#GOLD ETF's - Continued liquidation

 

Source: Bloomberg

 

Gold ETF holders continue to liquidate their holdings.

 

As of Monday gold holdings in the world's largest ETF totaled 885.04 tonnes, the lowest level since June. November has been one of the worst months in terms of outflows in the last 3 years as GLD gold reserves have dropped by 57.55 tonnes. The outflows total more than US$ 2.3 Bio.

 

Total Global Gold ETFs were DOWN 202kozs Nov 28 to 60.670Mozs.  They are down 3.2Mozs in November.  They are up 13.680Mozs so far in 2016 …. Global Silver ETFs were UP 162kozs Nov 28 to 660.4Mozs.  They are up 54.2Mozs YTD.   

#Gold companies: Where is the breakeven point to create Free #CashFlow

"In 2017e the average Mid-Tier/Intermediate and Junior gold producers will need US$1,124/oz and US$1,199/oz (Alacer outlier removed) respectively to cover all of their costs, including development capex."

 

Source: Scotiabank GBM Precious Metals Research

 

After a euphoric few months, analysts are back where the market has been a year ago, figuring  out free cash flow (FCF) breakeven points for gold companies. As the Table for Scotiabank outlines, intermediate gold companies need on average US$ 1,124 per ounce and junior gold companies (excluding Alacer Gold) US$ 1,199 per ounce to break even in 2017.

 

In 2017e the average Mid-Tier/Intermediate and Junior gold producers will need US$1,124/oz and US$1,199/oz (Alacer outlier removed) respectively to cover all of their costs, including development capex.  

 

A key item that will be carefully watched by Scotiabank's entire precious metals research team will be looking for with companies' 2017 guidance is the potential of a rising sustaining capex outlook.  The key question is how many companies cut sustaining capital over the past few years and will now have to "catch-up" on this front? 

 

#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%