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Gold has traded between $1,315 and $1,331 so far today…as of 7:35 am Pacific, the yellow metal is down $17 an ounce at $1,318…Silver is off 14 cents to $20.14 (see updated Silver charts at the bottom of today’s Morning Musings)…Copper is unchanged at $2.94…Crude Oil has added 51 cents to $99.97 while the U.S. Dollar Index is up slightly at 80.18…on top of strikes in South Africa, the Ukraine crisis is further exacerbating fears of constrained Platinum group metals supply as Russia and South Africa provide around 80% of the market…a curtailment of supply would tighten the market significantly…Palladium crossed the $800 an ounce level this morning, reaching its highest price since August 2011…

NATO’s top military commander warned yesterday that Russia was massing troops on Ukraine’s eastern border in a show of force ahead of President Obama’s arrival in Europe for talks on a united response to a crisis which has shaken the continent…Canadian Prime Minister Stephen Harper has used the most forceful language of any Western leader against Russia, stating over the weekend in Ukraine, “I think it is important that we in the free world not accept the occupation of Crimea, that we continue to resist, and sanction the occupation of Crimea, and that there be no return to business as usual with the Putin regime until such time the occupation of Crimea ends.” Investor holdings in exchange-traded products backed by bullion posted the first weekly decline in four last week…

Goldman Sachs’ most recent view on Gold which has been criticized by numerous analysts: “While we see clear catalysts for the recent rally in Gold prices, this move has been large relative to U.S. real rates which are a key input into our forecasts and benchmarking of Gold prices. As a result, we see potential for a meaningful decline in Gold prices towards the level implied by 10-year TIPS yields, which our rates strategists expect to rise further this year, and reiterate our year-end $1,050 Gold price forecast. More broadly, we believe that with tapering of the Fed’s QE, U.S. economic releases are back to being a key driving force behind Gold prices.  As a result, we expect that the decline in Gold prices will likely be data dependent, in contrast to our 2013 bearish Gold view which was driven by the disconnect between stretched long Gold speculative positioning and stabilizing U.S. growth.  Admittedly, a rebound in U.S. and Chinese growth this spring is a consensus view and a disappointment in either would lead us to delay our expected decline in Gold prices.  However, it would require a significant sustained slowdown in U.S. growth for us to revisit our expectation for lower U.S. Gold prices over the next two years.”

There are at least two major flaws in Goldman Sachs’ bearish view on Gold – #1, their forecast is too U.S. focused –  it doesn’t take into account the very robust underlying demand for physical Gold in China and elsewhere in Asia that’s underpinning the price of the metal; and #2, one of the key drivers of last year’s decline in Gold prices was ETF selling which has clearly stabilized – a major source of supply has therefore been removed from the Gold market in 2014…Goldman Sachs addresses neither of those issues…

The Indian government has eased import regulations to allow some of the country’s private sector banks to buy Gold from abroad in a move that could boost Gold imports in India and bring down physical premiums considerably…the Reserve Bank of India has allowed five private sector banks to participate in the import programs, according to a report from Mineweb, as the country seeks to prevent the flow of illicit money and smuggled Gold ahead of upcoming national elections…there is real potential for a significant jump in Gold buying from India this year, depending on political developments in that country…

Updated 1-Year Daily Gold Chart

This 1-year daily chart for Gold shows an RSI(14) support band between 40% and 50% (52% entering today), a strong double bottom base, and the formation of a bullish cup-with-handle pattern since May of last year with the handle now under construction…note the Fib. support levels for the handle – between $1,270 and $1,315…a close below $1,270 would invalidate this pattern…

Gold Seasonality Chart

Historically, March has been the third-worst month for Gold…it’s now down slightly for the month of March after ending February at $1,329…

U.S. Dollar Index Updated Chart

A struggling greenback remains a positive factor for Gold…a declining 200-day moving average (SMA), currently around 81, will limit the upside potential for the Dollar Index while Gold’s 200-day has flattened out and should provide support for bullion around $1,300… John’s 4-month U.S. Dollar Index chart also shows Fib. retracement levels (resistance) at 80.35 and 80.61 – key areas to watch…

2.5-Year Copper Chart Update

Copper’s recent decline appears to have largely run its course with RSI(14) on this 2.5-year weekly chart hitting previous support at 30%…horizontal channel support is holding between $2.90 and $3.00…

Today’s Markets

Asia

China’s Shanghai Composite shook off some weak economic data and gained another 19 points overnight (building on Friday’s 3% jump) to close at 2066…HSBC’s preliminary Purchasing Managers’ Index, released today, hit an eight-month low at 48.1 in March…”Evidently, market participants are hoping that China will counter the threat of economic downturn by launching stimulus programs in a bid to prevent the economy from sliding,” said analysts at Commerzbank…

Caterpillar (CAT, NYSE) chairman and CEO Douglas Oberhelman doesn’t see a “doom or gloom” playing out in China…“Our customer base in China is fairly solid – we haven’t seen the number of defaults, past-dues, repossessions we had seen in the past. I’m not so worried about that,” he told CNBC Asia’s “Squawk Box” this morning…“I’m more worried about the pace of reform – opening of the capital market, moving to a market orientation to really propel the economy into the next phase,” he added.  “We’re witnessing a continuing transition from a solid double-digit growth rate a few years ago, down to 7-8% and frankly we’re all caught up in that kind of a slowdown. That’s a big adjustment to make in a fairly short amount of time.”Oberhelman told CNBC Asia’s “Squawk Box” on Monday.

Japan’s Nikkei climbed 251 points overnight or 1.8% to finish at 14475…

Europe

European markets are down moderately but near session lows in late trading overseas…growth in euro-area manufacturing and services stayed close to the fastest since 2011 in March as France improved, providing further evidence that the region’s recovery is on track…

North America

The Dow is down 35 points as of 7:35 am Pacific…the TSX is off 44 points while the Venture is holding steady at 1035…

Fission Uranium Corp. (FCU, TSX-V) was halted pre-open and resumed trading at 7:30 am Pacific after the release of more stellar results (9 additional holes) from Patterson Lake South…PLS14-187 returned 53.47 m of total composite “off-scale” (>9999 cps) in 146 m of total composite mineralization, starting at a shallow depth of 58.5 m and closing the gap between the R390E and R780E high-grade zones…this hole is still in progress at a current depth of 407 m, in altered but unmineralized pelitic gneiss…FCU is up 6 cents to $1.67 after just 5 minutes of trading as of 7:35 am Pacific…Aldrin Resource Corp. (ALN, TSX-V), commencing a drill program at its Triple M uranium property, is showing strength in early trading today, up a penny at 11 cents on total volume (all exchanges) of 1.6 million shares…

13-Month Venture Chart

The Venture is holding up extremely well in the face of a 5% decline in Gold from its high last week…note the uptrend line on this 13-month daily chart, and keep in mind the Feb. 26 intra-day low of 1005 (the rising 50-day SMA is immediately below that)…there is tremendous support underpinning the Venture between the 970′s, an area of strong resistance last year, and 1005, limiting the potential of any near-term pullback from current levels to about 5%…some immediate weakness is understandable given the current posture of this chart including recent declining buy pressure…

Short-Term Silver Chart Update

Silver is attempting to stay within a bullish downsloping flag and it’ll be interesting to see if there’s an intra-day reversal today that would keep the metal above the Fib. support level of $20.28 on a closing basis…RSI(14) on this 4-month daily chart shows strong support at 40%, so the conditions are right for a potential immediate or near-term reversal…

Long-Term Silver Chart Update

The long-term Silver chart confirms that the metal has exceptional support just below $20…sell pressure has been dominant since early last year but is weak…if and when Silver breaks above the main downtrend line, watch out…RSI(2) has unwound from above 80% to 46%…

TSX Venture Exchange and Gold

Encouragingly, the Venture actually eked out a 1-point gain last week to close at 1035 despite a $49 drop in the price of Gold and a 7% setback in the TSX Gold Index.  How the week went was very much on display Friday as the top three volume leaders were medical marijuana plays, all performing exceedingly well, in a great example of “herd behavior” trading.  At least this “sector” is generating volume and some people are making money (lots of it in certain cases).   The Venture may have lost a little bit of momentum last week but this market certainly hasn’t gone to “pot”, pardon the pun.

One of the big gainers for the week was Reliant Gold Corp. (REC, TSX-V) which rose from the ashes and jumped from 2.5 cents to as high as 9 cents before settling Friday at 6 cents.  The company announced last Monday that it has worked out the terms of a JV agreement with Probe Mines Ltd. (PRB, TSX-V) on its Borden Lake South Project (a definitive agreement is expected to be executed by April 4).  Probe has been one of the great Canadian exploration success stories over the past year, one we’ve been tracking closely, and another company to keep an eye on in that area is Nikos Explorations Ltd. (NIK, TSX-V) – it has tripled in the past 10 trading sessions but potential 10-baggers aren’t restricted to just marijuana plays.

We’re in a new bull market on the Venture, albeit a selective one at the moment.  There are huge opportunities in the junior exploration space but the key is to focus on important discovery areas (the Sheslay Valley is a key example) that have an excellent chance to generate their own “herd behavior” trading in the not too distant future, and projects that make sense that are being advanced in the right way by capable management groups.  One of numerous examples – Highbank Resources Ltd. (HBK, TSX-V) took a big step forward last week as it obtained its NOW permit approval for its Swamp Point North aggregate project near the Port of Prince Rupert (a smart play on the LNG boom in B.C. and the expansion of the Port of Prince Rupert).  HBK has broken out above key resistance to a new multi-year high.

We have two charts on the Venture today, and both show tremendous underlying strength in this market.

John’s 5-year weekly chart gives us the “big picture” direction of where the Venture is likely headed in 2014 – somewhere, in our view, between the first two Fib. resistance levels (1465 and 1650, approximately).  Investor patience will be critical – it certainly won’t be straight up from here.  Understand the key support and resistance levels – near-term/short-term/medium term/longer term – so you don’t panic on a pullback or get overly bullish at the wrong time in terms of your trading.  Keep in mind, too, that “discovery plays” can run counter to the market as Doubleview Capital Corp. (DBV, TSX-V), Garibaldi Resources Corp. (GGI, TSX-V) and Prosper Gold Corp. (PGX, TSX-V) demonstrated near the end of January during a 5% Venture pullback.   We expect DBV to commence drilling this coming week at its Hat Property Cu-Au porphyry discovery and they have some “bulls-eye” targets.  If DBV hits again, and we like their odds, the Sheslay Valley plays could explode no matter what the overall market is doing.

13-Month Venture Daily Chart

Note the uptrend line on this 13-month daily chart, and keep in mind the Feb. 26 intra-day low of 1005 (the rising 50-day SMA is immediately below that).  There is tremendous support underpinning the Venture between the 970’s, an area of strong resistance last year, and 1005, limiting the potential of any near-term pullback from current levels to about 5%.  Declining buy pressure this month and an RSI(14) divergence with price on this chart are indicative of potential minor weakness and maybe a test of that trendline support in the days ahead.  We’ll see what happens – great accumulation opportunity if there is any weakness.

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.

Gold

Gold got hit by a few factors last week – profit taking, an apparent deescalation (in the eyes of the market) of the Russia-Ukraine crisis (Putin can’t be trusted, this is going to heat up), and remarks by Janet Yellen in her first news conference as Fed Chair.  Bullion recovered slightly Friday but still suffered a $49 or 3.5% weekly drop, closing at $1,335.

This 2-year weekly chart shows how Gold met resistance at a long-term down trendline.  The current trend remains bullish, however, with very strong support around $1,300 where the MA-10 on this weekly chart ($1,306) has crossed above the MA-40 ($1,298).  Asian physical demand has been subdued recently but should kick in at the bottom end of chart support between $1,275 and $1,300, if bullion were to drop that low.  The U.S. Dollar Index remains in a downtrend despite last week’s strength.

Silver fell $1.19 an ounce to close at $20.27.  Copper, clearly in oversold conditions, stayed unchanged at $2.94.  Crude Oil climbed by nearly $1 a barrel to $99.46 while the U.S. Dollar Index jumped three-quarters of a point to 80.12.

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 Gold’s largest annual drop in three decades in 2013, the fundamental long-term case for the metal remains solidly intact – 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 “momentum traders” away from bullion.  June’s low of $1,179 was likely the bottom for Gold.  Extreme levels of bearishness emerged in the metal last year.  With the long-term bull market remaining intact, we expect new all-time highs in Gold as the decade progresses.  Inflationary pressures should eventually kick in around the globe after years of ultra-loose monetary policy.

We are in the process of updating our eAlert list, especially in light of recent exploration discoveries and the much improved Venture outlook for 2014.  If you wish to be included in the BMR eAlert system, which sends out occasional important and timely market information that’s not always posted on our site (or before it’s posted on our site), simply click on the “Contact Us” button you see in the top right hand corner of this page, type in “Alert” in the subject line, give us your first name, and hit the send button.  Your email address is not given out to any other party.

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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.

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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.

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Gold is trying to rebound today after a $50+ slide this week…as of 7:30 am Pacific, bullion is up $7 an ounce at $1,336…Silver is up 7 cents at $20.34…Copper is 2 cents higher at $2.95…Crude Oil has added 57 cents and sits at $99.47 while the U.S. Dollar Index has fallen one-tenth of a point to 80.09…

Gold is headed for its first weekly loss since January after Federal Reserve Chair Janet Yellen said Wednesday that interest rates could rise “around six months” after asset purchases end (perhaps a poor choice of words, rookie mistake by Yellen?) which is expected later this year…the Fed cut monthly bond-buying by another $10 billion at the conclusion of their two-day meeting, leaving purchases at $55 billion…several factors are still underpinning bullion, however, including tensions over Russia’s annexation of Crimea and what may possibly yet unfold (what’s Putin’s next move?) in that geopolitical hotspot…

Bank of America Merrill Lynch has raised its outlook on Gold in a report released yesterday.  “We note that the recent rally was largely driven by investors in Europe and the U.S., while physical buyers in large parts of Asia have remained on the sidelines,” BAML said. “Acknowledging also that a few of the recent bullish macro-economic price drivers may normalize, we see a risk that Gold may give back some of its recent gains through 2Q14. Yet, at the same token, we continue to believe that Gold prices will bottom out in 2014, reflected in an increase of our average price forecast by 13% to $1,300/oz.”

Meanwhile, Goldman Sachs has reiterated its call for Gold to fall to around $1,050 an ounce by year-end due to a recovering U.S. economy…

Today’s Markets

Asia

Gains in the real estate sector lifted the Shanghai Composite nearly 3% higher overnight with a 54-point advance…attention now turns to the release of HSBC’s March China Purchasing Managers’ Index for manufacturing, due Monday…we’ll see if the trend of weak economic data continues…

Europe

European markets are mixed in late trading overseas, though Russia’s stock market (not surprisingly) was under pressure today – down about 2%…

North America

The Dow is up 75 points as of 7:30 am Pacific…the TSX has gained 9 points while the Venture is up a point at 1036…

U.S. Dollar Index Chart Update

A weakening U.S. Dollar Index is often bullish for the Venture as you can see in the 4-month Dollar Index below with a CDNX comparative near the bottom…the Venture now has a rising 200-day moving average (SMA); the Dollar Index is fighting a declining 200-day SMA, now at 81.04 where there is very stiff resistance…the Dollar Index has strengthened this week but a strong test of critical support at 79 has still not occurred since the confirmed downtrend in the greenback began last September – we expect to see that test at 79 at some point in the near future…there are many dollar bulls who are calling for a significantly higher greenback – that doesn’t match with the Venture and Gold trends we’re seeing, however…

Sheslay Valley Update – GGI Interview (Part 2) and ABR’s Hackett Property

“There are still a lot of investors and analysts who are just beginning to learn how prolific the Sheslay Valley is emerging,” Garibaldi Resources Corp. (GGI, TSX-V) President and CEO Steve Regoci told us the other day in an exclusive interview with BMR…that’s great news, in our view, for those who are positioned now in several of these exciting plays as the masses have yet to pile in…all the facts to date (drill hole results, geochemical and geophysical signatures, classic Stikine Arch terrane, the “cooked up” rocks and overwhelming evidence of a robust hydrothermal system) point toward the strong probability of the discovery of multiple deposits over a broad mineralized NW/SE trending corridor, the scale of which is massive – 22 km from the Grizzly West porphyry target to the Doubleview Capital Corp’s (DBV, TSX-V) Hat discovery along a corridor that is also broadening out as reported by GGI last week…

Regoci points toward some simple facts that are highly unusual in exploration – three Cu-Au porphyry discoveries (Star, Pyrrhotite Creek and the Hat) over wide distances in a previously under-explored district on just 49 drill holes (32 historical, 17 recent) with a superb “hit rate”…(Click on the forward arrow to listen to this 4-minute excerpt of the Regoci interview (part 2) – requires Adobe Flash Player version 9 or above):

[audio:https://e8d59e.a2cdn1.secureserver.net/wp-content/uploads/2014/03/Regocci-GGI-clip-2.mp3|titles=Regocci GGI clip 2]

Ashburton Ventures Inc. (ABR, TSX-V)

Some of the most astute staking/acquisition moves in the Sheslay Valley over the past 10 months, and in recent weeks, have come from Mike England who learned from his experience at Blackwater in 2011 that even a relatively small parcel of land (in that case just 15 sq km) in a hot area can turn out to be worth many millions of dollars (his Geo Minerals got taken out by New Gold Inc. – NGD, TSX – for $23 million)…since February, England has assembled a highly strategic land position for upstart Alix Resources Corp. (AIX, TSX-V) in the Sheslay Valley that holds company-changing possibilities as AIX now controls a 16 km-wide stretch contiguous to the entire northern border of Prosper Gold Corp.’s (PGX, TSX-V) Sheslay Project (North Cap East) and adjoining much of the northwestern border of Garibaldi’s Grizzly (North Cap West)…England also picked up ground for AIX contiguous to the northeastern boundary of Doubleview Capital Corp.’s (DBV, TSX-V) Hat Property…we’ll explore those moves in more detail in the near future…this morning we’re going to focus on the 900-hectare Hackett Property, claims that England staked in May of last year contiguous to much of the eastern border of the Hat…

Many geologists we’ve spoken to now believe the Hackett may represent an extension of any deposit at the Hat given the known southeast-trending nature of mineralization in the district, and historical reports (“Hoey showing”) confirming that mineralization does indeed extend to the east of Doubleview discovery holes HAT-08 and HAT-11…those holes are just 1,000 metres west of the Hackett border…the general market has been slow in picking up on the significance of the Hackett, but ABR could literally explode overnight on more good drill results from the Hat where crews are now mobilizing for the start of drilling almost any day now…ABR closed at just 5.5 cents yesterday, and also holds some high-grade Platinum prospects northwest of Whitehorse near the Wellgreen deposit…

According to geologist Eric Ostensoe’s NI-43-101 technical report on the Hat, the “Hoey stock” is a monzonite/gabbro variation intrusion in the southeastern part of the Hat (straddling the Hackett border)…the Hoey features strongly sheared mafic rich formations with pyrite, bornite, chalcopyrite and traces of molybdenite in association with crystalline carbonate…Gold values up to 1 oz/t (31 g/t) were reported by prospector Frank Hoey in the 1960’s – following that, areas proximal to the Hoey have assayed several g/t Au…grab samples have also assayed Cu as high as 2.2%…the area is strongly gossaned and one theory, as mentioned in the technical report, is that it may represent a “cap” area that overlies a zone of precious metal enrichment…PGM’s have never been investigated…

Several geologists we’ve spoken to are very bullish regarding the potential of the Hackett as it has never been systematically explored, and of course it’s right on trend with the DBV discovery and the Hoey showing…Ashburton reported last month that it will be commencing an early work program including sampling and mapping to prioritize potential drill targets at the property…historical aeromagnetics for the Hackett identified a magnetic high on the southern portion of the claims…

Below is a close-up view of the Hat discovery area…the Hat is surrounded on all sides by claims held by Ashburton, Garibaldi, Alix, Prosper and Romios Gold (RG, TSX-V)…

ABR Updated Chart

Below is an updated ABR 2.5-year chart from John…notice the immediate reversal from sell pressure to buy pressure in ABR almost immediately after the discovery reported by Doubleview January 20…”smart money” has been accumulating ABR since that time…RSI(14) is at support, the ADX indicator shows a very bullish trend, and the rising 50-day SMA is at 5.5 cents…

Highbank Resources Ltd. (HBK, TSX-V) Update

Lots happening in British Columbia, from the Sheslay Valley to the Port of Prince Rupert and beyond…aggregate rock may sound boring, but it’s a much-needed resource for looming LNG projects in the province as well as the expansion of the Port of Prince Rupert…earlier this week, Highbank Resources (HBK, TSX-V) received its Notice of Work permit for its Swamp Point North aggregate project which has an impressive NI-43-101 resource of 72 million tons of measured and indicated aggregate rock…the key, however, is the deposit’s proximity to tidal waters (it sits on the edge of the Portland Canal) which gives HBK an advantage over competitors who have to move material by truck over significant distances…with the permit now in hand to proceed to production, HBK is in a position to be able to raise the money it requires but putting an aggregate deposit into production is far cheaper and easier than starting a Gold mine…as the saying goes, location, location, location – Highbank has it with Swamp Point North and an excellent opportunity to exploit that resource…

Technically, HBK has broken out above long-term resistance at 15 cents which was support up until late 2009 as you can see in this 10-year monthly chart from John…HBK is up half a penny at 16.5 cents as of 7:30 am Pacific…

Balmoral Resources Ltd. (BAR, TSX)

Keep an eye on Balmoral Resources (BAR, TSX) which has resumed drilling at its Grassett Ni-Cu-PGM discovery (refer to yesterday’s news release and March 5 NR) located at the eastern end of the company’s Detour Trend Gold Project in Quebec…an extensive zone of Nickel-Platinum-Palladium (plus or minus Copper) mineralization has been intersected over a 700-m strike length in broadly spaced drilling and remains open in all directions…BAR also holds a wide assortment of advanced and early stage Gold exploration throughout the prolific Abitibi greenstone belt…

A 1-year weekly chart for BAR is showing a confirmed breakout…BAR is 3 cents higher at 73 cents as of 7:30 am Pacific…

Goldeye Explorations Ltd. (GGY, TSX-V)

Goldeye Explorations (GGY, TSX-V) has climbed about 50% since we introduced it to our readers in late February based on favorable geology at the company’s Weebigee Project in northwestern Ontario…since then, GGY has reported some high-grade intersections from both the Knoll zone (open in all directions) and the RvG4 zone on strike 500 m to the NW…drilling continues…still very speculative at this early stage, but results to date are highly encouraging…

The 2-year weekly chart shows an unconfirmed breakout above Fib. resistance at 16 cents, so today’s trading will be important…sell pressure was dominant for the past two years until late February…

Note: John and Jon both hold share positions in GGI, DBV, AIX and ABR.  Jon also holds a share position in PGX.

Gold has traded between $1,320 and $1,336 so far today, hitting a 3-week low…as of 8:00 am Pacific, the yellow metal is down $3 an ounce at $1,338…Silver is 26 cents lower at $20.35…Copper is off a nickel at $2.94…Crude Oil is down slightly at $100.15 while the U.S. Dollar Index is up one-fifth of a point at 80.24…

The Fed’s tone yesterday was slightly more “hawkish” than expected, or perhaps there were some rookie mistakes by Janet Yellen in her first news conference as Fed Chair…as expected, the Fed cut monthly bond-buying by $10 billion and said they will slow purchases in “further measured steps.” Central-bank officials estimated the benchmark rate target will be 1% at the end of 2015 and 2.25% a year later…that compares with their December estimate of 0.75% and 1.75%…Yellen sees a “considerable time” between the end of the stimulus and the first rate increase, meaning “around six months or that type of thing,” remarks that some market participants found a little unsettling (a Yellen “curve ball”) with rate increases possibly coming a bit sooner than expected…Gold came under pressure as a result and the greenback strengthened…

Gold could yet power higher on heightened tensions between Ukraine and Russia…leading members of Congress are demanding that the Organization for Security and Cooperation in Europe immediately deploy international monitors to eastern and southern Ukraine, according to Fox News…a letter sent by Sen. Dick Durbin, an Illinois Democrat, Arizona Republican Sen. John McCain, and six other lawmakers says monitors are needed to defuse tensions in Ukraine after Russia’s takeover of the Crimean peninsula…the lawmakers visited Ukraine last week and say Russia is using “provocateurs and intelligence agents to brazenly stir trouble” in eastern Ukraine as a possible “manipulated pretext for additional military action.”  The bottom line is that Vladimir Putin cannot be trusted and Russia is in an expansionist mode with no “policeman” on the international stage to confront him…

Remarks on Gold from much followed writer Dennis Gartman during an interview on CNBC: “I’ve quietly turned bullish on Gold for a few reasons. Firstly, beginning five and six weeks ago we started to see a lot of the mining companies –  even the largest Gold mining companies – begin to curtail production. That’s always a sign of an end of a bear market.   When senior management at the largest Gold mining firms throw their hands up in dismay and begin curtailing production, usually within weeks the lows are going to be found. Decision by committee is always that way. It’s slow; it takes time; and it’s always late.”

Updated Gold Chart

Gold appears to be completing a bullish cup-with-handle pattern, like some Gold producers already have, and this implies strong support between $1,270 and $1,315 as shown in this 1-year weekly chart…RSI(14) has unwound to previous support…

Today’s Markets

Asia

Asian stocks sold off overnight after Yellen suggested interest rate hikes could happen sooner than expected…China’s Shanghai Composite fell 28 points to close at 1993 while Japan’s Nikkei slipped 238 points or 1.7%…

Europe

European markets are mostly modestly lower in late trading overseas…

North America

The Dow is up 51 points as of 8:00 am Pacific…any pullback that has been related to the Fed since November has been a buying opportunity…the number of Americans filing new claims for unemployment benefits rose less than expected last week, pointing to some underlying strength in the labor market…the four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell 3,500 to 327,000, the lowest level since November…

The TSX has added 14 points through the first 90 minutes of trading…the Financial Post reported this morning that the Royal Bank of Canada is predicting relatively strong economic growth in Canada this year and next, although it says the loonie is about to fall even further, trading at 87 U.S. cents by the end of this year and dipping to 85 cents by the end of 2015…Canadian exporters will begin benefiting from a stronger U.S. economy this year and will get an added boost from the weaker loonie…

The Venture is down 4 points at 1035 as of 8:00 am Pacific…understanding volatility and how to deal with it are crucial for investors in the junior resource market…the Venture has clearly turned the corner as we have pointed out on many occasions in recent months – the technicals are overwhelmingly supportive of that conclusion – but minor pullbacks are going to occur along the way as the Index gradually moves to significantly higher levels as the year progresses…in a bear market, you accumulate during very oversold conditions and sell into rallies; in a bull market, you buy confidently into weakness and one strategy is to accumulate a trading position and a core position…it’s critical to understand resistance and support levels so you don’t panic on a minor correction and make a trading mistake…

This 1-year Venture chart shows a clearly defined uptrend with strong support at the 1000 level…this coincides with Fib. support and the rising 50-day moving average (SMA)…superb support for the Venture exists in the 970’s which for months was a level that provided very stiff resistance…

Pilot Gold Inc. (PLG, TSX) Update

Step-out drilling by Pilot Gold Inc. (PLG, TSX) at Kinsley Mountain’s Western Flank target in Nevada has intersected high-grade Gold mineralization, giving a significant lift to PLG recently and allowing the company to secure a $20 million bought deal financing at $1.53 per share…drill results support the fact that the Kinsley Project (held 78% by PLG) can host significant high-grade mineralization in the Secret Canyon shale, which is now becoming the primary target of interest for ongoing exploration at Kinsley Mountain…Nevada Sunrise Gold Corp. (NEV, TSX-V) has a minor interest in the project and has rocketed from a February low of under 20 cents to a recent high of 96 cents…NEV is up a penny at 89 cents as of 8:00 am Pacific…it has 19 million shares outstanding after a recent rollback and an early March financing at 35 cents for just over $1 million (3 million shares)…

Below is a 1.5-year weekly PLG chart from John…at $1.53, the stock is resting at the Fib. 50% support level and the 20-day rising moving average…one would expect that support to hold as the financing is completed (scheduled to close on or about April 2)…Fib. 28.2% support is at $1.37, slightly above the rising 50-day SMA…as always, perform your own due diligence…overall, this situation looks very promising but that doesn’t rule out a potential pullback before the uptrend resumes…

WestKam Gold Corp. (WKG, TSX-V) Update

Yet another British Columbia company worthy of our readers’ due diligence, which we first mentioned last month, is WestKam Gold Corp. (WKG, TSX-V)…WKG has been trading between 4 and 5 cents since the end of January…the company’s Bonaparte Gold Project covers more than 2,000 hectares of largely unexplored ground about a one hour drive north of Kamloops and approximately 40 km north of New Gold Inc.’s (NGD, TSX) New Afton mine…what’s interesting about WKG is that a 3D IP survey completed last fall extended the exploration target of a high-grade discovery Gold zone (historical drill results, for example intersected 143 g/t Au over 1.2 m and 115.5 g/t Au over 1.1 m) and also located a multi-phase intrusive structure and anomalies indicative of a large Copper-Gold porphyry intrusive…in fact, the potential for a Copper- Gold porphyry system was recognized by the B.C. Geological Survey in a 2013 report…

Technically, John’s 3-year weekly WKG chart shows a breakout above a long-term downtrend line…RSI(14) is hovering around resistance at 50%, so that’s a key level to watch…strong sell pressure late last year has turned into buy pressure, so accumulation is picking up and we’re seeing that in the volume…this could develop into a very interesting play in 2014, and it’s trading under a nickel with 49.5 million shares outstanding…

Aldrin Resources Corp. (ALN, TSX-V) Update

Aldrin Resources Corp. (ALN, TSX-V) has been held back by significant share dilution over the last year (more than a doubling of the O/S) but the company does have some excellent uranium prospects in the Athabasca basin and is mobilizing for a drill program (starting within a few days) comprising as much as 4,000 m…targets are coincident structure, radon, magnetic, basement conductor and gravity anomaly signatures, consistent with uranium deposits elsewhere in the region…technically, ALN is looking healthier these days and could be gearing up to challenge chart resistance at 14 cents…however, immediate Fib. resistance exists at 10 cents which coincides with the declining 200-day SMA…ALN may rise a little on speculation but ultimately it’s going to have to deliver results…ALN is unchanged at 9.5 cents as of 8:00 am Pacific…

Note: Jon holds a share position in WKG.

Gold has traded between $1,338 and $1,359 so far today…as of 8:30 am Pacific, bullion is down $15 an ounce at $1,339 on Fed “decision” day…a policy statement from the Fed comes at 11:00 am Pacific and this will be followed by Janet Yellen’s first news conference as Fed Chair…Gold has strong technical support around $1,350 and also at the March low of $1,327, so this pullback is not negating a bullish overall posture…Silver is off 16 cents at $20.65…Copper has slid 6 cents to $2.90…Crude Oil is down 2 pennies at $99.68 while the U.S. Dollar Index is up one-tenth of a point at 79.50…

The ease to which Vladimir Putin has annexed Crimea in Europe’s biggest land grab in decades will no doubt embolden the Russian President, but for now the market is naively taking him at his word that Crimea is all that he’s interested in…the west has shown weakness in dealing with the Russians, who are in an expansionist mode, and that will have repercussions down the road, ultimately a bullish factor for Gold…President Obama in recent years has treated the Kremlin as a top U.S. diplomatic partner in addressing national security challenges despite strong evidence Putin was working at cross purposes to American ambitions in many parts of the world…Rep. Eric Cantor, the #2 Republican in the House, got it right when he stated yesterday, “It is past time we reassess our entire strategy towards a nation that poses an increasing threat to international peace and security.”

Today’s Markets

Asia

China’s Shanghai Composite slipped 3 points overnight to close at 2022 while Japan’s Nikkei average gained 51 points to finish at a one-week high despite weak trade data…

Europe

European shares are mixed in late trading overseas…

North America

The Dow is up 6 points as of 8:30 am Pacific…the conclusion of today’s FOMC meeting and Fed Chair Janet Yellen’s debut news conference as Fed Chair will take center stage in a few hours…economists expect the central bank to taper by another $10 billion and alter its forward guidance stance…the Fed will release updated forecasts for growth, inflation, unemployment and interest rates…

The TSX is down 10 points through the first two hours of trading in the wake of yesterday’s resignation, for personal reasons, by Canadian Finance Minister Jim Flaherty…the loonie remains under pressure, trading slightly below 90 cents U.S., its lowest level since mid-2009…

Goldcorp Inc. (G, TSX) Updated Chart

Though near-term moves are difficult to predict, the overall chart patterns of many Gold producers are looking very favorable in this early part of 2014 – pointing, in fact, to a potentially very strong year for bullion…Goldcorp Inc. (G, TSX) is yet another example as you can see in this 15-month weekly chart that shows a classic cup-with-handle pattern…Goldcorp’s 200-day moving average (SMA) has also just reversed to the upside after being in decline since late 2011…despite Gold’s pullback this morning, Goldcorp is off just 30 cents at $30.54 as of 8:30 am Pacific…

St. Andrew’s Goldfields Ltd. (SAS, TSX)

A really encouraging sign for the Gold sector is when you see a chart like this for a company with 2014 production slated to decrease from 100,000 ounces to between 75,000 and 85,000 ounces…St. Andrew’s Goldfields (SAS, TSX), however, expects to maintain positive cash flow from its mine operations east of Timmins including its flagship asset, the Holt mine, which continues to expand…the company also reported encouraging underground drilling results from its Taylor Project earlier this month…

There is plenty of Fib. support in the 30’s which also coincides with a rising 100-day SMA at 31 cents and a rising 50-day SMA at 36 cents…the chart tells us there’s “opportunity” in any weakness here…SAS is unchanged at 39 cents through the first two hours of trading today…

The Venture is holding up well, unchanged at 1039 as of 8:30 am Pacific, in the face of weakness in Gold and base metals this morning…

Highbank Resources Ltd. (HBK, TSX-V)

Keep an eye on Highbank Resources (HBK, TSX-V) which is garnering attention this morning after announcing that it has received final permitting for its Swamp Point North aggregate project from the B.C. Ministry of Energy and Mines…HBK, with a NI-43-101 aggregate resource of 70+ million tonnes near the Port of Prince Rupert, is an interesting “infrastructure” play in an excellent position to take advantage of the boom in LNG projects in British Columbia…that’s certainly a major investment theme at the moment in the province…HBK’s advantage is proximity – its resource is so close to the Port of Prince Report, it can deliver aggregate at a lower cost by barge, as opposed to having to truck the material…with the permit now in hand to proceed to production, HBK is in a position to be able to raise the money it requires…

We’re encouraged by the fact that HBK is looking quite strong technically with the stock clearly on the rebound after hitting a multi-year low in late 2012…John’s 10-year monthly HBK chart shows important resistance at 15 cents…that’s the key area to watch – very bullish if HBK can close above that level…HBK opened at 16.5 cents this morning after yesterday’s halt, climbed as high as 18.5 cents and is up 2 cents at 16 cents as of 8:30 am Pacific on total volume (all exchanges) of just over 600,000 shares…as always, perform your own due diligence…

North American Nickel Inc. (NAN, TSX-V) Update

North American Nickel (NAN, TSX-V) announced this morning that it will be carrying out electromagnetic and gravity surveys through Crone Geophysics beginning next month at its 100%-owned Maniitsoq Nickel-Copper-Cobalt-PGE project in southwest Greenland…the Crone PEM system has played an important role in the exploration efforts at nickel areas around the world, such as the Raglan camp, Voisey’s Bay, Sudbury, Alaska, Tanzania, Western Australia, and now Greenland….gravity surveys should also be effective – they measure extremely small variations in the Earth’s gravitational field, which can be used to locate high density material such as nickel sulphide-bearing rock…NAN is off a penny at 31 cents as of 8:30 am Pacific…

Eskay Mining Corp. (ESK, TSX-V) Update

Northwest B.C., all the way up to the Sheslay Valley, is going to be “hot” this year which is why we introduced Eskay Mining Corp. (ESK, TSX-V) to our readers in mid-February when it trading at just 6 cents…since then, it has climbed by more than 50%…

ESK controls 40 sq. km surrounding the prolific past producing Eskay Creek mine, and they have some giant neighbors – Pretium Resources Inc. (PVG, TSX) and Seabridge Gold Inc. (SEA, TSX)…while it was in operation, Eskay Creek was the second richest deposit in North America and the fifth largest Silver producer in the world…a technical adviser for ESK is the highly respected James Rogers, P.Geo., who was Chief Geologist at the Eskay Creek mine between 1994 and 2003…Rogers prepared an ESK corporate presentation which is available on their web site – we suggest our readers check it out…

Technically, ESK broke out above a long-term downtrend line last month after finding rock-solid support at 3 cents in December…a surge in volume, always a valuable clue,  started in early January which is what caught our attention…below is an updated 5-year weekly chart from John…we’ll keep watching this one closely…very strong chart support exists at 7.5 cents which is also just above the rising 50-day SMA…ESK closed at 10 cents yesterday…

Prosper Gold Corp. (PGX, TSX-V)

Prosper Gold (PGX, TSX-V) has been quietly going about its business in recent months in advance of drilling at its Sheslay Cu-Au Porphyry Project scheduled to begin by early to mid-May…the level of detail that has gone into preparations for PGX’s Phase 1 drill program is extraordinary and typical of how Pete Bernier and geologist Dirk Tempelman-Kluit operate…do not mistake the relatively low volume in the stock compared to some of its peers in the Sheslay Valley as a sign that PGX is not the exceptional opportunity that it is at current levels…the Prosper crew has a template to work from that was established at Blackwater, and they will carry out their game plan with precision at the Sheslay…they also won’t waste any time in getting aggressive with step-out holes in an attempt to “connect” the Star targets, and they’ll also be taking aim at Pyrrhotite Creek to the southwest which bears all the classic signatures of a potential major new discovery…

Below is a 2.5-year weekly PGX chart from John…the “accumulation” zone is between 45 and 50 cents…

Note: Jon holds a share position in PGX.

Gold has traded between $1,351 and $1366 so far today following yesterday’s intra-day reversal…as of 8:35 am Pacific, bullion is down $10 an ounce at $1,358…Silver is off 39 cents at $20.80…Copper is up a penny at $2.96…Crude Oil has added more than $1 a barrel to $99.16 while the U.S. Dollar Index is up slightly at 79.44…

Gold’s 50-day moving average (SMA) on the daily chart is just $11 below the 200-day SMA, which implies that barring a Gold collapse, we should see bullion make a “Golden cross” in the very near future…according to www.usfunds.com, going back to 2000, a Golden cross in Gold is followed on average by a 50% rally lasting on average 15 months…interestingly, a “Golden Cross” has already occurred on the weekly chart as shown by John this morning (see below)…”Golden Crosses” aren’t always 100% reliable, however, and should be viewed in the context of other technical indicators…

How will Gold react to the Fed this week?…the Fed begins a two-day policy meeting today under the leadership of Janet Yellen who will give her first news conference tomorrow as the new Chair…the Fed is expected to continue to scale back its bond buying program but its language and Yellen’s words will be weighed carefully…new economic forecasts from the Fed will also be released…after cutting its monthly bond buying by $10 billion at the prior two meetings, the Fed will trim purchases by another $10 billion to $55 billion, and continue reductions at that pace at every meeting before announcing an end to the program at its Oct. 28-29 gathering, according to a Bloomberg survey…

5-Year Weekly Gold Chart

This 5-year chart tracks Gold’s RSI(14) and the 50 and 200-day SMA’s on a weekly basis…we’re seeing some volatility in the $1,300’s, but it’s hard not to be bullish about the overall trend that appears to be shaping up for 2014 after last year’s double bottom…

Today’s Markets

Asia

China’s Shanghai Composite was essentially unchanged overnight, closing at 2025, while Japan’s Nikkei climbed 134 points to finish at 14411.

Europe

European markets were solidly in the green today…a March survey of German investor confidence came in lower than anticipated…however, some positive trends were reported this morning…the 18 countries that share the euro had a surplus in their trade of goods with the rest of the world in January, an indication that the currency area’s economic recovery continued at the start of the year…meanwhile, European car sales rose by nearly 8% in February, the sixth consecutive monthly gain, as a gradual economic revival in southern Europe and price cuts boosted demand for new models…

North America

The Dow is up 97 points as of 8:35 am Pacific…the Commerce Department reported this morning that housing starts were little changed last month, illustrating the industry is stabilizing after harsh weather dented home building…separately, the Labor Department’s Consumer Price Index edged up 0.1% last month (inflation remains very subdued) as a drop in gasoline costs offset an increase in the price of food…

The TSX is 69 points higher as of 8:30 am Pacific while the Venture is even at at 1034…Doubleview Capital Corp. (DBV, TSX-V) announced this morning that it’s mobilizing for drilling at the Hat Property in the Sheslay Valley…drilling will focus initially on the discovery area at “Anomaly B”…John has an updated DBV chart this morning (see below) showing how the stock landed on very strong technical support yesterday…tomorrow we’ll take a look at some of the inviting targets DBV has to begin this new round of drilling…

The Scale Of The Sheslay Valley – BMR Interviews GGI’s Steve Regoci

The distance between Garibaldi Resources’ Corp.’s (GGI, TSX-V) Grizzly West porphyry target and Doubleview’s Hat discovery is a whopping 22 km along a NW/SE trend, with Prosper Gold Corp.’s (PGX, TSX-V) Star, Pyrrhotite Creek and Copper Creek discoveries and targets in between…this is an impressive long corridor with an excellent chance of broadening out as GGI reported at the end of last week, giving the Sheslay Valley incredible potential scale and the opportunity to emerge as a world class exploration and mining district…

This morning, some very interesting comments from GGI President and CEO Steve Regoci regarding the 262 sq. km Grizzly Property in particular and the Sheslay Valley in general in an exclusive interview with BMR (click on the forward arrow to listen to this 3-minute excerpt – requires Adobe Flash Player version9 or above):

[audio:https://e8d59e.a2cdn1.secureserver.net/wp-content/uploads/2014/03/Regoci-GGI-clip-1.mp3|titles=Regoci GGI clip 1]

We’ll have more parts of this interview throughout the week…

Doubleview Capital Corp. (DBV, TSX-V) Updated Chart

This is a very simple chart to understand – previous resistance at 25 cents has become new support for DBV as demonstrated yesterday when it slipped to an intra-day low of 25 cents before closing at 26.5 cents…DBV is also strongly supported by its rising EMA(20), currently at 25.5 cents…the overall trend remains very bullish…DBV is up half a penny at 27 cents as of 8:35 am Pacific…

Alix Resources Corp. (AIX, TSX-V) Updated Chart

Alix Resources (AIX, TSX-V) has aggressively been building an impressive land package in the Sheslay Valley including recently announced claims contiguous to the eastern border of DBV’s Hat Property…technically, AIX is climbing an upsloping channel – this is a very bullish scenario that matches well with what’s developing on the ground…the 200-day SMA has also reversed to the upside…the Sheslay Valley is clearly a company-building opportunity for AIX, so the next several months could prove to be very interesting…President and CEO Mike England’s last major “area play” in B.C. (Geo Minerals) got taken out by New Gold Inc. (NGD, TSX-V) in late 2011…AIX is unchanged at 4.5 cents as of 8:35 am Pacific…

Goldeye Explorations Ltd. Updated Chart (GGY, TSX-V)

Goldeye Explorations (GGY, TSX-V) has backed off slightly this morning after staging an unconfirmed breakout yesterday – surging 4 cents to close at 18 cents on strong volume – thanks to solid drill results from its Weebigee Project in northwestern Ontario…we initially brought GGY to our readers’ attention in late February when it trading around 11 cents, and Weebigee is showing increasing potential…more encouraging high-grade results were released yesterday from 7 more holes with drilling continuing through at least the end of this week…results from the Knoll zone included 8.59 g/t Au over 6.83 m…interestingly, at the RvG4 zone, 500 m to the northwest of Knoll, GGY intersected 23.15 g/t Au over 3.97 m in hole BK14-18…the relationship between these two zones is not yet known, however alteration, quartz veining, and host lithologies are similar…

Below is a 2-year weekly chart from John…GGY is off 1.5 cents at 16.5 cents as of 8:35 am Pacific…

Opportunities Around Borden Lake

As Reliant Gold Corp. (REC, TSX-V), demonstrated yesterday, there are clearly opportunities for investors in the area around the multi-million ounce Gold discovery of Probe Mines Ltd. (PRB, TSX-V) at Borden Lake in northwestern Ontario…Probe continues to drill the high-grade southeast extension of that deposit, and it’s an exciting exploration story we’ve been following closely at BMR for quite some time…investors may wish to perform their due diligence on little-known Nikos Explorations Ltd. (NIK, TSX-V) which was rolled back 1-for-5 late last year and is actively exploring its Borden Lake Extension Project immediately adjacent (5 km southeast ) to Probe’s discovery along the western extension of the Ridout shear zone…Nikos holds an option to earn a 100% interest in the 1,600-hectare property which has never been previously explored…NIK has approximately 11 million shares outstanding and closed yesterday at 12 cents…

The Strategic Importance of Crimea

As members of Vladimir Putin’s inner circle shrugged off “sanctions” aimed at them personally by President Obama and European countries yesterday, the Kremlin said late yesterday that Putin had signed a decree recognizing Crimea as an independent state – a necessary step before Russia can proceed with annexation, in what would be the most significant land seizure in Europe in decades…equity markets are moving higher today after Putin, addressing the Russian parliament, said he does not want Ukraine divided further, while asserting that Crimea should be under Russian sovereignty…

With no Ronald Reagan or Margaret Thatcher on the world stage to confront him, Putin knows he has some space within which to maneuver…he has likely carefully calculated the economic risk-reward ratio in terms of bringing Crimea back under Russian control…as Frank Holmes pointed out at www.usfunds.com, Russia’s significant dependence on Ukraine for gas exports has long been a source of friction between the two countries…as a result, Russia has been diversifying its supply options through the South Stream pipeline but (see graph below) Crimea may prove to be crucial for reducing the astronomical costs of the project as both depths and distances could be reduced substantially…in addition, annexing Crimea may offer Russia access to the major part of the explored offshore gas deposits and prospective hydrocarbon resources in the Black Sea…

Note:  John and Jon both hold share positions in GGI, AIX and DBV.  Jon also holds a share position in PGX.