BullMarketRun.com

Gold is firmer this morning on this U.S. Election Day…as of 6:15 am Pacific, the yellow metal is up $6 an ounce at $1,691…Silver is 15 cents higher at $31.33…Copper, which just hit a 2-month low, is up a penny at $3.48…Crude Oil is up $1 a barrel to $86.65 while the U.S. Dollar Index is off slightly at 80.63…

Updated Copper Chart

The recent weakness in Copper has pretty much run its course after overbought conditions emerged in September, and this bodes well for the equity markets including the Venture Exchange which lately has been outperforming Copper (and Gold)…John’s 6-month daily chart shows a support band between $3.45 and $3.50 while RSI(14) is expected to find support around current levels…

Today’s Markets

Asian markets were slightly lower overnight with investors’ risk appetite curbed by uncertainty over the outcome of the tight U.S. presidential election and renewed doubts over Greece’s political ability to push through severe fiscal reforms and the European Union…European shares are moderately higher today with the market taking in stride a raft of economic data and some renewed doubts over Greece’s political ability to push through severe fiscal reforms (the government is due to vote on further austerity measures tomorrow in order to receive more aid from the International Monetary Fund)…services PMI for Spain showed a contraction for the 16th consecutive month…in Italy, the services PMI contracted by a smaller than expected amount, but it was still the 17th straight month of contraction for the economy…services PMI for Germany and France also both showed a decrease…for the euro zone as a whole, composite PMI fell to 45.7 for October from a figure of 46.1 in September…

Stock index futures in New York are pointing to a positive open on Wall Street…all eyes of course are on today’s critical U.S. election…no Republican candidate has ever taken the White House without winning Ohio, so the Buckeye state is absolutely crucial for Mitt Romney and that’s why he’s campaigning there today…without winning Ohio, the math simply doesn’t add up for Romney in the electoral college, and polls there indicate Obama has the edge albeit by a fairly narrow margin…Ohio potentially could become the “hanging chad” of 2012 as tens of thousands of provisional ballots will not be counted until November 17…if the race in Ohio is extremely tight, we may not know the winner of this election for another couple of weeks or maybe even beyond depending on possible legal challenges…the best result for the market is a clear winner tonight, either way…the ideal scenario for Gold bugs is an Obama victory and a few more Democrats in the Senate and in the House, and right now that appears to be the most likely scenario after examining all the polls…conceivably, Obama could lose the national vote but still hang on to the Presidency by taking the electoral college…he has the edge in the swing states…

U.S. Debt “An Extraordinarily Dangerous Situation” – Former Fed Chairman Alan Greenspan

Neither candidate for President has shown a credible plan for tackling the U.S. deficit and debt problems…”It’s an extraordinarily dangerous situation,” former Federal Reserve Chairman Alan Greenspan told the Wall Street Journal, describing the growth of the nation’s debt and a lack of consensus about how to address it…”I believe we underestimate the size of current financial imbalances and how difficult it will be to resolve them…we’re trying to do this without pain…there’s just no credible scenario in which that happens”…

What the U.S. needs to do in our view is likely introduce a national consumption tax like Canada’s GST, reduce personal and corporate income taxes, close loopholes and generally simplify the tax system, sharply reduce the regulatory burdens on business in order to unleash the full potential of the private sector and the U.S. entrepreneurial spirit, and shrink the size of government…that kind of agenda would involve some initial pain and it would take true and dynamic leadership to advance it, and that’s what’s missing in the United States right now…

Indian Gold Demand Expected To Heat Up

In a run-up to the Diwali festival next week and the marriage season which is around the corner, leading jewellers and bankers in India are already quoting positive signs on Gold sales…bullion houses have said that while there has been a bit of volatility in prices, consumer sentiment remains unaffected…”Though the key presidential elections in the U.S. are set to give further direction to global financial markets on Tuesday, Indian consumers are waiting for Dhanteras, a day considered auspicious for Gold buying according to the Hindu calendar,” said Gitanjali group chairman Mehul Choksi…he added that sales were expected to leap frog 40% this Dhanteras (to fall on November 11), with most consumers opting for Gold coins to usher in the auspicious day…sales of Gold coins of different denomination have already risen by over 30% as compared to last year, he added…Indian Gold demand was weaker than expected for the first 9 months of the year…

Golden Goliath Resources (GNG, TSX-V)

John has two very interesting charts this morning on Golden Goliath (GNG, TSX-V) which holds a dominant position in Mexico’s Uruachic Mining District, though it doesn’t quite control the entire camp as we found out last week when upstart Alliance Mining (ALM, TSX-V) announced it had signed a binding letter of intent with a private Canadian company to acquire several thousand strategic hectares including claims within a few kilometres of Fresnillo PLC’s huge Orisyvo Gold deposit…

GNG closed at 17 cents yesterday, well below its early 2011 high of nearly 80 cents…both of John’s charts clearly demonstrate that this is a good time to be buying into weakness with GNG…as always, perform your own due diligence…

GNG 12-Year Monthly Chart

GNG 2.5-Year Weekly Chart

Abcourt Mines (ABI, TSX-V)

Abcourt released a very robust PEA for its Elder Mine yesterday, yet the stock gained just half a penny on over 2 million shares…for those holding ABI, we simply suggest patience as the stock still needs to break above its down trendline as shown in John’s chart below…the company holds high quality assets featuring the Elder/Tagami Project in addition to the Abcourt-Barvue Silver Property, so there are much better days ahead for ABI in our view – especially looking out to early 2013 when we expect overall market sentiment to be much better…

Vantex Resources (VAX, TSX-V)

Vantex Resources (VAX, TSX-V) is coming to life, and that must mean the Venture must have really turned the corner…VAX announced last Friday that it has restarted drilling at its Galloway Project west of Rouyn-Noranda, and that Rob McEwen has increased his stake in the company to 7.8 million shares which gives him 12.4% of the total currently outstanding…we’ve been to this area and it’s not a project we’re particularly excited about, and it also faces some potential environmental hurdles…nonetheless, VAX has formed an interesting cup-with-handle pattern as John shows in the chart below…with VAX on the move, this does give us even greater confidence that the worst is over for the Venture and that we’re actually in the very early stages of a new bull cycle…

Note: John, Jon and Terry do not hold positions in GNG, ABI or VAX.

Following Friday’s sell-off in precious metals, Gold has stabilized to begin a very important new week in the markets…as of 4:00 am Pacific, bullion is up $3 an ounce at $1,680 and has traded in a range between $1,671 and $1,682 so far today…Silver is unchanged at $30.91…Copper is off 2 pennies at $3.45 a pound…Crude Oil is flat at $84.87 while the U.S. Dollar Index is up more than one-tenth of a point to 80.75…

Gold fell through the $1,700 support level Friday but physical buying, short covering, and strong additional technical support between $1,640 and $1,670 should underpin bullion and provide a floor in the days ahead…the overall bull market remains completely intact, and bullion has always been a smart buy over the last decade whenever it has neared or dipped slightly below its 200-day moving average which currently sits at $1,666…sooner or later, the world will discover that bullion is more important than paper currency…November has also been Gold’s best month over the last 10 years, and its strongest 4-month stretch is consistently now through the end of February…

The Election, The Election, The Election…

In real estate, and in Gold exploration, it’s all about location, location, location…in the markets right now, it’s the election, the election, the election…markets hate uncertainty and the hope is that America charts a clear course come Wednesday morning…polls show a very tight race between President Obama and Republican challenger Mitt Romney going into tomorrow’s Big Day…while we’re cheering for a Romney win, partly for the fact that a Romney administration would make for a much improved business climate in the United States, our belief is that Obama will slither his way through like a snake in the grass and post a narrow victory (the positive side of this is that Gold should explode during a second Obama term)…he’ll then have another four years to continue his quest to change America, grow government and slow the rise of the oceans and heal the planet…Obama does appear to have a slight edge based on state polls in the critical battleground areas…given the sluggishness of the U.S. economy, with so many millions of people officially unemployed, and runaway government spending, defeating Obama should have been a slam-dunk for a Republican but Romney hasn’t exactly been a Ronald Reagan on the campaign trail…he’s a reluctant conservative with wavering views depending on the political winds…in a Canadian context, Romney most resembles Paul Martin…Obama, meanwhile, is another Pierre Trudeau, and Canada is still paying the price for Trudeau 30 years later…the lesser of two evils, in our view, is Romney but most Canadians (and most of the world) don’t see it that way…

Will There In Fact Be A Winner Tomorrow Night?

For the sake of the markets, we’re hoping there’s actually a clear winner tomorrow night…accusations of alleged voter fraud and shady voter registration practices are already flaring in a number of battleground states…conservative groups have sent squads of election monitors to polling stations in key states to watch for signs of improper voting as liberal groups prepare to push back, warning of intimidation and voter suppression…with such a tight race, it’s important to keep in mind that at least 18 states have automatic recount provisions on the books, including several – Ohio, Florida and Colorado stand out – sure to loom large in tomorrow’s voting…if either candidate wins by less than 0.5%, state law requires an automatic recounting of ballots…Ohio has a rule that if you request an absentee ballot but then decide to vote in person on Election Day, that vote is cast as a provisional ballot and not tabulated until later…the Wall Street Journal reports that in the key swing district of Hamilton County, which went for Obama in 2008 by 21,000 votes, nearly 20,000 absentee ballots hadn’t been returned by Friday…statewide, the figure topped 200,000, close to the Obama margin of victory four years ago…and all signs point to a far narrower margin in Ohio this year, no matter who wins…

Of course it’ll also be important to watch how things unfold in the Senate and the House, and at the moment it appears the Democrats could add slightly to their majority in the Senate while the Republicans may lose a few seats but still command a majority in the House…that kind of outcome would strengthen Obama’s hand, not to mention his ego…

U.S. Dollar Index

The U.S. Dollar Index staged a minor breakout Friday, scaring Gold bugs, but we’ve stated for quite a while that the Index’s greatest challenge would be to push through a stiff resistance band between 81 and 81.5…in fact, as John’s updated 2.5-year weekly chart shows, a move up to the 81 or 81.5 area may simply complete a bearish head-and-shoulders pattern…this theory, that the right shoulder is now developing, is supported by the divergences between the price, RSI and the MACD Histogram…the only hope in our view for the Dollar Index to bust through the 81.5 area is a Romney victory tomorrow night…otherwise, the greenback’s bearish trend should continue which has proven to be positive for precious metals and the Venture Exchange…

Silver Short-Term Chart

Silver recently has been behaving generally as expected, cleansing a seriously overbought condition that emerged during August and September…now is the time to really get bullish again regarding Silver with the RSI(14) on John’s 9-month daily chart at 33%…a very strong support band exists between $30.50 and $31, so the likelihood of a drop below $30 seems quite remote…

Silver Long-Term Chart

John’s 15-year monthly Silver chart shows a powerful “Wave 5” move is still very much intact, despite the recent weakness…in fact, you’ll notice that the RSI(2) indicator is now at 32%…ON EVERY OCCASION over the last three years after Silver reached overbought levels based on RSI(2), it rebounded and headed higher after finding support at or just above the 30% RSI level…

Today’s Equity Markets

Asian markets were down slightly overnight with China’s Shanghai Composite losing 3 points to finish at 2114…the Chinese Communist Party starts its 18th congress on Thursday, preparing for a once-in-a-decade leadership transition…hopes are high in some quarters that China’s new leadership will deliver stimulus measures to bolster economic growth, but those measures could prove to be quite modest…”We expect the new leaders to push ahead with the structural reforms and take modest measures to consolidate the stabilization in growth…however, investors expecting immediate and drastic changes in policy or another big stimulus package will likely be disappointed,” analysts at Barclays said in a report…European markets are down mildly this morning while stock index futures in New York as of 4:00 am Pacific are pointing toward a flat open on Wall Street…

Venture Exchange – Continued Bullish Signs

The Venture Exchange, which closed at 1310 Friday, has held up extremely well over the past month despite a significant drop in the price of Gold as well as weakness in the general equity markets…the Venture has been consolidating over the last 4 weeks but is down just 35 points or 2.8% during that time while Gold has lost nearly 6% of its value…the Dow is off 3.8% over the last 4 weeks while the Nasdaq has shed 4.9%…what this shows is how much sentiment has changed with the Venture…

In a bullish development, the Venture appears to have ended its under-performance vs. Gold which started in early 2011 as you can see in John’s 12-year comparative weekly chart below…during that period, the Venture lost 1311 points or 53% of its value – another massive drop after the 2008 Crash was still fresh in investors’ minds…take note of the Venture’s 1,000-day moving average (SMA) – it has reversed from a 4-year decline and that’s one of several reasons we’re so bullish on this market right now…in fact, though most brokers and investors don’t recognize it, the bear market is morphing into a new cyclical bull right before our very eyes…as we showed last week, the Venture is also very close to convincingly breaking above a down trendline, a falling wedge, in place since early 2011…

Discovery Ventures (DVN, TSX-V) – Slocan Valley Heats Up

A very interesting strong performer on the Venture over the past several weeks has been Discovery Ventures (DVN, TSX-V) which recently announced that it has signed a letter of intent to acquire an 80% interest in the Willa Gold-copper deposit in the Slocan Valley mining district, just 8 miles north of Rainbow Resources‘ (RBW, TSX-V) Gold Viking Property which is currently being drilled…last Friday, DVN reported that it has hired an independent consulting engineer to conduct a full site survey of the Willa project which is a subvolcanic breccia-hosted, Gold-Copper-Silver deposit…over $16 million was invested by majors and juniors from the 1980’s through about 2005 to develop the Willa deposit to its present status including extensive underground workings to access the mineralization…a 2005 technical report on Willa gave an all-category estimate of approximately 202,000 ounces of Gold, 17.4 million pounds of Copper and 345,000 ounces of Silver (historical, non-compliant*)…DVN believes that the current higher Gold and Copper price environment, combined with the possibility of the discovery of additional mineralization throughout the 50 sq. km property, makes this an attractive situation to re-visit…in addition, the general belief is that the area is much more receptive to exploration and mining now than it was in previous years…Discovery has pointed out that Willa is located in one of the most highly mineralized regions of B.C. for 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…(using a 3.5 g/t Au cut-off, the measured resource was estimated at 487,989 tonnes grading 6.77 g/t Au, 0.97% Cu, and 11.59 g/t Ag; indicated resource was estimated at 292,457 tonnes grading 5.31 g/t Au, 0.65% Cu, and 11.94 g/t Ag; inferred resource was estimated at 216,177 tonnes grading 6.55 g/t Au, 0.57% Cu and 7.32 g/t Ag)…

Interest in DVN has exploded from 634,000 total shares traded (all exchanges) in September to a whopping 13,727,741 shares (all exchanges, an average of 624,000 per day) in October with the stock rising from a low of 13 cents in September to a 52-week high of 31 cents last month when the Willa deal was announced…the stock closed Friday at 26.5 cents, giving it a market cap of $6.4 million with approximately 24 million shares outstanding…below is 2.5-year weekly chart from John showing a bullish overall trend but some near-term consolidation is possible with strong support in the low 20’s…the company has some other properties in British Columbia but the Willa opportunity is the most advanced…

Meanwhile, in another interesting development that shows how interest in the Slocan Valley area is beginning to build, International Bethlehem Resources (IBC, TSX-V), which previously worked on the Willa project, has granted Magnum Capital Corp. (MGK, TSX-V) an option to earn a 51% interest in certain claims near the Willa deposit including the “LH” area where a Gold discovery apparently was made in 1988 but was never followed up on due to market conditions…the deal between IBC and Magnum will constitute Magnum’s qualifying transaction, and begins with IBC drilling a hole in the immediate vicinity of that 1988 hole that went to a depth of 388 metres…rumor has it, that program may begin this week…

Huldra Mining (HDA, TSX-V)

Elsewhere in southern British Columbia, Huldra Mining (HDA, TSX-V) continues to aggressively move forward with production from its Treasure Mountain Property near Hope, the nearest operating mine to Vancouver…what was interesting on Friday is that HDA, despite the big drop in Gold and Silver prices and weakness across the equity markets, actually closed up 6 pennies to $1.46 – just 17 cents below its 2012 high…the commissioning of HDA’s 200-tonne-per-day Silver-lead-zinc mill in Merritt began August 7 and the company is currently testing the mill by processing a 5,000-tonne stockpile of mill feed from historical development work at Treasure Mountain…earlier this year, Huldra received a permit from the B.C. Ministry of Energy & Mines for mining and reclamation of up to 60,000 tonnes per year at Treasure Mountain…a NI-43-101 resource estimate from 2009, which was reviewed through an updated technical report on the property issued in June of this year, gave a total vein indicated and inferred resource of 4.5 million ounces of Silver, 10.4 million pounds of lead and 14.3 million pounds of zinc with mine workings open on strike and at depth for resource expansion…(33,000 tonnes in the indicated category grading 24.2 opt Ag, 4.16% Pb and 3.8% Zn at a cut-off of 10 oz/ton Ag, and 120,000 tonnes grading 27 opt Ag, 2.79% Pb and 4.36 Zn at the same Ag cut-off grade)…high-grade forgives all sins which gives Huldra an added advantage as it works through any potential glitches early on in the mining and production processes…substantial drilling has occurred since that estimate was put together, so the potential for upgrading and expanding resources has to be considered high…if Huldra can produce 60,000 tonnes per year, and it seems they’re on track to do so, it’s not hard to do the math and see that this company is going to start generating impressive cash flow with only 47 million shares outstanding and a current market cap of only $69 million…retail investors have not yet caught on to this story (Huldra has large institutional ownership, and Coeur d’Alene Mines recently increased its interest to just under 8% of the current outstanding shares)…

Below is a 2.5-year weekly HDA chart from John that shows the stock is currently at Fibonacci resistance and at the top of a symmetrical triangle, raising the possibility of an imminent breakout…with RSI(14) at just 59%, there is ample room for a move higher before temporarily overbought conditions set in…HDA is an intriguing emerging small producer that could really explode in a rising Silver market…as always, perform your own due diligence…new management, led by Ryan Sharp, took over Huldra in 2010 and has really transformed this company…

Lincoln Mining (LMG, TSX-V)

As regular BMR readers know, we are very bullish on mining and exploration-friendly Nevada where a number of juniors have been very successful this year…just one more reason why we’re so excited by Rainbow which not only has great prospects in the southeast B.C. but is currently drilling smack-dab in the middle of over 4 million ounces of NI-43-101 Gold reserves and resources along a prolific portion of the Battle Mountain-Eureka trend…

Another emerging situation in Nevada for our readers to consider and perform their due diligence on is Lincoln Mining (LMG, TSX-V) which climbed 2.5 cents Friday on its biggest volume day of the year, 560,000 shares as the stock closed at 8.5 cents…Lincoln has completed some interesting transactions recently including a private placement and a convertible debenture with a full-service mining contractor – Procon Mining and Tunnelling Ltd. – out of Vancouver…in addition, Lincoln also just recently signed a binding letter of intent with another company for an option to earn a 100% interest in the Bell Mountain Property, 95 miles southeast of Reno, and is also working toward putting its advanced-stage Pine Grove Property in western Nevada into production after a positive PEA was received late last year…

Lincoln has well over 100 million shares outstanding but at 8.5 cents, the market cap is still quite modest and the players involved appear to be serious about making things happen in Nevada…below is a chart from John that shows how LMG has broken above a down trendline in place since early 2011…this is an interesting play and we’re looking forward to tracking its progress…

Alliance Mining (ALM, TSX-V)

Speaking of interesting plays, there has been a volume explosion in Alliance Mining (ALM, TSX-V) and for good reason…on Thursday of last week, Alliance announced that it has signed a binding letter of intent to acquire claims over a nearly 50 sq. km area in Mexico’s prolific Uruachic district…some of these claims are contiguous to ground held by Fresnillo PLC and Agnico-Eagle Mines (AEM, TSX)…if you’re not familiar with Fresnillo or this particular area of Mexico, we suggest you check into it…the Uruachic mining camp lies directly in the centre of the several hundred kilometre trend of important past producers and new discoveries that characterizes the Sierra Madre Occidental…this historic trend has produced roughly 40 million ounces of Gold and up to 2 BILLION ounces of Silver over the last 400 years…for a small up-start junior like Alliance to ink a deal for a such a significant land package, which puts them within just four kilometres of Fresnillo’s huge Orisyvo discovery (9+ million Gold ounces), has us thinking that there could be some very powerful new forces at work behind the scenes with this company…in fact, Alliance announced August 9 that Ian Gordon was added to its Advisory Board and the renowned analyst is known to have strong ties with Eric Sprott…Sprott loves the Uruachic area as Sprott Asset Management holds a major position in Golden Goliath Resources (GNG, TSX-V) and of course Agnico-Eagle…one of Alliance’s properties straddles the southern border of the Las Bolas Gold-Silver Property that Agnico-Eagle has just finished drilling, and results from that will be interesting to see…Alliance has also assembled an attractive portfolio of properties in Arizona, so this appears to be a company with an aggressive game plan that could emerge as a big winner in 2013…ALM has just 28 million shares outstanding for a market cap of just $3 million based on Friday’s 11-cent closing price…

Note: John holds a share position in RBW.  Jon holds share positions in RBW, HDA and ALM.

TSX Venture Exchange and Gold

Note: Monday Morning Musings to be posted at 4:00 am Pacific, 7:00 am eastern

Friday’s action in the Venture – a modest 11-point loss – was actually quite encouraging on a day when Gold suffered one of its worst sessions of the year, the TSX Gold Index plunged 4.4%, while the broader equity markets were all down sharply.  Several months ago the same scenario would have resulted in an ugly day for the Venture which underscores how much this market has changed recently with the bulls having wrestled control from the bears.  For the week, the Venture was actually up 9 points as it closed at 1310, 10 points above its rising 50-day moving average (SMA) which has been providing impressive support.  Over the last four weeks, the Venture is down just 35 points or 2.6% vs. a $104 drop (5.8%) in the price of Gold, a 4.9% pullback in the Nasdaq and 3.8% decline for the Dow.  The Venture is out-performing other markets and that’s very bullish.

The Venture chart looks good.  RSI(14) recently broke above a down trendline and should find support right around the 50 level.  Buying pressure remains solid, and up volume has been greater than down volume.  And it’s always a positive sign when the Venture is outperforming the price of Gold as it has over the last number of weeks.  What that tells us is that Gold’s current weakness is only temporary and the primary trend is up.  The Index has very strong support from 1250 to 1300.  There is also an important resistance band between 1350 and 1365.  Ultimately, markets always take the path of least resistance.  Our belief is that the Venture this month will break out to the upside and this uptrend that started over the summer will accelerate and really gain some traction come January.  The 1,000-day SMA has reversed to the upside, ending a four-year decline, and the significance of this cannot be overlooked.

Below is John’s updated 6-month daily chart for the Venture.  The upcoming week is going to be critical, especially with Tuesday’s presidential elections.  The stage is set for a major fresh push to the upside which would include a confirmed breakout above a down trendline that has been in place since early 2011.  Alternatively, if overall markets head south, the Venture has varying levels of support between 1250 and 1300.

Gold

It was another rough week for Gold, although bullion was doing well up until Friday.  A moderately better-than-expected U.S. jobs report Friday morning (non-farm payrolls increased by 171,000) sent the U.S. Dollar Index soaring by more than half a point with Gold tumbling through support at $1,700 and finishing down $38 for the day at $1,677.  This was a classic overreaction to one piece of economic data, and technical factors in both Gold and the Dollar Index triggered major moves in each.  The U.S. economy needs to generate at least 200,000 new jobs each month for an extended period in order to bring the unemployment rate down significantly, which is why there’s no end in sight to the Fed’s easing measures (Bernanke has made this clear).  The market should understand this but a re-election of President Obama on Tuesday should pound that message home.

Besides the U.S. elections, there will be plenty of news for Gold bugs to chew on over the next week.  Mexico is hosting a Group of 20 meeting of finance ministers and central bank governors beginning this weekend.  There are central bank meetings in Australia, Britain and the ECB in the coming week, and China’s 18th party congress starts Thursday.  It will set new policy directions and elect new leaders for the next five to 10 years.

The fact Gold climbed all the way to $1,800 recently and then corrected was no surprise to John, our technical guru, who predicted the breakout and also made it clear that Gold had become technically overbought in September (commercial traders also built up large short positions) and needed to cleanse that condition.  The three major Fibonacci support levels he identified were $1,700, $1,670 and $1,646.  So the downside from current levels appears limited.  Physical buying, short covering, and technical support are all good reasons to believe that Gold is very close to putting in a bottom before a year-end rally.  The general consensus is that an Obama re-election will be immediately bullish for Gold and bearish for the greenback, which makes Friday’s action even more perplexing given that state polls in battleground areas give Obama the edge going into Tuesday.

Elsewhere around the globe, euro zone unemployment rose to the highest level (11.6%) since records began for the series in 1995, Japan’s industrial production fell 4.1% in September, and Brazil industrial production fell 1% in September, worse than expected.  Expect central banks around the world to continue to print money faster than rabbits can make bunnies, and that’s bullish for Gold.

Below is an updated 6-month Gold chart from John that shows RSI(14) has plummeted to 31%.  Some more weakness is possible, but again the downside from here is limited.  Only a Romney victory in our view could create a scenario in which Gold temporarily became heavily oversold and collapsed below the $1,640 support (good news for the U.S. economy, it seems, is bad news for Gold).

Silver plunged $1.35 an ounce Friday but finished down just 18 cents for the week at $30.91.  It has a strong support band between $30.50 and $31, and John will update the short-term and long-term Silver charts as part of Monday’s Morning Musings.  Copper was off 6 pennies for the week at $3.48.  Crude Oil declined $1.42 a barrel while the U.S. Dollar Index jumped just over half a point to 80.56 but faces a stiff resistance band beginning at 81.

The “Big Picture” View Of Gold

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

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates that won’t end anytime soon (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), money supply growth, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  QE3 has arrived, and massive central bank intervention is now taking place to prevent a breakup of the euro zone and to kick-start the global economy.  It’s hard to imagine Gold not performing well in this environment.

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

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

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

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

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

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Gold is taking a hit on this morning on a better-than-expected U.S. jobs report that could either help get President Obama re-elected, or a month from now could just as easily surprise to the downside…as of 8:40 am Pacific, bullion is off $31 an ounce to $1,684…Silver has retreated 93 cents to $31.33…Copper is down a nickel to $3.50…Crude Oil is off $1.70 to $85.39 while the U.S. Dollar Index has broken through some resistance, shooting up to 80.53, its highest level in 7 weeks…however, as we’ve pointed out previously, the Index faces a very stiff resistance band between 81 and 81.50…physical buying, short covering and technical support levels should limit Gold’s downside from current levels, so the drop this morning is not a concern for us…traditionally, this is also Gold’s best month of the year…the Fibonacci support levels are 1670 and 1646…

Entering today (perhaps a bearish contrarian indicator), Gold traders were the most bullish in 10 weeks and investors were hoarding a record amount of bullion as central banks pledge to do more to spur economic growth…18 of 27 analysts surveyed by Bloomberg through yesterday expected prices to rise next week and five were bearish…a further four were neutral, making the proportion of bulls the highest since August 24…holdings in Gold-backed exchanged-traded products gained the past three months, the best run since August 2011 according to data compiled by Bloomberg…they reached a record 2,588.4 metric tons yesterday, valued at $142.1 billion…

The Bank of Japan expanded its asset-purchase program earlier this week for the second time in two months, increasing it by 11 trillion yen ($137 billion)…the Federal Reserve said last week it plans to continue buying bonds and central banks from Europe to China have pledged more action to boost economies…Gold rose 70% as the Fed bought $2.3 trillion of debt in two rounds of quantitative easing from December 2008 through June 2011…

With the U.S. elections on Tuesday, precious metal trader Sharps Pixley notes the current market chatter is that Gold prices may react negatively to a Mitt Romney presidential win and vice versa to a Barack Obama win…regardless of who wins, the firm says, “most analysts seem to think the longer-term fundamentals of negative real interest rates, global stimulus and the debasing of fiat currencies will be supportive of Gold price”…

U.S. Non-Farm Payrolls Climb 171,000

U.S. employers added 171,000 jobs in October while the unemployment rate inched up to 7.9%, according to the Labor Department this morning…economists polled by Thomson Reuters expected non-farm payrolls to rise by 125,000, an increase on September’s 114,000 gain…

Today’s Markets

Asian markets were higher overnight with China’s Shanghai Composite gaining 13 points to 1217 (see chart below)…European shares were mixed today while North American markets are off marginally across the board…as of 8:40 am Pacific, the Dow is down 27 points while the Venture Exchange is off 9 points at 1312…

Venture Exchange – Interesting Technical Developments

Yes, the Venture is down this morning but we continue to see some very encouraging technical signs...in fact, the Index as of closing yesterday (1321) was just slightly above a down trendline that has been in place since early 2011…we’ll see how the market holds up today and performs over the next several days, but the two charts below are interesting indeed…the fact the Venture is not getting hammered this morning in the face of a significant drop in Gold strongly suggests we’re in a different type of market now with the Venture, and it begins with a big capital “B” for bullish…patience is required, however, and support from 1250 to 1300 is very strong…a firm breakout above the down trendline on increased volume would be a strong clue that the Index is ready to move significantly higher…

CDNX – U.S. Dollar Index 5-Year Comparison

CDNX – Gold-CRB 2.5-Year Weekly Comparison

SantaCruz Silver Mining (SCZ, TSX-V)

A company certainly worthy of our readers’ due diligence is SantaCruz Mining (SCZ, TSX-V) which we like as it’s aiming to become a mid-tier Silver producer within the next 3 to 4 years…John likes it a lot right now from a technical perspective as SCZ is showing a classic bullish continuation pattern along with a “cup-and-handle”…SCZ closed at $2.39 yesterday and is down just a penny in early trading today…

Corvus Gold (KOR, TSX) Closes Financing

Corvus Gold Inc. (KOR, TSX) reported this morning that it has closed its $3.5 million financing announced in mid-October (3,250,000 shares at $1.07 per share)…the majority of the financing was taken by large existing shareholders such as Haywood Securities Inc. Chairman John Tognetti, Apogee Global Advisors, Inc. and Equity Management Associates as well as two individual investors…Corvus is set to complete a Phase I feasibility study as it continues to rapidly advance the high-grade exploration on its North Bullfrog project…the company’s February 2012 Preliminary Economic Assessment indicates the potential for an attractive new Nevada mining operation at North Bullfrog with excellent infrastructure in one of the best mining jurisdictions in the world…the stock closed yesterday at $1.65 and is currently down a nickel…

Temex Resources Corp. (TME, TSX-V)

Temex Resources (TME, TSX-V), which just recently completed an $8.3 million financing, continues to work hard at advancing an impressive portfolio of projects in the Gold belt of northeastern Ontario…it has made a nice move since the May-June period when the Venture, in our view, finally found a bottom…below is an updated 2.5-year weekly chart from John…the stock has excellent support around 27 cents as John shows, and that also coincides with the rising 50-day moving average (SMA)…the rising 100-day SMA is at 24 cents which would be the next major support level…this is an interesting opportunity, especially on any kind of a pullback…as of 8:40 am Pacific, TME is down 2 pennies at 28 cents…

Northern Gold Mining (NGM, TSX)

Another northeastern Ontario situation worthy of watching closely is Northern Gold Mining (NGM, TSX) which we’ve mentioned here before…a cup-and-handle pattern is being formed with NGM, so some minor additional weakness is possible over the near-term as the “handle” takes shape…as of 8:40 am Pacific, NGM is off half a penny at 37 cents…

Note: John, Jon and Terry do not hold positions in SCZ, TME, KOR or NGM…

Gold jumped as high as $1,728 this morning before pulling back…as of 9:00 am Pacific, bullion is down $3 an ounce at $1,717…Silver is off its highs but still up 7 cents at $32.34…Copper, which is looking much better technically, is up 4 pennies to $3.55…Crude Oil is 77 cents higher at $86.96 while the U.S. Dollar Index has gained more than a tenth of a point to 80.05…

U.S. Monthly Jobs Report Due Tomorrow, Obama Leads Romney In Three 3 Key Battleground States

The U.S. private sector added a better-than-expected 158,000 jobs in October, according to the first report employment data firm ADP released since it changed its methodology…economists had forecast October’s report would show a gain of 135,000 jobs, according to a Reuters poll…investors are anxiously awaiting tomorrow’s non-farm payrolls report – the monthly jobs report – which is expected to show 125,000 jobs added in October…of course it’ll be the last jobs report before Tuesday’s presidential election…meanwhile, the lastest NBC News/Wall Stree Journal polls show that President Obama narrowly leads Mitt Romney in three key battleground states (Ohio, Wisconsin and New Hampshire) less than a week before the election…

U.S. Consumer Confidence At Highest Level In More Than Four Years

U.S. consumer confidence rose in October to its highest in more than four years as Americans were more upbeat about improvements in the labor market, a private sector report showed this morning…the Conference Board said its index of consumer attitudes jumped to 72.2 from a downwardly revised 68.4 in September…it’s now at the highest level since February, 2008, though it came in slightly shy of economists’ estimates for 72.5…

Today’s Markets

Asian markets were stronger overnight with China’s Shanghai Composite leading the way, jumping 36 points or nearly 2% to 2104…China got a boost from some positive economic data and measures by some city governments to ease restrictions on the property sector…in addition, the state-run China Securities Journal reported that as many as six Chinese cities have sought to spur housing demand by making it easier to obtain funds for buyers that could, in turn, support land sales, a major revenue source for local governments…meanwhile, the Financial Times reports this morning that China’s central bank pumped a record amount of funds into the country’s money markets this week in an attempt to ensure that there will be ample cash in the economy to support the government’s push for more infrastructure investment…European markets closed sharply higher today while North American markets are also strong this morning…as of 9:00 am Pacific, the Dow is up by almost 150 points while the Venture Exchange has gained 5 points to 1319…

Barrick Continues To Battle Cost Overruns At Pascua-Lama

The cost overrun at Barrick Gold Corp.’s (ABX, TSX) Pascua-Lama Gold project, the company’s largest and most complicated endeavour ever, will be even greater than expected, the world’s largest Gold miner said yesterday…the massive project in the southern Andes mountain range between Chile and Argentina is now expected to cost as much as $8.5-billion (U.S) to build as it targets first production in the middle of 2014…that is even more than the approximately $8-billion Barrick estimated Pascua-Lama would cost to develop in July…

Barrick is off more than $3.50 a share this morning on the news which has pushed the TSX Gold Index lower more than 6 points lower at 340…but the Index is still looking very healthy from a technical point of view as John showed the other day, and help in this regard is coming from the likes of Agnico-Eagle Mines (AEM, TSX) and Yamana Gold (YRI, TSX)…

Yamana is in a powerful “Wave 5” move as John shows in the 2-year weekly chart below…

Probe Mines (PRB, TSX-V)

One of our favorite potential takeover candidates is Probe Mines (PRB, TSX-V) which has really been on fire recently…we’ve written about its promising Borden Lake deposit in northern Ontario on many occasions over the last year, and the market finally seems to be waking up to the opportunity after PRB got sold off to crazy levels over the spring and summer…Probe has doubled in value since early September, closing up 18 cents yesterday to $1.95 on over a million shares…below is an updated chart from John…while we remain very bullish on Probe overall, it;s important to note that the probability of a near-term pullback to unwind current overbought conditions has increased significantly in recent days…

Orko Silver Corp. (OK, TSX-V) Chart Update

Orko Silver (OK, TSX-V) broke above strong resistance yesterday and is up another penny as of 9:00 am Pacific to $1.69…

Huldra Silver Ramps Up Production At Merritt Mill

Huldra Silver (HDA, TSX-V), which just recently completed a $5.4 million financing, continues to make excellent progress toward full commercial production with its Treasure Mountain deposit near Hope, British Columbia…the commissioning of its 200-tonne-per-day Silver, lead and zinc crushing, grinding and flotation mill in Merritt began on August 7…the company, as reported in a news release this morning, is currently testing the mill by processing a 5,000 tonne stockpile of mill feed from Treasure Mountain development work in 1988…the mill is currently operating 24 hours per day, five days a week, with two days a week for maintenance and upgrades…Huldra expects to transition to a continuous around-the-clock operating schedule during the month of November and plans to begin shipping lead/Silver concentrate to a smelter on a regular basis beginning next Monday under the terms of its previously announced lead concentrate purchase agreement…the way Huldra has been able to fast-track production at Treasure Mountain is a testament to the skill of this company’s management team, and we see exciting times ahead for Huldra given the very high grades at Treasure Mountain and the opportunity for new discoveries at that property…we’ll have much more on Huldra next week…HDA got as high as $1.46 this morning but has since backed off to $1.39, a loss of 4 pennies for the day…

Rainbow Resources (RBW, TSX-V) Chart Update

As an important month of November kicks off for Rainbow Resources (RBW, TSX-V), John has a long-term chart update this morning that is quite encouraging, showing continued accumulation and a Slow Stochastics(14) indicator that has unwound from overbought conditions in August and September…in addition, the RSI(14) is holding steady at 52% – just above strong support…with drilling at both Gold Viking and Jewel Ridge in Nevada, and news expected soon from the recently completed 15-hole program at the International Silver Property, we see Rainbow moving forward aggressively and successfully on the exploration front…as of 9:00 am Pacific, RBW is up half a penny at 21.5 cents on light volume after a busy day yesterday…

Alliance Mining (ALM, TSX-V)

We’ve mentioned this one before as a very interesting speculative play, and this morning Alliance Mining (ALM, TSX-V) has announced that is has signed a binding letter of intent to acquire a strategic 50 square km land package in Mexico, primarily in the prolific and under-explored Uruachic district (Sierre Madre belt) of northwestern Mexico…we say prolific because that’s where Fresnillo PLC, traded on the London and Mexican stock exchanges, has reported a discovery of more than 9 million ounces of Gold (Orisyvo)…Agnico-Eagle Mines (AGM, TSX) and Golden Goliath (GGN, TSX-V) are also very active in the immediate area, a district that Agnico’s Sean Boyd has spoken very bullishly about…Alliance’s claims include the closest privately held claims to the Orisyvo deposit, and ground that adjoins the southern boundary of the Las Balos Property (GNG, AEM), which shows Alliance appears to have some clout behind it in this foray into Mexico…ALM has already positioned itself very nicely in Arizona with an attractive exploration package there…ALM ran up as high as 15 cents on the news this morning and has since backed off a little bit to 13 cents, a gain of 2 cents for the day on nearly 400,000 shares on the Venture…

Note: John holds a share position in RBW.  Jon holds share positions in RBW (increased yesterday), HDA and ALM.