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Gold has traded between $1,690 and $1,696 so far today…as of 7:40 am Pacific, bullion is down $7 an ounce at $1,685…Silver is off a nickel at $32.17…Crude Oil has retreated 15 cents to $96.53…Copper is unchanged at $3.68 while the U.S. Dollar Index has reversed and is now up one-fifth of a point at 80.04…

India’s Gold Strategy

The Gold market has so far shown little reaction to Monday’s news that India will raise its import tax on the yellow metal to 6% from 4%…India is the world’s largest Gold importer and that has contributed in recent years to a growing and record current account deficit (the broadest measure of trade, tracking goods, services and investment income) that the country is trying to bring down…about 80% of India’s current account deficit is due to Gold imports, according to the Reserve Bank of India…Standard Chartered Plc said earlier this month that its Gold shipments to India soared on mounting concern the duty would be raised…“It was strong in November and that’s normally a usual seasonal pattern that we see coming through from Indian post-monsoon, wedding season buying,” Marc Ground, a commodity strategist at Standard Bank in Johannesburg, told Bloomberg…“The fact that January is as high as we see in November usually, that’s unusual…there was probably some Indian buying ahead of this tariff increase”…

The higher taxes aren’t expected to have a huge impact on Indian Gold demand, some of which undoubtedly will also shift to unofficial channels…”In volume terms, we expect India’s Gold imports to fall to 855 mt (metric tonnes) in FY13 from 891 mt in FY12; and to $48 billion (USD) from $56 billion in value terms,” said Sonal Varma, economist at Nomura Financial Advisory and Securities in an article from Bloomberg…”The additional imposition of import duty could lead to Gold imports moderating to 750-800mt in FY14…However, we do not expect Gold imports to fall much more than that as consumption demand for Gold (around 65% of Gold demand) and investment demand (35%) have already moderated close to their averages…Given India’s penchant for Gold for weddings and other religious ceremonies, a sharp fall in volumes is unlikely, in our view…With Gold prices hovering around $1,680, we expect Gold imports value to ease to $44 billion in FY14 from $48.3 billion in FY13, or a drop of 0.2 percentage points,” Varma added…

In conjunction with the increases import taxes, India’s finance ministry has directed Gold exchange-traded funds to park a portion of their Gold holdings with banks so that some demand is met from domestic sources…it also eased the terms of Gold deposit schemes of banks to encourage individuals to deposit their idle Gold, which will help increase domestic supply…interestingly, there has been a tremendous jump in lending against Gold in India (about 700% according to some reports since 2008)…as a result, while the Indian government may want to reduce the amount of Gold its citizens import, they have no interest in seeing the Gold price drop – a crash in Gold prices could wreak havoc on the Indian financial system given the extent to which Gold is now used as collateral…

Updated Gold Chart

The big test for Gold in the immediate term is whether it can push through strong resistance around $1,700 as shown in John’s 6-month daily chart below…Gold has been trading in a downsloping channel since the fourth quarter of last year, and it needs to break out of that channel in order for momentum in this market to pick up…RSI(14) is trending higher which is positive, buying pressure is increasing and the ADX trend indicator is starting to look bullish despite this morning’s minor weakness…

Today’s Markets

Asian markets were mostly lower overnight with Japan’s Nikkei average correcting 2% to close at 10487…the Bank of Japan’s latest aggressive easing fell short of some expectations for immediate action, sending the yen higher and the Nikkei down 223 points…China’s Shanghai Composite gained 6 points to 2321…European shares are mixed today while strong earnings from Google and IBM have given Wall Street a positive tone today…as of 7:40 am Pacific, the Dow is up 48 points to 13760…the Venture has gained 2 points to 1243 as it continues to attempt to break out from the 1240 resistance area…a strong close with an increase in volume today would be a bullish sign…

Sunward Resources (SWD, TSX-V)

A company we checked out during the Vancouver Resource Show that is worth our readers’ due diligence is Sunward Resources (SWD, TSX-V) which is sitting on over $30 million in cash as it continues to develop its multi-million ounce Titiribi Project in Colombia’s prolific mid-Cauca Gold belt…like many others, this stock had a very rough 2012 but appears to be bottoming out around the 80 cent area…its all-time high is $2.41 (early last year)…a rebound in SWD as the overall market strengthens seems very probable…

Madalena Ventures (MVN, TSX-V)

Occasionally, we present some potential oil and gas opportunities and Madalena Ventures (MVN, TSX-V) is also worth our readers’ due diligence given its interesting chart and recent acquisition of Online Energy Inc. and its Alberta assets that will help drive cash flow for Madalena…below is a 2.5-year weekly chart from John…the right handle of a basing “cup with handle” formation is nearly complete with critical support at 28 cents…MVN is off half a penny at 34 cents in early trading today…

Note: John, Jon and Terry do not hold share positions in SWD or MVN.

Gold has traded between $1,690 and $1,696 so far today…as of 7:40 am Pacific, the yellow metal is flat at $1,690…Silver is also unchanged at $32.01…Copper is up 3 pennies at $3.66…Crude Oil has gained a nickel to $95.61 while the U.S. Dollar Index is off its lows of the day but still down slightly at 79.99…

Analysts at Citigroup have taken a slight bearish turn on the precious metal, cutting their forecasts for this year (by 4.2% to $1,653) and next year (by 0.2% to $1,653)…their Silver price forecasts remain unchanged…”Gold’s recent struggle to sustain itself beyond the $1,800 technical resistance level despite seemingly conducive conditions such as record low interest rates and fiscal uncertainty has cast doubt onto the bullish case for Gold among the investor community,” said the analysts in a note…this contrasts sharply with many other views including those of Frank Holmes (www.usfunds.com) who presented another powerful case for Gold at the Vancouver Resource Show the last two days…(we’ll review some of his comments later this week)…some downers pointed out by Citigroup:  Central bank net purchases for Gold have fallen from their 2009 peak, jewelry demand continues to fall and private-sector demand may be set to follow…public and private net investment into Gold was positive in 2012…

Bank of Japan Embraces Limitless Stimulus

The Bank of Japan has moved to open-ended monetary easing, while yielding to the government’s call for a higher, harder target for inflation, in its strongest show of commitment to ending years of corrosive deflation…today the central bank said it would aim to achieve a rate of 2% inflation –  up from its current goal of 1% – “at the earliest possible time” by shifting to the kind of limitless stimulus embraced the U.S. Federal Reserve…from January next year, when its current round of asset purchases had been set to expire, the bank will begin buying Y13tn ($146 billion) of mostly short-term government debt each month until that inflation target is met…it also produced a statement vowing to strengthen the co-operation between the bank and the government to overcome deflation and achieve “sustainable economic growth”…

Updated Euro Chart

The euro continues to show strength which is negative for the U.S. dollar and bullish for Gold…John correctly called a bottom in the euro last summer, and a move to the 140 level seems highly probable after a breakout above the cup-with-handle pattern…

Today’s Markets

Asian markets were mixed overnight with China’s Shanghai Composite falling 13 points to 2315…European shares are moderately weaker while the Dow as of 7:30 am Pacific is off 11 points at 13639…

Below is a 2.5-year weekly chart comparing the CDNX with Gold and the CRB…the Venture, importantly, has now broken above a down trendline in place since early 2011…while this market at the moment resembles a very “slow moving train”, the technical evidence suggests it’s now going in the right direction and a pick-up in momentum is likely not far off – especially after the 1240 resistance area is cleared…as of 7:40 am Pacific, the Venture is up 3 points at 1240 as it continues to flirt with that important level…

Parlane Resource Corp. (PPP, TSX-V)

The Blackwater district in British Columbia is one of the biggest Gold discoveries in Canadian history, but the process of uncovering mineralization there is often time consuming due to a lack of historical information, limited outcropping and the need to rely heavily on tools such as IP surveying and soil sampling to identify drill targets…Parlane Resource Corp. (PPP, TSX-V) has wisely taken a cautious, systematic approach to exploration at its large Big Bear Project (14,000 hectares) in between New Gold Inc.’s (NGD, TSX) Blackwater and Capoose deposits, and that strategy is now paying dividends after the company reported a significant discovery hole after the market close last Friday, and two holes in total out of six that intersected mineralizaton…this is an excellent start…the company can now “follow the science” and an important trail of mineralization that is right on strike between Blackwater and Capoose…what’s also critical to understand is that industrially and now geologically, the Big Bear Property is a key strategic area for New Gold as it prepares for production by 2017…Big Bear is in a flat part of the valley that includes a major logging road that runs right through the middle of the property…hole BB-12-04 returned three significant mineralized intervals at different depths including 9 metres grading 2.14 g/t Au and 12.64 g/t Ag between 195 and 204 metres…mineralization at Big Bear is hosted in thick units of intermediate to felsic lapilli and crystal tuff, a volcanic package that has similar geological signatures to Blackwater and is believed to dip moderately to the northeast…CEO Robert Edie was in high demand at the Resource Show the last couple of days, fielding many questions from curious investors, and we have every reason to believe that Parlane is planning to follow-up on these highly encouraging initial results with a major second round of drilling starting this spring…at some point, either in the near future or further down the road, we can’t help but think New Gold will resume its area consolidation by swallowing Parlane, and the price for that could be far greater than PPP’s current market cap of $7.7 million…below is a map of the Big Bear Property showing the location of BB-12-04 which suggests that Big Bear could be an extension of Blackwater…PPP responded well to the news yesterday, climbing as high as 31 cents before closing up a penny at 26 cents on over half a million shares…it’s up half a penny on light volume in early trading today…

Discovery Ventures (DVM, TSX-V) Chart Update

Discovery Ventures (DVN, TSX-V) continues to consolidate with very strong support at two Fibonacci levels – 32 cents and 35-36 cents…the performance of this stock over the last several months has been impressive, both in terms of volume and price appreciation, so it’s not surprising that’s it has been taking a “breather” recently after more than tripling in value from September to December…DVN closed yesterday at 35 cents and is up a penny-and-half on light volume so far today…

Carpathain Gold (CPN, TSX-V)

As requested by a reader this morning, below is a chart for near-term producer Carpathian Gold (CPN, TSX) which is trading down a penny at 33.5 cents in early trading today…as always, perform your own due diligence…

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

Gold appears to have enough technical momentum to push through near-term resistance at $1,700 this week…as of 5:40 am Pacific, the yellow metal is up $5 an ounce at $1,690…last week, Gold was able to overcome a down trendline in place since late November on the 6-month daily chart, and its EMA-20 has also reversed to the upside…other technical indicators are also looking positive, suggesting bullion could be ready to test its 200-day moving average (SMA) at $1,720…Silver is up 13 cents at $32.02…Copper is off a penny at $3.63…Crude Oil is down 37 cents at $95.19 while the U.S. Dollar Index is down slightly at 80.00…

The Central Bank of Russia (CBR) bought 650,000 ounces of Gold in December, its largest monthly purchase since September, 2010…the CBR’s policy is generally to maintain a Gold-to-FX reserve ratio of around 10% and as of year-end 2012, that ratio stood at 9.5%…meanwhile, a report by the Official Monetary and Financial Institution Forum (OMFIF) suggests that demand for Gold will increase as central banks of emerging economies become increasingly interested in bullion in the gradual transition out of a single global reserve currency system…

Silver reached a 1-month high last week Silver reached a one-month high as the U.S. Mint sold out of 2013 American Eagle Silver coins…the Silver coin sale will resume on or about the week of January 28,  once inventory is replenished…below are John’s updated Monday morning Silver charts…you can see on the short-term chart that Silver’s gain of $1.45 an ounce last week allowed it to break above a resistance band, which is now new support, and the EMA-20 which is now rising at $31.13…the next resistance level is $32.50…

Short-Term Silver Chart

Long-Term Silver Chart

What’s always interesting about John’s long-term Silver Chart is the position of the RSI(2) which has recently moved from just below 30 to 52%, reflecting Silver’s current momentum…this indicator is generally very reliable regarding the short-term direction of the market…it appears the RSI(2) is about to push higher…from a long-term perspective, “Wave 5” continues to develop with a Fibonacci target (no timeline) of $78 an ounce…

Today’s Markets

It’s Martin Luther King Day in the United States, along with the presidential inauguration, so U.S. markets are closed today which will impact trading activity on the TSX and the Venture…Asian markets were mixed overnight…in Japan, the Nikkei average lost ground on profit taking, with forecasts for aggressive easing this week by the BOJ already mostly priced into the market…the Nikkei closed down 1.5% to 10,748, moving further away from a 32-month high of 10,952 hit last Tuesday…China’s Shanghai Composite fell 11 points to 2328…European shares are mildly positive today…

U.S. Debt Ceiling Discussions

House Republicans this week will take up a bill to raise the U.S. debt ceiling for three months in an attempt to push the deadline to mid-April and force the Senate to pass a budget, Majority Leader Eric Cantor said Friday…the U.S. is on track to run out of borrowing ability by mid-February or March, according to the Treasury Department, and a three-month bill if passed in the House and Senate would “kick the can” a little further down the road, something politicians on both sides of the aisle in Washington are exceptionally good at…

Vancouver Resource Show

The Cambridge Resource Show at the Vancouver Convention Centre started yesterday and wraps up today…we’re checking things out and we’ll be posting material from the show as the week continues…Yukon Dan, as he’s called, is drawing plenty of attention with his Gold panning display and his passion for the industry – the first time he’s been at the Vancouver Show in several years…what particularly impresses us is his work in the classrooms of British Columbia and elsewhere, teaching students about not just Gold panning but the importance of mining in general…this is critical education students need, especially given the negative influences from the environmental lobby and many in the media…Dan’s efforts are sponsored in part by AME B.C. (Association for Mineral Exploration), New Gold Inc. and Teck Resources…

"Yukon Dan" is drawing plenty of attention with his Gold panning display at the Vancouver Resource Show.

Gran Colombia Gold (GCM, TSX)

The highly respected Frank Holmes gave a thumbs-up to Gran Colombia Gold Corp. (GCM, TSX) yesterday in an upbeat presentation on the markets…below is a 1-year weekly GCM chart from John…the stock has been under accumulation since last summer while trading in a horizontal channel…as always, perform your own due diligence…

Trueclaim Exploration (TRM, TSX-V) Chart Update

Trueclaim Exploration (TRM, TSX-V) continues to perform well, gaining a penny-and-a-half last week on strong volume to close Friday at 10 cents…there’s room for TRM to move higher over the short-term as shown in John’s 2.5-year weekly chart below…

Note:  John, Jon and Terry do not hold share positions in GCM or TRM.

TSX Venture Exchange and Gold

Volume picked up modestly on the Venture last week with the Index continuing to flirt with the technically important 1240 resistance area.  Intra-day, the Venture climbed as high as 1247 in early trading Monday before being knocked down 17 points to 1230 at the close.  But it stayed at or above that level the rest of the week which was very positive.  Friday’s close at 1235 (a 5-point loss for the week) was slightly above the rising 10-day moving average (SMA) with the rising 20-day SMA at 1220 also providing support.  This market should begin to pick up some serious momentum once the 50-day SMA reverses to the upside, and this has a good chance of occurring by the end of the month or early February.

Below is an updated 7-month daily CDNX chart from John.  Volume and buying pressure continue to gradually increase, while the RSI(14) trend is positive.  There’s every reason to believe a move through 1240 will occur very soon.

Gold

Gold pushed higher again last week, climbing $22 an ounce to $1,685.  It broke above a down trendline, as shown in John’s 6-month daily chart below, the EMA-20 has reversed to the upside, and the RSI(14) trend is positive.  The combination of these three technical factors could give Gold the energy it needs now to break above resistance at $1,700.  Fundamentally, monetary printing presses around the globe are working overtime.  In the United States, an increase in the debt ceiling is on the way and the Fed’s balance sheet is increasing by $85 billion a month.  The potential for a near-term upside breakout, in our view, is very high at the moment.

Silver posted a strong gain last week of $1.45 an ounce to $31.89 (John will have his usual short-term and long-term Silver charts Monday morning).  Copper held steady at $3.64.  Crude Oil gained $2 a barrel to $95.56 while the U.S. Dollar Index rebounded half a point to 80.06.

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.

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Gold has hit a fresh 4-week high of $1,696…as of 6:00 am Pacific, the yellow metal is up $6 an ounce at $1,693…Silver has gained 28 cents to $32.01…Copper is up a penny to $3.64…Crude Oil is flat at $95.30 while the U.S. Dollar Index has gained one-quarter of a point to 79.95…

Orders have been pouring in for the U.S. Mint’s one ounce Silver Eagle bullion coins…4 million coins were sold on the first day they became available January 7th, the highest single day sale in the program’s history…since then, demand has apparently remained extremely strong with over 6 million coins sold in less than 2 weeks which has forced the Mint to temporarily suspend sales to its authorised dealers while it rebuilds inventory…

China Growth Expands In Fourth Quarter

China’s economic growth accelerated in the fourth quarter of 2012, confirming a rebound for the world’s second-largest economy after a more than two-year slowdown…the country’s gross domestic product rose by 7.9% from a year earlier in the fourth quarter, the National Bureau of Statistics said today…that was up from 7.4% growth in the third quarter and slightly above expectations for a 7.8% rise, according to the median forecast in an earlier Wall Street Journal poll of 17 economists…the up-tick suggests that Chinese growth is likely to stabilize at around 8% this year, lower than the double-digit rates that it has achieved for much of the past three decades, but still a robust pace of expansion that will help support the global economy and demand for commodities…increased government spending on infrastructure projects such as urban subways, plus moves by the central bank to loosen liquidity in the banking system since mid-year, helped to arrest the slowdown and engineer a recovery in activity…

Today’s Markets

Asian markets were strong overnight with China’s Shanghai Composite gaining 32 points to close at 2317…Japan’s Nikkei average, meanwhile, surged 303 points or 2.9% (its biggest daily percentage gain in 22 months)…the Nikkei is on its longest weekly winning streak since 1987…European shares are modestly higher while stock index futures in New York as of 6:00 am Pacific are pointing toward a flat to slightly positive open on Wall Street…a strong finish to the week by the Venture Exchange would be a welcome sign, especially if the Index can break above important resistance at 1240…it closed up 3 points yesterday at 1233…

CRB Index Chart

One important factor that bodes well for the Venture Exchange is the bullish-looking trend in the CRB Index as shown in John’s 2.5-year weekly chart below…this Index is within just a couple of points of breaking above resistance at 302 as an inverted head and shoulders pattern continues to evolve…significant strength in the CRB Index in 2013 would clearly energize the Venture as there is a strong correlation between the two…

Everton Resources (EVR, TSX-V) Update

As regular readers know, we are very bullish on the prospects for Everton Resources (EVR, TSX-V) in 2013 as the company ramps up exploration at its portfolio of properties in the Dominican Republic…of particular interest, of course, is the APV Property which adjoins the massive Pueblo-Viejo Mine that majority owner Barrick Gold (ABX, TSX) just put into commerical production (on time and on budget)…the structures controlling mineralization at Pueblo Viejo are believed to trend on to APV where drilling has been carried out over just a fraction (10%) of that property…the exploration upside is immense and the area of course is surrounded by excellent infrastructure…yesterday, we spoke with CEO Andre Audet who has granted our request for an interview during the upcoming Vancouver Resource Show (Sunday and Monday) to follow up on the company’s recent exploration date (January 9)…trading at just 9 cents, the risk-reward ratio with Everton is highly favorable in our view given the quality of its DR land package and several overall potential catalysts with this stock…as always, perform your own due diligence…our interview with Audet will be posted by the middle of next week…technically, EVR is looking very strong at the moment as outlined in John’s 2.5-year weekly chart…the recent price increase has been accompanied by higher volume, and it’s also worth noting (this is not shown in the chart) that EVR’s 200-day moving average (SMA) has flattened out at 8 cents and appears poised for a reversal to the upside after being in decline since late 2011…

GoldQuest Mining (GQC, TSX-V) Update

GoldQuest Mining (GQC, TSX-V) came out with fresh drill results yesterday (9 more holes) from its Romero Gold-Copper discovery in the DR, which were very positive though not spectacular, and GQC gained a penny to 62 cents…we’ll have more on GQC next week…

Parlane Resource Corp. (PPP, TSX-V) Update

Parlane Resource Corp. (PPP, TSX-V) has firmed up in recent days with a 3-cent jump to 21 cents yesterday on volume of nearly 300,000 shares…the company commenced a drill program on five target areas at its Big Bear Project in the Blackwater district in early November, and results are likely not far off with speculation obviously building…the chart below shows resistance at 21 cents, so it’ll be interesting to see what happens today…

Abcourt Mines (ABI, TSX-V) Chart Update

Note:  John, Jon and Terry do not hold share positions in ABI, GQC or EVR.  John and Jon hold positions in PPP.

Gold has softened after release of some positive U.S. economic data…as of 6:10 am Pacific, the yellow metal is down $11 an ounce at $1,669 after climbing as high as $1,685 overnight…Silver is down 34 cents at $31.15…Copper is up slightly at $3.61…Crude Oil is 87 cents higher at $95.11 while the U.S. Dollar Index is off its lows of the day, down one-tenth of a point at 79.74…

Germany To Repatriate Some Of Its Gold

The world’s second-biggest holder of Gold reserves, Germany, is planning to bring home some of its Gold held in New York and Paris – a move that some commentators are saying marks a breakdown of trust between the world’s major central banks…that could be reading more into the situation than actually exists, but time will tell….Germany stored so much Gold outside of the country due to the Cold War threat of the Soviet Union, but those dynamics of course have changed over the last couple of decades…the Bundesbank, Germany’s central bank, announced in a news release  yesterday that it plans to repatriate some of its Gold holdings from the New York Federal Reserve and the Bank of France…the release said the Bundesbank intends to move 300 tons of Gold from New York to Frankfurt by 2020, plus a further 374 tons from Paris…by 2020, it expects to hold 50% of its reserves in its vaults in Frankfurt, with the remainder split between New York and London…none will remain in Paris…Gold is therefore simply moving from one vault to another and will likely stay off the market which is the reason this news has not been a market-moving event for the the yellow metal…”With this new storage plan, the Bundesbank is focusing on the two primary functions of the Gold reserves: to build trust and confidence domestically (our emphasis, this is clearly a statement underlying the importance of Gold and its value) and the ability to exchange Gold for foreign currencies at Gold trading centers abroad within a short space of time,” the Bundesbank said…the Bundesbank said the complete withdrawal of its holdings from France is because the adoption of the euro means it is no longer reliant on Paris as a financial center in which to exchange Gold for an international reserve currency…

When Will the Bond Bubble Burst?

Last week there was an indication that the bond fund flows are starting to recede and revert back to equity funds which would be very bullish of course for the stock market and commodities…it was reported that during the week ended January 9, $22 billion flowed into long-term equity mutual funds and exchange-traded funds, according to data from Bank of America Merrill Lynch…this amount “was the second-highest amount on record,” according to CNBC…Bloomberg recently noted that, “Americans have missed out on almost $200 billion of stock gains as they drained money from the market in the past four years”…look for the trend you see in the graph below (U.S. mutual fund net flows) to start reversing in 2013…

Gold Stocks In U.S. Post-Election Years

Here’s another trend that’s interesting…historically, during post U.S. federal election years, the Philadelphia Stock Exchange Gold and Silver Index has seen significant gains…let’s hope for the same in 2013…interestingly, the turnaround has typically started during the second half of January and intensifies in February…

U.S. Economy Holds Up Despite “Fiscal Cliff” Media Hysteria

The U.S. economy withstood concerns about the “fiscal cliff” in December with the Federal Reserve’s business contacts reporting growth across the country…all 12 districts of the US Federal Reserve system reported moderate or modest growth according to the central bank’s latest Beige Book survey…the report is an encouraging sign that uncertainty about fiscal policy did not freeze overall economic activity and suggests the economy went into 2013 with some momentum…but there were still some indications that tax and spending decisions were weighing on sentiment…retailers reported a more pessimistic outlook for future sales because of “concerns that consumers will spend cautiously due to ongoing fiscal uncertainty”, according to the report…

The Labor Department reported this morning that the number of Americans seeking unemployment aid fell to a five-year low last week, a hopeful sign the job market is healing…but much of the decline reflects seasonal volatility in the data…in another piece of good economic news, home construction surged 12.1% in December to end the best year since 2008…

Today’s Markets

Asian markets were mixed overnight with China’s Shanghai Composite losing 25 points to close at 2285…European shares are slightly higher while stock index futures in New York as of 6:10 am Pacific are pointing toward a positive open on Wall Street…the Venture Exchange closed down 2 points yesterday at 1230 but on increased volume, thanks to the activity in Fission Energy (FIS, TSX-V) after Dennison Mines (DML, TSX) announced a deal with Fission that includes buying some of the junior’s assets for shares and a spin-out of the promising Patterson Lake South uranium property…

Edgewater Exploration (EDW, TSX-V) Updated Chart

Below is a very encouraging three-year weekly chart for Edgewater Exploration (EDW, TSX-V) which, as we pointed out recently, is certainly worthy of our readers’ consideration, especially now that the company has received the final ok from Spanish authorities for the Corcoesto Gold Project EIS (Environmental Impact Statement)…Edgewater is working on an updated resource estimate for Corcoesto (expected this quarter), and it should benefit from 45,000 metres of infill drilling (256 holes) completed since the previous estimate a year ago…classic “cup with handle” pattern on the chart as you can see below…

Northern Graphite Updated Chart (NGC, TSX-V)

The recovery in China has been helping some of the graphite stocks since they bottomed out around the middle of last month…NGC has been consolidating recently after a big run-up from a low of 58 cents to a high of $1.34 in just 17 trading sessions…the 20-day moving average (SMA), rising of course and currently at $1.13, has been providing support…below is an 18-month weekly chart from John that shows NGC could certainly power higher this quarter…

Kirkland Lake Gold (KGI, TSX) – Bottom Fishing Opportunity?

Kirkland Lake Gold (KGI, TSX) disappointed investors last month after issuing poor quarterly results and slashing its production forecast for the fiscal year…very similar situation to what occurred with Richmont Mines (RIC, TSX)…in situations like this, investors do tend to over-react and the stock becomes quite oversold…investors must be patient with a rebound, however…KGI dropped to a low of $5.11 intra-day December 13 and it has managed to hold above that level since…the chart is looking healthier and the next major resistance is $8 as John shows in the 2.5-year weekly chart below…

Note:  John, Jon and Terry do not hold positions in EDW, FIS or KGI.