Weekend Show – Sat 13 Jul, 2019

Hour 1 – Gold and US Markets Continue To Break Out, Here’s What Matters

What is seeming to be a trend right now is gold moving higher along with the US markets. All of this on the back on Fed rate cu expectations at the end of the month. Even though we saw some strong US data this week and inflation data above 2%, when Powell spoke in front of Congress he more or less assured us that a rate cut is coming.

In this weekend’s show we discuss all the points above with Jesse Felder, Marc Chandler, and Jeff Christian. Jordan Roy-Byrne also shares some details on an his updated book that looks at the potential of a long term gold bull market.

  • Segment 1 – Jesse Felder kicks off the show with a discussion on how he views the overall trend and momentum for the US markets and gold.
  • Segment 2 – Marc Chandler, Managing Partner at Bannockburn Global ForEx recaps where the Fed, ECB, an currently Bank of Canada stand while balanceing out the moves in the Dollar this week.
  • Segment 3 – Jordan Roy-Byrne just updated his book outlining the long term gold bull market we could be just starting. If you want a free copy of his book visit his site, The Daily Gold, or email me at Fleck@kereport.com.
  • Segment 4 – Jeff Christian, Managing Parter at the CPM Group takes a look inside this recent gold breakout and shares who is buying.

Exclusive Company Interviews and Comments


Jesse Felder
Marc Chandler
Jordan Roy-Byrn
Jeff Christan
View related posts on: , , , ,

Comments:
  1. On July 13, 2019 at 2:47 am,
    cfs says:

    Thanks for the show.

    • On July 13, 2019 at 11:26 am,
      Excelsior says:

      Agreed. A jolly good show as per usual. Thanks guys!

  2. On July 13, 2019 at 6:39 am,
    Snowy says:

    Thanks Cory.

    It looks like section 232 for Uranium is over. There will not be any quotas or tariffs to support US producers. Now we will see the sudden surge in utility activity buying supply that has been put off for a while.

    US producers (like energy fuels and UR energy) may still receive help. This help, again, will not be in the form of quotas or tariffs so this will have to go through the painstakingly slow government approval process. Trump can’t just flick his finger like he can with quotas or tariffs. The proposed help will be suggested after a 90 day review from a separate group. Examples of what they might suggest: no help, something like easier permitting, helping enrichment, or subsidizing US uranium producers.

    IMO, not investment advice/ do your own DD, after the big dip on Friday US Uranium producers are probably okay to buy now. They did drop for a legitimate reason, and will be volatile over the next few weeks. In the end this is the major significant tipping point in the uranium industry. We will see the impact of the undersupplied market in the next few months (and it is significantly undersupplied). I would buy your favorite Uranium stocks asap, the upcoming rally was just given the green light today (Saturday)

    https://twitter.com/quakes99/status/1149899330683191296?s=21

    • On July 13, 2019 at 11:23 am,
      Excelsior says:

      President Trump Announces that the Significant Challenges Facing U.S. Uranium Mining Are a National Security Issue

      @newswire on 13 Jul 2019

      “Ur-Energy Inc. (URG) (URE) and Energy Fuels Inc. (UUUU) (EFR) are advised that on July 12, 2019, President Trump announced that the U.S. Department of Commerce (DOC) found that imports of uranium are a threat to U.S. national security. President Trump established the U.S. Nuclear Fuel Working Group to further study U.S. nuclear fuel production, including uranium mining, as the next phase of this investigation.”

      “We commend President Trump for recognizing the significant challenges facing the American uranium mining industry. Over the next 90 days, the working group will examine the current state of U.S. nuclear fuel production and develop recommendations for reinvigorating the entire nuclear fuel supply chain consistent with U.S. national security and nonproliferation goals. Our two companies will stand ready to support the working group as it conducts its study.”

      In his memo, President Trump stated, “I agree with the Secretary [of Commerce] that the United States uranium industry faces significant challenges in producing uranium domestically and that this is an issue of national security.”

      https://ceo.ca/@newswire/president-trump-announces-that-the-significant-challenges

      • On July 13, 2019 at 11:25 am,
        Excelsior says:

        Here is a letter from the house to the president on Section 232 on Friday:

        https://westerncaucus.house.gov/uploadedfiles/section232uraniumletterfinal.pdf

        • On July 14, 2019 at 2:59 am,
          Excelsior says:

          Regardless of what happens with Section 232 or any of that news, these US #Uranium #Producers are maximizing their existing longer term contracts at present (so they aren’t losing money selling at $48-$53) whether it is from their production in the mid $30’s or buying on the spot market in the high $20’s.

          Yes, these 3 producers (URG)(URE) Ur-Energy, (UUUU) (EFR) Energy Fuels and (PEN.AX)(PENMF) are wisely scaling back their own production at present to save reserves, and that’s the right strategy.

          Uranium bears keep brining up how their production metrics are trailing down. Welll why would they ramp up production in this pricing environment?
          > Scaling back is the right idea until contract pricing, or spot pricing is there to underpin ramping up production.

          When their off-take agreements do expire (like Energy Fuels recently have), and new ones get negotiated, then that is what will drive spot and longer term pricing higher.

          When Canadian or Australian companies rip on the CURRENT production profiles of US producers, they seem to miss this obvious point, that they could produce 3-5 times as much, but it makes no sense to do so.

          $URG, $PEN.AX and $UUUU all have much more capacity they could bring online, when it finally makes sense to do so with new off-take contracts in place or with a backdrop of Uranium pricing going higher.

          • On July 14, 2019 at 3:11 am,
            Excelsior says:

            $URG $URE Ur-Energy has been buying #Uranium in the spot markets the last 2-3 years, augmenting their own production (which has been throttled back to conserve reserves) and has been selling into longer term supply contracts far above spot price at a profit.
            _________________________________________________________

            “In Q2 2019, sales totaled $11.5 million from 265,000 pounds sold. Our price per pound sold averaged $43.31. Early in 2019 Q2, we delivered 100,000 pounds into a scheduled 2019 term contract commitment and sold 165,000 pounds related to 2020 obligations under existing term agreements.”

            “As previously guided, we expect to deliver a total of 665,000 pounds into our contracts in 2019 at an 2 average price of approximately $48 per pound.”
            http://static1.1.sqspcdn.com/static/f/503515/28156772/1562883881347/20190711+Ur-Energy+2Q19+Operations+Update+Final.pdf?token=9Nu83ZyGDNUzIosQwczVDLuLBqI%3D

          • On July 14, 2019 at 3:12 am,
            Excelsior says:

            > From the first quarter release from (URG) (URE) Ur-Energy:

            “During the quarter we sold 97,500 pounds under term contracts at a price per pound of $49.35 per pound, of which 48,750 pounds were from production and the balance was purchased. ”

            “For the quarter, our uranium cost of sales totaled $3.2 million which included $1.3 million of purchase costs and $1.9 million of production costs. In 2019 Q1, we purchased 97,500 pounds at an average price of $27.50 per pound, of which half remains in our inventory. The average cost per pound sold from production was $37.74.”

            “Excluding the NRV adjustment of $2.0 million, the gross profit from uranium sales for 2019 Q1 was $1.6 million, which represents a gross profit margin of approximately 34%.”
            http://static1.1.sqspcdn.com/static/f/503515/28123112/1556918946793/20190503+Ur-Energy+Releases+2019+Q1+Results+Final.pdf?token=n1yQp3JPLmzHgrXfi1pS7pRxwxw%3D

          • On July 14, 2019 at 3:14 am,
            Excelsior says:

            (PEN.AX) (PENMF) Peninsula Energy has 5 different off-take agreements with:

            • “Weighted sales price between US$51-53/lb U3O8”
            • “Contract portfolio carries through year 2030”

            (See Pg 21 of their most recent Corporate Presentation)
            http://www.pel.net.au/images/peninsul—ipohshaena.pdf

          • On July 14, 2019 at 3:19 am,
            Excelsior says:

            Energy Fuels was doing the same thing selling production and Uranium that they sourced on the spot market into higher off-take supply contracts in the high $40’s – mid $50s, until those agreements expired recently.

            Now they are stockpiling their production for higher prices, and focused more on selling their Vanadium production at a profit.

            _____________________________________________

            $UUUU $EFR Energy Fuels most recent quarterly update:

            “The Company completed no uranium sales during the quarter and continues to add to uranium inventories. The Company believes that uranium prices will improve and that it may be able to sell inventory at higher prices in the future.”

            “The Company completed 53,000 pounds of #vanadium sales into the steel industry during the quarter, following conversion of the Company’s V2O5 product into ferrovanadium. The Company is continuing to convert V2O5 into ferrovanadium, while also evaluating the sale of certain quantities of high-purity V2O5 into specialty aerospace, chemical, and potentially the vanadium battery industries.”

            http://www.energyfuels.com/news-pr/energy-fuels-announces-q1-2019-results/

          • On July 14, 2019 at 1:34 pm,
            Excelsior says:

            Silver Will Soon Move Suddenly & Shockingly Higher – Here’s Why

            Lorimer Wilson – July 6, 2019

            “At the heart of the unprecedented move higher in the price of silver is the manner in which it will occur. It will be a price move like no other. It will be the greatest short covering rally in history. That’s guaranteed because the COMEX silver short position is the largest and most concentrated short position in history. There is no buying force in the financial markets more powerful than panicky buying by those forced to cover short positions. The largest short position ever holds the potential for the greatest short covering rally ever.”

            http://www.munknee.com/silver-will-move-suddenly-shockingly-higher-soon-heres-why/

          • On July 14, 2019 at 1:37 pm,
            Excelsior says:

            whoops. I was trying to figure out why that silver short covering rally piece didn’t post down below initially an I see now it posted up here in the Uranium thread.

            Sorry about the double-post, but maybe it’s fitting that Silver is posted with Uranium, as both markets are currently unloved and thrown out with the bath water….

    • On July 14, 2019 at 6:31 pm,
      Excelsior says:

      Arbitration Tribunal Rules in Favour of (CCO) (CCJ) Cameco Inc. in TEPCO Contract Dispute

      @nasdaq on 13 Jul 2019

      https://ceo.ca/@nasdaq/arbitration-tribunal-rules-in-favour-of-cameco-inc

      • On July 14, 2019 at 6:34 pm,
        Excelsior says:

        (CCO) (CCJ) Pleased with Section 232 Decision on U.S. Uranium Imports

        by @nasdaq on 13 Jul 2019

        “The President also announced the establishment of a United States Nuclear Fuel Working Group to further analyze the state of U.S. nuclear fuel production and report back within 90 days with findings and recommendations to enhance domestic capabilities if deemed to be necessary. This initiative may broaden the range of options that could be considered to support the U.S. uranium industry beyond the trade-related remedies permitted under Section 232.”

        “Cameco will participate in the efforts of this working group in any way we can,” Gitzel said. “As a long-term commercial producer, employer, supplier and investor in the U.S. uranium and nuclear energy sectors, we want to see this industry succeed and grow.”

        https://ceo.ca/@nasdaq/cameco-pleased-with-section-232-decision-on-us-uranium

  3. On July 13, 2019 at 8:02 am,
    b says:

    THX again Cory

    Another good show.

  4. On July 13, 2019 at 4:32 pm,
    Matthew says:
    • On July 14, 2019 at 12:26 am,
      Blue says:

      You nailed it, Matthew. NGD is outperforming GDX and it seems like this is just getting started.

    • On July 14, 2019 at 1:42 pm,
      Bonzo Barzini says:

      Both Doc and I bought NGD for less than 80 cents this spring. So did Renaud Adams, the new president.

      • On July 14, 2019 at 5:23 pm,
        RICHARD/DOC says:

        BB; yes I did—I bought a very nice position—I love the technicals and ex just gave me his view on the fundamentals. There are a few other stocks similar to ngd technically that have stalled that I’m waiting to purchase more.

  5. On July 13, 2019 at 9:28 pm,
    Matthew says:
  6. On July 14, 2019 at 12:53 am,
    Blue says:

    Matthew, NGD is done very well and EGO is on the right track with the gold price above 1400 usd and with a good q2 report telling the Q2 revenue 1 aug will almost certain bring record revenue.
    https://www.eldoradogold.com/news-and-media/news-releases/press-release-details/2019/Eldorado-Gold-Reports-Preliminary-Second-Quarter-2019-Results/default.aspxand
    But the most imported turnaround news in the short and longterm is permitting rhe Skouris project in Greece.But the waiting is now nearing the end with this news:
    https://greece.greekreporter.com/2019/07/13/new-greek-energy-minister-to-revive-helliniko-and-skouries-projects/
    EGD has had a nice run lately but with the Skouries project being a done deal whats the next stop for the stock in the short term? Closing the gap up to 11-12 usd? The big risk with permitting Skouries is that it will be bought by Barrick/Kirkland or another hungry producer and their own journey will be over.

  7. On July 14, 2019 at 9:50 am,
    Matthew says:
  8. On July 14, 2019 at 10:34 am,
    Silverdollar says:

    Cory: Thanks for the show. Jesse Felder’s comments are priceless IMO. Hope you don’t mind but here is another interview with Jesse on Macro Voices. Jesse is several minutes into the podcast. http://mp3.player.macrovoices.net/mvmp3player.php?mp3=https://www.podtrac.com/pts/redirect.mp3/www.macrovoices.com/podcasts/MacroVoices-2019-07-11-Jesse-Felder.mp3

    • On July 14, 2019 at 1:47 pm,
      Excelsior says:

      Albert Edwards: The US Is About To Take Global Currency War To A Whole New Level

      Thu, 07/11/2019

      “While Edwards is hardly the first analyst to suggest that the US will intervene directly in devaluing the dollar – BofA did so three weeks ago – the SocGen strategist is certainly the one to present the most comprehensive case why what may be the final lap in the race to the currency bottom has just begun.”

      “Specifically, Edwards begins by pointing out that while the primary target of Trump’s trade war ire has conventionally been China, he should be focusing on Japan, and perhaps even more so, Europe – and Germany in particular. As the SocGen strategist writes, “it would not have missed President Trump’s attention that while the US recorded an overall $625bn trade deficit in 2018, the eurozone ran a huge $600bn surplus (over 4% of GDP). By contrast China and Japan ran surpluses of only $100bn and a $10bn respectively.”

      In other words, “when it comes to global trade imbalances China and Japan are not the problem” – according to Edwards, it’s the Eurozone.

      https://www.zerohedge.com/news/2019-07-11/albert-edwards-us-about-take-global-currency-war-whole-new-level

    • On July 14, 2019 at 2:29 pm,
      Excelsior says:

      Silverdollar – I agree that it is always great to hear Jesse Felder’s macro thoughts.

  9. On July 14, 2019 at 1:35 pm,
    Excelsior says:

    Silver Will Soon Move Suddenly & Shockingly Higher – Here’s Why

    Lorimer Wilson – July 6, 2019

    “At the heart of the unprecedented move higher in the price of silver is the manner in which it will occur. It will be a price move like no other. It will be the greatest short covering rally in history. That’s guaranteed because the COMEX silver short position is the largest and most concentrated short position in history. There is no buying force in the financial markets more powerful than panicky buying by those forced to cover short positions. The largest short position ever holds the potential for the greatest short covering rally ever.”

    http://www.munknee.com/silver-will-move-suddenly-shockingly-higher-soon-heres-why/

    • On July 14, 2019 at 1:43 pm,
      Excelsior says:

      Someone else posted this earlier this week, but it ties in to the piece above about large buyers and sellers of Silver.
      ____________________________________________

      A Whale Is Accumulating Silver Futures

      By Alasdair Macleod – Goldmoney Insights – July 11, 2019

      “Silver’s recent price performance has been disappointing. Normally, it is almost twice as volatile as gold, so when the gold price rises 11%, as it has since last December, you would expect silver to rise about 20%. Instead it has fallen marginally.”

      “When we dig into the weekly Commitment of Traders’ Reports covering Comex futures, we see something very odd indeed…”

      “It turns out, as one would expect when gold is very overbought, the silver positions of the next largest four at net short 40,305 contracts are close to a record short. The second four see prices have hardly moved, and the speculators in the Managed Money category are only moderately long. Despite their individual short positions, they don’t realise they are in acute danger of being victims of a major bear squeeze.”

      “They appear to be blissfully unaware that they are as a group short to a very larger buyer in their own ranks. It is certainly possible no one has done the analysis covered in this article, because analysts and traders rarely look at the concentration figures.”

      https://www.goldmoney.com/research/goldmoney-insights/a-whale-is-accumulating-silver-futures

      • On July 14, 2019 at 2:44 pm,
        Excelsior says:

        Interesting thoughts on Silver from a few folks over at Ceo.ca this week:

        First up – Eric Coffin’s Silver reflection:

        @HRA-Coffin – July 13, 2019

        ” $Silver bugs have always put way too much emphasis on the “historic” gold/silver ratio that was set by US government fiat back in the day. It’s got nothing to do with anything other than that. Silver’s end user market is quite different from gold’s. Just comparing the annual production of each metal, for insitance, won’t give you any insight about what the silver price “should” be, in my opinion. It’s much more an “industrial” metal than $gold, which is why the silver price tends to get killed to a greater extent than gold in a global downturn. Relatively high base metal prices for the past 15 years have probably done more harm than good for silver. Most is produced as a base metal by-product so higher production of zinc and lead and (in some cases) copper, has just put that much more of it into the market. I don’t hate silver, but I wouldn’t hold my breath waiting for a return to say 50:1 ratio either. Might happen with enough speculative demand at some point but no reason it HAS to.”

        _______________________________________

        @dmandman – July 14, 2019

        “Re: Silver. Imo best to wait to buy until after the macro-markets crash. As at that point you will have in place an industrial demand low. And also the benefit from 2 demand sources going forward. Market recovery – industrial demand from a low, and also monetary demand from the excessive money printing that will be coming after the macro-markets crash. $Silver enjoys both, pretty much 50%, industrial demand and monetary demand. So getting silver at the industrial demand low, is your best bet to get both demands going forward at probably a much, but temporarily better entry point.”

        ___________________________________________________

        @Goldfinger – July 13, 2019

        “Silver is the Russell 2000 of precious metals.”

  10. On July 14, 2019 at 2:32 pm,
    Excelsior says:

    Fed’s Recessionary Indicators and Gold

    Sunshine Profits | July 12, 2019

    https://www.mining.com/web/feds-recessionary-indicators-and-gold/

  11. On July 14, 2019 at 8:33 pm,
    Matthew says:

    For the first time in a year, IPT has acquired back-to-back weekly closes above the 50 week MA:
    https://stockcharts.com/h-sc/ui?s=IPT.V&p=W&yr=4&mn=0&dy=9&id=p26676443365&a=676382921

  12. On July 14, 2019 at 9:05 pm,
    Matthew says:

    I don’t own AUN but those who do are due for some relief:
    https://stockcharts.com/h-sc/ui?s=AUN.V&p=W&yr=3&mn=6&dy=0&id=p94861832046&a=589314571

    • On July 14, 2019 at 9:43 pm,
      Excelsior says:

      Interesting. Thanks for that chart Matthew.

      I owned some Aurcana back when they were operating (poorly) in Mexico, and had just put the Shafter mine in TX into production without a resource estimate and failed. At that point I took my loss and moved on.

      Then I repositioned in late 2015 and early 2016, and while it increased in value (about a 4 bagger), those gains paled compared to other Silver stocks during the 2016 surge, so I eventually bailed out on most of the position to rotate into other names, and just kept a small position in it.

      However when they announced their plan to restructure (again) and buy interest in a prior producing mine, and do all kinds of gymnastics with personell, financings, and debt, I finally sold the rest (thankfully – as it really floundered from there the last few years).

      However, recently a guy that does a mining podcast Vince (aka @stateside) mentioned they were worth taking a look at again, so I just started following them again.

      It looks like they are in the middle of a capital raise PP with more paper being churned out, but once the dust settles I’m going to be watching AUN with more interest as they now have 2 prior producing mines and may have a nice optionality affect on rising silver prices.

      There are silver companies I like far more than Aurcana for the medium term, but after some of the larger names in my portfolio go on their initial runs (whenever Silver finally does make its move), then I may trim those back and rotate some of those funds further down the foodchain, to late stage development stories like this.

      For now just watching, as I’m full to rim with Silver stocks in my trading account already and have bet on the horses I want to ride for the next round. Cheers!

      • On July 14, 2019 at 9:45 pm,
        Excelsior says:

        affect = effect 😉

  13. On July 14, 2019 at 9:30 pm,
    Excelsior says:

    (ROXG) (ROGFF) Roxgold Announces Updated Mineral Reserves & Mineral Resources Statement Including Maiden NI 43-101 Mineral Resources Statement for the Séguéla Gold Project

    @newswire – 11 Jul 2019

    – Company wide Measured and Indicated Mineral Resources estimate for the Yaramoko and Séguéla gold projects of 1,323,000 ounces at 4.8 grams of gold per tonne (“g/t Au”) representing an increase of 79% over the December 31, 2016 estimate;

    – Maintained Proven and Probable Mineral Reserves of 658,000 ounces at 8.2 g/t Au at the Yaramoko Gold Project following production of 260,000 ounces at 14.4 g/t Au in 2017 and 2018 from the 55 Zone;

    https://ceo.ca/@newswire/roxgold-announces-updated-mineral-reserves-mineral

  14. On July 15, 2019 at 8:22 am,
    Charles says:

    Does anyone know what the catayst was for Brixton breaking out? Good call Matthew. Monster bar up.

    • On July 15, 2019 at 9:23 am,
      Matthew says:

      Brixton Metals Drills 554.70m of 1.97 g/t AuEq, Including 135.96m of 1.35 g/t Au, 0.31% Cu, 133.62 g/t Ag or 5.00 g/t AuEq Including 6m of 3.56% Cu, 3.37 g/t Au, 257.77 g/t Ag at its Thorn Project
      http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20190715:nGNX97qDkv

      • On July 15, 2019 at 9:36 am,
        Charles says:

        Nice! What a great result. Where do you expect the initial target? It seems like it might correct a bit after this move. The volume is incredible! It would be nice if it could take out that February high today, but that is probably asking a lot.

        • On July 15, 2019 at 9:56 am,
          Matthew says:

          It’s hard to say what the initial target might be but I have a feeling it is a good idea to simply hold. Brixton’s market cap is up roughly $6M cdn so far and that’s not much considering those drill results.
          If you haven’t already noticed, a thread developed about it under the political segment that was posted by KER yesterday.

        • On July 15, 2019 at 9:58 am,
          Matthew says:

          Throw in a strengthening silver price and the speculative appetite that follows recognition of a new bull market and Brixton could surprise us all.

      • On July 15, 2019 at 2:21 pm,
        Excelsior says:

        I was just circling around to see if anyone noticed the crazy move higher today in BBB – Brixton. Wow that is quite the drill hole!!

  15. On July 15, 2019 at 10:57 am,
    Charles says:

    Thanks. I will take a look at the politics post.