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Gold is coming under pressure this morning…it has traded between $1,664 and and $1,682 so far this morning…as of 7:45 am Pacific, the yellow metal is down $12 an ounce at $1,664…Silver is off 34 cents at $31.68…Copper, set for a third straight monthly advance, is down a penny at $3.71…Crude Oil is off 70 cents at $97.24 while the U.S. Dollar Index is flat at 79.22…this is an abbreviated edition of Morning Musings due to travel…

Updated Copper Chart

Copper continues to look strong, trading at a 3-month high, which is a positive leading indicator for the 2013 global economy and equity markets…

U.S. Personal Income & Spending Up In December

On the heels of yesterday’s reported contraction in economic growth, which will encourage the Federal Reserve to continue its expansionary monetary policy, the government reported this morning that weekly jobless claims rose after two weeks of declines, though personal income climbed sharply and spending gained as well…jobless claims jumped 38,000 in the past week, personal income surged 2.6% (well ahead of estimates) while personal spending was up 0.2%…

Today’s Markets

Asian markets finished the month on a mostly positive note…Japan’s Nikkei average edged up, posting its best January in 15 years as gains in the banking sector lifted sentiment, offsetting gloomy earnings from such bellwether companies like Nintendo...the Nikkei rose 0.2% to a new 33-month high of 11,138.66 points and posted a 7.2% gain this month, its strongest January performance since 1998 after rallying 22.9% in 2012…China’s Shanghai Composite gained 3 points to close at 2385…the Index was up 5.1% for January…China’s January official Purchasing Managers Index (PMI) tomorrow is likely to show manufacturing activity in the world’s second-largest economy expanded at its fastest pace in nine months…

The turnaround in the Chinese stock market came, as expected, when it finally broke out of a 2-year down trendline as shown below in John’s 2.5-year weekly chart below…the same pattern appears to be forming in the Venture Exchange but investor patience is critical…

European shares are down marginally in late trading overseas while North American markets have started on a mixed note…the Dow is up a dozen points, the TSX is off 83 points while the Venture is flat at 1222…

Cap-Ex Ventures (CEV, TSX-V) Chart Update

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

Gold has moved sharply higher after the Commerce Department reported at 5:30 am Pacific that the U.S. economy actually shrank unexpectedly during the fourth quarter…as of 6:50 am Pacific, the yellow metal is up $13 an ounce at $1,677…Silver quickly reversed its losses and is now up 44 cents at $31.82…Copper has held its gains and is up a nickel at $3.71…Crude Oil is 16 cents higher at $97.73 while the U.S. Dollar Index has fallen one-fifth of a point to 79.37…

U.S. GDP Shrinks In Q4

U.S. gross domestic product dropped at a 0.1% annual rate, the worst performance since the second quarter of 2009, when the world’s largest economy was still in the recession, Commerce Department data showed this morning…that’s a sharp slowdown from the 3.1% rate in the July-September quarter…the median forecast of 83 economists surveyed by Bloomberg called for a 1.1% gain in GDP during Q4…the Federal Reserve is wrapping up its 2-day meeting and will be making a policy statement later today…the U.S. economy was hurt in the fourth quarter by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles…

Today’s Markets

Global stocks are flirting with their best levels in more than four-and-a-half years – with some national benchmarks approaching all-time highs – as investors become more optimistic about the world’s economic prospects and thus corporate earnings…the laggard, of course, has been the Venture Exchange but we do expect it to start playing “catch up” as this first quarter progresses…CDNX momentum should pick up once the Index is able to push through the 1240 area which has provided stiff resistance since the beginning of the year…this would also trigger a reversal to the upside in the 50-day moving average (SMA) which has recently flattened out and is now providing support near this week’s low of 1214…below is another 2-day chart from John that shows the short-term trend is indeed very bullish after Monday’s intra-day recovery and yesterday’s 14-point gain to 1231…this sets up the strong possibility of a month-end breakout – finally – through 1240…

Venture-Gold-Copper Comparative Chart

This CDNX–Gold-CRB 2.5-year comparative chart comp shows how the Venture (in black) has broken above a down trendline in place since early 2011…this is fresh evidence that a breakout to the upside is likely in the very near future…

As of 7:00 am Pacific, the Venture is up 4 points at 1236…the TSX has climbed 56 points while the Dow has swung positive with an 8-point gain…

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

Aurcana (AUN, TSX-V) is bouncing back after finding support once again in the 80-cent area this week, just like it did in May, August, and December of last year…below is a 13-month weekly chart from John…not surprisingly, this Silver producer typically responds very well when the metal is in an uptrend…as of 7:00 am Pacific, AUN is up 2 pennies at 91 cents…

2012 U.S. Mineral Production Statistics

The U.S. Geological Survey released some interesting mineral production statistics yesterday…last year, 11 states each produced more than $2 billion worth of non-fuel mineral commodities including (in descending order of value) Nevada, Arizona, Minnesota, Florida, California, Alaska, Utah, Texas, Missouri, Michigan and Wyoming…the mineral production of these states accounted for 64% of the total U.S. output value, said the report…number-one ranked mining state Nevada’s principal mineral production, in descending order of value, included Gold, Copper, Silver, lime, sand and construction gravel for a total combined value of $11.2 billion in 2012…second-ranked Arizona contributed total mineral production worth $8.05 billion including (in descending order of value) copper, molybdenum, sand and gravel, cement and Silver, while third place Minnesota reported $4.5 billion of combined mineral production including (in descending order of value) iron ore, sand and gravel for both construction and industrial, crushed stone and dimension stone…U.S. mine production of copper in 2012 increased by 4% to 1.15 million tons and was valued at $9 billion…Arizona, Utah, New Mexico, Nevada and Montana – in descending order of production – accounted for more than 99% of domestic mine copper production…thirty operations yielded more than 99% of the Gold produced in the U.S. in 2012 with total Gold mine production valued at $12.6 billion…U.S. mines produced 230 metric tons of gold in 2012, down from 234 metric tons in 2011…in 2012, the United States mined 1,050 tons of Silver with an estimated value of $1.01 billion, down from 1,120 tons in 2011…Alaska was the country’s leading silver-producing state, followed by Nevada…Silver was produced as a byproduct from 35 domestic base and precious-metals mines…

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

Gold is firmer this morning…as of 7:05 am Pacific, the yellow metal is up $9 an ounce at $1,663…Silver is 38 cents higher at $31.22…Copper is up a penny at $3.65…Crude Oil has added 67 cents to $97.11 while the U.S. Dollar Index has slipped one-fifth of a point to 79.56…

Today’s Markets

Asian markets were mostly higher overnight…the Nikkei share average edged up as investors welcomed a newspaper report that major banks were likely to have significantly larger profits this year, while small caps such as bio-chemical stocks attracted retail investors…China’s Shanghai Composite gained another 12 points to 2359…European shares are mixed after reaching multi-month highs yesterday…meanwhile, the Dow and S&P are both up slightly in early trading…blow-out earnings reported by Ford Motor this morning while Pfizer also beat expectations…investors are cautious, however, ahead of the Federal reserve’s announcement on monetary policy tomorrow…

The Venture Exchange nearly touched its 50-day moving average (SMA) when it dropped as low as 1214 intra-day yesterday before rebounding slightly at the end of the day to finish at 1218…the 50-day is flattening out just above 1210 after being in decline since mid-November…a reversal to the upside in the 50-day is critical in order to give this market fresh technical momentum and an opportunity to push through resistance at 1240…

Below is a 2-day CDNX chart from John that shows some interesting patterns and strong support…the Venture has gained 10 points to 1228 through the first 35 minutes of trading today…

Cap-Ex Ventures (CEV, TSX-V) Updated Chart

In December, we pointed out the “bottom fishing” opportunity in Cap-Ex Ventures (CEV, TSX-V) when it was trading in the mid-20’s and showing technical signs of a reversal…it has traded as high as 40 cents this month and closed yesterday at 36.5 cents…below is an updated 6-month chart from John…a breakout above the pennant would be a very bullish development…the EMA-20 is providing strong support…

Discovery Ventures (DVN, TSX-V) Chart Update

Discovery Ventures (DVN, TSX-V) continues to unwind a recent overbought condition, and touched Fibonacci support yesterday at 27 cents…the company has just received conditional TSX Venture approval for its recent acquisition of the Willa deposit in the Slocan mining district…below is a 2.5-year weekly DVN chart from John…

India Cuts Interest Rate, Injects Liquidity Into System

The Reserve Bank of India cut the country’s benchmark interest rate by 25 basis points today, a move that will bring relief to the coalition government as it struggles to return the economy to higher growth…the central bank also said in a statement that it would cut the cash reserve ratio – the share of their deposits that banks must hold at the RBI – by 25 basis points to 4%, a surprise move that will release fresh liquidity into the banking system…while the single rate cut may not have a sizable impact on bringing down borrowing costs, it will provide a sentiment boost for Indian consumers, said experts, pointing to the property and auto sectors as the primary beneficiaries of policy easing…the two industries are particularly sensitive to changes in interest rates as purchases are largely financed through bank loans…”The rate cut may build expectations of an easing cycle…demand for more real estate and automobile loans will start increasing marginally,” Rahul Bajoria, economist at Barclays, told CNBC…he forecasts 100 basis points in rate cuts over 2013…

German Consumer Confidence Edges Higher

Consumer confidence in Europe’s largest economy is set to rebound slightly in February, market research group GfK said today, indicating that the positive sentiment in euro-zone markets has lifted spirits despite Germany’s sluggish economic growth…the forward-looking GfK consumer sentiment index rose slightly to 5.8 points for February from an upwardly revised 5.7 points for January, beating economists’ forecast for 5.7 points…despite the difficult economic climate in Germany during the fourth quarter of last year, consumers are “expecting a gradual revival in the economy over the course of this year” thanks to the “present calm situation on the financial markets,” GfK said…consumer spending has gained significance in Germany as a means of cushioning the euro zone’s economic engine as export growth slows…a strong labor market, steadily increasing wages and modest inflation have combined to boost consumer confidence, economists say…

Anglo-American Takes $4 Billion Writedown On Iron Ore Project

Global mining giant Anglo-Ameican PLC said today it would book a $4 billion impairment charge against the value of a Brazilian iron ore project, in a widely anticipated move following large cost overruns and delays that contributed to the resignation of Chief Executive Cynthia Carroll…Anglo-American purchased the Brazilian project, called Minas-Rio, at the top of the market in two installments in 2007 and 2008 for $4.8 billion in total…since then, the capital required to develop the project has ballooned more than threefold to $8.8 billion and the start date has been pushed back five years to the end of 2014…

Conference Board Sees Major Mineral Output Growth In Canada’s North

The Conference Board of Canada forecasts that Canada’s overall northern metal and non-metallic mineral output will grow by 91% from 2011 to 2020, a compound annual growth rate of 7.5%…in contrast, the Canadian economy is forecast to grow by an average of just 2.2% annually over this period, the Conference Board says…the annual gross domestic product of mining in the north, which was $4.4 billion in 2011, is expected to reach $8.5 billion in 2020 (both figures in constant 2002 dollars), according to the Conference Board… “Mining is the future economic driver of Canada’s North…to fully reap the benefits of this potential, we must find the right balance between risk and opportunity,” said Anja Jeffrey, director, Centre for the North. “For instance, governments need to be conscious of how changes to the regulatory environment can affect communities and industry.” The report also focuses on the need to improve infrastructure, labor skill and Aboriginal rights in order to maximize resources in the northern Canada. The Conference Board of Canada’s Centre for the North works with Aboriginal leaders, businesses, governments, communities, educational institutions, and other organizations to provide new insights into how sustainable prosperity can be achieved in the North…

Gold has traded in a range between $1,651 and $1,664 so far today…as of 5:45 am Pacific, the yellow metal is down $7 an ounce at $1,652…Silver trading in a strong support band between $30.50 and $31, is off 30 cents at $30.88…Copper is up a penny at $3.65…Crude Oil is up 36 cents at $96.24 while the U.S. Dollar Index has added one-tenth of a point to 79.89…

Today’s Markets & More Good News From China

Asian markets were mixed overnight but China’s Shanghai Composite put on a powerful show, climbing 55 points or 2.4% to close at 2356 on a whopping 38% increase in volume from Friday…as we noted back in December, the Shanghai broke above a down trendline in place since early 2011 and it has been on fire ever since…official data showed yesterday that profits earned by China’s industrial companies rose 17.3% in December from a year earlier to 895.2 billion yuan ($143.91 billion) as a fourth quarter recovery helped offset poorer corporate results from the third quarter…as reported earlier this month, the Chinese economy expanded an annual rate of 7.9% in Q4, snapping seven consecutive quarters of weaker growth, as a raft of pro-growth policies kicked in…the Q4 bounce helped lift full-year growth in the world’s second largest economy to 7.8% which, though China’s slowest pace in 13 years, generated roughly a third of global economic growth of 3.2% – itself the worst since the 2009 financial crisis and just barely above the 3% mark economists say signals a worldwide recession…European shares are mixed…on an intra-day basis, Germany’s DAX Index managed to reach a level not seen since January, 2008…European equity allocations are at a five-year high, according to a fund managers’ survey by Bank of America Merrill Lynch released last week…stock index futures in New York as of 5:45 am Pacific are pointing toward a positive opening on Wall Street after a stronger than expected durable good report that was just released…the S&P 500 crossed the key 1500 level Friday, logging its longest winning streak since 2004…

Global equities are clearly in a new bull phase, though this hasn’t spilled over just yet into the Venture Exchange which continues to struggle to gain traction despite putting in what appears to be a certain bottom in 2012…history tells us, though, that it’s just a matter of time before the Venture catches fire as investors gradually grow more comfortable with risk…a major discovery would clearly bring confidence and excitement back to the junior market, so that’s definitely something to watch out for – it could happen overnight…

Dow Chart Update

The Dow will need to take a breather shortly, based on John’s 9-month daily chart below…it’s possible that a minor pullback in the broader equity markets may also give a lift to Gold and Silver which both suffered last week…

Venture Comparative Chart

Going back to the Venture, it’s interesting to note that it has crossed above a down trendline on this 2.5-year weekly chart from John that also compares the CDNX with Gold and the CRB Index…theoretically, the trendline should now become new support…the Venture has been basing between 1220 and 1240 for the past 19 trading sessions…an important technical event to keep an eye on is a reversal to the upside in the 50-day moving average (SMA)….this hasn’t occurred yet but appears to be close at hand…reversals in the 50-day were followed by major moves in 2009 and 2010, and two significant rallies in 2012…with the stabilization of the situation in the euro zone, a recovery in China, and central bank support from Japan to the United States, 2013 should be a positive year for commodities and the Venture Exchange…

Rumors Of The Death Of The Gold Bull Market Are Premature

According to some analysts, Gold’s bull market is over…of course, that’s a comment we’ve heard rather frequently every year for the last several years…Gold’s recent inability to push through $1,700 an ounce has, however, definitely frustrated and concerned many traders and investors, but John has a long-term chart this morning that shows Gold’s behavior at the moment is very similar to the 2008-2009 period when it struggled for six quarters to push decisively through the $1,000 barrier…throughout its 12-year bull market, Gold has found terrific support around its monthly SMA(12) where it’s trading at now…patience is the key…keep in mind, too, that Gold is not trading much above the all-in costs of production for many companies…bullion is far from being in a “bubble”…many speculators and momentum players have left the scene for now, which has occurred from time to time over the last dozen years, but physical demand remains strong and the Fed’s balance sheet has crossed the $3 trillion mark for the first time with no signs of slowing down…

Updated Silver Charts – Short-Term & Long-Term

As usual every Monday morning, John has updated charts for Silver…some short-term technical weakness came into the market last week, but the support band between $30.50 and $31 is very strong and we’d be surprised if Silver were to break below that…

Silver Short-Term Chart

Silver Long-Term Chart

There have been only a handful of occasions over the last several years when RSI(2) on the 15-year monthly Silver chart has fallen to 30% or less, one of them being just recently when Silver dipped briefly below $30…when you follow this indicator, it’s hard to go wrong…RSI(2) has a clear pattern as it swings from overbought to oversold…what’s it’s telling us now, after bouncing off the 30 level, is that the downside risk at the moment is minimal…

Atico Mining Corp. (ATY, TSX-V)

Further to our piece on Friday morning regarding Atico Mining (ATY, TSX-V), and a very impressive result from underground drilling at the El Roble Mine, we suggest investors check out an excellent article by Kip Keen, including some core pictures from ATDHR-26 like the one below, that was posted at www.mineweb.com Friday (“So That’s What 7 Metres @ 15% Cu Looks Like“)…Atico gained another 3 pennies Friday to close at 98 cents, and there are some heavy hitters behind this play who are determined to make it succeed…as always, perform your own due diligence…

TSX Venture Exchange and Gold

The Venture continues to fight resistance around the 1240 level, but this overall base-building going back to June of last year is the type of activity that typically precedes an eventual major breakout to the upside.  As we’ve stated repeatedly, investor patience with this very “slow moving train” is critical.  It’s interesting to note, in John’s 7-month chart below, that the CMF indicator (Chaiken Money Flow), has shown positive buying pressure in the Venture since the second half of July.  So there has been consistent accumulation in this market by some investors who are obviously expecting a turnaround in 2013.  Sentiment toward the juniors is as poor now as it was bullish to the extreme in late 2010 and early 2011.  It generally wasn’t a good time to be a buyer back then, just like we believe it’s not a good time to be a seller right now – especially of the better quality juniors with strong management that either have proven valuable resources in the ground or an excellent chance at a significant discovery.  In this business, strangely enough, many investors act the opposite to how they shop for their everyday needs and desires.  They’ll line up outside a store for a few hours to get a bargain on electronics, but they’ll be first in line to sell a stock at fire sale prices out of fear when they really should be buying.  Go figure.  The market is definitely a great way to study human psychology and behavior.

The Venture traded as high as 1245 Wednesday before being driven back down to support at 1220 intra-day Friday.  Not surprisingly, it bounced off this support to close Friday at 1227, an 8-point loss for the week. What we’re seeing at the moment, then, is basing between 1220 and 1240.  The 50-day moving average (SMA) has flattened out around 1215 and a reversal to the upside in the 50-day would be a key factor in giving this market fresh technical momentum, so that is something to watch for in the coming days or over the next few weeks.  A breakout through 1240 this coming week, should it occur, would trigger that reversal in the 50-day SMA.

Gold

It was a rough week for Gold as the yellow metal plunged $28 an ounce to $1,659, selling that was perhaps out of traders’ frustration as Gold once again encountered stiff resistance at $1,700. Meanwhile, the assets of the Federal Reserve’s balance sheet have broken through $3 trillion, hitting new highs.  Money printing around the globe is in full swing but Gold isn’t responding in the way that some believe it should.  Below is a 6-month daily chart from John.  While there’s plenty of overhead resistance, there’s also strong support around $1,640.

Silver fell 71 cents for the week to $31.18.  Copper was flat at $3.64.  Crude Oil climbed another 32 vcents to $95.88 while the U.S. Dollar Index slid one-third of a point to 79.74.

As usual, we’ll be posting John’s short-term and long-term Silver charts Monday morning.

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 keep the euro zone intact 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 more than 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 $1,655 and $1,673 an ounce so far today…as of 7:15 am Pacific, the yellow metal is off $8 at $1,659…the biggest sale of exchange-traded products in three weeks signaled slowing investor demand in Gold even with a weakening U.S. dollar…ETP holdings of Gold dropped almost 5 metric tons, or 0.2 percent, yesterday, the most since Jan. 3, and heading for the first monthly drop since July (just prior to Gold taking off to the upside), according to data of exchanged traded funds and other products compiled by Bloomberg…Silver is down 24 cents at $31.38…Copper is flat at $3.65…Crude Oil is up 19 cents at $96.14 while the U.S. Dollar Index is down one-third of a point at 79.71…

Euro Zone Shows More Signs of Stabilizing

The European Central Bank said banks will next week repay more of its emergency three-year loans than economists forecast in another sign the euro region’s debt crisis is abating…some 278 financial institutions will return 137.2 billion euros ($184.4 billion) on Jan. 30, the first opportunity for early repayment of the initial three-year loan, the ECB said in a statement today…that compares with the median forecast of 84 billion euros in a Bloomberg News survey of economists…the ECB’s first loan totalled 489 billion euros and banks can continue to make early repayments in coming weeks…the ECB is taking back some of the extra liquidity it injected into the banking system a year ago in stark contrast to other central banks like the Federal Reserve and the Bank of Japan whose balance sheets are still blowing up…the euro gained half a cent on the news and is now sitting at $1.34, its highest level since February of last year…the ECB flooded financial markets with two tranches of so-called Longer Term Refinancing Operations totaling more than 1 trillion euros a year ago after banks stopped lending to each other because of Europe’s debt crisis…banks have the option of repaying the loans, which were offered at the average of the ECB’s benchmark rate over their duration, after a year…

Meanwhile, German business confidence rose for the third month in a row in January and hit a seven-month high, boosting the DAX index to its highest level since January, 2008…”The recent surveys add to growing signs that the German economy is turning a corner after a sharp contraction at the end of last year, and a strong rebound should be underway,” Barclays said in a research note…

Today’s Markets

Japan’s Nikkei climbed sharply overnight (nearly 3% to close at 10927) after the U.S. dollar posted its biggest one-day rise against the Japanese yen since October, 2011…the yen’s weakness follows comments from Japanese Vice Finance Minister Takehiko Nakao who indicated in an interview with The Wall Street Journal yesterday that “appropriate action” would be taken if the Japanese currency resumed its strengthening trend…China’s Shanghai Composite fell 11 points to 2291…European shares are in the green today, led by Germany, while North American markets are also positive…the Dow is up another 34 points, the TSX has gained 17 points while the Venture is up a point at 1230…

Canadian Dollar Chart Update

Surprisingly, the Canadian dollar has been showing some technical weakness recently, and a test of the 99-cent support level seems very possible in the near future before a rebound can be expected…the 100-day moving average (SMA) has also reversed to the downside which is creating some additional pressure…the Venture Exchange performs best when the commodity-sensitive Canadian dollar is showing upside momentum, so this in part helps explain the difficulty the Venture has been having in breaking through the 1240 resistance area…overall, the dollar is still very healthy from a technical standpoint and its current softness appears temporary…below is an updated 3-year weekly chart from John…

Parlane Resource Corp. (PPP, TSX-V)

As we reported Tuesday, Parlane Resource Corp. (PPP, TSX-V) has made an important discovery of Gold and Silver mineralization at its Big Bear Project in the Blackwater district of central British Columbia in a hole that’s right on strike with New Gold Inc’s (NGD, TSX) Blackwater and Capoose deposits…PPP climbed as high as 31 cents intra-day Monday, after five previous straight “up” days, so a technical pullback to unwind overbought conditions was not surprising…sure enough, the stock closed at Fibonacci support of 21 cents yesterday and has started to climb higher again this morning…what’s so unique about this situation is that for infrastructure reasons alone, New Gold Inc. needs Parlane’s large land package in our view – so a takeover of PPP at some point down the road seems inevitable…geologically, Big Bear could be an extension of the Blackwater deposit, or a skarn that feeds into it, based on Parlane’s initial results…we expect Parlane to get very aggressive with a second round of drilling in the spring to follow-up on the Phase 1 discovery…for all of the above reasons, the upside potential of this play far exceeds the downside risk in our view…as always, perform your own due diligence…

Atico Mining Corp. (ATY, TSX-V)

Atico Mining (ATY, TSX-V) reported impressive drill results yesterday from its El Roble underground copper and Gold mine in Colombia with the discovery of a new massive sulphide body at the north end of known mineralization…hole ATDHR-26 intersected 119.70 metres grading 6.89% Cu, 6.26 g/t Au and 16.50 g/t Ag…mineralization now extends 360 metres along strike and 250 metres below the 2000 level, the lowest production level at the mine…so this is a deep system but the grades are good…ATY announced January 16 that it had completed an $8 million private placement at 65 cents…the stock closed up 29 cents at 95 cents yesterday after hitting an intra-day high of $1.01…some consolidation can often occur after a move like yesterday, but this is definitely a situation to watch closely…there is strong technical support between 71 cents and 80 cents, the 2012 high…ATY is off a nickel to 90 cents in early trading today…as always, perform your own due diligence…

Note:  John, Jon and Terry do not hold share positions in ATY.  Jon holds a position in PPP.

Gold has traded between $1,664 – just below its 200-day moving average (SMA) – and $1,684 so far today…as of 7:10 am Pacific, the yellow metal is down $14 an ounce at $1,671…Silver, which hit a 5-week high yesterday, has backed off 43 cents to $31.80…Copper is down a penny to $3.65…Crude Oil is up 91 cents at $96.14 while the U.S. Dollar Index is flat at 79.96…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite closed 18 points lower at 2303 despite manufacturing that confirmed a recovery in the world’s second largest economy was on track…the HSBC flash Purchasing Managers’ Index (PMI) rose to 51.9 in January, the highest since January, 2011, and above the 50-point level that shows accelerating growth in the sector from the previous month…European shares ended mixed today, bouncing off their lows after a business survey showed the euro zone economy took a step closer to recovery this month as the rate of decline in the bloc’s private sector eased more than expected…Markit’s Flash Composite euro zone PMI, which surveys around 5,000 firms and is seen as a good growth indicator, jumped to 48.2 from December’s 47.2, beating expectations for a rise to 47.5…despite disappointing results from Apple and weakness in its stock this morning, North American markets are higher with the S&P rising above 1500 for the first time since December, 2007…the Dow, meanwhile, is up 81 points at 13861…the TSX has climbed 48 points while the Venture continues to fight the 1240 level…the CDNX is off 5 points at 1237…

U.S. Jobless Claims Fall To Lowest Level In Five Years

The number of Americans filing new claims for unemployment benefits unexpectedly fell to its lowest since the early days of the 2007-09 recession, a hopeful sign for the sluggish labor market…initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 330,000, the lowest level since January, 2008, the Labor Department reported this morning…claims have now fallen for two straight weeks, suggesting that if employers are concerned tax hikes enacted this year will affect consumer demand, this is not leading to more layoffs…analysts polled by Reuters had expected claims to rise to 355,000 last week…

Dow Chart

RSI(2) is one indicator flashing a warning sign that the Dow is short-term overbought and needs to take a breather…the Dow has risen 10% since mid-November and is now at its highest level since late 2007…however, with RSI(2) at an extreme level as shown in John’s 9-month chart below, a near-term minor pullback is increasingly likely…

Soltoro Ltd. (SOL, TSX-V)

Silver bulls may wish to take a look at Soltoro Ltd. (SOL, TSX-V) which is building on a significant compliant resource at its El Rayo Silver Property in Mexico…recent interesting developments include a 350-metre hole (RAY12-152) that extended mineralization 70 metres down-dip from the nearest hole with a substantial increase in Silver grades thanks to the discovery of Silver-rich massive sulphides near the end of the hole below the Las Bolas deposit…the hole returned 91.3 metres grading 129 g/t AgEq…three additional drill holes are being completed to the north, south and below RAY12-152 to further test the scope of the sulphide mineralization at depth and along strike…below is a 2.5-year weekly chart from John that shows SOL is close to a potential breakout – keep an eye on that 60-cent resistance level…as of 7:10 am Pacific, SOL is off 2 pennies at 58 cents…

Huldra Silver (HDA, TSX-V) Chart Update

Huldra Silver (HDA, TSX-V), one of our favorites, has been struggling lately with the stock down for 8 consecutive sessions during which it has fallen from a high of $1.36 to yesterday’s closing price of $1.09…Huldra continues to work toward bringing its Treasure Mountain deposit near Hope, B.C., into full commerical production as reported by the company January 8…HDA expects to be running at the 200-tonne-per-day capacity in the near future after additional mill modifications are completed…below is an updated chart from John, showing very strong support just above $1.00…we view the current weakness as an opportunity given the chart support and progress on the ground in terms of an expected significant ramp-up in production at Treasure Mountain…HDA fell as low as 99 cents during the first 15 minutes of trading this morning but has since recovered to $1.03, down 6 cents from yesterday but today could mark an important bottom…

Note:  John, Jon and Terry do not hold share positions in SOL.  Jon holds a share position in HDA.