Gold has traded in a range between $1,673 and $1,686 so far today…as of 6:05 am Pacific, the yellow metal is down $6 an ounce at $1,675…Silver is 24 cents lower at $32.29…Copper is 7 pennies lower at $3.80…Crude Oil is off $1.29 at $106.04 while the U.S. Dollar Index is up one-tenth of a point at 79.24…the market seems to be so fixated on every word spoken by Ben Bernanke…the Fed Chairman was on ABC News last night, following his speech to a group of economists earlier in the day that reversed the view of some traders that an improving economy makes it less likely that the Fed will engage in another round of quantitative easing…a look at stimulative measures introduced by central banks around the world in recent months clearly paints the picture of a global liquidity boom as we showed in Monday’s chart…”Fed speak” is back in force tomorrow when Bernanke lectures another class at George Washington University and several Fed presidents are speaking…
It’s budget day tomorrow in Ottawa and as investors in the resource sector, we can take comfort in the fact the Conservatives are likely to significantly streamline federal government regulation in the industry and quicken the project approval process…this, of course, is sure to draw of wrath of the environmentalists who have dangerously overdosed on all the green kool-aid served up by the likes of Obama, Gore, McGuinty and Suzuki…amazingly, the narrative in certain parts of Ontario and Quebec is that somehow Alberta and Saskatchewan are responsible for the decline in their manufacturing industries because of Canada’s “petro dollar”…of course that completely ignores the fact that Ontario and Quebec have been damaged severely by their own fiscally incompetent tax-and-spend governments who wouldn’t know how to run a profitable lemonade stand let alone create the conditions necessary to attract investment and foster entrepreneurial growth…
The American public’s attitude toward the economy is broadly on the upswing, according to the latest CNBC All-America Economic Survey, but details show deep-seated concerns that present problems for both political parties going into the November presidential elections…the poll of 836 Americans across the country found that 36% believe the economy will improve over the next year, a nearly 10-point gain from November, and the highest level of optimism since 2010…Americans expect the biggest gains in their paychecks in nearly four years…they are also more upbeat about their homes: 22 percent expect their home’s value to increase in the next year, up from 15% last quarter and the highest level since December, 2010…more than 51% of the public own an Apple product, with one in three owning more than one…interestingly, Gold is seen by the American public as the best investment right now, chosen by 37% of respondents…real estate is a distant second with 24%, followed by stocks at 19%…one could make the argument that those numbers are potentially bearish for Gold and bullish for stocks, though those readings could hit more extreme levels in the months ahead…
The price of Gold, one of the most eagerly watched indicators of market confidence, is currently “too low” relative to real interest rates, according to commodities analysts at Goldman Sachs…they forecast that Gold will rise to $1,785 per ounce over the next three months, $1,840 over the next six, and $1,940 over the next year…what’s very strange, however, is their statement Gold remains a “compelling trade” at current levels but “not a long-term investment”…that could be how Gold is viewed in the United States but not in Asia or other parts of the world…
At BMR, we continue to be bullish on Gold and John’s chart yesterday showed the strong possibility of a move to the $2,000 level later this year…Silver, however, could very well prove to be the investment of the decade which is why investors should perform their due diligence on high quality Silver producers and Silver exploration companies…
John has a chart update this morning on Silver which, like Gold, appears to be forming a bullish inverted head-and-shoulders pattern….below is a 9-month weekly chart…
Rainbow Resources (RBW, TSX-V) Update
Rainbow Resources (RBW, TSX-V) is holding an event for investors in Calgary tomorrow which leads us to believe that significant news is on the way from the company by tomorrow morning…over the last several weeks, Rainbow has been gradually providing more details on its West Kootenay land package but we suspect the company may have saved its “best for last” as far as the month of March is concerned…President David Johnston has agreed to speak with BMR following tomorrow’s Calgary event…rumor has it, some major brokers will be in attendance which adds further credence to the theory that Rainbow is up to something…we doubt they will disappoint given how things have progressed with the company over the last couple of months…
Argex Mining (RGX, TSX-V)
At the request of some of our readers, below is a chart update on Argex Mining (RGX, TSX-V)…RGX has been a great performer so far this year, and we like what this company is doing, but from a technical perspective it appears we’re about to see the “handle” form on this very possible classic “cup with handle” pattern…a cleansing of the current overbought conditions could have started yesterday when the stock climbed as high as 90 cents and closed down 4 pennies at 80 cents on high volume…
Note: John, Jon and Terry do not hold positions in RGX.
Probe Mines (PRB, TSX-V)
Probe Mines (PRB, TSX-V) has been making great progress with its Borden Lake Gold Project in northern Ontario, even though this month’s drop in the share price wouldn’t suggest that…Probe fell as low as $1.22 this month on a sell-off that made little sense, but smart buyers stepped in as we suggested they would…PRB closed at $1.50 yesterday
Note: John, Jon and Terry do not hold positions in PRB.