BullMarketRun.com

Gold is rebounding after being under some weak selling pressure this morning…as of 7:45 am Pacific, bullion is now off just $1 an ounce at $1,728…Silver is 16 cents higher at $32.58…Copper is unchanged at $3.46…Crude Oil is down 19 cents at $85.38 while the U.S. Dollar Index continues to climb within a resistance band and is currently up slightly at 81.12…

When you see headlines like this on CNBC, “Marc Faber: Prepare For A Massive Market Meltdown“, you know it’s the right time to actually be a buyer of stocks…”The markets are going into meltdown soon, so expect stocks to lose 20% of their value,” Faber stated…hmm, really?…investors have to understand that it’s quite a profitable business to peddle doom and gloom…

The behavior of the Venture Exchange recently – it’s always a leading indicator – certainly doesn’t suggest that stocks across the board are about to go into a meltdown as John has shown in recent charts (in fact, just the opposite is true)…in addition, of course, the Federal Reserve won’t allow a market meltdown…they are the greatest market manipulators of all and the Fed will do all that it can to ensure the markets remain healthy and above key levels…third, the major markets have rising and supporting 200 and 300-day moving averages which they’re trading within right now and very close to the 300-day which provided excellent support in the spring when the world was also about to come to an end according to Marc Faber and other doom-and-gloomers…the market has experienced a very normal pullback in recent weeks which has likely mostly run its course…

We also take comfort in how the CRB Index is performing, although it has pulled back significantly…in August, the CRB Index broke out of a downsloping flag which was a very bullish development…it met resistance around 320 and since then it has completed a normal retracement back down to the flag where there is strong support…we expect that support to hold, especially considering the current position of the Slow Stochastics which is at its most oversold point in the last 2.5 years…

Today’s Markets

Most Asian markets were down significantly overnight with China’s Shanghai Index falling 31 points to 2048 as it continues to have difficulty gaining traction…European shares are finishing the day down slightly (a German sentiment survey came in well below forecasts) while North American markets are mixed…as of 7:45 am Pacific, the Dow is up 18 points while the TSX is off 29 points…the Venture Exchange has declined 4 points on light volume to 1300…

Two of the top five volume leaders on the Venture yesterday were Fission Energy Corp. (FIS, TSX-V) and Robex Resources (RBX, TSX-V)…interestingly, both are right at the top of their downtrend lines in place since early 2011…Fision and joint-venture partner Alpha Minerals Inc. (AMW, TSX-V) have reported a potential high-grade uranium deposit discovery in the southwest portion of Saskatchewan’s Athabasca Basin…

Below is a 2.5-year weekly chart for FIS which shows what investors really need to be watching for – a confirmed breakout above the down trendline…as John mentions, nothing else matters…as of 7:45 am Pacific, FIS is off a nickel at 57 cents…

Robex Resources (RBX, TSX-V), which has a lot of shares outstanding, is also up against its downtrend line but has been building momentum recently after securing $15 in financing to allow for construction of a Gold-producing plant at its Nampali site in Mali, a country that obviously involves some political risk…however, Robex is confident it can begin producing at Nampali by the third quarter of next year (the deposit contains 1.5 million ounces of indicated and inferred NI-43-101 resources, please check their news releases and web site for a breakdown of this)…the key resistance level for RBX is 17 cents as John shows in this 2.5-year weekly chart…as of 7:45 am Pacific, RBX is down a penny at 15 cents…

U.S. Predicted To Become World’s Largest Oil Producer By 2020

A shale-oil boom (thanks to policies, by the way, initiated by the Bush Administration) will thrust the U.S. ahead of Saudi Arabia as the world’s largest oil producer by 2020, a radical shift that could profoundly transform not just the world’s energy supplies but also its geopolitics, the International Energy Agency said yesterday…in its closely watched annual World Energy Outlook, the IEA, which advises industrialized nations on their energy policies, said the global energy map “is being redrawn by the resurgence in oil and gas production in the United States”…the assessment, released yesterday, contrasts with last year, when it envisioned Russia and Saudi Arabia vying for the top position…”By around 2020, the United States is projected to become the largest global oil producer” and to overtake Saudi Arabia for a time, the agency said…”The result is a continued fall in U.S. oil imports [currently at 20% of its needs] to the extent that North America becomes a net oil exporter around 2030″…this shift will be driven primarily by the faster-than-expected development of hydrocarbon resources locked in shale and other tight rock formations that have just started to be unlocked by a new combination of two technologies: hydraulic fracturing and horizontal drilling…the IEA’s projections show U.S. oil production peaking in 2020 at 11.1 million barrels a day, up from 8.1 million barrels a day in 2011…within a decade, the IEA forecasts that U.S. oil imports will drop by more than half to just four million barrels a day, from 10 million barrels a day currently…much of this decline will be because of higher domestic production, but efforts to improve energy efficiency in the transport sector will also prove significant, the IEA said…

Uncertainty At Record Level Among U.S. Small Business Owners

American politicians of all stripes need to get the message which is to deal with the “fiscal cliff” issue and bring more certainty to the business and regulatory environment…the National Federation of Independent Business said its optimism index in a survey conducted before the presidential election found that the percentage of owners uncertain about whether business conditions would be better or worse in six months reached a record high of 23%…this actually eclipsed the pre-recession record of 15% reached during the Carter Administration…

Greece – Throw Them Out Of The Euro Zone

A clash between Greece’s international lenders over how the stricken country where the euro zone debt crisis began can bring its debts down to a sustainable level has reignited fears that the crisis could flare up anew…the International Monetary Fund and euro zone officials yesterday failed to agree on a long-term plan to cut Greece’s debt, preventing the release of immediate aid to Athens and pushing the euro to a 2-month low vs. the greenback…meanwhile, as unpalatable as it seems to euro zone policymakers, a sizeable reduction in Greece’s debt load is necessary to make the country’s debt sustainable in the long-term, according to a new report from Goldman Sachs…after investigating Greece’s debt sustainability, researchers at the bank have concluded that to reach the 120% debt-to-GDP target set by the IMF, an official sector restructuring of Greece’s debt, worth over 80 billion euros, was necessary…the authors of the report, economists Themistoklis Fiotakis, Lasse Holboell Nielsen and Antoine Demongeot, note that the IMF’s target is “unlikely” without such a “drastic debt stock reduction”… “To increase the likelihood that the Greek debt-to-GDP ratio approaches its 120% by 2020 target under realistic assumptions, a much more drastic debt stock reduction (possibly north of 80 billion euros in total) will be required,” the report states…

Gold remains firm to begin a new week after a powerful move last week…as of 7:35 am Pacific, the yellow metal is up $4 an ounce at $1,735…Silver is down 3 pennies to $32.60…Copper is off slightly at $3.44…Crude Oil is flat at $86.03 while the U.S. Dollar Index is unchanged at 81.00…

Updated Silver Charts

As usual, we have updated short-term and long-term Silver charts this morning and both pictures looks very good…on the 9-month daily chart, the important support band between $30 and $30.5 held while on Friday Silver pushed through its EMA-20 which is now reversing to the upside…the next two major areas of resistance are $33.30 and the recent high of $35.50…

Short-Term Silver

Long-Term Silver

A recent overbought condition in the RSI(2) indicator has cleansed itself, and we do expect the RSI(2) in this long-term chart to climb back into overbought territory in the near future which would be consistent with previous patterns…Wave 5, with a Fibonacci target of $78, continues to progress in a very orderly fashion…

Today’s Markets

Trading is quieter in North America today due to the Remembrance Day holiday in Canada and Veterans Day in the United States…as of 7:35 am Pacific, the Dow is up slightly to 12822…7 of the last 23 sessions have featured triple digit losses, bringing the Dow very close to its rising 300-day moving average (SMA) where there should be excellent technical support as was the case last spring…the Venture Exchange is up 5 points to 1306…Asian markets were mixed overnight while European shares are also mixed toward the end of the trading session there…

Japan Weakens, China Strengthens

Japan’s economy shrank 0.9% in the three months to September, marking the first contraction in three quarters and adding to signs that slowing global growth is nudging the world’s third-largest economy into recession…meanwhile, data on Saturday showed China’s trade surplus ballooned to its biggest in 45 months in October as export growth jumped to a five-month high above 11% – more evidence of an improving Chinese economy…

U.S. Dollar Index Chart Update

The U.S. Dollar Index has shown some strength recently but its big test will be if it can work its way through a stiff resistance band between 81 and 81.5…the daily EMA-20 (currently 80.27) is providing support…one very negative feature about the Dollar Index is the fact the 50-day SMA is in decline and has crossed below the 200-day SMA (the opposite situation has occurred in Gold, a rising 50-day has crossed above the 200-day)…so we view this rebound by the Dollar Index as very suspect…two things to watch out for – either a convincing break above the top of the resistance band (which would also put the Index in an overbought condition), or a break below the EMA-20…it’s interesting that both Gold and the Dollar Index moved higher last week…the assumption that Gold can only go higher on a weaker U.S. Dollar is not always true…

Venture Exchange

We continue to see plenty of underlying technical strength in the CDNX even though this market has been trading in a very narrow range over the past two months, from a low of 1283 to a high of 1345 on a closing basis…the Slow Stochastics(14) indicator appears to be forming a bullish “hinge” on John’s 6-month daily chart below while buying pressure has recently been increasing…as we showed in a chart yesterday as part of the Week In Review, the Index is also very close to breaking above a down trendline in place since the early part of 2011…so our outlook remains very positive, and it’s our contention this market will really catch fire at the beginning of the first quarter next year…now is an ideal time, therefore, to be performing due diligence on a wide number of potential individual stock opportunities…

It’s always a bullish sign whenever the Venture is outperforming Gold, the CRB Index and the broader equity markets…this has been the case recently and we believe this new trend will continue for at least the several months…below is a comparative chart from John that we posted yesterday but it’s worth posting again because of its significance…notice how September marked a turning point for the CDNX (black line) in relation to Gold and the CRB…

Huldra Silver (HDA, TSX-V)

Huldra Silver (HDA, TSX-V) announced this morning that it has been making some minor modifications to the processing plant at its mill in Merritt, B.C., and is now awaiting Ministry approval to re-start operations after a brief shutdown…Huldra says its considers the mill commissioning to be substantially complete…meanwhile, the high-grade Treasure Mountain Mine continues to operate with stockpiles of mill feed increasing on a daily basis from underground operations…this is a production situation we’re extremely bullish about, and the potential for additional discoveries at Treasure Mountain has to be considered high given that drilling has only been carried out over a small portion of the property…below is a 2-year weekly chart from John…notice the recent breakout (strong new support at the breakout point) and the “cup with handle” formation…as of 7:35 am Pacific, HDA is off 6 cents at $1.63…

Gold Bullion Development (GBB, TSX-V)

Last week’s drill results from Gold Bullion (GBB, TSX-V) weren’t spectacular but certainly strong enough to continue to support the case that the upcoming NI-43-101 updated resource estimate should show a significant increase in ounces…what gets us more excited about Granada is not the narrow very high-grade intercepts that occasionally pop up, but the distribution of Gold in the vein systems…long widths of lower-grade mineralization are critical and the LONG Bars Zone, it appears, continues to deliver in that regard…technically, GBB is looking better than it has in quite some time as shown in John’s 2.5-year weekly chart below…the stock’s biggest challenge between now and year-end is to work its through a strong resistance band between 15 and 17.5 cents…

Mineral Mountain Resources (MMV, TSX-V)

A situation that continues to look very interesting is Mineral Mountain Resources (MMV, TSX-V) which has been drawing a lot of interest recently in some financings as it begins to tackle its Holy Terror Gold Project in South Dakota…we encourage our readers to perform their due diligence on this one…MMV is off 4 pennies at 33.5 cents on light volume in early trading…below is a 2.5-year weekly chart…

Note: Jon holds a share position in HDA while Terry holds a share position in GBB.

TSX Venture Exchange and Gold

The Venture Exchange continues to outperform the broader equity markets, which is a positive sign, but volume at the moment is still short of where it needs to be in order propel the Index through an overhead resistance band between 1350 and 1365.  We believe, however, that it’s just a matter of time before an upside breakout occurs given the Venture’s much-improved technical health.  Investor patience is critical.  For the week, the CDNX lost less than 1% (9 points) to close at 1301 while the TSX was off 1.5%, the Dow fell 2.1% and the Nasdaq tumbled 2.6%.  Strength in Gold and Silver obviously aided the Venture while another friendly takeover (Andina Minerals Inc., ADM) again highlighted the fact there’s a lot of inherent value in this market.

The Venture’s low for the year – in fact, the low for this cycle – was put in early this summer at 1154.  Though most investors don’t recognize it, the Index in our view is now in the very beginning stages of a new bull market – an argument that a lot more people should begin to accept by the first quarter of next year.  Below is a 2.5-year weekly comparative chart that shows how the CDNX continues to threaten to push above a down trendline that has been in place since early 2011.  The rising 50 and 100-day moving averages (SMA’s) are providing excellent support at the moment, and at some point between now and the end of the calendar year this market should gather the strength to convincingly bust through resistance.  The recent reversal to the upside in the 1,000-day SMA constitutes a major long-term trend change that cannot be ignored, and this is one important reason why the Venture has held up so well over the last month or so despite significant pullbacks in the broader markets and a $130 correction in the price of Gold.

CDNX “Hugging” The Down Trendline – When Will The Breakout Occur?

Below is the same chart but over a shorter time frame – notice how the Venture in September started to outperform both Gold and the CRB Index, and how that trend has intensified over the past month or so.  This is a very bullish scenario going into year-end and the beginning of 2013.  One of our big concerns in March, 2011, was when a long trend of out-performance by the Venture (against Gold, the CRB, and the broader equity markets) had reversed.  That was a major red flag.  The opposite is occurring now, and the underlying technical health of the Venture is so much better.  The slow upward progression over the last several months is hugely positive and a strong indication of “smart money” jumping in and accumulating.  Most retail investors get it wrong at both major ends of a cycle – they are almost all very bullish at the top (late 2010, early 2011) and very bearish at the bottom (May-June-July, 2012).  In the early stages of a major trend change, like we’re witnessing now, there is often a lot of denial.

Last week’s U.S. elections mean more of the same:  Democrat Bill Clinton boldly declared that the “era of big government is over”.  President Obama is a different kind of Democrat, and the implications of that are that the U.S. debt problem isn’t going to be solved anytime soon which is bullish for Gold and bearish for the greenback.  The lack of sensible policies out of Washington (Obama’s first major mistake was introducing Obamacare when he should have remained focused on job creation and economic growth) has created a dysfunctional fiscal and regulatory environment that has hampered the private sector’s normal ability to fire up the engines of economic growth.  The private sector has also been “crowded out” by an increasing government share of the economy, and Obama’s rhetoric has been interpreted as anti-business which has has created division and uncertainty.  This has forced the Fed to use monetary tools (for example, “QE to infinity”) to a far greater extent than it normally would to help prop up the equity markets (to create the “wealth effect”), spur job creation and boost the housing market.  Will Obama change course, or be forced to change course, in his second term?  Only time will tell but his instincts are clearly to have government play a bigger role in American society at a time when government really can’t afford to.

We’ll see what happens over the next 6-7 weeks in terms of a potential resolution to the immediate problem of the “fiscal cliff”.  In all likelihood, some sort of compromise will be worked out (the road to a solution will probably be bumpy) that simply kicks the debt can a little further down the road.  Gold will love that, and the equity markets will march forward as Bernanke and other central bank leaders around the world keep the liquidity taps turned on full blast.  At some point this debt bomb is going to explode in ways we can’t even begin to imagine, but in the meantime there are some great money-making opportunities.

Gold

As expected, Gold reacted well to the Obama victory and ended a string of weekly declines with a powerful move to $1,731 – a gain of $54 for the week. Gold has gone through a lengthy period of consolidation following its all-time of just over $1,900 in September, 2011, and we believe the technical indicators are pointing toward much higher prices over the next several months – especially once bullion is able to clear the $1,800 area which it has not been able to do so far this year.

Below is a 6-month daily Gold chart update from John.  Gold broke above its EMA-20 last week which is now reversing to the upside.  The recent move from $1,800 down to the $1,660’s (very close to the rising 200-day SMA) was a normal Fibonacci retracement and nothing to panic about as we stated at the time.  Gold has major technical and fundamental support, and the primary trend remains strongly bullish, which is exactly what the Venture Exchange is telling us at the moment.

Silver climbed $1.72 last week to close at $32.63 (John will have updated short and long-term Silver charts tomorrow morning as usual).  Copper fell a nickel to $3.43, despite some bullish economic data out of China.  Crude Oil gained $1.21 a barrel to $86.07 while the U.S. Dollar Index was up by half a point to 81.07 (it is now within a strong resistance band between 81 and 81.50).

Gold imports by China from Hong Kong climbed 30% in September from a month earlier as central banks across the world took steps to prop up their economies, boosting demand for bullion as a haven. Mainland China bought 69,712 kilograms of Gold including scrap and coins, compared to 53,508 kilograms in August. Gold is in the 12th year of a bull run as investors seek to hedge against weaker currencies, government debt and the threat of inflation.

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.

Lest We Forget

Today in Canada and the United States is a day that has been set aside to honour those that have stood in the face of danger for the freedoms that we enjoy today.  Some of our soldiers have come home with all sorts of scars – physical scars, emotional scars, and mental scars.  Others have not walked off the plane onto North American soil but rather have been carried off in flag-covered coffins.  They have paid the ultimate price.  They have given their lives for freedom.  Here at BMR we hope that you will join us as we remember and honour our men and woman that have served and that are serving in our armed forces.  We are truly thankful.

In Flanders Fields

By Lieutenant Colonel John McCrae, May 1915

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place: and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead: Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved: and now we lie
In Flanders fields!

Take up our quarrel with the foe:
To you, from failing hands, we throw
The torch: be yours to hold it high
If ye break faith with us who die,
We shall not sleep, though poppies grow
In Flanders fields.

Lest We Forget

Terry Dyer

Owner/Publisher

www.BullMarketRun.com

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 between $1,728 and $1,740 so far today…as of 4:40 am Pacific, the yellow metal is down $1 an ounce at $1,731…Silver has lost 19 cents to $32.12…Copper is down 4 pennies at $3.42…Crude Oil is 27 cents lower at $84.82 while the U.S. Dollar Index is up more than one-tenth of a point to 80.97…the fact Gold is higher this week (up more than $50 an ounce) despite a stronger greenback is interesting indeed…the Dollar Index is now touching a major resistance band between 81 and 81.50…

China Releases Positive Economic Data

Some widely watched economic indicators showed today that the world’s second largest economy was on a path to recovery…October retail sales rose 14.5% last month from a year ago, compared to forecasts of 14%…industrial growth output quickened to 9.6% year on year, beating market expectations for a 9.4% rise…China’s fixed asset investment also rose 20.7% in the first 10 months from a year earlier, higher than expectations for a rise of 20.6%…Haibin Zhu, chief China economist at JPMorgan, told CNBC that the latest round of data point to further “upside surprises” out of the mainland economy going forward, adding that growth in the fourth quarter may outpace his current expectations of 7.4%…“Overall, this data shows a broad-based improvement…the recovery is gaining traction,” he stated…meanwhile, less-cited indicators such as electricity consumption – seen as a proxy for growth – also mounted a significant recovery last month, rising 6.4% from a year earlier, its best performance since March…in addition, China’s annual consumer inflation eased to 1.7% in October from September’s 1.9%, leaving policymakers with some scope to tweak monetary policy if necessary to shore up growth…

Consumption is becoming an increasingly important component of the Chinese economy, accounting for 55 percent of GDP growth in the first nine months of the year, outpacing the share of investment, which contributed 50.5%…continued financial reforms by the Chinese in the years ahead are expected to help facilitate the trend away from an export-led economy to a more consumption-focused economy…

China, India Economic Output To Exceed Entire OECD Output By 2060

The combined economic output of China and India will exceed that of the entire 34-nation OECD bloc (Organization for Economic Cooperation and Development) by 2060, the group said in a report published this morning…China, currently the world’s second biggest economy, is forecast to grow at an average pace of 6.6% from now till 2030, and 2.3% from 2030 to 2060…the projections for India, the 10^th largest, are 6.7% and 4%, respectively, the OECD said…in comparison, the 34 OECD nations are projected to grow an average of 2.3% per year from now till 2030 and 1.7% from 2030 to 2060…

Today’s Markets

Asian markets were down slightly to moderately overnight with China’s Shanghai Composite shedding 2 points to 2069 despite a slew of positive economic data…European shares are off marginally this morning while stock index futures in New York as of 4:30 am Pacific are pointing toward a slightly negative open on Wall Street…the Dow has suffered 7 triple digit losses over the last 21 sessions…the Dow and the Nasdaq are both closing in on their 300-day rising moving averages (SMA’s) which have provided strong support over the past year…the Venture Exchange, buoyed by another friendly takeover yesterday, gained 8 points to 1299…the Venture is showing terrific support in the immediate vicinity of its 50-day SMA, and the 20-day SMA is now reversing to the upside after trending down for the past month…

Huldra Silver (HDA, TSX-V)

One of our favorite Silver plays hit a new 50-week high yesterday as Huldra Silver (HDA, TSX-V), which has started production from its high-grade Treasure Mountain Property near Hope, British Columbia, climbed 19 cents yesterday to close at $1.69…Huldra is guided by a smart and aggressive management team that has fast-tracked this property into production, and Treasure Mountain also has strong upside exploration potential which we expect the company to test through a major drill program next year…the story is not well known yet in the general retail community with the stock held mostly by institutions…below is an updated chart from John which shows a breakout above the top of a symmetrical triangle…one can only imagine how HDA (and other Silver situations) may perform next year if the metal were to really bust loose as we believe it will…

Rainbow Resources (RBW, TSX-V) – Moving Fast On The Discovery Trail

We do have some astute readers at BMR, and sometimes they can sum things up better than we can…Rick posted last night, “This news has done for me what Obama did for Chris Matthews a few years ago…a thrill up my leg”…all kidding aside, Rainbow Resources (RBW, TSX-V) has been busy drilling holes into the ground in southeast British Columbia and Nevada, when far too many Venture companies have been too afraid to do much of anything in this market, and the first fruits of that labor are beginning to appear based on news that came out shortly after yesterday’s close…what we’re going to do this morning is walk our readers quickly through what we consider to be some very significant information that was revealed yesterday, beyond the fact we all have to wait a little longer for International assays…

Rainbow is certainly not a one-trick pony which is a major reason we’re so excited about this opportunity…this is a company that quietly assembled some of the best prospective Gold-Silver properties in the West Kootenays, 13,000 hectares in total plus a flake graphite package in the immediate vicinity of western North America’s only producing flake graphite mine, and cut a deal to earn a controlling interest in a Gold property with one of the hottest addresses in all of Nevada…

Jewel Ridge – Nevada

Some companies on the Venture this year have seen their share prices double, triple or quadruple simply by being able to replicate historical drill results in Nevada and reinterpreting past producing situations given a much more favorable Gold price environment vs. five or 10 years ago…that’s exactly what Rainbow has a great chance of doing prior to expanding its drilling strategy at the Jewel Ridge Property…yesterday, Rainbow announced that it has hit the contact zone between the Hamburg Dolomite and the Dunderberg Shale with “intense silicification” observed throughout each hole…this is important because a) intense silicification is one of the very encouraging clues from RC drilling in that area as it’s an important characteristic of Carlin-type disseminated sediment-hosted deposits; and b) the 2004 hole that intersected 2.1 g/t Au over 39.6 metres near-surface was drilled “sub-parallel to and within 15 metres of the Hamburg-Dunderberg contact” according to the news release at the time…in addition, “High-grade zones typically occur at and near the contact between the Dunderberg Shale and the Hamburg Dolomite” as reported by Timberline Resources (TBR, TSX-V) on page 49 of its April, 2012, NI-43-101 technical report on the Lookout Mountain deposit which is immediately adjacent to Jewel Ridge…so Rainbow appears to be intersecting the right structures so far, and they’ve already stated their initial holes are targeting the best historical drill results at the Hamburg Pit…Rainbow is also going a little deeper than previous drilling (still at open-pit depths but 1 g/t Au below 100 metres works great with $1,700 Gold now but didn’t back in 2004 or earlier)…Barrick Gold’s 3.5 million ounce Ruby Hill mine is contiguous to the northern border of Jewel Ridge while Timberline’s growing 600,000 ounce deposit is just a couple of kilometres to the south…it’s all the same geological structure with past producing open-pits lined up on a north-south basis…a few run right through Jewel Ridge including the Hamburg Pit…it’s one thing to drill previously undrilled ground (the risks are higher) – it’s quite another to be drilling into an area where there have been previous holes, and ones that assayed very well…

Gold Viking – RBW’s West Kootenay Sleeper?

Rainbow has obviously hit some very interesting core with what appears to be a lot of pyrite in two separate areas on the Gold Viking property, 1,000 metres apart…Gold deposits in this region are typically rich in pyrite but you’ll hardly ever see any visible Gold – it’s disseminated throughout the host rock, and the values can add up in a hurry…on our trip to the West Kootenays this past spring, an experienced prospector told us he found a rock in the Slocan area that most people would have simply tossed away…there was no visible Gold but a couple of features caught the oldtimer’s eye…he sent it to the lab and it came back with an assay of 28 g/t Au…what we know from yesterday’s news from Rainbow is that the company has intersected a potential stockwork vein system (that’s very good) with plenty of pyrite (disseminated to coarse or intense), breccia zones and mafic dikes…while it’s still very, very early in the game, the clues are all there that RBW is at least on the edges of a possible discovery if they haven’t made one already…they were also drilling into a prominent and coincident geophysical and geochemical anomaly, and there are historical adits throughout the property (we counted at least 10 on our visit) which is another positive indication of the current Gold potential…keep in mind, as Discovery Ventures (DVN, TSX-V) pointed out just recently, the Slocan Valley is one of the most highly mineralized regions of B.C. for both precious and base metals…since the late 19th century, the Slocan mining region has hosted more than 20 mining/milling operations and about 200 additional mines that have shipped ore to custom mills and smelters…Discovery’s plan is to put the Willa deposit, just 8 miles north of Gold Viking, into production as quickly as possible and that would obviously open up some interesting opportunities for Rainbow if a deposit can be found at Gold Viking…the fact Rainbow is already considering a Phase 2 step-out drill program over the winter, as announced yesterday, is a pleasant surprise as previously it was felt that there would be no drilling of any of Rainbow’s West Kootenay properties over the winter…

Gold Viking is on the outskirts of the high-grade Silver-lead-zinc areas of the Slocan Valley and that’s an important point…”On the outskirts of the Silver-lead-zinc areas, generally in or approaching granitic bodies, deposits essentially barren of lead-zinc values carry important values in gold,” stated W.H. Matthews in a 1944 B.C. Department of Mines Bulletin (No. 20, Part 2) that we discovered on the Internet yesterday as part of our research for this morning’s report…”It may be that prospecting in or near these or similar sections will reveal the presence of other lode-Gold deposits,” concluded Matthews…

International Silver Property

Rainbow’s International Silver Property is a terrific prospect given its multiple high-grade showings over a wide area and an important discovery that was made in the early 1900’s, about a kilometre to the north of where RBW was drilling in August and September…there’s an old adage in this business that good news travels by Fed-Ex while bad news travels by carrier pigeon…while there’s never a “sure thing” in the exploration business – initial International results, like Gold Viking, Jewel Ridge or any property – could turn out great or not so great – we caution investors not to jump to any conclusions simply because no assay results for the International have been released six weeks or so after drilling ended there…just one classic example of investor impatience that cost some of our readers an opportunity to make huge profits occurred in 2010 when assay results were very slow in coming in for Seafield Resources (SFF, TSX-V) which was a one-trick pony at that time with its Colombian project…a lot of investors gave up on Seafield but we didn’t…finally, in early December of that year, Seafield finally came out with numbers and they included a monster hole from the Miraflores deposit that sent the stock through the roof from the low 20’s to nearly 80 cents in a single day on incredible total volume of 100 million shares…

Rainbow – Only Needs To Go 1-For-3

In baseball, you’re an all-star and a batting leader with a .333 average…all Rainbow needs to do is hit at either the International, Gold Viking or Jewel Ridge in the days and weeks ahead, and investors should be handsomely rewarded…this was Rainbow’s strategy from the beginning as they made it very clear these were the three properties they would focus their drilling and discovery efforts on in 2012…they have honored that commitment, even in the face of one of the worst bear markets we’ve ever seen…some investors have under-estimated RBW all along, even suggesting over the summer that they wouldn’t be able to secure all their drill permits or even raise the capital necessary to forge ahead…aggressive juniors with exciting early-stage plays like Rainbow offer investors the kind of leverage they simply can’t find anywhere else…in May, we were writing about GoldQuest Mining (GQC, TSX-V) when it was trading at just 6 cents…within a couple of weeks it turned into a 10-bagger…the real success stories are certainly the exception, but to enhance your chances you look for companies that are working hard and working smart with high quality properties and RBW certainly fits that description…we encourage investors to say focused on the “Big Picture” with Rainbow as it has a lot of irons in the fire and a real opportunity at an exploration breakthrough before the end of the calendar year…

Discovery Ventures (DVN, TSX-V)

Discovery Ventures (DVN, TSX-V) continues to perform exceptionally well as it works toward completing an LOI to acquire an 80% interest in the Willa deposit north of Gold Viking…if DVN is successful is putting the Willa into production, this will certainly have a major impact on exploration and development in the immediate area…at yesterday’s 30 cent close, DVN’s market cap is approximately $7.2 million…below is a 2.5-year weekly chart from John…the first big clue that something was up with DVN was when it broke through its down trendline that had been in place since early 2011…this has occurred in many other stocks as well which supports a bullish case for the Venture in the months ahead…

Gold Bullion Development (GBB, TSX-V)

Gold Bullion Development (GBB, TSX-V) released a series of assay results from backlogged core yesterday that we will be reviewing in more detail over the weekend, but in general the results appear consistent with previously reported holes that support a growing resource at the property over a wide area…this will put a floor of value underneath GBB…our contention all along has been that the LONG Bars Zone has multi-million ounce open-pit potential but it has to be drilled aggressively…hopefully that’s the direction GBB can take things in 2013…we have no doubt Osisko Mining (OSK, TSX) is watching developments closely at Granada with an updated NI-43-101 resource estimate update from GBB expected by year-end…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) continues to recover after finding strong support at its 200-day moving average (SMA) around 70 cents…over the last 7 sessions the stock has climbed by 50% after touching a low of 67 cents…GQC has advanced for 6 straight trading days and closed yesterday at $1…key short-term resistance at the moment is $1.05…the 50 and 100-day SMA’s are currently just above $1.20…John’s 6-month weekly chart shows how RSI(14), after being overbought from mid-May through the middle of September, likely recently found a bottom just above 40%…keep focused on the “Big Picture” with GoldQuest as Romero is a major discovery that could yet deliver more outstanding results…

Continental Gold (CNL, TSX) Chart Update

Continental Gold (CNL, TSX) is making terrific progress with its Buritica Project in Colombia and the stock hit a new 52-week high yesterday of $10.02…below is an updated 2.5-year weekly chart from John…notice the breakout from the downsloping flag, a throwback to the top of that flag to test new support, and then a strong push higher…

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

Gold has traded in a range between $1,712 and $1,722 so far today…as of 7:30 am Pacific, the yellow metal is unchanged at $1,717…Silver is up 3 pennies at $31.87…Copper is flat at $3.45…Crude Oil is 26 cents higher at $84.70 a barrel while the U.S. Dollar Index is up slightly at 80.81 after touching the 81 level overnight which is the beginning of a major resistance band…

More Views On Gold Post-Election

Respected Gold analyst Jeff Nichols:  “With the election now behind us, the market’s short-term attention will re-focus on possible Federal Reserve policy initiatives that may be discussed or even initiated at the December 12th FOMC policy-setting meeting…there is already talk of further quantitative easing, expectations of which could soon become a strong up-side price driver…from a longer-term perspective, the Obama Administration will likely continue to endorse aggressive monetary stimulus as the only game in town to counter recessionary tendencies in the U.S. and global economy…moreover, when Chairman Bernanke’s term expires in 2014, President Obama is likely to appoint another monetary ‘dove’ to head the Fed”…

Updated Gold Chart

Gold has been volatile in recent days and briefly broke through the important $1,730 level yesterday, only to be driven back down…however, the chart is showing some renewed strength and the next several trading days should prove interesting…historically, November has been one of the most favorable months of the year for Gold prices and in fact has been the best performing month for Gold throughout this bull market over the last decade or so…below is an updated 6-month daily chart from John…

U.S. Trade Gap Narrows, Exports Up

The U.S. trade deficit narrowed in September as exports increased, suggesting the economy expanded more than previously believed in the third quarter…exports rose 3.1% in September, the biggest increase in more than a year despite a debt crisis in Europe that has weighed on the global economy…the seasonally adjusted monthly trade gap fell to $41.55 billion, the smallest deficit since December 2010, according to the Commerce Department…analysts were expecting the trade gap would widen to $45 billion…

ECB Keeps Interest Rates Unchanged

The European Central Bank expects the euro zone economy to continue to struggle, ECB President Mario Draghi said after the bank left interest rates unchanged this morning…“Economic activity in the euro area is expected to remain weak,” Mr. Draghi told his regular monthly news conference after the ECB held its main interest rate at 0.75%…he noted that recent economic surveys did not signal any improvement heading to the end of the year…highlighting weakness in the economy, German business confidence fell last month to its lowest since February, 2010, and euro zone manufacturing shrank for the 15th month running…Draghi reiterated the ECB’s view that inflation, which eased to an estimated 2.5% in October, would fall below 2% next year…the central bank targets inflation of close to but below 2%…

Today’s Markets

Asian markets were off sharply overnight, reacting to Wall Street’s case of nerves yesterday, but North American markets have stabilized this morning…as of 7:45 am Pacific, the Dow is up 9 points at 12941…the TSX is down slightly while the Venture has gained 8 points to 1299…another friendly takeover is giving the Venture a boost as Hochschild PLC is acquiring Andina Minerals Inc. (ADM, TSX) for 80 cents a share in cash ($103 million on a fully diluted basis) which represents a 106% premium to the 20-day weighted moving average price for ADM…Andina’s flagship Volcan Gold Project in Chile has proven and probable mineral reserves (as of January 31, 2011) of 6.6 million ounces of Gold at an average grade of 0.726 grams per tonne Gold contained in 283 million tonnes of ore…

Impact Silver (IPT, TSX-V) Updated Chart

A Silver play we continue to like for the long haul is Impact Silver (IPT, TSX-V) which is focused on Mexico…the company currently operates four underground Silver mines in that country and is building two new mines (both on budget and on time) within its 600+ square kilometre land package…the stock is trading in the immediate vicinity of its rising 1,000-day moving average (SMA), an area where it has consistently found support since late 2010…so the “Big Picture” outlook is very positive…IPT’s immediate challenge is to climb back above its EMA-20 as John shows in the chart below…as of 7:30 am Pacific, IPT is off a penny at $1.31…

Richmont Mines (RIC, TSX)

Richmont Mines (RIC, TSX) came out this morning with third quarter earnings which were below expectations at just $300,000…the stock is off slightly in early trading…lower than anticipated grades pushed up cash costs at the Francoeur and Beaufor mines which affected the bottom line for Q3…the company, however, has working capital of $66 million, limited debt and no hedging contracts…RIC expects to produce 65,000 ounces of Gold this year and 85,000 to 95,000 in 2013…

Aurcana Corp. (AUN, TSX-V) Chart Update

Another Silver producer that shows excellent potential, and is trading within a very nice upsloping channel, is Aurcana Corporation (AUN, TSX-V)…when you see a chart like this, you can have confidence that the company is on the right track and Silver is headed higher…AUN is a penny higher at $1.10 as of 7:30 am Pacific…

Richmont Mines (RIC, TSX)

Richmont Mines (RIC, TSX) came out this morning with third quarter earnings which were below expectations at just $300,000…the stock is off slightly in early trading…lower than anticipated grades pushed up cash costs at the Francoeur and Beaufor mines which affected the bottom line for Q3…the company, however, has working capital of $66 million, limited debt and no hedging contracts…RIC expects to produce 65,000 ounces of Gold this year and 85,000 to 95,000 in 2013…

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

The re-election of President Obama and an even more deeply divided Congress is producing volatility in the markets today…with the election out of the way, investors’ focus has shifted to the U.S. “fiscal cliff” and how Obama will handle that, and other issues such as global growth and the euro zone debt crisis…Gold rallied strongly yesterday on the assumption of an Obama win, and climbed as high as $1,734 this morning before pulling back on what has become a “risk-off” day in the markets…as of 8:15 am Pacific, the yellow metal is now down $8 an ounce at $1,709…Silver has backed off to $31.45, a loss of 57 cents for the day…Copper is down 8 cents at $3.44…Crude Oil is being hit hard, down $3.47 a barrel to $85.24 while the U.S. Dollar Index, after initially falling last night when Obama was officially declared the winner, has rebounded and is up one-tenth of a point at 80.75…

Obama managed to win a second term in the White House thanks in part to an extraordinarily negative campaign with little vision for how the next four years may play out…the Latino vote, which has grown increasingly important in American politics, was overwhelmingly behind the President which helped in Florida and elsewhere…Republican challenger Mitt Romney, who came fairly close in the national popular vote but lost decisively in the electoral college, couldn’t overcome some personal “brand” issues and his political career is now likely over after two attempts at trying to become President…Democrats actually increased their majority in the Senate while the Republicans’ only bright spot was making some gains in the House where they already commanded a majority…another big winner last night was probably Fox News which can look forward to an even greater ratings bonanza over the next four years as it appeals to the anti-Obama element that may become increasingly frustrated…

The market now will likely focus on expectations for continued relaxed U.S. monetary policy and the need for resolving the so-called “fiscal cliff”, nearly $600 billion worth of forced spending cuts and tax increases that risk pushing the economy into deep recession…

Election Result Views

Barack Obama’s re-election as President was unexpected and is disappointing, but will in all likelihood boost stock markets, according to Dennis Gartman, founder of the Gartman Letter…“History proves that Democrat presidents are better for stock prices than Republican presidents and I suspect that the bull market that’s been intact since March 2009 will continue to move higher as the monetary authorities expand reserves in the system,” he told CNBC…meanwhile, Jim Rogers told CNBC that investors should prepare for rising prices and more expansionary monetary policy now that Obama has won re-election…the co-founder of the Quantum Fund said he expects Obama’s policies will drive up commodities and drive down the U.S. dollar…“It’s going to be more inflation, more money printing, more debt, more spending…it’s not going to be good for you me or anybody else…it looks to me like money printing is going to run amok now, and spending is going to run amok now…I have to invest based on what’s happening and not what I would like”…

Updated Gold Chart

Gold’s major challenge at the moment is to break above important resistance at $1,730…RSI(14) on John’s 6-month daily chart below is now showing up momentum after finding support around 30 as expected…however, the ADX indicator still confirms a bearish trend which began in mid-October when Gold slipped below its EMA-20 which also reversed to the downside…so Gold still has some issues to work out, as evidenced by today’s trading, before we can proclaim the beginning of a new uptrend…the “Big Picture” view of course is still bullish, and an Obama victory last night has helped to solidify that…

Today’s Markets

Asian markets were mixed overnight while European shares, which initially rallied following Obama’s re-election, reversed course and are ending sharply lower…data came out today that showed German industrial output fell more than forecast in September…in addition, a report released by the European Commission also weighed on the markets as it showed growth for 2013 would flatline but would pick up again in 2014…North American markets are weak this morning, in particular the Dow which is suffering its fifth triple digit loss in the last 20 sessions…as of 8:15 am Pacific, the Dow is off 309 points to 12936…the TSX has shed 136 points while the Venture Exchange has slipped 17 points to 1286…

TSX Gold Index

The TSX Gold Index is plodding along with the 200-day moving average (SMA) providing support in the low 320’s…a sideways trend is still in place, as John shows in the 6-month daily chart below, until there is a definitive move through the 330 area…as of 8:15 am Pacific, the Gold Index is down 2 points at 327…

Huldra Silver (HDA, TSX-V)

Huldra Silver (HDA, TSX-V) continues to be a shining light in this market as the company ramps up production from its Treasure Mountain Silver-lead-zinc deposit…as of 8:15 am Pacific, HDA is up a penny at $1.55 after breaking through some important resistance yesterday…below is an updated chart from John…

GoldQuest Mining (GTC, TSX-V) Updated Chart

“This quest is just beginning,” according to Dundee Capital Markets which issued a report on GoldQuest near the end of last week after the stock touched its 200-day SMA at 70 cents…as of 8:415 am, GQC is unchanged at 86 cents…”This new discovery, while still modest in size (1 to 2 million ounces of Au), has all the qualities of a future low cost producer…the core zone of high grade represents high quality underground ounces that could potentially be mined in the lower quartile of costs based on grade and configuration”, the Dundee report stated…the new support band for GQC is between 67 and 71 cents while the next major resistance is $1.05 according to John’s 6-month weekly chart…

Note:  Jon holds a position in HDA and GQC…