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Gold fell as low as $1,640 overnight but has recovered somewhat…as of 6:00 am Pacific, the yellow metal is off $7 an ounce at $1,652…Silver is now up 7 cents to $31.57…Copper is unchanged at $3.65…Crude Oil is 29 cents lower at $102.54 while the U.S. Dollar Index is down slightly at 79.98…

Bullish Contrarian Sign For Gold

For the fourth time in the past year, Gold bears outnumbered the bulls in Bloomberg’s weekly Gold Bull/Bear Sentiment Survey…in fact, the bears had the bulls outnumbered by almost 2-to-1…

Today’s growing sloth of Gold bears is a “buy” signal for contrarian investors…research from the Gold team at Canaccord Genuity, as reported at www.usfunds.com over the weekend, found that Gold rallied about 10% on average during the month following each of these sentiment “cross-overs”…this historical increase means that Gold could potentially rally to the “high $1,700’s per ounce”, which Canaccord believes “would breathe some new life into the Gold equities”…

Another interesting chart this morning, from National Bank Financial that appeared in the Globe and Mail, shows how the TSX Gold Index, in relation to Gold itself, has nearly touched the panic-driven oversold lows not seen since the 2008 meltdown…either we’re in a new realm for Gold stocks or we’re about to see a major turn to the upside…

Spanish Yields At Highest Level This Year

Spanish 10-year government bond yields broke above 6% for the first time this year today as concerns over the country’s ability to keep its finances under control pushed debt markets back into “crisis mode”…Spanish yields are expected to rise further toward the panic-triggering 7% level beyond which debt costs are widely seen as unsustainable unless the European Central Bank resumes its bond purchases after a two-month break…

China Currency Move

A move by China Saturday to double the size of the yuan’s trading band against the U.S. Dollar is a strong signal that Beijing is comfortable with economic growth and believes it has avoided a hard landing…this was also a milestone step toward turning the yuan into a global currency…

The Shanghai Composite Index was essentially unchanged today, closing at 2357…the chart for the Shanghai is very interesting and shows strong potential for a major breakout in the coming weeks…such an event would be positive for global equities as a whole…

Today’s Markets

European markets are higher today while stock index futures in New York as of 6:00 am Pacific are pointing toward a strong open on Wall Street…the TSX and the TSX Venture Exchange have each declined for seven consecutive weeks, so a turnaround very soon is likely in the cards…

U.S. retail sales rose more than expected in March as Americans shrugged off high gasoline prices and bought a range of goods, suggesting that economic growth in the first quarter did not slow as much as many had feared…the rise in sales last month (0.8% vs. a forecast gain of 0.3%) was broad-based, even though Americans paid 27 cents more per gallon of gasoline than they did the prior month…so far, Americans appear to be taking rising gasoline prices in stride, thanks to a mild winter that has cut household heating bills…

Rainbow Resources (RBW, TSX-V)

John has several individual company charts to share this morning beginning with Rainbow Resources (RBW, TSX-V) which has pulled back into an zone of strong support…on Saturday, we spoke briefly with RBW President David Johnston who was checking on his recently-optioned Jewel Ridge Property in Nevada along with senior geologist Bob Morris…Johnston’s tone was very upbeat, and what we see potentially unfolding in Nevada is a terrific appetizer before the main course to be served in the West Kootenays this summer…the chart shows declining volume during a consolidation (normal) and consistent accumulation…the overall technical picture remains very attractive…

Note: John and Jon hold positions in RBW (Terry does not).

RJK Explorations (RJX.A, TSX-V)

The Blackwater Gold District in central British Columbia, which BMR has been following since Richfield Ventures‘ discovery in late 2009, could really heat up this summer, and a leader in that area is unquestionably RJK Explorations (RJX.A) which started a 2,000-metre drill program at its Blackwater East property in early February…the stock has broken out from a horizontal channel as John details below…

Note: John, Jon and Terry do not hold positions in RJX.A.

Golden Predator (GPD, TSX)

Note: John, Jon and Terry do not hold positions in GPD.

Canaco Resources (CAN, TSX-V)

Note: John, Jon and Terry do not hold positions in CAN.

TSX Venture Exchange and Gold

The spring of 2012 has been a rough one so far for Venture Exchange investors with the CDNX plunging as much as 15% thanks to seven consecutive weekly declines.  It’s in times like we’re in now, however, when serious money is made.  The same levels of pessimism have been prevalent on a few important occasions over the last couple of years – during the 20% pullback in 2010, the panic sell-off that culminated in a drop to 1300 early last October, and last December’s weakness that resulted in a fall to 1400.  This past week, the CDNX touched 1425 with the daily RSI(14) reaching an oversold level not seen since last October.  The market bounced back a bit to close the week at 1460.

During three periods since the beginning of 2010, the CDNX has met resistance at 1700.  And there have been four times when the Index has found support between 1300 and 1425.  So that appears to be the range until new dynamics come into play.  At BMR, our view is that this will be a stellar year for junior resource stocks and those who are selling in fear right now are making a mistake.  Support levels for the Venture are very strong and historically the Index has almost always enjoyed a very positive year when there has been a first quarter gain.  Fundamentally, the global liquidity boom engineered by central banks over the last several months is an underlying bullish factor for Gold and the markets despite the correction we’ve seen in Gold since the end of February.

The Venture Exchange has fared better than the TSX Gold Index this year (a 1% loss vs. an 11% pullback) and that kind of out-performance has usually been a very positive sign for the speculative juniors.  Gold stocks in general are hugely oversold, especially relative to the broad market.

Below is a very revealing chart of the TSX Gold Index showing the six major declines since 2007.

The average correction has been 26% and each dip has been a turning point.  The Index has been in decline for almost four months.  Either we’re in an entirely new realm for Gold stocks, or else we’re on the verge of a major reversal to the upside.  Sector weakness in Gold equities over the last six years has typically ended with “V”-shaped moves to the upside.  If you accept the theory that the TSX Gold Index has bottomed out, or is very close to a bottom, then now is certainly the time to be a bargain hunter on the Venture.

Gold

Gold, which has shown great support in the low $1,600’s, rose marginally last week to close at $1,659.  Silver was off slightly for the week, finishing at $31.50.  Copper weakened to $3.65, Crude Oil closed at $102.83 while the U.S. Dollar Index was up half a point Friday and closed at 79.88.

The latest Gold Fields Mineral Services (GFMS) report noted that Gold prices are expected to be driven by euro zone debt concerns and the prospects of additional monetary stimulus. In their view, the yellow metal has the potential to breach the $2,000 per ounce level in 2013. The report also said total cash costs for producers increased 15% in 2011 to $643 per ounce, up from $560 per ounce in 2010.  Declining mine grades are the largest component of the increase, contributing $28 of the $83 per ounce net increase. All-in costs (including depreciation as well as general and administrative charges) increased 22%.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, is having a huge impact on Gold.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates that won’t end anytime soon (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), money supply growth, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  It’s hard to imagine Gold not performing well in this environment.  The Middle East is being turned on its head and that could ultimately have major positive consequences for Gold.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than two years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.  While we focus very much on the Gold and Silver markets and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on undiscovered junior exploration companies or small producers, mostly in the Gold and Silver exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  If it’s the other way around –  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly –  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

This is an abbreviated edition of Morning Musings due to travel commitments today…Gold has hovered between $1,667 and $1,679 so far this morning…as of 6:00 am Pacific, the yellow metal is off $4 an ounce at $1,671…Silver is off 12 cents at $32.26…Copper is down 6 cents a pound at $3.68…Crude Oil is 28 cents lower at $103.36 while the U.S. Dollar Index is up one-quarter of a point to 79.59…

In economic data just released in the last 30 minutes, the U.S. Labor Department stated that the U.S. consumer price index increased 0.3%, in line with economists’ expectations…

John’s 6-month daily Gold chart shows RSI(14) has bounced up from previous support to its highest level (albeit an area of resistance) since just before the start of the sell-off at the end of February…the bullish inverse head and shoulders pattern, as we’ve been pointing out in recent weeks, is completely intact…what’s important to watch for in the immediate future is whether Gold can break out decisively above a recent downtrend line…

Oil Update

The tale of ever-tightening oil inventories and reduced supply appears to be coming to an end, the International Energy Agency said on Thursday…Saudi supply assurances, market speculation on a potential strategic stock release and hopes pinned on multilateral talks over Iran’s nuclear program have eased fundamentals and prompted falls in prices recently, the report said…

“Acknowledging that data remain preliminary, first quarter 2012 fundamentals nonetheless show a clear shift from the seemingly relentless tightening evident over the prior ten quarters,” the IEA said in its April report…

“Further surprises almost inevitably lurk around the corner for both demand and supply…but for now at least, the earlier tide of remorseless market tightening looks to have turned,” it said…

Chinese GDP At 8.1%

Chinese GDP grew 8.1% in the January to March period, according to the National Bureau of Statistics, missing analysts’ expectations of an 8.3% expansion…that was the weakest quarterly economic growth in China in almost three years, the result of weak exports and of Beijing’s cooling policies…but strong March data left economists and policy makers optimistic that faster growth may be seen in months ahead…

“We are in the middle of a recovery,” said Lu Ting, economist at Bank of America Merrill Lynch, adding that China’s growth rate likely bottomed in January and February…Chinese officials said they were pleased with the data as it furthered Beijing’s goal of re-balancing the economy by boosting domestic consumption…

“We must change the previous practice of relying on resource consumption and lots of cheap labor to bolster the economy,” said Sheng Laiyun, spokesman for the National Bureau of Statistics, in a press conference this morning…“After more than 30 years of nearly double digit growth, several factors that have supported China’s economic growth are beginning to show up in terms of restraining economic growth and supply and demand”…

Consumption spending accounted for 76% of first quarter economic growth, far above historic averages…fixed asset investment growth fell to 20.9% in the first quarter from the previous year, while retail sales growth rose to 15.2% in March from a year earlier…

Beijing has also been quietly injecting cash into the economy, encouraging banks to lend more and easing restraints on credit flows…a  larger than expected Rmb1tn ($200 billion) in new loans in March, announced yesterday, was the latest evidence of its shift towards a moderately pro-growth stance…

Today’s Markets

Asian markets were up overnight including an 8-point jump in China’s Shanghai Composite to 2359…European markets are weaker while stock index futures in New York are pointing toward a modestly lower open on Wall Street after yesterday’s strong performance…

Venture Exchange

The CDNX found support at 1425 this week and powered 37 points higher yesterday, though on unimpressive volume, to close at 1472…the next area of resistance is going to be between 1500 and 1513 as John outlines in the chart below…

Gold is off $6 an ounce to $1,654 as of 6:00 am Pacific…Silver is 4 cents lower at $31.57…Copper is up 2 pennies to $3.70…Crude Oil is 39 cents higher at $103.09 while the U.S. Dollar Index is off slightly at 79.58…

The disappointing performance of the U.S. labor market in March shows it’s too early to conclude the economy is out of the woods, despite months of encouraging data, New York Federal Reserve Bank President William Dudley said this morning…the Fed is gathering more data to determine whether last month’s non-farm payrolls report, which showed the economy added way fewer jobs than expected, was just a weather-related setback or a sign the recovery is losing momentum, Dudley said…an influential voting member of the U.S. central bank’s monetary policy committee, Dudley appeared to leave the door open to additional stimulus measures as he noted that the economic data also “looked brighter at this point in 2010 and again in 2011, only to fade later in those years”…

New claims for unemployment benefits in the U.S. rose last week to their highest level since January in statistics released by the Labor Department at 5:30 am Pacific…

Today’s Markets

Asian markets were strong overnight with China’s Shanghai Composite gaining nearly 2% or 42 points to close at 2351…that was the biggest one-day percentage rise in two months…the market was lifted by Shenzhen-related shares after local media reported that the southern Chinese city would soon unveil policies to support is economic development…

European markets were up slightly but have since reversed, while stock index futures in New York as of 6:00 am Pacific point to a flat open on Wall Street…

Venture Exchange

The CDNX got a lift yesterday when TomaGold (LOT, TSX-V) reported a discovery at its Monster Lake Project near Chibougamau, Quebec…drilling intersected 5.7 metres grading 237.6 g/t Au in hole M-12-60, between 69 and 74.7 metres downhole…mineralization is consistently high throughout the intercept (containing native Gold over its entire length) and the zone consists of a vein of black quartz hosted by a strongly sheared lapilli tuff with the surrounding tuff completely silicified…results from additional holes are pending with the company hoping to resume drilling in the coming weeks…TomaGold, with 40 million shares outstanding, rocketed as high as 96 cents yesterday before closing at 84 cents on volume of 1.6 million shares…Stellar Pacific (SPX, TSX-V) holds 22 million TomaGold shares and 16.5 million of them will be distributed to SPX shareholders at the end of the month (ex-dividend date is April 26)…

In an interview with Jack Stock of Globex Mining (GMX, TSX) last fall, we asked him what area of Quebec he thought had the most untapped geological potential and he said Chibougamau…Globex holds a strong land position there and its stock (a low volume trader) jumped 17 cents yesterday to $1.35…Visible Gold Mines (VGD, TSX-V) had a volume surge yesterday as it also holds some ground in the Chibougamau area…VGD was up half a penny to 9 cents on total volume (all exchanges) of 2.8 million shares…

Rainbow Resources (RBW, TSX-V) has commenced exploration at its recently-optioned Jewel Ridge Property in Nevada and some near-term results are expected which could be impressive given the past producing open-pits there...Rainbow has a fabulous prospecting tool which is their portable backpack drill, a device they may put to work at Jewel Ridge as mentioned in their news release yesterday…David A. Johnston gave an excellent demonstration of the backpack drill at the Rainbow event in Calgary a couple of weeks ago…Jewel Ridge, with many zones of mineralization, gives Rainbow a terrific opportunity for a major share price lift-off prior to the start of drilling at their flagship Big Strike Project in the Kootenays…could be a similar situation to what happened recently with Cadillac Mining (CQX, TSX-V) when it started exploration at its GoldStrike Project in Utah with numerous past producing open-pits…one hole propelled CQX more than five-fold in one day in January…

Speaking of Cadillac, the company announced yesterday that it has arranged a non-brokered private placement financing of up to $1 million at a price of 20 cents per unit to allow the company to resume drilling at GoldStrike…CQX closed yesterday at 23 cents, and below is an updated chart from John…

Note: John, Jon and Terry do not hold positions in CQX.

Focus Metals (FMS, TSX-V)

It was a strong day for Focus Metals (FMS, TSX-V) yesterday which gained 12 cents to $1.18 after announcing positive metallurgical results for its Lac Knife Graphite Property in Quebec…the FMS chart continues to look strong as John shows below…

Note: John., Jon and Terry do not hold positions in FMS.

Argex Mining (RGX, TSX-V) Chart Update

Gold is off slightly slightly this morning after a strong move yesterday…as of 6:15 am Pacific, the yellow metal  is down $4 an ounce at $1,657…Silver is 21 cents lower at $31.63…Copper, after falling 4% yesterday to a three-month low, is flat at $3.86….Crude Oil is 41 cents higher at $101.43 while the U.S. Dollar Index is off one-quarter of a point to 79.67…

Modest physical buying has been reported from India…the reopening of Indian jewelry shops following a three-week strike, and the important Akshaya Tritiya festival on April 24, should be supportive of the Gold price…throughout this decade-long bull market in Gold, physical buying has always been key during times of technical weakness…the next immediate resistance area is in the $1,670’s as John’s chart points out below…

Thomson Reuters GFMS figures Gold potentially could fall below $1,550 an ounce over the next two months but also return to last year’s record highs before 2012 ends…the consultancy listed its outlook for the precious metal this morning in conjunction with the release of its Gold Survey 2012 at events held in London, Johannesburg and Toronto…this was the 46th edition of the report…the report indicated that net world investment fell in 2012 but physical investment in the form of bars was strong and central bank buying continued…jewelry dipped but only modestly despite higher Gold prices, while mine supply rose…

Thomson Reuters GFMS offered some caution about Gold prices in the short term, citing some abatement of the euro zone debt crisis and lowered expectations for a third round of quantitative easing by the Federal Reserve…“The low $1,600’s came as little surprise and it’s quite possible we’ll see a push even lower, perhaps below $1,550 in the next month or two,” said Philip Klapwijk, global head of metals analytics with Thomson Reuters GFMS…still, the consultancy said it was bullish for the medium term…”We could easily see last September’s record high being taken out, and a push on towards $2,000 is definitely on the cards before the year is out, although a clear breach of that mark is arguably a more likely event for the first half of next year,” Klapwijk said…

TSX Gold Index

The TSX Gold Index, which has been under heavy selling pressure since December, is stabilizing after touching a low of 311 late last week – a level not seen since early 2010…the worst could be over this Index which fell a whopping 21% from late February…

Today’s Markets

European markets are showing strength this morning while China’s Shanghai Composite gained 3 points to close at 2,308 as strength in property shares offset weakness in the financial and resource sectors…China’s first quarter GDP will be released Friday…stock index futures suggest a positive start to the day for the Dow after the biggest plunge of the year yesterday…

The Venture Exchange is primed for a rebound after falling for the fifth consecutive session yesterday (a 7.8% loss during that time)…the daily RSI(14) shows the the most oversold conditions in the Venture since early last October when the Index hit an intra-day low of 1306…that turned out to be a fabulous buying opportunity and this time is likely no different, though picking the precise bottom is next to impossible…the strong support band in yellow below has held since 2010…for the brave and wise that like to go against the crowd, times like these when investor sentiment is so negative is often when fortunes are born…

Rainbow Resources (RBW, TSX-V) Update

One can’t help but be impressed with the determination of Rainbow Resources and the speed at which this young exploration company is proceeding…just two weeks after optioning the Jewel Ridge Gold Property in Nevada, Rainbow has just announced that it has commenced a field exploration program there that may even include some near-surface drilling with the company’s portable backpack drill…the program is designed to rapidly move Jewel Ridge to the Phase 1 drilling stage…this is a great little property with past producing open-pits and sandwiched in between Barrick’s Ruby Mine and Timberline’s Lookout Mountain Project…the company also provided an update on its flagship Big Strike Project…drill permit applications have been submitted for the Gold Viking and International Properties…some new information was also provided on the Ottawa Property concerning vein widths that is quite impressive…Rainbow managed to hold up quite well during the market sell-off and the chart continues to look very favorable…this is a company that should make a lot of noise in the coming months…

Argentum Silver (ASL, TSX-V)

We’re always on the lookout for interesting Silver plays and one that has pulled back considerably over the last several weeks – right down to its rising 100-day moving average (SMA) – is Argentum Silver (ASL, TSX-V)…Argentum is active on projects in southwestern Mexico and is worthy of our readers’ due diligence…it closed yesterday at 18 cents…

Gold is steady this morning…as of 6:10 am Pacific, the yellow metal is up $3 an ounce at $1,644…Silver has gained 4 cents to $31.80…Copper is off a nickel to $3.74…Crude Oil is down 21 cents to $102.25 while the U.S. Dollar Index is slightly weaker at 79.75…

Jewelers in India, the world’s biggest bullion buyer, have suspended a nationwide strike after the government assured them it would consider their concerns regarding a tax on non-branded Gold ornaments…the 21-day strike ended after jewelers met with Finance Minister Pranab Mukherjee who had proposed a 1% tax on non-branded jewelry for the first time and a doubling of import duties on Gold bars, coins and platinum in his March 16 budget speech…

The fact that Gold has found strong support around $1,600 is very bullish and also keeps the inverted head-and-shoulders pattern completely intact…current resistance levels are $1,643, $1,672 and $1,725 as shown below in John’s 6-month updated daily chart…Gold should start finding some traction very soon…

Chinese Economic Data

China returned to an export-led trade surplus in March, heralding the prospect that the global economy may be passing its low point in the current cycle and lifting overseas orders just in time to compensate for a slowdown in domestic demand…the trade surplus of $5.35 billion last month (exports increased 8.9% from the same month last year while imports rose 5.3%) confounded expectations of a $1.3 billion deficit as exports grew faster than expected and import growth eased from a 13-month peak, customs data showed this morning…the data reinforced the view of most analysts that China’s trade-sensitive economy is set for a soft landing, with GDP growth likely to have eased for a fifth successive quarter to 8.3% in the first three months of 2012 and remaining on course for its slowest year of expansion in a decade…exports to the United States –  the single country with the biggest trading relationship with China – were a particular high point, up 10.4% from a year ago…those to the 27 members of the European Union – the biggest overall market for Chinese goods – were down 3.1% from March last year…China’s overall export performance was still a lot weaker than it was in 2011 when exports grew 20.3% for the whole year…attention now turns to China’s GDP growth data for the first quarter which is due to be released Friday…it’s expected to exceed 8% but fall short of the 2011 fourth quarter growth rate of 8.9%…

Venture Exchange – Where’s The Bottom?

Gold stocks across the board have been hit hard since the end of February with the TSX Gold Index down a whopping 20% while the Venture Exchange has fallen 247 points or 15% over the last 28 sessions from its 2012 high of 1696 February 29…Gold itself is off only about 8% from its yearly high, so the extent of the weakness in the Venture and the Gold Index is puzzling – especially at a time when central banks are pouring so much liquidity into the global financial system…

We remain convinced that the pessimists have it wrong, that Gold and Gold stocks will indeed shine in 2012…the Venture could be following a similar pattern to that which occurred in 2005…the market roared higher in January and February, corrected 20% beginning in early March, and then went on a tear the rest of the year with a 40% gain from the spring low…

Gold stocks are in heavily oversold conditions, an environment not unlike what was witnessed in the 2008 panic…with regard to the Venture, this sell-off has nearly exhausted itself in our view with RSI(2) – a very reliable indicator – at a low extreme as shown in John’s 3-year weekly chart…

The sell-off in Gold equities has created unusual opportunities across the sector in our view, so this is precisely the time to be going against the crowd…Richmont Mines (RIC, TSX) is a classic example of a deeply oversold situation – its 2.5-year weekly chart is typical of many of its peers’ charts at the moment…

Note: John., Jon and Terry do not hold positions in RIC.

On the Venture, RJK Explorations (RJX.A) has held up well during this weakness and remains supported by its rising 50-day moving average (SMA) at 19.5 cents…it closed yesterday at 20 cents…other bright spots are Rainbow Resources (RBW, TSX-V), Focus Metals (FMS, TSX-V) and Argex Mining (RGX, TSX-V)…Cap-Ex Ventures (CEV, TSX-V) seems to have found support at its rising 200-day SMA in the mid-70’s…it closed yesterday at 77 cents…Spanish Mountain (SPA, TSX-V) has strong technical support in the 40’s and appears to be in recovery mode…Greencastle Resources (VGN, TSX-V) is trading at cash value at 11.5 cents and that’s always a steal, especially now that it’s Jewel Ridge Gold Property is in play through Rainbow…

Gold is firmer this morning after a weaker-than-expected U.S. jobs report Friday…as of 6:00 am Pacific, the yellow metal is up $16 an ounce at $1,647…Silver has gained 27 cents to $31.98…Copper is flat at $3.79…Crude Oil is down $1.61 a barrel to $101.70 while the U.S. Dollar Index is up slightly at 79.95….

This is an abbreviated edition of Morning Musings due to the Easter long weekend…regular postings resume tomorrow…

Gold imports into India tumbled more than 55% in March, thanks to a nation-wide jeweler’s strike to protest a tax on non-branded ornaments…the strike continues….the president of the Bombay Bullion Association noted that the country imported just 15 to 20 tonnes of Gold in March compared to the 45 to 55 tonnes that is usually imported on a monthly basis…he added that the high price of the precious metal also deterred fresh purchases in the first quarter…An upcoming Hindu festival, Akshaya Tritiya, held on April 24, may be the catalyst that brings the jeweler’s strike in India to an end and moves Gold prices higher in April…

Historically, March is the weakest month of the year for Gold prices as shown in the chart below…

Gold stocks have been beaten down dramatically since the end of February to the point of ridiculous extremes – in fact, they are very close to being at their most oversold levels relative to the broad stock market since the lows of the 2008 panic…this is a time to be going against the crowd, not with the crowd…

Big Week For Data Out of China

Inflation in China rebounded slightly in March…the benchmark consumer price index increased 3.6% cent last month from a year earlier, mostly as a result of higher food and energy prices, according to government figures released this morning…the inflation number is the first in a flurry of data releases set for this week that analysts and investors hope will provide a clearer picture of what is happening in the world’s second-largest economy…Beijing on Friday will unveil China’s first-quarter gross domestic product figure, which is expected to show that annualized growth slowed from 8.9%  in the fourth quarter of 2011 to about 8.4%…some analysts are growing increasingly bullish on China’s growth outlook for this year, so a “hard landing” in China just doesn’t seem to be in the cards…

Today’s Markets

Stock index futures in New York are pointing to a weak opening on Wall Street this morning…the Venture Exchange closed Friday at 1481, a drop of 85 points for the week or 5.4%…John will have an updated CDNX chart tomorrow…it may not seem so right now, but we believe this will be a stellar year for the Venture which means this pullback is full of opportunities…we’ll share some of those tomorrow…