oil prices thereafter,” Schieldrop said.

There will also be a lag in terms of a potential shale drilling slowdown in response to lower prices. During the last downturn, the reaction from the rig count data came at least six weeks after major oil price movements. As such, the recent meltdown in oil prices, which began back in October, may only now start to show up in the weekly rig counts.

At the same time, the EIA just released monthly U.S. oil production data, showing a jump in output in October to 11.537 million barrels per day (mb/d), up from 11.458 mb/d a month earlier. It was another solid increase in output, although to be sure, it was a fraction of the monthly increases for much of 2018.

Oil traders are still awaiting more definitive clues about the supply/demand balance, but volatility is likely to stick around for a while. In the short run, oil prices will likely follow global stock markets up or down on any given day until the fundamentals reveal a more discernable pattern.

Link to article: https://oilprice.com/Energy/Energy-General/Oil-Is-At-The-Mercy-Of-Financial-Markets.html

By Nick Cunningham of Oilprice.com

 

 

Gold Soars As Risk Sentiment Worsens On Weak US/China Data

Article By Orbex.com

Gold

The yellow metal had another bumper session this week, trading up to levels not seen since mid-2018, as the US Dollar weakened further. Despite the Fed having raised rates for a fourth time in 2018 at its last meeting in December, gold prices have since enjoyed a strong rally on expectations that the Fed will now pause its hiking program.

Weaker US data for December has added further bearish pressure to USD. In the first readings for December, both consumer confidence and IHS market manufacturing printed below expectations falling to 36-month and 15-month lows respectively. The data highlights the diminished outlook for US economic activity over 2019 which has lead to a resurgent appetite among gold traders and investors looking to use gold for its safe-haven status. At the Fed’s December meeting it lowered its dot plot forecast for 2019 from 3 hikes to 2 hikes.

forex gold

Gold prices are now firmly back above the broken bullish trend line from 2015 lows and are fast approaching structural resistance at the 1295.29 – 1304.36 region where we have confluence between prior highs and lows. Above here, the focus will be on a retest of the key 1366.80 – 1375.87 level which has been the high over the last four years.

 

Silver

Silver prices this week displayed a strong correlation with gold, rocketing higher as the yellow metal took off. While equity price declines can sometimes have a dampening impact on silver due to its uses in an industrial capacity, this week, the lower US Dollar helped light a fire under silver, taking it back up to mid-2018 levels.

forex silver

After stagnating for months near the main support of 1396, silver prices have since exploded higher and broken back above the key 15.1800 – 15.5700 level resistance, confirming a bullish shift in momentum. Prices are now fast approaching the 16.2267 region where we have confluence between a raft of prior swing lows and the long-term bearish trend line from 2016 highs.

Copper

Despite the weaker US Dollar, copper prices came under significant pressure this week, trading down to their lowest levels since H1 2017 as a combination of factors turned sentiment bearish.

Firstly, weak economic data out of the US and China fuelled fresh fears about the negative impact of the ongoing trade war between the world’s two largest economies. The Caixin Manufacturing PMI in China fell into contractionary territory in December exacerbating fears of a slowdown in China. Secondly, Apple downgraded its revenue outlook for the first time in 20 years due to reduced Chinese demand, further compounding fears about the outlook for the world’s largest consumer of copper.

forex copper

The sell-off in copper this week has seen price breaking down below the 2018 low of 2.582 and also through the sloping neckline of the large head and shoulder pattern which has formed over the past two years, signaling further downside to come. The next two support levels to watch are the 2.467 level and 2.292 level.

Iron

forex iron

Despite the heavy sell-off in copper and the broader negative sentiment linked to fears over a slowdown in China, iron ore prices have bucked the trend and traded higher this week. The main driver behind the moves is the short-term factors which are supporting iron such as the strong demand for coal linked to the peak winter fuel season as well as stimulus hopes which are keeping speculative traders poised for further upside. With Chinese data highlighting weakness, traders are banking on a fresh fiscal boost by the government which should translate into demand through increased infrastructure spending.

Iron ore prices are now just 3% down on the year after being as low as – 25% a few months ago. There is some interim resistance in the 71 – 72 region from prior swing highs and lows but the next main resistance to watch is the 76 level where price peaked on its last main rally.

Article By Orbex.com