Gold has traded in a range between $1,364 and $1,376 so far today in advance of the Fed’s policy statement following its 2-day meeting and a Ben Bernanke news conference shortly afterward…investors will be looking for clues as to when the Fed may start scaling back its $85 billion monthly bond purchases…the meeting ends today with an 11:00 am Pacific statement and revised economic forecast, and is then followed at 11:30 a.m. with a briefing from the Fed chairman…the impact on Gold prices, at least initially, could be significant, one way or the other…after weeks of speculation about whether the Fed will or will not clarify its position on quantitative easing, traders are handicapping the outcome of the Fed meeting and are looking for more guidance on when the Fed could begin what is mostly expected to be a very gradual paring back of its monthly purchases of Treasurys and mortgage securities…in a CNBC survey, the strategists, economists and fund managers who responded expect the Fed to begin to “taper,” or pare back its asset purchases sooner than they did when asked the same question in April…the majority now see the Fed starting to reduce its bond buying this December, compared to February next year, as expected in the April survey…another wrinkle that added to market confusion yesterday was a comment from President Obama, who basically confirmed market expectations that Bernanke will leave at the end of his term in January…in an interview, Obama stated the Fed chairman “already stayed a lot longer than he wanted or he was supposed to”…what does that exactly mean, Mr. President?…
The World Gold Council’s latest research carried out in May, 2013, reveals that 82% of consumers in India and China believe that over the next 5 years the price of Gold will increase or be stable…in May, 2013, 45% of Chinese and Indian consumers said they had bought Gold in the previous 6 months…
Recent advances in biotechnology have brought a renewed focus on Silver’s centuries old history as an important medical weapon…in a news release issued yesterday, the Silver Institute observed that the medical use of Silver has helped reduce the growing threat of antibiotic-resistant germs spreading through a hospital…“Today, advances in coatings technology has enabled medical equipment producers to introduce Silver-coated instruments and hospital equipment for use in treating patient- eliminating, on contract, almost every bacterial or fungal exposure,” said Michael DiRienzo, executive director of the Silver Institute…because Silver breaks down cell walls and interferes with respiration and reproduction, bacteria have great difficulty in developing immunity to the metal, the Silver Institute noted…“Today, the need to combat antibiotic-resistant superbugs and to suppress hospital-acquired infections has increased the importance and number of uses of Silver-infused products,” the Institute observed…the ability to coat materials such as polyurethane, silicone and textile fibers with either metallic silver or ionic silver compounds now provides clinicians with efficient means of overcoming difficult wound care and device-related infections, which have long proved costly and difficult to manage in terms of hospital care…
As of 6:45 am Pacific, Gold is up $6 an ounce at $1,374…Silver has gained 8 cents to $21.77…Copper has lost 3 pennies and sits at $3.13…Crude Oil continues to rise, off its highs but up slightly to $98.52, buoyed by fears of supply disruption due to the escalating conflict in Syria…the U.S. Dollar Index has retreated one-tenth of a point to 80.57 – just above support (watch closely)…
Interesting Oil Chart
WTIC has been behaving in a surprising manner over the past couple of months…it experienced what turned out to be a short-term breakdown in April when everyone was dumping commodities like garbage…what’s happened since then is that Crude has rallied back strongly and has actually pushed above a symmetrical triangle and RSI(14) resistance on the 6-m0nth daily chart…we’ll examine a longer-term chart tomorrow to get a better understanding of what might be happening in this market…anyway, strength in Oil prices is certainly a supportive factor for Gold…
Today’s Markets
Japan’s Nikkei average soared to a 1-week high today, climbing 238 points or 1.8% or after strong export data and a fall in the yen…China’s Shanghai Index fell 15 points, however, to finish at 2143 after news reports suggested the government could impose further curbs to contain the rise in property prices…measures to tighten activity in one segment of the economy would make it difficult for the Chinese government to introduce looser monetary policy to prop up overall slowing growth…activity in China’s vast manufacturing sector may have decelerated further in June, the flash estimate of the HSBC China Purchasing Manager’s Index (PMI) is expected to show, exacerbating worries about a downturn in the world’s second largest economy…the closely-watched flash PMI survey due tomorrow could fall to as low as 48.7, according to estimates by Credit Agricole and Nomura, worse than the final reading of 49.2 in May when the index moved into contractionary territory for the first time in 7 months… European shares are generally flat in late trading overseas, ahead of today’s Fed decision…as of 6:45 am Pacific, the Dow is down 26 points…the TSX is off 24 points while the Venture has lost 1 point to 929…
Iskut River Area Visit
BMR has completed a very fruitful visit to Iskut, British Columbia, and the immediate surrounding area…the purpose of this visit was to get our boots on the ground, observe what’s happening and talk to a range of different people in order to gain a better understanding and feel for the potential of this play, and to be able to more accurately identify the companies with the best chance for success…this trip also laid the groundwork for a future visit, likely sometime in July…we’ve gathered a wealth of information that we’ll be sharing with our readers over the next couple of weeks…
Our “Big Picture” view is this: In terms of Gold-Copper exploration, we don’t see a hotter area anywhere in Canada this summer, and the likelihood of additional discoveries beyond North ROK over a distance of at least 100 km east-west and 20 km north-south has to be considered significant…the region can support intense activity, which is important, and the money that’s going to be invested in exploration throughout this large area by both juniors and majors will be incredibly impressive relative to the amount of total money that’s being raised for exploration in Canada as a whole this year…northern B.C. is truly a “hot spot” and if the overall markets cooperate, the “Colorado Area Play” as it’s being referred to has the potential to go viral this summer…regardless, even with continued softness in metal prices and a struggling Venture, there will still be excellent opportunities for investors to cash in on select opportunities besides leader Colorado Resources (CXO, TSX-V) which has huge upside possibilities given its current market cap…
A couple of important observations and tips for investors, besides the obvious importance of performing your own due diligence and understanding your own tolerance for risk…maintain a wide focus, not a narrow one restricted to just the immediate area around North ROK…as a government geologist told us last week, a “cluster” of new Copper-Gold porphyry deposits over a wide area is a very real geological possibility…in many ways, the region has been poorly mapped and under-explored…pay close attention to the Telegraph Creek area west-northwest of Iskut…the credibility and skill that Pete Bernier’s Prosper Gold (PGX.H, TSX-V) team will bring to the Copper Creek Property should take that project to a whole new level…they are going to hit the ground running and should have no problem raising large amounts of money…if there’s a deposit at Copper Creek, there’s a very high probability in our view – supported by technical information and the opinions of various geologists and prospectors we’ve spoken to – that it extends onto Garibaldi Resources‘ (GGI, TSX-V) Grizzly Property which is massive in size (17,000+ hectares) and potential…in terms of companies trading UNDER a dime in this region, GGI in our view is the smartest speculation…they hold a very strategic and prospective property, and Prosper Gold and others WILL be knocking on their door…
A growing number of companies in this regional play have acquired land positions but in some cases, just for promotional purposes…so it’s critical to separate the wheat from the chaff…do your homework and focus on companies who have the capability of making things happen on the ground…that’s one reason we like Victory Ventures (VVN, TSX-V) so much as they were the first company besides Colorado to start drilling in the general vicinity of North ROK…in additon to the fact that Victory’s Copau Property has some excellent targets and lies at the intersection of 2 major regional faults, rumor has it (from prospectors who like to talk and general “chatter” from other companies) that Victory has been busy over the past couple of months trying to expand its footprint in the region…their aim, it seems, is to be one of the exploration leaders in the region and they’ve shown the ability to raise money and quickly put a drill rig on the ground…so we’re anticipating a very busy summer for this company…VVN’s share structure is still tight (26.5 million O/S) and a lot of that stock isn’t free-trading until October…as we’ve seen with Doubleview (DBV, TSX-V), even a sniff of something in a drill hole could send VVN sharply higher…they are targeting a strong magnetic anomaly at Copau that’s comparable in size to the one Colorado is currently focusing on at North ROK…
There are of course other very interesting situations, some of which we’ve already mentioned, and some new ones we’ll be introducing in the days ahead…let’s go back to Garibaldi for a moment for a look at the stock’s technicals after we gave an initial overview of the Grizzly Property yesterday…throughout most of this year, GGI has been trading in a horizontal channel between 4.5 cents and 7 cents…intense sell pressure since last fall is quickly declining, and RSI(14) is threatening to break out above long-term resistance…fundamentally, we see big possibilities with Garibaldi and the improving technical picture supports that view…as always, perform your own due diligence…
Comstock Metals Ltd. (CSL, TSX-V)
ATAC Resources Ltd. (ATAC, TSX-V) has started its 2013 drilling and exploration program at its 100%-owned Rackla Project in the Yukon, while Comstock Metals (CSL, TSX-V) is also worth watching closely as it follows up on its promising VG Zone discovery late last summer at its QV Project…exploration at QV commenced a couple of weeks ago, a little later than anticipated due to a cold spring in the Yukon…CSL has firmed up nicely after bottoming at 9 cents during April’s Gold collapse…the company had $2.2 million in working capital at the end of March…below is a 2-year weekly chart from John after CSL climbed 3.5 cents yesterday to close at 18.5 cents, just below important technical resistance at 20 cents…Comstock will be drilling what so far has shown to be a property of considerable merit, so it has a good chance to be a winner this summer…the 50-day moving average (SMA), now at 14 cents, has reversed to the upside after being in decline since last November…keep this one on the “radar screen” for sure – it could pullback slightly toward the 50-day SMA which could be an excellent entry point…
Mega Precious Metals Inc. (MGP, TSX-V)
Mega Precious Metals (MGP, TSX-V) is a company we haven’t mentioned before but John sees some things in the chart that he likes, and fundamentally MGP has a few things going for it (check out their latest news release issued Monday)…the company’s Monument Bay Gold Project in Manitoba is estimated to contain measured and indicated resources of 2.9 million ounces of Gold averaging 1.3 g/t and additional inferred resources of 700,000 ounces averaging 0.8 g/t Au, including high-grade pit-constrained mineral resources of 2.8 million ounces at 1.4 g/t Au and inferred resources of 300,000 ounces at 1.2 g/t Au…President and CEO Glen Kuntz stated in Monday’s release, “We are also pleased that we have identified and confirmed the repeatable high-grade domains and the discovery of tungsten mineralization, which may lead to a significant byproduct credit…the inclusion of tungsten mineralization in an updated resource is expected to increase the Gold equivalent grade of the deposit, making Monument Bay one of the highest-grade open-pit deposits in Canada.“…the company continues to analyze previously unassayed mineralized core (40,000 metres), and expects to complete approximately 12,000 metres of fresh drilling this year…MGP had $4.7 million in working capital as of the end of March…
Note: John, Jon and Terry do not hold share positions in CSL or MGP. John and Jon hold share positions in VVN while Jon also holds a share position in CXO.
