Mid-week metals market report

May 24, 2017 02:57 PM

Gold's Haven Status Refreshed as Trump's Turmoil Wounds Stocks/Bloomberg Markets: Gold traded near a two-week high as the disarray engulfing Donald Trump’s White House boosted the commodity’s allure as a haven, with equities in retreat and investors scaling back the odds of the Federal Reserve tightening policy next month.

Other precious metals fell. Bullion for immediate delivery eased 0.3% to $1,257.65 an ounce by 9:53 A.M.. in London after earlier touching $1,263.20, the highest since May 1, according to Bloomberg generic pricing. On Wednesday, the metal surged 2% to post the biggest gain since June 2016.

Mid-Week Metals Trivia: Humans have been decorating themselves with gold since what year? Hint it was early B.C.

MarketWatch: Gold rose on Monday, adding to the largest weekly gain since mid-April, as declines in the U.S. dollar index sent prices to the highest finish in three weeks. June gold GCM7, -0.13% tacked on $7.80, or 0.6%, to settle at $1,261.40 an ounce—the highest settlement since April 28, according to FactSet data.Gold scored a roughly 2.1% advance last week, a trading stretch marked by rising volatility and political unrest in the White House. That was the largest such return since the week ended April 13. The yellow metal has climbed in eight of the past nine sessions.

China's building a mega city from scratch – it's going to suck in lots of steel, copper/Frik Els: If Xiongan can achieve the same level of development as Binhai, we estimate the new area will add around 20 Mt of steel demand, 400 kt of aluminum demand and 250 kt of copper demand during the first 10 years. Binhai reached its construction peak around 2012, seven years after it was established. If this is repeated with Xiongan, the peak year is likely to be between 2020 and 2025.

First Quantum to kick off massive $5.48bn copper mine in Panama in just months Commissioning of the vast Cobre Panama mine will begin in early 2018/Cecilia Jamasmie: Canada's First Quantum Minerals (TSE:FM) is just a few months away from commissioning its massive $5.48 billion copper project in Panama, one of the largest of very few new red metal mines to begin production by the end of the decade.

The company, which gained control over the Cobre Panama project in 2013 with the acquisition of rival Canadian copper miner Inmet Mining, said Thursday the open-pit mine was now about 50% complete.

Cobre Panama project is now 50% complete and on track to produce 320,000 tonnes of copper in 2019. Speaking at the Paydirt Latin America Downunder conference, in Perth, First Quantum global exploration director, Mike Christie, said the firm would spend close to $1 billion this year to advance construction at the project, located about 120 km west of Panama City, and 20 km from the Caribbean Sea coast.

US Mint Circulating Coin Production in April 2017/CoinNews: U.S. coin production slowed to a four-month low in April, according to the latest round of manufacturing figures from the United States Mint. Nearly 960 million across cents, nickels, dimes, quarters, and dollars were pressed for the month.

In headline comparisons, the level marks declines of 33.6% from March and 28.3% from April 2016. Here’s how the month stacks up against others in the past year.

Silver/SRSrocco: According to the most recently released data from Chile’s Ministry of Mining, the country’s silver production declined a stunning 26% in the first quarter of 2017. This is a big deal as Chile is the fourth largest silver producing country in the

world. The majority of Chile’s silver production comes as a by-product of copper production.

Chile is the largest copper producer in the world, by a long shot. Last year, Chile produced 5.5 million tons of copper compared to Peru, who took a distant second place at 2.3 million tons.

Regardless, Chile’s silver production declined to 283.4 metric tons (mt) Q1 2017 versus 383.8 mt during the same quarter last year. Again, this is a huge 26% decline in the first three months of the year.

Pete's Corner

For sometime now I have written that the Russian and Chinese Central Banks will expand their roles in funding trade between the two nations. As both currencies are not as liquid as the Dollar they have but one choice. They will use gold as the lynchpin for trade between the two Central Banks. Using my model for cross-collateralization they will place Hallmarked Gold bullion in a neutral country and legally encumber it for trade collaterally. I'll attempt to publish a white paper on this topic this summer but in the meantime, we all can watch as this comes to pass in the next few years.

The world woke up to the fact that when it all goes bad, paper money is only good to start fires. Couple the dollars fall over the middle of last week with Brazil's Real collapse and gold had a very strong week. Try to remind your retail customers that 5-10% of assets should be in "hold in your hand" gold and not paper. Russia continues to demonstrate that gold is the shining path to stability.

Mining.com: Rio Tinto (ASX, LON:RIO) launched today a $2.5-billion bond buyback plan with the idea of reducing reduce its gross debt.

In a press release, the global miner explained that, under the plan, it has issued a redemption notice for approximately $1.72 billion of its 2019 and 2020 US dollar-denominated notes and commenced cash tender offers to purchase up to approximately $781 million of its five 2021, 2022 and 2025 US dollar-denominated notes. Such offers will expire on June 20.

The company also said that today’s announcement is part of its ongoing capital management plan and follows the completion of a series of $7.5 billion US dollar- denominated note redemptions and repurchases in 2016.

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About the Author

Peter Thomas is a senior vice president at the Zaner Precious Metal Division. As a licensed floor broker he was a filling broker in the silver pit back in the days when silver ran to $55 an ounce. He currently manages a global cash desk which handles Refiners, Recyclers, Mining Operations and Coin & Bullion companies.