Buckle Up! It's Going To Be A Big Week
(Kitco News) - As this newsletter is being written, the Groupof Seven summit is about to begin in my home province of Quebec. And it lookslike this G7 gathering might be one of the most bitter in years; with the worldon the brink of a trade war, the stakes are high.
Before arriving in Canada, President Trump noted he may leave early inpreparation for his upcoming Singapore summit with North Korean leader Kim JongUn. He also said that Russia should be readmitted as part of the group ofcountries meeting, breaking with other world leaders who have insisted thatMoscow remain ostracized after its 2014 annexation of Crimea.
Trump’s comments, made just hours before arriving in Canada, have the potentialto further upend talks with other leaders who are already furious about hisprotectionist trade policies.
On the topic of trade, Canada’s sweetheart, Kevin O’Leary came back on the showthis week to tell us that Capital isLeaving Canada Like “Rats Abandoning A Ship.”
Not one to mince words, O’Leary said that Canada is still uncompetitiverelative to its peers, primarily due to high corporate taxes.
“This has a lot to do with not just being competitive on a tax basis; [but] notbeing competitive on a carbon tax basis, not being competitive on a corporatetax basis, and then on top of all this you’ve got tariffs coming in,” O’Learytold Kitco News.
On to the gold front now, Kitco commentator Todd “Bubba” Horwitz said that investors mightwant to buckle up for a wild ride this week.
“The next seven days can be huge for equities, metals and commodities. It allstarts with the G-7, followed by the North Korean summit on Tuesday, the Fed onWednesday and the grand finale -- Super Mario and the ECB -- on Thursday.Anyone of these events could have a dramatic effect on all markets, especiallythe metals,” Horwitz said.
As for gold, a market that has been in consolidation at the bottom end of therange for weeks, Horwitz said investors might now see a move higher.
Martin Murenbeeld, president of Murenbeeld & Co., said that the threat of aglobal trade war, political uncertainty in Europe, and on-again-off-againnegotiations with North Korea are all reasons to hold gold as a long-terminsurance policy. In the current environment, he said that he is comfortableholding a 7% allocation in gold in his portfolio. He added that with priceshovering around $1,300 an ounce, now is a good time for investors to quietlybuy and build an allocation if they don’t already have one.
“There are an awful lot of balls up in the air and you just don’t know if oneof them will drop,” he said.
Meanwhile, on the mining front, don’t miss David Erfle’scomments this week where he notes that the mood in the juniorresource complex is nearing “contrarians dream” status. “Not only has theretail speculators' collective outlook become uber-bearish, one of the mostrespected newsletter writers in the complex has stated we are now in a goldbear market. At the Metal Investors Forum (MIF) in Vancouver last month, juniorminer analyst John Kaiser began his opening remarks with this statementregarding the gold sector: ‘"We are back in a bear market and my ownfeeling is it is not clear what is going to take us out of the bear market anytime soon.’”
But Erfle reminds us to keep in mind Rick Rule’s words of wisdom: are you acontrarian or a victim?
Alright, moving on now, last week I asked readers and viewers to guess whichfar away location I will be headed to in July. I received responses varyingfrom the Maldives to Argentina, but it can now be revealed that I am headed toNoosa, Australia - known as the Sunshine Coast of the country. I will becovering the Noosa Mining Conference and am very excited to explore and bring you the latest news from companiespresenting there.
Sponsored by Morgans, the Noosa Mining Conference is considered by many as theDiggers and Dealers of the East. More than 700 delegates expected toattend the event along with more than 50 presenting companies. So if you arestill looking for something fun to do this summer (or winter in Australia),come and join the Kitco News team, we’ll laugh, we’ll learn and hopefully seesome Koalas, you can register here:
Noosa Mining andExploration Investor Conference, 18-20 July 2018
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And Finally I didn’t want to talk about it but how can I not? Waking up to thenews today of Anthony Bourdain has left a very deep hole in my stomach; as ajournalist, I have nothing but the utmost respect for his writing, honesty andcandor. Rest in peace chef.
Enjoy the weekend; for our U.S. readers, if you are headed for a Saturdaymorning Starbucks run, keep in mind they quietly raised prices - again.
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dcambone@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.