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Gold has broken out of the narrow trading range that it was in most of the night and early morning (between $1,237 and $1,246)…as of 8:20 am Pacific, bullion is up $10 an ounce at $1,253…offsetting bullish and bearish factors have been influencing Gold in recent days but a close today above $1,250 may allow bullion to gain some traction and take a run at resistance around $1,275…Silver is up 29 cents at $20.38…Copper is up a penny at $3.35…Crude Oil is 29 cents higher at $94.25 while the U.S. Dollar Index is up more than one-tenth of a point at 81.07…

U.S. Dollar Index Updated Chart

The Dollar Index, despite this morning’s modest strength, is being pressured by a declining 200-day moving average (SMA) for the first time since late 2011, which is clearly to the benefit of Gold (and the Venture Exchange) as they often move in opposite directions of the greenback…the behavior of the Dollar Index over the coming weeks will be critical to watch…a confirmed breach of the 80.28 Fib. level would suggest the Index may re-test critical support at 79…resistance band between 81 and 83…

Today’s Markets

Asia

Asian markets finished mostly lower overnight…investors largely shrugged off news that Japan’s government raised its economic assessment for the first time in 4 months as the Nikkei slipped 13 points to close at 15734, down more than 1% for the week…China’s Shanghai Composite lost 19 points, finishing at more than a 5-month low at 2005…on Monday, China will report 4th quarter GDP data…many economists are predicting that China’s GDP slowed in the final 3 months of last year to 7.6% from 7.8% in the previous quarter…that would put the full-year growth rate at 7.7%, the weakest level since 1999…

Europe

European shares were moderately higher today…British shopping figures came in way above expectations for December, official data showed this morning, with strong growth at smaller stores resulting in the largest annual rise since 2004…retail sales volumes rose by 2.6% on the month, according to figures released by the U.K.’s Office for National Statistics – the largest increase in nearly 4 years…

North America

The Dow is up 65 points as of 8:20 am Pacific…interestingly, the latest sentiment survey from the American Association of Individual Investors shows an 8.5% jump in neutral sentiment to 39.5% – a 12-year high and well above the historical average of 30.5%…bullish sentiment has fallen 4.6% to 39% while bearish sentiment is down 3.5% to 21.5%…

The TSX is 62 points higher as of 8:20 am Pacific while the Venture is up 2 points at 977 and within shouting distance of an important technical breakout…

Garibaldi Resources Corp. (GGI, TSX-V) Update

Breaking News:  Doubleview Capital Corp. (DBV, TSX-V) halted just before the open, pending news – we suspect it’s regarding drill results from their Hat Property in the Sheslay Valley, contiguous to Garibaldi’s Grizzly Property and Prosper Gold’s Sheslay Project.

Very encouraging news out of Garibaldi Resources (GGI, TSX-V) after yesterday’s close…drilling continues at the company’s La Patilla Gold Property in Sinaloa State, Mexico, where each of the holes so far (#5 is in progress) has cut “significant intervals of quartz veining similar to that” which yielded impressive Gold values from recent channel sampling…La Patilla, where artisanal miners have been active for many years, is being diamond drilled for the first time ever to test the mineralization potential of a breccia and a vein/stockwork system (contiguous to each other) open in all directions based on extensive surface and underground sampling…initial assay results from the shallow drill program are pending…this is a highly interesting property, and Garibaldi has already cut a long-term deal with the local community to allow for any potential future metal extraction on La Patilla by the company…so the locals are on board and that’s important…

Channel sample results (true width) included 28.4 g/t Au over 1.3 metres, 7.5 g/t Au over 6.4 m, 6.2 g/t Au over 3.3 m, and 5.8 g/t Au over 7.9 m at the Murcielago breccia, and 13.5 g/t Au over 1.3 m at the La Patilla vein system, so the chance for some joy from drilling has to be considered very good…

What also has us confident are some of the drill core photos posted on the GGI web site last night that show the rocks at La Patilla have been cooked up nicely which enhances the mineralization possibilities…below is a great example of some very well-brecciated core with rock clasts (andesite or rhyolite) likely replaced with quartz-intense silicification, according to BMR’s consulting geologist…

La Patilla Drill Core (From GGI Web Site)

As we’ve pointed out, Garibaldi has several potential catalysts in its favor at the moment (Mexico and B.C., with GGI of course the largest landholder among juniors in the Sheslay Valley with its Grizzly Property) which should make the first quarter of this year, not to mention the rest of 2014, very exciting…there was also a reference in last night’s GGI news to the discovery of a graphite zone (assays pending) east of the Locust target at the Tonichi Project in Sonora State where the company is also generating royalty income from a pilot coal program…more details on the graphite situation are expected shortly…we’ll have much more on GGI by Monday, especially with potential developments concerning the Sheslay Valley…this is a company with all the critical pillars one should always look for in a junior exploration deal, especially in today’s environment – a strong and stable management and geological team, a healthy balance sheet, a basket of properties with excellent discovery potential, active work programs, an attractive share structure (no dilution in 5 years in this case), and the drive and determination to build shareholder value…as an investor, it’s hard to miss with these factors in your favour…with an improved Venture market, the potential upside with GGI is particularly significant given the company’s current modest market cap…GGI is up 2 cents at 13 cents as of 8:20 am Pacific…as always, perform your own due diligence…

Barisan Gold (BG, TSX-V) Chart Update

Barisan Gold Corp. (BG, TSX-V) staged a significant intra-day reversal yesterday, trading as low as 19 cents before bouncing back to finish up 6.5 cents at 25 cents on total volume (all exchanges) of 500,000 shares…the company is continuing to drill its Tengkering Project in Indonesia, and the recent sell-on-news weakness had the positive effect of unwinding the RSI(14) overbought situation as shown in this 2+ year weekly chart from John…this remains a very strong geological story going forward given the world-class Cu-Au porphyry intersections so far…BG is unchanged at 25 cents as of 8:20 am Pacific…

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

True Gold Mining Inc. (TGM, TSX-V) is higher again this morning, following news yesterday that the company has signed an engagement letter with Barclays and Societe Generale for a $90 million debt financing package to fund the low-capex Karma project in Burkina Faso…below is a 2.5-year weekly chart update from John showing a confirmed breakout above the 40-cent level…

Adventure Gold Inc. (AGE, TSX-V)

Adventure Gold Inc. (AGE, TSX-V) has been one of our long-time favorites given the quality of its management group, a solid property portfolio and an always healthy balance sheet, which is why we were saying it was such a good bottom-fishing opportunity while it was basing just above the 10-cent level in recent months…significantly, AGE has broken above a downtrend line in place since late 2012…worth following closely in the months ahead…

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

Gold has hovered between $1,236 and $1,246 so far today…as of 7:30 am Pacific, the yellow metal is flat at $1,242…Silver is off a nickel to $20.15…Copper has shed a penny to $3.34…Crude Oil is down slightly to $94.06 while the U.S. Dollar Index is off one-tenth of a point to 80.96…

2014 is considered the year of the horse in China, and horse-related Golden products are apparently posting massive sales in China before the start of the Lunar New Year on January 31…according to Mineweb’s Shivom Seth, in an article posted this morning (www.mineweb.com), Chinese language newspaper Beijing News has reported that Gold sales had surpassed 10 million yuan ($1.7 million) per hour in China, after Cai Bai jewellers in Beijing opened to a scintillating start on January 1, setting a new record…Cai Bai is touted as one of the largest Gold jewellery chain stores in Beijing…it reported sales of 200 million yuan (about $33 million) on December 31, 2013, while China Gold’s flagship store at Jiang Zhaikou sold more than 150 kilograms of Gold on the same day…Sun Gold Jewellers noted that since Gold prices slid in December, sales have grown significantly at its many stores…sales surged by at least 30% in December 2013 from a month earlier, and were up by 25% as compared to the same period in 2012, the retailer stated…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite finished relatively unchanged at 2024, while Japan’s Nikkei average slipped 62 points despite some upbeat economic data…European shares are mixed in late trading overseas…

In North America, the Dow is off 43 points through the first hour of trading after jumping more than 100 points in each of the past two days…the Federal Reserve said in its Beige Book published late yesterday that the U.S. economy continued to grow at a moderate pace from late November to the end of 2013, with some regions of the country expecting a pick-up in growth…

The TSX is down 18 points as of 7:30 am Pacific while the Venture has slid 3 points to 973…

Venture Chart Update

The Venture is on the cusp of a major technical breakout after yesterday’s 11-point gain to close at 976…confirmation of a breakout, however, is still required, and there are several factors that are part of that equation as John outlines in this 6-month daily chart…tomorrow’s weekly close will be important – it would be encouraging and very bullish to see a decisive move through the 970’s on increased volume to finish the week…we’ll let the market speak and tell us what it wants to do…investor patience, as always, is critical…

Other signs that are encouraging – two companies announced major financings yesterday…Simon Ridgway’s Cordoba Minerals Corp. (CDB, TSX-V), in the process of closing a key Colombian acquisition, has engaged a syndicate of agents, co-led by GMP Securities LP, Dundee Securities Ltd., BMO Capital Markets and including Clarus Securities Inc., to complete a $12 million financing at 50 cents…meanwhile, Nicorp Developments Ltd. (NB, TSX-V) has arranged a non-brokered private placement of up to 50 million common shares of the company at a price of 20 cents per share to raise gross proceeds of up to $10-million…the funds will be used to conduct further exploration and development of the company’s Elk Creek Niobium Project in Nebraska…

Big North Graphite Corp. (NRT, TSX-V) Updated Chart

Big North Graphite (NRT, TSX-V) is raising money and ramping up its activity on the graphite front in Mexico, so this is certainly a play to watch closely as 2014 unfolds…the stock staged an important breakout above resistance at 6 cents at the end of December and soared as high as 10 cents (resistance) January 3…since then, it has staged a normal retracement with strong new support between 6 and 7 cents…below is an updated 2.5-year weekly chart from John…

Fission Uranium Corp. (FCU, TSX-V) Updated Chart

Fission Uranium (FCU, TSX-V) rose 4 cents yesterday on its best volume day since October after the company released results from six more holes covering two high- grade zones (R390E and R780E) that remain open in all directions at its Patterson Lake South discovery…with 100% ownership of PLS, FCU is primed for an eventual takeover which is why investors should remain patient with this opportunity…support around $1 has held nicely, while FCU should gain some immediate momentum if it can overcome near-term resistance at $1.15…below is an updated 6-month daily chart from John…buy pressure has picked up this month as shown by the CMF indicator…FCU is up another 4 cents to $1.12 as of 7:30 am Pacific…

Critical Elements Corp. (CRE, TSX-V) Updated Chart

Further to John’s most recent chart (Jan. 8), Critical Elements Corp. (CRE, TSX-V) is picking up steam…as stated Jan. 8, “Technically, the key for CRE is to push above a stiff resistance band between 24 and 25 cents…the RSI(14) and other indicators on this 2.5-year weekly chart suggest an attempt will be made to overcome that resistance”…indeed, that’s exactly what’s unfolding as CRE is up half a penny to 23.5 cents through the first hour of trading today…there’s quite a bit on the offer at 24 and 25 cents, underscoring the stiff resistance in the mid-20’s…CRE continues to develop its Rose Tantalum-Lithium Project in Quebec, and recently reported improved recoveries of tantalum in metallurgical testing are highly encouraging…as always, perform your own due diligence…

Platinum Group Metals Ltd. (PTM, TSX)

Platinum is expected to be a hot commodity in 2014, and one company in that space which is very worthy of our readers’ due diligence is Platinum Group Metals (PTM, TSX)…the company completed a monster financing ($175 million) at $1.18 per share to finish 2013, just a few weeks after reporting impressive assay results from drilling at its Waterburg Extension Project in the prolific Bushveld Complex (South Africa)…

Below is a 3.5-year weekly PTM chart from John…note the very impressive long-term rising RSI trendline…the key “breakout” area to keep an eye on is in the mid-$1.40’s…excellent possibilities for 2014, geologically and market-wise…PTM is down a penny at $1.28 in early trading today…

Note: John, Jon and Terry do not hold share positions in FCU, NRT, CRE or PTM.

Gold has come under some mild pressure again today, down $7 an ounce at $1,238 as of 7:30 am Pacific…Silver is off 16 cents at $20.10…Copper is up 2 pennies at $3.33…Crude Oil is 78 cents higher at $93.37 while the U.S. Dollar Index has gained one-third of a point to 81.04…

China has granted licenses to import Gold to two foreign banks for the first time, according to a report from Reuters, as moves to open the world’s biggest physical bullion market gather pace…allowing more banks to import Gold could increase the supply of the metal into the country, easing local prices that are higher than in most Asian nations…China’s Gold imports more than doubled last year to over 1,000 tonnes – ousting India as the biggest buyer – as demand soared to unprecedented levels due to the first drop in international prices in 13 years…ANZ and HSBC were awarded import licenses late last year, two sources with direct knowledge of the matter told Reuters…other trading sources said China Everbright Bank has also received approval to join the nine local banks already allowed to ship Gold into China…Beijing strictly controls how much the banks import through a quota system…

Updated WTIC Chart

The recent drop in Crude Oil prices should not be alarming as it’s consistent with the long-term trend that shows strong ascending triangle support (and Fib. support) right around the $90 level as shown in this 10-year monthly chart from John…this is certainly a key support area for WTIC…

The Crude Oil market is not without supply concerns, however…increasing global growth will have to offset the huge recent jump in U.S. domestic Crude Oil production which is now at a 25-year high…

World Bank Raises Global Growth Forecast

The World Bank yesterday raised its forecast for global growth for the first time in three years as advanced economies started to pick up pace, led by the United States…the rosier outlook suggests the world economy is finally breaking free from a long and sluggish recovery after the global financial crisis…the institution is now predicting that global GDP will expand 3.2% this year, from 2.4% in 2013, according to its twice-yearly “Global Economic Prospects”…in the bank’s last forecast in June, it expected global growth to reach 3% in 2014…“For the first time in five years, there are indications that a self-sustaining recovery has begun among high-income countries – suggesting that they may now join developing countries as a second engine of growth in the global economy,” the bank’s chief economist Kaushik Basu said in the report…

Today’s Markets

Japan’s Nikkei average surged 386 points or 2.5% overnight to close at 15809…China’s Shanghai Composite, however, continues to struggle and fell 3 points to finish at 2023…Central Bank data showed Chinese bank lending and money supply growth for December missed forecasts, casting further worries on liquidity levels…

European shares are up strongly in late trading overseas…the Euro Stoxx 600 Index has hit highs not seen since May 2008…

The Dow is up another 100 points through the first hour of trading, following up on yesterday’s powerful advance thanks to strong retail sales numbers…the TSX has climbed 62 points while the Venture, importantly, gapped up at the opening bell and is 5 points higher at 970 as of 7:30 am Pacific…a confirmed Venture breakout could come as early as tomorrow or Friday…what’s particularly impressive is the Venture’s strength this morning on weakness in Gold…

Bayhorse Silver Inc.’s (BHS, TSX-V) 150,000 g/t Silver Sample

Quite a bonanza Silver grade reported yesterday by Graeme O’Neill’s Bayhorse Silver Inc. (formerly Kent Exploration) – a whopping 150,370 g/t Ag or 4,385 ounces per tonne from a grab sample taken from a narrow (4 cm) massive sulfosalt-sphalerite vein that occupies a faulted rhyolite-andesite contact at the company’s 250-acre Bayhorse Silver Property (a small high-grade past producer) in east-central Oregon…impressive, to say the least, and it certainly gives BHS promotional power…the speculators have been stepping in…unfortunately, the state of Oregon, where tree-hugging enthusiasts set a Guinness world record last year for the number of people embracing a tree (this is true, more than 950 Portlanders hugged a variety of Douglas firs and redwoods simultaneously for a least a minute at the Hoyt Arboretum), is one of the most pathetic examples of resource mismanagement in contemporary U.S. history…the state has four times the natural resources of most third-world counties, yet the government has steadily opposed development over the last three decades…Graeme is a good guy and we hope he succeeds with Bayhorse Silver, but he will face challenges in (we state this politely) “environmentally conscious” Oregon (sand dune rides on the coast are really cool, though)…BHS gained 3.5 cents yesterday on volume of 1.3 million shares…it opened at 15.5 cents this morning and is currently up 1.5 cents at 14 cents as of 7:30 am Pacific on total volume (all exchanges) of just over 400,000 shares…

Revolver Resources Inc. (RZ, TSX-V) Update

As we mentioned last month, Revolver Resources (RZ, TSX-V) was likely a smart speculation at 4 cents or less with a drill program commencing at its Summit B Property bordering Colorado Resources‘ (CXO, TSX-V) North ROK Property…Revolver reported yesterday that it has completed the first 400-metre drill hole of its planned 1,000-m program, and core will soon be sent in for assaying…the next two holes are expected to be completed within the next three weeks…previous resistance at 4 cents is now support…RZ is up 1.5 cents at 6.5 cents on light volume as of 7:30 am Pacific…

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

Madalena Energy (MVN, TSX-V) closed yesterday at the 81-cent Fib. level John has been mentioning for weeks, and is off slightly in early trading today…while MVN potentially could still march a little higher on momentum in the coming days, technically it will likely need to unwind an overbought condition in the near future…but this is a solid company with excellent prospects for production growth in Alberta and Argentina as outlined in a news release this morning…

North Arrow Minerals Inc. (NAR, TSX-V)

North Arrow Minerals (NAR, TSX-V) has been a light trader but that could change at some point in 2014 as the company has plenty of cash in the bank, a basket of diamond discovery opportunities, and a management team with a proven track record…the 4-month daily chart, shown below, is a “very unusual situation” in John’s words…NAR closed up a nickel yesterday at 70 cents and has yet to trade as of 7:30 am Pacific…

Probe Mines Inc. (PRB, TSX-V)

Probe Mines (PRB, TSX-V) has been one of our favorite discovery plays for quite some time, especially since early last year when the company really started to make progress in outlining a new high-grade Gold zone at its multi-million ounce Borden Lake deposit…another round of extensive drilling is coming up…a potential takeover of Probe cannot be ruled out, and keep in mind that Agnico-Eagle Mines Ltd. (AEM, TSX-V) grabbed a piece of this company (just under 10%) last spring…the PRB chart continues to show solid strength…

Note: John, Terry and Jon do not hold positions in BHS, RZ, MVN, NAR or PRB.

Gold has traded between $1,247 and $1,256 so far today…as of 7:30 am Pacific, bullion is up $1 an ounce at $1,253…Silver is 18 cents higher at $20.58…Copper is flat at $3.32…Crude Oil is up 76 cents at $92.56 while the U.S. Dollar Index is relatively unchanged at 80.56…

According to ETF Securities, “Gold may be carving out a double bottom near the $1,200 level, supported by strong physical demand, notably from Asia.  Indicative of strong physical demand, Gold 1-month forward rates remain negative. At the end of 2013 when the December futures contract expired, the Gold futures curve was in backwardation, another indication of strong physical demand. In contrast to a year ago, after the strong tailwinds coming from the global economic rebound in 2013, analyst consensus expectations for 2014 are strongly in favor of continued depreciation in Gold prices and appreciation in equity prices. The bearish Gold story is well known: increasing bond yields, coupled with a stronger U.S. dollar as the Fed tapers its stimulus activities because of fading tail risks, is keeping investment demand for Gold muted. Increasingly compelling though is the contrarian stance on the back of fundamentally attractive precious metals prices, which ended 2013 below most all-in-cost of production estimates, about $1,200 U.S. for Gold.”

ETF’s view corresponds with the chart John posted here yesterday, but we caution that Gold has two very important hurdles it must cross in order for the “double bottom” theory to begin to play out – bullion must be able to pierce through stiff resistance around $1,275, and then also overcome a downsloping wedge currently positioned around $1,300…

As Kitco contributing analyst Jim Wyckoff wrote yesterday, “If the air continues to come out of the overly inflated stock market balloon, then Gold and other hard assets will continue to benefit”. He may very well be right, and John will examine the current Dow chart this morning after the DJIA suffered its worst session since September 20 yesterday…

First, an update on the U.S. Dollar Index…one of our readers posted in our comments section over the weekend what is really a consensus view among analysts, that the greenback is in an uptrend…the Venture and the U.S. Dollar Index typically move in opposite directions of their main trends, so his comment was, how could the Venture be ready to breakout to the upside with the greenback in an uptrend?…excellent question, but we disagree with the premise…

We’ve already noted that in October, the Venture broke above a downtrend line on the weekly chart in place since 2011…this was the first important sign that the Index was preparing for a turnaround…interestingly, it occurred just a few weeks after the U.S. Dollar Index did the opposite – it broke below a 2+ year uptrend on the weekly chart after topping out around 85 at the same time early last summer as the Venture bottomed at 859 and Gold touched $1,179…

Since breaching a 2+ year uptrend on the weekly chart, the U.S. Dollar Index has seen its 200-day moving average (SMA) reverse to the downside and a very stiff resistance band has emerged between 81 and 82…critical support is at 79 which, we believe, will be tested sooner rather than later…the implications of a confirmed break below 79 are rather profound…Fib. support levels for the Dollar Index are 80.26, 79.01 and 77.75…this is not a healthy-looking chart, unlike the Venture which has some momentum behind it right now and just needs to overcome resistance in the 970’s…

The U.S. Dollar sell-off, as you can see in the above chart, had its genesis before Friday’s news that the American economy created just 74,000 jobs last month versus expectations for a 200,000 gain…it’s also interesting to note that China’s yuan has hit a record high vs. the dollar for a second straight day at 6.0415…

“Certainly, it [the dollar move] is a very grave challenge for the dollar bulls,” Sean Callow, senior currency strategist at Westpac Bank in Sydney, told CNBC yesterday…“It’s a definite worry if you’re bullish on the dollar because there’s been no shortage of economists coming out to explain that the December payrolls report was impacted by special factors and could be reversed next month,” Callow said. “They could be right, yet the money is not being placed to back that call.”

Updated Dow Chart

Below is a 5-year weekly chart on the Dow with a Gold comparison as well…the main “takeaway” from this chart is the recent Dow divergence between RSI(14) and price, coupled with declining buy pressure…that’s typically a warning sign of a possible correction…the divergence does not indicate when the reversal will happen or how deep it might be, just a high probability that it will occur…since the correlation with Gold is negative, one can expect bullion to move higher as per John’s chart and Wyckoff’s comments…

Updated CRB Chart

There are some signs of encouragement in the CRB Index…in December, it broke above a downtrend line in place for a few months on the weekly chart…that downtrend line has become fresh support…the behavior of the Venture seems to suggest that the CRB is indeed forming a double bottom base…we’ll have to wait and see…weakness in the U.S. Dollar would certainly give the CRB a lift…

Today’s Markets

Asia

Asian markets were mostly lower overnight, though China’s Shanghai Composite bucked the trend with a gain of 17 points to close at 2027…Japan’s benchmark Nikkei average plummeted nearly 500 points or 3.07% due to a sharp uptick in the yen following Monday’s holiday in that country…

Europe

European shares are slightly lower in late trading overseas…industrial production for November was up by 1.8% in the euro area compared to the month before, according to Eurostat…production saw a gain of 3% compared to November 2012…

North America

The Dow will try to reverse a 4-session slide today…it’s up 42 points through the first hour of trading after yesterday’s plunge……a gauge of U.S. consumer spending rose more than expected in December, suggesting the economy gathered steam at the end of last year and was poised for potentially stronger growth in 2014…the Commerce Department said this morning that retail sales excluding automobiles, gasoline, building materials and food services, increased 0.7% last month after a 0.2% rise in November…

About two dozen S&P 500 companies will report earnings this week…overall, analysts expect 4th quarter earnings for the S&P 500 to rise about 7%…

The TSX has climbed 57 points to 13739 as of 7:30 am Pacific…meanwhile, “13” proved to be an unlucky number for the Venture yesterday as its longest daily winning streak in many years was finally snapped…it’s up a point to 966 in early trading…

TSX Gold Index Updated Chart

Critical point for the TSX Gold Index…it has pushed above a 3-month basing channel and is now up against a long-term downtrend line with its declining 200-day moving average (SMA) not far above that…the Index is up 2 points at 172 as of 7:30 am Pacific…

Reservoir Minerals Inc. (RMC, TSX-V)

Reservoir Minerals (RMC, TSX-V) in our view is one of the top discovery plays on the Venture with its large land package in Serbia, including an important JV there with Freeport McMorRan…a recent drill result from a known high-grade zone at the Cukaru Peki target (part of the Freeport JV) returned a 166-metre interval grading a spectacular 7.75 g/t Au and 6.65% Cu (11.29% CuEq)…Gold can do whatever it wants – a discovery play like this will march to its own drumbeat, and the potential upside – even with the current share price in the mid-$5.50’s – is even greater if Gold turns the corner this year and the Venture performs the way we believe it will…

Below is a 2.5-year weekly RMC chart from John…an important breakout occurred last month when RMC decisively pierced the $5 level…

Magor Corp. (MCC, TSX-V) Updated Chart

While we’re focused mostly on the resource sector at BMR, when a legitimate tech play comes along that has highly respected people behind it, we don’t ignore it…that’s certainly the case with Magor Corp. (MCC, TSX-V), a video collaboration company, which is finally beginning to gain traction both in the market and with its business model…as always, perform your own due diligence, but we have been impressed with this company and its possibilities ever since it started trading on the Venture last March…the share price has rocketed from a low of 26 cents last month to an intra-day high yesterday of 60 cents…it closed yesterday at 54 cents, a breakout above Fib. resistance that requires confirmation today…there is also chart resistance at 55 cents…

Note: Jon holds a share position in MCC.

Gold has traded between $1,243 and $1,253 so far today to begin the new week…as of 7:30 am Pacific, bullion is down $2 an ounce at $1,247…Silver is off a nickel at $20.12…Copper is down a penny at $3.31…Crude Oil is 62 cents lower at $92.10 while the U.S. Dollar Index is up slightly at 80.68…

BlackRock Inc.’s Evy Hambro, manager of its $8 billion World Mining Fund, said Gold supply may fall “quite rapidly” as producers curb output at expensive mines…“Very few Gold companies are actually making significant profit,” Hambro said in an interview on Bloomberg TV’s “On the Move”…“If this trend of better management of these assets continues, supply will start to decline quite rapidly.”

John’s 9-month daily Gold chart paints a clear picture of what bullion must do in order to gain momentum in this first month of 2014 following its worst annual performance in nearly 30 years…Gold must overcome resistance around $1,275 and then pierce through the downsloping wedge just below $1,300…Gold has been trading mostly within this downsloping wedge since last summer…a bullish factor in the yellow metal’s favor is the potential for substantial short-covering…

Gold 9-Month Daily Chart

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite fell 4 points to close at 2010, a fresh 5-month low…the Index lost 3% last week in part on the fears of a glut of new listings…Japan’s Nikkei was closed today for a public holiday…Indonesia’s Jakarta Composite rallied 3.2% to a 2-month high as investors cheered President Yudhoyono’s last-minute decision to allow the export of Copper, Iron Ore, Lead and Zinc concentrates to continue, while banning other mineral ore exports in an attempt to force domestic miners to grow higher-value processing businesses instead of simply shipping raw materials to foreign buyers…

European shares are up modestly in late trading overseas…

In North America, the Dow is up 15 points as of 7:30 am Pacific…after last Friday’s much weaker than expected U.S. jobs report, attention now turns to U.S. corporate profits as earnings season gathers steam this week, with the likes of JP Morgan, Goldman Sachs, Intel and General Electric due to report…

The TSX is up 4 points through the first hour of trading while the Venture is off a point at 966…big news in the mining sector this morning as Goldcorp Inc. (G, TSX) has made a $2.6 billion offer in cash and shares for Osisko Mining Corp. (OSK, TSX) which is up more than $1 per share as of 7:30 am Pacific…Chuck Jeannes, Goldcorp President and CEO, stated, “With our world-class Eleonore project in Northern Quebec due to commence production later this year, Goldcorp will be the largest gold producer in the province, with the resources to continue building collaborative, long-term relationships while leveraging corporate and regional synergies.”

CDNX 3-Year Weekly Chart Update

The CDNX is aiming for its 14th consecutive daily advance today…the Index, though on less volume of course, has already topped its longest winning streaks recorded during the 2009-2011 bull market (11 straight advances in late 2009/early 2010 and 10 in late 2010/early 2011)…

We’ve been tracking the 3-year weekly CDNX chart consistently in recent months for the benefit of our readers as it has been an extremely useful guide in gauging the direction of the market…significantly, in October, the Index broke above a long-term downtrend line which then became support (tested repeatedly) for the next couple of months…just before Christmas, the Venture took the path of least resistance and boldly moved north of the downtrend line to once again test the critical 970’s…

Strikingly, RSI(14) – now at 55% – has broken decisively above 50 for the first time since the bear market began in early 2011…as we also pointed out over the weekend, a multi-year monthly chart shows how the MACD has finally turned upward after a decline that started during the first half of 2011…there are several other technical indicators as well that suggest the Index has finally turned the corner with last June’s low of 859 marking an important bottom (this doesn’t necessarily mean Gold has found its low yet, as the Venture historically has led bullion to the upside or the downside by many months with early 2011 being an excellent example)…

The big question now is, how soon will the Venture stage a confirmed breakout above critical resistance in the 970’s, a level it has failed to breach on several attempts since late April of last year?…there is overwhelming technical evidence to suggest that a breakout is going to occur, and possibly even this week, but exact timing is uncertain and no one – not even our chart wizard – has a crystal ball…the important point is that this market is healing and recovering, and 2014 is shaping up to be a positive year when astute investors will likely have a chance to recoup losses incurred since the bear market started 3 years ago…a rising tide will not lift all boats, some of which are still ready to sink due to several factors including weak management teams, decimated share structures and the inability to raise money…rollbacks will be occurring with increasing frequency…focus on companies with superior management, healthy balance sheets, active exploration programs, high quality properties and attractive share structures…

Below is the updated 3-year weekly chart with RSi(14) crossing the important 50 level where it met resistance in October, the summer of 2012 and early 2012…

Mason Graphite Inc. (LLG, TSX-V)

Interesting news from Mason Graphite Inc. (LLG, TSX-V) this morning…the company has reported that it has entered into an agreement whereby it would purchase up to 40% of the issued and outstanding shares of NanoExplore, a privately held research and development company focused on developing low cost, large-scale production of Graphene from natural flake Graphite, and integrating it into several industries including energy and textiles…in connection with the proposed transaction, LLG is completing a private placement at 80 cents, fully subscribed for by members of the management teams of Forbes and Manhattan and Mason Graphite…as of 7:30 am Pacific, LLG is up 8 cents at 79 cents…

Garibaldi Resources Corp. (GGI, TSX-V) Update

As we mentioned above, to take full advantage of a recovery in the Venture this year, investors must focus on companies with superior management, healthy balance sheets, active exploration programs, high quality properties and attractive share structures…Garibaldi Resources Corp. (GGI, TSX-V), which has more than doubled since we first uncovered this gem for our readers early last summer, is one of our favorites and certainly falls into that category…in fact, GGI has an explosive mix of high-grade Gold, Silver, Zinc and Graphite opportunities, in addition of course to the important Grizzly play in B.C.’s Sheslay Valley…drilling continues at the La Patilla Gold Property as a follow-up to high-grade channel sample results over significant widths, while of course the company is even earning royalty income from the extraction of near-surface Coal seams on concessions at Tonichi…

The 3.5-year weekly GGI chart shows a bullish flag formation while RSI(14) has broken above a trendline…with rising moving averages (SMA’s) and increasing buy pressure, GGI is well-positioned for a breakout above resistance at 15 cents…GGI is up half a penny at 13.5 cents as of 7:30 am Pacific…

Red Pine Exploration Inc. (RPX, TSX-V)

Below is an “awareness” chart from John on Red Pine Exploration Inc. (RPX, TSX-V) – we’ll have more on this one in the next couple of days…the company is drilling its Ceyenne-Chili Property near Timmins, prospective for the discovery of a VMS system…RPX has climbed systematically within an upsloping channel since mid-November, but will need very good drill results given the number of shares outstanding (about 200 million) and the current market cap…as of 7:30 am Pacific, RPX is up a penny at 11 cents…

Eagle Star Minerals Corp. (EGE, TSX-V)

On Friday, we suggested that investors keep a close eye on Encanto Potash Corp. (EPO, TSX-V) which appears to have put in a double bottom and has also broken above a downtrend line going back to last summer on its 2.5 year-weekly chart…this morning, we have a new potash play for our readers’ due diligence – Eagle Star Minerals Corp. (EGE, TSX-V) that is also exhibiting bullish technical tendencies at the moment…significantly, the company has also continued to report multiple thick intersections of high-grade Phosphate from drilling at its Santiago target in Brazil which borders MBAC Fertilizer Corp.’s (MBC, TSX) Canabrava discovery at its Itafos Property and appears to be an extension of that deposit…

Eagle Star has released results from all 23 RC holes completed at Santiago last year and plans on drilling up to 160…the company raised $1.7 million last summer from the exercise of 20-cent warrants but will certainly have to replenish its treasury in 2014…

What’s interesting about the EGE chart is that it shows the stock on the edge of breaking out above a downsloping channel…RSI(14) has pushed above 50 and the the trend is certainly positive…the stock has strong support at 18 cents with Fib. resistance levels between 21 and 27 cents…EGE is up 2 pennies at 23.5 cents as of 7:30 am Pacific…

Magor Corp. (MCC, TSX-V) Update

Magor Corp. (MCC, TSX-V) has been more active lately, climbing from a December low of 26 cents to a nearly 10-month high of 55 cents last week…it’s a tech play we like for the long-term, and 2014 could certainly be Magor’s breakout year after the company first started trading on the Venture last March…Magor is a “visual collaboration” company led by an all-star management team that includes some of the same senior personnel that guided Newbridge Networks…recently, Magor reported solid growth in its existing software transaction business, and the company is also in the process of rolling out its key Aerus cloud-based services…we expect Magor’s business model to really start to kick into gear during the second half of this year…the market is a forward-looking machine, so continued share price strength in Q1 is very possible if investors conclude that MCC is indeed on the right track and headed toward near-term profitability…MCC closed at 49 cents Friday…below is a 6-month daily chart from John…

Silver Short-Term Chart Update

Silver Long-Term Chart Update

Note: John and Jon both hold share positions in GGI.  John also holds a share position in RPX while Jon holds a share position in MCC.

TSX Venture Exchange and Gold

The Venture turnaround gained momentum last week with the CDNX climbing another 22 points to finish at 967.  Remarkably, the Index has posted 13 consecutive daily gains – better than any winning streak put together during the 2009-2011 bull market, though on less volume of course.  Expect trading activity to ramp up significantly on a confirmed breakout above critical resistance in the 970’s.  This could occur as early as next week, or perhaps we’ll need to be patient and wait a little longer.  In our view it’s only a question of when, not if, The Great Wall in the 970’s will come crumbling down.

Quite simply, the bears have lost control over this market, and the 3 charts below are proof of that.  Realizing this seismic shift now, ahead of the “herd”, will give you the opportunity to make bucket loads of money over the next 12 months as there are some incredibly cheap valuations at the moment despite the 13% move off last June’s Venture bottom.  Selectivity, of course, will be critical as a rising tide is not going to lift all boats (some boats are still destined to sink).

Its current wining streak is impressive, but what excites us the most about the Venture are some of the dramatic technical shifts that have occurred in recent months beginning with the breakout in October above a long-term downtrend line in place since 2011 on the 3-year weekly chart.  Importantly, through November and December, that downtrend line was repeatedly tested and held as support.  Starting just a couple of days before Christmas, following the end of tax-loss selling, the Venture took the path of least resistance and began to move powerfully north of the downtrend line.

We’ve been tracking that 3-year weekly chart consistently for the benefit of our readers and we’ll be posting an interesting updated version Monday morning.  Strikingly, RSI(14) – now at 55% – has broken decisively above 50 for the first time since the bear market began in early 2011.

Indeed, something very important is brewing. Not only has the Venture pushed above its 200-day moving average (SMA) for the first time since 2011, but this 13-year monthly chart from John shows how the MACD has finally turned upward after a decline that started during the first half of 2011.

13-Year Venture Monthly Chart

More Evidence Of A Major Technical Shift

This 2.5-year weekly chart shows another hugely significant development – the first bullish +DI/-DI crossover in the ADX indicator (on the longer-term weekly chart) since the bear market began in early 2011.

Updated Venture 9-Month Daily Chart

This updated 9-month chart from John shows how the Venture has overcome resistance around 940 and 958.  Now comes the test (yet again) of the 970 resistance.  There is certainly room for the RSI(14) on this daily chart to push higher, and we expect that it will.

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 in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their their overall operations.  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 (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe).   Ultimately, all of  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, grades have fallen significantly just over the past decade.

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 are strong financially, have superior exploration prospects, competent management and clean share structures.

As Frank Holmes pointed out last night in his weekly Investor Alert at www.usfunds.com, “Valuations of Gold miners are approaching their cheapest relative to book value in at least two decades, precisely at the time when free cash flow generation has bottomed and cost reductions are kicking in. The current valuations present opportunities for junior miners to acquire mining assets, just like Northern Star Resources did by purchasing the Plutonic mine from Barrick, based solely on the value of the proven and probable reserves.”

Gold

Gold and commodities in general responded well to Friday’s weak U.S. jobs report (employers hired the fewest workers in almost 3 years in December) with bullion jumping $21 an ounce to finish up $11 for the week at $1,249.  It appears Gold is ready to challenge resistance around $1,275.

According to Bloomberg, Gold analysts are the most bullish in a year on speculation that investors are covering near-record short positions. Following the first annual decline in 13 years, 15 analysts surveyed by Bloomberg expect Gold to rise this coming week, while 2 are bearish and 4 are neutral.

John’s 9-month daily chart shows that Gold may have formed a bullish technical double bottom.  If Gold can overcome resistance at $1,275, its next major challenge will be to push above the downsloping wedge.

Silver soared 63 cents Friday but finished the week up just 2 cents at $20.17.  Copper lost a penny to $3.32.  Crude Oil hit an 8-month low of $91.24 Thursday and closed Friday at $92.72, down $2.72 a barrel for the week (U.S. Crude Oil production is now at a 25-year high).   The U.S. Dollar Index is still finding very stiff resistance around 81 and closed the week down one-quarter of a point at 80.63, thanks to Friday’s weak jobs report.

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 at $4 trillion and still expanding, 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 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 – only  time will tell.  Given the high level of bearishness that exists in this market at the moment, it’s probably safe to say that if Gold hasn’t seen its low yet, it’s at least very close to a bottom (within 10% to 15%).  We do, however, expect new all-time highs as the decade progresses and inflationary pressures finally kick in around the globe after years of ultra-loose monetary policy.  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 more than four years and strictly through word-of-mouth we have built a loyal following.  We encourage reader feedback and the exchange of helpful opinions and ideas among investors in our forum. 

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

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.