Daily Close | Forex, Metals, Oil, Agriculture September 29, 2020



Source: Bloomberg The dollar leaked lower again today… Year to date, “in terms of gold, the dollar is declining over 20%,” said Bloomberg Intelligence’s Mike McGlone. A dollar of debt and spending produces less than a dollar of growth. He said that each dollar of government spending could produce more than $1 of growth. This diminishing of dollar value is an unavoidable singularity that will affect the citizens of the whole nation. However, a 2% rate applied over a 36 year period reduces purchasing power of a dollar by half!
Investors drove the US dollar lower ahead of the first Presidential debate between President Trump and former Vice President Joe Biden. In contrast, the Canadian dollar sold off against the greenback after Quebec tightened restrictions in 3 of its largest regions including Montreal and Quebec City. Euro and sterling also powered higher with the single currency leading the gains.


Many investors have taken a keen interest in gold stocks after Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) reported a brand new equity stake in Barrick Gold (GOLD). A high price for Gold helped B2Gold reach record gold revenue for Q2 2020 as noted in their latest Q2 2020 earnings release. If it drops back to 50, with gold at $1,950 that would imply silver at $39.If it falls even lower, say to 40, that implies $49 silver. The gold-silver ratio is a great longer-term indicator of silver’s value relative to gold, and to search for signs of what might lie ahead for the metal.
But gold is not likely to stop at $1,950.If it reaches $2,200, a gold-silver ratio of 40 would mean $55 silver. Right now, the Fekola mine in Mali represents a majority of the gold production, thus creating risks if production gets shut down. From there, silver typically outperforms gold as the ratio falls. If gold production halts, then investors are left holding a stock that bleeds through cash without generating any revenue.
The Fekola mine in Mali generated the majority of the company’s results and hit 147,424 ounces of gold production in the most recent Q2 2020. The COVID-19 pandemic halted gold mining production while the world began to fight the global health crisis. The bottom line: Green shoots are appearing in the gold market, and investors need to take action! I want to bring the spotlight on B2Gold because I believe this is an amazingly well-run company that falls under the radar in the gold mining stock community.
(Source: Steemit.com) As governments continue to print an endless supply of currency to ease the blow dealt by the COVID-19 pandemic, gold looks like an attractive investment class. Geopolitical risks also create problems for gold mining companies that must adhere to local government laws while appeasing shareholders at the same time. I’ll also note that the next US jobs report is October 2, and gold often rallies in the days following the release of that report.
Gold will go higher as world governments issue more currency as a coping mechanism for a flawed financial system. In addition, the latest COT report shows the commercial traders buying gold contracts on the COMEX. B2Gold is highly profitable and should continue to rake in profits as gold prices remain high. What we do know is that gold has been considered real money for thousands of years and cannot be printed by world governments. Source: Bloomberg And as the month comes to an end, we note that the USDollar is outperforming gold in September by the most since Trump was elected…


Oil prices tumbled today amid growing concerns of less stimulus and COVID second-wave fears driving expectations for less demand amid rising supply (overwhelming any Armenia-regional war premia). Crude Value Insights offers you an investing service and community focused on oil and natural gas. However, management did say that they believe that with oil in the low $40-per-barrel range, Denbury will be capable of generating “significant” free cash flow. The volatility in crude oil and gasoline prices has been clearly reflected in recent years in both the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE).
The past couple of years have been a period of transition for the oil and gas sector.
Amid all this, Bloomberg reports that Three of the world’s biggest independent oil traders said consumption won’t meaningfully recover for at least another 18 months. Longer term, I still see drivers for IDEX from increasing U.S.-based production capacity (leveraging lower-cost natural gas) and the LNG chain (both in production/liquefaction and for users/consumption).
In the Gulf Coast, it has an estimated 416 million boe (barrels of oil equivalent) worth of proved and potential reserves. Moving forward, this should help early investors generate nice profits, especially if crude prices rise beyond the $40 range. Short-cycle leverage here is more mixed; autos, ag, and “general industrial” should be getting better, but aerospace, oil/gas, power, and chemicals could drag on results a little longer. *Taken from Denbury With 97% of its production coming from crude, Denbury is about as close to a pure play on crude as you can get.
Its emphasis is on CO2 EOR (Enhanced Oil Recovery). I’m comfortable with a double-digit FCF growth outlook for IDEX, with growth opportunities in life sciences and photonics offsetting some longer-term pressure in oil/gas. Source: Bloomberg Finally, as Bloomberg notes, with the market concerned about the coronavirus pandemic’s impact on demand and supply cuts from OPEC+ producers. This is the most difficult economically-viable crude available to E&P firms.

United States

The Fed has persistently overachieved a 2% growth in the money supply (money inflation), as indicated by the growth of national debt at 8% over the last 20 years. Borrow rates on the QQQ Nasdaq 100 ETF (QQQ) rose in the days leading up to the rally, suggesting there were plenty of traders getting short the overall market. This would demonstrate Biden’s vigor and determination to lead the country, and if he does in fact consume Trump, Mike Pence would likely prove a far less formidable adversary.
The failure to distinguish money inflation from cost inflation allows economists to muddle the discussion over inflation, such that it diverts responsibility for economic damage from the Fed. Wall Street analysts are on average expecting the company to grow from $966 million in revenue this year to $5.2 billion in 2028. In 2019, H&R Block handled 20.2 million total US tax returns, about 13% total returns in the US, a sizeable market share. Underscoring that point, Poynter writes that the first Trump-Clinton debate in 2016 drew a whopping TV audience of 84 million, making it the most-watched presidential debate ever.
Harrison explained that is why people will pay more for a company like Apple (NASDAQ:AAPL) now than they would have when the discount rate was higher. ‘Loved-up’, Biden would also show a winning spirit of magnanimity towards Donald Trump, which might help sway independents. A good example would be President Trump’s 2016 victory, when Hilary Clinton had been widely expected to win.
The company’s assets consist of some pipelines, but it also owns significant production potential in parts of the US.
The Fed has forgotten (if it ever knew) the art of changing expectations about inflation, which is the key to changing consumer behavior and driving growth. The Fed put (FANG stocks have been the ultimate beneficiaries of monetary stimulus), Tech disruption and the rise of ESG investing favor Growth over Value. They may, however, trigger a psychotic break that would cause him to assault Trump on stage and try to eat him. The rising cost to borrow the ETF is an indication that many traders were looking to short the NASDAQ 100 ETF.
Trader quickly got short the NASDAQ 100 in early September, with non-commercial accounts now holding about 133,000 contracts net short as of September 25. Despite a recent pullback, Tesla (NASDAQ:TSLA) shares have enjoyed a massive rally this year punctuated by some solid quarterly profits. It continued to fall to 1.43 by late 2017, despite the Fed’s money printing and zero rate policy (2008–15). The US goods deficit (census basis) is expected to deepen to a very large $82.6 billion in August versus $81.2 billion in July (revised from $79.3 billion).
QYLD follows a “buy-write” strategy in which the fund buys the stocks in the Nasdaq 100 and, each month, sells at-the-money call options on the index.


Low inflation is a major problem for the central bank and one of the leading reasons why the ECB may consider further easing. The final round of talks began and there’s a wide divide between the European Union and the UK on many issues. In the UK on the other hand, mortgage approvals ticked up but the focus was on Brexit.