MasterMetals on Twitter

June 24, 2017

#Zinc Positioned to Move Higher After Successful Retest of Support: $TV.TO, $TK.V

Zinc is breaking out from a five month bearish channel and two month double bottom



From Paradigm Capital: 

Zinc Positioned to Move Higher After Successful Retest of Support: TV, TK

Chart 1 – Zinc has printed a bullish reversal off converging support levels along the 2014/2015 highs and retest of a seven year downtrend. The recent weakness was a healthy correction to work off the overbought pressure built up from the ~100% advance in 2016. Now weekly momentum has reset with Full Stochastics curling higher from oversold levels, confirming the price reversal off converging support levels. Zinc remains the strongest commodity within the CRB Index as price action carves out a multi-year uptrend and once again breaks out on a relative basis. Conservative long term upside measures to $3,500/t ($1.59/lb).

 

Chart 2 – Near-term, Zinc is breaking out from a five month bearish channel and two month double bottom. The breakout confirms the bullish divergence in momentum indicators and positions price action for a rally back to the 2017 highs. Look for any near-term checkback to find support at ~$2,650.

 

Chart 3 – Trevali was unable to break above resistance at the 2014 highs on its first attempt as momentum was already trending at overbought levels. Price action has subsequently pulled back in a retest of converging support levels along the uptrend from the 2015 lows and previous multi-year downtrend. With momentum now reset as price action tests support, the risk reward setup is very favourable.

 

Chart 4 – Tinka Resources has also pulled back to an attractive level along the rising 100-day moving average and 1/3rd retracement of the 2016-2017 advance. Momentum indicators have largely reset, providing a favourable risk/reward entry level.

 

 

 

Zinc: Bullish Reversal Off Support

 

 

 

 

Zinc: Breakout from Bearish Channel

 

 

 

 

Trevali Resources Corp.:

 

 

 

 

Tinka Resources Ltd.:

 

https://stockcharts.com/c-sc/sc?s=TK.V&p=D&yr=1&mn=0&dy=0&i=p77441726233&a=432125377&r=1498217754465&r=1498217919102

 

 



June 17, 2017

World's Billionaire Investors Buy #Gold

Infographic: Why the World's Billionaire Investors Buy Precious Metals
"They want to make money – but they also want to execute on strategies that will protect their wealth and build robust portfolios that can withstand any type of macro event."

Why the World's Billionaire Investors Buy Precious Metals


Why the World's Billionaire Investors Buy Precious Metals

There are always lessons that can be learned from the "smart money".

Unlike regular investors, billionaire money managers like Ray Dalio and Stan Druckenmiller are professional investors. They have entire institutional teams at their disposal, dive deep into the nuances and complexities of the market, and spend every waking moment of their lives thinking about how to get more from their investments. 

They want to make money – but they also want to execute on strategies that will protect their wealth and build robust portfolios that can withstand any type of macro event. 

Turning to Gold

In recent months, some of these elite investors have turned to precious metals like gold as a part of their overall investment strategies.

In the following infographic from Sprott Physical Bullion Trusts, we explain why these investors are adding precious metals to their portfolios, the underlying tactics, and the best quotes each investor has on assessing today's market


Why are these billionaires buying precious metals?

Their cited reasons can basically be summed up with six categories: wealth preservation, store of value, inflation hedge, portfolio diversification, future upside, and investment fundamentals.

What Billionaire Investors are Doing

1. Lord Jacob Rothschild
In late summer 2016, Rothschild announced changes to the RIT Partners portfolio because he was worried about very low interest rates, negative yields, and quantitative easing, saying they are part of the "greatest monetary experiment in monetary policy in the history of the world".

His solution? Buy gold to help preserve wealth, and as a store of value for the future.

2. David Einhorn
Einhorn has a similar assessment. He believes that monetary policy is becoming increasingly adventurous, and that this – along with the policies of the Trump administration – will eventually lead to large amounts of inflation.

In February 2017, he shorted sovereigns, and bought gold.

3. Ray Dalio
Ray Dalio is the founder of the world's top hedge fund, Bridgewater Associates, but he's also no stranger to gold.

If you don't own gold, you know neither history nor economics.

– Ray Dalio, Bridgewater Associates

More recently, in 2016, Dalio is quoted as telling investors to own a well-diversified portfolio that is 5-10% gold.

4. Stanley Druckenmiller
Druckenmiller, some people argue, is the best money manager of all time.

Lately, he's placed his bets on gold as well, but for different reasons than the above managers. Druckenmiller has always placed big trades with lots of conviction, and in February 2017 he put his money in gold because "no country wants its currency to strengthen".

Embed This Image On Your Site (copy code below):


June 16, 2017

#SouthAfrica - New 30% #BEE More cost and less productivity if implemented New black empowerment rules

#AngloGold Ashanti $AU  & #GoldFields $GFI are suffering 

From @Scotiabank 

 "South Africa: New Mining Charter More Unfavorable Than Expected (For AU & GFI)…:  The South African Department of Mineral Resources released its Reviewed Mining Charter this morning, which takes immediate effect. The final version of the Charter includes more stringent requirements for miners than both the Mining Charter previously in effect and the draft revised Mining Charter that was released last year. The South African Chamber of Mines, which represents the vast majority of the miners, characterized the new Charter as being unilaterally imposed on them and is commencing legal actions to suspend the implementation of the Charter. Scotiabank Senior Precious Metals Analyst  flagging the key details and impact of the new charter below.

 1)     Requirements of Revised Charter. i) Black ownership requirement: increased to 30% from 26%, and "once-empowered, always-empowered" concept removed; for green fields projects, the minimum is 50%+1 ii) Procurement: 70% of mining goods/80% of services must be sourced from black economic empowerment (BEE) companies and mineral samples must be processed in-country; additionally locally sourced mining goods must be manufactured in-country iii) Black employment requirement: certain minimum percentages of board members and employees at each organization level must be Black Persons, a portion of which must also be female iv) New 1% BEE Royalty: The 30% BEE owners are to receive a priority 1% gross royalty (not included in the draft).

 2)     Removal of "once-empowered, always-empowered" concept. In prior versions of the Charter, the BEE ownership requirements were only required to be met at one point in time (i.e. BEEs entities/people could sell their interests and use the proceeds as they pleased). Under the new Charter, a 30% minimum BEE ownership is required in perpetuity.

 3)     Miners' response: commencing legal action to suspend implementation of Revised Charter. The Chamber of Mines says that unlike for previous iterations of the Mining Charter, it was not substantively consulted in this process and the current version is unworkable. As a result, it plans to immediately commence legal proceedings to delay or reduce the impact of the new Charter, including seeking to suspend implementation of the entire Charter, pending court review of the requirements, and to challenge the removal of the "once-empowered, always-empowered" concept.

 4)     Impact to AngloGold Ashanti and Gold Fields: 26% of AngloGold Ashanti's (AU-US, SP, US$13.50, Tanya Jakusconek) and Gold Fields' (GFI-US, SP, US$4.00, Tanya Jakusconek) NAV are each related to South African operations. If implemented as-is, the most obvious impacts of to the companies are reduced ownership of and higher costs at their respective operations. At GFI, 10% of its South African operations is already owned by a BEE company, implying that an additional 20% could be required to be given to BEE groups (~$0.30/sh impact). For AU, Tanya understands that BEE groups do not currently have any direct ownership so they could be required to give 30% to BEE groups (~$1/sh). The more stringent procurement requirements in particular could cause costs to increase significant and could impact productivity if equipment selection is reduced".


 

June 14, 2017

#Palladium - Hitting 16-year highs - +40% ytd

"near-term pull-back likely before further gains in late 2017"

Below is a comment on Palladium from Metals Focus, June 13, 2017: 

Attachment 1 shows the long term chart of Palladium and attachment 4 the 1-year chart. Attachment 5 is the Point&Figure chart which shows how volatile this precious metal is.

 


Palladium has posted a remarkable rally over the last three weeks, hitting a 16-year high of $928 on 9th June, which represents a 23% increase from its recent trough in April. Moreover, with platinum's lacklustre price performance over the same period, the spread between the two fell to as low as just above $30 last Friday. Even though the rally soon lost momentum, palladium has so far managed to consolidate in the high $800s, making it by far the strongest performer in the precious metals complex.

 

Palladium's robust gains year-to-date have been assisted by a severe squeeze in physical liquidity in Western terminal markets. In spite of sizeable above-ground stocks (estimated at 15.3 Moz at end- 2016), signs of market tightness have emerged since late 2016; the market has seen moves into backwardation and securing metal in the spot market has been challenging. More recently, this backwardation in the Nymex futures has deepened, while inventories at the exchange now amount to a mere 42koz, their lowest level since 2003.

 

We believe that the biggest reason behind such tightness has been strong speculative demand for physical metal from Asian entities. Feedback from our field trips indicates that these heavy purchases have been fuelled by bullish price expectations as well as confidence that palladium fabrication demand will continue to strengthen in the coming years. This in turn has resulted in a major shift of stocks out of Western terminal markets.

 

Meanwhile, as palladium prices broke out above technical resistance levels, speculative interest from short-term investors seems to have picked up notably. As of 6th June, net managed money positions in Nymex futures stood at 1.18Moz, almost double their end-2016 figure and only a fraction below the peak recorded in August 2014 (when palladium last surpassed $900).

 

Looking ahead, as the palladium market is forecast to remain in a sizeable deficit in the foreseeable future, further price strength seems still justified. However, given the scale of the recent rally, we would caution that the white metal is vulnerable to heavy investor profit taking. After all, despite an apparent lack of short-term physical liquidity, palladium bullion stockpiles remain ample at present. More importantly, growth in global vehicle production is likely to slow down this year. Although the notable weakness in key car markets such as the US and China in recent months has so far little dampened investor confidence in palladium, this poses a downside risk to prices.

 

Ongoing macroeconomic uncertainties also cannot be ignored, which could weigh on investor sentiment towards industrial metals in general. Already in the US, expectations about economic growth have been scaled back, amid growing political turmoil and disappointing macroeconomic data. Related to this, we retain the view that a correction in US equities is looking increasingly likely.

 

Against this backdrop, we believe that $928 may well represent the peak for 2017. In the near term, the recent pull-back in prices may well continue, before renewed strength emerges later in the year.


Moreover, given that the palladium market is far smaller and hence less liquid, this renewed strength is likely to be accompanied by continued high price volatility".

 

 

June 8, 2017

Going deep for a rich #copper deposit, @RioTinto & @BHPBilliton pioneering #sensors & #AutonomousVehicles tech to data integration



Rio’s Resolution copper mine, more than a mile below ground, contends with constantly dripping water and temperatures nearing 175 degrees.

Mining a Mile Down: 175 Degrees, 600 Gallons of Water a Minute

Steven Norton STEVEN.NORTON@wsj.com


SUPERIOR, Ariz.—One of the world’s largest untapped copper deposits sits 7,000 feet below the Earth’s surface. It is a lode that operator Rio Tinto RIO 2.11% PLC wouldn’t have touched—until now.

Not that long ago, anabundance of high-grade copper could be mined out of shallower openpits. But as those deposits are depleted and high-grade copper becomestougher to find, firms such as Rio have been compelled to mine deeperunderground.
 ...
Advances in mining technology are making that possible—just as developments in oil and gas drilling heralded the fracking revolution. Now, using everything from sensors and data analytics to autonomous vehicles and climate-control systems, Rio aims  to pull ore from more than a mile below ground, where temperatures can  reach nearly 175 degrees Fahrenheit.
....
A 15-minute elevator ride 6,943 feet down Resolution’s No. 10 mine shaft leads to a dimly lighted cavern where warm water falls from the rocks like rain. Electrical gear buzzes constantly, and a  network of pipes pumps water out of the shaft at the rate of 600 gallons a minute. A ventilation system cools the area to 77 degrees.

Over the next few years, Rio plans to deploy tens of thousands of electronic sensors, as  well as autonomous vehicles and complex ventilation systems, to help it bring 1.6 billion tons of ore to the surface over the more than 40-year projected life of the mine.

 To monitor safety, sensors juggle many different kinds of data.

Data coming from those sensors will be fed into analytics engines that will help monitor tasks  ranging from  underground blasts to the movement of autonomous vehicles.

...

Rio hopes analytics will help to break down organizational silos. Rather than one person viewing data about a specific part of the mining process, information from across the mine can be sent to a single place where experts can obtain a more holistic view of operations.

“It is taking a lot of the decision-making out of the hands of the operator and putting it into a group of specialists who can manage the whole system,” Mr. Stegman said. ..

Read the rest of the article here:Mining a Mile Down: 175 Degrees, 600 Gallons of Water a Minute:

The MasterMetals Blog

@MasterMetals

MasterMetals on Facebook



June 6, 2017

#Gold Stocks: Focus on Leadership


Focus on Leadership Within the Gold Industry from Paradigm Capital 

Highlighting leadership names within the gold industry. Common characteristics include price above the 200-day moving average, relative uptrend versus the TSX Global Gold Index, and 50-day moving average > 200-day moving average. With Gold coming into converging resistance along the 2017 highs and 2011 downtrend, we continue to recommend sticking with leadership names.

 

 

Intermediate Producers:

-          Agnico-Eagle Mines Ltd.

-          Centerra Gold Corp.

-          IAMGold Corp.

-          Kirkland Lake Gold Ltd.

-          OceanaGold Corp.

 

Junior Producers:

-          Alio Gold Inc.

-          Wesdome Gold Mines Ltd.

 

Royalty Co's:

-          Franco-Nevada Corp.

-          Aurico Metals Inc.

 

Developers:

-          Sabina Gold & Silver Corp.

-          Victoria Gold Corp.

 

 

 

Agnico-Eagle Mines Ltd.:

 

 

 

 

Centerra Gold Inc.:

 

 

 

 

IAMGold Corp.:

 

 

 

 

Kirkland Lake Gold Ltd.:

 

 

 

 

OceanaGold Corp.:

 

 

 

 

Alio Gold Inc.:

 

 

 

 

Wesdome Gold Mines Ltd.:

 

 

 

 

Franco-Nevada Corp.:

 

 

 

 

AuRico Metals Inc.:

 

 

 

 

Sabina Gold & Silver Corp.:

 

 

 

 

Victoria Gold Corp.:

 

 

#Gold & #Silver #COT


Net Commitments of gold futures traders indicate that large speculators (hedge funds and money managers) increased slightly their long positions. Net commercial gold traders extended slightly their short exposure. Nothing special to read into these figures

(attachment 1).

 

The Gold Barometers reveal that gold stocks are not overbought and physical gold and silver is in neutral territory as it is already for weeks (attachment 2).

 

The KITCO Gold Survey shows that Wall Street is outright bullish for this week with nobody bearish. The graphic for Retail Investors (Main Street) has not been published due to technical problems (attachment 3).

 

Net Commitments of silver futures trades show large speculators added to their long positions and net commercial silver dealers increased their short positions. Yes, they have now expanded for three weeks but the outstanding positions are not at an extreme (attachment 4).

 

The gold hourly chart indicates gold had a good week as it closed on Friday in New York 4:00 p.m. at US$ 1'278 per ounce for a weekly gain of US$ 21 (attachment 5). Almost all the gain was due to a weak (relative to expectations) U. S. employment report last Friday (attachment 6).

 

The Arca Gold Bugs Index (HUI) (attachment 7) indicates that this index, which is composed mostly of larger gold stocks, lost 1.7% to 191.51 percent last week.

 

The 2-year HUI chart (attachment 8+9) shows that

gold stocks are still far away from a top in August 2016 when investors were extremely bullish and the index reached 286 points. HUI is now trading around 33% lower from that top. We remember that period very well because we were calling gold stocks at that time extremely overbought.

 

 

Rebalancing in $GDXJ $GDX brought big moves to all the stocks involved! Junior #Gold ETF (GDXJ) -

The share price of many gold companies declined between 25% to 30% - And this during a period gold prices were slightly up.

The VanEck Vectors Gold Miners ETF (GDXJ) tracks a market-cap-weighted index in global gold- and silver mining firms, focusing on small-capitalization companies.

 

GDXJ became so popular that holdings of some companies were bumping up against 20% ownership. Faced with these problems, GDXJ chose to dramatically alter the composition of the underlying index that GDXJ is supposed to track. In early April 2017, VanEck Vectors Junior Gold ETF announced to modify its rules to include larger companies on or around June 17, 2017.

 

Attachment 1 shows the potential reductions. One column states the estimated Index weight change and the next column the estimated new Index weight. Attachment 2 shows the additions to the Index.

 

The massive reshuffling meant that many of the

forecasted index flows represent 10+days of average

volume for some stocks, hence huge! Traders have been beaten the stocks coming out of the index with an ugly stick. One of Toronto-Dominion Bank (TD) Index specialist described the rebalance as "the single greatest wealth destruction event in index history".

 

Attachment 3 shows on average stock additions lost 3.3%, reductions -15.7% and GDXJ -16.1%. Attachment 4 shows how investors dumped the GDXJ ETF. The real picture, however, looks even worse. The last column of Table 9 shows the price changes from April 12 (date of the announcement of index changes to May 31st, 2017). As can be seen the share price of many gold companies declined between 25% to 30% (last column - Price Change). And this during a period gold prices were slightly up.