As we can see in the H4 chart, USDCAD is testing the support level once again. By now, the price has formed several reversal patterns, such as Doji. Considering the current downtrend, one may assume that the asset may finish the correction and then continue falling. In this case, the downside target is at 1.3434. Still, an opposite scenario suggests that the instrument may continue growing to return to the resistance area at 1.3685.
AUDUSD, “Australian Dollar vs US Dollar”
As we can see in the H4 chart, the uptrend continues. By now, AUDUSD has formed an Engulfing pattern not far from the resistance area; at the moment, the pair is reversing. The downside target is the closest support level at 0.6970. Later, the price may rebound from the channel’s downside border and continue the rising tendency. In this case, the upside target remains at 0.7070. At the same time, one shouldn’t exclude another scenario, which implies that the instrument may continue falling and return to 0.6900.
USDCHF, “US Dollar vs Swiss Franc”
As we can see in the H4 chart, after testing the support area and forming a Hammer pattern, USDCHF is reversing. The correctional target is the channel’s upside border. After completing the pullback, the pair may resume trading downwards to reach the next target at 0.9360. Later, the market may update its highs and continue falling.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The EUR/USD currency pair has become stable after a prolonged rally. At the moment, the trading instrument is consolidating near the round level of 1.1400. Investors have taken a wait-and-see attitude before today’s ECB meeting. It is expected that the regulator will keep the key marks of monetary policy at the same level. We also recommend paying attention to economic releases from the US. Positions should be opened from key levels.
The news feed on 2020.07.16:
– ECB interest rate decision at 14:45 (GMT+3:00);
– Report on retail sales in the US at 15:30 (GMT+3:00);
– Initial jobless claims in the US at 15:30 (GMT+3:00);
– Philadelphia Fed manufacturing index at 15:30 (GMT+3:00).
Indicators do not give accurate signals: the price has crossed the 50 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.
Trading recommendations
Support levels: 1.1385, 1.1365, 1.1325
Resistance levels: 1.1420, 1.1450
If the price fixes above 1.1420, further growth in EUR/USD quotes is expected. The movement is tending to the round level of 1.1500.
An alternative could be a decline in the EUR/USD currency pair to 1.1350-1.1320.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.25468
Open: 1.25731
% chg. over the last day: +0.24
Day’s range: 1.25266 – 1.25938
52 wk range: 1.1466 – 1.3516
GBP/USD quotes have been declining. The British pound has updated local lows. At the moment, the GBP/USD currency pair is consolidating. The key range is 1.2520-1.2565. The technical pattern signals a further fall in the trading instrument. We expect important economic reports from the US. Positions should be opened from key levels.
The UK has published rather optimistic data on the labor market.
Indicators signal the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram has moved into the negative zone, indicating the bearish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.2520, 1.2480, 1.2460
Resistance levels: 1.2565, 1.2590, 1.2640
If the price fixes below 1.2520, a further drop in the GBP/USD quotes is expected. The movement is tending to 1.2480-1.2460.
An alternative could be the growth of the GBP/USD currency pair to 1.2590-1.2620.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.36085
Open: 1.35095
% chg. over the last day: -0.77
Day’s range: 1.35013 – 1.35276
52 wk range: 1.2949 – 1.4668
Yesterday, aggressive sales were observed on the USD/CAD currency pair. The loonie has added more than 100 points in price against the greenback. The Bank of Canada, as expected, kept the key marks of monetary policy at the same level. The regulator does not plan to adjust interest rates for a long period of time. At the moment, USD/CAD quotes have become stable. The trading instrument is consolidating in the range of 1.3500-1.3540. We recommend opening positions from these marks.
The news feed on Canada’s economy is calm.
Indicators signal the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates a possible correction of the USD/CAD currency pair.
Trading recommendations
Support levels: 1.3500, 1.3450
Resistance levels: 1.3540, 1.3560, 1.3585
If the price fixes above 1.3540, USD/CAD quotes are expected to correct. The movement is tending to 1.3560-1.3580.
An alternative may be a decline in the USD/CAD currency pair to 1.3470-1.3450.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 107.182
Open: 106.930
% chg. over the last day: -0.28
Day’s range: 106.986 – 107.077
52 wk range: 101.19 – 112.41
The technical pattern on the USD/JPY currency pair is ambiguous. The trading instrument is consolidating. Local support and resistance levels are 106.85 and 107.10, respectively. Investors expect additional drivers. We recommend paying attention to economic reports, as well as to the dynamics of the US government bonds yield. Positions should be opened from key levels.
The news feed on Japan’s economy is calm.
Indicators do not give accurate signals: the price has crossed the 50 MA and 100 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.
Trading recommendations
Support levels: 106.85, 106.65
Resistance levels: 107.10, 107.30, 107.40
If the price fixes below 106.85, a further drop in USD/JPY quotes is expected. The movement is tending to 106.65-106.50.
An alternative could be the growth of the USD/JPY currency pair to 107.30-107.50.
By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime
Following a 6.8% contraction in the first three months of 2020, the Chinese economy managed to bounce back in the second quarter recording GDP growth of 3.2%, well above the 2.5% economists had expected. Given that China has managed to largely control the spread of Covid-19 since April, it wasn’t surprising to see an improvement in economic activity, especially given policymaker’s support through stimulus packages, lowering taxes, slashing lending rates and reducing the required reserve ratios for banks. However, the recovery did look uneven during the quarter as industrial production rose by 4.8%, while retail sales fell 3.9%. This is a clear indication that consumer confidence remains low and will be alarming if we see such a trend in the developed economies.
Investors seemed to put more weight on the consumption data and have pulled out of riskier assets. Asian equities have declined, led by the Shanghai composite which has shed more than 2.3% at the time of writing. European stocks have also retreated from yesterday’s rally and US indices are pointing towards a lower open.
Another risk event that may drive volatility later this afternoon is the ECB meeting. After raising its Pandemic Emergency Purchase Program by EUR600 billion to EUR1.35 trillion in June, bond purchases by the central bank declined significantly in the final week of that month. While we do not expect to see a change to the program or any of the monetary policy tools, the ECB President Christine Lagarde needs to reassure market participants that more tools will be deployed if required. After all, central banks have been the key driver of the equity rally and any signs of a retreat will hurt sentiment.
The Euro’s recent steep rebound will also be tested. After rising to a four-month high yesterday, the single currency failed to retest the March peak of 1.1492. While the ECB meeting may turn out to be fairly quiet, Friday’s EU Summit is likely to determine whether we see another leg higher or further retreat from the critical 1.15 level. The focus will be on the ambitious EUR750 billion recovery fund and how united the EU leaders are towards the union. Approval of billions in fiscal stimulus will send a strong signal to markets and encourage further long positions in EURUSD, otherwise expect the currency pair to remain capped around 1.15.
Wall Street investors will continue to monitor corporate earnings. The earnings beats from big banks like Goldman Sachs, JP Morgan and Citi were all impressive. However, it was the surge in trading activity that led to such performance, rather than other traditional banking services which the economy relies on. We still expect to see earnings decline by around 40% for the second quarter, but it’s what executives say about the upcoming quarters that matter the most and so far, we still have a gloomy outlook. The latest surge in equities was driven by hopes for a coronavirus vaccine, but as we have seen, such news is short-lived as the S&P 500 has so far failed three times to hold on to positive territory for the year. That is a negative sign for a bull market which has been driven by a narrow group of stocks.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Recent US economic data were positive: industrial production grew faster than expected in June, and consumer prices together with capacity utilization rose more than expected. Thus industrial production expanded 5.4% over month after 1.4% increase in May when a 4.5% growth was forecast, consumer prices rose 0.6% over month after 0.1% decline in May, and capacity utilization (percentage of available resources utilized by manufacturers, mines, and utilities) rose to 68.6% in June from 65.1% in May. And on monetary front Federal Reserve Governor Lael Brainard called for sustained large scale asset purchases by the US central bank to support the recovery. Positive US economic data are bullish for SP500.
The Dollar will be on focus as investors digest a slew of fresh insights into the state of the global economy.
The Dollar Index’s (DXY) support level at 95.7 has proven its worth for the time being, as prices rebounded off that line like it did in June, to climb back up towards the 96.0 psychological level at the time of writing. However, should markets feel more optimistic about the world’s ability to recover from the pandemic, based on today’s economic releases, a sustained presence below 95.7 could eventually carve a path towards the next support level at 94.6 on the daily timeframe.
Meanwhile, China is showing the world its way past the economic pains of the pandemic.
In the second quarter, the world’s second largest economy posted a positive surprise with a stellar 3.2 percent year-on-year expansion, which exceeded market expectations, while also standing in stark contrast to the 6.8 percent year-on-year contraction in the first three months of 2020. China’s June industrial production climbed by 4.8 percent, in line with market forecasts. However, domestic demand has yet to find a firm footing, as June’s retail sales contracted by 1.8 percent. Still, the retail sales data suggests that the worst is now over, and domestic consumption should eventually be restored to growth, aided by the support from policymakers.
Global investors will next turn their attentions to the European Central Bank’s meeting today. While the ECB is not expected to make any major adjustments to its policy settings, its conveyed outlook on the continent’s economy however could have a major say on market sentiment, perhaps even feeding into the Dollar index’s performance. Keep in mind that the Euro accounts for 57.6 percent of the Dollar index, which means the Euro holds a large sway over DXY.
The US weekly jobless claims, which have taken on greater significance amidst the pandemic, is set to emphasize the plateauing recovery in the US jobs market. To be clear, there have been very encouraging but nascent signs that the world’s largest economy is slowly finding its feet in the post-pandemic era, from the non-farm payrolls reports of the past two months, to yesterday’s better-than-expected June industrial production data.
Still, investors will need a steady flow of positive economic readings, including from today’s jobless claims figures and US June retail sales, in order to justify further gains in riskier assets, at least from a fundamental perspective. Although US equity futures are edging lower at the time of writing, either the economic data announcements or the Wall Street earnings releases today have the ability to push risk sentiment higher, potentially at the expense of the Greenback.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Equity markets are retreating currently ahead of European Central Bank policy meeting today with no change in policy expected after a series of stimulus measures to mitigate the crisis effects. US data are expected to yet again show over million Americans lost jobs last week while the declining trend for new unemployment benefits applications persisted.
Forex news
Currency Pair
Change
EUR USD
+0.24%
GBP USD
+2.12%
USD JPY
+0.07%
The Dollar weakening has paused currently ahead of US Labor Department report expected to show 1.25 million Americans likely sought unemployment benefits over the last week. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.2% Wednesday despite a Federal Reserve report industrial production jumped by 5.4% over month in June after 1.4% gain in May. Both EUR/USD and GBP/USD continued climbing yesterday with both pairs lower currently. The European Central Bank is expected to hold interest rates and its quantitative easing program unchanged today ahead of a European Union leaders meeting to discuss the proposed 750 billion euro recovery fund. USD/JPY continued sliding while AUD/USD continued climbing yesterday with the dynamics reversed for both pairs currently.
Stock Market news
Indices
Change
Dow Jones Index
+0.18%
GB 100 Index
+0.17%
Hang Seng Index
-2.31%
Futures on three main US stock indexes are down currently after a bullish session on Wednesday. Earnings season continues with Bank of America, Morgan Stanley and Netflix reporting quarterly results today. Stock indexes in US ended higher yesterday after better than expected corporate earnings reports so far for the second quarter: the three main US stock indexes recorded gains ranging from 0.6% to 0.9%. European stock indexes are retreating currently after a rally Wednesday led by travel shares. Asian indexes are down today led by Shanghai Composite after reports US is considering a sweeping travel ban on Chinese Communist Party officials, following travel restrictions by China on US lawmakers recently imposed. Markets ignored the positive report China’s economy grew 3.2% in annual terms in Q2, after a 6.8% contraction in the previous quarter.
Commodity Market news
Commodities
Change
Brent Crude Oil
-0.41%
WTI Crude
-0.62%
Brent is edging lower today. Prices advanced Wednesday supported by the US Energy Information Administration report that US crude oil inventories fell 7.5 million barrels last week. The decision by the Organization of the Petroleum Exporting Countries and allied producers, collectively known as OPEC+, to start easing record production cuts of 9.7 million barrels per day to 7.7 million barrels per day starting in August through the end of the year didn’t have much impact on prices. The US oil benchmark West Texas Intermediate (WTI) futures gained: August WTI added 2.3% but is down currently. September Brent crude closed 2.2% higher at $43.79 a barrel on Wednesday.
Gold Market News
Metals
Change
Silver
-0.21%
Gold prices are edging lower today. August gold rose 0.02% to $1813.80 an ounce on Wednesday.
Note: This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.
H.C. Wainwright & Co. raises GoldMining’s target price after increasing its long-term gold price forecast.
In a July 13 research note, analyst Heiko Ihle reported that H.C. Wainwright & Co. increased its target price on GoldMining Inc. (GOLD:TSX; GLDLF:OTCQX) to CA$7 per share from CA$6.50 after upwardly revising its precious metals price forecasts. GoldMining’s current share price is about CA$2.26.
Based on macroeconomic improvements in the market, H.C. Wainwright increased its long-term gold price projection to $1,700 per ounce ($1,700/oz) from $1,575/oz and its silver price forecast to $18/oz from $17.50/oz. These estimates are below the current spot prices for gold at $1,800/oz and silver at $18.70/oz, Ihle pointed out, “as we acknowledge the possibility for short and midterm metal price fluctuations.”
Also, Ihle highlighted that GoldMining is “boosting [its] global resource base through meaningful acquisitions.” Most recently, the junior resource company purchased the Almaden gold project in Idaho and quickly thereafter, in June, announced a resource estimate for it.
It “outlined Almaden’s near surface characteristics, which could facilitate favorable economics given the reduced need for resource conversion infill drilling programs,” Ihle noted.
Before preparing a preliminary economic assessment of Almaden, however, the Vancouver mining firm intends to conduct metallurgical and other work assessing various processing scenarios.
Ihle noted, “Following the recent creation of its new gold streaming and royalty subsidiary, GoldMIning could benefit from a re-rating as royalty companies tend to trade at a premium to producing or exploration firms.” H.C. Wainwright rates GoldMining a Buy.
Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: GoldMining. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from H.C. Wainwright & Co., GoldMining Inc., Company Update, July 13, 2020
I, Heiko F. Ihle, CFA, Tyler Bisset and Marcus Giannini, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analysts household has a financial interest in the securities of GoldMining, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of June 30, 2020, neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of GoldMining, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from GoldMining, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from GoldMining, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in GoldMining, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.
Shares of INmune Bio reached a new 52-week high after the company reported interim data from its Phase 1b study of XPro1595 that demonstrated decreased neuroinflammation in Alzheimer’s patients.
Clinical-stage immunology company INmune Bio Inc. (INMB:NASDAQ), which develops treatments that utilize a patient’s innate immune system to combat disease, yesterday announced interim clinical data from the Phase 1b study of its leading drug candidate, XPro1595, that demonstrated decreased neuroinflammation in Alzheimer’s patients. The firm reported that the interim results showed that “treatment with XPro1595 decreases white matter free water, a biomarker of neuroinflammation measured by MRI.”
The company advised that it compared biomarker data gathered from six patients treated with XPro1595 over 12 weeks with data obtained from 25 Alzheimer’s patients from the Alzheimer’s Disease Neuroimaging Initiative (ADNI) database. The firm indicated that “after 12 weeks whole brain inflammation increased by 5.1% in the ADNI patients compared to an increase of 1.7% and a decrease of 2.3% in patients treated weekly with 0.3mg/kg or 1.0mg/kg of XPro1595, respectively.” Notably, the company mentioned that greater in depth analysis revealed that in patients with Arcuate Fasciculus who were treated with XPro1595, a 40.6% reduction in neuroinflammation was achieved.
INmune Bio’s Director of Neuroscience CJ Barnum, Ph.D., commented, “We are extremely encouraged by these findings at such an early stage in our clinical trial…Not only do we see a clear reduction in neuroinflammation, but we also know where in the brain this is occurring, which may inform us on the domains of cognition that might be affected.”
“The preliminary results from INmune Bio’s Phase 1b study add to the growing enthusiasm for tackling neuroinflammation in the treatment of Alzheimer’s disease. Furthermore, MRI assessment of free water content in the brain holds promise as an exciting surrogate marker for tracking the impact of such treatment,” stated Sharon Cohen, M.D., FRCPC, a neurologist and Medical Director of Toronto Memory Program who, the company noted, was not involved with the clinical trial.
The company explained that “XPro1595 is a next-generation inhibitor of tumor necrosis factor that may possibly have beneficial effects in patients with Alzheimer’s disease by decreasing neuroinflammation.”
XPro1595 is currently being evaluated in Phase 1b clinical trial in Alzheimer’s disease patients who have biomarkers of inflammation to determine if neutralizing soluble TNF can decrease those biomarkers of neuroinflammation. The study includes adults who are greater than 18 years old who have been diagnosed with probable Alzheimer’s disease. The study’s objective is to determine the safety and ability of XPro1595 to reduce neuroinflammation using a combination of biomarkers of inflammation. The study will also attempt to identify the most effective XPro1595 dosage to be used in a larger future Phase 2 disease modification study. The firm stated that clinical trials are currently underway at several locations across Australia.
INmune Bio is a clinical-stage biotechnology company headquartered in La Jolla, Calif. The firm is engaged in developing treatments that target the innate immune system to fight disease. The firm’s DN-TNF product platform is presently being developed for Alzheimer’s (XPro595), cancer (INB03), COVID-19 complications (Quellor) and NASH (LIVNate) and its Natural Killer Cell Priming platform is targeted at priming patients NK cells to eliminate minimal residual disease in patients with cancer.
INmune Bio Inc. started off the day with a market capitalization of around $95.8 million with approximately 10.82 million shares outstanding. INMB shares opened nearly 100% higher today at $17.59 (+$8.74, +98.76%) over yesterday’s $8.85 closing price and reached a new 52-week high price this morning of $24.42. The stock has traded today between $13.57 and $24.42 per share and is currently trading at $17.65 (+$8.80, +99.44%).
Disclosure: 1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. 6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
In early July, gold and silver each broke out to fresh multi-year highs. The yellow metal is within striking distance of new all-time highs and the headlineworthy figure of $2,000/oz.
The white metal, meanwhile, has a lot of catching up to do. And as it does, the gains in percentage terms could be explosive.
Silver has already packed on 60% since its March panic-selling low. Importantly, it has shown leadership by narrowing its ,historically large discount to the gold price.
Also showing leadership are the precious metals miners. The notoriously volatile mining sector attracts speculators and smart-money insiders alike. It often serves as a leading indicator for the metals.
Since bottoming in March, the HUI gold mining stock index surged over 90% into the dog days of summer. If gold miners begin to underperform or diverge negatively from the gold price, that would be a warning sign for the gold market. It would suggest a significant pullback is likely coming.
So far since the March lows for miners and precious metals, we have not seen any such warning signs.
Risks to Fed-Fueled Bull Markets
Of course, there are always risks – both known and unknown – to any bull market advance. Virus risks and political risks heading into election season could drive renewed market volatility.
Will the U.S. stock market be susceptible to another epic plunge by the fall? Possibly.
The Federal Reserve and the rest of the “Plunge Protection Team” will certainly do their best to keep asset markets propped up. At some level, they will almost certainly succeed. There is a strong correlation between growth rates in the Fed’s balance sheet and directional moves in the S&P 500.
The question is: If the Fed prevents a wave of bank failures and municipal bankruptcies while jacking the stock market up to new all-time highs, then at what cost?
There ain’t no such thing as a free lunch – not even for Wall Street.
The costs will be paid largely by toilers in the real economy who see their costs of living go up as the real value of their wages falls. The costs will also be paid by savers and bondholders who will earn next to nothing in interest as the real value of their dollardenominated holdings falls.
Inflation Threatens to Heat Up
Inflation rates have the potential to surge in the months ahead, especially if coronavirus-depressed global economic demand recovers.
The Producer Price Index has yet to show any broad rises in wholesale prices.
But disrupted supply chains for a host of commodities and manufactured products are showing signs of stress and instability.
Consumers are feeling the pain of rising food (especially meat and dairy) costs. Pent up demand for discretionary consumer goods could soon trigger price spikes in other categories as well.
Asia and Europe appear to be faring better than the U.S. in terms of limiting the spread of the virus.
Their economies may thus be positioned to recover more strongly.
As U.S. COVID-19 cases continue to rise (even as the case fatality rate falls), even more state-by-state economic (re)lockdowns may occur. That means more calls for economic bailouts and stimulus measures – which, if enacted, would further exacerbate upward pressures on deficits and money printing.
The U.S. dollar is vulnerable to being debased – and possibly even ditched by large foreign holders including China. A bearish outlook for the U.S. dollar implies a bullish case for hard money – gold and silver.
The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.
A Red Cloud Securities report discusses why the firm is “encouraged by Vox Royalty’s pace and disciplined growth strategy.”
In a June 30 research note, Red Cloud Securities analyst Derek Macpherson reported that Vox Royalty Corp. (VOX:TSX.V) agreed to acquire a 1% nonsmelter returns (NSR) royalty on certain Bulong gold project concessions in Western Australia for AU$750,000. The deal is expected to close by the end of September 2020.
Macpherson noted that this is the final of the four acquisition agreements the company, before going public, said it intended to enter into. Vox is acquiring the Bulong royalty from an auto parts maker, RPM Automotive Group. The total consideration to be paid by Vox consists of AU$400,000 in cash and AU$350,000 worth of shares, about 100,000.
“We are encouraged by Vox’s pace and disciplined growth strategy,” wrote Macpherson. “These acquisitions from nontraditional vendors highlight what makes Vox a unique new entrant in the royalty space.”
Macpherson reviewed the Bulong NSR royalty and related transaction. He highlighted that the royalty is on an asset that is close to production. The next step is a feasibility study, which is expected from Black Cat Syndicate, the project’s owner/operator, in Q3/20 on the Myhree deposit. Myhree has a total resource of 1,427,000 tons at 3.4 grams per ton gold, containing 155,000 ounces of gold, and resource expansion potential.
“The high-grade tenure of this open-pit deposit makes it amendable to toll treating, providing a relatively short path to production,” added the analyst.
The royalty encompasses nine Bulong property tenements, including four mining leases, four prospecting leases and one exploration license, which span 82 square kilometers and are within driving distance of five mills.
Macpherson pointed out that this Toronto-based company closed a CA$13.75 million financing earlier this year and, thus, is well funded.
Due to the significant impact of acquisitions on small companies, Red Cloud has not yet determined a valuation, target price or rating for Vox, Macpherson indicated and added, “We expect the company’s share price to perform in line with the quality of its acquisitions.”
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Disclosures from Red Cloud Securities, Vox Royalty Corp., Corporate Update, June 30, 2020
Part of Red Cloud Securities Inc.’s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
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