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Japan’s government has approved its second round of stimulus in a little more than a month, as prime minister Yoshihiko Noda tries to pep up a flagging economy in the run-up to December’s…the cabinet announced today that it would tap reserve funds to spend$10.7 billion U.S. on a variety of measures, including rebuilding areas hit by the March 2011 earthquake, employment support and aid to cash-strapped small businesses…the plan is roughly double the size of a package announced in late October, which was also drawn mostly from reserves and aimed at reconstruction efforts…the stimulus comes as Japan hovers on the brink of a technical recession, its fifth of the past 15 years, as manufacturers cut production amid a steady worsening in their sales and profit outlook…falling exports were the main contributor to a 0.9% contraction in gross domestic product between July and September, and economists are braced for another GDP contraction in the three months to December…

Canadian Growth Slows

Canada’s gross domestic product rose just 0.1% in the third quarter compared with the second quarter, Statistics Canada reported this morning…on an annualized basis, Canada’s GDP expanded at just 0.6% in the third quarter – below forecasts and well down from the second quarter’s 1.9%…among the culprits in the third quarter were exports (they fell 2% amid soft demand in the United States and a strong dollar), declining business investment and residential investment, an indication that the housing market is cooling…the drop in exports was the fastest since the quarter of 2009…mining, excluding oil and gas extraction (-2.8%), was also down in the third quarter, as production declines at potash and at copper, nickel, lead and zinc mines offset increases in coal mining, Stats Canada reported…

Today’s Markets

Asian markets were stronger overnight with Japan’s Nikkei average hitting a 7-month high while China’s Shanghai Composite Index snapped a four-day losing skid by rising 16 points to 1980…property and infrastructure-related sectors gained after local media reported that Vice Premier Li Keqiang said urbanization will drive most of the country’s development in the next decade…markets are modestly higher in late trading in Europe while there’s a little bit of “green” in North America with the Dow up 14 points and the TSX 16 points higher as of 7:30 am Pacific…the Venture is steady at 1218…

Updated Copper Chart

Copper is a key leading indicator of the health of the global economy, and it has managed to hold an important support band between $3.45 and $3.50 which leads us to believe China is on the road to recovery…the next major resistance is $3.70…the supply-demand dynamics also look bullish for at least the first half of 2013…

Huldra Silver (HDA, TSX-V)

Huldra Silver (HDA, TSX-V) has pulled back about 25% from its early November 52-week high of $1.77, and John’s latest chart (2.5-year weekly) shows strong support near current levels with the rising 100-day SMA at $1.37 and the rising 500-day SMA at $1.29…HDA is unchanged at $1.37 in early trading…

Blackwater Update

It’s almost too quiet in the Blackwater district these days – perhaps the lull before the storm…RJK Explorations (RJX.A) announced yesterday that it has completed drilling for the 2012 season on the Blackwater East and Blackwater West properties with assays pending…reading between the lines of RJK’s news, it seems the company may have been quite pleased with the core it saw in the holes at Blackwater West…we say that because RJK also announced that “Upon completion of the initial drill holes on Blackwater West, (the company) has now decided to proceed with and pay the final property option cash payment prior to (an initial deadline of) Dec. 1, 2012″…

Troymet Exploration (TYE, TSX-V) is awaiting results from reverse circulation drilling in 16 holes at its Key Gold Project, while Parlane Resources (PPP, TSX-V) commenced a drill program at its Big Bear Property just over two weeks ago…

New Gold (NGD, TSX), of course, has been conducting a lot of drilling as it continues to build a very impressive resource with its Blackwater deposit…below is an updated chart for New Gold which has some important resistance to clear at current levels…it’s up 9 cents to $10.76 after the first hour of trading…

Richmont Mines (RIC, TSX)

Not surprisingly, Richmont Mines (RIC, TSX) is taking a hit this morning on the news that it has shut down its Francoeur Mine and will be putting its Wasamac Project on hold until the potential economics of it improve…these are positive steps by CEO Paul Carmel which should help lead to a recovery by Richmont in 2013 as it continues with its two current producers (Island Gold Mine and Beaufor) and investigates new opportunities that will focus on “lower-cost, longer-life assets to secure its future and generate an improved valuation in the marketplace”…RIC is armed with plenty of cash and has no long-term debt…typically, in situations like this, a company’s stock will become very oversold so we’re looking for a potential opportunity here over the next few weeks…as of 7:20 am Pacific, RIC is off 97 cents to $2.83…

Gold is firmer this morning after yesterday’s weakness that was apparently triggered by a single customer who sold 15,000 contracts shortly after the market opened…still, Gold held important support at $1,700 while Silver held support at $33.50 on a closing basis…as of 7:45 am Pacific, bullion is up $6 an ounce at $1,726 while Silver – looking very strong – has gained 50 cents to $34.27…Copper has shot up 8 cents to $3.59…Crude Oil is sharply higher, up $1.86 a barrel to $88.35 while the U.S. Dollar Index has retreated one-tenth of a point to 80.19…

Industrial demand accounts for around 55% of overall Silver demand, and 2012 was a weak year for industrial demand…so it’s interesting that industrial demand for Silver is now expected to rise by 7% in 2013 to a new record, according to a report from the Silver Institute…it also expects industrial demand for Silver to climb another 6% in 2014…growth in demand should be driven by Silver-oxide-catalyst production and the photovoltaic (solar-to-electrical power) industry…China is expected to play catch-up with the U.S. in terms of industrial demand, with the two nations combining to provide over 40% of industrial demand…

Copper Supplies Tight For First Half of 2012

Copper supply shortages will extend into the first half of next year as an accelerating Chinese economy more than doubles the pace of growth in global consumption even as mines extract a record amount of metal..demand will outpace supply by 316,000 metric tons in the first six months, more than all Copper in London Metal Exchange warehouses, before a surplus emerges in the second half, according to Barclays…production has lagged behind consumption since 2010, according to the International Copper Study Group…China, which uses 41% of the world’s Copper, is rebounding from seven quarters of slowing growth after the government approved a $161 billion subways-to-roads construction plan in September…Barclays estimates that global demand will expand 3.4% to 20.85 million tons next year, from a 1.5% gain in 2012…supply will climb 3.5% to an all-time high of 20.83 million tons…while that means an annual shortage of 19,000 tons, it’s driven by the projected first-half deficit, compared with a surplus of 297,000 tons in the second six months…China’s Copper demand may rise 5.5% to 8.1 million tons, compared to a gain of 4.8 % this year, according to Beijing Antaike Information Development Co. which has researched metals for two decades…

Comparative Chart – CDNX, Gold, Dow, Shanghai Index

Below is a comparative chart from John that covers the last four months…interestingly, Gold and the Dow are closely tracking each other as they are both on the same slope trendlines, while the CDNX and China’s Shanghai Composite Index are also on the same slope trendlines but in the opposite direction…(we’ve noted similarities between these two before)…over the last four months, however, the Venture has still slightly out-performed the Dow…

Shanghai Composite Index Chart Update

Has China’s Shanghai Index hit bottom yet after closing below the 2000 level for the first time in four years?…that’s impossible to say at this point, but importantly the Index is now trading at the bottom of a downsloping wedge where it should have strong support…there’s also a divergence between price and RSI(14) which is bullish…so what this tells us is that “risk off” could be about to switch back to “risk on”, at least for a while…

Encouraging U.S. Economic Data

Weekly U.S. unemployment applications dropped to 393,000 as impact of Superstorm Sandy faded, while gross domestic product growth was revised upward in the third quarter, according to economic data released this morning…the economy grew faster than initially thought in Q3 (2.7% vs. the initial estimate of 2%) as faster inventory accumulation and export growth offset weak consumer spending and the first drop in business investment in more than a year…but the question is whether the momentum can be sustained going into 2013 given the uncertainty in Washington over fiscal policy…meanwhile, buyers are coming back to the housing market in ever greater numbers, as an industry index measuring contracts to purchase existing homes surged 5.2% in October from September…

Fed Official Calls For More Action From Government To Boost Employment

Dallas Fed President Richard Fisher, a top U.S. Federal Reserve official, urged the U.S. government to give businesses more incentives to invest the liquidity the central bank has provided to create jobs…the Federal Reserve said in its Beige Book report yesterday that the U.S. economy had trucked along at a “measured” pace in recent weeks and hiring remained modest…Fisher called for more action from the government to boost employment, saying there were limits to what monetary policy could do…”We at the central bank have been carrying the load and this is a very dangerous predicament,” Fisher, a self-described anti-inflation hawk, said during a lecture in Frankfurt today…”Monetary policy provides simply the fuel, but the incentive has to come from our fiscal authorities,” he added…”The gas tank is full (with liquidity) and now we have to get someone to … step on the accelerator to propel the job creating machine in the United States…there is a limit to what a monetary authority can do…all we can do is provide liquidity”…

Today’s Markets

Markets are stronger across the board today on optimism regarding U.S. budget discussions…Asian markets were mostly higher overnight, though the Shanghai fell another 10 points to close at 1963…European markets were up by roughly 1% today while as of 7:45 am Pacific, the Dow is 38 points higher at 13023…the TSX has gained 59 points while the Venture Exchange is up 10 points at 1215…the CDNX has so far been able to hold support at 1200…if it can hold critical support at 1165 over the next three weeks, to the end of the tax-loss selling period, then it should be in excellent shape technically to finish 2012 on a positive note and start a fresh uptrend to begin 2013 which could include a breakout through the down trendline in place since last year…

Seafield Resources (SFF, TSX-V)

It has been a while since we’ve provided an updated chart for Seafield Resources (SFF, TSX-V) which has been driven down to important support with the recent weakness in the Venture…Seafield’s Miraflores Project in Colombia is coming along nicely but finding a way to put it into production is the challenge…by itself, Miraflores may not be enticing enough for a bigger player to step in which is why it’s important for Seafield to outline additional deposits in the area to complement Miraflores…John’s chart shows two critical support areas for SFF – 10 cents and 7 cents…given the current RSI(2) low extreme, the 10-cent area is likely to hold…SFF is up a penny to 11 cents in early trading…

Malartic Searched By Quebec’s Environment Ministry

In a sign that the new regime in Quebec may not be so mining friendly, Osisko Mining (OSK, TSX) reported late yesterday that representatives from Quebec’s environment ministry searched its Canadian Malartic mine yesterday morning…Osisko stated in a news release that the ministry collected documents related to “drilling, loading and blasting activities for certain dates between April 2011 and October 2012″…mining operations were reported as continuing as normal and the company said it was cooperating fully with the authorities and with the ongoing investigation…“The corporation believes that its operations are in compliance with laws and regulations, particularly with regard to environmental protection,” Osisko stated…the Quebec Sustainable Development, Environment, Wildlife and Parks Ministry in October asked the company to increase safety measures at the mine when it performed unplanned blasting…

Meanwhile, the Parti Québécois government has suffered a major setback with the resignation this morning of Environment Minister Daniel Breton…Breton’s unruly past came back to haunt him with front page news reports of unpaid rent, convictions for unemployment insurance fraud and a suspended driver’s licence…what a mess Quebec is in…

Note: Terry holds a share position in SFF.

Gold is off for the third straight day, and down sharply, with investors continuing to be risk-adverse as they grapple with the “Fiscal Cliff” and other issues…as of 7:00 am Pacific, bullion is down $33 an ounce at $1,709…$1,700 is a strong support area…Silver is 95 cents lower at $33.10…Copper is off 4 pennies at $3.49…Crude Oil has lost $1.54 a barrel to $85.64 while the U.S. Dollar Index has gained nearly one-fifth of a point at 80.52…

Holdings in Gold-backed exchange-traded products climbed 5.1 metric tons to a record 2,612.1 tons yesterday, data compiled by Bloomberg show…the U.S. Mint sold 75,500 ounces of American Eagle Gold coins so far this month, the most since January, data on its website show…

Buffett Chimes In On Fiscal Cliff

Speaking on CNBC this morning, Warren Buffett said he expects Washington lawmakers will come up with a compromise on the “fiscal cliff,” but he’s not sure that will happen by the end of the year…he doesn’t, however, think it will take several more months to come up with a fix and it won’t be the “end of the world” if a compromise comes shortly after the December 31 deadline…he stated lawmakers should not be negotiating in public…

Today’s Markets

Asian markets were lower overnight with China’s Shanghai Composite falling another 18 points to 1974…European shares are down modestly in late trading while North American markets continue to remain under pressure…as of 7:00 am Pacific, the Dow has lost 64 points, the TSX is off 86 points while the Venture Exchange has fallen just 2 points to 1204…the Venture has not been below 1200 since the beginning of August…

Venture Exchange Updated Chart

It has been a bad week so far for the Venture, plain and simple, with a combination of tax-loss selling, month-end pressures, overall Gold and equity weakness, and a general risk aversion mentality…the Index fell through support at 1215 yesterday and now the test will be to see if it can hold important support at 1165…

Mineral Mountain Resources (MMV, TSX-V)

Mineral Mountain Resources (MMV, TSX-V) has released initial drilling results from the continuing phase I exploratory and confirmation diamond drilling program at the Bismarck mine in South Dakota, part of the company’s Holy Terror Project…highlights from the first six drill holes include 11.40 g/t Au over 8 metres, 7.68 g/t Au over 4.35 metres, 10.02 g/t Au over 4.02 metres, 3.90 g/t Au over 10.02 metres, 10.59 g/t Au over 4.95 metres, and 6.92 g/t Au over 5.54 metres…this is a solid start as  this drilling has confirmed that newly identified, near-surface mineralization occurs in the hanging wall approximately 60 metres northeast of the main Bismarck Gold zone and is open in all directionss…assays from 5 more holes are pending…MMV is off 2 pennies in early trading at 34 cents…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) disappointed investors with fresh results yesterday from its Romero discovery in the Dominican Republic, another factor that is contributing to the weakness in the Venture…below is an updated chart from John that shows three support levels – 47 cents, 39 cents and 30 cents…as of 7:00 am Pacific, GQC has rebounded to 51 cents (up 2 pennies) after touching a low of 46.5 cents…

Tinka Resources (TK, TSX-V)

We first mentioned Tinka Resources (TK, TSX-V) a couple of months ago when we attended the Cambridge Resource Show in Toronto…the stock has been a solid performer this year, and closed at an all-time high yesterday of 84 cents…Tinka is working on a promising Silver-Lead-Zinc project in Peru with a current inferred resource of approximately 30 million ounces…below is an updated chart from John that shows momentum has driven the stock through resistance in the low 70’s which is now support…TK is worth watching closely but we wouldn’t recommend chasing it…there is a risk of a  pullback (perhaps to the EMA-20) given the current overbought condition…as always, perform your own due diligence…TK is off a penny at 83 cents in early trading…

Note: Jon holds a share position in GQC.

Gold has traded between $1,745 and $1.752 so far today…as of 8:00 am Pacific, the yellow metal is down $4 an ounce at $1,745…Silver is off 12 cents at $34.06…Copper is flat at $3.52…Crude Oil has lost 60 cents cents to $87.14 while the U.S. Dollar Index is up one-third of a point at 80.42…

Greece Gets A Reprieve

Greece’s international creditors reached an agreement overnight to end an impasse over the country’s rescue program and unlock long-delayed loan payments, though the plan left officials with a host of challenges that could derail efforts to cut the government’s debt burden…finance ministers from the 17-country euro zone and the International Monetary Fund struck a deal in Brussels to cut Greece’s debt to a target level below 124% of gross domestic product by 2020, officials said…to satisfy IMF concerns that Greece’s debt must fall even more to be considered “sustainable,” euro-zone ministers agreed to bring Athens’s debt target to substantially lower than 110% of GDP in 2022…the deal will allow Greece to receive loan payments of about $57 billion U.S. to be paid in four installments between December and the end of March, tied to the country sticking to the terms of the bailout deal…Citigroup released a fresh analysis yesterday in which the firm estimates that at least five nations along the periphery of the euro zone will need to restructure their onerous debt burdens…the worst of the bunch – Greece – likely will dump the currency completely before 2013 ends, while nations such as Spain and Italy that have ducked under the radar likely will find themselves back under pressure, Citi said…

OCED Cuts Global Growth Forecast

The OECD slashed its global growth forecasts today, warning that the debt crisis in the recession-hit euro zone is the greatest threat to the world economy…in light of the economic outlook, the OECD is urging central banks to prepare for more exceptional monetary easing if politicians fail to come up with credible answers to the debt crisis…the Paris-based think-tank forecast in its twice-yearly Economic Outlook that the global economy would grow 2.9% this year before expanding 3.4% in 2013…this estimate marked a sharp downgrade since the OECD last estimated a rate in May of 3.4% for this year and 4.2% in 2013.

Today’s Markets

Asian markets were mixed overnight…the Nikkei Index climbed to a 7-month high as Japanese opposition leader Shinzo Abe, who is expected to win a December election, said the country cannot restore its fiscal health without overcoming deflation, calling for bolder monetary and fiscal stimulus to revive the economy…China’s Shanghai Composite, however, continues it slump…it fell to a four-year low, closing at 1,991…European shares were mostly slightly higher today while North American markets are off modestly…as of 8:00 am Pacific, the Dow has retreated 41 points while the Venture Exchange is down another 4 points to 1222 after a 33-point decline yesterday…there is technical support at 1215…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) is taking a hit this morning on results from five more holes at its Romero discovery in the Dominican Republic…the best assay was an interval of 52 metres in LTP-111 that graded 1.31 g/t Au and 1.24% Cu…the first deep hole drilled at Romero (LTP-106) did not intersect significant mineralization at depth, which the market has clearly expressed disappointment about…this is still a very important discovery but drilling remains in the early stages…to gain a better understanding of the system(s) in the area, GoldQuest has launched a deep-penetrating IP survey of the Las Tres Palmas trend (to a depth of 500 metres), specifically west of Romero and north of La Escandalosa…GQC fell as low as 49.5 cents this morning…as of 8:00 am Pacific, it’s off 25 cents at 53 cents on volume (all exchanges) of nearly 6 million shares…

Discovery Ventures (DVN, TSX-V)

Discovery Ventures (DVN, TSX-V) is wasting no time in raising money to kick-start the process of putting the Willa deposit into production in the Slocan Valley…DVN announced a private placement yesterday of $2 million at 25 cents, a substantial discount to recent trading levels…this aggressiveness by DVN in wanting to move forward with production at Willa is certainly a bullish development for mining and exploration in this particular region which we’ve covered quite extensively over the past year through Rainbow Resources (RBW, TSX-V)….Rainbow’s Gold Viking Property, just 8 miles south of Willa, takes on more importance with what DVN is doing, especially if Rainbow’s recent drilling results in any discoveries…

Tinka Resources (TK, TSX-V)

A couple of months ago, while attending the Cambridge Show in Toronto, we introduced a company called Tinka Resources (TK, TSX-V) which at the time was trading around 70 cents…Tinka continues to make progress with its main asset, the 100% owned Colquipruco Silver-Lead-Zinc project covering nearly 10,000 hectares hectares in the richly mineralized Ag-Pb-Zn belt of central Peru, 40 km northwest of Cerro de Pasco…two zones, 1.5 km apart, have been the subject of drill campaigns so far…Tinka has broken through some important resistance and is now trading at an all-time high after hitting 77 cents yesterday (and on a bad day for the Venture)…it’s certainly worthy of our readers’ due diligence and John will be updating the chart this week…Tinka is up another 8 cents to 83 cents as of 8:00 am Pacific…

Dynasty Gold (DYG, TSX-V)

As we mentioned last week, there are some interesting situations on the Venture trading at a nickel or less, and out of all those companies there are sure to be some significant winners in 2013…one of them, possibly, could be Dynasty Gold (DYG, TSX-V) which has kept its burn rate very low this year to preserve a decent cash position ($1.5 million)…the company recently picked up a new project, the Strike Property (Gold-Copper-Silver-Lead-Zinc) in the Stewart Mining Camp of B.C., and reported very encouraging sampling results from there last week…in addition, it’s worth noting that Dynasty also holds a Gold asset with a NI-43-101 resource in in the world class Tian Shan Gold Belt in China…as stated on the company’s web site, Dynasty “is in the process of negotiating with various Chinese interested parties in the disposition of this asset”…so Dynasty is not one of those companies trading under a nickel that has a cash problem….it has secured an interesting new property and may be able to add to its treasury if it’s able to complete a sale of its Chinese asset…DYG closed yesterday at 4 cents, and below is an updated chart from John…

Adventure Gold (AGE, TSX-V)

Adventure Gold (AGE, TSX-V) came out with its first resource estimate yesterday for its Pascalis Gold Property near Val d’or…SGS Canada confirmed a very respectable inferred resource totaling 770,000 ounces of Gold in 9.13 million tonnes grading 2.63 g/t…SGS suggested the inferred resources have significant prospects for production with surface and underground bulk mining techniques…Pascalis is surrounded by excellent infrastructure (a currently existing 340-metre-deep shaft, underground development drifts on five levels, industrial access road, power line, a railway within 1.5 kilometres and custom milling facilities in Val d’or)…it’s adjacent to the past-producing J.C. Beliveau mine which historically was a low-cost producer, and Richmont’s (RIC, TSX) producing Beaufor Mine is also right next door…AGE bucked the overall trend yesterday by climbing 3 pennies to 34 cents…below is an updated 2.5-year weekly chart from John…the overall pattern looks bullish at the moment but AGE, like many other stocks and the Index as well, still needs to overcome its down trendline in place since last year…

Mineral Mountain Resources (MMV, TSX-V) Chart Update

Well-funded Mineral Mountain Resources (MMV, TSX-V) is still looking strong as it continues to work on its Holy Terror Gold Project in Utah…below is an updated 2.5-year weekly chart from John…as of 8:00 am Pacific, MMV is off 2.5 cents to 36 cents…

iSign Media Solutions (ISD, TSX-V)

One non-resource company on the Venture we’ve been intrigued with over the past year-and-a-half is iSign Media Solutions (ISD, TSX-V) which is up significantly this morning after announcing an agreement with GraphicMediaInc which has been appointed as iSign’s exclusive distributor throughout North, Central and South America (and in any other global locations arising from the needs of their customers through existing reseller agreements)…the agreement is for a five-year period subject to minimum performance/revenue, renewable for an additional five years…Graphic has been working with iSign and is in negotiations with several major end users for iSign’s Smart Antennas and related software…as part of the agreement, Graphic has signed an initial purchase order for $3-million, representing 6,000 Smart Antennas to be delivered within the next six months…below is an updated ISD chart from John through yesterday…

Note:  John holds share positions in RBW and DYG while Jon holds share positions in RBW, GQC and DYG.

Gold drifted as low as $1,745 overnight but clearly the bulls are in control after Friday’s surge through important resistance at $1,740…as of 5:30 am Pacific, the yellow metal is off $1 an ounce at $1,751…Silver, which gained over 5% last week, is up 4 pennies at $34.17…Copper is unchanged at $3.51…Crude Oil is down 49 cents to $87.79 while the U.S. Dollar Index is flat at 80.27…

Strong Holiday Shopping Sales In U.S. Thursday Thru Sunday

Earlier Thanksgiving hours and shopping in both stores and online spurred an estimated 12.8% increase in U.S. retailers’ sales over the four-day holiday weekend, an industry trade group has reported…an estimated 139.4 million adults visited U.S. stores and websites from Thanksgiving through Sunday, up from 131 million last year, according to a survey from the National Retail Federation…total spending for the weekend rose to $59.1 billion from $52.4 billion last year with the average holiday shopper spending $423 this weekend, up from $398 last year…the survey, conducted Nov 23-24 by BIGinsight for NRF, polled 4,005 consumers and has a margin of error of plus or minus 1.6%…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite Index fell 10 points to 2017 but Japan’s Nikkei Index hit a 7-month high on the back of a weaker yen…European shares are lower ahead of a meeting of Greece’s international creditors with the country awaiting a decision on its next tranche of emergency funds…over the weekend, French Finance Minister Pierre Moscovici said he was confident that aid for the country worth 31.2 billion euros ($40 billion) would be finalized Monday as the troika of international lenders (the International Monetary Fund, European Central Bank and euro group of finance ministers) meet…stock index futures in New York as of 5:30 am Pacific are pointing toward a modestly lower open on Wall Street…some of the more closely followed U.S. economic data on the calendar thisweek include durable-goods orders and consumer confidence tomorrow, new home sales and Fed Beige book Wednesday, jobless claims and gross domestic product Thursday, and personal income/spending and the Chicago Purchasing Managers Index on Friday…markets will also be keeping a very close watch on some Fed speakers this week…

Updated Silver Charts

Gold broke above its 50-day moving average (SMA) and reached its highest level Friday since October 17 while Silver hit its best level since October 5…as usual, we begin the new trading week with short-term and long-term chart updates for Silver…RSI(14) shows a sharp increase in momentum on the 9-month daily chart, and a near-term challenge of resistance at $35.50 appears very likely…support is now at $33.30 (the important support band between $30.50 and $31 held nicely)…

Silver – Short-Term Chart

Silver – Long-Term Chart

Based on historical patterns, it appears Silver is gearing up for another extended period above the RSI(2) 70 level as this “Wave 5” move continues to gather steam…2013 is going to be very interesting…the long-term Fibonnaci target level remains $78…

U.S. Dollar Index Chart Update

The U.S. Dollar Index continues to look weak in our view, especially given its inability (so far) to push through important resistance at 81.50…as we’ve mentioned previously, a bearish head-and-shoulders pattern is taking shape…a weak greenback is good news of course for Gold and Silver, and the Venture Exchange…below is a 2.5-year weekly chart update for the Dollar Index…

Euro Chart Update

Another way to look at the Dollar Index is through the euro, and the euro continues to look bullish relative to the greenback…this is a very important chart as a stronger euro means higher precious metals prices and the likely return of the “risk-on” trade…

Canstar Resources (ROX, TSX-V)

Canstar Resources (ROX, TSX-V) is worthy of our readers’ due diligence and has been a strong performer during the second half of 2012, doubling in price from its July closing low of 13.5 cents…at Friday’s 29.5-cent close, ROX is just half a penny below its all-time high from 2005, so this is definitely a situation to keep an eye on…diamond drilling has commenced on Canstar’s Mary March Property in the Buchans area of Newfoundland and Labrador…this property is held via a 50/50 joint venture between Canstar and Xstrata Zinc Canada with Canstar as the operator…this first phase of exploration, to be completed before year-end, will consist of eight holes designed to test sulphide zones (high-grade base and precious metal intersections) that were discovered over a decade ago (no exploration has been carried out since 2000)…the Mary March Property is 20 kilometres northeast of the past producing Buchans mine…the Buchans mine produced 16.2 million tonnes averaging 14.5% Zn, 7.6% Pb, 1.3% Cu, 126 g/t Ag and 1.37 g/t Au over its 56-year mine life…below is a 2.5-year weekly chart from John…a “Wave 5” move appears to be in the works – the exact timing of that, of course, is not certain…

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

TSX Venture Exchange and Gold

The Venture Exchange held important support last week and posted gains in 4 out of 5 sessions, closing Friday at 1259 – its 100-day moving average (SMA), 6 points above the top of a support band and a 24-point gain over the previous Friday.  Volumes were very modest, in part because of U.S. Thanksgiving Thursday followed by Friday’s shortened American trading session.

With Gold breaking out Friday above resistance at $1,740, the Venture may have the help it needs to finish the month on a strong note.  The first hurdle the Index must clear convincingly is its 100-day SMA to show that this is not new resistance.  Importantly, the 100-day continues to rise which is bullish.

Below is an updated chart from John that points toward the potential for a positive week ahead.

Amazingly, approximately one-quarter of all Venture-listed companies at the moment are trading under a nickel and 60% are trading at 15 cents or less.  This is a beaten-down market that has been on the slow road to recovery over the last several months.  We expect a sharp acceleration to the upside during the first quarter of next year, based on numerous factors including technical patterns.  Now, we believe, is the ideal time to be searching for bargains but investors must be selective and patient.

Gold

Gold jumped higher Friday, thanks in part to a weaker U.S. Dollar Index which appears to have put in a head-and-shoulders top (more on that Monday).  Bullion cut through resistance at $1,740 (the 50-day SMA) Friday like a knife through butter and closed up $22 for the day, finishing at $1,752 for a $38 gain for the week.  The $1,740 area is now support while the next significant resistance is $1,760.  Major resistance, of course, remains at $1,800.  Once Gold breaks above that level (we’re convinced it will, just a matter of when, not if), the party’s on and a re-test of the 2011 all-time high just above $1,900 won’t be far behind.  We see this scenario unfolding during Q1 2013.

Below is an updated 6-month daily chart from John.  Bulls are firmly in control.

Brazil raised its Gold reserves for a second month to the highest level in more than 11 years. The country’s Gold holdings expanded 17.2 tonnes last month, followed by the purchase of 1.7 tonnes in September. This brings total Brazil Gold reserves to 52.52 tonnes.

Holdings in Gold-backed exchange-traded products rose to a record 2,605.3 metric tonnes this past week.  Data from the U.S. Mint also showed sales of 1 ounce Gold Eagles were at 67,000 ounces so far for November, exceeding October’s sales of 59,000 ounces.

Concerns over the loose monetary policy, further quantitative easing and a weak U.S. dollar should support the upward trade in Gold and Silver.  Jim Rogers, billionaire and co-founder of the Soros’ Quantum Fund, says that he plans to sell federal debt and purchase more Gold and Silver. Rob McEwen, CEO of McEwen Mining (MAQ, TSX) and founder of Goldcorp (G, TSX), said he expects Gold and Silver prices to reach $2,000 and $50 per ounce in 2013, respectively.  Longer term, he sees $5,000 Gold and $200 Silver prices.

Silver had a strong week, outpacing Gold and climbing $1.82 or 5.6% to $34.13.  Copper gained 6 pennies to $3.51.  Crude Oil added $2.27 to close at $88.28 while the U.S. Dollar Index fell by a full point to finish on a bearish note at 80.22.  Significantly, the Dollar Index could not – as we expected – overcome a very stiff resistance band between 81 and 81.50.

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.

Gold has traded in a range between $1,728 and $1,736 so far today…as of 6:00 am Pacific, bullion is up $3 an ounce at $1,733…Silver is 2 cents higher at $33.40…Copper is flat at $3.49…Crude Oil is relatively unchanged at $87.40 while the U.S. Dollar Index is off one-quarter of a point to 80.49…

Today’s Markets

Asian markets were strong overnight though Japan was closed for a public holiday…Hong Kong shares rose for a third-straight session and closed out their best week in over two months…China’s Shanghai Composite posted its first weekly gain in three weeks by climbing 12 points to 2027…the Shanghai, which has lost 60% of its value since its 2007 peak, is languishing at 3.5-year lows despite signs of a strengthening Chinese economy…corporate profits continue to be a concern, however, as well as China’s overall corporate debt levels which are expected to rise to 122% of gross domestic product by the end of this year, up from 108% last year, as reported by Reuters earlier this week…much of this increase in debt was caused by the massive four trillion yuan ($642 billion) stimulus which the Chinese government pumped into the economy in November, 2008, to minimize the impact of the global financial crisis…a lot of this money was injected via banks, which in turn directed lending to state enterprises and other projects that could ultimately go sour…

European shares are up modestly in late trading…divisions between rich and poor countries have flared over the European Union’s next seven-year budget, leading German Chancellor Angela Merkel to rule out an accord until the new year…stock index futures in New York are pointing toward a positive open on Wall Street after yesterday’s Thanksgiving holiday…it’s a shortened trading day in the United States with markets closing at 10:00 am Pacific…traders and investors will be closing monitoring important “Black Friday” shopping numbers out of the United States…

Japan Likely To Pile Up More Debt, Abe To Promote $2.5 Trillion Public Works Package If Elected

The front-runner to become Japan’s next prime minister said he would consider loosening some of the nation’s fiscal-discipline policies, in defiance of warnings by credit raters to curb borrowing by the heavily indebted government, suggesting instead more spending to help jump-start growth…”First, we will concentrate our policy tools to curb deflation,” opposition leader Shinzo Abe said in an interview yesterday with The Wall Street Journal, “but that can’t be done solely by monetary policy”…he alluded to his prominent campaign to push the Bank of Japan to take more aggressive measures to boost an economy heading toward its second recession in five years…Abe said if his Liberal Democratic Party were to win control of the government in the Dec. 16th elections, he would promote a ¥200 trillion ($2.5 trillion) public-works package, and he wouldn’t feel bound by pledges made by the current ruling Democratic Party of Japan to avoid increasing the issuance of new debt…

“I Don’t Think We’re Anywhere Near Any Kind Of Limit” – San Francisco Fed President On Bond Buying

John Williams, president of the San Francisco Federal Reserve Bank and one of the Fed’s stronger advocates for continuing to use monetary policy to bolster the economy, said the central bank’s securities portfolio hasn’t grown “anywhere near” the kind of limits that might impede the Fed from carrying on with its bond-buying programs…”Our concern is to make sure our policies aren’t creating problems with market-functioning,” he said in an interview with The Wall Street Journal…”In terms of how far you can go, I don’t think that we’re anywhere near any kind of limit.…conceptually, you could imagine some upper limit to this but I don’t think we’re getting anywhere near it”…

Canadian Dollar Update

We regularly track the performance of the Canadian dollar as the Venture Exchange tends to perform best when the loonie is strong…at the moment, the Canadian dollar is healthy from a technical standpoint and appears to be in the early stages of a new uptrend after slumping the last half of September and most of October…if this is the case, then the Venture has a good chance of holding important support above 1200 during the coming few weeks – a period of the year when the Index can be up against some selling pressure…below is a three-year weekly Canadian dollar chart from John…

Huldra Silver (HDA, TSX-V)

Huldra Silver provided a major corporate update this morning which we’ll have a chance to review in more detail over the weekend, but the news from Huldra continues to be very positive…the company has achieved a major milestone by shipping its first concentrates from its mill in Merritt which is now fully-staffed and operating around-the-clock, 24 hours a day, 7 days a week…Huldra also announced its 2013 exploration plans which include 4,000 metres of underground drilling, which will help lead to an updated 43-101 resource estimate for the Treasure Mountain deposit, and the company next year will also be conducting an 8,000-metre surface drill program, spread across four separate targets…HDA closed yesterday up 3 pennies at $1.46…

Lumina Copper Corp. (LCC, TSX-V))

Lumina Copper Corp. (LCC, TSX-V) has significantly increased resources at its 100%-owned Taca Taca Copper/Gold/molybdenum project in northwest Argentina…at a 0.3% Copper-equivalent cut-off, total contained sulphide copper in the indicated resource category is estimated to be 21.1 billion pounds, while total contained sulphide copper in the inferred resource category is estimated to be 7.6 billion pounds…LCC, a potential takeover target, closed yesterday at $9.20 – in the immediate vicinity of its 100-day moving average (SMA)…

Corvus Gold (KOR, TSX)

One of our favorite companies operating in Nevada is Corvus Gold (KOR, TSX) which has recently pulled back, as expected, after climbing to a new 52-week high of $1.70…KOR closed yesterday at $1.35 which is about 20 cents above its rising 100-day SMA and 28 cents above its recent financing price…below is a detailed chart from John showing how Corvus has ended a “Wave 3” move and is currently in a “Wave 4” retracement that shows support at $1.26…

“Diamonds In The Rough”

Amazingly, approximately 25% of all Venture-listed companies at the moment are trading at a nickel or lower…we suggest readers check them out to look for potential opportunities for 2013…many of those companies likely aren’t worth investing in, but some undoubtedly will emerge as big winners in 2013 or beyond…we hope to uncover a few “diamonds in the rough” ourselves between now and the end of the year…one company that holds merit in our view, which we’ve mentioned before, is Dynasty Gold (DYG, TSX-V) which reported $1.6 million in cash ($1.5 million in working capital) as of June 30…the company has been doing an excellent job of preserving cash (expenses totaled just $141,000 for the three-month period ending June 30) and also recently picked up a project in the prolific Stewart District of B.C. (the “Strike” property), a Gold-Silver-Copper-Lead-Zinc target…Dynasty has already carried out some initial sampling and due diligence on the property to aid in identifying potential drill targets…Dynasty, which has nearly 120 million shares outstanding, has been trading between 2 and 4 cents since March and who knows when it’ll wake up but but they don’t have to worry about raising additional money in order to start a first phase drill program to kick-start things…below is a 5-year weekly Dynasty chart from John…

Note: Jon holds a share position in DYG.

Happy Thanksgiving to our American readers…U.S. equity markets are closed today and will be open tomorrow for just half the day…

Gold is trading in a narrow range so far today on this American holiday…as of 7:15 am Pacific, bullion is up $2 an ounce at $1,731…Silver is up 2 pennies at $33.41…Copper has gained 3 pennies to $3.50 on encouraging economic data out of China…Crude Oil is flat at $87.37 while the U.S. Dollar Index, which encountered strong resistance as expected around 81.50, is off one-tenth of a point at 80.66…

Chinese Economy Rebounding

China’s manufacturing sector expanded for the first time in 13 months in November…China’s HSBC Flash Purchasing Managers Index (PMI) rose to 50.4 in November, the latest indicator of recovery in the real economy after data showing solid credit growth, firmer exports and rising industrial output in the previous month…the stronger than expected PMI reading signals that the risk of a hard landing in China has lowered considerably…some analysts are quite bullish…“We’re out of the woods here, it’s going to be a V (shaped recovery),” stated Frederic Neumann, co-head of Asian economies at HSBC, in an interview with CNBC…”The new policymakers coming in certainly do not have an interest to see the economy tank next year,” he added…improvement in the manufacturing sector was supported by an increase in new export orders, while employment in the sector contracted at a slower rate…“It (PMI data) shows policy easing continued to support growth recovery, and reinforces our view that growth will pick up strongly in the fourth quarter,” said Zhiwei Zhang, chief China economist at Nomura…the Chinese government has stepped up policy efforts in recent months, through launching a $150 billion infrastructure stimulus package and providing tax breaks and subsidies to small firms…Nomura is forecasting that growth will pick up to 8.4% in the last quarter of the year from 7.4% in the previous three months…

Today’s Markets

Asian markets were mostly strongly higher overnight, though China’s Shanghai Composite strangely bucked the trend by sliding 15 points despite a reversal in the PMI…markets are modestly higher in late trading across Europe…PMI data for both Germany and France showed minor improvement…meanwhile, Spain sold nearly 4 billion euros of bonds with ease at an auction today that kicked off its funding program for a daunting 2013 when Madrid must shoulder regional debt needs and will struggle to meet deficit targets…the average yield on the 2021 bond was 5.5%, compared with around 5.6% for the benchmark 10-year on the secondary market, a long way from the 7+% levels in July…Madrid faces some 28 billion euros in debt redemptions in January while in 2013 the country’s funding needs rise to 207 billion euros from 186 billion euros this year, assuming the country doesn’t overshoot its deficit targets…

As of 7:15 am Pacific, the TSX is up 70 points at 12170 while the Venture Exchange is up 2 points at 1245…

Fission Energy (FIS, TSX-V) Updated Chart

Two hot uranium plays recently have been Fission Energy (FIS, TSX-V) and joint-venture partner Alpha Minerals (AMW, TSX-V) who have made a discovery at their Patterson Lake South (PLS) Project in Saskatchewan’s Athabasca Basin…below is an update to John’s recent chart on Fission which has not yet broken out despite its climb to an intra-day high of 66 cents yesterday…it closed at 60 cents, exactly at the long-term down trendline that it needs to overcome…this is a familiar chart pattern – some stocks have already broken out of their down trendlines going back to 2011, others like Fission are right on the edge (the Venture itself is close but hasn’t yet broken out)…as of 7:15 am Pacific, FIS is unchanged at 60 cents…

Rainbow Resources (RBW, TSX-V) Chart Update

Buying pressure has been on the increase again with Rainbow Resources (RBW, TSX-V) which has reversed from last week’s lows when the stock traded down to strong support…RSI is showing up momentum…there are a few potential near-term “triggers” that could power Rainbow to John’s Fibonacci levels in a hurry, specifically results from three different properties – the International, Gold Viking and Jewel Ridge…RBW is up a penny at 20 cents in early trading, and the 10-day moving average (SMA) has swung positive…

Argex Titanium (RGX, TSX-V)

Below is a chart update on Argex Titanium (RGX, TSX-V) which we have been following occasionally through most of this year…it is now trading at an all-time high after closing 13 cents higher yesterday at $1.32 on strong volume (all exchanges) of nearly 1.4 million shares…RGX is up 4 pennies at $1.36 through the first 45 minutes of trading…

Note: John and Jon both hold share positions in RBW.  John, Jon and Terry do not hold share positions in FIS or RGX.