MIT professor – this new battery could change the world, these metals needed

In order to transition towards a fully renewable energy-based economy, the problem of intermittency in non-fossil fuel electricity generation first needs to be solved, said Donald Sadoway, professor of materials chemistry at MIT.

“I wanted something that was versatile and could go wherever you needed to have the gap, bridge, when the sun isn’t shining and wind isn’t blowing,” Sadoway told Kitco News.

Sadoway, who was named one of Time Magazine’s “100 Most Influential People” in 2012, had worked on new battery technologies that would solve this problem; he and his team at MIT created a liquid metal battery to be used for stationary energy storage.

“When it comes to massive storage…we need something different [from lithium ion batteries], something that would operate at large scale safely without fear of fire, and it has to have long, long service lifetime and it has to be cheap,” he said. “So I set out to find a new chemistry and that led to the invention of the liquid metal battery.”

Sadoway envisions the liquid metal battery platform to be used to power large stationary electricity users, such as hospitals, manufacturing facilities, or even a subdivision of several hundred homes.

The affordability of this technology was crucial in the design aspect of this battery, Sadoway noted.

“For me, it’s all about giving people technology that enhances the quality of life and does so at a competitive price point. I’ve been very, very strict with my team about not inventing something that’s super expensive that's going to get you into the journal, but it’s never going to get you into customer hands,” he said.

The shift to a carbon-free economy needs to come from the private sector and from new technologies and inventions that outperform existing power generation methods, Sadoway said.

“I’m not comfortable with incentives in the form of these subsidies and rebates and so on. I think that the change should take place via market forces where the technology becomes superior and it becomes competitive to buy an all-electric vehicle versus the vehicle with a combustion engine,” he said.

The dominant battery today is still lithium ion, Sadoway noted.

“We hear talk about silicon and so on, but we’re not seeing a lot of penetration on that, so graphite is definitely going to be needed for the foreseeable future. And on the positive electrode, there are various combinations of nickel oxide, cobalt oxide, manganese oxide, aluminum oxide, people want to get rid of the cobalt and get the cobalt down to as low as they can,” he said. “There’s an increasing demand on nickel.”

 

By David Lin

For Kitco News

 

David

Global stocks falter as tech stays weak, dollar dips after three-day run

NEW YORK (Reuters) – A gauge of global stocks fell for a second straight day on Friday and marked its biggest weekly percentage drop in nearly three months, while the dollar ran out of steam, ending a three-day run higher, after a U.S. payrolls report painted a weaker economic picture.

U.. job growth slowed in August as financial aid from the government was depleted, with nonfarm payrolls increasing by 1.371 million jobs versus 1.734 million in the prior month. Expectations were for the addition of 1.4 million jobs. The unemployment rate fell to 8.4% from 10.2%.

“It points in the right direction, but still leaves some question marks as 8.4% of unemployment is still a high rate,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “They certainly point to recovery, but yet a weak recovery.”

For a graphic on Jobs fell off a cliff:

On Wall Street, stocks remained under pressure for a second consecutive session, as technology shares again played an outsized role. The tech sector dropped 1.34% and suffered its biggest two-day percentage drop in almost six months.

The Dow Jones Industrial Average fell 159.42 points, or 0.56%, to 28,133.31, the S&P 500 lost 28.13 points, or 0.81%, to 3,426.93, and the Nasdaq Composite dropped 144.97 points, or 1.27%, to 11,313.13.

U.S. markets are closed on Monday for the Labor Day holiday.

The pan-European STOXX 600 index lost 1.13% to close down 2.03% on the week. MSCI’s gauge of stocks across the globe shed 0.95% to end the week and give the index its biggest weekly percentage drop since mid-June.

The U.S. dollar gave back initial gains following the jobs report and turned lower late in the session to snap a three-day run of gains off of two-year lows. The euro edged lower to continue its decline after breaching the $1.20 mark on Tuesday.

The dollar index fell 0.047%, with the euro down 0.08% to $1.1839.

U.S. Treasury yields climbed on the heels of the jobs report.

Benchmark 10-year notes last fell 29/32 in price to yield 0.7148%, from 0.622% late on Thursday.

Oil prices continued to weaken on demand concerns and were on track for their worst week since mid-June.

U.S. crude settled down 3.87% at $39.77 per barrel and Brent was at $42.66, down 3.2%, on the day.
 

Reporting by Chuck Mikolajczak; Additional reporting by Sinéad Carew and Sagarika Jaisinghani in Bengaluru; Editing by David Gregorio and Leslie Adler

David

U.S equities move strongly lower, after hitting new record highs yesterday

After hitting new all-time record highs in both the NASDAQ composite and S&P 500, profit-taking and selling pressure today took all three major indexes dramatically lower. The largest drawdown today occurred in the indices that has performed the best of all three major indexes, the NASDAQ composite. After closing above 12,000 yesterday the NASDAQ composite opened at 11,859 this morning, and was at 11,458 by the close. The selling pressure in the NASDAQ composite took that index 598 points lower which is a decline of almost 5% (-4.98%).

The S&P 500 lost 3.51% in trading today, the total drawdown of 125.78 points taking that index to 3,455.06. The index that had the smallest percentage drawdown was also the index that did not trade to an all-time record high yesterday which is the Dow. The Dow Jones industrial average lost 807 points which is a net decline of -2.78%, taking that index to 28,292.73.

The catalyst for today’s dramatic selloff in U.S. equities is not crystal clear. However MarketWatch reported that Chris Zaccarelli, chief investment officer for Independence Advisor Alliance said, “In the absence of a specific catalyst, it’s easy to classify today’s swoon as profit-taking, noting that the “most-loved” parts of the market — the technology, consumer discretionary and communications services sectors — sold off the most.”

This report also cited a statement by Esty Dwek, head of global macro strategy for Natixis Investment Managers which said, “Tech stocks, and the overall market, hadn’t really had a bad day since June, so this is a healthy breather. It was never just going to be a straight line up. But the long-term structural support for technology has not changed and support for equities has not either,”.

Today’s selloff occurred in conjunction with positive economic data. New applications for unemployment benefits fell 130,000 to a seasonally adjusted 881,000. This was lower than the estimate which was looking for a seasonally adjusted number of 940,000. This data certainly suggests that although slow, a recovery has begun in the United States.

However, the most important data to be released this week will occur tomorrow when the U.S. Labor Department releases its jobs report for last month.

Lower U.S. equity pricing pressured the precious metals, and with the exception of palladium, all the precious metals sustained a wide loss in trading today. Silver had the largest percentage drawdown, which is logical due to its industrial component. Silver futures lost 2.32%, taking the most active December 2020 contract to $26.76, after factoring in today’s decline of almost $0.64.

Gold sustained the smallest percentage drawdown giving up 0.38%, with the most active December 2020 futures contract closing at $1,937.40. Our technical studies indicate that the next strong level of support in gold occurs at $1,900 per ounce, with major support at $1,847 which is the 38% Fibonacci retracement level. Major resistance for gold continues to remain $2,000 per ounce.

 

By Gary Wagner

Contributing to kitco.com

David

Silver is now trading like a currency look for higher prices – Kootenay Silver CEO

Silver has seen significant momentum in the last two months as it is now outperforming gold. One mining executive said that all-time highs are not out of reach for the precious metal with this strong tailwind.

In an interview with Kitco News on the sideline of the Mines and Money Online Connect global virtual mining conference, Jim McDonald, CEO of Kootenay Silver, said that unprecedented loose monetary policy around the world would continue to drive precious metals higher. He added that silver's all-time high around $50 isn't even the full target.

"I don't think [$50 silver] out of reach at all. I firmly believe it's going to happen. I don't know what the timing is going to be," he said. "And I think it's going to overshoot that old price and maybe buy quite a bit. We've been waiting a long time for it to break that major psychological $20 barrier."

McDonald said that he could see the gold/silver ratio falling to 30 points in an over-corrective move after hitting an all-time high around 125 in March.

"That kind of ratio and the silver price would be close to a hundred," he said.

Not only is the silver market expected to rally higher, but McDonald said that he expects market conditions to sustain higher prices.

Although weak industrial demand was weighing on silver at the start of the year, causing the precious metal to underperform gold, McDonald said that those factors are now being outweighed by the massive stimulus measures undertaken to support the global economy, devastated by the COVID-19 pandemic.

"We're getting to see a silver start to trade, like a currency as well. That will be the overriding factor here in driving the silver price, not the economy," he said.

McDonald added that the rally in gold and silver has created a transformational shift in the marketplace. He explained that only a few years ago, Kootenay Silver had to beg for every investment dollar it could get.

"Fast forward to today. We announced our financing in the morning and the book was closed about an hour later on $5 million and we up-sized it to seven. So it's a very, very different environment," he said.

Kootenay Silver has one of the biggest portfolios of silver assets in Mexico. McDonald said that their focus now with their new capital is to continue to de-risk their projects, including their cornerstone property Columba silver project.

 

By Neils Christensen

For Kitco News

David

Silver's fundamentals are stronger than gold – Randy Smallwood

The gold/silver ratio continues to hover near its lowest level in a month as silver continues to play catchup within the precious metals markets.

On the sidelines of the Mines and Money Online Connect virtual mining conference, Randy Smallwood, president and CEO of Wheaton Precious Metals, said that now is silver's time to shine. It is only a matter of time before the metal follows in gold's footsteps and hit record highs above $50 an ounce, he added.

"There's just all sorts of benefits to silver," Smallwood said. "We've been saying for a long time, the fundamentals are much stronger, but silver always lags gold when gold starts moving. In the last two months, we've really seen silver totally outperform and claw its way back up. Now, we're not at record highs yet, but with the fundamentals behind silver… I'm confident that we will see record highs in silver over the near term."

Smallwood's comments come as silver prices push to a nearly two-week high. September silver futures last traded at 28.385 an ounce, up more than 2% on the day. Meanwhile, the gold/silver ratio is currently trading at 70, down significantly from March’s all-time high around 125.

Some analysts have said that silver prices have struggled in gold's shadow because of weak industrial demand due to the devastating impact of the COVID-19 pandemic; however, Smallwood said that along with being a monetary metal, silver's industrial demand is what makes it more compelling than gold.

He added that silver's industrial demand is only going to continue to grow. In a world that looks to be more energy-efficient, Smallwood noted that silver is the best conductor in the world, "better than gold, better than copper."

"Everything here feels like we're just building up from our foundations for our continued strong move up," he said.

Smallwood said that with gold and silver just starting what is expected to be a long-term bull market, he continues to see strong growth for streaming and royalty companies.

However, he also noted that higher gold and silver prices make deals a little more expensive and harder to come by.

"There are times to make deals and there's times not to," he said. "What we look for, of course, are opportunities where we can deliver value back to our shareholders," he said. "There's still a lot more development that needs to be funded in this industry. We haven't seen a lot of redevelopment invested in, and so I think that demand is going to be there and be strong."

Smallwood said that an area of growth he sees in the future is working with base metal producers, getting a streaming deal for precious metals produced as a bi-product.

"When they see the record high prices on the precious metal side, especially the gold space…there's a lot of consideration about whether they should crystallize some of that non-core byproduct value," he said. "So, we are seeing still some good, strong interest on the streaming side."

 

By Neils Christensen

For Kitco News

 

 

David

Anglo Australian eliminates all third-party royalties at Mandilla Gold Project

Anglo Australian Resources (ASX: AAR) reached agreements to end royalty payments at its Mandilla Gold Project, located 70km south of Kalgoorlie in Western Australia.

The first royalty holder, which was due to receive $1 per tonne of gold ore mined and treated, will receive 1,142,588 ordinary AAR shares at a deemed issue price of $0.175 per share

The second royalty holder will receive a US$400,000 paylout. The extinguished royalty agreement was pegged at 4% net smelter royalty on gold production in excess of 100,000oz; and a price participation royalty of 10% of every dollar the gold price exceeds A$600 for every ounce produced.

Anglo Australian Managing Director, Marc Ducler, calls the transaction transformational.

"The agreements we have struck with the royalty owners amount to a transformational development for the Company, given our corporate focus on advancing the project as quickly as possible and delivering a maiden Mineral Resource," said Ducler.

“With the Mandilla Gold Project effectively royalty free, we can focus on the ongoing drilling programs – which are progressing well and laying the foundations for a maiden Mineral Resource Estimate later this calendar year. Given the strategic location of the deposit, we are now extremely well-placed to continue to build value in the company and realise full value for the potential ounces in the ground.”

 

By Michael McCrae

For Kitco News

David

A split congress in November would be bad for gold – Forexlive.com

Although the gold market has struggled to hold on to $2,000 an ounce, one market analyst encourages investors to look past the current volatility and focus on the broader trend currently in place.

Adam Button, chief currency strategist at Forexlive.com, said that he sees the current price action as a healthy consolidation period.

"If you think about a long-term bull market, you don't want to see a nonstop parabolic move," he said.

Button said that U.S. central monetary policy and government fiscal stimulus will continue to be the gold market's critical drivers. He added that he doesn't see the current environment of ultra-low interest rates changing anytime soon.

"In the long term, the main one is runaway fiscal spending, and the second one will be easy monetary policy," he said. "And I think we're setting up for a decade of both of those things."

Although Button is bullish on gold, he expects to see more volatility in the near term, especially surrounding the November U.S. presidential and general elections.

Button said that because the gold market is addicted to fiscal stimulus and loose monetary policy, investors will be sensitive to shifting political winds. He added that the worst-case scenario for gold is if Democratic nominee Joe Biden becomes president and Congress remains split with the House staying with the Democrats and the Senate remaining Republican.

"You would consider selling gold on that and just heading to the sidelines for a little bit because that's that fiscal conservatism will come back," he said. "That limits both the economic growth in the United States, but more so than that, runaway fiscal spending that I think is the main tailwind for gold."

The best scenario for gold would be a Democrat sweep on Capitol Hill. Analysts and economists would expect the government to implement aggressive fiscal policies, Button added.

Although a split government would hinder gold prices in the near-term, Button added that it wouldn't ruin the long-term uptrend. He said that the government will have to continue to spend to support economic growth, no matter who is in office.

"So I think we might kind of hover around these levels on electron uncertainty until then," he said. "But then I think after that, there's a good chance that we run up through $2,000, maybe up to $2,200, a by year-end. That's a level I'd look at," he said.

 

By Neils Christensen

For Kitco News

David

The ‘J. Powell Paradox’ and Gold Pricing

The ‘J. Powell Paradox’ is a scenario in which the Federal Reserve begins to send out signals indicating moves in the future, which are then backed up by a more comprehensive explanation of what the Fed is planning on doing, and their intent or desired result from these actions. However, market participants are not quick to react to the anticipated changes. In some cases, this creates a knee-jerk effect opposite to what the Fed had hoped for and the common sentiment.

Yesterday the long-awaited economic summit held virtually began with a keynote speech by, Jerome Powell. For weeks prior the Federal Reserve began dropping subtle hints as to some upcoming changes in their monetary policy. They began to release information prior to Powell’s Keynote address in order to accomplish two things.

First, was to not rattle or shake off the market. They were embarking on a major change in their monetary policy and wanted their ideas to be already on the public’s mind. Secondly, was to have some a semblance of transparency.

True to their words through the chairman the Federal Reserve announced yesterday that they had no intent on being hasty to raise interest rates as they work to achieve more economic stability in the United States. By letting inflation run a little hot, it can allow more focus upon the first part of their dual mandate, which is to reach maximum employment.

In the past, during recent periods of economic uncertainty they maintained a maximum target of 2% in regards to inflation. During the points in time in which inflation would get close to that target interest rates were raised, thereby slowing down the economic recovery. On certain instances raising rates too quickly resulting in a setback to aid the United States economy.

Many analysts including myself, believe that if the Fed followed through with this revised monetary policy it would have a bullish effect in the ‘risk-on’ market. Take As well as take the U.S. dollar lower which would concurrently have an extremely bullish effect on the ‘safe haven’ asset class such as gold and silver. However, this assumption did not take into account the enigma that exists as market participants react to changes by the Fed involving their monetary policy.

Price changes that occurred on Wednesday, Thursday and today were all examples of this paradox unfolding. The day prior to chairman Powell’s keynote speech (Wednesday, August 26) gold futures rose dramatically gaining about $40 on the day in anticipation of a major change in monetary policy by the Fed. However, on the day of the keynote speech the anticipated market reaction was 180° different than the traders and investors had anticipated.

Rather than the initial anticipated reaction to the shift in monetary policy. The preliminary reaction resulted in a volatile trading session that sent bullion pricing higher prior to chairman Powell’s speech. At the time the speech began gold futures basis the most active December contract had traded to an intraday high of $1980. Then just as Powell began his keynote speech, gold pricing eroded and then reversed taking gold to an intraday low of $1914.

The majority of analysts, including myself interpreted yesterday’s decline as a direct result of profit-taking. However, a more plausible explanation was that market participants were not able to immediately interpret the ramifications and of such a major shift in the monetary policy of the United States.

This in a nutshell the ‘J. Powell Paradox’ refers to the way market participants react to a shift in monetary policy by the Federal Reserve.

The reaction seems to involve a two-step process. First and foremost is a major knee-jerk reaction which can cause market prices to move strongly in both directions in a single trading session. In the case of yesterday’s activity, the knee-jerk reaction resulted in gold and silver prior to chairman Powell’s address moving sharply higher, and then reverse course and prices moved in the opposite direction that was anticipated.

Secondly, is a time delay before the investment community at large is able to fully comprehend the potential outcome and intended results of this historical move. In the case of the announcement made by the Federal Reserve it would take a full day before traders were able to take ownership of the idea that these actions would have a profound change in gold prices, in essence shifting market sentiment in gold and silver from bearish to bullish, whiles always being underlying bullish.
 

Wishing you as always, good trading,

 

By Gary Wagner

Contributing to kitco.com

 

David

Jackson Hole Wyoming, the economic event of this summer

Since 1978 the Federal Reserve of Kansas City has been sponsoring an annual economic symposium. Central bankers and finance ministers from around the world attend the symposium to focus upon critical economic issues. Former Federal Reserve Chairman Ben Bernanke moved the venue to Jackson Hole Wyoming in 1981.

According to Investopedia, “The Jackson Hole Economic Symposium is one of the longest-standing central banking conferences in the world. The mission of the event is to foster an open discussion. Attendees are selected based on each year’s topic, with additional consideration given to create regional diversity among attendees.”

At each symposium it is the role of the Federal Reserve Bank of Kansas to select a specific topic that the symposium will focus upon. Although the number of individuals attending is only about 120 people, these individuals represent the key global economic policymakers. These policymakers will use this topic as the focal point for their research and submit their findings online.

The 44th Annual Economic Policy Symposium will be held from August 27 to August 28, although on this occasion the symposium will be held virtually due to concerns of the global pandemic.

One of the most startling aspects in terms of this year’s primary topic is in the comparison to the primary focus of the 2019 event. Last year economies worldwide experienced one of the largest economic expansions in history, and the topic of discussion during the symposium was “Challenges for Monetary Policy”.

In his opening remarks Chairman Jerome Powell addressed the current challenges for monetary policy saying, “For the Federal Reserve those challenges flow from our mandate to foster maximum employment and price stability. From this perspective, our economy is now in a favorable place … The current U.S. expansion has entered its 11th year and is now the longest on record. The unemployment rate has fallen steadily throughout the expansion and has been near half-century lows since early 2018.”

This year’s topic is “Navigating the Decade Ahead: implications for Monetary Policy”. The severity and long-term implications of the pandemic which began this year are underscored in this year’s topic which is a discussion of the decade ahead, rather than the year ahead.

The global pandemic is the core crisis that all governments are facing. According to the Japan Times, “The Federal Reserve and other monetary authorities have gone to unprecedented lengths to combat the COVID-19 crisis, flooding the global economy with trillions of dollars in liquidity and credit, and in the process have become a towering presence in the financial markets … the pandemic has also exposed an unpleasant reality for the monetary mavens: After decades in which they rode high as overseers of the global economy, they no longer have the firepower to manage the business cycle on their own. They need the help of fiscal policymakers to do that — a fact made painfully clear by the U.S. congressional stalemate over another stimulus package and the threat that poses to the nascent economic recovery.”

The truth is that monetary policy by central banks worldwide have used the majority of their tools to attempt to stabilize their core economies. However, without further fiscal stimulus by the Federal Reserve and other central banks a global economic recovery to that of the pre-pandemic era seems virtually impossible.

While central banks worldwide will continue to play a critical role in the economic recovery, alone they stand very little chance of meeting their objectives.

 

By Gary Wagner

Contributing to kitco.com

David

Gold price starting the week under pressure, market looks vulnerable

The gold market is starting a new trading week on the back foot as the U.S. dollar continues to find new buyers.

December gold futures last traded at $1,942 an ounce, down 0.26% on the day. Meanwhile, the U.S. dollar index last traded at 93.15, roughly unchanged on the day.

Gold's selling pressure comes after it was unable to hold $2,000 an ounce last week.

According to some analysts, after an historic drive since the start of the year, gold has entered into a necessary consolidation period. Analysts have said that they see this as a healthy correction that will help gold maintain its long-term uptrend.

In a recent interview with Kitco News, Ole Hansen, head of commodity strategy at Saxo Bank, said that new momentum in the U.S. dollar could be gold's most significant headwind in the near-term.

Last week speculative bearish interest in the U.S. dollar fell slightly after hitting its highest level in nine years. Hansen said that this trend probably has more room to unwind.

"We are seeing dollar short positioning at extreme levels and these positions right now are squeezable," he said. "That makes bullish gold position squeezable in the near-term," he said.

While gold looks vulnerable to lower prices in the short-term, many investors wonder just how low they could go as it trades near critical support levels.

In a report on Sunday, Christopher Vecchio, senior currency strategist at DailyFX.com, said that it will be important to watch if gold prices can hold initial support at $1,921 an ounce, the yellow metal's previous all-time high, set in 2011.

"Gold prices failing through the former yearly high at 1921.07 would be a major warning sign for gold bulls," he said.

After that, Vecchio said that investors should keep an eye on the August lows.

"A loss of the August low at 1862.90 would be a very important development insofar as redefining the recent consolidation as a topping effort rather than a bullish continuation effort," he said.

In a recent interview with Kitco News, Daniel Ghali, commodity strategist at TD Securities, said that the gold market could see a considerable correction as the momentum trade, which carried prices above $2,000 an ounce, starts to fade.

He added that there could still be room for prices to go higher, but he compared the price action to a rubber band being stretched.

"The rubber band is really being stretched to the limit and some point it's going to give and then we will see some pain."

As to how significant the correction could be, Ghali said that a drop of 17% or more than $300 could be possible. However, he added that once the correction is over, he expects that the fundamental issues that ignited gold's rally, should continue to support prices.

Some analysts have said that gold prices could fall as low as $1,800 an ounce and remain in a long-term bullish uptrend.

 

By Neils Christensen

For Kitco News

David