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Gold has traded between $1,282 and $1,290 so far today after hitting a nine-week low yesterday…as of 6:45 am Pacific, bullion is unchanged at $1,284…Silver is up 6 cents at $19.45…Copper is off a penny at $3.01…Crude Oil is up slightly at $101.85 while the U.S. Dollar Index has retreated one-tenth of a point to 79.81…

Interesting – Gold remains the investment of choice for lower-income Americans, according to Gallup’s Economy and Personal Finance poll conducted over a four-day period early this month…although real estate was the top option as a long-term investment, Gold made the top of the list (31%) for the subcategory of Americans whose annual household income is less than $30,000…in contrast, only 18% of high-income earners favor Gold as an investment…overall, 30% of total respondents said that real estate was the best long-term investment, up from 25% in 2013…Gold tied for second place overall with stocks and/or mutual funds…prior to 2011, Gold was not an option in the investment survey (it held top spot among all respondents in 2011)…bonds have been Americans’ least favored investment option for as long as Gallup has been asking the question, the report stated…

China’s March imports of Platinum group metals and Silver improved in March, according to Barclays.  “The March numbers confirm the strength we saw in February with both Platinum and Palladium imports rising month-on-month,” the bank stated…Platinum imports were down 8% year-on-year, but were stronger than in both January and February at some 236,000 ounces…Palladium imports were up on both a monthly and yearly basis to 77,000 ounces, their highest since November, which in turn was the highest since December 2011.  “This strength in imports aligns with auto production in China, which continues to grow.  Auto sales grew in January and February, with the latest data for March showing a 9% year-on-year rise in passenger vehicle sales.”

Today’s Equity Markets

Asia

HSBC’s flash PMI for China came in at 48.3 in April, higher than the bank’s final March reading of 48, but still in contraction territory for a fourth straight month…the People’s Bank of China said that it will reduce the reserve requirement ratio for rural commercial banks by 2 percentage points starting Friday in a bid to boost growth in those regions…the Shanghai Composite fell 5 points overnight while Japan’s Nikkei average climbed 158 points…

Europe

European shares are down slightly on profit taking in late trading overseas after a significant run-up yesterday…business activity across the euro area accelerated at its fastest pace in almost three years in April…the survey data from Markit Economics showed that the composite output index rose unexpectedly to 54.0 in April from 53.1 in March…the latest reading was the highest since May 2011…economists had forecast the score to fall marginally to 53…the PMI has now been above the 50.0 level for 10 consecutive months, signaling a continuous expansion of business activity since last July…the crisis in the Ukraine and the strength of the euro are threatening to undermine growth, while deflation is still a major concern…Markit’s survey showed that companies cut prices for a 25th straight month…the appreciating euro (the currency has gained 6.5% against the dollar in the past 12 months) is curbing the price of imported goods, undermining the fight against low inflation…

North America

The Dow is down 10 points through the first 15 minutes of trading today…the Nasdaq is off modestly and will need to rally in order to post its seventh straight daily advance…

Nasdaq 3-Year Weekly Chart

What’s interesting about the Nasdaq is that the sell-off in March/early April was a much needed and very normal pullback, very similar to the one that occurred in late 2012 and again during the second quarter of last year…this is why technical analysis is so important – it takes emotion out of the equation and puts volatility into context…of course it also shows where a market should find strong support, like we’ve seen recently with the Venture…

Interestingly, the Nasdaq reversed higher after testing the bottom of an upsloping channel in place for more than a year, as well as its rising 200-day SMA…RSI(14) was in overbought territory for several months, needed to unwind and found support just below 50…there’s also a long-term up support trendline coinciding with Fib. support around 3600, so this is a healthy market showing no signs that it’s about to collapse…pullbacks, therefore, have to be considered buying opportunities until the technicals change dramatically…

Venture Updated Chart

The TSX is up 8 points as of 6:45 am Pacific while the Venture has added 3 more points to 1008…the Venture has impressively held support despite weakness in Gold, and its 10-day SMA has reversed to the upside with the 20-day now threatening to do the same…so a strong finish to the week could be in store for the CDNX…let’s take a look at an updated chart…

The Venture is performing according to script, correcting very modestly to strong support around 980…buy pressure has replaced sell pressure on this 9-month daily chart with sell pressure peaking early this month…RSI(14) has broken above a down trendline…there is some resistance at 1007 – that’s an area to watch at the moment as a confirmed breakout on a closing basis above 1007 would certainly be bullish…

Overall, the “Big Picture” for the Venture remains extremely positive (still a selective, early-stage bull phase) with superb technical support in the mid-900’s…what’s also interesting is the Venture’s 300-day SMA (currently at 973) which forms part of this market’s support…the 300-day is beginning to flatten out and one can make the projection that it should begin to reverse to the upside at some point in June…history shows that this would be a hugely bullish development which adds credence to our view that the Venture is in for a rip-roaring summer, led in part by fresh discoveries including the Sheslay Valley in northwest British Columbia…

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

Speaking of the Sheslay district, we had a fascinating look from the air at Prosper Gold Corp.’s (PGX, TSX-V) Star Project during our recent area visit…we’ll be posting some pictures next week and reviewing some key points…regular readers know where we stand with regard to this project – it is first-rate and led by a superb team headed by Pete Bernier and Dirk Tempelman-Kluit…given all the geological, geochemical and geophysical evidence, there’s every reason to believe that Prosper has a high probability of success in terms of being able to connect the advanced Star target with the Star North and Star East targets, within about a kilometer, which have never been drilled…Prosper starts attacking the Star Project with step-out drilling during the first half of next month, so get ready for a show…meanwhile, Pyrrhotite Creek, about 4.5 km southwest of the Star, is a distinct multiple-target area that has tremendous potential to emerge as a major discovery by itself in the next few months…it has all the classic signatures of a Cu-Au porphyry system, and we’ll detail all the reasons why next week…

In the meantime, below is an updated 3-year weekly PGX chart…an ascending triangle has formed, which is potentially quite bullish, while RSI(14) is climbing an uptrend…a very strong support band exists between 45 and 50 cents…technically, the key event to watch for is a breakout above the horizontal channel…

Doubleview Capital Corp. (DBV, TSX-V) – Part 2 Of Video Interview With John Buckle

During our recent Sheslay Valley and Hat Property visit, we had the opportunity to meet Doubleview Capital (DBV, TSX-V) consulting geologist and geophysicist John Buckle who has played a critical role in selecting drill targets at the Hat…through our hundreds of hours of Sheslay Valley research, one thing is certainly clear – geophysics has been and is going to continue to be instrumental in drill target selection for all companies throughout this district…the dots are connecting, so to speak, with regard to certain signatures…

Below is the second excerpt of our interview with Buckle which took place inside one of the camp units, hence some occasional background noise and movements…Buckle started his career in 1972 with Teck…former president of the Canadian Geophysical Society, and also former president of the Association of Professional Geoscientists of Ontario, Buckle has worked in 10 countries and has several discoveries under his belt…he specializes in porphyry Copper, Gold, Nickel, kimberlite and polymetallic exploration…

Pilot Gold Inc. (PLG, TSX) Update

More very solid results this morning from Pilot Gold’s (PLG, TSX) Kinsley Mountain Western Flank target in Nevada as the company reported the remaining five holes from a 12-hole, 3500-m winter drilling program…these included infill hole PK137C grading 21.3 g/t Au over 29 m, and step-out holes PK133C and PK134C (10.6 g/t Au over 30 m and 2.84 g/t Au over 18.9 m, respectively)…the zone of high-grade mineralization remains open in all directions with drilling set to resume early next month (one core drill and two RC drills)…PLG is up 9 cents at $1.44 as of 6:45 am Pacific…

Technically, a turning point for PLG came early this year when the stock broke above a downtrend line as you can see on this 1.5-year weekly chart…after climbing to a new 52-week high of $1.75 on Kinsley results March 12, and then announcing on that same day a $20 million bought deal financing at $1.53, PLG gradually retraced to the Fib. 38.2% level…support has held, and PLG may now be set to challenge resistance in the $1.50’s…this could certainly be an exciting play in 2014…

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

Gold has traded between $1,277 and $1,294 so far today…as of 8:45 am Pacific, bullion is down $11 an ounce at $1,279…Silver is 7 cents lower at $19.37…Copper is off 2 pennies at $3.01…Crude Oil has lost $1.94 a barrel to $102.43 while the U.S. Dollar Index is relatively unchanged at 79.95…Nickel has advanced to a 14-month high on concerns that escalating tensions in Ukraine may disrupt supplies from Russia amid Indonesia’s ban on ore exports…

Reuters reports that China has started to allow Gold imports through its capital Beijing, in a move that would help keep purchases by the world’s top bullion buyer discreet at a time when it might be boosting official reserves…the opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong’s pole position in China’s Gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying…bullion markets can get a sense of Chinese purchases based on the monthly release of export data by Hong Kong, which last year supplied $53 billion worth of Gold to the mainland…Gold has traditionally been imported from Hong Kong into Shenzhen, where nearly 70% of the Chinese Gold jewellery business is located…Shanghai was opened up as a second port last year…only banks are allowed to import Gold into China…China imported nearly 1,160 tonnes of Gold from Hong Kong last year, more than twice that of 2012 as the drop in prices caused a spurt in demand…an analysis of trade figures from data provider Global Trade Information Services showed that China imported at least another 194 tonnes last year from centers other than Hong Kong, likely into Shanghai, showing that direct imports have ramped up…China’s central bank last disclosed its Gold reserves in 2009 when it announced that its bullion holdings had risen to 1,054 tonnes from 600 tonnes in 2003…the U.S. currently holds 8,812 million tonnes of Gold, so China would still need about 10 years for its Gold holdings to catch up to the U.S., suggesting continued strong demand for bullion in the years ahead as pointed out in a report from the World Gold Council last week…

India’s Elections & Gold

Keep an eye on elections in India that started on April 7 and will end on May 12…due to India’s severe restrictions on carrying physical cash in large denominations which were imposed on Gold traders during the elections, several jewelers have stopped business until the elections are over…this low Gold demand is expected to continue until the middle of May…in nine phases of polling that move from region to region, 814 million Indians are eligible to vote for the next government – roughly the number of people who have been eligible in the last four U.S. presidential elections combined…Indian citizens will have 370 different political parties to choose from, though it’s really a two-horse race between the incumbent government run by the Congress Party headed by Rahul Gandhi and its perennial challenger, the Bharatiya Janata Party (BJP) headed by Narendra Modi (Modi’s BJP is considered more business oriented and has the support of many in the Gold trade)…current polls suggest that Modi is ahead, though it’s important to note that Indian opinion polls have a history of projecting outcomes incorrectly…according to various estimates, political parties in the world’s largest democracy are pumping about $5 billion into vigorous campaigns, second only to the U.S. 2012 presidential campaign in which more than $6 billion was spent…

Don’t Try This At Home (Especially If You’re In India) – Man Swallows 12 Gold Nuggets

Doctors in India have discovered 12 Gold nuggets in the stomach of a wealthy businessman, according to local reports…the businessman, from the Chandni Chowk district of Delhi, went to the hospital on April 9, saying he had swallowed a metal bottle cap in anger…on examination, doctors found 12 nuggets, each weighing 33 grams, stuck in his small intestine…India taxes Gold imports at 15%, so the man was trying to save about $2,300…he survived a high-risk surgery and was recently discharged, but the police confiscated his Gold…

Interesting 3-Year Silver Chart

A 3-year weekly chart was very effective in giving us an early heads-up on a turnaround in the Venture during the fourth quarter of last year, and a 3-year weekly is equally interesting as it pertains to Silver at the moment…

As you can see on the chart below, Silver in February broke above a downtrend line in place since late 2012…short-term technically overbought conditions then ensued with the metal also running into stiff resistance just above $22…what has happened since then is quite healthy and normal – Silver has retraced back to the top of the trendline (just like the Venture did in December of last year) and is also now trading within a horizontal support band…yesterday, Silver closed at a fresh 11-week low, and bearish sentiment is high at the moment which is good…RSI(2) on this 3-year weekly has plunged to 5% – a level we haven’t seen since the price lows of late January…note also how the sell pressure has been in an overall decline since peaking during the second quarter of last year when Silver, Gold and the Venture all hit what appear to be important bottoms…

It’s possible that Silver could test the top of that downtrend line a little more vigorously in the days ahead, but expect support to hold…based on this chart, now would be an ideal time to accumulate some high quality Silver stocks in anticipation of a stronger metal price (a longer-term Silver chart is at the bottom of today’s Morning Musings)…

Today’s Equity Markets

Asia

China’s Shanghai Composite rebounded in the final hour of trading to post a 7-point gain, closing at 2073…the Index reversed from a two-week low following Monday’s 1.5% plunge after 19 new IPO filings were listed on the China Securities Regulatory Commission web site…

Japan’s Nikkei average erased earlier gains to end at a one-week low, down 124 points, as the yen strengthened against the dollar in afternoon trade…

Europe

European shares were up strongly today as merger and acquisition activity boosted sentiment…

North America

The Dow is up 91 points as of 8:45 am Pacific…the TSX is 25 points higher while the Venture has added 2 points to 999…Fission Uranium Corp. (FCU, TSX-V) climbed as high as $1.48 in early trading but is now off 3 cents at $1.40…the company announced more drill results from Patterson Lake South this morning…PLS14-187 (line 660E) returned a continuous 102.5-m interval of 5.98% U3O8 – the widest high-grade interval to date at PLS…

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

The long-term chart for Garibaldi Resources (GGI, TSX-V) suggests some very positive developments are in store for GGI as 2014 progresses…no doubt the Grizzly Property will take center stage as GGI proceeds toward drilling and the Sheslay Valley overall enters a whole new phase during this second quarter, but the chart could also be telling us that there could be some positive developments out of Mexico where GGI remains very active…exploration success in Mexico is what built GGI and has negated the company’s need for a financing since 2009…GGI is off a penny at 16 cents as of 8:45 am Pacific…

A few significant features regarding this 10-year GGI monthly chart which is very intriguing…

1.  RSI(14) has been climbing an uptrend line since the middle of last year and at 54% has plenty of room to move higher…

2.  Note the support band between 15 and 17 cents, between the uptrend line and the Fib. level…

3.  The 100, 200, 300 and 500-day moving averages (SMA’s) are all in bullish alignment – the 500-day is indicated on this chart and it recently reversed to the upside – a similar occurrence in late 2009 ushered in a move in the stock from 15 cents to nearly 60 cents by early 2011…

4.  The Chaiken Money Flow (CMF) shows the strongest accumulation in GGI in many years, while the ADX trend indicator remains very bullish…

Doubleview Capital Corp. (DBV, TSX-V) & Part 1 Of Interview

Doubleview Capital (DBV, TSX-V) has been under some selling pressure recently after the company announced March 27 that it had decided to accelerate the expiry date of the warrants issued on Dec. 31, 2012, in connection with its flow-through and non-flow-through private placement unit offerings…however, those warrants expire at the end of this week and the DBV chart is looking increasingly bullish with key support holding at and above the rising 200-day SMA in the high teens…a new round of drilling of course began at the property a few weeks ago…

Below is a 3-year weekly DBV chart update from John…RSI(14) has unwound significantly from overbought conditions that began to emerge in late January when the company reported a Cu-Au porphyry drilling discovery at Anomaly “B” on the Hat Property…as of 8:45 am Pacific, DBV is off a penny at 22 cents where the 20-day SMA is flattening out after being in decline since the last half of March…

BMR Interviews DBV Consulting Geologist & Geophysicist John Buckle

During our recent Sheslay Valley and Hat Property visit, we had the opportunity to meet Doubleview consulting geologist and geophysicist John Buckle who has played a critical role in selecting drill targets at the Hat…through our hundreds of hours of Sheslay Valley research, one thing is certainly clear – geophysics has been and is going to continue to be instrumental in drill target selection for all companies throughout this district…the dots are connecting, so to speak, with regard to certain signatures…

Below is the first excerpt of an expanded interview with Buckle with today’s version very general in nature to give readers an introduction to the individual interpreting the geophysics at the Hat…the interview took place inside one of the camp units, hence some occasional background noise and movements…Buckle started his career in 1972 with Teck…former president of the Canadian Geophysical Society, and also former president of the Association of Professional Geoscientists of Ontario, Buckle has worked in 10 countries and has several discoveries under his belt…he specializes in porphyry Copper, Gold, Nickel, kimberlite and polymetallic exploration…

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

Highbank Resources (HBK, TSX-V) continues to make progress, announcing last Thursday that it has closed the first tranche ($2.7 million) of its total $4 million convertible debenture to accelerate development of its Swamp Point North aggregate project on the Portland Canal near Prince Rupert…below is a 10-year monthly HBK chart from John…previous long-term resistance at 15 cents is now the first area of major support…HBK is off half a penny at 16.5 cents as of 8:45 am Pacific…

Erdene Resource Development Corp. (ERD, TSX)

Erdene Resource (ERD, TSX) caught our attention last week when it announced a $350,000 financing with Teck Resources Ltd. (TCK.B)…ERD is certainly worthy of our readers’ due diligence, especially given some weakness today…Erdene recently aligned with Teck to fund and explore a Copper porphyry discovery and Erdene’s large land holdings in southwest Mongolia, about 200 km from the China border…ERD’s 100%-owned Altan Nar Gold discovery is a near-surface Gold-polymetallic mineralized system that extends over a 5.5 km by 1.5 km area, and a drill program is expected to commence by month-end…in addition to the investment by Teck, ERD is raising up to another $650,000 through a non-brokered private placement at 16 cents…

This 2.5-year weekly ERD chart is promising with strong Fib. support between 14 and 16 cents…as of 8:45 am Pacific, ERD is off 4.5 cents at 15 cents…

Silver Long-Term Chart

This 11-year monthly 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 (there are two downtrend lines to take note of)…RSI(2) has unwound from above 80% to 31%…

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

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.

Again, use the “Contact Us” button you see in the top right hand corner of this page OR send us an email at:  [email protected]

IMPORTANT:  If you are already an eAlert subscriber, or if you’re about to become one, please ensure you add “[email protected]” to your email contact list.

Today is a message about hope.

As exciting as it is to see our favorite stocks explode to the upside, or as gut-wrenching as it is to see our portfolios shrink during a severe resource sector bear market like we all experienced between 2011 and 2013, we should never let money or our stocks control our happiness or joy. And true happiness – lasting joy – can only be found in our view by knowing God and serving Him through His son, Jesus Christ, who died on the cross over 2,000 years ago and rose from the dead three days later on this day (Easter Sunday).  The resurrection, The Greatest Victory of All, is the underpinning of the Christian faith.  That’s why we celebrate Easter.  It’s not about the Easter bunny or chocolates or Easter egg hunts or enjoying a day off work. It’s about what Jesus did at Calvary.  He suffered and died for us, out of His love and mercy for us, and actually conquered death.  That is so powerful and gives hope to us all.  Think about it.

Nothing is more important in our view than one’s relationship with God through Jesus. He is the creator of all things, including every mineral deposit on this earth, and He has also provided us, through His precious Word, all the guidance we need for our daily lives, even how we should approach the handling of money and investment matters.

This Easter weekend is a great opportunity for each of us to put some time aside and reflect on what Easter is really all about and why we celebrate it.  And draw closer to God in the process.

We wish all of our readers a very special and joyous Easter.

By Terry Dyer

Have you ever asked someone a question and then also asked, “Do you want the good news first or do you want the bad news first?”

I took my car into the garage one day to have the brakes done. When the technician called me with the quote he asked me that very question, “Do you want the good news or the bad news?” He told me that the brakes were only going to cost me $500 but in the next breath he told me that my ball joints needed replacement. The good news and the bad news. This Easter we look at both.

Let us look at the bad news first. We all have sinned and fallen short in the eyes of the Lord (Romans 3:23, New International Version) and since we have sinned we are destined to die “for the wages of sin is death” (Romans 6:23). We are all sinners and death is our payment for our sin.

When someone offers employment to an employee he offers him a set amount of money to work for him. Maybe twenty dollars an hour for every hour that employee works. It is a contract. It is also a contract when you break the law. If you are driving your car and you do not stop at a stop sign a police officer will write you a ticket and you will have to pay a set fine. It’s a penalty for not stopping at the stop sign. This is true in God’s world as well. When we sin we are destined for spiritual death. It is both the wage and the penalty. Sin is awarded death.

Some may ask what is spiritual death? Spiritual death is an eternal separation from God. In the Gospel of Luke, chapter 13, we are told that there will be weeping and gnashing of teeth. In the book of Revelation we are told that death and Hades were thrown into the lake of fire. Spiritual death is a bad place to be in and we are told that we are all destined for this. The apostle Paul writes, “For all have sinned and fall short of the glory of God” (Romans 3:23, NIV). That is the bad news. We are all sinners and by the sin that we commit we are destined for Hell. It doesn’t get any worse.

But wait – there is still the Good News. Jesus came to the earth fully man and fully God. When Jesus willingly went to the cross He carried the sin of the world, past, present and future, so that those that believe in Him will be saved from an eternity of death, pain, anguish, and separation from God. “For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life. For God did not send his Son into the world to condemn the world, but to save the world through him. Whoever believes in him is not condemned, but whoever does not believe stands condemned already because they have not believed in the name of God’s one and only Son” (John 3:16-18, NIV).

Jesus paid the price for your sin, for my sin, and for the sin of the world. All you have to do is accept Him, put your faith in Him and allow Him to be Lord of your life. Turn away from the world, your old ways, and toward Jesus. It doesn’t matter what you have done with your life up until now. There is no sin too big for Jesus. All one needs to do is say with a heart of repentance, “I am sorry, Jesus, for what I have done. Today I ask you into my life. Come and make me whole. I turn toward you.”

This Easter I invite you to accept Jesus into your heart or to renew your commitment to Him. If you have never prayed to Jesus take a moment now and turn your heart to Him. If you already know Jesus but want him in your life in a greater way, then by all means pray for that too. Invite Him into your life in a bigger way.

From all of us here at BMR I would like to wish you a very Happy Easter. May your day be full of love and blessings. I thank you for your support of BMR as we strive to be of service to you. From my home to your home, Happy Easter.

Terry Dyer

Publisher/Owner, Langley, BC

TSX Venture Exchange and Gold

The Venture gained a mere 1 point this week but it was an important week, nonetheless, as the Index staged an impressive turnaround intra-day Tuesday after testing strong support around 980, and then closed Thursday at 999 with RSI(14) on this 9-month daily chart pushing above a downtrend line in place for the past month.  Sell pressure has declined significantly.  The stage appears to be set for a move back above the 1000 level next week.  The fact that the Venture held steady this week while bullion and the TSX Gold Index fell 1.7% and 2.2%, respectively, is certainly encouraging.

Venture 9-Month Daily Chart

Venture 5-Year Weekly Chart

This 5-year weekly chart demonstrates how the Venture is now in the very early stages of a new bull phase with the 200-day moving average (SMA) now rising, ending a 2+ year decline, and joining exceptional chart support around 970.   What this chart is telling us is that there’s a strong probability of a major move to the upside in the Venture during 2014, so prepare now before the masses start piling back in.  Smart money has been accumulating for several months.

Ultimately, 1650 on the Venture – a whopping 65% advance from today’s level – is very conceivable over the next 12 months in our view given this market’s current technical posture.  If you think that’s far-fetched, keep in mind that the Athens (Greece) Stock Exchange surged 71% in just nine months from mid-July last year to the middle of last month.  The masses were treating Greece like it was radioactive a year ago (sound familiar, re: the Venture?).  That’s always when the opportunity is the greatest, just like it is now with the Venture. Patient, astute investors have an opportunity to make a fortune over the next 6-12 months.

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 fell $23 an ounce or $1.7% this week as China reported a significant drop in money supply growth to 12.1% year-over-year in March, an historic low, while the World Gold Council estimated that demand in the world’s biggest Gold consumer is likely to stay flat in 2014(demand for bullion in China has expanded every year since 2002, when it declined). However, over the longer term, the WGC predicts that China’s appetite will rev up again with demand, excluding factory stockpiles, jumping about 20% by 2017 to 1,350 metric tons.  As China’s economy continues to expand and citizens become more affluent, more of them are expected to purchase Gold jewelry or bullion for the first time.  By 2020, China’s middle class is expected to grow from 200 million people to 500 million.

Bullion has very solid chart and Fib. support around $1,275, as you can see below, while important resistance is at $1,350, just above a downtrend line. That will be the key area for Gold to push above and remain above in order to create the conditions for a sustained advance. Over the past 10 months it appears that bullion has been forming a bullish cup-with-handle pattern with the handle now under construction and the $1,270′s acting as support.

Silver closed Thursday at $19.63, down 33 cents from last Friday, while Copper was unchanged at $3.03.  Crude Oil strengthened to $104.30 while the U.S. Dollar Index climbed more than one-third of a point this week to finish at 79.88.

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 of 2013  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.

BMR’s regular Week In Review And A Look will be posted this evening in advance of the Easter long weekend.  Canadian and U.S. stock markets are closed tomorrow for Good Friday and re-open Monday.

BMR Morning Musings returns Tuesday as we take a slightly extended Easter break.

As of 8:00 am Pacific, Gold is down $2 an ounce at $1,300, Silver is off a penny at $19.62 while Copper is relatively unchanged at $3.02.  The Venture is up a point at 999 and appears to be on track for a slight weekly gain after Tuesday’s important intra-day reversal when it reacted at support around 980.

We wish all of our readers and their families a safe, peaceful and joyful Easter.

Note From Terry re: Easter Posting Schedule

BMR will be taking a four-day Easter break Friday through Monday with the next Morning Musings on Tuesday.  Tomorrow’s Morning Musings will be replaced by an end-of-day, end-of-week wrap-up of the Venture and Gold prior to the Good Friday holiday.  This will give our team some much-needed rest and will also allow them to prepare coverage of some exciting special situations (current and new), including the Sheslay Valley as we have an immense amount of material to review from our recent site visit.  We appreciate your understanding and we extend best wishes to each of our readers and their families for an enjoyable and peaceful Easter.

Gold has traded between $1,293 and $1,308 so far today…as of 8:30 am Pacific, bullion is down $1 an ounce at $1,301 after yesterday’s weakness…Silver has added a nickel to $19.61…Copper is also up a nickel to $3.03 as China’s Q1 GDP slightly exceeded expectations…Crude Oil is unchanged at $103.75 while the U.S. Dollar Index is up slightly at 79.85…

Gold’s 2% sell-off yesterday, its largest one-day drop since a 3.4% decline December 19, a day after the Federal Reserve said it would begin winding down its stimulus program, was likely triggered by predictions of a moderation of demand growth in China this year after a 30% jump in 2013…a significant drop in money supply growth in China was also probably a factor…an argument has also been put forward that the drop was the result of the “shock and awe” tactics of a short seller to break the backs of the Gold bulls…

There was plenty to be encouraged about, however, in the report on Gold released yesterday by the World Gold Council which sees growth in Chinese demand in volumetric terms of 25% over the next three years to about 1,350 tonnes…the next six years will see China’s middle class grow from 200 million people to 500 million. “Comparing this to the total population of the U.S., which stands at 319 million, puts the size of this new market of affluent consumers, with the propensity to buy Gold, in perspective,” the WGC’s report stated.

Check out www.mineweb.com for a very informative interview between Kip Kean and WGC Managing Director Marcus Grubb (“There Will Be Gold – WGC Reports On China’s Precious Decade”).  “Our base case as outlined in the report is a growth in demand in volumetric terms of about 25% over the next three years to about 1,350 tonnes. However, if there’s a likelihood that’s going to be out, it’s a highly conservative estimate. I think that’s an important point to make. And I think the reason is: It really comes down to the long-term trends. And they’re not even that long-term,” Grubb told Kean.

“It’s in the next two, to three, to four years.  Look at the growth in urbanization – now 170 cities with a million people or more; and probably another 200 million people coming into the middle class in China.  Add to that likely growth in household income…which is higher than GDP growth.  Real household incomes are variously estimated at between 15 and 20% growth in the next few years on a real basis.  And then you’ve got the high savings rate, which is again well documented.  As it’s generally known, Chinese households tend to have a higher savings rate than households in Western countries…somewhere, depending on how you measure it, between 20 and 45%.

“At the end of the day, unless you get a protracted economic downturn, a readjustment of significant proportions, these factors are likely to stimulate Gold demand into the next half decade driven by the growth in household income, growth in savings, in urbanization and prosperity of the Chinese middle classes – and that really is the big driver,” Grubb concluded.

Chinese Q1 GDP Weakens But Exceeds Expectations

In the three months to the end of March, China’s GDP expanded 7.4% from the same period a year earlier, a slowdown from 7.7% growth in the fourth quarter but faster than the 7.2% pace that some analysts had predicted…the first quarter expansion, revealed by China’s National Bureau of Statistics today, was the slowest since the third quarter of 2012 when the government loosened monetary policy and accelerated infrastructure investment as growth dropped to 7.4%…

Reduced momentum in investment and consumption – key drivers of the economy – were behind the moderately weaker Q1 growth…industrial production grew 8.8% in March, slightly below analysts’ expectations of 9%…this compares with 8.6% year-over-year growth in January and February, combined to limit distortions from the Lunar New Year holiday…fixed-asset investment – covering areas such as machinery, land and building – edged up to 17.6% in the first quarter, compared with 17.9% year-over-year in January-February, which analysts attributed in part to problems in the housing sector…retail sales, meanwhile, posted 12.2% year-over-year growth for March, in line with the consensus and a modest increase over the 11.8% year-over-year rise seen in January and February…the PMI Index for March, another indicator of the health of the manufacturing sector released earlier this month, was also less than robust…

WTIC Chart Update

Crude Oil continues to look strong, bolstered in part by the Russia-Ukraine situation…strong technical support has been established around $100 a barrel, buy pressure has been increasing in 2014 and RSI(14) at 59% on this 1-year weekly chart has plenty of room to move higher and is also climbing a trendline…a test of a resistance band between $108 and $110 appears to be in the works…some energy plays should perform quite well in this environment, and firm Oil prices are a supportive factor for Gold…

Today’s Equity Markets

Asia

Japan’s Nikkei led Asian markets higher overnight, posting a gain of 421 points or 3%…China’s Shanghai Composite digested a slew of economic data and recorded a 3-point advance to finish at 2015…

Europe

European shares were up significantly today…on the data front, U.K. unemployment hit a new five-year low as pay growth and inflation grew by the same level for the first time in almost four years…

North America

The Dow is up 101 points as of 8:30 am Pacific…the Nasdaq, which staged its biggest intra-day turnaround in five years yesterday, has added another 27 points to 4061…the Nasdaq fell as low as 3946 in trading yesterday – nearly a 10% correction from its March 6 high – before surging nearly 100 points…there are a number of Fed speakers today, but the most important by far is Fed Chair Janet Yellen who speaks to the Economics Club of New York at 9:25 a.m. Pacific…Yellen will also answer questions from economists…

The TSX is up 108 points through the first 2 hours of trading…on the political front, Ontario’s governing Liberals say they’ll table their crucial budget on May 1…it’s a high-stakes spending plan that could trigger an election if the minority government can’t win the support of at least one opposition party…

The Venture is off a point at 991…Canadian Mining Company Inc. (CNG, TSX-V) is one of the volume leaders this morning after announcing an MOI with Thelon Capital Ltd. (THC, TSX-V) to test the company’s zeolite in the growing of medical marijuana…interestingly, CNG has an historical, non-compliant resource of zeolite near Princeton, B.C. (Sun Group Zeolite Project) which Thelon will have an option to earn a 50% interest in…CNG is up half a penny to 2.5 cents on total volume (all exchanges) of 6.5 million shares…the fact CNG may actually have something of value in the ground may attract the attention of speculators…CNG’s 200-day SMA has reversed to the upside after being in a steady decline since 2010…

Venture 9-Month Daily Chart

As we’ve pointed out on several occasions, the Venture is underpinned by a tremendous band of support stretching from the 940’s to the 980’s…a divergence between RSI(14) and price in March gave a fair warning of a possible retrace which is what occurred…yesterday, the Venture touched the top of its support band (for the second time since March 27) and reversed during the day to close down just 4 points…in the next few trading days it’ll be interesting to see if RSI(14) can push above the downtrend line…the intra-day turnaround in the Venture yesterday was unusual given the fact that Gold was down by 2%…

Agnico Eagle Joins With Yamana To Top Goldcorp Offer For Osisko

Osisko Mining Corp. (OSK, TSX), Yamana Gold Inc. (YRI, TSX) and Agnico Eagle Mines Ltd. (AEM, TSX) have entered into an agreement pursuant to which Yamana and Agnico Eagle will jointly acquire 100% of Osisko’s issued and outstanding common shares for total consideration of $3.9-billion or $8.15 per share…the total offer consists of approximately $1 billion in cash, $2.3 billion in Yamana and Agnico Eagle shares, and creation of a new company (“New Osisko“) with an implied value of approximately $575 million (Canadian dollars)…the offer represents an 11% premium to the current Goldcorp hostile bid, and Osisko shareholders would own approximately 14% of Yamana and approximately 17% of Agnico Eagle…OSK is up 44 cents to $7.87 on the news in early trading today…it’ll be interesting to see what Goldcorp Inc.’s (G, TSX) next move is…OSK is up 47 cents at $7.90 as of 8:30 am Pacific…

Nevada Sunrise Gold Corp. (NEV, TSX-V) Update

Nevada Sunrise Gold Corp. (NEV, TSX-V) has approved an increase of $1.57-million U.S. to the 2014 exploration budget at Kinsley Mountain for an amended total of $6.04-million…Pilot Gold Inc. (PLG, TSX), the operator of exploration at Kinsley Mountain, proposed a budget increase to the Kinsley Mountain JV after strong Gold mineralization was encountered in the 2013 and 2014 drilling programs at the Western Flank target…results are still pending from the 2014 phase 1 drilling for an additional five holes in the Western Flank that targeted the promising Secret Canyon shale…a phase 2 drill program of approximately 25,600 metres is scheduled to begin with two drills on May 7…NEV is unchanged at 91 cents as of 8:30 am Pacific…

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

Keep a close eye on North American Nickel (NAN, TSX-V) which continues to make preparations to commence drilling by mid-June at its 100%-owned Maniitsoq Nickel-Copper-Cobalt-PGM Project in southwest Greenland…the company announced the awarding of drill and camp contracts earlier this month, and will be following up on an important discovery made last year…ground geophysics deep-penetrating electromagnetic (DPEM) and gravity surveys were scheduled to begin by the middle of this month at the Imiak Hill conduit complex, to define new drill targets there, while other drilling this summer will focus on priority regional EM exploration targets about 25 km northwest of Imiak Hill…

Technically, NAN’s rising 100-day moving average (SMA), currently at 32.5 cents, has provided strong support so far in 2014, while the rising 200-day SMA is at 29 cents…this coincides with strong Fib. support between 27 and 30 cents…a band of resistance starts at 38 cents…the overall trend remains very bullish and NAN has the potential to be quite an exciting play this summer given how prospective its large land package in Greenland is for new discoveries…NAN closed at 35 cents yesterday…

Note: Jon holds a share position in CNG.

A volatile day in Gold with bullion under pressure, trading between a high of $1,322 and a low of $1,289…as of 8:30 am Pacific, bullion is down $26 an ounce at $1,301 (the 200-day SMA is $1,300)…Silver is off 45 cents at $19.52…Copper is off 4 pennies at $2.99…Crude Oil is 27 cents lower at $103.78 while the U.S. Dollar Index is flat at 79.78…

Chinese firms may have locked up as much as 1,000 tonnes of Gold in financing deals, an industry report states, indicating a significant slice of imports has been used to raise funds due to tight credit conditions rather than to meet consumer demand…the financing-related buying in the world’s top Gold consumer means prices could come under pressure if imports are hit by a broader crackdown on using commodities for finance…

The report – issued by the World Gold Council (WGC) today – and other sources in China confirm that Gold is not as widely used for raising money as Copper, which saw prices drop to a 3-1/2 year low in March on fears that those deals would unravel.  “Imported Gold is being used via Gold loans and letters of credit (LC) to raise low cost funds for business investment and speculation,” the report said.  “The use of Gold for purely financial operations is a form of demand that represents a small part of the much wider growth in shadow banking. It is feasible that by the end of 2013 this could have reached a cumulative 1,000 tonnes.” That figure would account for almost a third of annual global production and is worth about $43 billion at current prices…the practice of importing Gold simply to raise funds is being conducted by wealthy individuals and firms for cheap short-term financing either for business or speculation to circumvent capital controls, the WGC report said…

Chinese Gold Demand Expected To Hold Steady In 2014

Demand in the world’s biggest Gold consumer is likely to stay flat in 2014, according to the latest estimates from the World Gold Council (demand for bullion in China has expanded every year since 2002, when it declined)…the WGC expects that 2014 will be a year of consolidation for Chinese Gold demand.  “We’re looking at best for it to be on par with 2013,” said Albert Cheng, managing director for the Far East at the WGC…Cheng pegs China’s private sector Gold consumption, a category that includes jewelry, bullion and industrial demand, to remain roughly at 2013’s level of 1,187 metric tons…in the longer term, the WGC estimates that China’s appetite will rev up again with demand, excluding factory stockpiles, jumping about 20% by 2017 to 1,350 metric tons…as China’s economy continues to expand and citizens become more affluent, more of them are expected to purchase Gold jewelry or bullion for the first time…

Ukraine Commences “Anti-Terrorist” Operation

A Ukrainian military operation to wrest control of cities in the east from pro-Russian militants has begun, Ukraine’s acting president said today, as Russia’s foreign minister warned use of force could derail international talks on the crisis…Oleksandr Turchynov said that a phased “anti-terrorist” operation began in the early morning hours in the northern Donetsk region, where the majority of the cities commandeered by pro-Russian forces are located…

Today’s Equity Markets

Asia

China’s Shanghai Composite slipped 30 points overnight to close at 2012 as caution set in ahead of tomorrow’s data deluge which includes Q1 GDP, March retail sales, industrial output, and fixed asset investment…meanwhile, it was reported today that money supply in the world’s second largest economy in grew at its weakest pace in March (12.1%) in more than decade…tomorrow’s GDP data is likely to confirm a significant slowdown in the broader economy…some economists, including those at Barclays and Société Générale, expect the Chinese economy to have expanded 7.2% during the quarter, the lowest rate since the financial crisis…

Europe

European markets are down significantly in late trading overseas as Ukraine concerns persist…

North America

The Dow is off 17 points as of 8:30 am Pacific…the Federal Reserve Bank of New York this morning reported that its gauge of manufacturing fell to 1.29 (the weakest reading since November) from 5.61 in March…meanwhile, the consumer price index for March rose 0.2% on the month versus forecasts of a 0.1% rise…excluding good and energy, core CPI also grew o.2%, topping estimates of a 0.1% rise…

Despite the weakness in Gold today, the TSX is up 6 points through the first 2 hours of trading while the Venture is off 10 points at 986…

Sheslay Valley:  “We Can Have Several Deposits In This District” – Doubleview Capital Corp. (DBV, TSX-V) President & CEO

While he’s currently focused on his own drill program, following up on discovery holes 8 and 11 at the Hat Property, the bigger picture of what could be unfolding in the Sheslay Valley district of northwest British Columbia is certainly not lost on Doubleview Capital (DBV, TSX-V) President and CEO Farshad Shirvani.  “The whole area is really prospective,” Shirvani emphasized in an extensive interview with BMR during our just-completed site visit.  “We stand a lot of chances in here with these projects, we can have several deposits.  We can see it in the MINFILE records, they’re all lining up.  Yes, we stand a chance to have one of the largest mining camps in Canada.”

We’ll have more of our interview with Shirvani later this week.  At the moment, Doubleview is attempting to connect some of the dots at Anomaly B and get a handle on the geometry of this potential sizable deposit, about 9 km southeast of Prosper Gold Corp.’s (PGX, TSX-V) advanced Star target (one of several targets on the Sheslay) and 22 km southeast of Garibaldi Resources Corp.’s (GGI, TSX-V) Grizzly West porphyry target (one of several targets on the Grizzly).  Many more holes and additional solid results will be required to push the Hat to an initial NI-43-101 resource estimate over the next 12 months or so, but DBV has set those wheels in motion with an early start to 2014 drilling. “We’re going to have a very aggressive year at the Hat,” explained Shirvani.  “That’s my plan.  For that plan that I have, we need more than one drill.  I don’t know how many right now, but we have it in the plan.  I’m working on it, setting the blueprint and talking to the government.  The goal is to have the Hat at a level where we can have a resource calculation by the end of the year, at least on the four anomalies we’re planning to put into action.”

DBV President and CEO Farshad Shirvani at the Anomaly "B" drilling area.

GoldQuest Mining Corp. (GQC, TSX-V)

GoldQuest Mining (GQC, TSX-V) has commenced its 2014 field exploration program for its Tireo Project in the Dominican Republic, surrounding its Romero Project…ground geophysics including an IP program have been initiated, along with geological and alteration mapping, to follow up on an airborne ZTEM geophysical survey that has identified new trends with numerous targets showing similar properties to that of Romero.  “We are identifying exploration targets, and plan to announce the commencement of drilling shortly, to compliment the Romero Project’s Preliminary Economic Assessment (PEA) expected in the coming weeks,” stated CEO Julio Espaillat in a news release this morning…the company has two drill rigs stationed at a field camp next to Romero and will initially mobilize one rig to start drilling by the end of this month…with $11 million in cash, GQC’s 2014 exploration plans are fully funded…GQC is off a penny at 28.5 cents as of 8:30 am Pacific…

Precipitate Gold Corp. (PRG, TSX-V)

Another company in the DR readers should keep on their radar screens is Precipitate Gold (PRG, TSX-V) which is ramping up its activities…PRG has received government authorization for diamond drilling at its Ginger Ridge Zone within its Juan de Herrera concession in the DR…the host Tireo volcanic rocks are very prospective…multiple targets have been generated at Ginger Ridge through recent geochemical and geophysical programs…an IP survey indicated a strong correlation between a surface Gold-in-soil anomaly and subsurface chargeability and resistivity highs over a measured strike length exceeding 800 m…the geophysical chargeability anomaly remains open in both directions and at depth, and will be the primary target of upcoming drilling…the company, however, hasn’t yet specified when drilling will commence…

Below is a 2-year weekly chart for PRG which is quite encouraging…the stock broke above a downsloping channel in early March, and is now threatening to break above a cup-with-handle pattern….the 200-day SMA recently reversed to the upside and provides excellent support just above 12 cents…PRG is off half a penny at 16.5 cents as of 8:30 am Pacific…

Probe Mines Ltd. (PRB, TSX-V) Update

One of the top Gold exploration plays in the country over the past year has been Probe Mines Ltd. (PRB, TSX-V) with its multi-million ounce Borden Lake Project in northwestern Ontario…extensive drilling continues…Probe is taking a hit this morning, selling that is likely technically-driven as support at the $3 level did not hold, at least on an intra-day basis…as of 8:30 am Pacific, PRB is down 34 cents at $2.85 after falling as low as $2.65…

As you can see on John’s 2.5-year weekly chart below, there is major support in the vicinity of $2.60 which is just above the rising 200-day moving average (SMA)…as always, perform your own due diligence, but this looks like nothing more than a healthy correction and an enticing opportunity after a nearly 4-fold increase in the share price over the past year…

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