Housekeeping: Good Morning.
Bretton Woods Three is a Process, Not an Event
“The World has been and always will be Mercantilist” - Macro Discretionary Fund
Today:
Barrick’s Problem
Premium: [starts 19:00 mark] GoldFix in depth analysis of CITI’s $3,000 price target hike. Follow along at bottom. This is institutional grade commentary
Markets Yesterday:
US equities declined on Tuesday after Fed Chair Powell signaled that rates will need to stay higher for longer given a lack of progress on lowering inflation.
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The bank upgrades its baseline gold price forecasts to bull-case scenario from the 2Q Commodities Outlook and Wildcards 2024 reports
For 2024E, this means a 6.8% bump to $2,350/oz; for 2025E, this means an admittedly massive 40% upward revision to $2,875/oz.
Much more at bottom…
Barrick under pressure in Mali as regime eyes control of Loulo-Gounkoto
Barrick Gold (TSX: ABX; NYSE: GOLD) is under increasing pressure in Mali as the country’s military regime seeks to tighten its grip on the lucrative mining sector, The Globe and Mail reported.
After seizing power in a coup in 2021 and forming an alliance with Russian mercenary Wagner Group, the Mali junta has been focusing on the mining industry. They conducted an industry audit and introduced a new mining code aimed at expanding state control over mining companies.
Recent reports suggest that the regime may be planning to seize control of Barrick’s key mining complex, Loulo-Gounkoto, one of the world’s largest gold-producing mines. Barrick has declined to comment.
GoldFix Video Notes
Geopolitically Brics Sanctions
Natural resource protectionism
How warlords operate
Barrick- it’s a negotiation, a blackmail, raising the price of doing business
Mining Analysis
Mining Risk: Panama Copper, Ghana Gold, Mexico Silver, Russian Gold
Already discounted in stock prices… any reaction now will be an exaggeration.
Good companies are unfairly beaten down by across the board selling
Companies with strong ties to government, an ability to scale distribution vertically, vertical integration plans, and a grasp on technological implementation to do these things.
Unsophisticated investors are the problem in mining , and they create the opportunity
Banks do not promote miners for a reason. It’s about the metal price
You can read the rest below1
Price Action:
Gold- beachball time
Silver- leading the pack… not obvious.. silverleads or chop now
Miners-
Oil- touch and go
BTC/ETH- looks weak, but not sickly
Stocks- there is a problem now.. VIX Manipulation
Bonds- YCC is coming
Dollar- 2025 will not be kind if ycc comes
Market News:
Out with the old, wall street gains at main streets expense, offshoring services onshoring of manufacturing
"Federal Reserve Chair Jerome Powell said Tuesday that the U.S. economy, while otherwise strong, has not seen inflation come back to the central bank’s goal, pointing to the further unlikelihood that interest rate cuts are in the offing anytime soon. Source: CNBC
"America’s biggest banks reported stronger-than-expected earnings in the first quarter, highlighting how a resilient economy is helping power everything from Main Street to Wall Street. JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley all reported revenue and earnings that beat or met analysts’ expectations. Consumer spending remained robust. Pent-up demand for dealmaking, stock and bond sales lifted earnings at the Wall Street-heavy banks. A market rally continued in early 2024, boosting fees the banks collect on money they manage for clients." Source: WSJ
"The Chinese economy grew more than expected in the first three months of the year, new data shows, as China built more factories and exported huge amounts of goods to counter a severe real estate crisis and sluggish spending at home. Source: NYT
"Big technology companies are cutting back on office space across major coastal cities, leaving some exposed landlords with empty buildings and steep losses... Source: WSJ
"Microsoft’s just-announced partnership with Abu Dhabi’s G42 followed behind-the-scenes negotiations between the US government and the Middle Eastern firm, which agreed to divest from China and pivot to American technology." Source: Bloomberg
"Princeton University’s endowment, known for its aggressive bets on private equity, is facing the “worst ever environment” for the asset class as a slump in dealmaking and public listings weighs on returns, according to its outgoing chief investment officer." Source: FT
GEOPOLITICS
Prior MSM Stories HERE
Some headlines via NewSquawk or DataTrek
Data on Deck:
MONDAY, APRIL 15 8:30 am U.S. retail sales MarchTUESDAY, APRIL 168:30 am Housing starts 1:15 pm Fed Chair Powell speaksWEDNESDAY, APRIL 17 2:00 pm Fed Beige Book
THURSDAY, APRIL 18 8:30 am Initial jobless claims
FRIDAY, APRIL 19 10:30 am Chicago Fed President Austan Goolsbee speaks2
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