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Gold has traded between $1,322 and $1,341 so far today…as of 7:05 am Pacific, bullion is down $17 an ounce at $1,326…Silver is off 71 cents at $22.02…Copper is unchanged at $3.29…Crude Oil has slid 26 cents to $96.56 while the U.S. Dollar Index has gained one-third of a point to 80.07 – rallying modestly as expected out of temporarily oversold conditions and after finding support around 79…the Dollar Index, however, is now trading within a stiff resistance band between 80 and 81, so any rally has limited upside potential and little chance of gaining serious traction in our view…this should be supportive of Gold prices…

There were no major surprises from the Fed yesterday, though it did not sound as negative on the economy as some had expected…it also removed some dovish language from its statement including comments highlighting its concern about tightening financial conditions – one reason cited for maintaining easing in September…Deutsche Bank analysts (Jim Reid and anthony Ip) probably stated it best in a research note this morning as reported by CNBC:  “Our view continues to be that the market will swing between taper fear and complacency over the coming months but that at the end of the day, they (the Fed) will under-deliver on tapering relative to expectations.”

Technically, as John’s charts have shown, Gold is facing strong resistance in the $1,360’s…physical demand needs to pick up, but that’s not evident so far given a recent decline in Shanghai premiums while official Indian demand remains constrained due to stiff measures to curb imports which has also created a Gold supply problem in that country…many jewellers are reportedly focusing on platinum-based diamond jewellery over traditional Gold and Silver jewellery this festive season…

Barrick Suspends Construction at Pascua-Lama

Barrick Gold Corp. (ABX, TSX), the world’s largest producer of the metal by sales, stated this morning it will temporarily suspend construction at its Pascua-Lama mine project on the Argentina-Chile border to conserve cash…all work will cease except for that needed for environmental protection and regulatory compliance…a decision to restart work will depend on future costs and the outlook for Gold prices, it said…Barrick also reported that 3rd quarter net income fell to 17 cents a share from 65 cents a year earlier…

Yamana Expects “Robust” Production Increases In Q4

Yamana had a strong day yesterday, rising 49 cents to close at $10.71 after reporting lower costs and increased production during Q3 for net earnings of $43.5 million or 6 cents a share…all-in sustaining costs of $730 per Gold equivalent ounce on a byproduct basis was a a 20% reduction from the 2nd quarter of this year…on a conference call, President and CEO Peter Marrone said he expected “robust” production increases in Q4…he also restated the company’s stance and philosophy during this volatile year for commodities, and sounded upbeat regarding his outlook for Gold prices…

“Preservation of margins and the generation of cash flow and pre-cash flow is at our philosophical core; we’ve been consistent with that for some time and this is an important point.  In an environment where Gold prices are rising, or there is a reasonable certainty that it will continue to rise, where there’s minimal risk of margin compression, marginal ounces should be produced, they will contribute to the generation of cash flow.  The overall objective in a certain and rising Gold price environment is to maintain increased cash flows and maximize production.”

Yamana’s improving fundamentals are supported by a healthier-looking chart…below is a 6-month daily YRI chart from John…strong support at $10.25…YRI fell as low as $10.31 in early trading today…as of 7:05 am Pacific, it’s down 30 cents at $10.41…

The TSX Gold Index is gradually climbing out of a double bottom pattern, though investor patience is critical…below is a 2.5-year weekly chart from John…the overall bearish trend continues to weaken, and RSI(14) is supported by a rising trendline…the 100-day moving average (SMA) at 181 provided support during yesterday’s volatile session – we’ll see if that repeats itself today, on a closing basis at least…as of 7:05 am Pacific, the Gold Index is indeed sitting at 181 – off 7 points…

Today’s Markets

Asian markets were moderately lower overnight…China’s Shanghai Composite declined 19 points to 2142 while Japan’s Nikkei average slipped 174 points to 14328…

European shares are mixed in late trading overseas…inflation in the euro zone fell to its lowest in almost 4 years in October, raising pressure on the European Central Bank to ease the money supply and support the region’s fragile economy at its rate decision next week…the annual rate of consumer price rises fell to 0.7% in October, the lowest since November 2009, from 1.1% in September, according to preliminary figures from Eurostat, the European Union’s statistics agency…data from individual countries this week show price growth waning in Germany and Belgium as well as in Spain, where annual inflation was just 0.1%…

In New York, the Dow is down 45 points as of 7:05 am Pacific…the TSX has lost 54 points while the Venture is down 7 points at 956…

Updated Venture Chart

The Venture is lower this morning to finish off the month, but keep in mind it’s underpinned by strong chart support around current levels…below is a look at the 3-month daily from John showing RSI(7), which had become overbought, as opposed to RSI(14) which we normally show…the EMA(20) is at 956 and the 50-day SMA is at 950 and still rising, so there’s no need to panic regarding this morning’s drop…the 970 area continues to provide resistance of course…

Quebec Mining Bill Scrapped

The socialist/separatist attack on the Quebec mining industry has thankfully been stopped, at least for now…Quebec’s mining bill has been scrapped because of a lack of opposition support, amid deepening economic concerns…the minority government’s Bill 43 died on the order paper yesterday as opposition parties opposed the minority government’s bill…the PQ is expressing frustration over that turn of events, noting that the bill was already a watered-down version of the plan it campaigned on and that it had incorporated opposition ideas…“What a great way to help the Quebec economy – blocking a bill that needed to be adopted,” Premier Pauline Marois told the legislature…

What a great way to help the Quebec economy?…how ignorant and stupid can some of these politicians be?…among other things, mining companies would have been required to pay a minimum annual tax, based on extraction amounts, and a royalty on profits ranging between 16% and 23%, at a time when the industry is already suffering…“In the mining sector there’s a movement that exists, it’s called ‘Quebec, never again,’ it’s an anti-Quebec movement around the world in reaction to its mining bill,” stated Quebec MNA Jean-Marc Fournier…

Fission Uranium (FCU, TSX-V) Updated Chart

Bargain hunters should be keeping an eye on Fission Uranium (FCU, TSX-V) which has very strong support around current levels…a support band exists between $1.01 and $1.07, while directly beneath that area there’s strong Fib. support at 96 cents…the recent weakness in FCU has come on low volume…FCU is unchanged at $1.02 through the first 35 minutes of trading…

Aldrin Resource Corp. (ALN, TSX-V)

Aldrin (ALN, TSX-V), which yesterday appointed Edward Marlow (formerly a managing director at Credit Suisse) to its board, continues to look very promising, technically and fundamentally…the company has also increased its recently announced financing to $1.5 million…

“We are thrilled to have Mr. Marlow join our board of directors,” stated ALN President and CEO Jonathan More in a news release yesterday.  “His past success with Hathor Exploration from its inception to its $654-million sale to Rio Tinto, as well as his early involvement with Alpha Minerals Inc.’s Patterson Lake project, greatly enhances the depth of our board of directors.”

Below is a 3-year weekly ALN chart from John…exceptional support exists at 11 cents…note how ALN broke above a long-term down trendline over the summer…ALN is off half a penny at 13 cents as of 7:05 am Pacific…

Note: John, Jon and Terry do not hold share positions in YRI, FCU or ALN.

Gold is pushing higher this morning in advance of a Fed statement in a few hours…as of 7:20 am Pacific, bullion is up $13 an ounce at $1,357…Silver is 50 cents higher at $23.02…Copper has surged 4 cents to $3.30…Crude Oil is off $1.02 at $97.17 while the U.S. Dollar Index has slid one-tenth of a point to 79.52…

Mineweb’s Lawrence Williams pointed out this morning that the latest Societe Generale GFMS Global hedge book analysis, covering the 2nd quarter of this year, shows that the global Gold miners’ hedge book continues to fall – by 16 tonnes over the quarter…while the period being covered obviously pre-dates a recommendation by Goldman Sachs that producers should hedge their output, the consultancy also comments that it sees only limited evidence of any new hedging activity subsequent to the end of the 2nd quarter with producers instead seeking to protect margins through cost-containment measures…

Today’s Markets

The Dow and S&P 500 have both hit new record highs in early trading today…as of 7:20 am Pacific, the Dow is up 5 points…U.S. job growth faltered in October, with the private sector adding just 130,000 new positions, according to the latest report from ADP and Moody’s Analytics…economists expected ADP to show private business created 150,000 new jobs in October, down from 166,000 in September…almost all the new jobs were in services which added 107,000 positions…meanwhile, the delayed CPI for September had inflation up a benign 0.2%…the Fed will likely see no reason to begin scaling back its bond purchases anytime soon…its 2-day meeting ends later this morning with its usual statement around 11:00 am Pacific…the central bank is expected to maintain its $85-billion-a-month bond-purchasing program until April 2014, according to the latest CNBC survey  of economists, strategists and money managers…

The TSX is down 15 points through the first 50 minutes of trading while the Venture is up a point at 969…

Asian markets were higher overnight with China’s Shanghai Composite rebounding 32 points to close at 2160 after hitting an 8-week low yesterday…Japan’s Nikkei average climbed 176 points to finish at 14502…European shares were up modestly today…

Sheslay Trend Expands Significantly

In early 2010, following its initial reported discovery, Richfield Ventures rocketed to more than $2 a share…by mid-year, though, the stock had tanked by about 60% as it briefly fell below $1 a share…at BMR, we stuck with the story – despite impatient and cranky investors at times – because the geology at Blackwater made sense and the people behind the company knew what they were doing…and we’re glad we stuck with the story because Richfield ultimately increased by 10-fold by the spring of the following year thanks to the confirmation of a multi-million ounce Gold deposit followed by a $550 million takeover by New Gold Inc. (NGD, TSX)…the same Richfield team is now at the helm of Prosper Gold (PGX, TSX-V), and history could every easily repeat itself…many investors were kicking themselves for not scooping up Richfield for a paltry $1 when weakness in the stock gave them that opportunity…you make money in the market by buying into weakness when the company fundamentals are solid…and Prosper’s fundamentals are solid as a rock…

Prosper took a 30% haircut yesterday in a silly sell-off that was likely triggered, we believe, by some shareholders who decided it was an ideal time to lock in profits on some 6-cent seed stock… most of that cheap stock had been cleaned up in the market, but obviously not all of it…some panicky shareholders who didn’t have enough time to absorb the news release (it came out just before the opening bell) and thought the results for some reason must have been poor due to the market’s reaction, also hit the sell button which compounded the problem…so PGX opened 13 cents lower at 48 cents and dipped as low as 37.5 cents intra-day before stabilizing…it closed the session at 41.5 cents…

With porphyry systems in the prolific Stikine Arch, you don’t see the consistency and the quality of grades and intersections like the Sheslay is producing without a major deposit or a producing mine…what many investors may also have overlooked is the fact that extensive airborne and IP surveys carried out by Prosper, in addition to regional soil sampling, have more than doubled the potential mineralized footprint of the Star target…based on historical geophysical, geochemical and drill data, the Star target was believed to cover an approximate 700 m x 500 m area as reported by Prosper over the summer…that has now expanded to 1500 m x 1500 m based on yesterday’s news…

“Drill holes S024 to S029 cover an area of approximately 300 metres by 300 metres of the Star porphyry body,” Prosper reported.  “They confirm consistency of grade for all 6 drill holes. Mineralization is open for extension in all directions. DDH S027 shows the mineralized system is deep rooted with depth potential to at least 598 metres from surface.  Based on historical drill results, new geophysical chargeability and magnetic data, and soil geochemistry and highly mineralized trenches 500 metres to the south, less than 20% of the Star Copper-Gold porphyry body has been drill tested to date.”

What’s more, Prosper is now saying that the North Star and East Star targets (approximately 800 metres to the northeast and the east, respectively, “appear to have similar size potential to the main Star porphyry discovery, with similar associated geophysical and anomalous geochemical signatures”…the North Star and East Star have never been drill-tested…there’s a growing likelihood that these 3 targets (Star, North Star, East Star) could link up…if the grades and intersections are roughly the same, Prosper will have a world class deposit on its hands…

Prosper has greatly expanded its knowledge of the Sheslay system with all the work it has completed in recent months beyond the 6 drill holes that were completed at the advanced Star target over an area 300 m x 300 m…

In short, this is shaping up to be exactly the kind of massive system that Dr. Dirk Tempelman-Kluit, one of the brightest geologists in the country, envisioned when he carefully weighed this property against the 150 or so other properties he and Pete Bernier investigated…we’re sure Tempelman-Kluit will emphasize this when he makes a major presentation on the property before investors, brokers and analysts next Tuesday in the Discovery Centre of the Geological Survey of Canada office in downtown Vancouver…

When drilling a porphyry system, it’s never easy to stay in mineralization (Colorado Resources – CXO, TSX-V – is a great example)…and that’s one of the other amazing things about the Sheslay…the 29 holes drilled at the Star target so far, including 23 historical holes, have shown remarkable grade and width consistency…

Below is a recap of the 6 holes drilled by Prosper this year…no “glory holes” here, which hurt the stock yesterday, but these are nonetheless the type of grades and intersections that help build an economic deposit…the numbers compare very favorably with other major Cu-Au porphyry deposits in the Stikine Arch…

Prosper’s challenge now is not only to tell the Sheslay story effectively, but to keep investors engaged over the next several months before drilling resumes at the property in the spring…on that note, President and CEO Pete Bernier stated in yesterday’s news release that the company intends to “expand on its current project base with a focus in North and South America”…we take that to mean Prosper may have a 2nd property lined up that they intend to work on over the winter…

With a market cap of just $10 million, a lead project (Sheslay) that’s showing every indication of becoming B.C.’s next major Cu-Au porphyry deposit, and a top-notch management and geological team with a proven track record of success, we can’t help but think Prosper is one of the most attractive opportunities on the Venture at the moment for investors who are serious about building wealth over the next 12 months…Prosper could easily command a market cap in excess of $100 million by this time next year through an aggressive 2014 drill program that links the Star with 1 or 2 more of the other porphyry targets with similar grades and intersections as drilled to date…in the southwest corner of the Sheslay, the Pyrrhotite Creek Porphyry appears to be a 2nd distinct major system connected with Garibaldi Resources’ (GGI, TSX-V) Grizzly Property…the Grizzly itself has big scale possibilities with multiple targets already outlined over a distance of 15 km from Grizzly West to Grizzly Central…

Speaking of Garibaldi, we’ll have more on GGI later this week…it fell in sympathy with PGX yesterday…if PGX went down in part because some investors were concerned about a potential lack of activity on the ground over the next few months from PGX, they needn’t worry about that with regard to GGI…Garibaldi has been busy in northwest B.C., but they’re also ready to ramp up drilling in Mexico where the company has some exceptional targets and is even generating monthly royalty income from a pilot program at the Tonichi Project…given all of its pillars of strength, the outlook for GGI is as positive as ever with a very modest market cap just slightly above the company’s working capital position…

Probe Mines Ltd. (PRB, TSX-V) Updated Chart

Here’s another story we’ve stuck with for many months, and it’s paying off…Probe Mines‘ (PRB, TSX-V) Borden Lake deposit in northern Ontario is looking exceptionally good as the company continues to expand a high-grade zone to the southeast of the original lower-grade, bulk tonnage deposit…PRB has consistently out-performed Gold since the spring, and its 50-day moving average (SMA) – currently at $2.16 – has been providing consistent support since the early summer…a confirmed breakout through resistance at $2.20 should set PRB up for a run toward John’s Fib. target…as always, perform your own due diligence…as of 7:20 am Pacific, PRB is off a penny at $2.20…

GoldQuest Mining Corp. (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) enjoyed a strong day yesterday following release of its maiden NI-43-101 resource estimate for its Romero and Romero South deposits in the Dominican Republic…like with PGX, patient investors could be rewarded handsomely with GQC over the course of the next year…there is certainly excellent potential for additional mineralization between the 2 bodies based on limited drilling and favorable geophysical data…GQC will be examining the economics and technical aspects of mining at both deposits as well as testing the mineral potential adjacent to the resources outlined at Romero and Romero South…

Technically, GQC has strong support in the high 20’s and considerable resistance in the upper 30’s…it climbed 8 cents yesterday on total volume (all exchanges) of 1.8 million shares, the best single-day volume in several months…as of 7:20 am Pacific, GQC is off a penny at 35 cents…

B2Gold Corp. (BTO, TSX)

B2Gold (BTO, TSX), a rapidly growing intermediate Gold producer, appears to have picked up a valuable asset for cheap in its proposed all-share friendly takeover of Volta Resources Inc. (VTR, TSX) announced Monday…cash-rich BTO appears to be on the rebound, technically and fundamentally, after touching a 2+ year low of $1.87 in late June…BTO has a chance to accelerate quickly if it can overcome resistance around $2.80 as shown in John’s 3-year weekly chart…BTO is up a nickel at $2.77 through the first 50 minutes of trading…

Radius Gold Inc. (RDU, TSX-V)

Radius Gold, which holds a large share position in BTO, is looking a lot better after breaking above a long-term down trendline over the summer…since then, the down trendline has provided support along with the now-rising 100-day moving average (SMA) which is currently at 11 cents…earlier this month, RDU announced the start of a drill program at its Santa Brigida epithermal silver-Gold Property in Mexico (an initial 8-hole, 1,500 m program)…as of 7:20 am Pacific, RDU is up a penny at 12 cents…

Note: Both John and Jon hold share positions in PGX and GGI.

Gold has traded between $1,340 and $1,358 so far today, hitting a 5-week overnight as the 2-day FOMC meeting begins later today…as of 8:40 am Pacific, Gold is down $6 an ounce at $1,347…Silver is up a nickel at $22.56…Copper has gained 2 pennies to $3.27…Crude Oil is 47 cents lower at $98.20 while the U.S. Dollar Index is up slightly at 79.39…

Macquarie Commodities Research reports that retail sales in China of Gold and Silver jewelry during September were 21.9 billion yuan, according to data released by the National Bureau of Statistics (NBS) last Friday…this was 18% higher year-on-year, but still shy of August’s record, reflecting a seasonally weak period…implied Shanghai Gold Exchange volume suggests sales of about 68 tons of Gold, 44% higher than a year ago…

In a dramatic shift, the CNBC October Fed Survey finds Wall Street expecting the Federal Reserve to maintain its $85 billion level of monthly asset purchases until April, 2014…that’s 5 months ahead of the average in the last survey…what’s more, the 40 respondents – economists, strategists and money managers – see the Fed buying about $650 billion of assets next year, up from $381 billion in the September survey…with Fed tapering apparently off the table for at least several months – perhaps longer – this should keep the greenback under pressure and provide a tailwind for Gold to move up…this past spring, it was the prospect of Fed tapering by September at the latest that drove Gold below critical support around $1,500…

October’s Unusual Gold Trades

The above chart is from Reuters’ Frank Tang…as Frank Holmes reported in his weekly Investor Alert at www.usfunds.com over the weekend, Mineweb contributor Lawrence Williams studied this month’s unusual Gold trades on the futures markets which started to occur with increased frequency…the chart above shows the number of contracts traded daily and the corresponding movement in the Gold price…what are visible are massive trading volumes every day of over 5,000 contracts, all around the same time…on October 1, as well as on October 10, there were huge trades of over 20,000 contracts…this amount represents well over 2 million ounces, or around $2.6 billion…as Holmes pointed out, “It’s safe to say nobody has that amount of physical Gold, apart from the big central banks, so these trades are being done by entities trading Gold they do NOT have in a manner designed primarily to trigger stop loss orders…however, someone with enormously deep pockets does have to be there in order to support these massive trades – the risks could be huge if the market turns against them…obviously the “big bad banks” haven’t learned anything in regards to the risk of failure due to this speculation.”

U.S. Dollar Index Updated Chart

The U.S. Dollar Index broke below a long-term up trendline in September on this 2.5-year weekly chart – clearly a bearish development – and this also implied a near-term test of strong support at 79 which has occurred…RSI(14) is also now at previous support, so it’s reasonable to expect a bounce in the Dollar Index and that’s what we’re beginning to see today…it will meet stiff resistance, however, between 80 and 81…

Prosper Gold (PGX, TSX-V) Under Pressure After Sheslay Results

Nervous nellies started dumping Prosper Gold (PGX, TSX-V) at the open this morning following release of the 4th, 5th and 6th holes drilled by PGX at the Sheslay Property…no “glory hole”, which many were hoping for, but rest assured – these results confirm a robust system at the Sheslay, and the grades and intersections fully support the deposit model that Dr. Dirk Tempelman-Kluit will be speaking about next Tuesday in the Discovery Center of the Geological Survey of Canada in Vancouver…in total, nearly 30 holes have been drilled at the Star target (23 historically, 6 by Prosper), and each and every hole has delivered results that compare favorably in terms of grade and widths to other major deposits in the Stikine Arch…the Sheslay holes have also shown remarkably consistent Copper-Gold ratios…only a small portion (20%) of the Star target has been drilled, and of course there are several other Cu-Au porphyry targets at the Sheslay that have yet to be drill-tested…in addition, of course, Prosper has completed extensive airborne and IP surveys in addition to regional soil sampling throughout the land package and results of that should provide valuable insight as far as the “big picture” is concerned…nothing has changed with regard to the highly prospective nature of the Sheslay, and short-term traders who can’t look beyond the next 24 hours are simply delivering stock from weak hands into strong hands…

We’ll review these results more extensively tomorrow…hole #4 (S027) intersected 334 metres from near-surface (7 to 341 metres depth) grading 0.35% Cu and 0.11 g/t Au, and also included a 72-metre intersection of 0.27% Cu and 0.10 g/t Au from 504 to 576 metres – confirming the existence of mineralization at deeper levels at the Sheslay…this will have to be investigated more…we were hoping to see some significant higher-grade sections below 400 metres…hole #5 returned 144 metres grading 0.45% Cu and 0.26 g/t Au, while hole #6 intersected 0.34% Cu and 0.21 g/t Au over 252 metres…again, very respectable results – the kind that help produce significant deposits, and that any geologist would be very happy with…unfortunately, even very good results are often not good enough in the current market environment to drive momentum in a stock…the market, understandably, wants a company to exceed expectations…

PGX is down 23 cents at 38 cents as of 8:40 am Pacific…there’s every reason to believe PGX will rebound as the week progresses and investors have a chance to think through these results a little more…

GoldQuest Releases Resource Estimate For Romero & Romero South

GoldQuest Mining (GQC, TSX-V) released a NI-43-101 resource estimate this morning for its Romero and Romero South deposits in the Dominican Republic (Romero South is formerly Escandalosa, 950 metres south of Romero)…total combined indicated resources are 2.4 million ounces AuEq (19.4 million tonnes grading 2.63 g/t Au, 3.7 g/t Ag, 0.63% Cu and 0.29% Zn)…total inferred resources are 790,000 ounces AuEq at 1.64 g/t Au, 3.8 g/t Ag, 0.36% Cu and 0.42% Zn…

“High grade, long drill hole intersections from the Romero Project have translated into a high quality resource statement within 17 months of the Romero discovery,” commented Julio Espaillat, Goldquest’s CEO. “At a $150 net smelter return cut-off Romero includes a coherent high-grade indicated core of 6.23 million tonnes grading 6.9 g/t Gold equivalent, containing 1,386,000 ounces of Gold equivalent, which also encourages us to consider commencing early economic studies to advance the project towards a mining decision.”

The core of the Romero deposit in the indicated resource appears to have favorable geometry for large tonnage underground mining…Micon International Ltd. selected a NSR cut-off of $60 as an estimate of what might be a reasonable marginal cost of extraction at Romero…

Gold Standard Ventures Corp. (GSV, TSX-V) Update

Gold Standard Ventures (GSV, TSX-V) is making progress with its Railroad Project in Nevada with the stock doubling over a 1-month period from its September 12 low of 51 cents to its October 10 intra-day high of $1.04…the stock then retreated to 77 cents, just above strong support, and has since rebounded to 92 cents, yesterday’s close…

GSV faces a stiff resistance band between 96 cents and $1.20…higher volume and increasing buy pressure will be required to push through this area…higher Gold prices and a good run by the Venture of course would also help…

Madalena Energy Inc. (MVN, TSX-V) Update

Madalena Energy (MVN, TSX-V) is very active with a large land base of over 150 net sections (100,000+ net acres) in the Paddle River area of west-central Alberta with increasing production and reserves on 3 horizontal plays…the company also has very attractive assets in Argentina where it’s focused on the multi-billion barrel potential of 3 large blocks within the “sweet spot” of Argentina’s prolific Neuquen basin…

Technically, MVN has been looking very strong over the past couple of months which is why we’ve been featuring it quite often…yesterday, it broke above a cup-with-handle breakout target as shown in John’s 2.5-year weekly chart…the next Fib. level is 68 cents…

Contact Exploration Inc. (CEX, TSX-V) Update

Another energy play that makes sense to us at the moment is Contact Exploration (CEX, TSX-V) which got a boost recently after successfully completing and testing its 4th Montney well in Alberta which has expanded the scope of magnitude of the company’s Eask Kakwa Project…

CEX is now at the top end of a horizontal channel, and the question is whether or not it can break above that channel in the near future…we believe it’s in a good position to attempt a breakout (note John’s Fib. level)…CEX closed at 27 cents yesterday…

Note: John and Jon both hold share positions in PGX.

Gold has traded between $1,346, just above its 50-day moving average (SMA), and $1,354 so far today…as of 4:30 am Pacific, the yellow metal is down $2 an ounce at $1,351…Silver is off 11 cents at $22.49…Copper is flat at $3.26…Crude Oil is 17 cents lower at $97.68 while the U.S. Dollar Index is unchanged at 79.22…

There are signs of improving investor demand for Gold, but stronger buying is needed from the physical market, according to Barclays in a report carried by Kitco this morning…the number of open Comex positions has increased with the price and is now at the highest level since mid-August, implying fresh longs, the bank says…“The (recent) price increase is being carried by investor interest, and weaker-than-expected macro data has scope to bring on board greater investment buying, but prices lack support from the physical market for sustained gains, in our view”…

Credit Suisse precious metals analysts led by Tom Kendall said in a report last week that the macro environment has not shifted enough for Gold to challenge its late-August high above $1,400, though UBS commodity analysts disagreed…“The shutdown showdown and the short-term punt of the budget fight to early 2014 delays in our view the Fed taper from December 2013 to March 2014,” said UBS’ Dominic Schnider and Giovanni Staunovo…taper delays will fuel “weakness in the U.S. dollar and the subsequent strength in the Gold price could run further in the coming weeks,” they said, adding that if the euro tested $1.40 against the dollar, that “would facilitate a Gold price move above $1,400“…

The euro and Gold have been moving together recently, while the dollar is now trading at a 2-year low ($1.38) vs. the single European currency…

Yukon Dan And Gold Fever In The Classroom

The work that Yukon Dan is doing in the classrooms of British Columbia (and elsewhere across the country) has drawn the much-deserved support of New Gold Inc. (NGD, TSX), Teck Resources Ltd. (TCK, TSX) and AME BC (Association for Mineral Exploration British Columbia), and BMR is also doing everything it can to assist this very worthwhile project…last week, we were with Yukon Dan as he conducted 2 terrific presentations for Grade 4/5 students at a school in Richmond, B.C. – we’ll have much more on that this week including a short video clip of Dan in action…what he’s doing from the elementary to high school levels is hugely supportive of the mining industry…

High Gold Premiums In India

Gold buyers in India are paying big margins over the international price, with choked-up supplies and a fast approaching key festival season to blame…wholesale buyers such as jewelers are reportedly paying up to $150 a troy ounce over the international price, excluding taxes, local traders are saying, compared with about $3 a year ago and $50 a couple of weeks ago…

India, which imports almost all of the Gold it consumes, levies a 10% import tax, increasing costs further for local buyers…add to that the sales tax and value-added tax, and Gold was selling at 32,000 rupees ($520) per 10 grams, or $1,617 an ounce, Friday, up about 6% in October…

The premium that Indian buyers pay is expected to widen further over the next few days, according to traders…some added that Gold smuggling is likely to increase due to the festival season demand-supply gap…

Demand peaks around Diwali – the festival of lights, celebrated this year on Nov. 4 – because of a Hindu belief that buying Gold during the period brings good luck…demand usually remains strong through December as the wedding season follows the festival period…

Today’s Markets

Japan’s Nikkei average enjoyed a strong rebound today from a two-and-a-half week low on Friday…the Index shot up 308 points or 2.19% overnight to close at 14396…

China’s Shanghai Composite stabilized and finished 1 point higher overnight after a drop of more than 2% last week…the Index is up 15% from this year’s low in late June but still down 6% for the year…

Data over the weekend showed an 18.4% annual jump in profits for Chinese industrial firms in September, but that figure was below the 24.2% jump seen in August…the recent launch of a free-trade zone in Shanghai and expectations for economic overhauls at a Communist Party meeting next month are providing encouragement that China will continue with much-needed structural reforms to re-balance its economy…the changes next month are expected to include greater access to the economy for private and foreign investors, further economic deregulation and moves to allow increased mobility of the population…

European shares are mixed in late trading overseas…in New York, meanwhile, stock index futures are pointing toward a modestly higher open on Wall Street…

The TSX closed at 13399 Friday while the Venture finished at 974…we’d like to see the Venture move with some conviction (like a 10-point gain) on higher volume to confirm a breakout above the important 970 resistance level…at the moment, 955 is the new support after the confirmed breakout above that level…

Sheslay Cu-Au Porphyry Project Presentation At Discovery Center – Geological Survey Of Canada

Prosper Gold Corp. (PGX, TSX-V) Update

The fact that Dr. Dirk Tempelman-Kluit will be giving a major presentation on the Sheslay Project a week from tomorrow (Tues., Nov. 5th) at the Geological Survey of Canada Discovery Center in downtown Vancouver should be considered a strong indication, in our view, that the pieces of the Sheslay puzzle are coming together very nicely…drill results from holes 4, 5 and 6 (S027 through S029) are expected shortly, and any 1 of those could prove to be a major game-changer as they were each drilled to depths never previously tested at the Sheslay…hole 4, in particular, could grab the attention of the market as it intersected mineralization from the surface to the bottom of the hole at 598 metres…

Prosper Gold (PGX, TSX-V) carried out an extensive Phase 1 exploration program at the Sheslay which included 2,300 metres of drilling in 6 holes, IP and airborne surveys, and soil geochem grid sampling over a wide area…what’s going to emerge out of this, we believe, is a much greater understanding in the minds of investors of the scale and potential of this project…all of the geological evidence so far is pointing toward a deposit or series of deposits consistent with others in the Stikine Arch…with a current market cap of just $13.75 million, based on Friday’s closing price of 55 cents, that means PGX is trading at a huge discount to the value equation that’s emerging on the ground given historical drill data and results to date from Prosper…the Sheslay is a robust hydrothermal system with a minimum of 5 known Cu-Au porphyry targets, some of which could link together…

PGX Updated Chart

We can’t stress enough to investors how important share structure is…that’s 1 more reason we’re so bullish with regard to both Prosper Gold and Garibaldi Resources (GGI, TSX-V), the largest landholder among junior companies in the Sheslay Valley…

PGX has just 25 million shares outstanding with two-thirds of that total locked up from trading due to the 4-month hold on the August financing and escrow provisions…with only 9 million free-trading shares at the moment – most of which are believed to be in very tight hands – one doesn’t have to be a mathematician to figure out the potential impact of a sudden surge in demand for PGX stock in this kind of a limited supply situation…if Prosper delivers a stellar hole, the share structure set-up is extremely bullish…

Technically, PGX is in an ideal position for a substantial move higher given the RSI(14) condition and the bullish SS crossover…the stock closed above resistance at 50 cents Friday…

Garibaldi Resources (GGI, TSX-V) Updated Chart

Garibaldi Resources (GGI, TSX-V) showed increased volume Friday as it touched its highest level (14.5 cents) in 2 months, a bullish sign…GGI is benefiting from an effective 1-2 punch on the exploration side, focusing on the highly prospective northwest portion of the Grizzly Property – contiguous to Pyrrhotite Creek and the rest of the Sheslay – while also advancing its assets in Mexico where GGI will be drilling throughout the winter…historical reports show a striking similarity in alteration and mineralization styles between the northwest part of the Grizzly and the Sheslay, and preliminary results from an airborne survey carried out by GGI last month confirm that the rock units and structures underlying the Grizzly extend onto the Sheslay…more news from the Grizzly and Mexico is expected very soon…

GGI is also benefiting from a healthy share structure…many Venture companies have blown up their share structures over the past couple of years because of their need to raise money just to survive…GGI hasn’t had to carry out a financing since early 2009, keeping its outstanding share count to 58 million with no warrants…the company is also currently generating modest monthly cash flow out of operations in Mexico, income that could increase significantly over the next couple of years…

John’s 4-month daily GGI chart shows increasing buying pressure and the growing likelihood of a near-term breakout above the horizontal channel toward the next Fib. target (24 cents)…

Arianne Phosphate Inc. (DAN, TSX-V) Update

Arianne Phosphate (DAN, TSX-V) enjoyed a strong day Friday, gaining 19 cents to close at $1.44 after releasing very positive results from a feasibility study on its Lac a Paul Phosphate Project in Quebec…DAN has positioned itself well, we believe, for a possible takeover by a company that could put this project into production…

The feasibility study shows an internal rate of return of 20.7% with a capital payback of 4.4 years before taxes and mining duties…the estimated mine life is 25.75 years with average annual phosphate concentrate production of 3 million tonnes grading 37.6% phosphorus pentoxide and an average mill recovery of 90%…importantly, the all-in cost on board the ship in the Port of Saguenay is estimated at $93.70 per tonne life of mine, yielding an operating margin of 56% with an average selling price of $213 per tonne at the port…those are robust numbers, and the stock responded well Friday with a sharp gain on its best volume in more than 2 years…

Since November, 2011, DAN has traded in a horizontal channel between 81 cents and $1.47…it could be ready now for a breakout above the $1.47 resistance…below is a 3-year weekly chart from John…

Azincourt Uranium Inc. (AAZ, TSX-V) Update

Azincourt Uranium (AAZ, TSX-V) continues to look strong and may soon once again challenge resistance at 33 cents…if you’ve been following AAZ, a simple money-making trading strategy has been to accumulate near the bottom of the horizontal channel and sell near resistance…at some point we do expect AAZ to bust through that resistance level (see John’s Fib. target in the 15-month weekly chart below) as this is a strong story and a hot area play…a 2,500- to 3,000-metre diamond drill program is planned for this winter on existing and some newly generated targets in the central and southern PLN project area…

Updated Silver Charts

Short-Term Chart – 6-Month Daily

Strong support from $21.40 (Fib. 38.2%)…Silver appears to have lost a little bit of momentum, short-term, but we’ll see if that changes this week…a couple of closes above $23 would be very bullish…

Long-Term Chart- 13-Year Monthly

The long-term chart is interesting and shows the possibility of a powerful move higher after a bottoming out around $18 an ounce…

Note: John and Jon both hold share positions in PGX and GGI.

TSX Venture Exchange and Gold

The Venture enjoyed another strong week, pushing decisively through resistance at 955 on increased volume as it gained 23 points to finish at 974, a 6-month high.  This 2.4% advance compared favorably with the TSX (up 2%), the Dow (up 1.5%) and the Nasdaq (up less than 1%), though Gold (up 2.7%) slightly out-performed the Venture while the TSX Gold Index climbed a whopping 10.6%.

After several previous unsuccessful attempts, the Venture’s breakout through 955 is very encouraging.  The Index also broke above a down trendline on a long-term weekly chart.  The 100-day moving average (SMA) is also now reversing to the upside, another very positive development.  However, we’re still looking for the Index to show some conviction on a move through resistance at 970. Friday’s action was unconvincing in that regard.  The Index was in slightly negative territory for most of the trading session before closing near its high of the day at 973.58, up a point from Thursday.  Friday’s volume was also just marginally higher than Thursday’s.  Patience is a virtue.  The next few trading days should be interesting as the month draws to a close.  Two things to watch for that could trigger that “decisive” move investors would like to see – even higher Gold prices (a breakout through the $1,360’s, for example) and/or a stellar drill hole from somewhere that generates a rush of fresh enthusiasm and confidence into these juniors.

Below is a 3-month daily Venture chart from John.  Buy pressure is increasing – a positive sign.  At the moment, 955 is now strong new support.

The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks

There’s no better cure for low prices than low prices.  The great benefit of the collapse in Gold prices this year is that it forced producers (at least most of them) to start to become much more lean and mean in terms of their cost structures.  Among many others, Barrick Gold (ABX, TSX), the world’s largest producer, said it may sell, close or curb output at 12 mines from Peru to Papua New Guinea where costs are higher.  Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their operating structures.  Exploration budgets among both producers and juniors have also been cut sharply.  In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists.  Ultimately, all these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, a recent Mineweb study showed that grades have indeed fallen significantly just over the past decade.  For instance, grades in the South African Gold sector fell from an average of 4.3 grams per metric ton in 2002 to an average of 2.8 grams per metric ton in 2011.  It doesn’t take a rocket scientist to figure out that the next huge bull market in Gold stocks is just around the corner due to demand-supply dynamics, much leaner producers who will suddenly become earnings machines, and a junior market that will be healthier simply because a lot of the “lifestyle” companies sucking money out of investors will simply disappear or get taken over by individuals or groups who are actually competent and serious about building shareholder value.   A healthy “cleansing” in the market has been taking place.  As this continues, more and more seeds are being planted for an incredible future move in well-managed Gold producers and explorers that could make the dotcom bubble look like a tea party.  As for the juniors, focus on the small universe of companies that have the ability to execute both on the ground and in the market – companies that have the cash, the expertise, the properties and the drive to make discoveries that majors will buy.

Gold

After a $44 advance the previous week, Gold shot up another $36 an ounce this week to close Friday at $1,353.  Looking ahead to the coming week, bullion will need a catalyst to push through chart resistance in the $1,360’s or it will consolidate its recent gains with support extending from the $1,320 level.

The CMF indicator shows that a 1-month period of sell pressure has been replaced by weak buy pressure.  Importantly, there has also been a bullish +DI/-DI crossover – the last time this occurred was in early August.  RSI(14) on the 3-month chart is at 60%, so Gold still has room to move higher in the immediate future before getting into overbought territory.  So right now, Gold is caught between support and resistance.  A decisive move through the $1,360’s would certainly trigger fresh buying.  Due to the recent partial U.S. government shutdown, we don’t have the advantage of examining up-to-date COT reports for a look at what the commercial traders in particular have been doing recently with regard to their Gold positions.  The Commodity Futures Trading Commission says it will catch up on those delayed reports by the week of November 4.

The Federal Reserve meets this coming week (Tuesday and Wednesday) and is widely expected to continue the current pace of its bond-buying program, but the Fed’s tone and language will be gauged carefully by the market.

Below is a 3-month daily Gold chart from John.

Silver gained 64 cents last week to close at $22.60 (John will have updated Silver charts Monday).  Copper fell a penny to $3.26.  Crude Oil lost $3 a barrel to close at $97.85 while the U.S. Dollar Index continues to be under pressure.  It fell by more than one-third of a point to close at 79.21.

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 this year’s drop, 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 $3.5 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 (especially from China), emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflationary concerns around the globe and the prospect of Fed tapering by the end of the year (not likely now) had a lot to do with Gold’s plunge during the spring below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew money away from bullion.  June’s low of $1,179 may have been the bottom for bullion – time will tell.  We do, however, expect new all-time highs as the decade progresses.  There are many reasons to believe that Gold’s long-term bull market is still intact despite this 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 4 years and strictly through word-of-mouth we have built a loyal following.

We’re continuing with our plans to ultimately construct a very unique investment and money-management resource site that goes considerably beyond what we have now.  We focus a great deal on the Gold, Silver and Copper markets as well as trends in the global economy, in addition of course to the technical health of the TSX Venture Exchange (CDNX).  An important component of this site, as well, will always be original research on high quality junior exploration companies or small producers 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, and we are being more selective than ever in the current market environment.  We look for companies with the ability to execute both on the ground and in the market, who are determined to build shareholder value, which actually excludes most Venture stocks.  However, investors must understand that the companies we do put forward for our readers’ due diligence are still highly speculative situations and entail considerable risk, volatility and unpredictability.

Our intent is to provide you with information that you can use as part of your own due diligence.  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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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 is strengthening after dropping as low as $1,336 overnight…as of 7:30 am Pacific, bullion is unchanged at $1,347…it hit a 4-week high yesterday…Silver is off 27 cents at $22.46…Copper is down 2 pennies at $3.23…Crude Oil has gained 49 cents to $97.60 while the U.S. Dollar Index is flat at 79.20…

Interesting article by David Franklin, market strategist for Sprott Assett Management, at www.GoldInvestingNews.com yesterday afternoon…Franklin investigated Gold inflows into China this year and has found a direct link between China’s physical Gold deliveries and the drop in Gold inventories within the COMEX and GLD ETF…physical Gold, according to Franklin, was redeemed out of the largest ETF’s, shipped to Switzerland from the UK for vaulting or refining purposes with a significant portion then sent to Hong Kong for Chinese consumption (UK Gold exports to Switzerland jumped more than 10-fold in the first 8 months of this year compared to 2012)…the 2 largest Gold exporters to Hong Kong in 2013 have been Switzerland and the United States…earlier this year, Sprott calculated that one-third of China’s import growth has been driven soley by its citizens’ desire to own Gold and not from a growing domestic economy…recorded demand for Gold from China’s private sector has escalated to the point where it now accounts for significantly more than the rest of the world’s mine production…the Shanghai Gold Exchange, in the first 8 months of this year, delivered 1,730 tonnes into private hands (an annualized rate of 2,600 tonnes)…excluding China, the world mines an estimated 2,300 tonnes per year…“How this massive movement in Gold can coincide with a Gold price drop of $359 U.S. per ounce so far in 2013 is beyond our capability to explain. But it does mean that China is now the undisputed destination for physical Gold and that this trend shows no signs of slowing down,” Franklin concluded…

Global Exploration Declines Nearly 30% In 2013

The worldwide budget for nonferrous metals exploration in 2013 was $15.2 billion, a 29% drop from the 2012 level, according to a metals research group as reported by Kitco (nonferrous includes precious and base metals, diamonds, uranium, and some industrial minerals, and excludes iron ore, aluminum, coal and oil and gas)…SNL Metals Economics Group studied data collected from nearly 3,500 global mining and exploration companies, of which more than 2,100 had exploration budgets for 2013…the research group said the companies budgeted a total of $14.43 billion for nonferrous exploration in 2013…“Including our estimates for budgets we could not obtain, the 2013 worldwide exploration budget came to $15.2 billion,” they said…

Exploration for new deposits is decreasing while the world’s overall demand for metals continues to increase – which is why there is such an historic opportunity at the moment in certain high quality, well-funded juniors who are actively developing and searching for deposits that majors will want to buy over the next few years…

Today’s Markets

Asian stocks were dealt a blow on the final trading day of the week as concerns over a repeat of June’s credit crunch in China overshadowed gains on Wall Street…China’s Shanghai Composite fell another 31 points overnight to close at 2133, a 7-week low…China’s short-term money market rates continued to spook investors after the 7-day repo rate, a key gauge of liquidity, rose to 4.8% today while the overnight repo rate jumped to 7.5%, its highest level since June…Japan’s Nikkei average fell 398 points or 2.75% to close the week at 14088 as the yen experienced its biggest 1-day fall in over 2 months…

European shares pushed off session lows and turned slightly higher after growth data from the UK gave investors encouragement…

The Dow is up 16 points as of 7:30 am Pacific…U.S. consumer sentiment dropped in October to its lowest level since the end of last year…the TSX is up 14 points while the Venture is off a point at 972…a close above 973 today (yesterday’s close) would confirm a Venture breakout through the 955-970 resistance band as per John’s chart yesterday…

CDNX – U.S. Dollar Index Comparative Chart:  Venture’s Move Is For Real

Below is a very revealing chart from John on the behavior of the Venture in relation to the U.S. Dollar Index…a few weeks ago, John noted how the Dollar Index had broken below a 2.5-year uptrend on the weekly chart – this was a clear indication that Gold was likely going to power higher and that the Venture bear market might indeed have finally run its course…the correlation between the Venture and the Dollar Index is extremely high…

As you can see in this 3-year weekly chart from John, the Venture topped out in late 2010/early 2011 just as the Dollar Index was bottoming out in the low 70’s…the greenback then reversed with a strong uptrend that continued through the rest of 2011 with a brief correction early in Q3 that year…another correction occurred during the 1st quarter of 2012 when the Venture rallied to the top of its down trendline at 1700…

The Dollar Index’s bull run finally ran out of steam at the end of June/early July this year when it met very stiff resistance in the mid-80’s at the same time as the Venture was into an extended oversold RSI(14) condition…since then, the Dollar Index has broken below its uptrend in place since 2011 while the Venture has just broken above its down trendline line…

The Venture’s RSI(14) on this 3-year weekly chart has plenty of room to move higher before getting into overbought territory…in fact, the uptrend in this RSI is very different in its look than during any other Venture rally over the past couple of years…it’s also now threatening to push above resistance…at some point the Dollar Index can be expected to rally, but it’ll be a rally within the context of an overall new downtrend…this is why investors should take this Venture move since June very seriously – the Index is now at a 6-month high and the technical evidence strongly suggests that the next 6 months should be even better…it’s critical, though, to stay focused on high-quality situations – companies with the working capital, the expertise at the management and geological levels, the right properties in the right jurisdictions, attractive share structures, and the desire to be active and drive shareholder value…the 2.5-year bear market has severely weakened hundreds of companies, and it will actually be good for the Venture if many of those companies simply disappear…

CDNX – U.S. Dollar Index Comparative Chart

Unigold Inc. (UGD, TSX-V)

Unigold Inc. (UGD, TSX-V) was the Venture’s 2nd most active stock yesterday as it climbed a penny-and-a-half, or nearly 25%, to close at 8 cents following the release of strong drill results from the its 100%-owned Neita concession in the Dominican Republic…keep in mind that while this property has excellent potential and yesterday’s results were very good, showing continuity of mineralization, the 3 holes were drilled into the heart of a known mineralized zone for metallurgical testing and in advance of an initial resource estimate…LPMET01, drilled down-dip, returned 423.6 metres grading 1.07 g/t Au and 1.2 g/t Ag along with Copper and Zinc values…

UGD has a lot of shares outstanding (about 250 million) and will need heavy volume to push through stiff resistance up to 10 cents…will be interesting to watch…UGD is starting to recover after putting in what appears to be an important bottom over the summer based on this 15-month weekly chart…UGD is off half a penny at 7.5 cents as of 7:30 am Pacific…

Garibaldi Resources Corp. (GGI, TSX-V) Long-Term Chart

The technical evidence favors an important breakout in Garibaldi Resources (GGI, TSX-V) in the near future, perhaps as early as next week…GGI has a huge advantage over many of its peers at the moment – the company is very active on the ground in 2 friendly jurisdictions (Mexico and B.C.), with of course the largest land position of any junior in the rapidly emerging Sheslay Valley exploration camp – an area that we believe is destined to become B.C.’s Cu-Au exploration hotspot…from a share structure standpoint, many companies right now are battling a “paper” problem – so many dilutive financings over the past 2+ years have created an “overhang” in the markets of many stocks…GGI, fortunately, does not have that issue as they haven’t had to do a financing in over 4 years…GGI’s latest financials, ending July 31, show $4 million in working capital, and the company has monthly cash flow from operations in Mexico with the potential for much greater revenue and profits over the next couple of years…these are all reasons why GGI in our view is going to be one of the first out of the gate and thrive as the Venture’s bullish new phase continues to evolve…this 10-year monthly chart from John clearly shows that GGI is in the early stages of a major new uptrend…

Colorado Resources Ltd. (CXO, TSX-V) Updated Chart

Trading activity in Colorado Resources (CXO, TSX-V) has been interesting this week with increasing volume and a corresponding jump in the share price…more assay results are pending from CXO which disappointed investors over the summer, but that could quickly change if they’re able to deliver results comparable to their 1st hole…technically, the stock is showing signs it wants to move higher – there is fresh new momentum after a nasty slide that took CXO down as low as 24 cents…it’s unchanged at 32.5 cents on light volume so far today as of 7:30 am Pacific…

Note: John and Jon both hold share positions in GGI.

Gold has traded at a 4-week high between $1,334 and $1,351 so far today…as of 7:45 am Pacific, bullion is up $11 an ounce at $1,345, $2 above its 50-day moving average (SMA)…good traction above $1,350 would likely attract fresh buying…Silver has gained 18 cents to $22.74…Copper is flat at $3.24…Crude Oil has stabilized, up 34 cents to $97.24 while the U.S. Dollar Index is down slightly at 79.20…

According to Business Insider, analysts at Bank of America Merrill Lynch and Morgan Stanley are telling clients that Gold could benefit from the Indian festival season now underway…“Indian festival season could provide a lift to Gold,” Morgan Stanley analyst Paretosh Misra wrote in a note to clients. ”Traditionally, the Diwali festival (specifically, Dhanteras, the 2 days before Diwali) is the biggest Gold buying period of the year in India. In the last 10 years, Gold has risen an average 2.5% in the one month around Diwali. While government’s new import restrictions and INR depreciation could adversely affect Gold imports, buying should be supported by ~20% YoY decline in Gold in Rupee terms.”

The Commodity Futures Trading Commission said yesterday it will catch up on its delayed reports (due to the partial U.S. government shutdown) during the week of November 4…the updated COT reports will give us some valuable insight into who has been doing what in the Gold market recently…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite slipped another 19 points to close at 2164, its lowest level since late September and 35 points below its 200-day moving average (SMA), after short-term money-market rates continued to be in focus…traders have been concerned about a drying up of lending in the interbank market in recent days with the People’s Bank of China (PBOC) remaining on the sidelines, not injecting cash into the system…Meanwhile, HSBC’s China flash Purchasing Managers’ Index (PMI) rose to a seven-month high in October at 50.9…the figure was higher than the previous month’s reading of 50.2 and is the latest piece of positive data to emerge from the world’s second-largest economy following last week’s upbeat Q3 GDP report…

Japan’s Nikkei average climbed 60 points overnight…meanwhile, European shares closed modestly higher today…Markit’s flash PMI revealed that the euro zone’s composite reading fell from 52.2 in September – a 2-year high – to 51.5 in October, worse than forecast in a Reuters poll…

In New York, the Dow is up 67 points as of 7:45 am Pacific…in Toronto, the TSX has jumped another 37 points while the Venture is 5 points higher at 972…a confirmed breakout by the Venture through critical 970 resistance appears to be imminent (within a few trading days)…confirmation could come as early as tomorrow – what that would require is a close above 970 today and a higher close to finish the week tomorrow…Unigold Inc. (UGD, TSX-V) is among the most active this morning, up 1.5 cents at 8 cents, after just reporting very good drill results from the Dominican Republic…

TSX Updated Chart

Since finally topping the 13000 level last week, the TSX has been looking very strong with the next major chart resistance at 13500…so a new range appears to be forming between 13000 (previous resistance) and 13500…yesterday, the Index confirmed a breakout above Fib. resistance at 13135…below is a 4-year weekly chart from John…the TSX is still quite a ways from its mid-2008 all-time high of 15073…

Agnico-Eagle Mines (AEM, TSX-V) Shows Improved Q3 Performance

Agnico-Eagle Mines (AEM, TSX) reported Q3 net income of 47.3 million or 27 cents per share following the close of trading yesterday, thanks in part to record quarterly production…this was a big improvement over AEM’s Q2 performance when it lost 17 cents per share…the company increased byproduct production in Q3 and also reduced capital and operations costs by $50 million and cut its exploration budget by $20 million…AEM has responded well to the news, up more than $4 a share in early trading today…

WTIC Updated Chart

Gold producers are getting a break from the drop in Crude prices which just recently were threatening to push through important resistance at $110 a barrel…below is a 10-year WTIC chart from John…Crude has been trading between triangle support and resistance for the last few years…decision-time (a major breakout either above or below the triangle) is approaching, but for now expect the strong support in the low $90’s to hold…

Prosper Gold Corp. (PGX, TSX-V) Updated Chart

As we glance at the calendar, we can’t help but think that Prosper Gold (PGX, TSX-V) is within just a few trading days of releasing assay results from its 4th, 5th and 6th holes at Sheslay (S027 through S029)…keep in mind, hole #4 intersected mineralization at the deepest levels ever (to 598 metres) at Sheslay in what potentially could turn out be Prosper’s version of Colorado Resources‘ (CXO, TSX-V) April “glory hole”…unfortunately for CXO, that was the 1st hole they drilled and they haven’t been able to repeat that success…

In the case of the Sheslay, drill results at the Star target going back to Firesteel Resources‘ (FTR, TSX-V) drilling between 2004 and 2007 have been remarkably consistent…historically, the Sheslay has never been tested below a depth of 350 metres…so Prosper’s 4th hole, which intersected mineralization from top to bottom, could be a serious game-changer – particularly if they hit some wide sections of higher grades at depth, perhaps a magnetite-enriched potassic core…

With any company, it’s always critical to examine share structure…in the case of PGX, it’s important to note that this stock is primed for a VERY explosive move if indeed results from holes 4, 5 and 6 are stellar, as we believe they could be…65% of all PGX stock is locked up at the moment due to escrow provisions and the 4-month hold on the August financing…according to our research, most of the other stock (about 75% or 7 million shares) that can be traded right now is believed to be in tight, friendly hands (long-term holders)…the 0ther 25% (about 2 million shares) has been “loose stock” from the original 6-cent financing but most of that has been cleaned up since PGX resumed trading at the beginning of September…so the conditions from a share structure standpoint are about as attractive as they can possibly get – buyers potentially could be scrambling to get their hands on PGX paper, depending of course on results…

Technically, the stock has unwound an overbought condition that emerged in early September, and the Slow Stochastics (SS) indicator is showing increased up momentum…the stock has been consolidating between 45 and 55 cents…volume has picked up this week and a couple of 100,000 share blocks have also gone through which again, we believe, is stock moving from weak hands into strong hands…

Sheslay Drill Core Photos

Sheslay drill core photos, published on the Prosper Gold web site, provide ample evidence of a robust hydrothermal system at this property…a strong porphyry system requires water and plenty of heat and pressure…when you see intensely fractured rock, and multi-directional veining as well as multi-generations of veins (common in drilling to date at the Sheslay) – those are very encouraging signs that Prosper is indeed drilling into a classic Stikine Arch Cu-Au porphyry system that has the potential to produce Red Chris style grades and intersections…

Prosper Gold President and CEO Pete Bernier has always demonstrated a great sense of timing…he appears to be doing so again with these important results expected in the coming days, just as the Venture is heating up and showing signs of an imminent major breakout…

Colorado Resources (CXO, TSX-V) Update

We prefer what we’re seeing unfold in the Sheslay Valley with Prosper Gold and Garibaldi Resources (GGI, TSX-V) leading the way there vs. North ROK to the east where Colorado has been struggling trying to repeat its early success…North ROK is still very prospective, and Colorado could yet come up with another stellar hole that will turn their market around, but both PGX and GGI have certain dynamics that CXO lacks – better share structures as well as business and market savvy at the top, to go along with geological expertise…those are important factors in favor of both PGX and GGI…in addition, we just see the Sheslay area as more attractive geologically…

Nonetheless, Colorado is showing signs of kicking up its heels and not going down without a fight…below is a 2-month daily chart from John…the overall technicals for both PGX and GGI are certainly superior, but CXO’s chart is starting to look better with the possibility of a near-term breakout above a downtrend channel that has restrained the stock since September… below is a 2-month daily CXO chart from John…watch for a possible breakout above 30 cents in the near future…selling pressure has been in decline recently…CXO had a good day yesterday and is up a penny at 29.5 cents as of 7:45 am Pacific…

Magor Corp (MCC, TSX-V) Update

Refer to Morning Musings October 15 for more details on Magor Corp. (MCC, TSX-V), a promising tech play we’re following closely…in mid-October, MCC was trading around a quarter after completing a $1.5 million private placement…yesterday, the stock closed at 37.5 cents with current strong support at 30 cents and resistance at 40 cents as shown in John’s 6-month daily chart…yesterday, MCC announced a brokered debenture offering for gross proceeds of up to $2 million as the company senses a true growth opportunity with the full launch of its Aerus cloud-based video collaboration solutions this fall…