Source: Metal Focus, J.P. Morgan Commodities Research The return of gold hedging With gold prices rallying over 20% since the end of last year, a fast-growing number of gold mining companies have been locking in profit margins through hedging. In 1Q16, gold producers hedged almost 2.6 million ounces (79.6 tonnes) of their future gold production, by our estimates (Exhibit 1). This compares to 28 tonnes hedged in 2015 and 116 tonnes in all of 2014 (Exhibit 2). The move back towards hedging has been broad-based with producers from Australia, Canada, Russia and Africa hedging through a combination of forward contracts and zero-cost collars. Exhibit 2: Global gold producer hedging/de-hedging Tonnes
Source: GFMS, Metal Focus, J.P. Morgan Commodities Research
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May 10, 2016
#Gold Hedging is back, in Q1 amount hedged is >2.5x am't hedged in all of 2015
May 9, 2016
#Lucara Diamond $LUC.TO - 813 carat exceptional diamond sold for US$ 63 Mio
Lucara Sells Its 813 Carat Diamond for US$63 Million, the Highest Price Ever Achieved for the Sale of a Rough Diamond.
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 9, 2016) - (TSX:LUC)(BOTSWANA:LUC)(NASDAQ OMX Stockholm:LUC), Lucara Diamond Corp. ("Lucara" or the "Company"), is pleased to announce that the exceptional 812.77 carat, Type IIa diamond recovered from the Karowe mine in Botswana in November 2015 (see news release dated November 19, 2015), has been sold for US$63,111,111 (US$77,649 per carat). As part of the sale, Lucara has partnered with Nemesis International DMCC, and retains a 10% interest in the net profit received from the sale of the resultant polished diamonds.
The 813 carat diamond has been named, "The Constellation", in collaboration with our partner.
William Lamb, President and CEO, commented, "We are very pleased with the result from the sale of this magnificent 813 carat diamond as well as the opportunity to further participate in profits earned when the polished product is sold. The sale of the 813 carat diamond is the highest price ever achieved for a rough diamond, breaking all records. This achievement solidifies our reputation in the jewelry industry as one of the most important sources of diamonds of the very highest quality. We look forward to the next stage of Lucara's development with the sale of the spectacular 1,109 carat, Lesedi La Rona diamond which will take place at Sotheby's London on June 29, 2016."
May 3, 2016
Cantor: #Gold target raised to $1,425/oz; initial resistance @ $1,338/oz -$1,383/oz.
Bullish continuation pattern complete. $1,338/$1,383 near term resistance levels. Longer term trend reversal remains in play.
· Gold completed a bullish symmetrical triangle pattern last week <chart#1>.
o This pattern projects a minimum price objective to $1,425.
· Spot Gold traded with a negative price series for 2.5 years until the move above $1178/$1200 and the pivotal 50WMA in the first half of February this year <chart#2>.
· Above $1,383 is a historic low volume trade zone which lacks significant resistance levels.
· Cross asset focus: €/$ in breakout mode above 1.1530. Negative correlation to the US$ remains.
Chart#1. Spot Gold $/Oz Daily. Including 50DMA.
· Key focus: Bullish symmetrical triangle pattern.
Chart#2. Spot Gold $/Oz Weekly. Including 50WMA, Volume at Price indicators.
· Key focus: Resistance levels at $1,338 and $1,383.
From: O'Leary, Guy
Sent: 11 April 2016 11:35
To:
Subject: Update: Positive Gold set up
Remain positive above $1178/$1200 breakout zone targeting resistance levels $1295/$1338/$1383. Positive price action and momentum now in play. Key range in the near term $1208 to $1272.
· Spot Gold traded with a negative price series for 2.5 years until the move above $1178/$1200 and the pivotal 50WMA in the first half of February this year <chart#1>.
· Price posted a near term 'higher low' in March <chart#2>.
· Momentum indicators have turned to positive mode while Gold Price Volatility continues to fall with the %age daily Average True Range is now 1.5% vs 2% twelve month high / 1% twelve month low <chart#3&4>.
· Negative correlation to the US$ remains. Key range support in DXY = 93.13. Key range resistance in €/$ = 1.1534.
· Key support Gold: $1208 near term range support, $1200/$1178 February breakout zone.
· Key resistance Gold: $1272 near term range resistance, $1295, $1338 and $1383.
Chart#1. Spot Gold $/oz. Weekly chart. April 2012 to present day. Inc 50WMA.
Chart#2. Spot Gold $/oz. Daily chart. July 2015 to present. Inc 50DMA.
Chart#3. Daily momentum dynamic Spot Gold. Weekly and Monthly readings remain positive.
Chart#4. Volatility. Average True Range %age. Spot Gold.
From: O'Leary, Guy
Sent: 11 February 2016 09:46
To:
Subject: Gold breaks above $1200. Bullish.
Spot Gold broke above its $1200 major resistance level today, if price remains above $1200 (currently $1216) for the weekly close tomorrow look for a direct move toward $1295 (Q1/2015 highs).
· Gold has traded with a series of lower highs and lower lows since a bearish triangle completed in September 2014.
· $1200 marked the previous high (October 2015) in the negative sequence.
· Positive Gold move during extreme equity selloffs as per DM Government Bonds (US10 year yield now 1.6% from 2.28% on 4th Jan).
· Primary resistance is $1295 with secondary resistance at $1339 and R3 at $1383.
Spot Gold $/oz. Weekly chart. May 2012 to present day.
Gold vs S&P500. Daily Chart. November 2015 to present day.
· Panel 1: Gold vs S&P500 price.
· Panel 2: Gold vs S&P500 ratio spread.
· Panel 3: Gold S&P500 40 day correlation.
____________________
Guy O'Leary MA, MBS, MSTA, APA
Global Macro Strategy Team
