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Gold is firming up after successfully testing support yesterday at $1,730…as of 5:45 am Pacific, the yellow metal is up $4 an ounce at $1,741…Silver had added 17 cents to $32.87…Copper is up a penny at $3.70…Crude Oil is flat at $91.83 while the U.S. Dollar Index is off over one-quarter of a point to 79.40…

The Silver Love Trade In India

The launching of a 1 kilo Silver futures contract by India’s largest commodity bourse at the beginning of October has proven to be very popular…officials say retail investors have shown high interest in the new offering as it enables them to take delivery of a 1 kilo Silver bar at lower margins, as compared to the earlier 30 kilo bars…officials said the timing of the new offering was ripe…”We have the Navratri festival starting tomorrow (October 16), and given the beginning of the holy, pious period, many more investors are expected to get into Silver futures and also buy Silver coins to mark the occasion,” said Manikbhai Godhadia, bullion retailer, in a report from Mineweb.com…Navratri is a vibrant nine-night festival held in India to honour the Mother Goddess…a clay pot symbolizes the womb which is the source of life on earth…it is a prominent feature during Navratri celebrations across the country…women in vibrant and grand costumes dance around the pot which is filled with water, a betel nut and a Silver coin…a coconut is placed on the top of the pot…in this particular ensemble, only a Silver coin will do…on the occasion, people also exchange gifts and sweets and gifting a Silver coin engraved with the Mother’s image is considered highly auspicious…it is generally priced at a premium in the prelude to the festival, and it’s considered a valuable keepsake…

Canadian Household Debt Continues To Increase

Canadians have entered the debt danger zone that helped trigger real estate crashes in the U.S. and Britain…the Globe and Mail reports that the average household now has just 63 cents of disposable income for every dollar of debt, according to figures released yesterdday by Statistics Canada…that’s the highest ratio of debt to income ever recorded in Canada, and more inflated than the levels witnessed in the U.S. and Britain before their housing market collapses in the mid-2000’s…the rise in debt levels comes as Canada’s housing market is showing increasing signs of weakness, with more than half of major markets seeing sales drop 10% in September from a year ago and the average national price rising a scant 1.1% over the same period…in spite of tighter federal mortgage rules and repeated warnings from Bank of Canada Governor Mark Carney, debt levels continue to rise…

Today’s Markets

Asian markets were solid overnight with Japan’s Nikkei Index climbing 1.4% as investor sentiment improved thanks to an overnight rally in U.S. stocks that was fueled by better than expected earnings from Citigroup, the third-largest U.S. bank, and above-forecast retail sales data…Europe is strong this morning while stock index futures in New York as of 5:45 am Pacific are pointing toward a positive open on Wall Street…U.S. consumer prices rose in September as the cost of gasoline surged, posing a threat to consumers’ spending power although faster inflation looked unlikely to derail the Federal Reserve’s ultra-easy policy path…The CPI increased 0.6% last month, in line with analysts’ expectations and matching August’s reading, data from the Labor Department showed this morning…

U.S. Dollar Index Chart Update

The U.S. Dollar Index continues to look very weak, and that’s bullish in terms of the primary trends for both Gold and Silver and the Venture Exchange…the Dollar Index has rallied recently but John’s chart shows how it’s currently constrained by the EMA-20 and a downtrend line…RSI(14) on this 6-month chart is also at resistance…this lends strong credence to the view that the pullbacks we’ve just seen in Gold and Silver and the Venture may have run their course…

The Fearful Just Don’t Get It

Investors who have been selling Venture stocks in recent days, as opposed to “buying the dip”, out of fear the Index is ready to go into another free-fall is another great example of emotion trumping common sense which is why so many investors aren’t nearly as successful as they should be in this volatile speculative market…after a nearly 200-point advance since the beginning of August, and up against a resistance band recently beginning at 1350, a minor correction in the Index should not have been a major surprise…that’s what has occurred over the past five sessions with the Venture losing 62 points or nearly 5%…this is a healthy pullback and has created a situation where the RSI(2) is now at a level not seen since the end of June when the Venture bottomed out at 1154…the Index could still drop a little lower but the strong support levels give us a lot of confidence that this is a pullback to embrace…

Below is an updated chart from John that also shows very clear and strong support levels…given the RSI(2) situation, plus the rising 50 and 100 day moving averages (SMA’s), the Fibonacci support levels John has outlined beginning at 1274 have a lot of credibility and should hold…

Prodigy Jumps On Friendly Takeover

Prodigy Gold (PDG, TSX), one of our favorites over the past year, has agreed to a friendly, all-share takeover by Argonaut Gold (AR, TSX)  in a deal valued at $341 million…Prodigy owns the multi-Magino Gold Project in northwestern Ontario that features an indicated resource of more than 6 million ounces (223 million tonnes at 0.87 gram per tonne gold using a cut-off grade of 0.35 gram per tonne)…the combined entity will benefit from the strong operating experience and cash flow of Argonaut Gold and its ability to successfully advance the Magino Project…Prodigy shareholders will receive 0.1042 of an Argonaut Gold share and 0.001 cent in cash per Prodigy share, representing $1.08 per share based on AR’s 20-day volume-weighted average price, and a premium of 54% based on both companies’ 20-day VWAP’s as of October 12…the deal follows another takeover earlier this year involving a similarly-sized deposit in which Iamgold (IMG, TSX) bought up the Cote Lake project in Western Ontario for $608 million (or $505 million net of cash) through an all-cash takeover of Trelawney Mining and Exploration…

Probe Mines Ltd. (PRB, TSX-V)

Another prime candidate for a takeover is Probe Mines (PRB, TSX-V) which we’ve highlighted on many occasions, and Probe jumped a dime yesterday to close at $1.51 following the news on Prodigy…Probe has been enjoying great success in growing its Borden Lake deposit near Chapleau, Ontario, which is still open in all directions and has recently expanded to depths greater than 500 metres…Probe currently has four rigs on site and has drilled approximately 250 holes in total at Borden Lake, outlining a global indicated resource of 4,051,000 ounces of Gold averaging 0.71 g/t Au and an additional inferred resource of 1,796,000 ounces of Gold averaging 0.62 g/t gold, at a 0.3 g/t cut-off grade…

Below is an updated Probe chart (2.5-year weekly) from John…the next major resistance level is $1.70…Probe has performed very well over the past six weeks after bottoming out just below $1 over the summer…it has posted gains in 12 out of the past 14 sessions, so while it’s an attractive potential takeover candidate it’s also prone to a minor pullback in the immediate future with support at previous resistance levels of $1.40 and $1.20…

Rainbow Resources (RBW, TSX-V)

Rainbow Resources‘ (RBW, TSX-V) President David W. Johnston was in a very upbeat mood yesterday as we caught up with him during his brief visit to Vancouver…he had just been to the International Property where prospecting continues following completion of the Phase 1 drill program…with drilling at Gold Viking set to begin, and the Nevada Project proceeding to the drilling stage very quickly (at or before the end of the month), Johnston is very hopeful for a discovery at any one or a combination of the three properties…the vein system was consistently hit during drilling at the International, as reported yesterday by Rainbow, and initial results are expected soon…that vein system is known to host sections of massive galena which potentially could run very high in terms of Silver content…new information surfaced yesterday regarding Rainbow’s Jewel Ridge Property and we’ll be reporting more on that this week…we’re continuing to prepare a Rainbow article after yesterday’s lengthy news and our interview…

Calibre Mining (CXB, TSX-V) Chart

Note: John and Jon hold share positions in RBW.  John, Jon and Terry do not hold share positions in PRB or CXB.

Gold is under some mild pressure to begin the new week but is holding above important support at $1,730…as of 5:55 am Pacific, the yellow metal is down $11 an ounce at $1,743…Silver is off 33 cents at $33.15…Copper is flat at $3.69 (Copper traders are the most bearish in four months – probably a bullish sign – on mounting concern that demand for industrial metals will weaken as growth slows from China to Europe)…Crude Oil is relatively unchanged at $91.73 while the U.S. Dollar Index has backed off from the 80 area once again and is now down one-tenth of a point at 79.68…

Today’s Markets

Asian markets were mixed overnight…Hong Kong rallied to a five-month high while China’s Shanghai Composite fell 6 points to 2099…European shares are higher this morning while stock index futures in New York as of 5:55 am Pacific are pointing toward a positive open on Wall Street…

China News

Market sentiment has been given a boost to start the week, thanks to benign inflation data from China which suggests scope for further monetary easing measures…China’s consumer price inflation eased to 1.9% in September from August’s 2%, while producer prices dropped 3.6% from a year earlier…further good news came from China over the weekend with customs data showing exports in September grew 9.9% from a year earlier, roughly twice the 5% rate expected…imports rose 2.4% year-on-year in September, in line with findings in the benchmark Reuters poll that had forecast a recovery from August’s surprise 2.6% annual decline.

Canadian Dollar Update

Just one reason why we’re so bullish on the markets is the action we’re seeing in the Canadian dollar…the way the dollar has behaved in recent months tells us that the trend is up for commodity prices and down for the U.S. dollar…this is good news for the Venture Exchange – the combination of a higher Canadian dollar and a lower greenback has always been positive for the Venture…below is an impressive monthly chart from John that goes back to 2007 and shows just how strong the trend is right now with the Canadian dollar…

Gold & Silver Chart Updates

As John outlined in his updated Gold chart posted Saturday, bullion has very strong support at $1,730 and the recent overbought condition has been cleansed…the COT structure at the moment, however, is not favorable for either Gold or Silver with commercials ramping up their short positions to high levels recently…that’s a cause for concern as the commercials are rarely on the wrong side of the short-term trade…about the only reason we can think of that would produce a more significant correction in the precious metals in the near future is a change in the dynamics of the U.S. elections…an Obama victory, which is somewhat less concern right now, would be more bullish for Gold and Silver (more of the same from the White House over the next four years) while markets would have to seriously ponder what a Romney victory could mean for Fed policy…Romney is more aggressive regarding deficit cutting and has vowed not to reappoint Fed Chairman Ben Bernanke when his term ends January 31, 2014…Obama and Romney debate for the second time tomorrow night…

Silver – Short-Term Chart

Silver continues to consolidate but is at support this morning as shown in John’s updated 9-month daily chart…RSI has fallen from overbought levels to previous support…

Silver – Long-term Chart

The long-term Silver chart continues to show Wave 5 progressing very well, though this doesn’t preclude the possibility of a near-term correction…RSI(2) in this 15-year monthly chart, however, can remain in an overbought state for an extended period as we’ve witnessed in recent years…John’s ultimate Fibonacci target (no timeline as yet) continues to be $78…the primary trend remains strongly bullish…

RBC – Two-Thirds Of Proposed Gold Projects Require $1,500 Gold To Generate IRR Of 20%

RBC’s precious metals team noted they are seeing evidence that suggests we may have reached a turning point where capital spending is curtailed and as a result we are seeing signs that inflation is easing in the mining space…capital estimates in 2012 are up 23% over 2011 and 40% over 2010 levels and now stand at $200 per ounce of Gold-equivalent production over the life-of-mine…RBC believes two- thirds of proposed projects require a Gold price of $1,500 per ounce to generate an after-tax IRR of 20% in the current cost environment…

Rainbow Resources’ (RBW, TSX-V) October Triple Play

Rainbow Resources (RBW, TSX-V) just delivered news within the past hour, and a wild few weeks appear to be in store for RBW with assay results pending from the International, and drilling starting at both Gold Viking in the West Kootenays and Jewel Ridge in Nevada…quickly, here are the highlights as we see them (we’ll review this morning’s news in more detail during the day in preparation for a story tomorrow morning):

1. Assays expected within 2-3 weeks for the International – 15 shallow holes drilled in Phase 1 with “drilling consistently intersecting the International vein system”…testing is for Silver, lead, zinc and Gold mineralization;

2. Drilling starts this week at Gold Viking where Rainbow is targeting an impressive anomaly (1,400 metres by 320 metres) in the central portion of this property (geochemical and airbornes line up exactly) which is contiguous to the past producing Ottawa Mines (2 million ounces at an average grade of over 60 ounces per ton Ag plus Gold, lead, zinc and copper)…recent grab sample assays from Gold Viking have returned Gold values up to 10 g/t;

3. Nevada Surprise – is Rainbow already sitting on a deposit?  Rainbow reported this morning that not only will it start drilling Jewel Ridge within the next two weeks, focusing on the past-producing Hamburg Pit where an historical result (2004) returned a stellar 2.1 g/t Au over 39.6 metres near-surface, but the company has acquired “vast amounts” of historical data that is leading to a reinterpretation of the potential of this property which is situated right in between 4+ million ounces of Gold (Ruby Hill + Lookout Mountain)…this is the most detailed information Rainbow has provided to date on Jewel Ridge…it is a treasure chest of details (with much more to come it appears) including:

“Gold mineralization at the Hamburg Pit occurs within the Hamburg Dolomite and at the contact with the overlying Dunderberg Shale…Gold values are present throughout the Hamburg Dolomite which appears to be at least 200 metres thick…northeast trending faults host higher-grade grade gold mineralization“…

“Geochemical signatures at Jewel Ridge are also similar to those reported at both Ruby Hill and Lookout Mountain”…

Below are some historical drill results from the Hamburg Pit area that we just copied from Rainbow’s news this morning:

Rainbow’s plan is to extend the shallow pits at Jewel Ridge at depth (to 200 metres which is still ideal for open-pit mining) and this is how Timberline Resources (TBR, TSX-V) is rapidly building its Lookout Mountain Project resource immediately to the south and on the same geological structure (Timberline is trading much higher volumes recently – it trades mostly on the AMEX – and is up 50% since mid-September)…

Rainbow is more attractive than ever in our view with a hot property in Nevada, in addition to the 13,000-hectare Big Strike Project in southeast British Columbia which not only hosts the International and Gold Viking past producers, but another half dozen properties that also hold discovery potential…with two drill programs underway imminently, and results pending from the International, trading in RBW should be quite vigorous not only in the days ahead but through the remainder of the year…

Rainbow, which was first listed just last year on the Venture, continues to show that it’s progressing with its business plan and that’s what helps make us so comfortable with this play…there is consistent forward movement and plenty to speculate on which attracts investor interest…

B.C.’s Blackwater District

As prolific as Rainbow’s West Kootenay region is, investors need to keep focused on the Blackwater camp in central British Columbia which features perhaps the most aggressive drill program in the entire world at the moment…New Gold (NGD, TSX) is reported to have at least a dozen rigs in action right now as they continue to work on upgrading and expanding their resource of nearly 10 million ounces of Gold and 60+ million ounces of Silver…juniors with drill programs in progress are RJK Explorations (RJX.A) and Troymet Exploration Corp. (TYE, TSX-V)…Parlane Resources (PPP, TSX-V) has announced its intention to commence at 2,000-metre drill program shortly…

Just recently, RJK started drilling into the guts of an interesting silver discovery the company made last spring that went relatively unnoticed by the market – 3.3 metres, near-surface, grading 79 ounces per ton…after following up on this property, RJK will move south and tackle its highly prospective Blackwater West Property that includes a 350-metre-wide-north-south-by-600-metre-long open-ended anomaly that we’ve been told by veteran geologists has rarely ever been seen in this camp…

BMR will be heading to the Blackwater district in the very near future to report on what is believed to be the largest Gold discovery ever in Canada west of Ontario…new takeovers by New Gold can’t be ruled out, especially after recent comments by Executive Chairman Randall Oliphant…

Below is an encouraging updated chart on RJK which closed Friday at 14 cents…

Aurcana Corporation (AUN, TSX-V) Chart Update

Note:  Both John and Jon hold share positions in RBW and RJX.A.

TSX Venture Exchange And Gold & Silver

It was a rough week for the Venture Exchange as it took the path of least resistance – volume just wasn’t there to push this market through the 1350 area – and slipped 52 points or 3.9% to close at 1293.  While the Index is now below its 20-day moving average (SMA) for the first time in more than two months, the good news is that this market has plenty of support in the 1250 to 1300 range.  The 1250 level was previous resistance in July and August, and it’s also where the rising 100-day SMA is parked at the moment.  So there’s tremendous support there.  The rising 50-day SMA, meanwhile, is just above 1270.  RSI(14) is at support while the Slow Stochastics(14) indicator is at a level not seen since late July.  So for some investors to suggest that this market has broken down, the facts just don’t support that conclusion.  Some near-term indicators obviously turned negative, once the Index fell below the 20-day SMA, but the primary trend remains positive.

There are always a lot of doubting and skeptical investors in the very early stages of a new bull market, which is what we believe we’re in right now, and that’s a good thing.  The climb up the ladder in the early going of a bull run is often gradual and typically features repeated periods of a few steps up followed by a couple of steps back.  Later on, more investors turn bullish which provides fresh waves of upside momentum.  As John has been showing recently, many individual stocks on the Venture have broken out of long-term downtrends in place since early 2011.  In addition, after a 4-year decline, the 1,000-day SMA has reversed to the upside and that’s hugely important.  These are technical developments that cannot be ignored.  Given that the late spring/early summer low of 1154 exhibited so many signatures of a bear market bottom, including extreme negativity and sellers’ exhaustion, we’re very confident in concluding that this market has started an entirely new phase.  The merchants of doom and gloom will want you to believe differently.  Selling fear, just like selling greed, has become a profitable industry.  And sometimes it’s easier to sell fear.  A lot of investors are still hurting from the 50% drop over the past year-and-a-half, and it doesn’t take much at this point to shake any little bit of confidence they may have regained over the past couple of months.

Below is an updated 3-month daily chart that offers some hope for a better week coming up.

Below is an interesting 2-day, 5-minute chart that shows some encouraging patterns at the end of the day Friday, and a divergence between RSI and price beginning late Thursday.

Gold

The last time Gold dropped $20 or more in a week (the week ending August 3), it was a great buying opportunity.  The same could be true now.  Gold fell $27 last week to close at $1,754, $46 shy of resistance at $1,800 and $24 above very strong support at $1,730.  This could be the range we see bullion continue to trade in, however, until the uncertainty regarding the U.S. elections is over in early November.  An Obama victory, and four more years of the same from the White House, would be a more bullish scenario for Gold than a Romney victory.

Gold’s overbought condition on John’s 6-month daily chart below has mostly cleansed itself, which is encouraging, with RSI(14) very close to previous support.  The Bollinger Band Width reversal implies there could be some near-term volatility, so that’s something to watch for.

Views On Gold

Edel Tully, precious metals strategist at UBS, said while speculative buying and ETF inflows have supported Gold to current levels, she is watching physical demand, which generally has been lagging with Gold prices near record levels in most emerging market currencies.

“The future path of (emerging market) currencies versus the dollar will therefore be an important factor for returning Gold demand,” she said.  She noted the recent strengthening of the Indian rupee has helped to revive physical buying there.  “This currency strength is occurring at the right time for Gold, with the wedding season intensifying from late October and followed by Diwali from Nov. 13.  So long as the rupee doesn’t weaken materially, Gold demand should pick up further in the coming weeks, and this will be further helped by low inventory,” she added, “although it’s not likely to make up for the poor sales earlier in the year”.  Tully said Gold prices can appreciate further, but she does offer some factors that could be stumbling blocks this quarter for the yellow metal, including a break in equity prices, weakness in the euro, the U.S. presidential elections, improved U.S. economic data and a resolution to the fiscal cliff.

Global central bank easing continues with Brazil and South Korea both cutting interest rates by 25 basis points last week.  Meanwhile, the repeal of a 7% tax on investment-grade Gold and other precious metals brought into Singapore became effective October 1.  Singapore is hoping to expand its trade in bullion, convince trading houses to store bullion with them and perhaps lure precious metals refineries to their country.  This is all part of bigger push within Asia to store wealth in assets that have maintained their purchasing power over time.

Pimco’s Bill Gross stated that a number of recent studies have concluded that “the U.S. balance sheet, its deficit and its fiscal gap, is in flames and that its fire department is apparently asleep at the station house.”  In a white paper titled, “Gold – The Simple Facts”, posted on Pimco’s website, Pimco analysts Nicholas J. Johnson and Mihir P. Worah also said some interesting things, including, “Our bottom line:  given current valuations and central bank policies, we see Gold as a compelling inflation hedge and store of value that is potentially superior to fiat currencies.”

John will update the short-term and long-term Silver charts Monday morning as usual.  For the week, Silver fell $1.01 an ounce to $33.48.  Copper was down 7 cents to $3.68.  Crude Oil climbed $1.98 a barrel to $91.86 while the U.S. dollar gained one-third of a point to 79.69.

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.

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.

Gold has traded in a narrow range so far today between $1,764 and $1,774…as of 6:10 am Pacific, bullion is up $3 an ounce at $1,770…Silver is off 9 cents at $33.91…Copper is down 2 pennies at $3.71…Crude Oil has gained 12 cents to $92.19 while the U.S. Dollar Index has retreated one-quarter of a point to 79.56…

Today’s Markets

Asian markets were mixed overnight with Japan’s Nikkei Index falling to its lowest close in more than two months for the second day in a row…European shares are relatively unchanged while stock index futures in New York are pointing toward a slightly positive open on Wall Street….

Chinese Central Bank Vice Governor Predicts 7.8% Yearly Growth

Peoples Bank of China Vice Governor Yi Gang today defended the central bank’s record in managing the Chinese economy, and predicted full-year gross domestic product growth would be around 7.8%…speaking on a panel alongside the annual meetings of the International Monetary Fund, Yi noted that the PBOC has lowered interest rates and required reserve ratios twice each this year…he said loan growth so far this year is running at around 16%, which he characterized as “fairly robust”…meanwhile, speaking on the same panel, Reserve Bank of Australia Governor Glenn Stevens said the economic slowdown in China was worse than his expectations but remains manageable…the Australian economy is strongly linked to China through raw material exports…China will report its third-quarter economic data next Thursday and it is widely expected to have posted a seventh successive quarterly slowdown, with exports verging on negative growth…

Chinese Currency Continues To Appreciate

The renminbi has been trading at or near its strongest level against the dollar since Beijing revalued the currency in 2005…it was last this high 19 years ago…the renminbi closed on Friday at 6.2672 to the dollar, up 0.16 per cent from Thursday and once again near the top of the 1 per cent range in which it is allowed to deviate from a daily fixing set by the central bank…over the past three months the renminbi has climbed about 2% against the dollar, frustrating many investors who had been betting on the currency to depreciate as Beijing tries to support the country’s beleaguered exporters…“This is something that has been quite remarkable,” Louis Kuijs, an economist with Royal Bank of Scotland in Hong Kong, told the Financial Times…“The PBoC [People’s Bank of China] has surprised the markets but the appreciation is in line with the observation that policy makers don’t seem to be as concerned about the slowdown as some people in the markets and some corporates”…one possible explanation for the appreciation is that Chinese officials have expressed concern that the Federal Reserve’s policy of quantitative easing would fuel higher global commodity prices, and a stronger renminbi would be a way of blunting imported inflation…

China will report its third-quarter economic data next Thursday and it is widely expected to have posted a seventh successive quarterly slowdown, with exports verging on negative growth…

Venture Exchange

The Venture opened higher yesterday but closed down 2 points for the session at 1300, its third consecutive daily loss…the 1294 level is strong support, while beneath that are the rising 50-day and 100-day moving averages at 1273 and 1247, respectively…RSI(14) is at previous support…

GoldQuest Mining (GQC, TSX-V) Update

GoldQuest Mining (GQC, TSX-V) released results from 4 more holes yesterday from its Romero discovery in the Dominican Republic (the best result was 231.6 metres grading 2.04 g/t Au and 0.30% Cu), but the market is starting to see some limitations to the deposit with drilling results not as strong in areas further away from the centre of the main IP geophysical anomaly…the stock climbed as high as $1.46 yesterday but then went into retreat and finished the day below $1 a share at 96 cents for the first time since July 23…ongoing drilling includes the first deep hole below depths (currently at 651 metres), and continues to the south and east of the discovery holes…below is an updated chart from John that shows the stock has a support band between 81 cents and $1.05…

Probe Mines (PRB, TSX-V) Updatre

Probe Mines (PRB, TSX-V) continues to make excellent progress with its Borden Lake Gold deposit in northern Ontario, and the stock is looking much healthier from a technical standpoint with rising 50 and 100-day moving averages for the first time since the beginning of the year…PRB closed up 7 cents yesterday at $1.38, just a couple of pennies below important resistance that we believe the stock should be able to overcome in the near future…

Northern Gold Mining (NGM, TSX-V)

Northern Gold Mining (NGM, TSX-V) has been a very strong performer over the past couple of months with the stock forming a bullish cup-with-handle pattern…this is definitely a situation to keep watching closely as what we now expect is a minor pullback to unwwind current overbought conditions and to allow for the development of the right handle of this pattern…there should be strong support at the EMA(20) as John shows in the chart below…the rising 50-day SMA is at 37.5 cents…this is a nice-looking chart…there are many individual situations in this market that are looking quite bullish from a technical standpoint – another major reason why we believe the Venture will enjoy a strong fourth quarter and experience an acceleration in the uptrend as Q1 gets underway…

Note: John and Terry do not hold positions in GQC, PRB or NGM.  Jon holds a share position in GQC.

Gold is looking solid so far today and is up $4 an ounce to $1,767 as of 5:50 am Pacific…Silver, which seems to have found support at its 20-day moving average (SMA), is up 14 cents at $34.12…Copper is up 4 pennies at $3.73…Crude Oil has gained $1.28 to $92.53 while the U.S. Dollar Index is off one-fifth of a point to 79.84 after again encountering resistance overnight just above 80…

U.S. Silver Output Down 12% In July

U.S. mined Silver output was down 12% in July from the same month a year ago, according to figures released by the U.S. Geological Survey…total July production this year was 2,588,140 ounces…Silver holdings in exchange-traded products (ETP’s) reached their highest level in 14 months in mid-July, and provided a short-term boost to silver prices, the agency stated…physical holdings in major Silver ETP’s increased to levels last seen in May, 2011…

U.S. Jobless Claims Drop To Lowest Level In Four Years

Weekly jobless claims fell to their lowest level in four years, while the U.S. trade deficit widened and import prices rose more than expected, according to economic numbers released at 5:30 am Pacific…the number of Americans seeking unemployment aid plummeted to 339,000 last week, the lowest level in more than four years…the sharp drop offered a hopeful sign that the job market could pick up…the Labor Department said weekly applications fell by 30,000 to the lowest level since February, 2008…the four-week average, a less volatile measure, dropped by 11,500 to 364,000, a six-month low…

Romney Narrows Gap In Presidential Race

Mitt Romney’s strong performance in the first presidential election debate has drawn him closer in the race for the White House against President Barack Obama, according to new NBC News/Wall Street Journal polls of three swing states…in Virginia, Romney leads Obama by 48% to 47% among likely voters…before last week’s debate, Obama held a slim 2% lead…in Florida, the Democratic incumbent leads his Republican challenger by 48% to 47% among likely voters…that 1% margin was unchanged since before the debate…and in Ohio, Romney has trimmed 2% off Obama’s pre-debate lead…Obama holds a 51 to 45% edge among likely voters in that state…all three surveys were conducted for NBC/WSJ by the Marist College Institute of Public Opinion with margins for error of 3.1 percentage points…

Today’s Markets

Asian markets were mixed overnight with China’s Shanghai Composite pulling back modestly (down 17 points to 2103) after several days of strong gains…European shares are stronger this morning while stock index futures in New York as of 6:00 am Pacific are pointing toward a positive open on Wall Street…

Stay Focused On The Big Picture

John has charts this morning on both the Venture Exchange and the TSX Gold Index which should put any nervous nellies at ease after a bit of a rough first half of a shortened trading week…the Venture has fallen 43 points or 3.2% the last 2 sessions while the Gold Index recovered slightly yesterday after falling 14 points or 4% the previous two days…there are so many arguments in favor of the position that the Venture and precious metal stocks in general are in a major new primary uptrend at the moment that should only accelerate over the coming months…so in our view, minor pullbacks along the way – a couple of steps down the ladder after a few steps up – are great bargain-hunting opportunities in quality situations if you accept that big picture view…there are always plenty of doubters in the very early stages of a new bull market which we contend is what the CDNX is currently in, and that’s entirely normal and healthy…the number of bulls will gradually increase as time wears on and the bull market ultimately gets exhausted when virtually everyone is bullish…

First, let’s take a look at the TSX Gold Index which, in this 6-month daily chart from John, is trading in a horizontal channel and has just bounced off previous RSI support at 50…the recent overbought condition has cleansed itself, and the Index has a very strong support band between 332 and 335…

Venture Exchange

The Venture’s biggest challenge at the moment is overcoming a resistance band between 1350 and 1365, so the market has stepped back slightly to rebuild the energy to do that…the Venture has closed below its 20-day SMA for the first time since early August which is unsettling to some, but from 1250 to 1300 there’s a ton of support based on Fibonacci numbers and rising 50 and 100-day SMA’s…in fact, right now, you’ll notice in John’s 3-month chart below that the RSI(14) is now at previous support after spending much of last month in overbought territory…the consolidation channel is very much intact…

Comstock Metals (CSL, TSX-V)

It was a bad overall market day for Comstock Metals (CSL, TSX-V) to come out with news yesterday, and the stock got sold off sharply despite the fact the company released decent preliminary Gold assay results from two of the first eight holes completed at its QV Project in the Yukon (results from check assays and metallic fire assays have not yet been received)…QV12-001 returned 82 metres (from a depth of 20 to 102 metres) grading 1.02 g/t Au, while QV-002 intercepted 52.4 metres near-surface grading 1.28 g/t Au…this is an encouraging early-stage discovery…all eight holes at QV intersected thick zones of quartz-sericite-carbonate altered gneiss and feldspar porphyry dikes with quartz vein stockworks, breccias, disseminated and vein controlled pyrite, and visible Gold…”The broad, near-surface Gold zones, along with a shallow dip of 30 degree to the northwest, make an ideal open-pittable mining scenario at the VG zone,” stated company President and CEO Rasool Mohammad…”We are also very encouraged by our high-grade Gold zones in the broader low-grade near-surface mineralization, indicating underground mining potential as well”…CSL slid 12.5 cents yesterday to close at 36.5 cents…

AuricoGold Inc. (AUQ, TSX)

AuricoGold Inc. (AUQ, TSX) is a compelling situation to look at, for those interested in producers, after the company announced a $750 million cash deal Tuesday to sell some of its assets in Mexico…the stock jumped $1.34 yesterday on the news to close at $7.60…below is a 2.5-year weekly chart from John that shows an important bottom was put in on this stock in early September at $5.20 per share…

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

IIROC Studying High Frequency Trading

The Globe and Mail reports in today’s edition that the Investment Industry Regulatory Organization of Canada (IIROC) is involved in an intensive study to see how markets are being influenced by high frequency trading, which could be positive news for retail investors especially…the Globe’s Noreen Rasbach wrote that what the study has looked at so far is the prevalence of this activity – 42% of all trades in the Canadian market and 32% of the value traded…”High-frequency traders can see things a millisecond ahead of the rest of us, but a millisecond is worth a fortune,” stated University of Toronto’s Rotman School of Management professor Eric Kirzner…Kirzner says high frequency traders “can see what slow moving traders are doing and move ahead of them”…Baskin Financial Services President David Baskin says, “This is sort of a ‘tragedy of the commons’ situation where the high frequency traders have found a way to exploit the market in the short run, but run the risk in the long run of spoiling the markets for everyone”…the Globe describes Baskin as an unabashed critic of the practice…proponents say high frequency trading is actually helping the markets by improving liquidity…

Gold has traded between $1,756 and $1,769 so far today…as of 6:15 am Pacific, the yellow metal is down $3 an ounce at $1,762…Silver is off 4 pennies at $33.86…Copper is down slightly at $3.69, hitting its lowest level in more than a month as concerns about continued demand weakness offset fresh hopes for pro-growth policies from top metals consumer China…Crude Oil, after a big jump yesterday, has retreated 45 cents to $91.94 while the U.S. Dollar Index encountered resistance just above 80 and is currently down more than one-tenth of a point to 79.94…

Bullion backed ETP’s took in approximately 270,000 ounces of Gold yesterday, taking total holdings to a record high of 74.76 million ounces…

Investors should double the amount of Gold they hold as the value of paper currency diminishes along with the prospects for global economic growth, said a senior executive at Coutts, the private banking arm of Britain’s Royal Bank of Scotland…ideally, investors should aim to have 7 to 8% of their assets in Gold, above the wealth management industry’s average of 3%, Gary Dugan, Coutts’ chief investment officer for Asia and Middle East, told Reuters…”What’s happening in precious metals is that they are becoming more mainstream,” Dugan said, adding that a decade ago investors rarely held any Gold in their portfolios…”Some of the clients ask where Gold prices are going, and I say don’t even think about prices…it’s a store of value”…

China’s Equity Market Bouncing Back

Asian markets were generally lower overnight, though China’s Shanghai Composite bucked the trend by gaining another 5 points to close at 2120…the Index has jumped more than 5% in recent sessions as Chinese authorities seem determined to make the 2000 level the floor…China’s major insurance companies increased their combined stock holdings by more than 10 billion yuan ($1.6 billion) over the last three trading days and will continue buying equities, according to the official Shanghai Securities News today…the report comes after Chinese banking shares rallied in the previous session on expectations that Central Huijin, a unit of China’s sovereign wealth fund, would continue to increase its stake in banks…a rebounding equity market in China has potential global implications, so it’s important to keep an eye on developments there…the country’s leadership transition is coming up next month and that’s when the government is expected to take more measures to boost economic growth…that’s good news in terms of the outlook for commodities going into 2013…

Below is an updated chart from John showing “decision time” is drawing near for the Shanghai Index to break above a downtrend line that has been in place for well over a year…critical support recently held…

Taiwan Numbers Point To Possible Asian Turnaround

Taiwan, among the first Asian countries to release monthly data, saw September exports rise 10.4% from a year earlier, ending a streak of six consecutive monthly declines which suggests that the beginning of stabilization is starting to take place in Asia…the data followed better than expected trade figures from South Korea, which reported last week that exports fell by a smaller-than-expected margin of 1.8% in September to $45.66 billion from a year earlier, with exports to China rising 1.1%…one month’s data may not mark the start of a trend, but for some economists the numbers at least give some hope that a dismal environment for global exports may be abating…Taiwan in the past has proven to be a reliable leading indicator…“The Taiwan data is particularly interesting because it leads to the question of whether we are at the cusp of a turning point,” CNBC quoted Vishnu Varathan, Market Economist at Mizuho Corporate Bank…“It’s hard to raise a solid conclusion from the data but they do raise some hope”…Taiwan’s exports to key U.S. and China markets returned to growth last month, bolstered by demand ahead of Christmas…the finance ministry said it expected exports to rebound in the fourth quarter…

Geopolitical Events Boost Crude Oil

Turkey’s Prime Minister Tayyip Erdogan continues to make strong comments aimed at neighboring Syria, saying his country would not avoid war if it is forced to act…Syrian shells have landed in Turkish territory for six consecutive days, and NATO yesterday said it drew up plans to defend Turkey if necessary…another catalyst for oil prices came as Israeli Prime Minister Benjamin Netanyahu called for early elections…he said he was forced to call a snap poll for early 2013, about eight months ahead of schedule, because his coalition could not agree on a budget…Netanyahu is expected to win and his Likud Party is ahead of rivals, so traders viewed the announcement as a referendum on Netanyahu’s hard line towards Iran and its nuclear program…meanwhile, a new assessment from nuclear experts and former UN inspectors said Iran was two to four months from being able to produce weapons-grade fuel…

Today’s Markets

European shares are flat this morning while stock index futures in New York as of 6:15 am Pacific are pointing toward a flat to slightly negative open on Wall Street…the Venture Exchange closed down 17 points yesterday at 1328, it’s 20-day moving average (SMA) which provided support in late August and again in late September…

Osisko Stakes Ground In Mexico

Osisko Mining (OSK, TSX) turned a few heads yesterday with the announcement that the company has staked 1 million hectares in “an emerging gold-rich mineral belt in Mexico”…a systematic first-stage exploration program was initiated in late 2011, starting with a high-density stream sediment survey comprising over 4,000 samples…detailed mapping, geochemistry and geophysics were subsequently completed over identified anomalous areas…the work to date has identified a large magmatic-hydrothermal system with a coincident 5 sq. km Gold-copper-silver (Au-Cu-Ag) soil and lithogeochemical anomaly, all located within a 14 sq. km hydrothermal alteration zone…this target is currently undergoing preparatory work for a preliminary 10,000-metre drill program…two additional anomalies were also identified, and work is under way to bring them to drill-ready status…Osisko President and CEO Sean Roosen stated, “We are excited by the preliminary results of our exploration efforts in Mexico…we believe that we can deliver significant value to our shareholders through systematic greenfields exploration programs, and continue to work toward building the team and the knowledge base to pursue significant new gold discoveries”…

Corvus Gold (KOR, TSX) Hits New All-Time High

Nevada continues to be red-hot and one of our favorite Nevada plays hit a new all-time high yesterday…Coruvs Gold (KOR, TSX) reached an intra-day high of $1.50 and finished the session up 7 cents at $1.34 after releasing results from the final 11 holes of the company’s Phase 2, 26-hole resource expansion and conversion program at its Mayflower deposit (North Bullfrog Project)…encouraging higher-grade drill results will be incorporated into an updated Preliminary Economic Assessment (PEA) for the company’s two-stage mine development strategy at North Bullfrog later this fall and a subsequent feasibility study on the Mayflower mine for the first quarter of 2013…the company believes it’s on track to achieve its objective of establishing Gold production by late 2014…the latest Mayflower results include near-surface high-grade vein-related mineralization (9.94 g/t Au over 6.1 metres in hole NB-12-164) that will be part of the early mining of the Mayflower deposit…

Below is an updated Corvus chart from John…

Argex Titanium Inc. (RGX, TSX-V) Chart Update

It’s been a while since we’ve done a chart update on RGX, so below is John’s latest take on the technicals for this play…$1.15 is important resistance at the moment…

Note: John, Jon and Terry do not hold positions in KOR or RGX.

Gold has traded in a range between $1,769 and $1,781 so far today…as of 6:00 am Pacific, the yellow metal is down $1 an ounce at $1,775…Silver is off 4 cents at $33.94…Copper is flat at $3.71…Crude Oil is up $1.24 to $90.27 while the U.S. Dollar Index has gained over one-tenth of a point to 79.69…

This should be an important week for both Gold and Silver as we find out just how strong the short-term trends are…one concern at the moment is the bearish COT structure (commercial short positions have ramped up considerably recently, now at higher levels than they were back in February) and some analysts have pointed to some bearish technical signals last Friday…however, John’s 6-month daily Gold chart posted Saturday still shows strength and even the formation of an RSI(14) bullish “W”…

Silver, meanwhile, is showing some technical weakness with buying pressure in decline and the RSI(14) now falling toward support at 50 on the short-term chart…this can be viewed as a healthy minor pullback, however, that could continue to find support at or near the SMA(20) which is currently $34…next major support below that is $34 as shown in John’s chart below…

Silver – Short-term

Long-term, Silver remains locked in a powerful Wave 5 advance that has a Fibonacci target of $78 an ounce…below is John’s updated 15-year monthly chart…RSI(2) remains in overbought territory, a condition that should continue for a while yet based on historical patterns…at some point it will correct to support and then get back into the overbought range again as the Wave 5 move continues…

Silver – Long-Term

Gold – Long-Term

John has an interesting long-term Gold chart this morning (12-year monthly) that shows how the yellow metal is performing very similar to the recovery following the Crash in 2008…this is a bullish pattern that suggests a trading range between about $1,700 and $1,900 through the remainder of the year, followed by a break to record highs in early 2013…

Global Liquidity & Gold

Not surprisingly, there has been a direct correlation between the steady increase in global liquidity and the jump in Gold over the last dozen years…this liquidity boom shows no signs of abating – in fact, given the Fed’s recent actions and initiatives elsewhere, it’s now intensifying…

Today’s Markets

Asian markets were mixed overnight though trading resumed with another vigorous gain in China’s Shanghai Composite after a one-week national holiday…the Shanghai gained another 41 points to close at 2115 after a strong finish to the third quarter at the end of September…a report in China Daily said market regulators had pledged to speed up approvals for quotas for Qualified Foreign Institutional Investors (QFIIs), the only way for offshore investors to directly access China’s domestic markets…European shares are generally in positive territory this morning while stock index futures in New York as of 6:00 am Pacific are pointing toward a a slightly higher open on Wall Street…

Venture Exchange Chart Update

Canadian markets return to action after yesterday’s Thanksgiving holiday…the Venture Exchange closed last week at 1345, just beneath the beginning of a resistance band at 1350…the Index is also right at the top of a downtrend line in place since the spring of last year…this market can be expected to accelerate rapidly once this downtrend line is cleared…of great significance is the fact the Venture has broken out relative to the U.S. dollar, a situation that did not exist when the Index failed to get through the downtrend line in February/early March of this year…

IMF:  Global Recession Risk Grows

The International Monetary Fund expects the world economy to expand just 3.3% this year and 3.6% in 2013, as growth slows in nearly every major nation and political uncertainties threaten recoveries in the U.S. and euro zone…that’s a revision downward of 0.2% for 2012 and 0.3% for 2013 from its July forecast…under the IMF’s definition, global gross domestic product doesn’t have to shrink for the world to be in recession…”No significant improvements appear in the offing,” the IMF said…the global economy grew 3.8% in 2011 and 5.1% in 2010…

High Desert Gold (HDG, TSX-V) and Victoria Gold (VIT, TSX-V)

John has charts this morning on a couple of interesting situations for our readers’ due diligence that hold good potential over the coming months…

High Desert Gold (HDG, TSX-V) has been strengthening again recently after a pullback from a big move in mid-August after the company released solid results from its Gold Springs Property (Gold-Silver) that straddles the Nevada-Utah border…HDG completed 34 holes in a Phase 1 program and a 10-15 hole Phase 2 program commenced last Friday…Gold Springs is a 70/30 joint venture with Pilot Gold Inc. (PLG, TSX) in which HDG holds a 70-per-cent interest and is the operator of the joint venture…

Victoria Gold Corp. (VIT, TSX-V)

Victoria Gold Corp. (VIT, TSX-V) has a lot of shares outstanding (over 300 million) but the company’s Eagle deposit is expected to become the Yukon’s next operating Gold mine and includes probable reserves of 2.3 million ounces (92 million tonnes grading 0.78 g/t Au)…the NI 43-101 mineral resource has been estimated to host 222 million tonnes averaging 0.68 g/t Au, containing 4.9 million ounces in the indicated category (inclusive of probable reserves) and a further 78 million tonnes averaging 0.60 g/t containing 1.5 million ounces of Gold in the inferred category…

From a technical standpoint, the stock has put in a double bottom and has broken above an important downtrend line as John shows in the 3-year weekly chart below…

Note:  John, Jon and Terry do not hold positions in HDG or VIT.