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Buckle Up! It's Going To Be A Big Week

Kitco News

(Kitco News) - As this newsletter is being written, the Group of Seven summit is about to begin in my home province of Quebec. And it looks like this G7 gathering might be one of the most bitter in years; with the world on the brink of a trade war, the stakes are high.

Before arriving in Canada, President Trump noted he may leave early in preparation for his upcoming Singapore summit with North Korean leader Kim Jong Un. He also said that Russia should be readmitted as part of the group of countries meeting, breaking with other world leaders who have insisted that Moscow remain ostracized after its 2014 annexation of Crimea.

Trump’s comments, made just hours before arriving in Canada, have the potential to further upend talks with other leaders who are already furious about his protectionist trade policies.

On the topic of trade, Canada’s sweetheart, Kevin O’Leary came back on the show this week to tell us that Capital is Leaving Canada Like “Rats Abandoning A Ship.”

Not one to mince words, O’Leary said that Canada is still uncompetitive relative 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] not being competitive on a carbon tax basis, not being competitive on a corporate tax basis, and then on top of all this you’ve got tariffs coming in,” O’Leary told Kitco News.

On to the gold front now, Kitco commentator Todd “Bubba” Horwitz said that investors might want to buckle up for a wild ride this week.

“The next seven days can be huge for equities, metals and commodities. It all starts with the G-7, followed by the North Korean summit on Tuesday, the Fed on Wednesday and the grand finale -- Super Mario and the ECB -- on Thursday. Anyone of these events could have a dramatic effect on all markets, especially the metals,” Horwitz said.

As for gold, a market that has been in consolidation at the bottom end of the range for weeks, Horwitz said investors might now see a move higher.

Martin Murenbeeld, president of Murenbeeld & Co., said that the threat of a global trade war, political uncertainty in Europe, and on-again-off-again negotiations with North Korea are all reasons to hold gold as a long-term insurance policy. In the current environment, he said that he is comfortable holding a 7% allocation in gold in his portfolio. He added that with prices hovering around $1,300 an ounce, now is a good time for investors to quietly buy 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 one of them will drop,” he said.

Meanwhile, on the mining front, don’t miss David Erfle’s comments this week where he notes that the mood in the junior resource complex is nearing “contrarians dream” status. “Not only has the retail speculators' collective outlook become uber-bearish, one of the most respected newsletter writers in the complex has stated we are now in a gold bear market. At the Metal Investors Forum (MIF) in Vancouver last month, junior miner analyst John Kaiser began his opening remarks with this statement regarding the gold sector: ‘"We are back in a bear market and my own feeling is it is not clear what is going to take us out of the bear market any time soon.’”

But Erfle reminds us to keep in mind Rick Rule’s words of wisdom: are you a contrarian or a victim?

Alright, moving on now, last week I asked readers and viewers to guess which far away location I will be headed to in July. I received responses varying from the Maldives to Argentina, but it can now be revealed that I am headed to Noosa, Australia – known as the Sunshine Coast of the country. I will be covering the Noosa Mining Conference and am very excited to explore and bring you the latest news from companies presenting there.

Sponsored by Morgans, the Noosa Mining Conference is considered by many as the Diggers and Dealers of the East. More than 700 delegates expected to attend the event along with more than 50 presenting companies. So if you are still 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 see some Koalas, you can register here:

Noosa Mining and Exploration 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 the news today of Anthony Bourdain has left a very deep hole in my stomach; as a journalist, I have nothing but the utmost respect for his writing, honesty and candor. Rest in peace chef.

Enjoy the weekend; for our U.S. readers, if you are headed for a Saturday morning Starbucks run, keep in mind they quietly raised prices - again.

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.

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