Declining Gold Demand is Just a Myth

Market analysts Jonathan Kosares and Peter Grant of Centennial Precious Metals rebut what they call “the myth of declining gold demand.”  According to Kosares and Grant, reductions in jewelry and electronic purchases are headline news, but these reductions are being more than offset by investment demand and the reversal of the posture of the central banks in the gold market.

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GATA Chairman Bill Murphy Interviewed by King World News

GATA Chairman Bill Murphy was interviewed on August 28, 2009 by Eric King of King World News about the improving prospects for gold and silver.  Click below to listen.

Cobalt Poised for Further Gains After Steady Summer Rise

London 26 August 2009 – Cobalt prices are poised to see modest gains in September on increased buying from battery producers and tightness in high-grade metal.  The majority of market participants polled expect cobalt to rise by between $1 and $2 per lb by the end of September following steady gains through the European summer.

Low-grade cobalt has been trading at $17.50-$18.50 per lb and high-grade cobalt has been trading at $18.80-$20.20 per lb since August 12.  Prices have been firming steadily through the summer on better demand and more bullish sentiment.

Low-grade cobalt was trading at $12.60-13.30 per lb at the start of June, while high-grade metal was changing hands for $13.50-14.50 per lb.  An increase in consumer enquiries this week has given traders and producers hope for a more active September.

“I have seen a lot more enquiries this week,” said one trader on Wednesday who has received interest for over 150 tonnes since Monday.

“I think it will go up steadily rather than rapidly. By the end of September we’ll be slightly higher, perhaps up by a dollar,” he said.

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Next Up . . . Cobalt?

The following write-up on Geovic Mining Corp. (OTC BB: GVCM; TSX: GMC) appeared in yesterday morning’s release of Canaccord Capital’s “Morning Coffee,” a daily publication containing general market commentary.

Geovic Mining* (GMC : TSX : $0.81), Net Change: 0.04, % Change: 5.19%, Volume: 375,628

Next up…cobalt? While this rare earth metal has not yet triggered a massive rally nor inspired the same kind of media attention that lithium has, it has begun to garner some attention. According to a recent article, cobalt has became one of the two “major” minor metals in this decade’s metals cycle, the other being molybdenum. Similar to lithium, cobalt’s largest market is in the rechargeable batteries that are used in billions of electronic devices from cell phones to laptops to hybrid automobiles. Cobalt is also used in super alloys, catalysts, metallurgical (hard metals), pigments, soaps, adhesives, and magnets. Also similar to copper and nickel, the cobalt price has spiked in the last couple months, rising from lows of US$11 per pound to US$21 per pound, and according to one newsletter writer, a major Chinese supplier is now selling at US$23 per pound. Moreover, the supply/demand economics look fairly attractive as supply is typically constrained as roughly 95% of world cobalt production is a byproduct of nickel and copper mines, with the politically unstable Democratic Republic of Congo (DRC) containing half the world’s cobalt supply and representing a significant share of anticipated future cobalt supply. So will the lithium craze spread to cobalt? And if so how can investors leverage themselves to this play? Well, there are currently limited ways to play cobalt, at least until the London Metals Exchange begins trading contracts in February 2010. Geovic is one of the few Canadian stocks we could find with leverage to this metal (note U.S.-based OM Group (OMG) and Freeport (FCX) both produce cobalt). The huge scale of Geovic’s asset provides a great deal of leverage to the cobalt price. It is eveloping the largest primary cobalt deposit in the world in the African country of Cameroon. Geovic has risen steadily month-to-date, up 40%, with fairly low volatility.  However, this move pales in comparison to the Canadian lithium plays, many of which have exceeded 100% gains month-todate.  With cobalt prices moving higher and new LME cobalt contracts bringing greater transparently and likely increased price stability (encouraging development of new cobalt uses?) is it time for cobalt to be part of your rare element holdings?

Bankers Watch as Swedish Interest Rates Go Negative

Swedish Riksbank is the world’s first central bank to have negative interest rates, a move designed to encourage commercial banks to boost lending.  Bank of England governor has hinted he may follow the Swedish example.  Fears are rising of a liquidity trap, where cash from banks don’t filter to economy.

Aug 27 – For a world first, the announcement came with remarkably little fanfare.  But last month, the Swedish Riksbank entered uncharted territory when it became the world’s first central bank to introduce negative interest rates on bank deposits.

Even at the deepest point of Japan’s financial crisis, the country’s central bank shied away from such a measure, which is designed to encourage commercial banks to boost lending.  But, as they contemplate their exit strategies after the extraordinary measures of the past two years, central bankers will be monitoring the Swedish experiment closely.

Mervyn King, the Bank of England governor, has hinted he may follow the Swedish example as the danger of a so-called liquidity trap, where cash remains stuck in the banking system and does not filter out to the wider economy, is an increasing concern for the UK.

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Truth About Bailout Programs Would Threaten Companies and Economy

The U.S. Federal Reserve seeks to maintain secrecy about banks in bailout programs, urging the court not to enforce an order revealing names of banks who have participated and the sums they have received.  For their part, banks believe that disclosure of said information would result in a massive loss of confidence in the banks themselves and perhaps the entire system.

NEW YORK, Aug 27 (Reuters) – The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy.

The central bank filed its request on Wednesday, two days after Chief Judge Loretta Preska of the U.S. District Court in Manhattan ruled in favor of Bloomberg News, which had sought information under the federal Freedom of Information Act.

Preska said the Fed failed to show that revealing the names would stigmatize the banks and result in “imminent competitive harm.” The Fed asked the judge not to require disclosure while it readies an appeal.

“Immediate release of these documents will cause irreparable harm to these institutions and to the board’s ability to effectively manage the current, and any future, financial crisis,” the central bank argued.

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Biopack Engages Torrey Hills Capital for Investor Relations

HONG KONG–(BUSINESS WIRE)–Biopack Environmental Solutions Inc. (OTCBB: BPAC – News) a leading designer, manufacturer, and supplier of 100% biodegradable and compostable packaging products wishes to reiterate further to its Form 8-K filing of June 8, 2009 that it has signed a six-month Consulting Agreement with San Diego Torrey Hills Capital, Inc. (“Torrey Hills Capital”) to act as Investor Relations consultants to the company.

Torrey Hills Capital is a leading investor and financial public relations firm specializing in small and microcap companies. It will be Biopack’s goal to build and maintain an informed investor audience by increasing awareness about the Company through Torrey Hills Capital’s established relationships with investment professionals, investment advisors, money managers, and market makers focused on the microcap market space. Torrey Hills Capital will also develop a profile on Biopack for coverage on its website, www.babybulls.com, a website developed to showcase and provide exposure for emerging micro-cap companies to an audience of proven micro-cap investors. Focusing on serving investors in North America, Torrey Hills Capital can be reached at ir@babybulls.com or through Biopack’s toll free 1-800-963-9970 number.

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Gold and Silver Consolidating, Waiting for a Sign

HOUSTON – Both gold and silver continued within the confines of their respective consolidations in the two weeks since the last full Got Gold Report.  Whether bullish or bearish, the action is not the very volatile kind that short-term traders really prefer. “Boring” doesn’t quite describe it, but neither does “exciting.” 

It’s August. Historically liquidity is thin in the last full month of summer. The last full week of August is particularly so. That is a subtle hint that the “dawg daze” won’t be with us very much longer.  

Here’s a little of what we are watching and reporting on below: Weakness in the U.S. dollar continues as ICE commercial traders dump long-dollar positions; negative money flow from the largest gold ETF just stopped, and the largest of the largest of gold futures traders just covered or offset a bunch of their short-gold contracts a week before COMEX and OTC options expire. 

The commitments of traders action was less than bullish on the silver front, but not frighteningly so. Meanwhile, over a billion Chinese are now silver bullion buyers, legally and openly, encouraged by the government there, which actually realizes that the gold:silver ratio is out of whack.

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Cobalt – A Unique Way to Profit from Lithium

The Lithium sector of the junior resource market has seen huge gains in the last month. OK, let’s not be coy. The Lithium space is experiencing investor mania.

Look at some of the gains. Canada Lithium (TSXv:CLQ) is up 30% in a month on over 7 times its usual volume. Lithium One (TSXv:LI) up 300% in 2 months from 50 cents to $1.50, and First Lithium up 300% from 8 cents to 24 cents in just 1 week. Tell the world that you have a piece of moose pasture with Lithium on it and junior exploration companies will beat a path to your door in no time like a herd of stampeding cattle.

The tipping point for this surge higher was a CNBC report aired on August 13 2009 that spoke about the brilliant future ahead for Lithium thanks to the growing demand for Lithium-ion batteries. This was followed by Barrack Obama giving $2.4 billion in stimulus money to the electric vehicle industry and Ontario Premier Dalton McGuinty offering up $16.7 million for battery research. But caveat emptor….buyer beware – these lithium stocks have gotten a tad too expensive too quick. Piling in to Lithium stocks at this juncture may invite trouble to your portfolio.

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Dejour Enterprises New Corporate Update Now Available

 

 

 

 

 

 

 

 

Dejour Enterprises further defined their development strategy and pool of highly prospective/producing energy properties in an updated 4 page Corporate Overview which is now available at: http://www.dejour.com/docs/dejourcorporateprofile.pdf 

This new overview includes several excellent graphics of Dejour landholdings in both the Piceance Basin and BC/Alberta Canada (140,000 net acres) and the proximity of their properties to many of the major oil companies/operators in those regions such as Occidental Petroleum (NYSE:OXY), Barrett Petroleum and Orion. Recently we reported the Williams Co. (NYSE:WMN) purchase of land and farm-in interests that geographically surrounds Dejour’s acreage for $285 million. Dejour estimates that this land transaction pegs the value of their Gibson Gulch property alone at somewhere between $40 and $80 million. 

Highlights covered in detail in the corporate update include:

• Gibson Gulch value substantiated by Williams Co. Purchase of Piceance Properties (08/09)
• Total liabilities reduced by $9.7 M
• Oil  & Gas revenue of $1.7M in Q2. (08/09) 
• Operational efficiencies improved at Peace River Arch in Q2 (07/09)