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Welcome!

A market wrap following another Fed meeting and no rate hikes

July 27, 2016

Chris Temple joins Cory from the Sprott Conference and Al in studio to discuss the movements today after the conclusion of the Fed meeting and statement.

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Discussion
89 Comments
    Jul 27, 2016 27:41 PM

    Chris is spot on

    DFS
    Jul 27, 2016 27:42 PM

    I’m going to go out on a limb and suggest that the sideways move we’ve had in mining shares for the last few weeks is sufficient to have removed the overbought condition that we had in mining shares. There is currently not a need for a correction in mining shares. There will only be need for one if we go up too quickly.

    DFS
    Jul 27, 2016 27:45 PM

    The rise in gold today was helped by the fall in the dollar.

    People are also concerned by a potential collapse of the world economy: hence also a desire for precious metals.

      Jul 27, 2016 27:47 PM

      Good one ,again

      Jul 27, 2016 27:52 PM

      DFS, I’m not sure it’s any more complicated than traders seeing that the Fed is still too scared to raise rates. The biggest driver long-term fundamentally for gold is negative real interest rates; and the Fed won’t be changing that regimen.

    Jul 27, 2016 27:49 PM

    Infographic: Tesla’s gigafactory opens this week:
    What we know in 9 epic slides
    Visual Capitalist | about an hour ago

    http://www.mining.com/web/infographic-teslas-gigafactory-opens-this-week-what-we-know-in-9-epic-slides/

      Jul 27, 2016 27:51 PM

      Why lithium will see another price spike this year
      James Stafford (Oilprice.com) | 21 July 2016

      http://www.mineweb.com/news/industrial-metals-and-minerals/lithium-will-see-another-price-spike-year/

        DFS
        Jul 27, 2016 27:59 PM

        I know there is a delay between the gigafactory opening and mega-use of lithium, but it seems to me that if their projections are close to being right, there is simply going to be a lack of supply of lithium at any price.

          Jul 27, 2016 27:10 PM

          Agreed. In addition, there is more to the demand equation in Lithium than just Tesla’s gigafactory, and some inputs like corporate/solar/wind “Backup Power” are growing areas of demand worldwide. In addition all the tech gadgets from Laptops, smartphones, and power tools – to hoverboards, RC cars/planes, and drones use lithium batteries. Then of course there is the expanding world population that need more ceramic and glass where Lithium is integral.

          The supply crunch was coming with our without Tesla, but this factory will just exacerbate the demand side of the equation.

          This is why I like the new producers like Orocobre, Galaxy, and Neometals, and the near-term producers like Lithium Americas Corp, Nemaska Lithium, Pure Energy Minerals and maybe Lithium X (although that’s a Frank Giustra company thinking back to that Clinton Foundation video the other day).

            Jul 27, 2016 27:51 PM

            I am not buying anything associated with Frank and friends

            Jul 27, 2016 27:03 PM

            Hi Shad:
            I agree, the near term producers are the place to be.
            The macro doesn’t seem strong enough yet to be attracting cash into the more speculative plays yet.
            One area that I am keeping an eye on is the separation of the Li.
            Posco talked about technology that would reduce the conventional method of evaporating brines by a time that would put it in the exponentional disruptive technology category.
            Another one that could prove interesting is Ucore with their Super LIG technology.
            If one of these companies can get on to a new technology that works,it could be a game changer in the Li space.
            Thanks for your posts.

            Jul 27, 2016 27:27 PM

            *–> OOTB – Yes, I’m kind of done with Frank Giustra companies, and that is why, despite the large share-price appreciation, and marketing glam, I remain a little suspect of the Lithium X hoopla.

            I’m much more of a fan of the other companies mentioned which I feel are the read deal (Orocobre, Galaxy Resources, Neometals, Lithium Americas, Nemaska Lithium, and Pure Energy Minerals).

            *–> JohnK – I agree that Posco is a player, and yes we’ve discussed the unique opportunity with Ucore in Rare Earth jaunts, but it could definitely impact Lithium .

            There are now so many new Lithium explorers jumping on the bandwagon (about 60 more) that I can’t keep up with the madness and the froth. Like anything is it sorting through the deck of cards to find the 4 Aces, or shucking oysters for pearls.

            Cheers!

            Jul 28, 2016 28:09 AM

            I appreciate your post on lithium,l just think ,Frank is not that sharp,just crooked scum

    Jul 27, 2016 27:52 PM

    How is Japan going to affect the markets on Friday morning? More QE?

    More QE meaning that everything – conventionals and PMs – go up?

    Or have I got that wrong?

      Jul 27, 2016 27:02 PM

      Japan’s “Helicopter Money” Play: Road to Hyperinflation or Cure for Debt Deflation?
      Posted on July 25, 2016 by Ellen Brown

      https://ellenbrown.com/2016/07/25/japans-helicopter-money-play-road-to-hyperinflation-or-cure-for-debt-deflation/

        Jul 27, 2016 27:08 PM

        Great article

          Jul 27, 2016 27:16 PM

          Looked at it on http://www.321gold.com earlier and it seemed appropriate to Bob UK’s post.

          DFS
          Jul 27, 2016 27:42 PM

          Ellen Brown appear to show lack of knowledge to me. She is a well known Californian author and attorney. Written many books and articles, and has a Web of Debt Blog.
          (But, I believe her thinking is entrenched in bias.

          Ellen Hodgson Brown is an American author, political candidate, attorney, public speaker, and advocate of alternative medicine and financial reform, most prominently public banking. Brown is the founder[1] and president[2] of the Public Banking Institute, a nonpartisan think tank devoted to the creation of publicly run banks. She is also the president of Third Millennium Press,[3] and is the author of twelve books, including Web of Debt and The Public Bank Solution, as well as over 200 published articles. She has appeared on cable and network television, radio, and internet podcasts,[4] including a discussion on the Fox Business Network concerning student loan debt with the Cato Institute’s Neil McCluskey,[5] a feature story on derivatives and debt on the Russian network RT,[6] and the Thom Hartmann Show’s “Conversations with Great Minds.”[7] Ellen Brown ran for California Treasurer in the California June 2014 Statewide Primary election.[8]

            Jul 27, 2016 27:48 PM

            What do you expect from an attorney high on carrot juice

            Jul 27, 2016 27:36 PM

            Ha! Good one.

            I’ve been starting to drink a little carrot juice and green juices a little more, but would, of course, steer clear of them if I ever became an attorney and pondered Japanese economics.

          Jul 27, 2016 27:49 PM

          +1 DFS (Dollars For Silver? Diamonds?)

          I have no time for Brown.

            Jul 27, 2016 27:33 PM

            Dollars For Silver has a nice ring to it for DFS.

            I don’t really have an opinion on Brown, and just thought of that article I had read right before Bob UK asked that question, and thought….. maybe it will be fun for a conversation and that it raised some interesting points.

      DFS
      Jul 27, 2016 27:17 PM

      Your analysis is conventionally correct.

      The problem Japan has, however, is that while no one knows exactly what percentage of their sovereign debt has been monetized, rumors are spreading that it is as much as 50%
      That means that they have to prop up their market by words, but they have to be careful about promising too much.
      Also it is not their turn to monetize again for a few weeks…..It is China’s turn next, then EU.
      Luckily words do not necessarily correlate with actions directly, and vice versa.

    Jul 27, 2016 27:13 PM

    It seems to me that an overall negative bias exists among ALL the commentators with the exception of Rick Ackerman.

    Its the same old same old, I am bullish long term, but gold and silver MUST correct.
    Why?

    I do not hear the same commentators say, AMZN, AAPL, Facebook etc. need to correct now do I? Even though these stocks are up several hundred percent.

    Negative bias is quite apparent.

    I think you need to address why you beat down daily your listeners with your biases?

    DFS
    Jul 27, 2016 27:29 PM

    You don’t seem to read a lot, Dave.
    I have seen many comments about Facebook being overpriced because they have a problem monetizing the huge numbers of users it has.
    I’ve several articles about the tragic death of their prime spark of genius, and how they are being beaten by cheap Asian knock offs, and also saturation of the market, which is why they will have to depend on ApplePay for growth.
    Several commentators commented on corrections in stock prices.

      Jul 27, 2016 27:38 PM

      Not sure what you are talking about.

      I am referring to the daily commentaries here on kereport. I challenge you to show me one single case of Al, Cory, Doc, Chris or any of the commentators on this site.

        Jul 27, 2016 27:40 PM

        Any one of the commentators in writing or on audio warning us about how expensive Amzn, aaple are.

        But daily we hear how gold stocks are up 100-500% and they must correct.

          Jul 27, 2016 27:55 PM

          Dave, I have on numerous occasions — even in the last few days — discussed how important it is for people to be selective and not chase those stocks that have been pushed to absurd levels. Among other groups I have mentioned utilities which — in the race for yield — have been pushed to historic P.E. levels.

          Jul 27, 2016 27:56 PM

          Tough I must confess I have not discussed Amazon, at least lately — and am an agnostic on Apple (though, frankly, it is one of the relatively better valued big cap stocks, even if I don’t advocate it due to China worries among other things)

            LPG
            Jul 27, 2016 27:22 PM

            Dave,

            As far as I’m concerned:

            1) As a shopper, I care about what I can buy on AMZN and as a user, how my Apple ecosystem works – don’t ask me about Facebook coz I ain’t there.

            As far the SHARES of these companies are concerned, I COULD NOT CARE LESS if they go up, down, sideways. But that’s just me.

            Just to be clear, in my previous role, I used to be responsible for both AAPL and AMZN shares, and we owned a good few $mn of each – when they were (much) cheaper. So I have nothing again the stocks per se. But in the current context (ie their current price level), I don’t understand why I should care about these stocks.
            Can they double from here over the next 3-5 yrs ? Of course they can ! Do I care ? Not a single second. But again, that’s just me.

            2) Not sure EVERYONE commenting on KER is suggesting PM stocks must correct as a whole.
            If you follow Avi Gilburt, my understanding is that he ain’t saying so (correcting in a serious say 20-30-40% fashion that is).
            To my knowledge, Avi is the ONLY guy who has said for months now: stay the course, and just suggested on a few occasions to take a hedge for protection.
            I just bring this to you and everybody’s attention – if need be – as 1) I try to follow him (I’m not a sub) and 2) I exchange regularly with him and 3) I think he’s absolutely brilliant with his calls. I highly recommend you check him out.

            Lastly, if I may:
            Let’s assume you are right and that EVERY commentator on KER says PM stocks must correct. Again: who cares ? The market will do what it wants to do.

            My investment decisions are mine: the good ones and the bad ones. There are people I respect a lot on KER – Doc is one and I liaise with him all the time, everyday: e-v-e-r-y-d-a-y. Over the past few days, Doc was selling some stocks, I was adding to sometimes the same names he was selling. Doc is selling ? So what ? KER commentators are ALL saying shares will correct ? So what ? Listen but think for yourself, and act how you think you must act: the process is what matters first.

            Best,

            LPG

            Jul 27, 2016 27:37 PM

            I’m sure you’re not counting nobodies like me but I’ve been all-in all year and have said so here several times. I am now just 4% off of my 2016 high (which put my dozen+ gold/silver miners up 5-fold since the January low).

            Fwiw, I moved 11% of that portfolio’s value (as of today) into uranium stocks in recent weeks so I am not quite as “all-in” as I was earlier.

            Jul 28, 2016 28:03 AM

            Great day today for my ASX listed miners,
            Personally my Uranium (Aussie listed) miners are still stagnanting though Matthew….not going anywhere fast at present. But good luck with yours!
            I do see that one of the Aussie listed Uranium miners wants to list on the NYSE soon iirc…..its Peninsula.
            Cheers.

            Jul 28, 2016 28:26 AM

            Skeeta – Peninsula Energy (PENMF) is an Australian owned company, but it’s flagship assets are in the US in Wyoming where it is now on the short list of Uranium insitu producers. They do have the Uranium/Molybdenum project in Africa and the Gold project in Fiji as well, but the primary focus has been in becoming a U3O8 producer in the States. It makes sense that they’d want a US listing.

            Jul 28, 2016 28:44 AM

            Hi Skeeta,

            My uranium miners aren’t going anywhere yet either, but I think they will start to move before many expect.

            Good luck with yours!

            Jul 28, 2016 28:23 AM

            Saw this article which is another plus for the Uranium supply/demand picture.

            Japanese institute sees 19 reactor restarts by March 2018
            28 July 2016

            http://www.world-nuclear-news.org/NP-Japanese-institute-sees-19-reactor-restarts-by-March-2018-2807164.html

            Jul 28, 2016 28:28 PM

            Thanks for that, Ex. I hope Ex owns UEX! 😉

          DFS
          Jul 27, 2016 27:07 PM

          You mean like this?

          http://www.cnbc.com/2016/07/01/apples-stock-cant-move-higher-until-street-cuts-estimates-says-baird-analyst.html

          Rick and the Doc on this site, mostly make comments about mining stocks, not about FANG.

            LPG
            Jul 28, 2016 28:13 AM

            Hello Matthew,

            Not sure your comment @ 8:37pm was directed at me, but just to clarify something when I mentioned
            “To my knowledge, Avi is the ONLY guy who has said for months now: stay the course,”
            —> I was referring to AMONG the newsletter writers/guys who run websites.
            My comment had to be understood in that context, which I had not specified properly – and apologies for that and the potential misunderstanding caused.

            Best as always,

            LPG

            Jul 28, 2016 28:40 AM

            Hi LPG,

            I was pretty sure you were referring to newsletter writers.

            Best

            LPG
            Jul 28, 2016 28:01 AM

            All good Matthew.
            Thanks for drawing my attention to that though. I wasn’t clear/explicit.
            Best,
            LPG

      Jul 28, 2016 28:55 AM

      No I don’t know how to read or write.

      If its not on television or in audio soundbyte form; I get no information.

    LPG
    Jul 27, 2016 27:30 PM

    A few weeks old, but a great interview from Raoul Pal on RealvisionTV:
    http://stockcharts.com/h-sc/ui?s=%24GOLD&p=W&yr=6&mn=6&dy=0&id=p92913289591&listNum=26&a=460442624
    It falls into the “must watch” category.

    For those of you who want to understand macro and hear MANY of the brightest guys in the business, get a subscription to RealvisionTV.com: you won’t regret any $ of it – and there’s a 1 week free trial period if I’m not mistaken.

    I am very confident these will be the best dollars you’ve spent for your financial education in a long time – aside Bob Moriarty’s book for on $3.99, obviously 😉 – and will give you plenty of investment ideas.

    PS: I have no skin in the game. Just sharing paths to knowledge.

    Best,

    LPG

    Jul 27, 2016 27:08 PM

    First it’s oil, then junk bonds and derivatives..then suspect banks….and the snowball gets bigger..bigger..and..bigger..
    Metals will be interesting in this environment.

    ( funny folks don’t see this,, Now! )

    Jul 27, 2016 27:16 PM

    Hi, gold prices can straight up. ‘Bye!

    DFS
    Jul 27, 2016 27:21 PM

    Right now in Asia demand for gold and silver is high and volume is high.
    (I mean right now as I watch)premium on the SGE IS a dollar for gold and 15 cents for silver.
    It will be interesting in the morning.

    Jul 27, 2016 27:03 PM

    Obama sure can deliver a speach, cannot deny it, its his ultimate talent

      Jul 27, 2016 27:47 PM

      Nigel..couldn’t watch that dribble…good riddance in January…

        Jul 27, 2016 27:59 PM

        Hi Gator, it was painful I agree

        Jul 28, 2016 28:40 AM

        Ditto Gator….

          Jul 28, 2016 28:44 AM

          Obama still can not find his birth certificate.

            Jul 28, 2016 28:59 AM

            Dumbo will soon be a forgotten nightmare

            Jul 28, 2016 28:49 AM

            Dumbo ,Bill and Hillary are going into a new adventure called cannabis, of course Bill never inhaled,but Dumbo is a chain smoker , and Hilly would look adorable in gold chains.

    Jul 27, 2016 27:15 PM

    The assertions made out as fact make me laugh…

    DFS
    Jul 27, 2016 27:56 PM

    Mostly on Angel investing, for those that have made a bundle in precious metals so far this year:

    http://www.macrovoices.com/macro-voices-research/podcast-mp3-files/200-macrovoices-2016-07-27-david-rose/file

      Jul 27, 2016 27:07 PM

      I liken Angel investing to the “Angels’ Share” experienced when aging whiskey in a barrel. The amount of product that evaporates is said to be the “Angels’ share”. At least all involved pony up. I just wish when it comes time to pony up again….all existing share holders should get a chance to re-invest before their shares being diluted.

    Jul 27, 2016 27:56 PM

    Hate to say….but Obama’s speech was the best political speech since circa 1984 Cuomo’s “We believe” speech. High complement

      DFS
      Jul 28, 2016 28:03 AM

      If one is not constrained by the truth, anything is possible.

      It must be genetically engineered into his DNA; after all most of the best internet frauds originate from Kenya.

      Jul 28, 2016 28:43 AM

      I liked Biden and even Bloomberg

    Jul 27, 2016 27:46 PM

    When will we be declared dissidents?
    Should we self-identify ourselves as dissidents?
    In the Soviet Union during the 20’s a symptom of the tyranny was voluminous regulation selectively aggressively enforced. Anyone the state decided was an enemy of the state was dealt with by the collective without due process harshly. Anyone could be found to be guilty of something. Under Article 58 of the Soviet Penal Code was the definition of an enemy:
    “A counter-revolutionary action is any action aimed at overthrowing, undermining or weakening of the power of workers’ and peasants’ Soviets… and governments of the USSR and Soviet and autonomous republics, or at the undermining or weakening of the external security of the USSR and main economical, political and national achievements of the proletarial revolution”
    So if you said the Potemkin village was a facade even though it was true you were classifiable as a counter-revolutionary subject to the wrath of Soviet Collectivists power.
    Who will be our Aleksandr Solzhenitsyn ?
    For an Article 58 if it does not already…..will surely exist. One will be subject to life imprisonment….death….property confiscation for speaking out against ACCORN…for anti-SEIU sentiment…for calling into question monetary mayhem that is and will increase. Who will follow the orders to put people who think in jail? Should we lie to ourselves and get our minds right (aka left)?
    A series of Chinese proverb is almost too scary to write today, to wit…here goes:
    “May you live in interesting times?
    May you come to the attention of powerful people?
    May you find what you are looking for?”
    The question from this proverb(almost curse) is…..was it a diagnosis of a self-destructive self- fulfilling prophecy……or was it a more libertarian optimistic wish that truth will defeat tyranny?
    If the former is the intent our society has shortened the ancient wisdom with “Don’t fight the Fed!”
    Defenses of the later were at least once enshrined in our “Bill of rights”.
    Unfortunately we live in interesting times.

    Jul 28, 2016 28:40 AM

    Platinum up 11, ratio now 1.17

    Jul 28, 2016 28:53 AM

    Gold looking good

    Jul 28, 2016 28:33 AM

    Article… 321 gold…. The hundred and 75% in Gold stocks in five months, 22 days now places us as the 11th greatest first leg up in any bull market in any of the tangible assets during the past 150 years

    Jul 28, 2016 28:53 AM

    Does RICK have a pivot point at 1341?

      DFS
      Jul 28, 2016 28:07 AM

      I put the pivot at about $1332.5
      Resistance up around $1357
      Should run up for 2-3 weeks yet, before further stimulus, which could come from Europe.

    Jul 28, 2016 28:59 AM

    Here are a few mining news blurbs on companies many follow on the KER:
    Thursday July 28, 2016

    – OceanaGold Lists 2Q Profit, Expects Haile Commissioning This Year

    – Fortuna Completes Acquisition of Goldrock Mines Corp.

    – New Gold Posts 2Q Adjusted Profit, Trims 2016 Cost Guidance

    – Detour Gold Reports Rise In 2Q Adjusted Earnings From Year Ago

    – Teranga Gold Reports Production Record For Second Quarter

    Click the link for the brief updates…..

    http://www.kitco.com/news/2016-07-28/New-Gold-Posts-2Q-Adjusted-Profit-Trims-2016-Cost-Guidance.html

      Jul 28, 2016 28:30 AM

      There is still a bit of arbitrage between Teranga Gold (TGCDF) for their acquisition of Gryphon Minerals (GPHYF) for anyone interested. The conversion rate is at .169.

      Teranga has been growing steady and improving their costs with a record 2nd quarter, so I’m excited to have my Gryphon shares converted over when this deal finalizes.

      Cheers!

        Jul 28, 2016 28:56 AM

        Teranga Gold Sets New Production Records for Second Quarter and First Six Months
        Thu July 28, 2016 6:05 AM

        Second Quarter 2016 Financial & Operating Highlights

        — Surpasses more than 10 million hours worked without a lost time incident
        at the Company’s Sabodala gold operation
        — Best ever production(1) record of 52,540 ounces for second quarter and
        123,267 ounces for first half of the year
        — Mill throughput surpasses 1 million tonne milestone for only third time
        in Company’s history
        — All-in sustaining costs per ounce of $968(2), including all development
        capital and total cash costs per ounce of $619(2)
        — 17 percent cash margin expansion
        — Net profit attributable to shareholders of $6.1 million or $0.02 per
        share
        — Significant growth in free cash flow per ounce to $97 from ($11) in the
        prior year quarter(3)
        — 31 percent increase in cash balance since start of year; pro forma June
        30, 2016 cash balance of $70.2 million(4)
        — Teranga receives United Nations Global Compact Network Canada
        Sustainability Award
        Second Quarter 2016 Growth Highlights

        — Successful drill programs expected to lead to several initial resource
        estimates by year end
        — Mill optimization project is ahead of schedule and set to be fully
        commissioned by end of third quarter
        — Announces all share offer to acquire Burkina Faso-focused Gryphon
        Minerals (“Gryphon”) (the “Proposed Gryphon Acquisition”) in June with
        follow-on 5 percent equity investment completed in July
        — Expands footprint into Cote d’Ivoire with Miminvest SA, a company owned
        and controlled by David Mimran, a director of Teranga

        http://seekingalpha.com/pr/16560701-teranga-gold-sets-new-production-records-second-quarter-first-six-months

        Jul 28, 2016 28:26 AM

        Teranga Gold Corp: Making Money, Adding Ounces, Staying Cheap
        Jul. 21, 2016

        http://seekingalpha.com/article/3990217-teranga-gold-corp-making-money-adding-ounces-staying-cheap

      Jul 28, 2016 28:03 AM

      For those investors in Oceanagold that want the full press release:

      OCEANAGOLD REPORTS SECOND QUARTER 2016 OPERATIONAL AND FINANCIAL RESULTS
      July 28

      http://www.oceanagold.com/wp-content/uploads/2016/07/160728-OceanaGold-Q2-2016-Results-News-Release.pdf

    Jul 28, 2016 28:02 AM

    Harry Dent seems to be quite convinced we are heading into across the board Deflation… including GOLD, his latest email (newsletter rant) suggested “GOLD heading lower to $750”.
    I find it hard to believe he is a Harvard Educated graduate only due to the way he writes his narratives, it’s so long and so wordy it’s just un-edited drivel for pages and pages and I’m still not certain what his main thesis was supporting the argument why Gold absolutely must go lower?

    Does anyone who follows his style of thinking how he differentiates so much from the Schiffs, and Maloneys of the world?

    Just seeking some clarification as we are in a universe of cliques where bearish and bullish cliques are more divergent and it seems when too many folks get over-confident in one direction, there is a lop-sided teeter totter that I am almost always on the wrong side of.

      DFS
      Jul 28, 2016 28:09 AM

      When in the last 5 years has Dent not called for deflation.
      His work is totally based on demographics.

    Jul 28, 2016 28:08 AM

    TSA ..US pervert gov’t ,forced to pay $475,000 for illegally searching women’s privates…zero h.

      Jul 28, 2016 28:11 AM

      Seems this happens a lot, the government already has a form made up…..

      GH
      Jul 28, 2016 28:18 PM

      So, the taxpayers have to pay a fine because the gov’t is violating…the taxpayers?

    Jul 28, 2016 28:42 AM

    Atlanta Fed just slashed its Q2 GDP estimate To 1.8%, cycle Low…zh

    Jul 28, 2016 28:46 AM

    Obama’s brother voting for Trump

      Jul 28, 2016 28:49 AM

      News flash to Capt Zero…from zero hedge

    Jul 28, 2016 28:54 AM

    Question ..Does the White House have transgender restrooms ?