The Weekly Dig - Oct 20, 2017
by Mick Carew, PhD, email@example.com, Emma Boggio, MSC, CPA and CA, and The Haywood Mining Team
The Weekly Dig - Gold Price Falls as the Dow Jones Industrial Average Reaches Record High
Precious Metals: As the US dollar climbed, the price of gold fell further on Friday following a Thursday evening Senate vote, where Republicans took the first step toward passing a tax plan and fulfilling a long-held campaign pledge as they narrowly voted, 51-49, to pass the fiscal 2018 budget. The Dow recorded a 392-point gain over the week to reach a record high as it finished at 23,329 on Friday. On the other hand, precious metals struggled with gold finishing down 1.82% at US$1,280, silver down 2.29% at US$17.03, platinum down 2.38% at US$924, and palladium down 1.59% at US$976 per ounce.
Base Metals: This week, the LME nickel price continued to improve, rising 0.5% to $5.29/lb, representing a gain of 17% YTD. Nickel had advanced as high as $12,000/t ($5.44/lb) during the week, reflecting a growing deficit. Copper rose 0.9% to $3.14/lb, ahead 26% YTD, amid speculation that the metal is trading ahead of its fundamentals; while zinc fell by 4.3% to close at $1.43/lb, but still up 23% YTD. Although the strong dollar, approaching the highest close since July, has had a moderating effect this past week, the strength in base metals was supported by data this showing continued economic growth in China for Q3/17 and rising industrial production in September, combined with slower than expected global mine supplies. In response, the S&P/TSX diversified Metals and Mining Index was slightly negative, down 0.9% WoW, but still up 10.6% YTD. Among the base metal equities this week, Trevali slipped 4.5% (but remains +33% YTD), while Capstone and Copper Mountain were up 7.6% and 7.1%, respectively. Copper Mountain is now up 61% YTD, helped by strong production results, reported on October 11 and an improving balance sheet.
The Week Ahead: Lundin Mining is reporting Q3/17 results on October 25, while Capstone Mining and Nevsun Resources are reporting Q3/17 results on October 26. Nevsun also plans to release the updated Preliminary Economic Assessment for the Timok Upper Zone project with financial results. Barrick Gold and Detour Gold will be reporting Q3/17 financial results on Wednesday October 25th after market close, and Eldorado Gold will be reporting after market close on Thursday October 26th. OceanaGold Corp. is reporting Q3/17 operating and financial results Pre-Market on Thursday October 26th, with the management conference call held on the 27th at 5PM ET/2PM PT (1-888-390-0546).
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