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November 23, 2016

#Copper and copper #MiningStocks


Attached is the weekly copper chart

(attachment 1). The copper price had

an excellent run from US$ 2.10 per pound

to around US$ 2.70 per pound. The price

looks stretched at the moment. The PPO

(upper chart) is very high. PPO stands for

Percentage Price Oscillator and is a

momentum oscillator that measures the

difference between two moving averages

as a percentage of the larger moving

average. The 1-year copper chart (attachment 2)

indicates that copper prices haven't been as high

for 2016.

 

Copper stocks had a great day yesterday:

 

Copper Mountain (CUM)                            CAD  0.81            +11.0%

HudBay Minerals (HBM)                           CAD  8.83            +  9.3%

Lundin Mining (LUN)                                CAD  6.79            +  7.3%

Taseko Mines (TKO)                                  CAD  0.76            +  7.0%

First Quantum Minerals (FM)                     CAD 15.73           +  6.3%

Nevsun Resources (NSU)                           CAD   4.35           +  5.8%

 


 

November 22, 2016

#Platinum Quarterly covering Q3 & FY’16 & initial 2017 forecast: Released today







Today we publish our ninth Platinum Quarterly data set, which examines activity in the third quarter of 2016. In the analysis from our research partners SFA (Oxford), we revise the forecast of supply and demand for the full year 2016, highlighting that the deficit for the full year 2016 will be lower than previously forecast, as a result of softening of Chinese jewellery demand. 

The Foreword to the report includes an insight on platinum demand fundamentals and a brief overview of our market development activities.

Key data from the study, which can be downloaded here, includes:


SFA's revised supply and demand forecast has recast the full-year 2016 deficit, scaling it back by 350 koz, to a predicted deficit of 170 koz:

  • Global demand in 2016 is forecast to decrease by 3 per cent year-on-year to 8,040 koz, while total platinum supply is expected to be marginally lower year-on-year at 7,870 koz.
  • Total supply is set to be 35 koz lower year-on-year, as lower refined production in South Africa (-230 koz) outweighs an increase in jewellery recycling (+110 koz) related to weaker consumer offtake in China.
  • Jewellery demand is projected to fall by 300 koz this year – down 10 per cent year-on-year – with growth in India, North America and Western Europe unable to offset lower manufacturer buying in China and Japan.
  • Industrial demand in 2016 is expected to rise by 2 per cent year-on-year following stronger demand for use in chemical catalysis, petroleum refining and other industrial end-uses.
  • Total investment demand for the year is forecast at 350 koz due to robust bar and coin demand and a modest decline in ETF holdings.
  • The forecast market deficit of 170 koz in 2016 is expected to reduce estimated above ground stocks to 2,145 koz at the end of the year.

For the third quarter of 2016, today's report shows a fall in both supply and demand.

  • Total global supply of platinum was down 9 per cent from Q2 2016 to 2,000 koz, with total mining supply estimated at 1,490 koz.
  • Total global demand for platinum was 1,940 koz during the third quarter, down by 5 per cent from Q2 2016 and by 17 per cent year-on-year.
  • Total mining supply in Q3 declined 235 koz quarter-on-quarter due to lower production from South Africa. This was driven by safety stoppages and producers replenishing inventories used during outages earlier in the year.
  • Total recycling in Q3 increased 30 koz quarter-on-quarter to 510 koz, as higher jewellery recycling (+55 koz) from retailer destocking in China more than offset a decline in autocatalyst secondary supply (-25 koz).
  • The main contributing factor to the decline in Q3 demand was seasonally lower autocatalyst demand, down 90 koz quarter-on-quarter. This was partly offset by the 45 koz increase in jewellery demand, which included a 20 per cent increase in India, following heavy promotion of men's platinum jewellery.
  • Third quarter industrial demand decreased by 10 koz and investment demand was 50 koz lower this quarter as Japanese investors eased back on their platinum bar and coin purchases.

Today's report also includes a complete forecast for 2017, which estimates that the platinum market deficit will continue next year, marking the sixth consecutive year of market deficits.

  • Total platinum supply in 2017 is forecast to fall 2% to 7,745 koz, with mining supply expected to be flat year-on-year in 2017 at 6,000 koz, and platinum recycling expected to decline to 1,745 koz (down 6 per cent year-on-year). Recycled platinum from autocatalysts is expected to stay relatively flat, while global jewellery recycling is projected to drop by 120 koz, as recycling in China returns to a more typical level.
  • Total platinum demand in 2017 is also forecast to fall 2 per cent year-on-year to 7,845 koz with projected growth in jewellery demand unable to offset expected declines in automotive, industrial and investment demand.
  • Automotive demand for platinum is expected to dip by 1 per cent to 3,360 koz in 2017, due to a slight decline in autocatalyst demand.
  • Jewellery sales are expected to grow in 2017 by 2 per cent, supported by strong demand in India.
  • Lower requirements for use in petroleum refining, chemical catalysis and glass fabrication are estimated to reduce industrial demand 6 per cent to 1,610 koz next year.
  • Total investment demand is projected to be 250 koz next year due to healthy demand for bars and coins and a modest increase in ETF holdings.

We hope you find this quarter's report supportive to your efforts to assess and better understand the platinum market, and ultimately make better informed investment decisions. As always, we welcome your thoughts regarding additional insights and research that the WPIC can instigate in the coming months.

Kind regards

Paul Wilson
Chief Executive Officer
 
World Platinum Investment Council
64 St. James' Street
London SW1A 1NF
 
www.platinuminvestment.com
 
World Platinum Investment Council Ltd is registered in England and Wales. Registration Number 9301487. Registered Address, 64 St. James' Street, London SW1A 1NF
 
The WPIC does not offer investment advice and the material contained herein is provided for general information only. Any information contained in this email is subject to the terms and conditions as found on our website www.platinuminvestment.com

 

 


 


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November 21, 2016

#Gold & #Silver - Technically still weak


The net short gold position of

commercial dealers dropped to

a 35 week low as of November 15,

2016, but are still large. The large speculators

(hedge funds and managed money)

took their losses and the position is

the lowest since the middle of March.

However, historically these positions

are still large.

 

The KITCO Gold Survey (attachment 2)

shows a neutral short term picture (1 week).

 

The Gold Barometers show no oversold

position (attachment 3).

 

In silver, net commercial dealers only

reduced marginally the positions as did

the large speculators. The positions are

historically still very large.

 

The 30-minutes gold chart (attachment 5)

indicates that gold closed on Friday, at

4 pm New York time, at 1,208 per ounce

for a loss of $ 19 per ounce.

 

The gold continuous futures contract shows

that gold  held the 1,210 per ounce level for

already 3 times (attachment 6). The overall

picture is really not promising but gold might

try to rally again from the US$ 1,210 level in

the short term.

 

The Point&Figure chart of the Gold Bugs

Index (HUI) (attachment 7) shows that

chart completed a Head&Shoulder Formation

and broke through on the downside at 196.

Also the uptrend is broken (blue line)

Currently a triangle formation is in the

making. There is strong resistance on the

upside at 196 (currently 182) or about 7-8%

higher.

 

 

 

 

November 11, 2016

#Gold #MiningStocks Vulnerable to Further Downside


This comment from Paradigm Capital 

Subject: Gold Stocks Vulnerable to Further Downside

Chart 1 - Gold stocks are resuming their downtrend after failing at a retest of the 50-day moving average and downtrend from the August highs.  

Chart 2 – Gold stocks are underperforming the commodity with the GDX vs GLD breaking support along the 200-day moving average.

Chart 3 – Barrick Gold Corp is still above the October lows but vulnerable to further downside.

Chart 4 – Newmont Mining failed at a retest of the August downtrend and 50-day moving average signalling the resumption of the current downtrend.

Chart 5 – Anglogold Ashanti has cracked below the October lows on a new MACD sell signal below the 0 line signalling further downside risk.

 

 

Equal Weight Gold Index: Resuming Downtrend

After reaching our technical target, gold stocks rolled over with the equal weight gold index now breaking below the month long uptrend. The breakdown is mirrored in momentum indicators as RSI fails at 50 and MACD triggers a new sell signal in bearish territory. Furthermore, gold stocks remain in a relative downtrend versus the broader market and as such we remain cautious on the space. We expect ZGD to make another lower low suggesting there is still another 10% downside risk for the space.