Gold Tumbles With Silver to Lowest Since 2010 – $1,000 Gold ?

Gold and silver slumped to the lowest level since 2010 as the dollar strengthened after the Bank of Japan unexpectedly boosted unprecedented stimulus and the Federal Reserve ended asset purchases.

Bullion for immediate delivery lost as much as 2.6 percent to $1,167.49 an ounce, the lowest since July 2010, and traded at $1,177.26 at 4:13 p.m. in Singapore, Bloomberg generic pricing shows. Silver slid as much as 3 percent to $16.0009 an ounce, the lowest since February 2010. They fell as the dollar rose to the highest in more than six years against the yen.

The Fed is weighing the timing of interest-rate increases as other central banks add to stimulus to boost their economies. The Bank of Japan said it’s targeting an 80 trillion yen ($726 billion) expansion in the monetary base, up from 60 to 70 trillion yen before. Gold yesterday erased the year’s advance after U.S. gross domestic product beat estimates and China probed a surge in precious-metals exports.

“People are generally looking at the direction of the dollar, which moved higher against the yen after the BOJ announcement, although the news itself is neutral for gold,” said Wallace Ng, a Shanghai-based trader at Gemsha Metals Co. “A higher dollar depresses prices and sentiment in the gold market was already weak because of the Fed.”

Bullion is heading for a decline of 4.4 percent this week, the most since September 2013. The metal is also set for the first consecutive monthly loss in 2014. Holdings in the SPDR Gold Trust shrank for a third day to 741.2 metric tons yesterday, the least since Oct. 2008.

Double-Whammy

Gold rose 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent. Prices slumped 28 percent last year, the most in three decades, on expectation that the central bank will scale back its bond-buying program that was put in place to fuel growth while failing to stoke inflation.

The U.S. central bank, which has held its key rate at zero to 0.25 percent since 2008, this week cited an improving job market in deciding to end bond buying, while maintaining a commitment to keep rates low for a considerable time. It also said inflation is running below its 2 percent target.

“Precious metals cratered, hit by a double-whammy of the rather hawkish Fed policy statement, coupled with a stronger-than-expected U.S. GDP report,” Edward Meir, an analyst at INTL FCStone Inc., wrote in a note. “Gold is again confronting the specter of a stronger dollar, rising equity prices and tame inflation, a trifecta that does not bode well for price prospects going into 2015.”

Futures for December delivery fell as much as 2.7 percent to $1,166.20 an ounce on the Comex inNew York, the lowest level since July 2010, before trading at $1,175.80.

$1,000 Gold

The collapse of oil prices into a bear market amid rising global supplies has also cut inflation concerns. The chances of bullion dropping to $1,000 are increasing as cheaper energy “means lower inflation and adds to the bearish gold story,” said Michael Haigh, head of commodities research at Societe Generale SA, who correctly forecast the metal’s 2013 rout.

The bank isn’t alone in predicting more losses for gold, which is Morgan Stanley’s least preferred metal. Jeffrey Currie, Goldman Sachs Group Inc.’s head of commodities research who also correctly forecast 2013’s slump, said last month that the worst isn’t over yet for gold. He expects prices to drop to $1,050 by the end of year.

Concern that demand may falter in the world’s largest users also hurt prices. China sent investigators to probe a seven-fold surge in September’s precious-metals exports. In India, the biggest consumer after China, imports are set to drop in October after a more than four-fold jump last month.

Gold of 99.99 percent purity on the Shanghai Gold Exchange, the benchmark, sank as much as 3.1 percent to 230.05 yuan per gram ($1,172.35 an ounce), the lowest level this year. Volumes tumbled to a one-month low today.

Silver for immediate delivery slid 2.4 percent to $16.1078 an ounce, set for a fourth monthly decline that’s the worst run since June 2013. An ounce of gold bought as much as 73.3154 ounces of silver today, the most since April 2009.

Spot platinum decreased as much as 1.8 percent to $1,223.05 an ounce, the lowest since Oct. 6. It’s heading for a fourth month of losses that’s the longest stretch since June 2013. Palladium slipped 0.1 percent to $779.67 an ounce.

Gold Plunges

Gold Heads for Biggest Drop in Three Weeks as Fed Ends QE

Gold prices fell as the Federal Reserve ended its bond-purchase program, cutting demand for the metal as hedge against inflation.

The Fed maintained its pledge to keep interest rates near zero percent for a “considerable time,” while citing improvements for the American labor market as it ended its asset buying at the conclusion of its two-day policy meeting today.

“People will not see the need for gold in an environment of low inflation and solid job growth,” Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said in a telephone interview. “While it was expected, the ending of the asset-purchase program added to the negative sentiment.”

Bullion fell to this year’s low on Oct. 6 amid waning demand for a store of value. Holdings in global exchange-traded products backed by gold are at the lowest in five years, and measures of volatility for the metal have pared recent gains. The U.S. economy isn’t in danger of a major pullback even as Europe languishes and China’s growth slows, Treasury Secretary Jacob J. Lew said today.

Gold for immediate delivery dropped 1 percent to $1,215.69 an ounce at 2:16 p.m. New York time, heading for the biggest drop since Oct. 3. Prices touched $1,215.47, the lowest since Oct. 8.

Bullion climbed 70 percent from December 2008 to June 2011 as the U.S. central bank bought debt and held borrowing costs near zero percent in a bid to shore up growth. Prices slumped 28 percent last year partly because the gains for consumer prices investors were concerned about after the increase in money supply failed to materialize.

Low Inflation

Fed policy makers said that while inflation in the near term will probably be held down by lower energy prices, it repeated language from its September statement that “the likelihood of inflation running persistently below 2 percent has diminished somewhat.”

Inflation expectations, measured by the five-year Treasury break-even rate, this month reached the lowest since October 2011.

Gold prices will drop to $1,050 over the next 12 months as the U.S. economy accelerates,Jack A. Bass, author of The Gold Investors Handbook has said.

Gold Action/ Direction Continues Down : Braggin’ Rights To JAB Part 2

You can review my past articles to confirm my calls:

1) BUY when gold was below $ 900

2) Steady reductions in all positions for Jack A. Bass Managed Funds

from $ 1800 til today.

Friday morning Oct .3 gold fell $20 an ounce – our accounts are smiling – gold bugs are crying conspiracy 

 

THIS Is What We Wrote Last Week

 

Now What ?

We continue to see more downside risk in the next several days

 

: ” as the next major level of support is 1,180 & if that price level is broken prices could slide rather dramatically. Gold prices settled last Friday at 1,216 finishing slightly lower for the trading week as volatility has certainly increased as prices were up $20 a couple of days back on the news of the coalition & the United States bombing ISIS but then prices came right back down as I still think lower prices are ahead as there’s no reason to own gold right now especially with a very strong U.S dollar so continue to play this to the downside making sure you place your stop above the 2 week high.”

No stocks are being spared .

In my book ” The Gold Investors Handbook” – available on Amazon – I pick B2Gold ( BTO) as my top junior . It moves lower and is so very tempting but there is no way to call a bottom. Wait and buy when there is a turn rather than catch all the falling knives.Use the book to develop your own gold watchlist . In the meantime there are so many better places to earn money with less risk.

The ever lower prices for Yamana are almost painful to watch – but there is less pain in the sideline compared to watching your portfolio wither away.

It is criminal in my less than humble opinion the Sprott and Peter Schiff continue to urge investors to buy into the conspiracy theory of manipulation of the commodity price. The printing press in the U.S. runs at full speed 24 hours a day – but the fact is there is still no inflation and no inflation on the horizon. This undermines a central argument for owning gold. Mining costs continue to escalate and thus pressure mining returns at lower commodity prices.

Even the Ukraine and Middle East turmoil and have not proved to be much of a factor to boost gold as a safe haven in times of trouble. Gold bugs are reduced to hoping the stock market stops its advance and the economic recovery in the U.S. runs out of steam.Right now dividend paying stocks in a recovery are more attractive than the gold sector.

The Challenge – a guarantee of a minimum of 12 % for your annual investment return

Investors and pensions need efficient methods to screen, research, perform due diligence and monitor managers in their quest to deliver returns. They need to know the data they are using is accurate and fresh — and represents the best options available worldwide across every asset class. They must take into account their own assets and liabilities and the impact to portfolio risk while screening strategies and tracking exposures. They also need polished reports and presentations to provide evidence of a sound, inclusive selection processes for regulators and committees.

Placing these decisions in Jack A. Bass Managed Accounts removes the work from your hands to ours .

Meeting the Challenge

Jack A. Bass Managed Accounts offers a comprehensive suite of solutions for screening and monitoring, as well as risk assessment leveraging the data of the most important databases. In fact, 89% of surveyed clients agree that Jack A. Bass Managed Accounts helps them save their time during the due diligence process, while 75% of pension clients agreed .

The answer to When? – is always NOW ! – not tomorrow.
Contact Information

Information must proceed action and that is why we offer a no cost / no obligation inquiry service if you are not already a client.

Email info@jackbassteam.com OR

Call Jack direct at 604-868-3202 Pacific Time 10:00- 4:00 Monday to Friday

( Same time zone as Los Angeles)

Gold Action/ Direction Continues Down : Braggin’ Rights To JAB

You can review my past articles to confirm my calls:

1) BUY when gold was below $ 900

2) Steady reductions in all positions for Jack A. Bass Managed Funds

     from $ 1800 til today.

 

Now What ?

We continue to see more downside risk in the next several days- from The Crude Oil Trader blog this quote which I second: ” as the next major level of support is 1,180 & if that price level is broken prices could slide rather dramatically. Gold prices settled last Friday at 1,216 finishing slightly lower for the trading week as volatility has certainly increased as prices were up $20 a couple of days back on the news of the coalition & the United States bombing ISIS but then prices came right back down as I still think lower prices are ahead as there’s no reason to own gold right now especially with a very strong U.S dollar so continue to play this to the downside making sure you place your stop above the 2 week high.”

No stocks are being spared .

In my book ” The Gold Investors Handbook” – available on Amazon – I pick B2Gold ( BTO) as my top junior . It moves lower and is so very tempting but there is no way to call a bottom. Wait and buy when there is a turn rather than catch all the falling knives.Use the book to develop your own gold watchlist . In the meantime there are so many better places to earn money with less risk.

The ever lower prices for Yamana are almost painful to watch – but there is less pain in the sideline compared to watching your portfolio wither away.

It is criminal in my less than humble opinion the Sprott and Peter Schiff continue to urge investors to buy into the conspiracy theory of manipulation of the commodity price. The printing press in the U.S. runs at full speed 24 hours a day – but the fact is there is still no inflation and no inflation on the horizon. This undermines a central argument for owning gold. Mining costs continue to escalate and thus pressure mining returns at lower commodity prices.

Even the Ukraine and Middle East turmoil and have not proved to be much of a factor to boost gold as a safe haven in times of trouble. Gold bugs are reduced to hoping the stock market stops its advance and the economic recovery in the U.S. runs out of steam.Right now dividend paying stocks in a recovery are more attractive than the gold sector.

The Challenge – a guarantee of a minimum of 12 % for your annual investment return

Investors and pensions need efficient methods to screen, research, perform due diligence and monitor managers in their quest to deliver returns. They need to know the data they are using is accurate and fresh — and represents the best options available worldwide across every asset class. They must take into account their own assets and liabilities and the impact to portfolio risk while screening strategies and tracking exposures. They also need polished reports and presentations to provide evidence of a sound, inclusive selection processes for regulators and committees.

Placing these decisions in Jack A. Bass Managed Accounts removes the work from your hands to ours .

Meeting the Challenge

Jack A. Bass Managed Accounts offers a comprehensive suite of solutions for screening and monitoring, as well as risk assessment leveraging the data of the most important databases. In fact, 89% of surveyed clients agree that Jack A. Bass Managed Accounts helps them save their time during the due diligence process, while 75% of pension clients agreed .

The answer to When? – is always NOW ! – not tomorrow.
Contact Information

Information must proceed action and that is why we offer a no cost / no obligation inquiry service if you are not already a client.

Email info@jackbassteam.com OR

Call Jack direct at 604-868-3202 Pacific Time  10:00- 4:00 monday to Friday

( Same time zone as Los Angeles)

China Data Signals Slowing Economy – Commodities Update – Oil, Iron Ore, Gold, Nickel, Copper

Copper lead most industrial metals lower after factory and retail-sales data signaled further slowing in China, the world’s biggest user.

Copper in London fell as much as 1 percent, while aluminum, nickel, lead and tin also declined. Industrial-output growth in China was the weakest in August since the global financial crisis, while investment and retail sales moderated, figures released Sept. 13 showed. Factory data due today from the U.S., the second-biggest metals user, will probably indicate activity in August slowed from the previous month, according to a Bloomberg News survey.

“The Chinese data over the weekend came in worse than expected,” Daniel Hynes, an analyst at Australia and New Zealand Banking Group Ltd., said by phone from Sydney. “It’s not surprising the base metals are weaker on the back of it.”

Copper for delivery in three months on the LME fell to as low as $6,770.75 a metric ton, the lowest intraday level since Sept. 11. Prices were down 0.5 percent at $6,804 a ton by 3:16 p.m. Hong Kong time, poised for the lowest close since June 19.

In New York, the December-delivery contract dropped 1 percent to $3.077 a pound, while in Shanghai the metal for delivery in November fell 0.4 percent to close at 48,380 yuan ($7,877) a ton.

Industrial output in China rose 6.9 percent from a year earlier in August, the National Bureau of Statistics said on Sept. 13. That’s down from 9 percent in July and the slowest pace outside the Lunar New Year holiday period of January and February since December 2008, based on previously reported figures compiled by Bloomberg.

On the LME, lead fell 0.6 percent to $2,110 a ton, while aluminum declined 0.4 percent to $2,020.50 a ton.

Vale’s View

Iron ore may rise to as much as $100 a ton by the end of the year because of declining inventory at ports, Vale Chief Executive Officer Murilo Ferreira told reporters on Sept. 12 in Beijing. Some producers are reducing exports given current prices, Ferreira said. China is the world’s largest buyer.

In China, there’s mounting evidence locally-mined supplies are starting to drop, Morgan Stanley’s Crane wrote. Output, when adjusted to show the equivalent of 62 percent content, fell 13 percent between April and July year-on-year, he said.

“Market participants appear split on the floor price,” Australia & New Banking Group Ltd. analysts including Mark Pervan wrote in a report today. While some are “thinking the resilience of Chinese iron ore supply will see prices fall below $80 a ton, while others firmly believe domestic output can’t sustain current price levels for much longer.”

Expanding Glut

Iron ore prices are unlikely to recover as the global surplus expands, Goldman Sachs Group Inc. said in a Sept. 10 report. The bank reduced its price forecast for the final three months of 2014 by 10 percent to $90, and also reduced full-year estimates for 2016 and 2017.

The structural nature of the surplus and a weak demand outlook in China make a recovery in prices unlikely, Goldman analysts Christian Lelong and Amber Cai wrote in the report. The global glut will more than triple to 163 million tons in 2015 from 52 million tons this year, and widen further to 245 million tons in 2016 and 295 million tons in 2017, it said

Oil Supply

Brent fell to $96.27 a barrel after settling at its lowest level since June 2012 amid concern global fuel consumption is slowing while output climbs. West Texas Intermediate crude sank 1 percent to $91.34 today, after slipping 0.6 percent Sept. 12. The International Energy Agency cut its global oil-demand forecast for 2015 last week.

Russia’s ruble slid as much as 0.5 percent to 37.0380 per dollar, a record low, before trading at 37.985. The euro bought 49.2745 rubles, the most since Sept. 1. The Micex Index climbed 0.2 percent in Moscow.

Copper for three-month delivery on the London Metal Exchange fell to $6,802.75 a metric ton, following last week’s 2 percent retreat. Lead dropped 0.6 percent to $2,108 a ton.

Gold for immediate delivery increased 0.4 percent to $1,234.98 an ounce after closing last week at $1,229.65, the lowest since Jan. 9.

Palladium climbed 1.3 percent to $848.50 an ounce.


2014-08-13 Reuters Gold Poll

Reuters quarterly interviews analysts to gather their gold price prediction. We have collected the forecasts made in 2014 and conclude that the sentiment has stabilized but the expectations for 2015 remain low.

THOMSON REUTERS 2014 Avg Gold Price Prediction 2015 Avg Gold Price Prediction No of Analysts interviewed
Q1 Poll Jan 2014 $1,235 37
Q2 Poll Apr 2014 $1,278 $1,250 28
Q3 Poll July 2014 $1,277 $,1250 31

 Nickel Falls a Fifth Session Amid China Slowdown Signals

Sept. 15 (Bloomberg) — Nickel and aluminum fell for a fifth session in London as industrial metals declined after factory and retail-sales data added to evidence of a slowing economy in China, the world’s biggest consumer. Copper slid.

Chinese industrial-output growth in August was the weakest since the global financial crisis, while investment and retail sales moderated, figures showed. Factory data due today from the U.S., the second-biggest metals user, will probably indicate activity in August slowed from the previous month, according to a Bloomberg News survey.

“Weak Chinese data weighed on base-complex prices,” RBC Capital Markets Ltd. said in a note today. Commodities slumped to the lowest level in more than five years.

Copper for delivery in December lost 0.8 percent to $3.081 a pound by 8 a.m. on the Comex in New York.

The metal for delivery in three months fell 0.4 percent to $6,808 a metric ton on the London Metal Exchange and lead touched the lowest price since June. An index of the six main metals traded on the LME slid the most since March last week.

Industrial output in China rose 6.9 percent from a year earlier in August, the National Bureau of Statistics said on Sept. 13. That’s down from 9 percent in July and the slowest pace outside the January-February Lunar New Year holiday period since December 2008, based on previously reported figures compiled by Bloomberg.

“Prices may well weaken further,” William Adams, an analyst at Fastmarkets.com in London, said in a note today. “We saw last week a combination of weakness and bouts of scale-down buying, and we feel we may see more of the same this week, especially in those metals that have seen strong price gains in recent months.”

Copper stockpiles monitored by the LME fell 0.1 percent to 156,375 tons, daily data showed. Orders to take the metal from warehouses rose to 40,250 tons on bookings in New Orleans and are up 40 percent in three sessions, the most since April 2013.

Tin and zinc declined in London.

The Gold Sector :The Worst Slump In Prices In 30 Years Will Continue

The gold industry, recovering from the worst slump in prices in 30 years, needs more mergers to help

improve investor returns and eliminate unprofitable mines or prices will continue to fall said Jack A.

Bass , author of The Gold Investors Handbook.

ABN Amro’s commodity analysts put it plainly last week. They expect gold’s 11% rise in the first-half of 2014 to be “temporary” because US Fed rates hikes are coming, while the outlook is “positive” for equities. Such thinking makes sense based on 2013’s example. Taper talk pushed bond prices down last year, nudging market interest rates higher. The S&P500 meanwhile returned 32%, a little more than gold prices fell.
Logic might also see a trade-off between gold and rising returns on other assets. Because the metal yields nothing and does nothing. It can’t even rust. Equities and interest-paying investments on the other hand work to increase your money. So gold prices should fall when equities rise, and also when the markets expect higher interest rates. Or so analysts now think.
GOLD was a universal “sell” for professional analysts at New Year, writes Adrian Ash at BullionVault.
Losing 30% in 2013, the gold price faced the long-awaited start of US Fed tapering – widely supposed to make fixed-income bonds go down, nudging interest rates higher – plus strong hopes for further gains in world equities. Who needed the barbarous relic?

Gold producers, which are gathering for the annual invitation-only Denver Gold Forum that began yesterday, cut budgets, sold assets and adjusted mine plans after the metal plunged 28 percent last year, prompting more than $26 billion of writedowns. The industry already has started a consolidation process.

“The industry did a very poor job from a capital-allocation standpoint, from a risk-management standpoint and from an operational-execution standpoint,” he said. “For long-term oriented investors it would be better for the industry to get more right-sized where companies are focused on generating profit at a conservative gold price assumption.”

‘Darwinistic Scenarios’

Combining companies can help eliminate their respective unprofitable operations, he said. Weak companies with good assets may also be targeted by stronger producers, he said.

“Or the least appealing of the Darwinistic scenarios is a company that has gotten all of those things — capital allocation, risk management and operational execution — wrong and they wind up going bankrupt,” he said.

There have already been some moves toward consolidation this year. Yamana Gold Inc. and Agnico Eagle Mines Ltd. bought Osisko Mining Corp. after beating out a hostile bid from Goldcorp Inc. Barrick Gold Corp. (ABX) and Newmont Mining Corp., the two largest producers by sales, also discussed a merger this year before breaking off talks in April.

“I do believe the gold industry is in the process of consolidating,” Wickwire of Fidelity  said.

‘Survivors and Thrivers’

Wickwire said as an investor he focuses on companies he terms “survivors and thrivers”: those with good management and strategy. He is also interested in enterprises that may have poor strategy or boards and management but own good assets that would be better operated by another producer. He declined to name specific companies.

The Fidelity Select Gold Portfolio rose 17 percent this year through Sept. 12, compared with a 2.4 percent increase in New York gold futures. The Philadelphia Stock Exchange Gold and Silver Index of 30 companies gained 8.9 percent.

Wickwire holds both bullion and gold equities in his fund. While gold miners underperformed the metal in the past two years, they can also outperform strongly when companies’ operations, capital allocation and risk-management decisions improve, he said.

“Under the appropriate backdrops, if you have a 10 percent movement in the gold price, some companies out there have the potential to generate 30 to 40 or 50 percent cash flow and earnings-per-share growth,” Wickwire said. “And when the companies are executing, the market rewards that dynamic aspect with a higher valuation.”

WTI – and Gold – Drops on Date – as Global Manufacturing Misses Estimates

West Texas Intermediate crude fell amid speculation that weakening manufacturing from Germany to China will cap global oil demand. Brent declined in London.

Futures dropped as much as 1.2 percent from the Aug. 29 close. Floor trading in New York was shut for the Labor Day holiday, and transactions will be booked for settlement purposes today. Purchasing manufacturing indexes for Germany, Italy, the U.K. and China all came in below estimates for August, while OPEC’s output increased to the highest level in a year.

“All eyes are on the demand side, and weaker statistics for example in China are bearish,” Bjarne Schieldrop, chief commodity analyst in Oslo at SEB AB, said by telephone. “The increase in tension between Russia and Ukraine is bearish for oil” because economic sanctions on Russia may eventually result in a slowdown in Europe, he said.

WTI for October delivery declined as much as $1.19 to $94.77 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.88 at 1:46 p.m. London time. The volume of all futures traded was more than double the 100-day average for the time of day. Prices decreased 2.3 percent last month and are down 3.6 percent this year.

Brent for October settlement was $1.11 lower at $101.68 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.83 to WTI, compared with a close of $7.23 on Aug. 29.

Factory Output

China’s manufacturing slowed more than projected last month, joining weaker-than-anticipated credit, production and investment data in indicating that the economy is losing momentum. The nation is the world’s second-largest oil consumer.

Markit Economics’ euro-area gauge slid more than initially predicted, with the index for Italy unexpectedly falling below 50, signaling the first contraction in 14 months. In the U.K., manufacturing expanded by the least in more than a year.

A final reading of Markit’s U.S. manufacturing PMI is due today, along with the Institute for Supply Management’s factory index for August, which economists forecast will drop to 57, from 57.1 in July.

“There are slowdowns occurring,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “OPEC is producing enough oil to placate any issues.”

Production from the 12-member Organization of Petroleum Exporting Countries rose by 891,000 barrels a day to 31 million in August, according to a Bloomberg survey of oil companies, producers and analysts. Nigeria, Saudi Arabia and Angola led supply gains as new deposits came online, security improved and field-maintenance programs ended. Iran and Venezuela were the only members to reduce output.

Ukraine warned of an escalating conflict in its easternmost regions as U.S. President Barack Obama headed to eastern Europe to reassure NATO members. Ukraine’s army will take on Russia’s “full-scale invasion,” Defense Minister Valeriy Geletey said on Facebook, a shift away from the government’s earlier communication that focused on battling insurgents.

Dollar Strengthens Before Data as Bonds Decline With Gold

The dollar strengthened to a seven-month high against the yen, government bonds tumbled and gold fell before data that analysts forecast will show expansion in U.S. manufacturing.

The dollar climbed 0.6 percent to 104.93 yen at 8:42 a.m. in New York and gained 0.4 percent to $1.6535 per British pound. Yields on 10-year Treasury notes increased four basis points to 2.38 percent. Futures (SPX) on the Standard & Poor’s 500 Index added 0.1 percent after the index rallied the most since February last month. Gold dropped 1.5 percent.

U.S. investors return after the Labor Day break with manufacturing and construction spending reports. Gauges of factory output in Europe and China signal slower growth, boosting speculation that policy makers will need to boost stimulus measures. European money markets are pricing in about a 50 percent probability that the European Central Bank will cut interest rates by 10 basis points this week, according to BNP Paribas SA.

“In the U.S. across the board we have had strong data,”said Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen. “That will keep growth momentum going. We have had a positive dollar trend for the past two months. I find it difficult to see this trend is going to disappear in the short term.”

U.S. Reports

The Institute for Supply Management’s August factory gauge probably held last month near the highest since April 2011, according to the median of 70 estimates in a Bloomberg survey. Another report probably will show U.S. construction rebounded in July, a Bloomberg survey showed. Reports yesterday signaled manufacturing slowed in China, the U.K. and the euro area.

The yen fell to its lowest level against the dollar since Jan. 16 amid speculation Japan’s Prime Minister Shinzo Abe will appoint an ally to head the ministry in charge of reforming the Government Pension Investment Fund, potentially boosting investment overseas. The currency weakened to 105.44 on Jan. 2, a level not seen since October 2008.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, climbed 0.3 percent to 1,033.71 and touched 1,034.16, the strongest since January.

The pound weakened after a YouGov Plc poll showed growing support for Scottish independence before this month’s referendum. One-month implied volatility on sterling versus the dollar jumped by the most in almost six years.

Government Bonds

European government bonds fell as Germany’s 10-year yield increased four basis points to 0.91 percent and the U.K.’s rose five basis points to 2.43 percent.

The euro overnight index average, or Eonia, which measures the cost of lending between euro-area banks, fell to a record minus 0.013 percent yesterday.

Corporate borrowing costs fell to a record in Europe, with the average yield demanded to hold investment-grade bonds in euros dropping to 1.28 percent, according to Bank of America Merrill Lynch index data. The gauge declined 19 basis points in the past month on stimulus speculation.

The Stoxx 600 of European shares fell 0.1 percent after increasing 0.5 percent in the past two days.

Vallourec SA climbed 4 percent after UBS AG advised investors to buy shares of the French producer of steel pipes for the oil and gas industry. Weir Group Plc gained 2.9 percent after Credit Suisse Group AG raised its recommendation on the British supplier of pressure pumps to outperform from neutral.

Asanko Gold Inc. Spec BUY

AKG : TSX : C$2.50
AKG : NYSE MKT
SPECULATIVE BUY 
Target: C$3.25

COMPANY DESCRIPTION:
The combination of AKG and PMI created a significant gold
development company with 2P reserves of 4.8 Moz with a
permitted, financed (US$231M in cash, Q2/14) mine plan on half
the reserve (Obotan project) with the permit in hand with a permit
pending on the other half (Esaase project). All the assets are
within the Ghana, one of the premier jurisdictions in the entire
African continent.
All amounts in C$ unless otherwise noted.

Metals and Mining — Exploration and Development
GOLD ROYALTY ON PHASE 1 REDUCED FROM 7% TO 5% NSR
Investment recommendation
The company announced an agreement to buyback a 2% NSR reducing
the overall NSR from 7% to 5% for Phase 1 (Obotan) of the Asanko Gold
Mine in Ghana, West Africa. We view the acquisition of the NSR as a
strong positive and highly accretive given that the Phase 1 project is
breaking ground and close to production (H1/16E). We raised our target
(+C$0.10) accordingly to C$3.25, a 30% premium to current price levels,
and maintained our SPECULATIVE BUY recommendation. We anticipate
more construction updates leading to a resource update for Phase 1
followed by an updated mine plan (Q4/14E

Investment highlights
 Our revised target price is based on an increase in our NPV8% (+4%
to US$733 M) of the combined Obotan (Phase 1) and Esaase (Phase
2) gold projects, now known as the Asanko Gold Mine, related to the
reduction of the NSR at Phase 1 (Obotan) from 7% to 5%. On an
NPV8% basis, we valued the 2% NSR on Phase 1 at C$25-30 M (LT
US$1422) The drop in our NSR assumption from 7% to 5% for Phase 1 is
related to the recently announced purchase of the 2% Goknet
(privately held company) NSR for 1 M shares of AKG and cash (we
estimate US$1 M as the details were not disclosed). In addition, AKG
will transfer the rights to two exploration projects, Kubi and Diaso,
which the company deems as non-material.
 In November 2012, Asante Gold Corp. (ASE : TSX-V
offered to purchase half (1%) of the 2% NSR on the Obotan project
from Goknet for C$22.5 M via shares (45 Msh, C$0.50), which
would now be worth about C$4 M (for 1% NSR). The sale was never
completed

Detour Gold Corporation

DGC : TSX : C$14.90

HOLD 
Target: C$15.00

COMPANY DESCRIPTION:
Detour Gold Corp. is a gold development company presently focused on advancing the Detour Lake project in the Abitibi Greenstone Belt of northeastern Ontario.
All amounts in C$ unless otherwise noted.
Investment recommendation
We maintain our HOLD rating on Detour Gold but are raising our target
price to C$15.00 from C$11.00. The company has made considerable
progress in de-risking the balance sheet and ramping up the Detour Lake
operation. Year-to-date, the stock is up 234% relative to the S&P/TSX Gold
Index, highlighting the market’s favourable response to management efforts
in addition to potential M&A speculation. While progress-to-date has been
encouraging and the plant is expected to hit nameplate capacity by year-end,
we still see a long way to go before the ramp-up is complete. As per the
latest mine plan, the head grade is expected to gradually increase to reserve
grade in 2017 while mining rates are expected to continue to ramp-up to
peak at 389 ktpd in 2020.
Detour Gold currently trades at 0.81x P/NAV and 8.1x P/CF 2015 vs the
large cap producer average of 0.89x and 10.2x respectively. At this stage of
the ramp-up we believe the discount is justified – continued execution on the
mine plan and successful completion of the ramp-up could lead to a
meaningfully higher multiple over the next few years. Considering the stock’s
higher leverage to the gold price, we also see the potential for the share price to move higher if the gold price continued to increase.

Valuation

We have updated our valuation and forecasts to reflect our revised commodity and currency price deck. The stronger assumed C$ has had a negative impact on our valuation and forecasts, but offset by lower assumed sustaining capital forecasts and longer-term operating costs closer to the recent mine plan (We had previously modeled 20% higher LOM sustaining capital and 20% higher longer term site costs beyond 2020).
The combination of the encouraging progress to date, expected meaningful operational improvements in H2/14, greater comfort level following the recent positive site visit and productive meetings with management have resulted in us increasing our target P/NAV multiple to 0.85x from 0.70x which is the primary reason for the increase in our target price.
Our 12- month target price has increased to C$15.00 from C$11.00 based on 0.85x (previously 0.70x) our operating NAVPS estimate plus working capital and other adjustments.

Gold Investor’s Handbook – Top Pick

My personal top pick is B2Gold ( BTG in the U.S. and BTO.TO) – management built and then sold Bema Gold. The company’s most recent acquisition – at $125 per ounce shows their savvy . My article / blog ( yes less than humble me )with that news is at http;//http://www.amp2012.com June 13th article

AMP Gold and Precious Metals Portfolio: The Gold Investor's Handbook

http://www.amazon.com/gp/reader/0969031939/ref=sib_dp_pt#reader-link

 

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