The bearish sentiment prevails on the EUR/USD currency pair. Quotes have updated local lows again. Demand for risky assets is still quite low amid growing concerns about the beginning of the second wave of the coronavirus pandemic. The World Health Organization has reported a record increase in the number of COVID-19 virus cases in the world. At the moment, the key support and resistance levels are 1.1170 and 1.1220, respectively. A further decline in the trading instrument is possible. Positions should be opened from key levels.
The Economic News Feed for 2020.06.22:
At 17:00 (GMT+3:00), data on existing home sales will be published in the US.
Indicators do not give accurate signals: the price has crossed 50 MA.
The MACD histogram is near the 0 mark.
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: 1.1170, 1.1140, 1.1100
Resistance levels: 1.1220, 1.1260, 1.1290
If the price fixes below the level of 1.1170, a further drop in EUR/USD quotes is expected. The movement is tending to 1.1140-1.1120.
An alternative could be the growth of the EUR/USD currency pair to 1.1250-1.1280.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.24180
Open: 1.23435
% chg. over the last day: -0.55
Day’s range: 1.23353 – 1.24283
52 wk range: 1.1466 – 1.3516
GBP/USD quotes have become stable. The British pound is currently consolidating. There is no defined trend. The key support and resistance levels are 1.2370 and 1.2455, respectively. Financial market participants expect additional drivers. Today we recommend paying attention to economic reports from the UK. A further fall in GBP/USD quotes is possible. Positions should be opened from key levels.
The news feed on the UK economy is calm.
Indicators do not give accurate signals: the price has crossed 50 MA.
The MACD histogram is near the 0 mark.
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: 1.2370, 1.2335, 1.2300
Resistance levels: 1.2455, 1.2510, 1.2565
If the price fixes below 1.2370, a further drop in GBP/USD quotes is expected. The movement is tending to the round level of 1.2300.
An alternative could be the growth of the GBP/USD currency pair to 1.2500-1.2550.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.36010
Open: 1.36128
% chg. over the last day: +0.02
Day’s range: 1.35596 – 1.36299
52 wk range: 1.2949 – 1.4668
The loonie continues to be traded in a prolonged flat. There is no defined trend. At the moment, the key support and resistance levels are 1.3550 and 1.3625, respectively. Investors expect additional drivers. Today, we recommend paying attention to economic releases from the US, as well as the dynamics of “black gold” prices. Positions should be opened from key levels.
The news feed on Canada’s economy is calm.
Indicators do not give accurate signals: the price has crossed 50 MA and 100 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the oversold zone, the %K line is below the %D line, which gives a weak signal to sell USD/CAD.
Trading recommendations
Support levels: 1.3550, 1.3510, 1.3455
Resistance levels: 1.3625, 1.3680
If the price fixes below 1.3550, USD/CAD quotes are expected to fall. The movement is tending to the round level of 1.3500.
An alternative could be the growth of the USD/CAD currency pair to 1.3660-1.3690.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 106.941
Open: 106.775
% chg. over the last day: -0.08
Day’s range: 106.746 – 107.011
52 wk range: 101.19 – 112.41
The USD/JPY currency pair continues to be traded in a prolonged flat. There is no defined trend. The key support and resistance levels are still: 106.65 and 107.15, respectively. Financial market participants expect additional drivers. We recommend paying attention to the dynamics of 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 50 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the neutral zone, the %K line has started crossing the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 106.65, 106.00
Resistance levels: 107.15, 107.65, 108.20
If the price fixes below 106.65, USD/JPY quotes are expected to fall. The movement is tending to the round level of 106.00.
An alternative could be the growth of the USD/JPY currency pair to 107.60-107.90.
Early in another week of June, EUR/USD is slightly correcting, which is quite logical after several “negative” trading sessions in a row. On Monday morning, the major currency pair is trading at 1.1200.
Moody’s kept the long-term rating of the USA at AAA “stable” and said that the US economic security was self-explanatory, while the USD was and would be the strongest global currency. This statement should have supported the American currency but it didn’t happen.
However, it appears that market players are still in the mood for risks, that’s why their interest in the USD as a “safe haven” asset is rather low.
In addition to that, investors were very closely watching the press conference by the US Fed Chairman Jerome Powell, who said the American economy would undoubtedly recover but it would take much time. However, markets don’t like to wait, that’s why his words are counting against the USD.
As we can see in the H4 chart, EUR/USD is moving inside the descending channel. It should be noted that earlier the pair broke 1.1222 and formed a downside continuation pattern. At the moment, the price is trying to correct and return to 1.1222. After that, the instrument may fall to reach the target of the third descending wave at 1.1100. Later, the market may correct to test 1.1222 from below and then resume trading downwards to reach 1.1000. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is falling under 0 in the histogram area. After the price reaches 1.1100, the line may leave the area and grow towards 0.
In the H1 chart, EUR/USD is correcting towards 1.1222 and may later fall to reach 1.1170, thus forming a new consolidation range between these two levels. If later the price breaks 1.1170 to the downside, the market may resume the downtrend with the short-term target at 1.1100. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving above 80, thus implying completion of the correction and further decline towards 50 or even 20. After the line breaks 50, the price chart may boost its decline.
Disclaimer
Any predictions contained herein are based on the author’s particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime
After declining 5.4% from the peak reached on May 18, gold is again flirting with the key resistance level and recent multi-year high of $1,764. The resurgence in the precious metal price has coincided with a record increase in global coronavirus cases and as of Friday, the SPDR Gold Trust holding saw a rise in net inflows of 2%.
While many investors do not like gold as an asset class given that it pays no interest, those same investors may find the precious metal a better alternative to many other asset classes.
The stock market rally is clearly losing steam and there isn’t much incentive to keep the bull market running much longer. Equity prices have already discounted the actions taken by central banks across the globe and another big round of stimulus is not likely at this stage. Assuming the S&P 500 remains in the range of 3,000 to 3,200 until year end, it will be trading at a price to earnings multiple of 24 to 26 times for 2020, and 19 to 20 times for the end of 2021. That is considered the most expensive market since the dot com bubble. This isn’t to say that equities are due a sharp correction, but to continue moving higher they need a fundamental positive surprise on two fronts, economic and earnings, which is currently far from the base case scenario.
What is more important for gold is where fixed income markets are heading next. Today the US 10-year real yields are trading at -0.61%, and when excluding the one day drop to -0.98% on March 9, that’s the lowest level for real yields since 2013, the year when the Federal Reserve delivered a huge shock to financial markets by revealing their intention to withdraw stimulus.
Real yields in Europe are even lower than those in the US, especially in Germany and that is terrible news for people approaching retirement as it seems they are now assured of a pension that will fall in value if they don’t take a riskier approach. And with the trillions of dollars in government and central bank stimulus since the start of Covid-19, we shouldn’t be surprised if inflation begins edging higher. That will be another hit for savers.
The notion that central banks will follow Japan in targeting yield curves is growing. Keeping short and medium-term yield maturities under pressure may sound like good news for risk taking, but again the price will be paid by the elderly as real yields fall further into negative territory. This should make gold a great hedge against negative yields, devaluation of currencies, an unexpected surge in inflation or deflation, poor economic performance and shocks in equity markets.
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.
After a weak start into the last week of trading, the Fed helped the DAX30 push back above 12,000 points last Monday. Over the last days, the German index has stabilised between 12,170/200 and 12,450/500 points.
The announcement that the Fed is to begin buying a broad portfolio of US corporate bonds and Equities, intending to further narrow the gap in US central bank buying, underlines once again why traders shouldn’t “fight the Fed”, we consider chances of a bullish breakout elevated.
This breakout activates a projected target around 12,750 and above, around 12,900 points in the coming days.
Still, it needs to be seen whether Equities can continue to trade higher given the fact that the only bullish driver seems to be central bank liquidity.
And with rising fears around a second wave Coronavirus (Beijing started to once again close schools last Tuesday, while City Government raised their COVID-19 Emergency Response Level from III to II), markets could be hit by broader selling pressure again in the days to come.
That said, the technical main focus on the downside if we get to see a break below 12,170/200 points would initially be found on the projected and psychologically relevant region around 12,000 points, a stint lower activates the region around 11,800 points:
Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between June 2, 2020, to June 19, 2020). Accessed: June 19, 2020, at 10:00pm GMT
Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between March 6, 2019, to June 19, 2020). Accessed: June 19, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.
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Global investors are set to be given a healthy dose of reality this week, which could help them firm up their outlooks for the global economy. Until there is greater clarity on the outlook of the global economy, fundamental-focused investors are likely to continue treading water, unless jolted by a major risk event. Safe havens such as Gold are expected to remain well bid amid the expected wait-and-see sentiment in the markets, with Bullion attempting to reach the $1780 line for the first time since 2012.
The purchasing managers indexes (PMI) of major economies, which measure the health of the manufacturing and services sectors of the respective countries, are due to be released in the near future. On Tuesday, the June PMIs for the US, UK, Euro-area, and Japan are expected to show that the worst of the coronavirus is now in the past, with the Markit US manufacturing PMI forecasted to mark a return to expansion .
Market participants around the world would also have to monitor this week’s data releases on US home sales, jobless claims, as well as personal income and spending. These economic prints would speak to the overall state of US consumption, and whether it’s been able to take advantage of the tremendous amount of support measures in reviving the US economy. Should any of these data unveil a deeper-than-expected hit from the global pandemic that could translate into a long and dreary recovery, the ensuing risk aversion could aid the Dollar’s attempted recovery seen over recent weeks.
Global investors will also be benchmarking their outlooks against the International Monetary Fund’s latest growth projections, which are due to be released on Wednesday. Back in April, the IMF forecasted a global contraction of three percent in 2020, which would mark the steepest recession in almost a century. The IMF is expected to turn in a gloomier forecast this week, although such expectations have mostly been priced in. In the event that the IMF offers hopeful cues that the worst is now over, that may translate into some risk-on activity in global markets. A sustained recovery for the global economy is imperative to fundamentally justify the gains seen in riskier assets since March.
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.
Global equities are mixed currently after a choppy trading Friday. Investors are cautious after reports of rising coronavirus cases in US and Brazil provide support to bears who contend the recent market rebound has been too fast.
Forex news
Currency Pair
Change
EUR USD
+0.11%
GBP USD
+0.05%
USD JPY
+0.28%
The Dollar strengthening has halted . 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, gained 0.1% Friday as the US Bureau of Economic Analysis reported US current account deficit narrowed by 0.1% in the first quarter. Both GBP/USD and EUR/USD continued falling Friday. The dynamics has reversed for both pairs currently. Both AUD/USD and USD/JPY continued falling on Friday with both pairs having reversed their sliding currently.
Stock Market news
Indices
Change
Dow Jones Index
-1.03%
GB 100 Index
+0.52%
Nikkei Index
-0.68%
Hang Seng Index
-0.12%
US equity markets are pulling back today after ending mostly lower on Friday after Apple said it will re-close some stores due to rising cases in some states. The three main US stock indexes recorded daily returns ranging from -0.8% to +0.03% while booking weekly gains ranging from 1% to 3.7%. European stock indexes are retreating currently after ending higher on Friday as European Union’s 27 governments started negotiations over a proposal for a 750 billion euro ($841 billion) recovery fund. Asian indexes are mixed today led by Hong Kong’s Heng Seng index as China suspended some Tyson chicken imports after rising coronavirus cases at Arkansas plant despite reports Beijing intends to ramp up buying US agricultural products as China has only reached 13% of the 2020 target under the phase one deal in the first four months of the year.
Commodity Market news
Commodities
Change
WTI Crude
+0.22%
Brent is edging higher today. Oil prices ended higher last session buoyed by reports China will increase buying of US ethanol in line with a phase one trade deal signed at the start of this year. The US oil benchmark West Texas Intermediate (WTI) futures ended solidly higher Friday: July WTI rose 2.3% and is higher currently. August Brent crude closed 1.6% higher at $42.19 a barrel on Friday.
Gold Market News
Metals
Change
Gold
+0.19%
Gold prices are extending gains today. August gold rose 1.3% to $1753 an ounce on Friday.
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.
Bob Moriarty of 321gold awaits results from this explorer’s drill program.
The market was waiting for definitive news from Blackrock Gold Corp. (BRC:TSX.V; BKRRF:OTCMKTS) about their upcoming drill program at Tonopah West. On the 17th of June the market got it and liked it a lot. The shares were up 18% on the day and 50% over the past three weeks.
Investors have been waiting patiently for assay results coming out from Blackrock’s Silver Cloud project. Some were in for assay six weeks ago and have yet to be released.
Management tells me the next big news will be coming from their Tonopah West Silver project where the company plans 16 RC holes for a total of 7,285 meters of drilling. That drill program has started and since it is RC drilling results could come out as early as the 1st or 2nd week of July.
Between 1900 and 1950 the Tonopah district produced 174 million ounces of silver and 1.8 million ounces of gold at a grade equivalent of 2,125 g/t Ag with a value today of about $1160 USD for the rock. Blackrock is being pretty smart with their drill plan. They plan on punching down where the greatest grades and thickness were from historical reports. It’s all well and good to determine what the total tonnage and grade is for the deposit but investors buy shares for the sizzle, not the steak.
If they hit over 2 kilo silver equivalent over a few meters they will look like a hero. If they don’t. . .
Blackrock is an advertiser. I have participated in several private placements so naturally I am biased. Their website is pretty good and presentation excellent.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
Disclosure: 1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Blackrock Gold. Blackrock Gold is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector. 2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 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.
Shares of Alpine Immune Sciences set a new 52-week high after the company reported that it entered into an exclusive worldwide option and license agreement with AbbVie Inc. to develop and commercialize ALPN-101.
Under the terms of the agreement, Alpine Immune Sciences will grant AbbVie option to license exclusive worldwide rights for ALPN-101. This will enable AbbVie to build upon its continued efforts to develop novel therapies in immunology. Alpine Immune Sciences will receive $60 million in an upfront cash payment and is additionally eligible to receive up to $805 million for exercise of the option and if certain success-based development, regulatory and commercial objectives and milestones are met.
The report indicated that Alpine Immune Sciences will be conducting a phase 2 study in systemic lupus erythematosus during the option period. Upon exercise of the option, AbbVie would then conduct all future clinical development, manufacturing and commercialization activities for ALPN-101.
The company explained that “CD28 and ICOS are key costimulatory molecules that likely play critical roles in multiple autoimmune and inflammatory diseases and that ALPN-101 is a potent inhibitor of both CD28 and ICOS pathways with demonstrated efficacy in multiple preclinical disease models, superior to blockade of either pathway alone.”
The company’ Executive Chairman and CEO Mitchell H. Gold, M.D., commented, “We are very pleased to partner ALPN-101 with AbbVie, a world leader in the development and commercialization of innovative immunology therapies…AbbVie is an ideal partner for ALPN-101, with the therapeutic area expertise, R&D commitment, and global resources needed to maximize ALPN-101’s potential for patients suffering from autoimmune diseases. Today’s agreement validates our unique Directed Evolution platform that has yielded multiple product candidates, including ALPN-101. We look forward to working with our colleagues at AbbVie to potentially transform clinical outcomes in systemic lupus erythematosus, a disease with currently few appealing treatment options.”
AbbVie’s SVP and Chief Scientific Officer Tom Hudson, M.D., remarked, “AbbVie’s expertise in Immunology has led to remarkable breakthroughs in the treatment of autoimmune diseases…ALPN-101’s dual mechanism of action has compelling potential as a next-generation treatment in systemic lupus erythematosus and other autoimmune diseases. We are excited to partner with the team at Alpine on the development of this novel therapeutic.”
Alpine Immune Sciences is a clinical stage biopharmaceutical company headquartered in Seattle. The firm is engaged in the development of multifunctional immune therapeutics to improve patients’ lives using unique protein engineering technologies.
AbbVie is a global biopharmaceutical and healthcare company based in North Chicago, Ill., with a market cap of greater than $168 billion. The company’s products address key therapeutic areas including eye care, gastroenterology, immunology, neuroscience, oncology, virology and women’s health, as well as products and services throughout its Allergan Aesthetics portfolio.
Alpine Immune Sciences started the day with a market capitalization of around $86.6 million with approximately 18.59 million shares outstanding. APLN shares opened more that 200% higher today at $14.05 (+$9.59, +215.02%) over yesterday’s $4.46 closing price and reached a new 52-week high price this morning of $15.00. The stock has traded today between $8.70 and $15.00 per share and is currently trading at $12.72 (+$7.86, +161.29%).
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.
– The economic pressures and concerns within the global markets have not abated just because the US Fed has ramped up the printing presses. Inversely, the stock market price levels may be elevated based on a false expectation of a quick recovery and of future expectations that may be very unrealistic.
In terms of technical analysis, Gold has set up a very interesting sideways basing pattern after recently breaking above a major resistance channel near $1720. Our research team believes the recent base in Gold, near $1720 to $1740 is setting up just like the 2005 to 2007 peak in the US stock markets – just before the Credit Crisis hit in 2008. We believe the similarities of the current and past events, in price and in technical/fundamental data, are strangely similar.
An underlying asset/economic class had recently experienced a stupendous bullish rally. This euphoric rally phase was brought on because the US Fed and global markets were running high on cash and credit – heck, everyone was. The “no fear” mentality was running wild, and so was the market. Suddenly, it appeared that the credit markets were seizing up and that interest rates had nearly doubled or tripled overnight as banks and lending institutions reacted to the US Fed raising rates. At that point, the catalyst for the Credit Crisis had already been set up – much like what is happening today.
SPY – SPDR S&P500 ETF Trust Weekly Chart
This SPY chart highlights the similarities between 2006-08 and now. It may be difficult for you to see on this compressed chart, but the price pattern we’ve experienced over the past 2+ years is very similar to the price pattern that set up the peak in the markets near October 2007. This time, volatility appears to be 3x or 4x the levels from 2006/07 – yikes.
Gold to Silver Price Ratio Weekly Chart
The current level relating the price of Gold to the price of Silver is 98.2 – an extremely high historical level. There has never been a time like this in history where Gold has achieved this high of a price ratio compared to Silver. It is very likely that Gold has rallied to these current levels as a “global hedge against risk” and that Silver has simply been overlooked as a secondary asset. Even though supply for Gold and Silver has been decreased over the past 6+ months because of demand and the COVID-19 virus, we believe the current pricing relationships present a very clear opportunity for skilled technical traders.
Traditionally, the Gold to Silver ratio will likely fall to levels below 65 to normalize the price disparity. This suggests that Silver may see a 2x or 3x rally over the next 12+ months and Gold would likely see a 60% to 150% rally from current levels.
Gold Futures Weekly Chart
This Gold Futures Weekly Chart highlights Fibonacci Expansion ratios from similar pre-expansion price ranges. The first measures the advance of Gold from 2001 to 2008 – the peak of the 2008 markets. The second measures the advance of Gold from 2015 to the recent peak (2020) – the presumed peak in the US stock markets
The overlapping Fibonacci expansion levels on this chart paints a very clear picture that Gold may attempt to target certain levels should it begin a much broader upside price move…
_ $1950 – Key initial target level and could become minor resistance.
_ $2250 – The next major target level representing a 2x expansion from the initial 2008 price rally.
_ $2731 – This key level is like to become the bigger target for 2020. Our research team believes the alignment of this level with the current price expansion in Gold sits perfectly as the next upside price target.
_ $3200 – This upper price target shows some importance – yet it is still quite far away from current price levels. Still, it is a valid upside price target.
We suggest taking a moment to review some of our earlier research posts related to Precious Metals and Gold…
June 3, 2020: Gold & Silver “Washout” – Get Ready For A Big Move Higher
May 28, 2020: Shortage Of Physical Gold & Silver
May 19, 2020: Gold. Silver, Miners Teeter On The Brink Of A Breakout
GLTR Precious Metals ETF Daily Chart
This Daily GLTR chart highlights the current FLAG formation that has setup in price and is about to breakout/breakdown. Our researchers believe the obvious breakout move to the upside is going to happen given the current global economic environment and the fact that we are looking at Q2 data within 10+ days that will likely shock many investors. Notice that our Fibonacci price modeling system has drawn UPPER GREEN and LOWER RED triggers levels well above and below the current FLAG APEX level. This adaptive p[rice modeling system attempts to track price rotation and ranges while adapting internal factoring levels to identify proper Trigger and Target levels. At this point, GLTR must move above $85 to trigger a new BULLISH TREND or below $77.50 to trigger a new BEARISH TREND.
GLTR Precious Metals ETF Weekly Chart
This Weekly GLTR chart highlights a 100% Fibonacci expansion range from the previous upside price rally levels. Should GLTR breakout to the upside and complete a 100% measured upside price move, the next target level for GLTR would be $94.70 – nearly 15.5% higher.
This is an incredible opportunity for skilled technical traders if they understand how the precious metals and miners sectors are aligning for a bigger move higher. There has rarely been a time in history where Gold and Silver have been this depressed in terms of pricing when the global economy and stock markets have been this inflated/elevated. It really may be the “opportunity of a lifetime”.
We believe the next 15 to 30+ days will prompt a “melt-up” in Gold to levels near $2000 to $2100. Silver will likely rally to levels above $25 to $26 over that same span of time. Once the bigger price breakout begins in Silver, attempting to normalize to the advanced price levels in Gold, Silver will begin to rally much quicker than Gold prices. We believe that will happen as Gold nears and breaches the $2000 price level.
For skilled technical traders, this extended price move in Precious Metals, Miners, and a host of other sectors presents a very clear opportunity to time and execute some very exciting trades. We had been warning our friends and followers for over 18+ months now that the end of 2019 and all of 2020 was going to be incredible years for skilled traders. Don’t miss the bigger moves – they are about to unfold over the next 30 to 60+ days and continue well into 2022.
In short, I hope you glean something useful from this article and that I don’t come across as a doomsday kind of guy. If this is the start of a double-dip, it’s going to be huge, if it’s the start of a bear market, it’s going to be life-changing. If you are new to trading, technical analysis or are long-term passive investor worried about what to do you can follow my lead and trades both as a swing trader and my long term investing signals using simple ETFs at TheTechnicalTraders.com
Chris Vermeulen Chief Market Strategist Found of Technical Traders Ltd.
Ely Gold aims to emulate the early years of today’s royalty majors.
Ely Gold Royalties Inc. (ELY:TSX.V; ELYGF:OTCQB; I4U:FSE) features a unique business model: in addition to purchasing royalties outright, it engages in royalty generation, which is acquiring properties mostly through staking, optioning them out and retaining a royalty when the sale is completed.
Ely Gold’s market cap, around CA$250 million, places it in the middle range of junior royalty companiesjunior royalties are usually defined as having market caps between $100 million and $500 million. At $250 million, Ely Gold’s market cap is roughly in line with Metalla Royalty & Streaming and Abitibi Royalties.
“We think Ely Gold offers attractive growth potential.” – Mark Reichman, Noble Capital Markets
“While we are focused on becoming a mid-tier royalty company, we are really aspiring to be the next Royal Gold or Franco-Nevada by emulating what they did in their first four or five years,” Ely Gold’s President and CEO Trey Wasser told Streetwise Reports.
“Both Royal Gold and Franco-Nevada started with Nevada gold mining properties,” Wasser explained. “In their first four years in existence, they produced returns of 3,200% and 3,700%, respectively. Royal Gold, in the early 1990s, started with just one asset, the Cortez Pipeline royalty. They were a 30-cent stock that over the next few years became a $12 stock, and today they are a $135 stock. In the case of Franco-Nevada, they were a $2 stock that became a $55 stock in their first four years, fueled mostly by their Goldstrike royalties.”
“All that happened with a business plan very similar to Ely Gold’s: with projects located at some of Nevada’s larger gold mines,” Wasser said. “We’re picking up royalties on some of these same projects, so we believe that people are picking up on the comparisons to Ely Gold as the next Royal Gold or Franco Nevada. Is that aspiration too high? We have the potential, given the assets we are acquiring, and hope to generate those kinds of returns.”
Around 95% of Ely Gold’s assets are in Nevada, and the firm engages in royalty generation in addition to royalty purchases. The firm currently has an inventory of 34 properties for sale, which with royalty interests and properties being purchased brings the total number of properties to more than 100.
“That potentially makes us one of the largest property owners in Nevada, certainly by number of projects, that’s pretty compelling for a junior company and gives us a solid platform for growth,” Wasser stated.
Wasser differentiates his company from others by using three key metrics: business model, management execution and path to production.
Commenting on Ely Gold’s business model, “We differentiate ourselves from many of our peers in that we are generating royalties from property acquisition and sales that subsequently generate royalties,” Wasser said. “We never do joint ventures or earn-ins. We do straight 100% property sales. When a buyer has made all their options payments, we give them a mineral deed and they give us a royalty deed. If they don’t make all the payments, we get the property back 100%.”
The company is aggressively purchasing royalties. “The major and mid-tiers generally make royalty investments by being part of the financing package of new mine construction or mine expansion, where there’s a large capex requirement. The junior companies are mostly purchasing royalties, or in our case purchasing and organically generating royalties,” Wasser explained.
Management execution is the second metric in evaluating a royalty company. “Our focus is on adding net asset value to the portfolio. Net asset values are based on the cash flow that the royalties should generate in the future. The longer that revenue stream is from starting, the lower the net asset value on the asset. We are very active and have closed nine royalty transactions so far this year. Four of them are pretty significant royalties on three of Nevada’s largest gold mines,” Wasser said.
The third metric is the path to production. “First, you have to look at the project and determine if it can be developed at current gold prices emphasizing the ‘what and when’ of the potential cash flow,” Wasser stated. “But the second part is the operator of the project. Is it owned by a junior company that has never built or operated a mine before? Does the operator have the capital to build the mine or borrow to finance the construction, or is it going to take a corporate miracle for that to happen? Or, as is the case with our key assets, is the operator a seasoned operator, a mine builder, a well-financed major or mid-tier producer? That’s where our portfolio is being differentiated and it is really shaping up with our recent acquisitions.”
In February, Ely Gold announced the acquisition of VEK Associates, a privately held company. VEK’s portfolio holds a 50% interest on leases on five properties. Four are leased to Nevada Gold Mines, the Barrick-Newmont joint venture: REN, Lone Tree, Pinson and Carlin Trend. The other, Marigold, is leased to SSR Mining. “Two of the properties are near-term producing assets,” Wasser said. “SSR Mining is a standout mid-tier producer. There are two deposits on the acquired Marigold claims and lease that are in the current mine plan to start production in 2022. The Marigold Mine is an open pit, heap leach operation running at 200,000 tonnes per day and has over 3 million ounces in reserves.”
The other near-term producing asset is operated by Nevada Gold Mines, at its Goldstrike mine. “The REN property is the extension of the underground ore body,” Wasser stated. “Centerra outlined a mineralized resource of 2 million ounces on our REN claims between 2000 and 2010 in a JV with Barrick. In 2010, Barrick bought out Centerra’s interest and really hasn’t done any exploration on the property since. It now is looking at plans to bring the REN property into production and explore the entire property from underground. It is a very deep high-grade deposit and is already permitted for mining. In addition to the REN lease, ELY Gold purchased a 3.5% net profit interest royalty on REN.”
Wasser noted, “Goldstrike and Marigold were important assets for Franco-Nevada’s growth. Goldstrike has produced over 45 million ounces of gold, including over 12 million from the underground mine near REN. Marigold has produced over 3 million ounces of gold. Franco Nevada has multiple royalty interests on both assets. We are following in their footsteps.”
Ely Gold currently has three producing assets. At the privately operated Jerritt Canyon mine, Ely Gold holds a Per Ton Royalty Interest on all material that goes through the mill, and a 0.50% Net Smelter Return (NSR) royalty on production from the entire property package. The third asset is a 0.75% NSR royalty on the Isabella Pearl property, operated by Gold Resource Corp. Ely Gold also has a 2.5% royalty on 6 miles of expansion ground at Isabella Pearl that was generated from their property portfolio.
Wasser is also excited about Wallbridge Mining’s Fenelon project, located in Quebec. “The project is growing quickly. This past year as Wallbridge has outlined a large underground ore body and it’s looking like it’s going to get much bigger.”
“Jerritt Canyon and the REN property both have mineralized resources of about 2 million ounces of gold and we believe they have the potential to become tier one mines, which means 5 million ounces or greater. Fenelon also has that potential. And all have a clear path to production. As mentioned, Jerritt Canyon is currently producing and the way we structured that purchase we’ll see nearly a full year of royalties in this year,” Wasser stated. “Two other key assets, the Gold Rock project of Fiore Gold and the Lincoln Hill project with Coeur Mining, are satellite mines and due to be in production sometime in 2023.”
“When you talk about that path to production, we have some of the best properties, with the best operators in the best mining jurisdictions in the world. All, except Gold Rock and Hog Ranch, are current operations where the mine and processing plant does not need to be built,” Wasser said.
“We do not buy longer term exploration royalties with no real net asset value. We generate those as either development or exploration assets in our portfolio. All our 21 development assets are at or near producing mines and of our 33 exploration assets, eight of them are currently being drilled. Most were generated internally through property sales. This allows us to focus on purchasing royalties with a clear net asset value by buying royalties that are at or near production. You will rarely see us spending shareholder equity for anything that doesn’t add a clearly defined net asset value to our portfolio,” Wasser concluded.
On May 21, Ely Gold closed a brokered private placement for gross proceeds of CA$17.25 million, at CA$0.80 per unit, with one unit composed of one common share and one-half of a purchase warrant to acquire one common share at a CA$1.00 exercise price for three years. Ely Gold has about 157 million shares outstanding, and 197 million fully diluted. In May, the company up-listed to the OTCQB Market, and trades there under the symbol ELYGF. It trades on the TSX Venture Exchange under the symbol ELY.
Ely Gold has caught the attention of industry analysts. Noble Capital Markets analyst Mark Reichman awards Ely Gold an Outperform rating and wrote on June 16, “In 2020, the company has announced the purchase of 8 producing or near-term producing royalties and option/sale agreements on several properties, including Olympic and White Rock. We believe potential exists for the company to announce additional royalty purchases this year and also increase the company’s exposure to projects in which the company already holds royalty interests.
“In our view, Ely Gold offers shareholders leverage to gold prices through its growing portfolio of long-term gold royalties. Ely has made several significant transactions in recent months that are expected to accelerate revenue and cash flow growth. Based on the company’s successful record of growing its project portfolio coupled with a constructive gold price outlook, we think Ely Gold offers attractive growth potential,” Reichman concluded.
Analyst Jay Taylor wrote in Hotline on May 8, “I think there is a lot more upside for Ely Gold given their pipeline of near-term producing projects as well as a large number of attractive exploration projects located mostly in Nevada.”
Disclosure: 1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 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: Ely Gold Royalties. Click here for important disclosures about sponsor fees.
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Additional disclosures:
Disclosures for Noble Capital Markets, Ely Gold Royalties, June 16, 2020 Company Specific Disclosures The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report. The Company in this report is a participant in the Company Sponsored Research Program (“CSRP”); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report. The Company has attended Noble investor conference(s) in the last 12 months. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) within the next 3 months. Noble is not a market maker in the Company.
ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.” FINRA licenses 7, 24, 63, 87.
Disclosures from J Taylor’s Hotline, May 8, 2020 The opinions expressed in this message are those of Jay Taylor only and they do not necessarily represent the opinions of Taylor Hard Money Advisors, Inc., the publisher of J Taylor’s Gold, Energy & Tech Stocks. The management of THMA may, from time to time, buy and sell shares of the companies recommended in J Taylor’s Gold, Energy & Tech Stocks newsletter and in this Hotline message. No statement or expression of any opinion contained either in this Hotline or in J Taylor’s Gold, Energy & Tech Stocks newsletter constitutes an offer to buy or sell the securities mentioned herein.
Companies are selected for presentation in J Taylor’s Gold, Energy & Tech Stocks strictly on their merits as perceived by Taylor Hard Money Advisors, Inc. No fee is charged to the company for inclusion. The editor, his family and associates and THMA are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein.
