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1. Gold has traded between $1,284 and $1,293 so far today, touching a new multi-month high…as of 7:00 am Pacific, bullion is up $7 an ounce at $1,291…Silver has added 15 cents to $15.65…base metals remain under mild pressure due to China growth concerns with Copper, Nickel and Zinc at $2.62, $4.78 and $1.11, respectively…Cobalt is unchanged at $25.17…Crude Oil has pushed 34 cents higher to $46.88 while the U.S. Dollar Index has slipped one-tenth of a point to 96.54…the U.S. remains in a partial government shutdown…hopes of bipartisanship anytime soon appear dim…the growing socialist wing of the Democratic Party will start to flex its muscles today with the seating of the new U.S. Congress as more self-described Democratic Socialists join the ranks…Democrats, not unlike their liberal cousins in Canada, are embracing a massive government expansion that would make FDR look like a penny pincher…the party agenda is increasingly focused on big-government policies as well as an aggressive “Green New Deal” intended to fundamentally overhaul America’s economy and specifically its energy sector (eerily similar to the Trudeau National Energy Program)…serving as a check on the Democratic controlled House is the Republican majority in the Senate, and of course a Republican President…

2. After battling some severe headwinds, including a strong U.S. dollar for most of 2018, Gold is looking “to take the bull baton from the U.S. dollar and stock market” in 2019 according to Bloomberg Intelligence (BI) in its January Commodity Outlook…Mike McGlone, BI’s senior commodity strategist, says supporting factors for Gold and commodities in general this year include a weaker greenback, continued volatility in the equity markets, and a less aggressive Federal Reserve…“It should play out positively for commodities, with elevated mean-reversion risks in the trade-weighted broad dollar at the highest end-of-year level ever, an extended stock-market bull showing exhaustion and subsiding Federal Reserve tightening.  Metals, notably Gold and Copper, should be primary beneficiaries of a peak greenback,” McGlone said…“On an end-of-year basis, the trade-weighted broad dollar has never been higher.  Sustaining that strength should require continued U.S. stock-market outperformance vs. global equities, and more rate hikes.  These dollar-bullish drivers are near exhaustion vs. commodities.  Technicals are explosive for Gold, which trades in its narrowest 36-month range in almost 2 decades.  The 3-year market picture for Gold indicates prices migrating higher within an increasingly compressed range, which typically portends a breakout”…

3. Mixed U.S. economic data this morning…activity in the manufacturing sector expanded at a much slower pace than expected last month…the Institute for Supply Management’s manufacturing index fell to 54.1 in December, its lowest level since November 2016…economists were expecting the index at 57.9 in December, down from 59.3 in November…“Comments from the panel reflect continued expanding business strength, but at much lower levels,” said Timothy Fiore, ISM chair…“Demand softened, with the New Orders Index retreating to recent low levels, the Customers’ Inventories Index remaining too low – a positive heading into the first quarter of 2019 – and the Backlog of Orders declining to a zero-expansion level”…meanwhile, contrary to growing concerns about a potentially slowing U.S. economy, job creation surged in December as measured by the latest ADP/Moody’s Analytics survey released this morning…companies added 271,000 new positions as 2018 came to a close, smashing estimates of 178,000 from economists surveyed by Reuters...it was the survey’s best month since February 2017, which saw a gain of 280,000, and brought the average monthly gain for last year to 206,000…the Labor Department’s jobs report will be released tomorrow…

4. U.S. equity markets took a dive at the open this morning after Apple (AAPL, NASDAQ) warned investors to expect lower sales from the holiday quarter due primarily to “lower than anticipated” iPhone sales in China…the company says it was hurt by slower growth in that country and ongoing trade tensions with the United States…other factors were also at play, according to CEO Tim Cook, including the company offering cheaper iPhone battery replacements…after decades of expansion, the Chinese economy is slowing down with growth in 2018 expected to be the weakest since 1990…China is a huge market for Apple, making up about 15% of its global revenues…“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook stated in a letter to shareholders…Apple now expects revenue for the 3 months ending in December to be about $84 billion, down from an earlier estimated range of between $89 billion and $93 billion…it’s the 1st time since June 2002 that Apple issued a reduction in its quarterly revenue forecast…the iPhone has been Apple’s chief moneymaker for years, accounting for nearly 60% of the company’s total sales in the 3 months ending in September…while Cook focused on the impact of China, he did note in the letter that the number of people upgrading to new iPhones was “not as strong” as the company had hoped in other more developed markets…investors in the 4th quarter were anticipating a slowdown for Apple when the stock dropped 30% in the final 3 months of 2018…Apple’s warning has also dragged down other companies that do big business in the world’s 2nd-biggest economy…

5. The facts on China: Retail sales in China marched downward most of last year with growth decelerating to 8.1% in November, the lowest level in more than 15 years…consumption accounted for more than three-quarters of economic growth in 2018 and is expected to fall to just under two-thirds this year…in recent months, investment into factories, buildings and the like slowed to a rate unseen in at least a quarter century before stabilizing…manufacturers have reported a drop in new orders, and profits from big, mostly state-owned industrial firms declined in November, the first drop in 3 years…Beijing, which has scurried to respond, has tools at hand to shore up the economy…in recent months it has given the green light to railway and other infrastructure projects shelved as unsuitable 2 years ago when the economy was stronger…many economists expect expanded deficit spending from Beijing this year, and Chinese leaders last month endorsed more tax cuts for businesses and households…growth overall is likely to hit Beijing’s annual target of about 6.5% for the past year, at least by official statistics, and many analysts expect the government to set a slightly lower goal for growth in 2019…a slowing Chinese economy should give President Trump leverage in negotiating a trade deal…

6. The Dow has fallen 399 points after 30 minutes of trading, but investors have been buying into any dips in recent sessions…the TSX is down 126 points…Wesdome Gold Mines (WDO, TSX) is threatening to hit a new high, up 8 cents at $4.51 in early trading…Kirkland Lake Gold (KL, TSX) has gained 33 cents to $35.74 while New Gold (NGD, TSX) has hit its best level since early December at $1.16…the Venture is gunning for its 6th straight winning session…it’s up another point at 572, shrugging off the drop in the broader markets which is a positive sign…with a loss of nearly 36% in 2018 the Index is coming off its worst annual performance since 2008…that was also one of the greatest buying opportunities in Venture history, but few people knew it at the time…

7. Blommberg’s Thomas Biesheuvel wrote this morning that Barrick Gold’s (ABX, TSX, NYSE) new CEO has a message for the Gold industry: This is just the start of a big shake-up…Barrick agreed to buy smaller rival Randgold Resources in a $5.4 billion deal (U.S.) deal announced in September…as part of the agreement, Randgold’s CEO, Mark Bristow, has become the CEO of Barrick, the world’s biggest Gold miner…“Without a doubt, this industry needs transformation,” Bristow stated…“We believe we have started that…this industry, if it had carried on the way it was, was going to become irrelevant…it has too few assets with too many management teams and it needs reorganization”…by combining the 2 companies, Barrick says it will run 5 of the 10 best Gold mines in the world, with operations from Nevada to South America and Mali and the Democratic Republic of Congo…the new company, which started trading yesterday, is still known as Barrick but its trading symbol on the NYSE has changed to GOLD, the ticker formerly held by Randgold on the NASDAQ…Barrick’s TSX ticker symbol has remained the same…

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