Technical Levels on #Gold Stocks

From Paradigm Capital:

·         Yesterday's weakness in the gold equities has been on relatively low volume and stocks have yet to break any key technical levels.

 

·         The On Balance Volume indicator continues to strengthen in most gold stocks, signalling that the volume on up days continues to outweigh the volume on down days.

 

·         The US Dollar has been strengthening since last week's lows but remains in a downtrend from the January highs. It is important to note that May is one of the seasonally strongest months for the Dixie and as such there is still potential for further upside. However given the weakness in the monthly and weekly charts, including monthly and weekly MACD sell signals, we think the rally will be shallow.

 

·         With the potential for further USD strength in the near-term there is still risk of weakness in gold equities, however unless we see technical levels start to break we remain buyers of the dips.

 

·         Below we highlight some key levels to watch on a number of gold names:

o   Seniors: ABX, G

o   Intermediates: AEM, DGC, ASR

o   Juniors: KDX, OGC

o   Royalties: RGLD, SSL

 

 

Barrick Gold Corp:

 

 

Goldcorp Inc.:

 

 

Agnico-Eagle Mines Ltd.:

 

 

Detour Gold Corp.:

 

 

Alacer Gold Corp.:

 

 

Klondex Mines Ltd.:

 

 

OceanaGold Corp.:

 

 

Royal Gold, Inc.:

 

 

Sandstorm Gold Ltd.:

 

 

#Gold Hedging is back, in Q1 amount hedged is >2.5x am't hedged in all of 2015

Exhibit 1: Global gold producer hedging/de-hedging in tonnes  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

#Lucara Diamond $LUC.TO - 813 carat exceptional diamond sold for US$ 63 Mio

 

Lucara Sells Its 813 Carat Diamond for US$63 Million, the Highest Price Ever Achieved for the Sale of a Rough Diamond.  On June 29, 2016, Sotheby,'s will auction the 1,109 carat diamond called "Lesedi La Rona" (our light) in London. It is anticipated that this second largest ever found diamond could achieve a price between US$ 70 to US$ 100 Mio.

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."