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Gold is stronger today but the yellow metal is nonetheless poised to post its first monthly loss since May…this is not totally surprising, given the fact Gold had clearly become technically overbought in September (a condition that has now been completely cleansed)…in addition, October historically is one of the worst months of the year for bullion…November, however, has been the best month for Gold prices over the last decade, so there’s good reason to believe that $1,700 will hold as the low for the final quarter of the year…

Data tracked by Bloomberg show that holdings in Gold ETP’s (Exchange Traded Products) rose to 2,587.92 metric tons yesterday, a new record…

As of 5:35 am Pacific, the yellow metal is up $11 an ounce at $1,720…Silver is up sharply, 52 cents to $32.27…Copper has gained 3 pennies at $3.53…Crude Oil  is up 61 cents to $86.29 while the U.S. Dollar Index is weak again today, down another one-fifth of a point to 79.78…the Dollar Index could not get through important resistance the other day, embolding the bears which is good news for Gold (and the Venture Exchange)…

Today’s most important chart is Copper, and the reason we’re excited is that it has hit extreme oversold levels based on RSI(2) not seen since the May-June period…this means we have good reason to expect a rebound in November and, indeed, Copper is starting to firm up today…it appears support will hold at $3.50 and another test of resistance around $3.80 appears to be in the cards based on this 2.5-year weekly chart from John…this is bullish for the Venture Exchange that typically performs best when Copper is in an uptrend…

Gold Views

Tom Kendall, head of precious metals research at Credit Suisse, in a report Tuesday according to CNBC:  “$1,800 remains a formidable barrier on the upside…a break through that level will likely require a combination of improved demand from Indian and/or Asian physical dealers plus renewed Fed purchases of Treasuries outright once Operation Twist expires at the end of the year…with the end of the festival season (traditionally marked by the end of Diwali, or the ‘festival of lights’) just over two weeks away, we can say with some confidence that this year will be one of the weakest for Indian gold imports in the past seven years”…

Robin Bhar, head of metals research at Societe Generale:  “The balance of interest may be shifting in the short term, away from professional investors who have been active in Q3 (and helping to drive the price higher), while their retreat, and associated price fall, is now starting to entice fresh physical interest…outside India and China, and elsewhere in Asia, physical demand remains keenly attuned to price movements, but there are signs now of some bargain hunting on any approach to $1,700″…

Germany To Check On Gold Reserves

Growing demands from German officials and politicians to formally check German Gold reserves now held in the United States have sparked media reports that the Gold reserves of several Western nations are believed to be smaller than previously thought…in an article published yesterday in Coin Week, Louis Golino suggests, “If these reports are accurate, they have important implications for the future price of Gold, and therefore for precious metals investors…first, they suggest that much less mined Gold exists than previously believed…second, this is especially significant to the so-called manipulation thesis, which hold that governments act to surpress the price of Gold,” Golino noted…”if governments hold less Gold than we thought they did, then their ability to affect the price will also be greatly diminished,” he advised…

Germany is believed to have 3,396 tons of Gold reserves, the second-largest Gold reserves in the world after the United States…German politicians, as well as Germany’s federal Court of Auditors, requested recently that the Bundesbank, Germany’s equivalent of the Federal Reserve, check up on Germany’s Gold reserves, the majority of which are in storage in offshore banks…Der Spiegel now reports that the Bundesbank has agreed to check up on the reserves…the Bundesbank will make arrangements to repatriate some of the country’s Gold reserves and test the Gold for purity…the Bundesbank has reportedly agreed to ship 150 tons of Gold currently stored at the New York Federal Reserves to Germany over a three-year period…German newspaper Bild reports 50 tons of Gold per year will be returned to Germany, where it will be melted down entirely to test the overall purity before being re-cast into standard Gold bars…

TSX Gold Index

The TSX Gold Index continues to look strong…what was important recently was when it held support around the 330 level despite the fact Gold itself fell through a support level at $1,730…below is an updated and bullish 6-month daily Gold Index chart from John…

Today’s Markets

Asian markets were mostly higher overnight as investors regained risk appetite despite absence of a fresh lead by Wall Street…European shares are also mostly higher after earnings reports showed positive results from European airlines and oil and gas firms…stock index futures in New York as of 5:35 am Pacific are pointing toward a positive open on Wall Street after the first two-day weather-related shutdown since 1888…estimates of the cost of Superstorm Sandy to the U.S. economy vary between $10 billion and $50 billion…the storm has killed at least 50 people, according to the Associated Press, and left millions of homes without power…New York City and New Jersey have suffered extensive flooding damage…

The Venture Exchange continues to show strong support as it gained 12 points yesterday and closed at its high of the day at 1303…we do believe a breakout above its downsloping channel in place since early 2011 will occur in November as outlined yesterday…

Corvus Gold (KOR, TSX)

The chart for Coruvs Gold (KOR, TSX), one of our favorites this year, has been a picture of beauty but the stock is now very close to the top of its trading channel where it is likely to meet stiff resistance…near-term, therefore, the risk of a pullback is quite high…Coruvs has been working on a financing (up to 3.25 million shares at $1.07) since the middle of the month, and they should have no problem closing that given the current stock price…

Newstrike Capital (NES, TSX-V) Chart Update

Newstrike Capital Inc. (NES, TSX-V) is looking solid on the charts right now as the company continues to make progress on the ground at its 100% owned Ana Paula Project in Mexico’s Guerrero Gold Belt…

Impact Silver (IPT, TSX-V)

As BMR readers know, we’re very bullish on the price of Silver and one of the beneficiaries of any major move in Silver over the coming months will be Impact Silver (IPT, TSX-V) which has three operating mines in Mexico as well a couple of others coming on stream…the stock has shown excellent support around the $1 level since late 2010, and closed yesterday up 19 cents at $1.43 where there is resistance at the 50-day SMA…any slight or mild pullback, however, should be considered an attractive entry point based on John’s chart below and the big picture outlook for Silver…as always, perform your own due diligence…

Note: John, Jon and Terry do not hold positions in KOR or NES or IPT…

U.S. markets are closed again today, marking an historic second day of a weather-related shutdown due to Superstorm Sandy which has ravaged parts of the East Coast and killed at least 16 people in the United States and one in Canada…the New York Stock Exchange and Nasdaq will remain closed today amid a storm that is expected to cause at least between $10 billion and $20 billion in damages…this is the first time since 1888 that the markets have remain closed for two days due to weather…

How this will impact the U.S. elections next Tuesday remains to be seen…the stock market crash in 2008 helped Barack Obama get elected as President, and this October surprise – as tragic as it is – could also aid his cause if he’s perceived to be handling the situation effectively…for Mitt Romney, media coverage of his late momentum has now been overshadowed by the disaster and that can’t be considered helpful for his campaign, but it’s really impossible to predict at this time what the impact will be come election night…

This is an abbreviated edition of Morning Musings due to travel and the closure of the U.S. markets, but we do have some interesting charts from John…

Gold has traded between $1,707 and $1,716 so far today…as of 7:55 am Pacific, bullion is relatively unchanged at $1,711…Silver had added 17 cents to $31.93…Copper is up a penny to $3.50…Crude Oil is off 32 cents to $85.22 while the U.S. Dollar has retreated nearly one-third of a point to 79.93…

Asian markets were mixed overnight with China’s Shanghai Composite gaining 3 points to 2062…European shares are strong this morning thanks to positive earnings and a successful bond auction in Italy…volumes on the TSX and the Venture Exchange were down significantly yesterday due to the U.S. shutdown, and that will remain the case today…as of 7:55 am Pacific, the Venture is unchanged at 1291…

Below is a long-term Venture chart from John (4-year weekly) that makes it very clear what the Index needs to do in order to head north, and that is to bust out above the downsloping channel that has been in place since early 2011…it’s very close to doing that…given various technical indicators, and for fundamental reasons including the likelihood of higher Gold prices, we do envision this breakout occurring over the final two months of the year which should set up a very bullish scenario for the beginning of 2013…

John’s technical outlook for the TSX is also bullish as the senior market appears to be either forming an inverted head and shoulders pattern, or a “cup with handle”…below is an 18-month weekly chart…

U.S. Dollar Index Chart Update

The greenback has been showing signs recently of wanting to rally, breaking above a resistance level around 80, but we doubt any rally would be long-lasting given the strong overhead resistance band between 81 and 81.5 which includes the 200-day moving average (SMA)…the 200-day has flattened out and is threatening to roll over, so it can be expected to provide stiff resistance to any upside push…overall, this is a weak chart that could likely only be saved by a Romney victory next week…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) has just come out with additional assays from its Romero discovery in the Dominican Republic, and the market sold off to the 200-day moving average (SMA) before stabilizing…drill results from three holes included 157 metres grading 1.07 g/t Au and 0.40% Cu, 101 metres grading 1.60 g/t Au and 0.74% Cu, and 39 metres of 1.04 g/t Au and 0.10% Cu…these were large step-outs to the east and south, demonstrating that mineralization occurs beyond the limits of the initial discovery and extends in excess of 300 meters in the north-west to south-east direction…we’ll have more tomorrow…below is a GQC chart from John after trading yesterday…it’ll be interesting to see where GQC closes today and if it can get back above the 80 cent level…while this morning’s results may have disappointed some investors, Romero is still a major discovery with great potential…

Continental Gold (CNL, TSX)

Continental Gold (CNL, TSX) delivered some fabulous results from its Buritica Gold-Silver Project in Colombia yesterday, and the stock is up again this morning…below is a 2.5-year weekly chart…

Note: Jon holds a position in GQC.

U.S. Markets Closed

As Hurricane Sandy bears down on the U.S. eastern seaboard, stock and options exchanges are closed in the United States today (possibly tomorrow as well) in the first unscheduled, market-wide shutdown since September, 2001…our prayers go out to those who will be affected which will be in the tens of millions…in economic terms, this will likely become one of the “Top 10” most costly hurricanes, perhaps even surpassing the $10-$15 billion impact that Hurricane Irene had last year…

Asian markets were quiet overnight with a slight negative bias…European shares are moderately lower today…Reuters reported this morning that Greece’s foreign lenders had refused to make any further concessions to to labor laws which had been contested by the small Democratic Left Party in the country, thus prolonging any agreement on the crucial EU/IMF austerity package…ECB policymaker Ewald Nowotny was also vocal about Greece today, saying that the European Central Bank could not participate in a public sector writedown of Greek debt as this would amount to indirect state financing…the Athens stock exchange was the biggest loser in Europe, falling by over 3%…

Trading in the precious metals markets is subdued given the U.S. market shutdown…Gold has traded in a range between $1,706 and $1,718 so far today…as of 7:50 am Pacific, bullion is unchanged at $1,711…Silver is off 22 cents at $31.87…Copper has slid a nickel to $3.48, a 7-week low…Crude Oil is 15 cents lower at $86.13 while the U.S. Dollar Index is up slightly at 80.18…

As of 7:50 am Pacific, the Venture Exchange is down 6 points to 1295 on very low volume due to the U.S. shutdown…both the TSX and the TSX Gold Index are flat…

U.S. Consumer Spending Jumps

U.S. consumer spending rose solidly in September as households stepped up purchases on automobiles and a range of other goods, but the increase came at the expense of savings…the Commerce Department said this morning that consumer spending rose 0.8%, the largest increase since February, after an unrevised 0.5% gain in August…economists polled by Reuters had expected spending, which accounts for about 70% of U.S. economic activity, to increase 0.6% in September…

Americans Feeling Better About Economy

A recent Gallup poll showed that for the first time in five years, more Americans are feeling better off financially than they did a year ago, as opposed to worse off…the shift was largely due to a decline in those feeling worse off, from around 49% of people at the beginning of the year to about 34% when the latest poll was taken late this month…the number of people feeling better off rose to 38% from 29% in January…how that could impact next week’s U.S. elections remains to be seen as the latest polls are showing a virtual dead heat…

Updated Chart – U.S. Money Supply Expansion

One of the major contributing factors to the rise in Gold prices over the last few years has been the huge jump in U.S. money supply which shows no signs of abating given the recent actions of the Federal Reserve…in the latest Weldon’s Money Monitor, Greg Weldon discusses the consequences of the Fed’s debt monetization and liquidity provisions, showing the “somewhat frightening pace” of expansion in money supply…Weldon says that over the last four years since August, 2008, the U.S. Narrow Money Supply, or M1, which is physical money such as coins, currency and deposits, has increased 73%, or more than one trillion dollars…this is about as much as it expanded in the previous 40 years…

Updated Silver Charts

As usual, John has provided his updated short-term and long-term Silver charts this morning…on the short-term chart, we can see that RSI(14) has formed a bullish “W” near a support level, somewhat similar to what occurred at the beginning of the summer…there are two support bands of note – $31.50 to $32, and $30.50 to $31…Silver could be ready now to move higher after completely unwinding its overbought condition from August and September…at the very least, we see the $30 level holding…

Silver Long-Term Chart

The long-term “Big Picture” for Silver continues to look extremely bullish…”Wave 5″ is progressing well, and RSI(2) on this 15-year monthly chart has unwound to 48%…John’s Fibonacci target of $78 an ounce (no timeline) remains intact…

Canadian Dollar Chart Update

The Canadian dollar has been on a slide since mid-September and has pulled back to par with the U.S. dollar, an important level from a technical perspective…we should start to see the loonie regain strength very soon as $1.00 is the rising 200-day moving average and the Fibonacci 61.8% retracement level…the Venture Exchange and commodity markets often go in the direction of the Canadian dollar, so “bottoming action” here by the loonie gives us a lot of encouragement regarding the broader markets for next month…not shown in John’s chart below is the Slow Stochastics indicator which is now at a level not seen since the May/early June lows…the Canadian dollar went on quite a climb from then until mid-September (96 cents to $1.035), so this recent pullback has to be viewed as a normal and healthy correction and sets the stage for the next wave up…

TSX Venture Exchange and Gold & Silver

The Venture has held up extremely well this month despite a $100 correction in the price of Gold and weakness in the U.S. equity markets.  For the month, after Friday’s close at 1301, the Venture is down just 34 points or 2.5% which compares to a 2.5% drop in the Dow, a 4% pullback in the Nasdaq, and a 3.7% correction in the TSX Gold Index.  Interestingly, the TSX is essentially unchanged for the month so far, down just 17 points.

The Venture’s rising 50-day moving average (SMA) is providing support just above 1290 (the intra-day low last week was 1285 on Tuesday) and the 100-day SMA has flattened out over the past month and appears poised to start rising over the final two months of the year – that’s definitely a positive sign and points to a better November after a period of consolidation in October.

Below is a 6-month daily chart from John.  What we need to keep an eye on in the coming days is the RSI(14) and whether or not it can break above the down trendline (this has just occurred in Gold).    Volume and buying pressure both need to increase.  The Venture is almost exactly in the middle of a range that features a band of resistance between 1350 and 1365, and very strong support around 1250.  Our belief is that there’s a greater probability of a breakout to the upside before year-end, positioning the Index for a powerful first quarter of 2013.  The recent reversal to the upside in the 1,000-day SMA, after a four-year decline, helps support this view.

Another takeover last week (Hana Mining, HMG, TSX-V) was cheered by investors and further underscores that there are great values in this current market.  For the week, HMG was up 76%.

The Venture lost 15 points for the week but closed 16 points above its weekly low.  It’s quite possible we could see more “churning” until the U.S. elections November 6.

Gold

Gold has been going through a very steady, orderly and healthy correction this month to unwind an overbought condition that became very evident in September as bullion met resistance at $1,800 an ounce.  Gold closed Friday at $1,711, a $9 loss for the week after previous weekly setbacks of $34 and $27, respectively.

A couple of interesting technical points regarding Gold: 1) Strong support at $1,700 held last week, and this resulted in some short covering by traders; 2) RSI(14), as shown in John’s 6-month daily chart below, appeared to find support and has broken above a down trendline; 3) Increased near-term volatility is likely, given the climbing Bollinger Band Width; 4) the ADX indicator shows that the recent bearish trend is weakening.

The above bullish indicators contrast with a somewhat bearish COT structure that shows commercials still holding significant short positions, though there was some trimming back of short positions last week.  However, over the last decade, November has been Gold’s best month of the year.  In addition, the Hindu festival of lights, Diwali, begins next month and traditionally that brings in plenty of physical buying into the market.

The suddenly up-in-the-air U.S. Presidential election has created some confusion among many traders and investors in all markets, Gold included.  Generally, an Obama victory is viewed by most analysts as being more favorable for Gold and bearish for the U.S. dollar though the possibility of four more years of this president at the helm should scare people more than anything else this Halloween.  Mitt Romney, on the other hand, seems to go in whatever direction the wind is blowing.  True leadership is missing in Washington, and ultimately that has to be considered bullish for Gold as the safe-haven ultimate currency.

Silver was up slightly for the week, 7 cents to $32.09.  Copper fell 8 pennies to $3.54.  Crude Oil declined $3.72 to $86.28 while the U.S. Dollar Index gained just over one-third of a point to close the week exactly at 80.  The Dollar Index is being pressured by a falling 50-day SMA at 80.18 and a declining 200-day SMA at 80.64.

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.  QE3 has arrived, and massive central bank intervention is now taking place to prevent a breakup of the euro zone and to kick-start the global economy.  It’s hard to imagine Gold not performing well in this environment.

Welcome to our site, or at least the initial version of it!  BMR has been online for three 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 a great deal 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.

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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.

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Gold reversed nicely in the last few hours…after falling as low as $1,700 overnight, where there is clearly strong support, buyers stepped in and bullion is now up $5 an ounce to $1,715 as of 8:15 am Pacific…the inability of bears to push Gold below $1,700 an ounce, up to this point at least, has likely caused some shorts to begin to cover…Silver has also rebounded after almost touching $31.50…it’s currently up 12 cents at $32.23…Copper is off a penny at $3.54…Crude Oil is down 25 cents at $85.80 while the U.S. Dollar Index briefly shot past 80.20 but bears have pushed it back to 80.05…

Reports coming out of India are seeing better demand for physical Gold amid the festival season in that country…

TSX Gold Index Chart

We’ve seen an interesting divergence recently between the price of Gold and Gold stocks…the TSX Gold Index has managed to hold support around 330 despite the fact bullion recently fell through the $1,730 support area…this has to be considered a vote of confidence by investors in Gold’s primary trend (similarly, the Venture Exchange has hung in nicely as well)…below is an updated 2.5-year weekly chart from John for the Gold Index, and you can see how the weekly EMA(20) – currently at 328 – is providing rock-solid support…

Today’s Markets

Asian markets were sharply lower overnight, thanks in part to weak U.S. futures that reversed just prior to the opening of North American markets…European shares have finished strongly higher today, after being in negative territory, while the Dow is down 23 points as of 8:15 am Pacific…the Venture Exchange, which roared ahead 17 points yesterday, is off 4 points at 1301…the Venture has held up well in October, however, despite a $100 drop in the price of Gold…November should be better…

U.S. Economy Expands Slightly Better Than Expected

The U.S. economy expanded at a slightly faster 2% annual rate from July through September, buoyed by an uptick in consumer spending and a burst of (oh, just what we need) government spending…the Commerce Department said growth improved from the 1.3% rate in the April-June quarter…still, growth remains too weak to rapidly boost hiring and was held back by the first drop in exports in more than three years and flat business investment in equipment and software…but the public sector helped pick up the slack…

Despite the slow recovery and uncertain prospects, Americans also opened up their wallets in the third quarter…consumer spending accounted for most of the increase in GDP – real personal consumption expenditures climbed 2% compared with 1.5% in the second quarter…purchases of long-lasting goods posted an especially strong gain of 8.5%…

Government spending contributed to economic growth for the first time in more than two years, led by federal outlays on national defense…overall federal government spending jumped 9.6%, versus a 0.2% fall in the second quarter…state and local government spending was down slightly…and an improving housing market helped boost residential fixed investment by 14.4%, continuing a string of solid gains for the category…

U.S. Consumer Sentiment At 5-Year High

U.S. consumer sentiment rose to its highest level in five years in October as Americans were more upbeat about prospects for the economy and their own finances, a survey released this morning showed…the Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 82.6 from 78.3 in September, roughly in line with expectations…that’s the highest level since September, 2007, on a final reading basis…

Japan Approves Stimulus Package

Japan’s Cabinet approved a ¥423-billion ($5.3-billion U.S.) economic stimulus package today, moving to fend off recession as the recovery in the world’s third biggest economy falters…the emergency spending package, which is double the size originally expected, is also meant to help make up for lost momentum from reconstruction in the region devastated by the March 2011 earthquake and tsunami…the new stimulus will be paid for from government reserves. Prime Minister Yoshihiko Noda’s leeway to boost spending is limited by a legislative standoff preventing issuance of deficit-covering bonds as the country faces a “fiscal cliff” of some ¥38.3-trillion…the Prime Minister ordered the government to draft further measures to boost growth by next month, and the legislature is due to convene an extraordinary session on Monday…Chief Cabinet Secretary Osamu Fujimura said Noda told the Cabinet the package was meant to speed up Japan’s revitalization and help end a long and debilitating spell of deflation…

Orko Silver Corp. (OK, TSX-V)

Orko Silver (OK, TSX-V) has been showing strong chart patterns in recent months with a very obvious “cup and handle” and a rising 100-day SMA at $1.40 that’s currently underpinning the stock…OK jumped 13 cents yesterday to $1.62, and is off slightly in early trading this morning…we’ll have more on Orko’s fundamentals next week, but below is an updated chart from John…patient investors should do well with this one, especially if Silver takes off again to the upside as we expect it will…

Nevada Sunrise Gold Corp. (NEV, TSX-V)

As BMR readers know, we are extremely bullish regarding Nevada and another company we’re keeping an eye on there is Nevada Sunrise Gold (NEV, TSX-V) which recently broke above its weekly EMA-20 earlier this month after trading below it since May…the chart is telling us that NEV’s prospects look very positive for the next several months at least…as of 8:15 am Pacific, NEV is unchanged at 13 cents…

Note: John, Jon and Terry do not hold positions in OK or NEV.

Gold is firmer this morning after finding support at $1,700 yesterday…as of 8:15 am Pacific, the yellow metal is up $13 an ounce at $1,715…Silver has jumped 41 cents to $32.14…Copper is unchanged at $3.56…Crude Oil is even at $85.73 (John has a WTIC chart below) while the U.S. Dollar Index is up slightly at 79.99…

Gold prices eased slightly below $1,700 intra-day yesterday for the first time in seven weeks…however, as John’s chart showed, bullion is underpinned by three strong areas of support beginning around $1,700…bullion is on track to break a 4-month winning streak, down about 4% in October…

Gold’s Monthly Historical Performance

Most investors are aware that the month of September is typically strong for Gold, and Gold equities – as it was this year – but over the last decade, October has been the third-worst month while November has been by far the best month of all…in fact, we’re about to enter Gold’s strongest four-month period which is November through February as you can see in the Bloomberg chart below…dating back to 2000, Gold has gained an average of more than 8% from November 1 through the end of February – aided significantly during this period by physical demand from Asia…

Through yesterday, Gold was off 4% here in October which puts it on track to break a 4-month winning streak…if historical patterns are any indication, though, expect Gold to resume those monthly advances beginning in November…

Crude Oil Chart Update

Some analysts have stated Crude Oil has broken down, but we don’t see evidence of that given the fact Crude has a strong support band between $84 and $86 as shown in John’s 6-month daily chart below…RSI(14) is also currently at a support level, so we’ll see what happens…

UK Comes Out Of Double Dip Recession

The U.K. Office for National Statistics reported that the British economy rebounded out of recession in the third quarter, posting a stronger-than-expected 1% quarterly rise in gross domestic product after three consecutive quarters of contraction…that marked the strongest quarterly rise in GDP since 2007, aided in part by the impact of the London Olympics and technical factors…

Fed Stays The Course

The conclusion yesterday of a two-day meeting of the Federal Reserve’s policy-making panel was uneventful, as expected…the central bank made no changes to its plans to make $40 billion in monthly purchases of mortgage-backed securities via its third round of quantitative easing, or QE3, unveiled last month…the Fed is also buying $45 billion of Treasurys offset by sales of shorter-term securities under its Operation Twist program…making minimal changes to its statement, the Fed noted some areas of improvement, such as consumer spending, but said job growth remains slow and that unemployment remains “elevated”…it also noted that “inflation recently picked up somewhat”…

China Overtakes U.S. As Top Foreign Investment Venue

China overtook the U.S. as the world’s top destination for foreign direct investment in the first half of 2012, according to the United Nations Conference on Trade and Development (UNCTAD)…China absorbed $59.1 billion in foreign direct investment (FDI) in the first six months, down slightly from $60.9 billion a year earlier, the agency said in a report…the United States attracted $57.4 billion in 2012’s first half, down 39% from a year earlier, it said…during 2011, the U.S. received $227 billion in FDI while China attracted $116 billion, according to UNCTAD…the third biggest recipient of FDI in the first half of this year was Hong Kong, with $40.8 billion…the report said the third biggest in 2011 was Belgium, with $102 billion…

Canadian Conservatives Give Up On Paying Down Debt

All the hawkish rhetoric from Stephen Harper’s Conservatives about the importance of paying down the federal debt was just that – rhetoric, and Republicans down south will probably be no different…it seems once in office, all politicians catch the spending disease and are incapable of making the really tough decisions…the Globe and Mail reports this morning that Ottawa’s “Conservative” government no longer has targets for easing Canada’s federal debt, which grew by a whopping $125 billion since the 2008 recession…Finance Minister Jim Flaherty confirmed yesterday that the recession has derailed Ottawa’s long-term debt plans and new targets won’t be set until the government starts posting yearly surpluses again – which is not forecast to happen for three more years…Canada’s federal debt stood at $582.2-billion for 2011-12, which is up from $457.6-billion in 2007-08…it was just five years ago that the government was promoting an ambitious plan called Advantage Canada that promised to erase the country’s net public debt “by 2021 at the latest,” according to Flaherty’s 2007 budget…meanwhile, the fiscally conservative Canadian Taxpayers’ Federation said the government should be pressured to stick with its original debt plan, regardless of the recession…“By abandoning it, they’re saying they’re adrift,” said Gregory Thomas, the federation’s federal director…“I think the fiscally conservative base of the government has to be profoundly concerned”…

U.S. Economic Data

The number of Americans filing new claims for unemployment benefits fell last week, giving a clearer sign that the labor market is healing after wild fluctuations in claims data at the beginning of the month…initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 369,000, the Labor Department said this morning…that was pretty much in line with expectations…the four-week moving average for jobless claims, which smooths out volatility, rose 1,500 to a 368,000…

The Commerce Department reported this morning that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, was unchanged last month at $60.3 billion…that was short of economists’ expectations for a 0.7% gain…

New durable goods orders, however, posted their biggest gain last month since January, 2010…new orders for durables (items from toasters to aircraft that are meant to last at least three years) rose 9.9% , above analysts’ expectations and partially reversing a sharp loss in August….

In a sign of a still struggling housing market, signed contracts to buy existing homes were essentially flat in September from August, edging up just 0.3% according to a monthly index from the National Association of Realtors…the index is 14.5% above September, 2011…

Today’s Markets

North American markets are in the green amid plenty of corporate earnings reports today and a slew of economic data (Apple comes out with earnings post-market)…as of 8:15 am Pacific, the Dow is up 30 points while the TSX has gained 100 points…

Venture Exchange

The Venture has been finding support right around its rising 50-day moving average (SMA), and is getting a bounce today from higher Gold prices and another friendly takeover…Hana Mining (HMG, TSX-V) is up 35 cents to 80 cents on news that it has entered into an agreement with Cupric Canyon Capital LP for an all-cash buyout at 82 cents per share, an 88% premium to the 20-day volume-weighted-average HMG share price…this values Hana at approximately $82 million, and further illustrates how so many Venture companies remain undervalued…this is the third buyout in just over a week, and undoubtedly there will be more…in part this is why we’re so bullish regarding this market looking out over the next several months…as of 8:15 am Pacific, the Venture is up 15 points to 1303…

Below is an interesting chart from John that shows how the Venture is so close to breaking out of a down trendline that has been in place since early 2011…both Gold and the CRB Index have broken out of their down trendlines, so the Venture should follow soon…

Mineral Mountain Resources (MMV, TSX-V)

Mineral Mountain Resources (MMV, TSX-V) has more than quadrupled the size of its original Holy Terror land package in South Dakota with new staking covering significant structural and magnetic anomalies…the project now encompasses an area 14 kilometres long by 1.5 kilometres wide (1,800 hectares) with the company consolidating eight former high-grade producers in a proven mining district that has been under-explored…drilling is in progress…MMV, with a strong support band between 28.5 and 31 cents, is up 2 pennies at 33 cents as of 8:15 am Pacific…

Rainbow Resources (RBW, TSX-V)

With drilling underway or just about to commence at Gold Viking and Jewel Ridge in Nevada, there are two more important reasons to be bullish regarding Rainbow Resources (RBW, TSX-V) which is also expected to have results out from the International Silver Property within the next week or two…at the International, the language from RBW has indicated that the Phase 1 shallow drill program consistently hit mineralization but the company has taken what appears to be a conservative approach with little in the way of “visual” information with regard to the core…in a way we find that refreshing as perhaps the strategy is to “under-promise” and “over-deliver”…too often we’ve seen companies provide glowing remarks regarding drill core, only to disappoint with actual assay results…in terms of the Gold Viking Property, it has received little fanfare and we’re surprised Rainbow hasn’t been more aggressive in highlighting this property given its strong geological merits and history…it’s also right beside the former producing Ottawa Mines that churned out nearly 2 million of Silver in the 1900’s at an incredible average grade of over 60 oz per ton…there appear to be multiple vein systems at Gold Viking and all Rainbow needs to do is cut through a few of these in its drilling to really get the ball rolling…at Jewel Ridge, if Rainbow is successful just in duplicating some of the historical drill results, that project will really start to garner some major attention given the fact it’s right in between over 4 million ounces of 43-101 reserves and resources (Ruby Hill and Lookout Mountain)…

Carlisle Goldfields (CGJ, TSX-V) and Canasil Resources (CLZ, TSX-V)

John has chart updates on two situations we’ve pointed out that are worthy of our readers’ due diligence, Carlisle Goldfields (CGJ, TSX-V) with a major project in northern Manitoba, and Canasil Resources (CLZ, TSX-V) which is focused on Gold, Silver, Copper, lead and zinc opportunities primarily in Mexico…

Carlisle Goldfields (CGJ, TSX-V)

Canasil Resources (CLZ, TSX-V)

iSign Media Solutions (ISD, TSX-V)

An interesting non-resource play we’ve followed on and off for the past year-and-a-half, because of its interesting business model, is iSign Media Solutions (ISD, TSX-V)…buying on weakness and selling into strength has proven to be the best strategy with this play which continues to be volatile…below is a chart update from John…

Note: John and Jon both hold share positions in RBW.

Gold continues to hold above the $1,700 support level, but barely…as of 8:45 am Pacific, bullion is down $7 an ounce at $1,701…Silver is off a nickel at $31.62…Copper, trying to break a 4-day losing run that has seen prices shed 4.8% and drop to a 6-week low, is off another 3 pennies to $3.55…Crude Oil has fallen $1.02 a barrel to $85.65 while the U.S. Dollar Index is up one-tenth of a point at 80.04…

As John pointed out in a chart yesterday, Gold has three important levels of support – $1,700, $1,670 and $1,640 with the likely bottom somewhere between those levels…

Gold Views – UBS & Global Hunters Securities

UBS

Edel Tully of UBS, one of the Gold market’s top analysts, observes: “There are two stories at play here – a short-term case of frustrated investors, disappointed that Gold hasn’t rewarded them with a +$1,800 price tag, but against this is another player, with a more strategic view who is either 1) not willing to sell into current weakness and/or 2) using the pullback to add to length.”

Either way, Tully concludes, Gold feels like its set for a big move…”Sentiment right now suggests that move is lower…but given how hard the metal is trying to hang on to price levels above $1,700, perhaps the big move the market is waiting for is actually north?…will this be gold’s trick or treat moment?”…

Tully adds that the moves down of late have been “without drama”…”The labored move lower in Gold is baffling many…from conversations with clients in recent days, nearly all expected a move lower and nearly all thought the move would be more painful than we’ve seen so far…is it just a matter of time?…perhaps…Gold is reacting to the mood that prevails across other markets with equities lower, Q3 earnings softer and the euro weaker”…

But, as she points out, while some are holding out for a dramatic move lower, many seem to be overlooking the fact that the metal has already given back nearly $90 from its October high…Tully goes on to say it is important not to underestimate the “deeper and broader held view that the current macro backdrop is gold positive”…

Gold To Surpass $2,000 In early 2013:  Global Hunter Securities

Gold is likely to surpass $2,000 an ounce in early 2013 and average $1,850 for the year, although with periods of volatility, said Global Hunters Securities in an outlook released this morning…the firm looks for the metal to peak at close to $2,300 in 2014, although it also anticipates that the average for that year will fall back to $1,750…

GHS lists several factors supportive for Gold…“Gold prices have anticipated various monetary inflation waves since 2008, and we believe these monetary conditions will persist for quite some time,” the firm said. “Gold prices may also anticipate a future non-monetary inflationary phase in which consumer prices lift much higher than central-bank overnight rates, thus creating another favorable source of price support because of gold’s attractiveness during times of higher inflation”…

Rising Gold prices since 2003 have slowly eroded world gold-jewelry consumption, but central-bank demand has emerged as a source of support, GHS said…“Central banks globally seem to be taking advantage of Gold’s talent as a currency, something more difficult for household-sector jewelry consumers to utilize, in our view, thus reducing our concerns about jewelry demand’s recent weakness”…

GHS said the downside risks to its price forecast come primarily from the equity markets and the strong inverse correlation between global stock prices and the U.S. dollar…

Today’s Markets

Asian markets were mixed overnight with Japan’s Nikkei ending a 7-session winning streak…China’s Shanghai Composite posted a 2-point gain to 2116…European shares are up modestly this morning (European Central Bank President Mario Draghi visited the German parliament, the Bundestag, in Berlin and reiterated his belief that the ECB bond buying program is vital to the euro zone) while North American markets are trying to regain their footing after yesterday’s sharp losses due in large part to earnings disappointments…as of 8:45 am Pacific, the Dow is up 21 points to 13124…the TSX is down slightly while the Venture Exchange, which found support yesterday at its rising 50-day moving average (SMA), is unchanged at 1289…

FMOC Meeting

No action is expected from the FMOC meeting which wraps up later this morning…Federal Reserve Chairman Ben Bernake has stated he’ll stoke the economy until the job market recovers “substantially”…that promise may force him to keep buying bonds until the final months of his term ending in January, 2014, according to economists in a Bloomberg survey…68% of 60 economists said the Fed chairman’s third round of quantitative easing will last until late next year or beyond…just 51% of them said the strategy will help boost employment, with a median estimate of 116,000 jobs over the course of next year…

U.S. Dollar Index Chart Update

The greenback is showing signs of wanting to push higher at the moment, perhaps a bet by some traders that Mitt Romney could pull off a victory in the November 6 Presidential elections…however, the Dollar Index would still face a considerable resistance band between 81 and 81.5…yesterday, importantly, the Dollar Index broke above a down trendline as well as its EMA(20), so the dollar has to be watched closely as a potential catalyst that could knock Gold down below $1,700 to its next level of support…

Germany’s Manufacturing Sector Weakens But China On The Rebound

Germany’s manufacturing sector, the engine of Europe’s economic growth, slumped in October, dragging the entire euro zone further into decline as private sector activity in the 17-country single currency area plunged at the fastest rate since June, 2009…purchasing managers’ indices for Germany showed manufacturing and services activity fell unexpectedly to 48.1 in October from 49.2 in September – significantly below the 50 mark, which indicates a contraction – driven by a sharp drop in the automobile sector and exports to southern Europe…meanwhile, German manufacturing dropped to 45.7 in October from 47.4 the previous month, according to the data from Markit Economics…

China On The Rebound

Similar PMI data for China suggested the world’s second biggest economy, a key world exporter, is slowly recovering from its weakest period of growth in three years, with new orders and output at their highest in months…an initial gauge of Chinese manufacturing activity rose in October compared with a month earlier, offering the latest sign that China’s economic slowdown might be bottoming out…the reading from the preliminary HSBC China Manufacturing Purchasing Managers Index still showed manufacturing activity contracting in the world’s No. 2 economy but the rate was a healthy improvement from the September reading…”October’s flash PMI reading continues to recover for the second month, thanks in part to a gradual improvement in the new orders index, which picked up to a six-month high,” said Qu Hongbin, chief economist for HSBC Holdings PLC’s China arm, in a statement…the numbers are the latest positive sign for the Chinese economy, along with a spate of indicators from money flows to exports to industrial production..still, some economists see sluggish growth continuing into next year…last Thursday, China said growth slowed to 7.4% in the third quarter from a year earlier, compared with 7.6% in the second quarter and rates well above 8% in 2010 and 2011…

Kicking The Can Further Down The Road – Greece Gets Extension

CNBC reports this morning that Greece has been granted its long-standing plea for additional time to push through austerity cuts that have been finalized after months of negotiations…”Today, we obtained the extension,” the country’s finance minister (Yannis Stournaras) told parliament, referring to the additional two years to hit bailout targets that Athens has been lobbying for…he also said the government would tell European counterparts that it is ready to put its latest austerity package to parliament next week after winning additional concessions from foreign lenders…a Greek finance ministry spokesman confirmed to CNBC that the country had been granted a two-year extension but declined to comment on who had granted it…a swift deal on the package is crucial for Greece’s efforts to unlock more aid under its latest bailout, with the country just three weeks away from running out of cash…

Rainbow Resources (RBW, TSX-V) Chart Update

Volume has been picking up in Rainbow Resources (RBW, TSX-V) in recent days, and John’s updated chart shows some encouraging signs given the symmetrical triangle formation as explained below…Rainbow’s strength during a bad overall market day yesterday was certainly impressive…with drill programs at Gold Viking and Nevada set to begin, and results pending by the end of the month/early November from the International where Rainbow indicated it intersected the vein system, the next couple of weeks are going to be very interesting…more on that tomorrow…

GoldQuest Mining (GQC, TSX-V)

The strong support around 80 cents that John has shown in his recent GoldQuest charts has held up well, and GQC is up a penny to 86 cents as of 8:45 am Pacific…below is an another updated chart…

Corvus Gold (KOR, TSX) Chart Update

Corvus Gold (KOR, TSX), one of our favorite Nevada plays, has performed remarkably well recently after announcing a $3.5 million private placement at $1.07…as of 8:45 am Pacific, KOR is off 3 pennies at $1.45…note that KOR is now trading near the top of an upsloping channel…it could still move a little higher over the near-term but traders should be cautious at the moment…

Note: John and Jon both hold share positions in RBW while Jon also holds a share position in GQC.