BullMarketRun.com

It’s a weak day on the commodity front…Gold is about to test its next major support level which is around $1,640 an ounce…as of 7:30 am Pacific, the yellow metal is down $22 an ounce at $1,644…Silver has fallen by more than $1 to $29.90…Copper has fallen 8 cents to $3.50…Crude Oil is down 8 cents to $89.92 while the U.S. Dollar Index continues to hover just above support at 79, down more than one-tenth of a point to 79.25 after nearly touching 79…

Due to the upcoming Christmas holidays, we’re now on an abbreviated schedule at BMR through December 31…we’ll have postings each market day as usual, but they’ll be shorter…there will be no Week In Review And A Look Ahead this weekend but this regular feature will return December 29…

U.S. Grows At Faster Pace Than Expected In Q3

The U.S. economy grew at a faster pace that previously forecast in the third quarter, while weekly jobless claims rose slightly more than expected in fresh data released this morning…the final estimate on third quarter U.S. gross domestic product was 3.1%, a government report showed…the economy had been expected to grow at a pace of 2.8% in the quarter, up from a previous estimate of 2.7%, according to Thomson Reuters consensus estimates…a separate report showed weekly jobless claims rose to 361,000 in the latest week…claims had been expected to rise to 357,000, from 343,000 the prior week…

Japan’s Central Bank Eases Monetary Policy

The Japanese central bank eased monetary policy today as it announced an increase of its asset-buying and lending program by 10 trillion yen ($118.7 billion), a widely expected move in response to intensifying pressure from incoming premier Shinzo Abe to deliver bolder steps to beat deflation…

Today’s Markets

Japan’s Nikkei average fell on profit-taking on the news from its central bank but still closed above 10000…China’s Shanghai Composite rose 6 points to 2168 as it continues to trade slightly above the top of a down trendline in place since April, 2011…European markets are flat in late trading while as of 7:30 am Pacific, the Dow is down 3 points while the Venture Exchange is off 2 points at 1175GQ…

Crude Oil Chart

Interestingly, crude oil has broken out above a symmetrical triangle and the EMA-20 is again on the rise…the top of that triangle, just below $88 a barrel, is now new support…below is an updated WTIC 6-month daily chart from John…

GoldQuest Mining (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) came out with news this morning, announcing that it’s undertaking an IP survey covering the complete Las Tres Palmas trend and outlying areas in the company’s extensive land package, including Los Comios, Romero West, and Jengibre…this survey will investigate to a depth of approximately 500 metres which is almost twice the depth of the 2011 IP survey that identified the Romero mineralization…initial results of the current survey at Romero and north of the La Escandalosa deposit have identified deeper chargeability anomalies, where higher readings appear to correlate with sulphide mineralization…the company is mobilizing a fourth deep drill rig to test new targets along the trend beginning in January when results from the last 9 holes of the 2012 drill program are also expected…GQC is up 7 cents at 59 cents through the first hour of trading…

Discovery Ventures (DVN, TSX-V)

Discovery Ventures (DVN, TSX-V) has been a major success story during this fourth quarter with its acquisition of the Willa Gold-copper-Silver deposit in the Slocan Valley, less than 10 miles north of Rainbow Resources‘ (RBW, TSX-V) Gold Viking Property…DVN touched 43 cents last week, a Fibonacci resistance area as pointed out in John’s recent charts…it has since backed off, closing yesterday at 36.5 cents…DVN clearly has some power behind and the company recently completed (very quickly) a financing for nearly $3 million, so they mean business and we suspect the stock will continue to be a strong performer going into 2013…as always, perform your own due diligence, but we view this pullback as an opportunity with strong support on the chart between 32 and 36 cents as John outlines below…

Northern Graphite (NGC, TSX-V)

This is more of an “awareness” chart as graphite plays are starting to stir again after in part because of signs of economic recovery in China…a good example is Northern Graphite (NGC, TSX), which fell as low as 60 cents earlier this month but climbed as high as $1.07 yesterday…it’s up a few pennies to 97 cents in early trading today…Focus Graphite (FMS, TSX-V) has also been firming up, among others in this space…

Note: John, Jon and Terry do not hold positions in DVN or NGC.

Gold continues to be under some pressure this morning after yesterday’s plunge to a 3.5-month low and below a support level at $1,675…as of 7:05 am Pacific, the yellow metal is down $5 an ounce at $1,666, $1 below it’s 200-day moving average (SMA)…there’s certainly no need to panic in our view but it’s possible Gold could soon test another next major support level which is around $1,640…however, it’s still up 7% for the year and on track for its 12th consecutive annual gain…reasons for weakness this month include uncertainty regarding the U.S. “fiscal cliff” and year-end “window dressing” by some major funds (December was also a rough month last year for Gold when it fell 10% and that turned out to be a fabulous buying opportunity despite claims that Gold’s long bull run had finally ended) at a time when trading is typically thin which can exaggerate moves in either direction…

Due to the upcoming Christmas holidays, we’re now on an abbreviated schedule at BMR through December 31…we’ll have postings each market day as usual, but they’ll be shorter…there will be no Week In Review And A Look Ahead this weekend but this regular feature will return December 29…

Silver is off 41 cents at $31.23…Copper is down 4 pennies at $3.58…Crude Oil is up 17 cents to $88.10 while the U.S. Dollar Index has tumbled one-fifth of a point to 79.14…as John’s recent charts have shown, the Dollar Index should find temporary support at 79 (the “neckline”) but it is completing a rather ominous head and shoulders formation…below is an updated Dollar Index chart from John through yesterday’s trading…

World Bank Gives Brighter Outlook For China

The World Bank has raised its 2013 economic growth forecasts for China and developing East Asia, and says the region remained resilient despite the lackluster performance of the global economy…”For 2013, we expect the region to benefit from continued strong domestic demand and a mild global recovery that would nudge the contribution of net exports to growth back into positive territory, a trend projected to continue into 2014,” the World Bank said in its latest East Asia and Pacific Economic Update…”Most countries in the region have retained their strong macroeconomic fundamentals and should be able to withstand external shocks,” it added, although it warned of risks such as a sharp drop in investment growth in China that could shake global confidence and a U.S. failure to reach an agreement on tax increases and spending cuts before the end of the year…the World Bank said China was expected to expand by 8.4% next year, fueled by fiscal stimulus and the faster implementation of large investment projects…the latest forecast is higher than the 8.1% figure cited in an October report…”The slowdown in the Chinese economy appears to now have bottomed out…while third quarter growth, at 7.4% year-on-year, is still low compared to last year, quarter-on-quarter growth has picked up notably, reaching 9.1% in the third quarter at a seasonally-adjusted, annualized rate,” the World Bank stated…

Today’s Markets

Asian stocks hit multi-month highs today as expectations of more aggressive monetary stimulus from Japan and signs of progress in reaching a U.S. fiscal deal lifted riskier assets…all eyes will be on Japan’s central bank as it announces its policy decision tomorrow…incoming prime minister Shinzo Abe’s landslide victory further strengthened easing expectations after he requested the BOJ to consider adopting a 2% inflation target in January…Japan’s Nikkei share average jumped 2.4% overnight to end above 10,000 for the first time in more than eight months on growing expectations of an easier monetary policy under a new government…China’s Shanghai Index was unchanged at 2162 (2 points above a down trendline in place since April, 2011)…

European shares are finishing the trading day on a strong note…helping the bullish cause in Europe (and elsewhere) is the continuing reduction of euro zone sovereign debt tensions… Italian and Spanish borrowing costs sit near multi-month lows and the euro is now at an eight-month high…the currency is also benefiting from news that an index of German business sentiment rose again in December…

North American markets are relatively flat in early trading…as of 7:05 am Pacific, the Venture Exchange is up 3 points at 1179…importantly, the Venture has held above critical support this month, an important feat considering the pressures of tax-loss selling, the “fiscal cliff” and weakness in precious metals…below is an updated weekly Venture chart from John,, going back to late 2010, that shows the top of the downsloping wedge is currently around 1275…the Index needs to push through that level in order to mount a sustained new uptrend…we believe there’s a strong probability of this occurring in either January or February…

Dynasty Gold (DYG, TSX-V)

An interesting play under a nickel that could perform very well for patient investors in 2013 is Dynasty Gold (DYG, TSX-V) which traded over 1 million shares yesterday, closing at 3 cents…we’ve pointed this one out before as it’s certainly worth our readers’ due diligence…DYG is sitting on nearly $1.5 million in cash and has kept a very low burn rate in 2012…in September, they acquired the Strike Property in the prolific Stewart area of northwest British Columbia and got some impressive initial sampling results pursuant to a drill program that will likely be carried out next summer…the company also has a Gold asset in China that it’s looking to sell…below is an updated chart from John…notice the huge increase in buying pressure since October…this tells us considerable accumulation has been taking place…

Note:  Both John and Jon hold share positions in DYG.

Gold continues to trade in a narrow range in the vicinity of $1,700 (support band is between $1,675 and $1,700) and that pattern can be expected to continue through Christmas…as of 7:40 am Pacific, the yellow metal is down $5 an ounce at $1,692…Silver is 3 cents lower at $32.25…Copper is off 2 pennies at $3.62…Crude Oil is up 49 cents at $87.69 while the U.S. Dollar Index is off more than one-tenth of a point at 79.43…

Due to the upcoming Christmas holidays, we’re on an abbreviated schedule at BMR from today through December 31…we’ll have postings each market day as usual, but they’ll be shorter…

Insider Sentiment Improves In Precious Metals Stocks

Insider sentiment in the sector has been trending higher in recent weeks and there are now more than three stocks in the group with key insider buying for every one with selling, according to INK Research which monitors trading activity by executives and directors within their own businesses…INK Research’s indicator for the group now stands at 321 per cent, up 110 points since November 15…since mid-November, the TSX Gold Index is down about 2%..for the year, it’s down about 18% and is one of the worst performing sectors on the TSX…insiders are betting the stocks may be undervalued or are at least likely to rise in coming months…insider sentiment within sectors tends to best foreshadow market moves over a 12-to 18-month time frame…

Today’s Markets

Asian markets were generally higher overnight with China’s Shanghai Composite closing up 2 points at 2162, 2 points above a down trendline in place since April, 2011…we should certainly get confirmation of a major breakout in this market over the next 2 to 3 weeks…meanwhile, Japan’s Nikkei average hit an 8.5-month high…investors will be keenly watching the Bank of Japan this week as it begins a policy meeting today…Shinzo Abe, Japan’s next Prime Minister, piled pressure on the central bank on Monday, calling for more aggressive monetary easing, after his party’s landslide election victory Sunday…it’ll be interesting to see how the situation in Japan works itself out over the coming months and what impact it may have on a global scale…the yen recently surpassed the euro as the most shorted major currency for the first time in three years…

North American markets continue their upward momentum amid optimism that a “fiscal cliff” deal will be reached by year-end…the Dow is up 53 points as of 7:40 am Pacific while the TSX has gained 33 points…the Venture Exchange now appears to be out of danger after falling within a point of critical support last Thursday…tax-loss selling pressures are quickly abating and the Index has likely started a year-end rally that should intensify in the days ahead…the Venture is currently down 2 points at 1183…

Below is a long-term weekly Venture chart from John going back to 2001 which shows the Wave 2 correction from 2465 to the June 2012 low of 1154…the solid blue line is the 1000-day moving average (SMA) which has recently reversed to the upside after a four-year decline…the pattern we’ve seen over the last 6 months, including a successful re-test of the June low, is highly encouraging entering 2013…

Rainbow Resources (RBW, TSX-V) Update

Below is Part 2 of our recent interview with RBW President David Johnston:

BMR: David, Rainbow has had a very active second half of 2012, drilling three properties and carrying out prospecting on others.  What’s the focus going forward?

Johnston: You’re right, we’ve been testing our Big Strike Project in the Kootenays and besides the International, the Gold Viking, Referendum and Whitewater properties look the most interesting at the moment.  With Gold Viking, I suggest investors carefully review our last news on December 4.  A lot of information was jammed in there  including preliminary results from the second hole where we had two samples that came back with greater than 100 grams per tonne Silver in a 4.6-metre interval near-surface.  These samples were over-limit.  Basically, this particular analysis could not detect how much greater than 100 grams these samples were.  So they were sent back for fire assaying which will give us precise numbers.  There was some Gold in there as well, less than a gram over 4.6 metres but it showed we could be on the trail of something.  This hole was drilled south of Springer Creek where historical reports have stated there’s good potential for a Gold-Silver system.  The fact we hit this intersection in only the second hole ever drilled at Gold Viking is interesting to say the least.  We’re cautiously optimistic regarding other holes in this area based on visual analysis.  We’re looking forward to getting the re-checks back and assay results from additional holes very soon.

BMR: If you got some breakthrough results, is it possible to go back to Gold Viking for some follow-up drilling over the winter?

Johnston: Logistically, this shouldn’t be a problem.  There’s not nearly as much snow at Gold Viking over the winter as the International.  Gold Viking is further south and at a much lower elevation.

BMR: A little bit to the north of Gold Viking, about 8 miles, is Discovery Ventures’ Willa deposit.  Discovery Ventures has grabbed a lot of attention by announcing they intend to put the Willa into production.  Was the Willa something that Rainbow ever considered?

Johnston: Our strategy is to discover deposits and deliver value to our shareholders by doing so.  Discovery Ventures is doing something quite different but we’re delighted to see that they’re enjoying success so far.  It’s positive for the whole area.  And if we do make a discovery at Gold Viking, perhaps there’s a way to work together with that group to both companies’ mutual benefit.  So I couldn’t be happier to see what they’re doing.  What that also demonstrates is the geological merit of the district.  It’s a great area to be searching for Gold and Silver, very under-explored despite considerable historical production.   Gold Viking itself is right next to the Slocan Valley’s #1 Silver producer from the 1900’s, the Ottawa Mines which is part of our Ottawa Property.  The grades were astounding.

BMR: It seems you still have some sorting out to do in the Kootenays to determine exactly what your flagship property is in that area with 8 properties in total.  Overall, is Jewel Ridge the go-to project at the moment?

Johnston: It’s certainly the most advanced, and we’re thrilled at what we’ve seen there so far.  We have a real opportunity in the year ahead to outline a significant deposit at Jewel Ridge.  That’s what our focus will be.  Access is easy and all the required infrastructure is nearby.  You couldn’t ask for a better jurisdiction to operate in.  The historical data we have is invaluable and should save us an enormous amount of time and money as we put the numbers together and carefully target important areas to drill.  There’s no question, we have a lot of work to do with this property.  The mineralization going north-south appears to be continuous for 4 kilometres.  We have a lot of data coming in between now and the end of the month, so we’ll have a major update on this project in January for sure.

BMR: Thanks, David, have a Merry Christmas and good luck in 2013.

Johnston: Thank you very much.  And I’d like to take this opportunity to also thank our shareholders for their loyal support and wish them a Merry Christmas, too.   There are still a couple of weeks left in 2012, and when we look back at this year I’m confident we’re going to be able to say it has been a year of great achievement for Rainbow.

Cadillac Mining (CQX, TSX-V)

Cadillac Mining (CQX, TSX-V) has a tendency to make major moves very quickly…for the past couple of months, CQX has been hovering between 8 and 10 cents where there is strong technical support…the company made impressive strides with its Gold-Silver project in Utah this year and is currently looking to secure financing to carry out additional work…

Castle Resources (CRI, TSX-V)

Another company to keep an eye on is Castle Resources (CRI, TSX-V) which continues to advance its Granduc Copper Project near Stewart, British Columbia…we suggest investors perform their due diligence on CRI if they haven’t already…technically, it has a strong support band between 18 and 20 cents as John shows in this 2.5-year weekly chart…

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

Gold has traded between $1,685 and $1,695 so far today…as of 6:50 am Pacific, the yellow metal is flat at $1,696…Silver is down 3 cents to $32.28…Copper is off slightly to $3.63…Crude Oil is up 37 cents to $87.10 while the U.S. Dollar Index has retreated one-tenth of a point to 79.53…

Gold is down just over 1% so far in December (vs. a 10% loss for the entire month last year) as it faces the possibility of a third straight monthly loss…for the year, however, bullion has gained 8% as central banks from the U.S. to China and Europe took action to prop up economies, debasing currencies and increasing haven demand…holdings in ETPs have expanded 12% this year to 2,630.703 metric tons as of Dec. 14, according to data compiled by Bloomberg…

One can’t help but be bullish regarding the prospects for Gold when one examines the balance sheet trend for the Federal Reserve…Gold really started to take off in late 2007 when the Fed balance sheet, as seen in the chart below, crossed the $1 trillion level for the first time…the Fed’s balance sheet has nearly tripled since then, and is now set to increase by $85 billion per month – it will pass the $3 trillion level by mid-2013 – as the Fed announced last Wednesday…it’s hard to imagine Gold not ultimately moving to a record high and shooting through the $2,000 mark as the Fed’s printing press goes into overdrive…

First Majestic Launches Friendly Takeover Of Orko Silver

There’s nothing like a takeover to give the Venture Exchange a lift and inject fresh cash into the market…First Majestic Silver Corp. (FR, TSX) and Orko Silver Corp. (OK, TSX-V) have entered into a definitive agreement pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of Orko for consideration of 0.1202 of a common share of First Majestic plus 0.01 cent in cash per Orko common share…the offer implies a value of $2.72 per Orko share based on Friday’s closing prices for FR and OK, a premium of approximately 69% to Orko’s 30-day volume-weighted average price for the period ending December 14…through the first 20 minutes of trading, OK is up 87 cents a share to $2.47 while FR is down nearly $2 to $20.81…

China and Silver

China’s role in the global Silver market has dramatically changed over the past decade…once a small player in the global market, China now is the world’s leading market for both physical investment and paper trading of Silver futures and other similar products, and is also the second largest silver fabricator…Chinese demand for the white metal is expected to achieve further strong growth in the years ahead, according to a report by Thomson Reuters GFMS released last week by the Silver Institute (www.silverinstitute.org)…

Total Silver demand in China has grown by over 100 million ounces in the past 10 years to a record 171 million ounces…the strength of the Chinese economy, assisted by a boom in the manufacturing sector, along with heavy investment in infrastructure, has boosted domestic demand for Silver since the liberalization of the Chinese Silver market at the start of 2000…this has propelled China into becoming the world’s second largest Silver fabricator, with its share of global demand standing at 17% at the end of 2011…overall Silver fabrication demand has grown from 67 to 160 million ounces from 2002-2011, a rise of 137%…

In the same time period, Chinese industrial Silver fabrication experienced an almost uninterrupted period of growth, posting an impressive 135% increase…the largest slice of industrial demand has come from the electrical and electronics sector, rising from 17 million ounces in 2002 to 40 million ounces last year…key to this development has been a rapid expansion in the country’s semi-conductor sector…similar growth across a wide range of applications has also occurred, including a surge in cell phone and computer production to account for 70% and 90% respectively, of the global total last year…additionally, strong advances have been reported in other personal electronic goods, including tablet computers, notebooks and light emitting diode backlit televisions…

Investment demand from Chinese Silver investors has jumped in recent years, making China the world’s biggest market for both physical investment and paper trading of Silver futures and other similar contracts…of note, during the first full year after the liberalization of the Chinese Silver investment market in 2009, net demand for Silver bars and coins doubled to 9.8 million ounces…in 2011, the figure soared to 17 million ounces, accounting for 8% of global net purchases of Silver bars and coins…

On the supply side, Chinese mine production has almost doubled over the last decade, assisted by the base metals mining sector, leading to a sharp rise in Silver produced as a by-product…China’s mine production of Silver now accounts for 14% of global supply, and it is likely to be recorded as the second largest Silver producing country in 2012…

Silver Short-Term Chart

Silver has outperformed Gold in 2012 and we expect that trend to continue through 2013, though Silver did suffer some minor short-term technical damage last week as it closed below the $32.50 support band…however, support is very strong between $31.50 and $32 as shown in this 9-month daily chart from John…

Silver Long-Term Chart

Long-term, nothing has changed with Silver as it remains locked in a powerful Wave 5 phase that ultimately should take it well beyond the record $50 level…John’s Fibonacci target (no timeline at the moment) for the end of Wave 5 is $78 an ounce…

More Reforms Coming In China As Country Focuses On Urbanization

China’s new leaders over the weekend sent their strongest signal yet that their top economic priority is to remake the economy so it relies more on domestic demand and less on exports and investment in capital-intensive state-owned companies, even if that reduces short-term growth…in a statement issued after the annual Central Economic Work Conference, a weekend meeting of senior officials to assess economic and international challenges, Beijing’s leadership said it wanted to boost imports and speed the integration of rural migrants into cities as ways to spark domestic consumption, according to reports in China’s state-owned news agency, Xinhua…China needed to show “more courage to reform”,  the statement said…the conference was chaired by the incoming premier, Li Keqiang, and focused on one of Li’s top economic priorities, urbanization, which the group’s statement called an “historic task” and “the biggest potential driver of domestic demand”…rural migrants can earn far more money working in China’s cities than they can in their home villages, giving them a lot more cash to spend…China’s State Council, the government’s top body, is now looking at a land reform plan that would increase the payments to farmers whose land is seized by local governments and later used in real-estate development…such payments would make it easier for farmers to move to China’s cities…China’s population became more than 50% urban last year…

Shanghai Index Close To Breakout

It has been a tough year for China’s Shanghai Composite Index which recently fell below 2000 and touched its lowest level since early 2009…but a major turnaround appears to be on the way, which we also view as a good sign for the Venture Exchange as the two speculative markets have interestingly been very much in sync over the last several years…the Shanghai climbed 10 more points overnight to close at 2160, putting it exactly at the top of a downtrend line in place since April, 2011…a breakout above this downtrend line would be hugely bullish…

Shanghai-CDNX Comparative Chart

Below is a very interesting long-term chart from John that shows how closely the Shanghai and the Venture have been in sync over the last several years, with the Shanghai typically taking the lead in one direction or the other…if this pattern continues, expect the Venture to have a strong 2013 and break above its downtrend line in the near future…note that both the Shanghai and the Venture appear to be at the end of a Wave 2 consolidation…

Euro Chart Update

The euro is heading into 2013 on a strong note, and that has to be viewed as bullish for Gold and the Venture Exchange, and bearish for the greenback…the euro has formed a classic cup-with-handle pattern as John shows in this 2.5-year weekly chart…

Today’s Markets

Asian markets were mixed overnight but Japanese equities jumped to an eight-month high after the Liberal Democratic Party’s (LDP) electoral triumph propelled the yen to a 20-month low…Shinzo Abe, leader of the LDP, is expected to usher in a government committed to a tough stance in a territorial row with China and a potentially risky prescription for hyper-easy monetary policy and fiscal spending to beat deflation and tame a strong yen…European shares are modestly lower in late trading overseas, while North American markets are in the green so far today…as of 6:50 am Pacific, the Dow is up 52 points while the Venture has edged 5 points higher to 1189…

Canamex Resources Corp. (CSQ, TSX-V) Updated Chart

Below is a chart update on Camamex Resources (CSQ, TSX-V) which is making progress with its Bruner Gold Property in Nevada, and recently completed a $2.5 million strategic private placement with a wholly owned Canadian subsidiary of Hecla Mining…CSQ is unchanged in early trading at 20.5 cents…

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

Deceased Nevada Man Stashed Away Millions In Gold Coins

A substitute teacher from California was found to be the only heir to a fortune of Gold coins discovered by a cleaning crew in the home of a reclusive cousin who quietly stashed away a treasure of more than $7 million before he died this year…Arlene Magdon is the lone heir to the treasure valued at $7.4 million found in the home of Walter Samaszko Jr. who lived a quiet life in Carson City, Nevada, since the late 1960’s and no one apparently knew of his wealth…records show he withdrew just $500 a month from his stock accounts to pay modest bills…Samaszko apparently had no living family in Carson City, so genealogical researchers went to work to find relatives elsewhere…they found Arlene Magdon is the only living heir to what appraisers say is an estate worth more than $7.4 million…a crew hired to clean up the man’s house discovered the eye-popping stash: boxes of Gold coins and bullion in the garage…more boxes were later found…the Gold coins, some neatly wrapped in foil and plastic cases, were enough to fill two wheelbarrows…Samaszko also had money market, stock and bank accounts totaling $165,570 and $5,330…but the vast majority of the fortune was in Gold coins…appraiser Howard Herz filed his report several weeks ago listing a total of 2,695 coins appraised at more than $7.4 million…”What some individuals have called a hoard of Gold is, in fact, a quite well-thought-out investment in Gold,” he wrote…

TSX Venture Exchange and Gold

The Venture Exchange held critical support this past week, dipping as low as 1166 but recovering intra-day Thursday and again Friday to close the week at 1184.  The loss from the previous Friday was just 2 points.  Sellers’ exhaustion has once again set in with this market.  If the bears couldn’t take this Index to a new low last week in the face of tax-loss selling pressures, “fiscal cliff” worries and weakness in Gold (an overall climate of negativity), then indeed we have seen the bottom in the Venture for 2012 and a much healthier market should begin to emerge going into year-end and the start of 2013.  In fact, we saw the first evidence of this Friday as the Index climbed 10 points.  As we stated recently, once traders and investors have the perception that the Venture has found a bottom – for six months it has stayed above the 3-year low of 1154 set in late June, successfully re-testing that low this month – then market psychology could change dramatically very quickly.  We saw the same thing in the opposite way in March, 2011, when astute investors came to the conclusion that the Index had made an important top at nearly 2500 after more than tripling in value since late 2008.

Below is an updated 7-month daily chart from John – notice how buying pressure has increased in each of the past 4 sessions.

Gold

Gold continued to bounce around last week with some large funds locking in profits for the year, keeping resistance around the EMA-20 which is currently at $1,713.  Concerns over the “fiscal cliff” have also helped to keep Gold in check.  As Duetsche Bank reported, if the fiscal cliff talks were to fail, “this would result in a further decline in money velocity within the country which would be an offset to the growth in money supply implicit in the Fed’s QE announcement.”

The surprise from the Fed Wednesday was the elimination of its pledge to keep rates low through mid-2015 with numerical thresholds on unemployment and inflation expectations (which potentially of course come before or after 2015).   The Fed also planted the seed regarding the removal of stimulus, saying that it would do so in a balanced way.  This could be construed as slightly more hawkish than the market expected. For now at least, however, the current QE program is on pace to “print” $1 trillion per year until the economy improves.  “Operation Twist” was revenue-neutral.  The actions the Fed announced Wednesday are not – its balance sheet will be expanding by a further $45 billion each month $85 billion in total) until the unemployment rate falls to 6.5% (not likely anytime soon) or inflation unexpectedly starts taking off (also not likely anytime soon).

Barclays Capital said Friday it is forecasting an average price of $1,815 an ounce for Gold in 2013.  Analysts said they were lowering their prior forecast but “we retain a positive view on the Gold market.”  Gold has been hurt by profit-taking lately as year-end approaches and amid uncertainty about the fiscal cliff.  Investor interest has diverged, Barclays said, pointing out that holdings of Gold by exchange-traded products remain around record highs but tactical positioning among futures traders has weakened.  “Positives are that physical demand has responded to prices at one-month lows; central bank buying continues; and, in our view, a number of price triggers are stacked in Gold’s favor over the forthcoming months,” Barclays said.  “In line with our economists’ expectations, the FOMC converted Operation Twist into open-ended purchases of long-term Treasury securities at a rate of $45 billion per month, meaning the Fed balance sheet will expand at a rate of $85 billion per month. Beyond the fiscal cliff negotiations, uncertainty over the U.S. debt ceiling lingers, and in Europe our economists expect the Spanish government eventually to request a precautionary program.”

Below is an updated 6-month Gold chart from John who expects the yellow metal to continue to trade in the support band between $1,675 and $1,700, perhaps through the end of the month.

Sales of American Eagle one-ounce Gold bullion coins more than tripled in November of this year, from 41,000 ounces sold in November 2011 to 131,000 ounces.  The U.S. Mint also reported that total Gold sales increased 132% from 59,000 ounces in October 2012 to 136,500 Gold ounces in November 2012.

Silver suffered some minor technical damage last week, falling 80 cents to $32.31 (John will have updated short and long-term Silver charts Monday morning).  Copper gained 3 pennies to $3.65 on positive economic news out of China.  Crude Oil jumped 80 cents to $86.73 while the U.S. Dollar Index tumbled nearly a point to 79.56.

The “Big Picture” View Of Gold

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

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

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

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

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

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

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

Gold has traded between $1,693 and $1,7032 so far today…as of 7:50 am Pacific, bullion is down $2 an ounce at $1,695…Silver is 13 cents lower at $32.41…Copper is up a penny at $3.64…Crude Oil has gained 48 cents to $86.37 while the U.S. Dollar Index is off more than one-tenth of a point at 79.79…

Year-end profit taking by some large funds and “Fiscal Cliff” worries are keeping Gold in check at the moment with the yellow metal poised to decline for the third week in a row despite the Fed’s announcement Wednesday of more stimulus measures that will actually increase the size of its portfolio…Duetsche Bank reports that if the “fiscal cliff” talks were to fail, “this would result in a further decline in money velocity within the country and therefore an offset to the growth in money supply implicit in the Fed’s QE announcement”…

China’s Growing Appetite For Silver

In spite of rapid development in the Chinese Silver market over the past decade, both Silver demand and supply are expected to achieve further growth, says a Thomson Reuters GFMS study released yesterday by the Silver Institute…meanwhile, investment demand from Chinese Silver investors has jumped in recent years, making China the world’s largest market for both physical investment and paper trading of Silver future and other similar contracts, says the study…in 2011, China’s demand for Silver bars and coins soared to 17 million ounces, accounting for 8% of worldwide net purchases of physical Silver…

China Shares Soar, Manufacturing Data Shows Strength

Growth in China’s vast manufacturing sector picked up in December, a preliminary private survey showed, with rises in areas such as new orders and employment underlining a brighter outlook for the economy in coming months…as a result, onshore China shares posted their sharpest gains in more than three years today on strong volume amid speculation of new state-backed buying in mainland markets…the improved sentiment comes ahead of an annual policy-setting meeting over the weekend that will chart the course for the Chinese economy in 2013…the CSI300 Index of the top Shanghai and Shenzhen listings closed up 5.1% at 2356 while the Shanghai Composite soared 4.3%…the indices jumped 4.9 and 4.3% for the week, respectively, their second-straight weekly gain…Shanghai volume was the highest since March 14 as the financial sector led gains in mainland markets…”It confirmed that China’s ongoing growth recovery is gaining momentum, mainly driven by domestic demand conditions,” Qu Hongbin, chief China economist for HSBC Holdings PLC, said in a statement…the reading also pointed to solid economic growth in the fourth quarter…Nomura economist Zhang Zhiwei said the PMI reading reinforces his view that China’s economy “is on track for a strong recovery,” with growth likely to top 8% in the fourth quarter…the government has targeted a 7.5% rise in the economy this year…gross domestic product grew 7.4% in the third quarter from a year earlier, its slowest pace since the first quarter of 2009…

Euro Zone Downturn Slows

Euro zone business activity shrank in December at the slowest rate in nine months, suggesting that although the economy continues to weaken, the downturn may have bottomed out…data company Markit said today that its preliminary purchasing managers’ index, a gauge of activity among euro zone factories and services companies, rose to 47.3 in December from 46.5 in November…a reading above 50.0 would signal an expansion…the national measure for Germany picked up to 50.5 from 49.2 in November, indicating that activity rose in the euro zone’s largest member…”The euro-zone downturn showed further signs of easing in December, adding to hopes that the outlook for next year is brightening,” said Chris Williamson, chief economist at Markit…

Today’s Markets

As noted above, China’s Shanghai Composite posted its largest daily gain overnight since October, 2009, putting the Index at 2150 and within shouting distance of a breakout through a long-term down trendline in place since April, 2011…in fact, the top of the wedge is 2160…John reports this morning that the Shanghai is also now above its weekly EMA(20) for the first time since May of this year…European shares are mixed in late trading while North American markets including the Venture Exchange are generally flat as of 7:50 am Pacific…

U.S. consumer prices fell in November for the first time in six months, pointing to muted inflation pressures that should allow the Federal Reserve to stay on its ultra-easy monetary policy path as it nurses the economy back to health…the Labor Department said this morning that its Consumer Price Index dropped 0.3% last month as a sharp decline in gasoline prices offset increases in other areas…it was also the largest drop since May and followed a 0.1% gain in October…

CDNX Chart

Below is a 1-day chart from John that shows how the Venture Exchange behaved yesterday as it rebounded after falling within a point of critical support at 1165 to close at 1174…our view is that if the Venture cannot break to a new 52-week low this month given tax-loss selling pressures, “fiscal cliff” worries and weakness in Gold, then market psychology may change dramatically going into 2013 with the idea that the Index just isn’t going lower than the 1154 low set in late June…seasonal strength typically sets in during the week before Christmas, so the window is rapidly closing on the bears if it hasn’t already…

Discovery Ventures (DVN, TSX-V)

The market has shown a strong appetite for Discovery Ventures‘ (DVN, TSX-V) Willa deposit in the Slocan Valley as DVN has been an incredible performer during this fourth quarter…all the more reason why it would be so helpful for Rainbow Resources (RBW, TSX-V) to make a discovery at its Gold Viking Property which is just 8 miles south of the Willa…this entire area is drawing more attention given DVN’s intention to put the Willa into production…DVN is trying to crack the 40-cent barrier today on a closing basis…through the first hour + of trading it’s up a penny at 41 cents…below is an updated DVN chart from John…

Parlane Resources (PPP, TSX-V)

Parlane Resources (PPP, TSX-V), which closed up a penny at 17 cents yesterday, has shown resilience this month…it’s definitely a situation to watch closely as the company wraps up drilling at its Big Bear Property in the Blackwater district…Parlane has some strategic ground in between New Gold Inc.’s (NGD, TSX) Blackwater and Capoose deposits, so NGD itself is undoubtedly very curious about results…technically, PPP has been in an overall since August and there has also been a recent change in buying pressure (bullish) as indicated in John’s 6-month daily chart below…with less than 30 million shares outstanding, PPP has significant upside potential in the event of good results from Black Bear and/or a take-out offer from New Gold if the producer wishes to further expand its large holdings in the district…

GoldQuest Resources (GQC, TSX-V) Chart Update

The support band held for GoldQuest Mining (GQC, TSX-V), and what a steal it was around 40 cents…as of 7:50 am Pacific, GQC is up another 7 cents at 62 cents…

Note:  John and Jon both hold positions in PPP.  Jon also holds a position in GQC.

Gold came under pressure overnight with some more mysterious selling out of Asia, the third week in a row this has occurred for no fundamental reason…as of 7:30 am Pacific, bullion is down $13 an ounce at $1,698 after dipping as low as $1,689……Silver has retreated 86 cents to $32.59…Copper is off 6 pennies to $3.63…Crude Oil is down slightly at $86.66 while the U.S. Dollar Index is down slightly at 79.83…

Fed Puts Another Drug Into Clinical Trials

The Federal Reserve dropped one “Twist” but introduced another yesterday as for the first time it spelled out the unemployment level it would like to see before it raises short-term interest rates…the Fed said it would enter 2013 with a plan to purchase $85 billion a month in mortgage-backed securities and Treasury securities, part of a continuing attempt to drive down long-term interest rates to encourage borrowing, spending and investing…the Fed said it didn’t expect to touch short-term rates until it saw the unemployment rate fall to 6.5% or lower, as long as inflation forecasts remain near its 2% target…that would mean, according to the Fed’s own economic projections, that it would keep short-term rates near zero into at least 2015…the central bank also altered its Treasury-securities purchases at the meeting in a way that will involve pumping more money into the financial system…”Operation Twist” was balance sheet neutral but yesterday’s announcement will involve new money creation as the Fed will be funding its purchases by adding reserves to the banking system…

At $85 billion a month, the Fed’s balance sheet will thus keep growing from its current $2.9 trillion, heading toward $4 trillion by the end of 2013…four years ago it was less than $1 trillion…Gold may be down today but this type of action from the Fed is definitely Gold-bullish for the long-term…

Meantime, as the Wall Street Journal stated this morning, we haven’t yet seen the real “fiscal cliff” but it’s coming – eventually…”The Fed’s near-zero interest rate policy will continue to disguise the real cost of government borrowing…one reason the Obama Administration can keep running trillion-dollar deficits is because it can borrow the money at bargain rates…Stanford economist and Journal contributor John Taylor says the Fed has bought more than 70% of new Treasury debt issuance this year…all of this will create a fiscal cliff of its own when interest rates start to rise…the Congressional Budget Office says that every 100 basis-point increase in interest rates adds about $100 billion a year to government borrowing costs…pity the President and Congress who have to refinance $15 trillion in debt at 6%…if Mr. Bernanke really wants to drive the President and Congress to reduce future spending, he shouldn’t keep bailing them out with easier money”…

U.S. Dollar Index Chart Update

In light of yesterday’s Fed announcement, how is the greenback looking?…the simple answer is, not very healthy, and generally that’s good news for junior resource investors and the commodity markets…the Dollar Index is in the midst of what appears to be a bearish head-and-shoulders top…a move down to the neckline at 79, as shown on John’s chart below, would complete this formation with additional weakness expected to come thereafter…

Federal Reserve, Central Banks To Extend Credit Lines

Top central banks are extending their arrangements to swap dollars and other currencies to make sure banks have the money they need…the decision announced this morning extends a crisis measure that was to expire Feb. 1, 2013…now it will be extended for another year…taking part are the Federal Reserve, the Bank of England, the Swiss National Bank, and the Bank of Canada…the Bank of Japan is to consider the measure at its next meeting…

EU Strikes Banking Deal

The European Union reached a landmark deal overnight to make the European Central Bank the bloc’s top banking supervisor, giving EU leaders greater confidence that they are gaining the upper hand over the euro zone’s debt crisis…EU finance ministers forged a deal on the single supervisor in the early hours of this morning after marathon talks…leaders will give their stamp of approval at a summit starting later in the day, their last of 2012, and also discuss closer fiscal ties for their troubled currency area…after a hectic year of crisis management, during which Greece had a close brush with the euro zone exit, getting an agreement on the first stage of a banking union is a victory for the EU and represents a bold step towards pooling sovereignty…the reform requires governments to surrender jealously guarded control over national banks, in the most concerted financial integration project since the creation of the single currency…

Canadian Household Debt Burden Climbs

A key measure of consumer debt continues to swell in Canada…the level of household credit market debt to disposable income reached 164.6% in the third quarter of the year, Statistics Canada reported today, up from 163.3% in the second quarter…in its latest financial system review, the Bank of Canada warned again that the biggest domestic threat to Canada “continues to stem from the elevated level of household indebtedness and stretched valuations in some segments of the housing market”…

Today’s Markets

North American markets are off marginally so far today...as of 7:30 am Pacific, the Dow is up 5 points…fresh data this morning showed that weekly jobless claims in the U.S. fell sharply while retail sales rose in November…the TSX, meanwhile, has shed nearly 60 points with the Gold sector under pressure…the Venture Exchange is off 12 points to 1173, about 20 points above the yearly low from late June…Asian markets were mixed overnight…Japan’s Nikkei average surged above 9700 for the first time since early April, with exporters buoyed by a yen that falls as expectations rise that the Bank of Japan will implement more aggressive monetary easing…European shares are slightly lower in late trading…

Kaminak Gold (KAM, TSX-V)

Kaminak Gold (KAM, TSX-V) has come out with an earlier than expected initial NI-43-101 resource estimate for its Coffee Project in the Yukon – 64 million inferred tonnes grading 1.56 grams per tonne Gold for 3,236,000 ounces of Gold at a base case cut-off of 0.5 g/t Au for oxide and transitional material and a 1 g/t Au cut-off for sulphide material…this is generally within expectations, and Kaminak geologists see considerable expansion potential along strike from the current resource and elsewhere on the 150,000 acre project…below is an updated 2.5-year chart from John…KAM has responded well to this morning’s news (up 16 cents at $1.42 as of 7:30 am Pacific), underscoring how great a deal this was just a few days ago when it was trading at just $1 a share…

GoldQuest Resources (GQC, TSX-V) Chart Update

RoxGold Inc. (ROG, TSX-V)

Roxgold Inc. (ROG, TSX-V), with projects in West Africa, has been recovering nicely since hitting a low of 44 cents in August…ROG closed at 81 cents yesterday, and it’s worth watching closely as it appears to be in the midst of a significant new uptrend after completing a 3-wave corrective phase…below is John’s 6-month daily chart…as always, perform your own due diligence…