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Gold has traded between $1.409 and $1,421 so far today after staging an important move yesterday, pushing above the $1,400 level…as of 4:15 am Pacific, bullion is down $3 an ounce at $1,411…Silver is off 33 cents at $22.45…Copper is down a penny at $3.28 but is poised to post its first monthly gain in 4…Crude Oil has slipped another 41 cents a barrel to $93.20 while the U.S. Dollar Index is up nearly one-fifth of a point at 83.25…this is an abbreviated edition of Morning Musings due to travel…

Gold Stocks – Short-Term Trend Is Up

Get ready for a significant rally in Gold stocks, over the short-term at least, a rally that should also extend to the Venture Exchange…

As we’ve noted recently, the Venture has been giving some encouraging signs and we now do expect a breakout through the important 970 resistance in the near future…what has us particularly excited this morning is an obvious change in the dynamics of the TSX Gold Index as bullion starts to flex its muscles again after negative sentiment reached extreme levels…

Below is a 1-year weekly chart for the Gold Index which clearly gives Gold bugs something to cheer about…increasing up momentum, decreasing sell pressure and declining bearishness in the trend are all very evident – plus an RSI(14) that’s climbing from a low “W” in the oversold zone…this bodes extremely well for the month of June…a 20% gain from current levels in the TSX Gold Index is entirely possible which would lift the Index slightly above its 100-day moving average (SMA), currently at 240…the Gold Index gained 10 points yesterday to close at 206 after posting a 7-point gain Wednesday…a minor pullback after a couple of strong days should be expected but any weakness would certainly be a buying opportunity, in our view, based on this bullish chart pattern…the set-up for next month looks very promising…

The inability of the U.S. Dollar Index to push through important resistance at 84.50 has given Gold a much-needed shot in the arm…below is an interesting chart from John that compares the euro with the Dollar Index over the past year, and also shows the performance of Gold which appears to have formed a double bottom (at least for now, a new low in Gold later in the year as part of 1 final plunge can’t be ruled out)…notice the strong support at the neckline for the euro (helpful for Gold)…

Today’s Markets

Asian markets were mixed overnight with Japan’s Nikkei average bouncing back with a gain of 186 points to close at 13775…China’s Shanghai Composite, which far out-performed Asian’s major markets in May with a 6% advance, fell 17 points to finish at 2301…European shares are moderately lower in late trading overseas…retail sales data for Germany disappointed, showing a 0.4% dip when analysts had expected a 0.2% increase for April (month-on-month)…French consumer spending was better-than-expected, posting a 0.3% fall in April compared with estimates of a decline of 0.6%…also in France, producer prices fell 0.9% on a month-on-month basis in April, worse than forecasts…

In North America, stock index futures in New York are pointing toward a lower open…it will be another busy day for U.S. economic data after a slight downward revision in GDP figures and rising numbers for unemployment claims yesterday…investors today will get their first insight into second quarter consumer spending, with the release of personal consumption data for April at 5:30 am Pacific…analysts polled by Reuters forecast personal consumption and income both rose by 0.1% in April, after gains of 0.2% in the previous month…In addition, the Chicago PMI (Purchasing Managers’ Index) for May will be released today and will provide an early indication of how Monday’s ISM manufacturing index might read…

The Venture gained 7 points yesterday to close at 961…a close above 966 today would break a 3-month losing skid…the Venture’s 30-day moving average (SMA) has reversed to the upside – rising for the first time since January – and should now provide support…it’s currently at 954…

Macro Enterprises Inc. (MCR, TSX-V) Updated Chart

As follow-up to a recent chart and positive comments regarding Macro Enterprises (MCR, TSX-V) – a rare Venture company with earnings momentum – below is an updated chart from John as MCR continues its march higher…it gained 62 cents yesterday to close at $3.65…

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

Gold is powering higher this morning, crossing above the technically and psychologically important $1,400 barrier…as of 6:40 am Pacific, bullion is up $18 an ounce at $1,410 after climbing as high as $1,418 during the last hour…a close above $1,400, looking increasingly possible, would put the bears on the defensive over the near-term…Silver is 51 cents higher at $22.97…Copper is flat at $3.29…Crude Oil is $1.02 lower at $92.11 while the U.S. Dollar Index is off one-third of a point to 83.20…the greenback has hit its lowest level against the yen in 3 weeks which contributed to the sell-off overnight in the Nikkei…

The Venture is up 3 points in early trading to 957 and a June rally could be in the works, especially with Gold looking much healthier…technically, the Venture is also looking much more positive and the key resistance level to watch is 970…

Iskut River “Colorado Area Play” Map

This was pointed out to us last night – an enterprising individual, it appears, has launched a web site (www.ColoradoAreaPlay.com) featuring companies with land packages near Colorado Resources‘ (CXO, TSX-V) North ROK discovery in the Iskut River area of northwestern British Columbia…of course we’ve been following this story closely, and next week we’ll be posting a special piece reviewing the “Contenders” and “Pretenders”…

Holding claims in this area is one thing; actually doing something with them this summer is quite another…that’s why our interest is mostly restricted to the companies that will actually be drilling in the coming weeks and months…on that note, Victory Ventures (VVN, TSX-V) is clearly the early favorite next to CXO for potential price appreciation and a discovery…Victory is no Johnny-come-lately to the area, having put in nearly 2 years of work on its Copau Property to advance it to the drill-ready stage…through our own research of the area, we’ve also learned that the fault setting at Copau bears remarkable similarities to the fault setting at North ROK – a fact confirmed by an independent geologist we consulted with…

Victory is expected to begin drilling Copau as early as next week…

Below is the map from www.ColoradoAreaPlay.com…

A picture tells a thousand words, so the above map is certainly helpful…but the map that really jumped out at us is the one below from the B.C. Geological Survey that shows fault zones (thick lines) in the Iskut River area…note how the Copau Property, which we’ve circled, actually lies at the intersection of 2 major regional fault zones in a fault setting similar to that of North ROK immediately to the west…as we indicated Monday morning, this may have cooked up a very special recipe at Copau that Victory will soon be drilling into…the property has never been previously drilled, so in its first few holes a “victory” for VVN will be to locate a trail of mineralization and acquire a better understanding of the geological structures at Copau…mag and IP work produced very encouraging results…the interpretation is that there is increasing sulphide content within a southwest-dipping body of syenite rock, possibly related to hydrothermal processes within the syenite body…so this is not moose pasture that Victory will be poking holes into; they have a bona fide series of targets and a very good chance of early success…the B.C. Geological Survey made the initial discovery of surface mineralization at Copau in 1994…the property is about 10 km north of Imperial Metals‘ (III, TSX) massive Red Chris Copper-Gold porphyry deposit that is expected to go into production next year…

Victory was first listed on the Venture nearly 2 years ago as a 15-cent IPO…the company has had one of the lowest overhead costs in the industry and will be commencing its drill program with a small float (17 million O/S prior to this month’s financings) and nearly $1 million in its treasury…the driving force behind Victory has been Howard Milne, a respected entrepreneur whose most recent success was International Wex Technologies, a biotech deal that soared to $8 a share under Milne’s 6-year stewardship…he helped raise over $100 million for the company, and many of those investors followed him into Victory in 2011…

Zenyatta Ventures Ltd. (ZEN, TSX-V)

John’s ZEN chart the other day anticipated some bullishness in the stock, and indeed ZEN zoomed 20 cents higher yesterday to close at $2.42…intra-day, it came within 6 cents of its early March all-time high of $2.50…yesterday’s breakout above the horizontal trend channel needs to be confirmed, so that’s what to watch for today…

GoldQuest Mining Corp. (GQC, TSX-V)

One of the best exploration stories anywhere in our view remains in the Dominican Republic where GoldQuest Mining (GQC, TSX-V) has already discovered 2 deposits on its Las Tres Palmas trend, and is now hunting for a third immediately to the west of that area…GoldQuest has tied up all the land in this region, so in effect they could generate their own “area play” if additional discoveries are made…and why won’t they?…this is a very prolific area, and logic dictates that somewhere buried in the ground is the “heat engine” or the feeder system that’s driving the mobilization of Copper and Gold as found at Romero and Escandalosa…at the moment, GQC is drilling along the Guama trend in search of that heat engine…below is a map for our readers’ reference, taken from the GoldQuest web site, followed by our recent interview with GQC Executive Chairman Bill Fisher in text format…

BMR: Bill, thank you for joining us today.  First off, paint a picture if you could please of what’s generally happening on the ground right now for GoldQuest in the Dominican Republic.

Fisher: Thank you.  Of course about a year ago at this time we made a discovery at Romero, some of the best drilling in the world with the first holes.  We raised over $20 million and still have over $14.5 million in our pockets.  We’ve been drilling with up to 4 rigs in the area.  Some of those 200-metre intersections at Romero graded up to 10 g/t AuEq, so we had some really excellent results.  Right now we’re doing some infill drilling and some speculative drilling.  The speculative drilling will not stop.  The infill drilling at Romero and Escandalosa will hopefully produce a NI-43-101 compliant resource estimate (in the case of Escandalosa, an updated resource) during the 3rd quarter of this year.  The Guama trend just came into focus the last couple of months – we have some great hopes there.

BMR: Over the past year what is the one thing you would say you’ve learned the most that will help you in current and future exploration and drilling?

Fisher: We’ve identified what the system is and how it works.  What we didn’t know when we first made this discovery at Romero was the geometry of the system.  It’s a hydrothermal system in a volcanic package, a large-scale system, 200 metres top to bottom is very large and it’s almost a kilometre across at Romero.  So we have a large mineralized system, what we don’t know exactly is how much is iron-bearing fluids and Copper and Gold bearing, so we’re learning a lot about that.  Also, IP, which looks for buried sulphides, has been a really good technique in developing targets.  We’ve learned how the system works and the best techniques to use.  Very little of this comes to surface, there’s generally no surface expression, so it’s a real tribute to our geologists and geophysicists to find this stuff.

BMR: What’s the footprint of this system at the moment at Romero and how much potential to you see for continued expansion?  I know it’s not quite as big as the market was anticipating or hoping for early on.

Fisher: Nothing is certain until we’ve done a formal resource that is put together by our consultants, and we’re in the process of that.  Romero is a hydrothermal system, probably in the thickest part of it over 230 metres thick.  And it heads off toward the southwest, 50 to 100 metres thick.  So it’s very large in terms of vertical extent.  It’s probably 600 or 700 metres across and a few hundred metres linear from the northeast to the southwest.  Still open to the north and the south a bit, but not a great amount.  It’s still a large coherent body, though probably an underground operation I would suspect because of the geometry of it.  The highest grade material is 300 metres down.  We’re also trying to find out the relationship between Romero and Escandalosa which is our previous resource just 2 km to the south of Romero.

BMR: What has puzzled you the most about Romero to this point?

Fisher: We’re seeing that some of these anomalies which are very strong are actually iron sulphides, iron pyrite, but they give a very similar geophysical signature to the Copper sulphides, so not all the anomalies are necessarily of economic interest, no matter how strong they are.  Apart from that, the more we find and the more that we drill, the more we can start differentiating between iron and Copper-Gold mineralization.

BMR: Some more drill results from Romero came out in your May 16th news release.  Hole #135 was terminated in strong Gold mineralization at a depth of about 450 metres.  The drill crew encountered poor drilling conditions within a fault breccia.  What are the plans to follow up on that, do you need a different rig?

Fisher: Yes, we were using hand portable rigs to drill so we don’t have to build roads everywhere.  We’re going to get a deeper rig in there and still have stronger portable rigs to follow up in this particular area.  We like this a lot as it’s about 700 metres south of Romero and 700 metres north of Escandalosa, and there’s a very strong anomaly at depth linking the two.  Hopefully this deep Gold area will give us a chance to extend both our known mineralizations.  It’s a very good place to be, between two systems.  This is the first time we’ve drilled to this depth along this trend in the central area.  We’re very excited, but it could be just a mineralized fault zone which is the one that held the drill up.  We rather hope we’re hitting the top of a Romero-type system.  We will do follow-up drilling over the next few weeks and months as the geophysicists continue to understand what the drill core tells us in the context of the deep geophysics.

BMR: What are the plans for Escandalosa through the remainder of the year?

Fisher: We’ve just done some more infill holes.  I expect Escandalosa may be a little larger but not much larger than we have right now.  But because it has open-pit potential it could be a good place to start when you’re looking at mining options in the future.  We’re going to put Escandalosa and Romero together in our resource estimate for later in the year, we believe that will give good guidance to the investor.  Although they’re 2 separate mineralizations today, let’s hope they link up.

BMR: You’ve got a very interesting situation at the moment with your newly-identified Guama trend to the west of Romero.  Mineralization is outcropping at Guama, and you’ve also had some very good IP results.  What’s your take on Guama?

Fisher: If we had the information a year ago that we have today, we would definitely had started drilling Guama first.  It’s a series of these quartz veins that are carrying a lot of Copper and that generally means there’s a system where the Copper is being picked up and taken to surface.  You can see the native Copper.  There’s about 35 grab samples of over 2% Copper in the Guama trend.  You don’t see that kind of Copper mineralization at surface at Romero.  This is directly overlying the brand new IP that’s being generated as we speak.  We like it a lot.  We’re drilling into it.  We don’t know what’s there yet, we hope of course it’ll be mineralization.  If it’s Copper, it will also be associated with Gold as that seems to be a feature of this region.

BMR: Bill, you’ve got a deposit at Escandalosa, another one of undetermined size at Romero, but you haven’t yet found the source or the heat engine of this mineralization.  Investors are always impatient, but this can be like finding a needle in a haystack.  The big picture that I see is a very large and prospective area where it makes sense that with enough drilling eventually you’re going to find something very massive.

Fisher: We don’t believe there’s a big heat engine that actually outcrops, so therefore it’s probably going to be buried.  We will need to use geophysical methods to find it.  We have a very big anomaly in the north end of the Guama trend that has yet to be drilled, and there’s also another one in the southwest corner of the Guama trend.  Once again, these could be large intrusive bodies, creating the heat and the pressure to mobilize Copper and Gold.  If that’s the case, then Romero would just be a side branch to this, and would be related to the porphyry.  What we’re thinking is to find out what we have at Romero and Escandalosa, and look at it from a regional basis to see if we’re actually developing a mining camp here or whether Romero and Escandalosa are kind of one-off events.  We hope it’s an area play – we got all the land tied up in the area.

BMR: Financially, you’re in good shape at the moment as you said with $14.5 million in the treasury.  Is there a dollar figure you don’t want to drop below given the current market environment for junior resource stocks?

Fisher: We must continue to explore.  We were drilling on a grid basis across Romero and now we seem to be coming to the limits of it.  We’ve slowed that down so we’re just doing very selective drilling at Romero.  We’ve been doing some infill drilling at Escandalosa and now we’ve just started drilling targets at Guama.  Our burn rate is currently $600,000 per month.  At that rate we can keep going for at least a couple of years or more (without having to raise more money).  Obviously we’d like to maintain our budget as high as possible, and our treasury as high as possible, but if we find something, it would be a waste of money for us to sit on the cash.  We’re in a much more fortunate position than most with $14.5 million in our pockets and some excellent targets to go after.  We’ll be very careful.  At Guama our plan is to do one hole at a time rather than grid drilling, a prudent move at this time.

BMR: Bill, political risk is a bigger factor than ever when making investment decisions these days.  The recent dispute between Barrick and the DR government seems to have smoothed over a little bit, but it’s still not very comforting seeing that sort of thing.  You’ve got a lot of experience in the DR dealing with political and business leaders.  What’s your perspective on how the government is viewing the mining industry right now?  Is there anything we should be concerned about?

Fisher: I don’t feel so myself.  There was a disagreement being blown up both from a political perspective from the government of the Dominican Republic in February, but also I think the response was somewhat inflexible as far as the public perception was concerned.  Since then, both the government and Barrick seemed to have put their differences aside.   I think the differences were pretty much manufactured in the media.  Both parties knew what they were doing, so I’m not really concerned.  The issue for Barrick of course was they just finished their $4 billion investment into the country, so it was a very bad time for them to have a wobble.  On the other hand, from the Dominican’s point of view, the nature of the original contract was such that there was no money coming to the government for many years.  So both their issues have been solved I think, and both parties need to move forward.  I’ve been in the Dominican Republic since 2000.  We built a mine in another company called GlobeStar, we built it on time and under budget in 2008, under the Mining Act.  We sold GlobeStar to an Australian group and that operation has been going well ever since of course.  So you can build mines in that country, I don’t have a problem with that.  The CEO of our company is a Dominican national and is a very senior man in Dominican exploration and mining circles.  So I think that if we act correctly, and we always do, whatever we find we will be able to exploit.  The issues of course are going to be like everywhere in the world, water, the fear of cyanide and other such items, and environmental damage.  We have all these things under monitoring right now.  We are looking to go on environmental baseline studies and we’re engaging with the communities. There is precedence for very large scale stuff in the Dominican and let’s hope that we’ve got another one here.

BMR: Bill, thank you very much, and continued success with your drilling.

Fisher: Thank you.

Probe Mines Ltd. (PRB, TSX-V)

Probe Mines (PRB, TSX-V) announced the closing of its $15 million bought deal the other day at $2 per share (flow-through), but new information is that Agnico Eagle Mines (AEM, TSX) was the strategic investor and now has a 9.9% stake in Probe…this is certainly a vote of confidence in the quality of Probe’s Borden Lake Project…

Technically, Probe is now above its 50-day moving average (SMA) for the first time since February and one can argue an important low was put in at $1.10 in late April…the key now for this stock is how it handles resistance between $1.50 and $1.55, and this will also give us some insight into the current trend strength of Gold and the Venture…it could take a few more weeks for PRB to potentially overcome this resistance, we’ll see what happens…regardless, the fundamentals look very good for an exploration situation – the Borden Lake deposit continues to grow and new high grade zones are being discovered – and the company is sitting on more than $40 million in cash with Agnico Eagle as a major new shareholder…

Timmins Gold Corp. (TMM, TSX)

A producer we like a lot that’s churning out great bottom line results is Timmins Gold Corp. (TMM, TSX) as we’ve been mentioning in recent weeks…like PRB, Timmins is also up against important near-term resistance and will be interesting to watch in the days ahead…it closed yesterday at $2.46…below is an updated 2.5-year weekly chart from John…

Today’s Markets

North American markets are positive in early trading…as of 6:40 am Pacific, the Dow is up 15 points…U.S. weekly jobless claims unexpectedly gained 10,000 last week to a seasonally adjusted 354,000, according to the Labor Department this morning…economists surveyed by Reuters expected a reading of 340,000…but a Labor Department analyst said claims for 5 states, including Virginia, Minnesota and Oregon, were estimated since state offices had less time to prepare data because of the Memorial Day holiday on Monday…meanwhile, the U.S. economy grew at a 2.4% annual rate in the first 3 months of the year, according to revised numbers from the Commerce Department, falling slightly short of estimates for a 2.5% gain…the TSXis 6 points higher while the Venture, as we mentioned, has added 3 points so far this morning…European shares are up slightly in late trading overseas…

Japan’s Nikkei average took another hit overnight, falling 737 points or 5.15% to close at 13589…at this point, this appears to be no more than a normal correction to unwind heavily overbought conditions that had become very evident…it could decline further but there is support at 13500, and the RSI(14) on John’s 6-month daily chart is also now at support…

Despite heavy losses in Japan, China’s Shanghai Composite held steady as it lost just 6 points to close at 2318…

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

Gold has traded between $1,381 and $1,396 so far today…as of 6:55 am Pacific, bullion is up $4 an ounce at $1,387…Silver is 3 cents higher at $22.39…Copper is off 2 pennies at $3.28…Crude Oil is 8 cents lower at $94.93 while the U.S. Dollar Index has tumbled nearly three-quarters of a point to 83.63…

The U.S. Mint is on pace to sell 62,100 ounces of Gold coins in May, 17% more than a year earlier, according to data released yesterday…the agency said yesterday that it would resume taking orders for its one-tenth ounce Gold coin after suspending sales in April while demand surged after prices tumbled…Gold has slumped 17 percent this year as investors slashed holdings in ETF’s…“In contrast to demand among institutional investors, who withdrew funds from the Gold ETF’s again yesterday, Gold demand among retail investors thus remains extremely robust,” according to Daniel Briesemann, an analyst at Commerzbank AG in Fankfurt (source: Bloomberg)…

Assets in ETP’s dropped 0.2% to 2,154.2 metric tons yesterday, according to data compiled by Bloomberg…the holdings have shrunk 18% this year, tumbling to the lowest since June, 2011, as demand for haven assets declined amid robust global equity markets and an improving economic outlook in the United States in particular…

The central banks of Russia, Kazakhstan and Azerbaijan all boosted their Gold purchases in April, according to a report Monday from the International Monetary Fund…together, the 3 countries bought up some 24,125 pounds of Gold in the month…as far as the first quarter was concerned, as a whole, central bank net purchases accounted for more than 11% of the demand for bullion according to the World Gold Council…if it weren’t for central bank buying, Gold would clearly be significantly lower than it is now…

OECD Cuts Global Growth Forecast

Signs of gathering strength in the U.S. economy were not enough to stop the Organization for Economic Cooperation and Development (OECD) from cutting its global growth forecasts today as it warned the euro zone was set to fall further behind…the OECD forecast the world economy would grow 3.1% this year and 4% next year…this was a slightly gloomier outlook than its November predictions of 3.4% growth this year and 4.2% in 2014…the forecast comes after the largest rise in U.S. house prices in 7 years and a surge in consumer confidence, bolstering hopes of recovery in the world’s largest economy…it warned the euro zone was still in serious trouble and forecast its economy would contract 0.6% this year…“Protracted weakness could evolve into stagnation with negative implications for the global economy,” the think-tank said…while calling on countries to implement more structural reforms, particularly to their labor markets, it said “reform fatigue” was mounting…

IMF Cautions On China

The International Monetary Fund has joined a host of private economists who have lowered expectations for growth in China, an outlook that has raised questions over whether Beijing will return to stimulus to support the economy…the Fund also cautioned about China’s rising debt levels and a surge in credit, which it warned could be plowed into inefficient uses if it isn’t properly managed…speaking at a briefing in Beijing at the end of the IMF’s annual review of the Chinese economy, IMF First Deputy Managing Director David Lipton said the Fund lowered its growth forecast for the Chinese economy this year to around 7.75% from an earlier forecast of 8%…he cited sluggishness in the global economy, which hurts demand for China’s exports…Lipton stressed that the new forecast still puts the Chinese economy at a brisk growth rate and that Beijing still has the ability to respond to surprises…the IMF’s new forecast puts China’s growth higher than the official 7.5% target, and the Fund expects the pace of the economy should “pick up moderately” in the second half, as the recent credit expansion takes hold (source: Wall St. Journal)…meanwhile, on Monday Goldman Sachs put out a bullish report on the Chinese stock market and stated that investors are now focusing more on the pace of reforms in that country than on government stimulus…China is trying to rebalance away from an over-dependence on exports and investments to being more consumption-led…the bank wrote that it expects reforms to accelerate further in the second half of the year which will boost investor sentiment…

Today’s Markets

Asian markets bounced around overnight with Japan’s Nikkei average finishing almost flat, up 14 points at 14326…Japan’s government said today that it would announce next week its draft road map for a comprehensive 3-year economic overhaul, as Prime Minister Shinzo Abe tries to convince potentially skeptical investors about his vision for ending years of deflationary pressures…the release of the third pillar of Abe’s economic revival plan – alongside aggressive monetary easing and fiscal stimulus – will be the first test of whether the stock market rally over the past six months under this administration was based on reality or merely inflated expectations…China’s Shanghai Composite was up 3 points overnight to close at 2324…European shares are lower in late trading overseas…German labor data showed that more people than expected had been added to the unemployment rolls for the month of May…in North America, the Dow has retreated 90 points through the first 25 minutes of trading…the TSX is down 50 points at 12700…helping the TSX recently has been the strength of the energy index…since mid-April, when it hit its lowest point in 2013, the energy index has risen 8.5%, although in the past year its growth is still only half that of the main index…the energy index has been given a boost by rising bitumen prices (heavy oil is now trading at a discount of only $20 a barrel to WTI as opposed to $40 earlier in the year) as trains are helping to clear export clogs…the Venture opened slightly higher but is unchanged at 954 as of 6:55 am Pacific…a very bullish signal in the coming days would be a close above important resistance at 970…

Pacific Potash Corp. (PP, TSX-V) Appoints New President, CEO

A company we continue to track more closely is Pacific Potash (PP, TSX-V) which seemingly strengthened itself yesterday with the appointment of Andre Costa as President and CEO…Costa has nearly 2 decades of geological experience in Canada and Brazil, and most recently was the chief geologist for Brazil Potash, a private company with operations surrounding the majority of Pacific Potash’s claims…”Working on this basin for five years gave me strong understanding of the drilling program logistics, drilling methods, stratigraphical correlations, depositional environments, structural constraints, mineralization spatial distribution and seismic correlations,” Costa stated in yesterday’s news release announcing the appointment…”This knowledge will be important to achieve positive potash intercepts and consequently advancing to the next stages…all the efforts will now be focused on the upcoming drilling program in order to confirm and evaluate the potash mineralization to be found on Pacific Potash claims that would be developed into potash resources on this new and already-confirmed world-class potash basin”…

Pacific Potash closed down a penny at 15 cents yesterday….technically, a bullish cup-with-handle pattern is what appears to be coming together on the 2.5-year weekly chart as you can see below…the handle is currently forming, so expect some continued consolidation in the immediate future as this plays out…the 50-day moving average (SMA) at 12 cents should provide excellent support and could be a terrific entry point heading into the summer and PP’s drill program…as always, perform your own due diligence…

Amarc Resources Ltd. (AHR, TSX-V) Chart Update

Volume has picked up considerably in Amarc Resources (AHR, TSX-V) over the last 6 sessions…the stock hit an all-time low of 4.5 cents this month and closed yesterday at 6 cents…the company has 5 high-quality projects in central and northern B.C., and a significant rebound in the stock price certainly seems possible this summer as long as the company carries out some planned drilling…AHR had $6 million in cash at the end of December…they’ll need to make things happen to do another raise at higher prices (hopefully) later this year…there are indications the strong bearish trend is beginning to weaken and that AHR may have finally bottomed out…the stock is now above its 10 and 20-day moving averages (SMA’s) for the first time in nearly 5 months…below is a 2.5-year weekly chart from John…

Trueclaim Exploration Inc. (TRM, TSX-V)

Trueclaim Exploration (TRM, TSX-V) has recovered nicely from its April dive and bears watching as it continues to work on closing a financing…as investors know, the current environment is not a friendly one for most companies who need to raise money…we see strengths in TRM that should enable it to succeed, but we’d like to see the completion of their financing very soon and then the outlook for the company will improve…right now, the chart is looking quite positive…

Note: John holds a share position in TRM.

Other Views

Interesting “Guest Blog” on CNBC.com this morning from Marshall Glitter, Head of Global FX Strategy at IronFX, an on-line trading firm specializing in Forex, CFDs on U.S. and U.K. stocks, and commodities:

I recently wrote an article for CNBC about why I thought Gold was going down. It was a pretty straightforward article, I thought, maybe even a bit dull with its echoes of Economics 101.

Well, I couldn’t have imagined the response I got, which were mostly negative and angry. The experience made me wonder: why were so many people so upset with me for trying to explain why gold has been going down?

Gold peaked in September 2011 and the decline has accelerated recently, with the price down over 20 percent since last October. This is a fact. You would think that investors in gold would want to understand why it’s falling so that they can decide whether to get out now or, if they think the reasons for the decline are wrong, buy more. So why get so upset? The answer to that has a lot to do with what makes someone a good investor. It’s a lesson that everyone should learn if they are going to invest in anything.

The reason is what behavioural finance calls cognitive dissonance. Cognitive dissonance is what you experience when you find out something that goes against your beliefs. The best example is the typical TV news interview with a murderer’s mother. She always says what a good boy her son is, he would never do anything like that, he loves his mother, he loves his dog, etc. etc. This is normal. When faced with some new information that goes against our long-held beliefs, most people prefer to ignore the new information or rationalize it away rather than change their beliefs.

The more time and effort people have invested in those beliefs, and the more costly it would be for them to admit that the new information is true, the greater the dissonance that they experience and the greater the need that they feel to reduce it. Reduce it not by changing their beliefs, but by ignoring or discrediting the new information.

So a mother, who’s spent years and years raising her son and does love him, would naturally just refuse to believe that he’s a murderer. And an investor who owns a lot of gold, subscribes to newsletters about gold, talks about gold with his friends, and has made a lot of money in gold in recent years, is likely to refute or reject any new information that says now might not be the best time to buy gold.

This is especially so because most people have a lot more confidence in themselves, their knowledge and their decision-making abilities than they should. I could see that in the responses to my article, some of which showed an imperfect understanding of economics at best.

For example, one reader who execrated me for saying bank reserves aren’t money, argued that they are money because the U.S. Federal Reserve pays interest on them, which ignores the fact that the Fed didn’t pay interest on them before 2008, the European Central Bank currently doesn’t pay interest on them, and the National Bank of Denmark actually charges a fee for holding them! Yet they were very confident in their opinion. Overconfidence is a big problem in investing.

Unfortunately, if someone does begin to feel unsure about their beliefs, then they usually won’t try to learn more to see if their beliefs really are true. On the contrary, they’ll generally take action to justify their existing beliefs. This is called confirmation bias. They will sort through the article and pay greater attention to any facts that support their position than the facts that don’t. They’ll try to find some small part that they “know” is wrong, and will therefore feel justified in ignoring the whole thing.

The important point to learn from this is that investors have to realize their own biases and tendencies and deal with them when investing. The market doesn’t care what you believe any more than the rain cares whether you get wet. You can’t let your emotions get in the way of your understanding the market, otherwise you can get swept away.

Cognitive dissonance can be deadly when it comes to investing. When you’re investing, it doesn’t matter whether you are right or wrong; what matters is whether you make money. You shouldn’t invest to prove something about yourself, to prove to other people that you’re smart or that you’re right, because at some point you’re definitely going to be proven wrong. Some losses are inevitable in investing. It’s not a shame. It’s not a disgrace. It’s normal. One of the keys to being a good investor is therefore to minimize your losses.

Confirmation bias can also be deadly. Naturally, it’s more pleasant to read things that you agree with than things that you don’t agree with. But if you don’t try at least to understand why some people think differently from you, you’re going to lose money sometime. It doesn’t matter how smart you are; nobody can know everything. That’s why stop-loss orders were invented. As the famous investor Howard Marks said, “you can’t predict. You can prepare.”

You have to have a plan before you go into a trade. You have to understand why you are taking a position, you have to have a target for how far you think it will go (since nothing goes up forever) and you need to decide on the stop loss level: the point at which you decide you were wrong and get out of the trade.

If you want an emotional experience, go on a date! Get married! That’s where your emotions should come into play. In investing, our emotions are our enemies. We have to understand them and conquer them or else they can cause us to defeat ourselves.

The author is the Head of Global FX Strategy at IronFX, an on-line trading firm specializing in Forex, CFDs on U.S. and U.K. stocks, and commodities. He was previously Head of the Forex Committee at Deutsche Bank Private Wealth Management.

Gold has traded between $1,375 and $1,394 an ounce so far today…as of 7:00 am Pacific, bullion is off $3 an ounce at $1,384…Silver is up 3 cents at $22.42…Copper has advanced 3 pennies to $3.31…Crude Oil is up $1.45 a barrel to $95.60 while the U.S. Dollar Index has gained one-fifth of a point to 83.87…

Euro Pacific Canada came out with an interesting report yesterday on Gold’s current COT structure…the smart-money commercials have reduced their net short position to the lowest level since the October, 2008, bottom, meaning this is the most bullish they’ve been on Gold since that time…their net position increased from a low of -269,270 contracts in October, 2012, to the latest reading of -84,122…in other words, commercials initiated new long positions and covered previous shorts which increased their total net position by just over 185,000 contracts…large traders, which include hedge funds, tend to have their largest net position at market tops and smallest net position at market bottoms…they are currently net-long 83,726 contracts – the most bearish reading since the October, 2008, bottom…this group is characterized as trend-followers and as a result they are typically the most bearish at market bottoms and the most bullish at market tops…the last remaining participants are the small traders…historically, they have been on the wrong side of the Gold market at key inflection points…this month, this group had a net position of -1,704 contracts, an extremely bearish position not seen since February, 2001, when the Gold market was about to embark on a decade long bull market run…the current dynamics between the three groups signal that a significant intermediate-term bottom is forming in the Gold market, according to Euro Pacific…”This does not necessarily mean that prices cannot head lower, but it does mean that prices are attracting commercial buying interest – the smart-money – at levels not seen since the financial crisis when Gold declined from $1,000/oz and hit a critical low at $700/oz,” Euro Pacific stated…

According to a report from Reuters this morning, retail demand for Gold in India is slowing down…”Many potential buyers made purchases earlier this month…now we are heading towards the lean demand season…unless we see a sharp fall in prices, say by 4 or 5%, demand will remain subdued,” said said a Mumbai-based jeweller…the Reserve Bank of India (RBI) restricted banks from consignment imports of Gold, except for jewellery exporters, after imports jumped more than 150% n April, despite a 50% hike in the import duty in January…the RBI said yesterday that banks would not be allowed to give loans against units of Gold exchange-traded funds (ETFs) and Gold mutual funds…the rupee, which is trading near its lowest level in more than eight months, plays an important role in determining the landed cost of the dollar-quoted yellow metal…

Today’s Markets

Asian markets were stronger overnight with Japan’s Nikkei average gaining 169 points to close at 14312…China’s Shanghai Composite climbed 28 points to finish at 2321…Goldman Sachs is bullish on the Chinese market for the rest of this year, and says investors are now focusing more on the pace of reforms in that country than on government stimulus…China is trying to rebalance away from an over-dependence on exports and investments to being more consumption-led…the bank wrote in a report yesterday that it expects reforms to accelerate further in the second half of the year which will boost investor sentiment…European shares are up significantly in late trading overseas…supportive central bank comments from around the globe and a strong U.S. housing report this morning have sent the Dow up sharply in early trading…as of 7:00 am Pacific, the Dow is up 178 points as it shoots for its 20th consecutive positive Tuesday…the TSX has gained 69 points to 12765…the TSX chart is looking healthy at the moment with the Index trading in a horizontal channel between 12600 and 12900, a level it hasn’t been above since late 2011…so that’s a key resistance area, and it would be a very bullish development if the TSX were able to overcome it…notice the strong up momentum in the RSI(14) as shown in John’s 6-month chart…another attempt to bust through 12900 appears to be in the cards…

The Venture is up 5 points at 953 through the first 30 minutes of trading…it’s threatening today to close above its 30-day moving average (SMA), currently at 948, for the first time since January – clearly a positive sign…we’re continuing to work on our Iskut River play feature and our new time frame for posting that is between tomorrow and next Tuesday as we investigate and build upon new material that has come in which has pushed back our original schedule…

Zenyatta Ventures ltd. (ZEN, TSX-V)

Zenyatta Ventures (ZEN, TSX-V) has been a strong performer again recently, posting gains in 6 consecutive trading sessions following encouraging drilling and exploration news from its Albany graphite deposit in northeastern Ontario…Zenyatta hit an all-time high of $2.50 in early March and has been consolidating since then…below is a 6-month daily chart from John…ZEN closed yesterday at $2.13…strong support at $1.75, resistance at $2.28…

Alpha Minerals (AMW, TSX-V) Chart Update

Alpha Minerals (AMW, TSX-V) and Fission Uranium (FCU, TSX-V) reported more solid results from their Patterson Lake South Property (PLS) yesterday, including 20.5 metres at 8.57% U308 in PLS-13-059…many more results to come throughout the summer as a $7 million drill program continues…notice how AMW‘s 100-day moving average (SMA) has provided solid support during overall market turbulence the last couple of months…this is looking good…

Ashburton Ventures Ltd. (ABR, TSX-V)

Ashburton Ventures (ABR, TSX-V) has picked up more ground in northwestern B.C. as they have tied on to the eastern border of Doubleview Resources‘ (DBV, TSX-V) Hat Property, northwest of Telegraph Creek, where DBV is about to commence a drill program…this is quite a distance from Colorado Resources‘ (CXO, TSX-V) discovery but it’s in a very interesting area where Peter Bernier’s Prosper Gold (PGX.H, TSX-V) is expected to be very active this summer following approval of its qualifying transaction for the Copper Creek Property…the Hat Property adjoins the northeast corner of Copper Creek…

Seafield Resources (SFF, TSX-V) Makes Fresh Discovery Near Miraflores

Nice hole reported by Seafield this morning from its Quinchina Gold Project in Colombia…hole TS-DH-02, just 800 metres southeast of the company’s Miraflores deposit, has returned 384 metres grading 1.01 g/t Au…the Tesorito target was originally examined as a possible tailings site for Miraflores, but clearly it has mineral potential…the anomalous zone outlined by Gold in soils and high chargeability IP covers an area of 500 metres by 700 metres…hole TS-DH-01, also reported this morning, returned 268.5 metres grading 0.46 g/t Au…both holes intercepted porphyry style mineralization and alteration from surface to the final depth of each hole…more drilling is planned…SFF is the most active stock on the Venture in early trading, up a penny at 6 cents on volume (CDNX) of 2.4 million shares…

True Gold Mining Inc. (TGM, TSX-V) Update

True Gold Mining (TGM, TSX-V), which completed a $10 million financing with Teck Resources Ltd. (TCK, TSX) earlier this month, has reported impressive intervals of near-surface Gold mineralization from its advanced-staged Karma Project in Burkina Faso, West Africa…results from include one of the longest intersections of mineralization ever recorded at Karma – 110 metres grading 1.07 g/t Au…drilling at the Watinoma target intersected Gold mineralization in 6 of 9 holes holes over a distance of 550 metres, with mineralization open in all directions…True Gold will invest another $300,000 in ground geophysical surveying and 1,500 metres of diamond core drilling next month to further assess this target’s potential…

Huldra Silver (HDA, TSX-V) Update

Huldra Silver (HDA, TSX-V) provided a detailed update on its progress yesterday which we suggest investors check out…the company’s objective is to produce 1.4 million ounces of Silver, 5 million pounds of lead and 4 million pounds of zinc on an annualized basis from its high-grade Treasure Mountain deposit near Hope, B.C., beginning in July…commercial production started in March and has been steadily ramping up since then…Huldra’s stated goal is to have “one of the lowest operating costs for an underground mining company in the industry by utilizing its fully integrated structure”…technically, the stock is trapped in a downtrend at the moment but that will pass in due course…it needs to build a base, so be patient with it…there’s important support between 28 and 31 cents as John has pointed out…HDA closed yesterday at 33 cents, giving it a market cap of $17 million…

Note: John, Jon and Terry do not hold share positions in ZEN, AMW, ABR, SFF or HDA.

Gold is firmer on this U.S. Memorial Day holiday…as of 6:50 am Pacific, the yellow metal is up $9 an ounce at $1,395…volatility could ramp up tomorrow which is options expiration day for June Gold…Silver has gained 27 cents to $22.66…Copper is unchanged at $3.29…Crude Oil is off 60 cents at $93.55 while the U.S. Dollar Index is down slightly at 83.60…

Barclays estimates that 109 metric tons of global Gold exchange-traded-product holdings are still cash negative, meaning potential for future liquidation…net redemptions have hit 94 metric tons so far in May, with year-to-date outflows in the 55 physically backed products tracked by Barclays at 443 tons…”As we have highlighted previously, net inflows above the $1,500/oz level are the most vulnerable in the near-term; the build in holdings above that price point is sizeable but also represents the interest that is relatively new,” Barclays stated…”The minimum amount of cash negative holdings has now fallen to 109 tons; thus, in our view, prices continue to be exposed to downside risk in the near term…but once this metal is flushed out, we believe prices are more likely to stabilize”… (source: Kitco news, Allen Sykora)…

John’s 2-year weekly Gold chart, posted yesterday, offers some encouragement for Gold bulls – for the short-term at least…RSI(14) has formed a low “W” while sell pressure is weakening according to the CMF indicator…lastr Monday’s strong intra-day reversal could prove to be important but what will lift Gold out of this current trap below $1,400 is anyone’s guess…strong physical buying around the globe continues below $1,400, helping to offset the “paper” selling…central banks continue to be net buyers…according to IMF data released today, Turkey, Belarus, Azerbaijan and Greece joined Russia and Kazakhstan in adding Gold to reserves last month…as Rick Rule has stated, strong hands are central banks in frontier and Eastern markets and retail investors who are buying bullion for cash…that trend should be considered as a very bullish sign for the long-term…

Informative web site we suggest our readers take a look at:  http://www.visualcapitalist.com/what-is-the-cost-of-mining-gold

Interestingly, the Gold-to-S&P 500 Index ratio has fallen to lows not seen since 2008, according to UBS Investment Research…it’s possible the ratio could become even more extreme, if equities continue to climb over the near to short-term, but sooner or later something’s got to give…

Today’s Markets

Japan’s Nikkei average went on another wild ride overnight, falling as much as 4% before paring losses and finishing down 470 points or 2% at 14143…some investors are saying that the real economy in Japan hasn’t had time to catch up with monetary measures…China’s Shanghai Composite was up slightly overnight, gaining 5 points to close at 2293…European shares are mostly modestly higher in late trading, but volumes are light due to the U.S. holiday…trading activity in Canada will also be subdued today of course…the TSX is up 18 points through the first 20 minutes while the Venture has added 4 points to 952…

Solvista Gold Corp. (SVV, TSX-V)

A close examination of the trading in Solvista Gold Corp. (SVV, TSX-V) Tuesday through Friday last week underscores a few important facts about the current junior resource market…a) Reaction to really good news is generally slow (many investors are of course very tentative at the moment, which actually gives astute investors an unusual advantage; b) There is still an appetite for very good exploration stories and “upside” surprises;  c) There are still excellent near-term opportunities as well as terrific long-term opportunities in the current market, though one must be careful and selective; and d) Technical analysis is important, and investors are stepping up to the plate in stocks that are showing momentum…

Also, it’s unfortunate that many investors who were so active in the junior resource market just a couple of years ago aren’t even paying attention right now as money can be made if you’re selective – the strange thing is, the hordes will come rushing back at just the wrong time somewhere down the road when the market is on a roll and the risk is higher…

Many investors are followers…it’s like standing at the street corner, waiting for the pedestrian light to turn green…one pedestrian is bold and doesn’t perceive any risk and starts walking despite the red light…others follow right behind…that’s what happened with Solvista Friday as the bold jumped in, based on the fundamentals and the improving technical picture, and the rest soon started to follow…

Below is a 1-year weekly SVV chart from John after Friday’s breakout…previous resistance in the mid-40’s is now support…Solvista reported fresh drill results from its Caramanta Property in Colombia last Tuesday which included 456.7 metres of 1.4 g/t AuEq in CAD-1218, drilled within the Caramanta porphyry cluster…check out Morning Musings last Wednesday for further details and analysis…as always, perform your own due diligence…SVV climbed as high as 58 cents in early trading this morning…as of 6:50 am Pacific, it’s up 7 cents at 57 cents…note the technical resistance areas beginning around 60 cents…

GoldQuest Mining Update (GQC, TSX-V)- BMR Speaks With Bill Fisher

Last week, we spoke with GoldQuest Mining (GQC, TSX-V) Executive Chairman Bill Fisher, an interview we’ll be posting sometime this week…it was an interesting discussion, as usual, with Fisher who remains very upbeat about his company’s prospects in the Dominican Republic even though investors have knocked more than 80% off the value of GQC since its high of $2.03 last summer when the overall market was in much better shape and the early drill results from Romero showed such great promise…Romero has not turned out to be as big of a Gold-Copper find as investors were initially betting on or hoping for, but it is significant nonetheless…an initial resource estimate is expected by the 3rd or 4th quarter…in addition, GoldQuest is working on upgrading resources at La Escandalosa – 2 km to the south of Romero…the company’s financial position remains very healthy with $14.5 million in cash at the moment and a current burn rate of $600,000 per month, Fisher told us…based on Friday’s closing price of 33 cents, GQC’s market cap is approximately $48 million, leaving plenty of room for growth if another discovery is made or the markets rebound…the “Big Picture” with GoldQuest is very simple…they are exploring a large land package in a hot geological area…often it takes a lot of holes to hit the motherload…2 deposits have been uncovered but the company is still searching for the HEAT ENGINE for these systems (Romero and Escandalosa could merely be “side branches”)…buried somewhere could be a massive intrusive body that could have created all the heat and pressure to mobilize the Gold and Copper over a wide area…if and when they find it, last year’s market event – a run from a nickel to $2 a share – may look like a tea party in comparison…

It’s possible, but certainly very speculative at this point, that the heat engine GoldQuest is looking for could exist somewhere along the recently identified Guama trend, a couple of kilometres west of Romero, where drilling started last week…

“If you had the information we have today, you’d definitely drill the Guama trend first (ahead of Romero),” Fisher told BMR…not only did GoldQuest get some impressive IP readings from Guama (there’s a very big anomaly in the north end of this trend), but strong Copper mineralization is interestingly outcropping at surface there which is not the case at Romero…Copper is being picked up and taken to surface in quartz veins, and some sort of a system has to be responsible for that…

GoldQuest is also still exploring a possible link between Romero and Escandalosa…overlooked by many investors in GQC’s May 16 news release was hole LTP-135…this is important…the hole was collared 800 metres south of the centre of the Romero mineralization and 700 metres north of Escandalosa, basically right in between the two systems…it was the first deep hole in this part of the Las Tres Palmas IP chargeability geophysical trend…it was terminated in strong Gold mineralization by poor drilling conditions within a fault breccia at a depth of 445 metres, where the final 2.1-metre assay interval graded 10.6 g/t Au…GoldQuest will revisit that hole and that area…what they’re hoping is that they hit the top of a system that ultimately might link with Escandalosa…

One thing is for certain – it’s going to be an interesting summer for GoldQuest with potential for a discovery at Guama…

Iskut River – Stunning Map From B.C. Geological Survey Is Good News For Victory Ventures (VVN, TSX-V)

From the bowels of the B.C. Ministry of Mines web site, we are posting a fascinating map this morning from the B.C. Geological Survey that shows major regional fault zones in the Iskut River area…we showed this map (see below) to an independent geologist over the weekend, someone with general knowledge of the area but not connected to any of the companies currently exploring in the district, and he confirmed the significance of it…this map strengthens our confidence in the geological possibilities of Victory Ventures’ (VVN, TSX-V) Copau Property which is about to be drilled – in fact, VVN will be the first company outside of Colorado Resources (CXO, TSX-V) to drill in the Iskut River area since CXO’s discovery was announced a month ago…

Prior to this map, what we knew about Copau – based on Victory’s news – is that an IP survey carried out by the company last summer located a strong chargeability response underlying the southwestern portion of the property…the chargeability anomaly occurs from depths of approximately 200 metres with increasing response to 450 metres (similar to patterns at North ROK), which was the maximum reading depth of the IP…the present known extent of the anomaly varies between approximately 300 and 400 metres wide (east-west) and over 1,200 metres long (north-south), appearing open to both the west and south and at depth…the interpretation is that there is increasing sulphide content within a southwest-dipping body of syenite rock, possibly related to hydrothermal processes within the syenite body…rock outcrop samples containing traces of pyrite, chalcopyrite and magnetite in syenite were found during the survey work, and their locations coincide with underlying IP chargeability responses…in 2011, a ground magnetic survey located a pronounced northwest-southeast linear-trending anomaly throughout much of the claim area…the property has never been previously drilled…the B.C. Geological Survey made the initial discovery at Copau during a 1994 prospecting program as they identified what’s called the “B31” showing…

Now to the map…what it shows is major regional fault zones at Iskut River with the Copau Property positioned at the intersection of 2 of these zones…this is a zone of weakness, something mineralization often likes…there is much for geologists to still learn about these faults, and it’s true of course that not every major fault is metallogenically well-endowed…but this is the kind of set-up that can get a geologist’s (and an investor’s) heart beating very rapidly as it’s seen in other deposit situations…a significant number of deposits are directly related to movement of metal-bearing hydrothermal fluids along faults…whether these faults around Copau control a potential mineralized system there, we’re about to find out…

Indeed, there is nothing like a map to clarify the picture…note the fault structures (indicated by the lines) at and near Colorado’s discovery (Mabon and Edon) as well…the fault setting is similar in both areas…we circled the approximate Copau claim area which is almost 5 sq. km around the B31 showing…all things considered, Victory has a very legitimate chance for a discovery – at the very least, initial results that would be encouraging enough to warrant plenty of additional drilling and exploration work throughout the summer…that, of course, could translate into some very robust trading activity…VVN closed Friday at 12 cents, giving it a modest market cap of $2.5 million prior to this week’s anticipated closing of the latest financing…drilling is scheduled to commence next week…

Understanding fault structures was critical to exploration success at the Red Chris deposit 11 km the south of Copau…that massive deposit (300 million tonnes) is primarily associated with the Red stock, a monzodiorite intrusion which has quartz, sericite, ankerite, potassium feldspar and hematite alteration, and is subsequently cut by a sulphide-bearing quartz stockwork… the northeast trending South Boundary fault and the quasi-parallel East zone fault converge from the southwest, according to the latest Imperial Metals’ (III, TSX) technical report on the deposit…the Red Chris is expected to go into production next year upon completion of the Northwest Transmission Line…

Editor’s Note: We are continuing to finalize a report on the Iskut River play that will cover at least a dozen companies…due to some late information we’ve received, including the above, we now are planning to post this on Wednesday as opposed to later today…we’ll update our readers on this again tomorrow…

Updated Silver Charts

As usual, John has long-term and short-term Silver charts this morning…they both show that Silver is trying to build a base of support around $22…

Short-Term (3-Year Weekly) Silver Chart

Long-Term Silver Chart (11-Year Monthly)

Note: John and Jon both hold share positions in VVN.  Jon also holds share positions in SVV and GQC.

TSX Venture Exchange and Gold

Weekly advances on the Venture have been a rare event over the past 6 months, but the Index climbed 15 points last week to close at 948.  This puts the CDNX back above its 10-day moving average for the first time in nearly 2 weeks.  Improving Gold prices helped, along with rising enthusiasm over what’s developing in the Iskut River area and in some other select situations.  It’s still a very tentative market but we do see a glimmer of hope in John’s 1-year weekly chart below.  RSI(14) has recovered from the oversold zone and is showing increasing up momentum, buy pressure (interestingly) remains constant according to the CMF indicator, while the ADX indicator shows a weakening bearish trend.  Could it be that we’ll see a significant rally unfold in June?  This is very possible, but first the Venture must get through important resistance at 970.  A close above 970 would be very bullish, for the short-term at least.  It’s too early to tell if this market has truly bottomed out yet.  Continue to focus on a “market within a market” as all exploration deals aren’t dead.  The Iskut River play is demonstrating that, and Solvista Gold Corp. (SVV, TSX-V) is another example as it doubled last week on some excellent drill results out of Colombia.  It has momentum in its favor and could continue to move higher in the days ahead.

The Venture closed April at 966, so after 3 straight months of losses totaling 21% the Index has a chance to post a small gain for the month of May with 5 more trading sessions to go.

Gold

Gold staged a significant intra-day reversal last Monday which has given Gold bugs fresh hope that the April lows will hold.  They probably will for now given the intense physical buying below $1,400 – the question is, where will Gold be several months from now in this uncertain environment and with the primary trend still negative?

Gold purchases are getting so strong these days, buyers are willing to pay a premium, says Mineweb. The mining publication reported last week that premiums on Gold bars are climbing to all-time highs in Hong Kong and Singapore, with Chinese residents paying $5 to $6 an ounce over the spot London price due to the classic economic one-two punch of huge demand and tight supply.  According to data from the Hong Kong Census and Statistics Department, “net Gold flows from Hong Kong to China jumped to 223.519 tons in March from 97.106 tons in February, smashing a previous record of 114.372 tons in December,” stated Mineweb.

Below is a 2-year weekly chart, and what we like about – for the short-term at least – is the “W” formation in the RSI(14).  Sell pressure and the bearish trend are showing signs of weakening.  Again, like with the Venture, this points to a possible June or summer rally.

Silver collapsed below support at $22 last Monday morning but reversed strongly and closed above that level by the end of the day.  For the week, Silver was off 47 cents as it finished at $22.39.  Copper was off a penny at $3.29.  Crude Oil slipped $1.87 a barrel to $94.15 while the U.S. Dollar Index encountered resistance above 84 and closed down half a point for the week at 83.64.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been 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, has had a huge impact on bullion.  Despite its current weakness, the fundamental long-term 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, a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, money supply growth around the globe, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflation is prevailing over inflation in the world economy and this had a lot to do with Gold’s recent plunge below the technically and psychologically important $1,500 level, along with the strong performance of equities which are drawing money away from bullion.  Where and when Gold bottoms out in this cyclical correction is anyone’s guess, but we do expect new all-time highs later in the decade.  There are many reasons to believe that Gold’s long-term bull market is still intact despite a major correction from the 2011 all-time high of just above $1,900 an ounce.

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.  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 perspective (His money that we have been given stewardship of), He will bless you.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

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Gold is on track to end the week higher after an important intra-day reversal Monday...as of 7:00 am Pacific, bullion is down $2 an ounce at $1,389…Silver is off 16 cents at $22.27…Copper is flat at $3.28…Crude Oil is down $1.08 a barrel to $93.17 while the U.S. Dollar Index is at 83.56, down one-third of a point…

The SPDR Gold Trust reported late yesterday that its holdings had fallen by another 1.5 tonnes, bringing its total outflow for the week to 19.8 tonnes…the fund is on track for its largest weekly outflow since the week ending April 26…at 1,018.567 tonnes, its holdings are at their lowest in more than 4 years…

Total ETF lquidation this year now stands at 450 tonnes of gold, equivalent to mine production from all of Africa and South America during the same period…very strong physical demand is very apparent in the Gold market below $1,400…we’ll have to wait and see what the catalyst will be for Gold to push through $1,400 again and perhaps take another run at the $1,500 level…

“Gold should still be in demand as an alternative currency,” said Daniel Briesemann, a commodities analyst at Commerzbank AG in Frankfurt (source: Bloomberg, Nicholas Larkin article)…“The quantitative easing by central banks should lead to a depreciation in rates for major currencies and in the end should also lead to some inflation concerns, although this is not an issue at the moment…as long as institutional investors are selling Gold ETP holdings, this will probably outweigh robust retail demand”…

Debt Loads In Asia Piling Up – “A Host Of Land Mines Ahead” For China

An interesting article in this morning’s Wall Street Journal…debt loads in Asia’s emerging economies – gauged by public and private debt as a percentage of gross domestic product – now exceed what they were in 1997, when Asia went into a financial crisis that lasted for several years…much of the run-up has come over the last four years…the overall debt-to-GDP ratio rose to 155% in mid-2012, from 133% in 2008, according to the most recent data from McKinsey Global Institute…China, the world’s second-largest economy, has led the borrowing binge…its debt-to-GDP rose to 183% in mid-2012, from 153% in 2008, according to McKinsey…some economists say China’s debt-to-GDP ratio has risen higher and faster, to above 200%, based on government data that more fully incorporate non-traditional “shadow” lending institutions such as trust companies, which operate in parallel to the mainstream banking system…”China’s financial system is still fragile and vulnerable,” says Yu Yongding, a Chinese economist who has served as an adviser to China’s central bank…”I don’t think there will be a financial crisis at the moment, but there are a host of land mines ahead”…

Today’s Markets

Japan’s Nikkei average hit John’s Fibonacci 14000 level overnight and then violently reversed to the upside, finishing the day up 128 points to close the week at 14612…the Nikkei was ripe for a correction and it’s quite possible it was just a 2-day event with new highs coming in the near future…China’s Shanghi Composite gained 13 points to 2289…European shares are modestly lower in late trading overseas…the Dow is down 67 points through the first 30 minutes of trading in New York, while the TSX is off 10 points to 12651 where it’s supported by its 100-day moving average (SMA)…the Venture is up 3 points to 945…Solvista Gold Corp. (SVV, TSX-V), which we highlighted earlier in the week following release of impressive results from its property in Colombia, is beginning to gain traction as we anticipated it might as the news got digested by investors…a breakout could be imminent…refer to John’s chart from Wednesday…

Here’s A Rarity:  A Venture Company With Earnings Momentum

Okay, how often do you see a Venture company actually make money?…a certain model seems to be working very well for Macro Enterprises Inc. (MCR, TSX-V) which reported Q1 earnings yesterday of 40 cents per share ($9.68 million) on total revenue of $60 million vs. 21 cents per share and $41 million in revenue during the same period last year…the stock climbed 64 cents on its second-highest volume day ever to close at $3.21, a five-fold increase in just 6 months, and an insider took advantage of the jump in price and volume yesterday to sell 80,000 shares for about $250,000 according to insider trade summaries at www.TMXMoney.com…Macro is a construction and maintenance service provider to the energy and resource industries…potentially, this is a stock that ultimately could provide a dividend if earnings and cash flow continue to improve…we asked John to examine the MCR chart and here’s what he came up with…as always, perform your own due diligence…

Iskut River Play

On Monday we’ll be providing a complete overview of the Iskut River play, covering about a dozen companies including of course the leader of the pack – Colorado Resources (CXO, TSX-V), and our early pick (Victory Ventures, VVN, TSX-V) which has enjoyed a strong month of May…VVN could accelerate sharply in June as drilling commences at its Copau Property west of North ROK and immediately north of Imperial Metals‘ (III, TSX-V) Red Chris claims and deposit…

Earlier this week, we spoke with Peter Bernier of Prosper Gold (PGX.H, TSX-V), and that’s another company to watch very closely as soon it resumes trading as we’ve mentioned already…Prosper’s qualifying transaction (a deal with Firesteel Resources – FTR, TSX-V on its Copper Creek Property northwest of Telegraph Creek, about 170 km  from Colorado’s discovery) is in the review stage with the Exchange which could take another 6 weeks or so…Bernier has the same team with Prosper that he had with Richfield Ventures which of course made the huge discovery at Blackwater a few years ago and ultimately got taken over by New Gold Inc. (NGD, TSX-V), so the fact that Bernier’s team has chosen northwest B.C. for their next major project speak volumes as they reviewed many other properties elsewhere…

Doubleview Resources‘ (DBV, TSX-V) Hat Property, where high-grade Gold and copper were first discovered in prospecting in the 1960’s, is contiguous to Copper Creek, and a drill program is set to begin shortly – hence the increased activity in DBV recently…Doubleview doesn’t have the kind of technical team that Prosper is blessed with, but they’ve reviewed a lot of encouraging historical data and are confident with their drill targets…this is definitely another area to watch closely…Prosper will have everything in place to start drilling this summer, shortly after their QT is approved…

Below is a chart from John on DBV after it climbed 3 cents yesterday to close at 15 cents…

Gold Standard Ventures (GSV, TSX-V)

Gold Standard Ventures (GSV, TSX-V) appears to be on the rebound after falling from a $3 high last year to a low of 47 cents early this month…on Tuesday, GSV reported assay results from 8 drill holes at its Railroad Project in Nevada and they included a 73.5-metre interval grading 3.67 g/t Au on a 75-metre step-out, extending the high-grade zone north of the known deposit…GSV remains confident that the North Bullion deposit represents a major Carlin-style discovery that can be further demonstrated as such in the coming months…only a small portion of the 10 km strike length has been explored…GSV has 84 million shares outstanding with working capital of about $4.5 million at the end of the first quarter…it has climbed for 3 straight trading sessions, closing yesterday at 76 cents…John’s 6-month chart shows how very oversold conditions emerged during April, lasting through to early May…

Note: John and Jon both hold share positions in VVN.  Jon also holds share positions in CXO, SVV and MCR.