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Gold has traded between $1,309 and $1,319 so far today…as of 7:15 am Pacific, bullion is up $1 an ounce at $1,316…Silver is up 3 cents to $20.91…Copper has gained another 2 pennies to $3.12…Chinese Copper imports fell in May but the factors impacting this have reversed in June, according to Citi Research…Crude Oil is off 63 cents a barrel to $106.19 while the U.S. Dollar Index is relatively unchanged at 80.35…

Bank of America recommends investors buy Gold into the third quarter as the seasonality trade kicks in with Ramadan and Indian buying…historically, the July-August period sees a demand boost from religious festivities, which Bank of America believes could push Gold past $1,400 this year…

The World We Inhabit:  Four suspected illegal miners were found dead Saturday with gun shot wounds to the head at a Gold mine near Johannesburg…the bodies were found by security guards employed at the mine, South African police stated…motives for the killing were unknown…illegal mining of abandoned shafts is common in the Gold mines around Johannesburg, with informal miners living underground in dangerous, cramped conditions for weeks on end as they dig out small parcels of Gold-bearing ore…meanwhile, the Montreal Gazette reported over the weekend that Denis Lefebvre, one of the three fugitives arrested yesterday morning after a recent helicopter jail break, allegedly supplied a helicopter as part of an aborted plan to rob Gold ingots from a mining company in Val d’Or in 2010 (the company was not identified)…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 2 points overnight to 2024 despite a very positive flash PMI reading from HSBC…it rose to 50.8 in June, the first expansion in six months…the figure was well above May’s final reading of 49.4 and Reuters’ estimates for 49.7…

Japan’s Nikkei rose 20 points to finish at its highest level since January 29 after data showing that domestic manufacturing activity in June expanded for the first time in three months…investors were also optimistic ahead of Prime Minister Abe’s announcement of more reform measures, part of his “third arrow” plan, sometime this week…

Europe

European markets are down modestly in late trading overseas…new figures for France showed that the manufacturing and services sector in the country had continued to contract in May…Germany’s reading showed an expansion but slipped from May’s number…

North America

The Dow, which has advanced for six straight sessions to a new all-time high, is off 27 points through the first 45 minutes of trading…the U.S. manufacturing sector expanded more strongly than expected in June, with the rate of growth and key sub-indexes advancing to their highest levels in more than four years, an industry report showed this morning…financial data firm Markit said its preliminary or “flash” U.S. manufacturing PMI rose to 57.5 in June, above economists’ expectations for 56.5 and the highest reading since May 2010…the final read for the index last month was 56.4…

The TSX is down 1 point as of 7:15 am Pacific while the Venture is flat at 1026…North American Nickel (NAN, TSX-V), one of our favorites this year, continues to push higher after breaking out above important resistance at the end of last week…it’s up 3 pennies at 56 cents through the first 45 minutes of trading today with a drilling campaign now under way at the company’s 100%-owned Maniitsoq NI-Cu-PGE Project in southwest Greenland…

CRB Seasonality Chart

As The Wall Street Journal’s E.S. Browning pointed out in a weekend commentary, some analysts argue that weak global growth and an aging population will for years keep inflation and bond yields lower than many consider possible, potentially changing the way investors view the world…others still warn that complacency at the Fed will lead to damaging inflation…how this turns out will have a big impact on where stock, bond and other asset prices go in the months and years to come…

Some factors definitely argue for “creeping” inflation – the growing possibility of a major breakout in Oil prices being one contributing factor…this week, we’ll study the CRB Index in more detail to see what kind of technical clues it’s giving…Gold’s rise last week was clearly attributable to the perception of a more inflationary environment on the horizon while the Fed remains committed to record low interest rates…

In the meantime, below is a seasonality chart for the CRB Index…there is a whopping 90% probability of a higher CRB Index in July given monthly performances going back a full decade – another reason for the Venture to push higher in the coming weeks…

Venture 3-Year Weekly Chart

Below is John’s latest Venture 3-year weekly chart, based on Friday’s close of 1026…this chart has served as our incredibly reliable guide over the last nine months in particular, and clearly points to an Index that’s gaining momentum and will push higher in Q3…RSI(14) has been following an uptrend line since last summer…buy pressure has recently been strengthening…

Note how the Index broke above a long-term downtrend line last October, then retraced to that area as new support until late December before taking the path of least resistance…exceptionally strong support around the 970 area held as expected during the spring pullback from the mid-March high of 1050…

Not shown on this chart is the 300-day moving average (SMA) which is now reversing to the upside – time for the bears to go into hibernation…the bulls now control this market…

Silver Long-Term Chart

What’s particularly revealing and important about this long-term Silver chart is that the metal has staged a confirmed breakout above a downtrend line in place since last year…this is something we’ve been watching for…a further immediate or near-term push higher makes sense, followed by a brief consolidation period during which the downtrend line is possibly tested as new support…what’s also really encouraging is the position of the Slow Stochastics (SS)…it has formed a low “W” pattern – extremely bullish…that type of pattern suggests a critical trend change and a major advance are on the way – history tells us this should occur during Q3 which is consistent with how the bullish indicators are lining up with the Venture…

If and when Silver clears stiff resistance at $26, watch out – you’ll want to back up the truck and load up…the COT structure, as mentioned recently, has become very favorable, suggesting Silver is indeed gearing up for a strong move over the summer…

Silver 3-Year Weekly Chart

The Silver 3-year weekly chart shows near-term resistance at $22 and an RSI(2) that’s now in extreme territory at 95%, so it’s reasonable to suggest that a sustained breakout above $22 is not immediately in the cards…this market will need to consolidate, catch its breath and “fuel up” for a major push at some point during Q3…

Like the Venture (except in February, as opposed to last October), Silver broke above a long-term downtrend line and then successfully re-tested that area as new support…Silver advanced more than 6% last week and has confirmed a breakout above a support band between $17.50 and $19.50…

Abcourt Mines Inc. (ABI, TSX-V) Update

Higher Gold and Silver prices are good news for Abcourt Mines (ABI, TSX-V) which continues to move toward full commercial production at its Elder Mine near Rouyn-Noranda…this project has been guided along in very astute fashion during challenging market conditions over the past couple of years, and investors should really start to see the fruits of that labor during the second half of the year…

Importantly, ABI has pushed above a long-term downtrend line on this 2.5-year weekly chart…ABI closed Friday at 8 cents and has yet to trade so far this morning…

Critical Elements Corp. (CRE, TSX-V) Update

Another company with an interesting property in Quebec to keep an eye on is Critical Elements Corp. (CRE, TSX-V), which we started looking at again when it was in the upper teens…the company reported last month that it has started shipping samples of lithium concentrate to a number of users for analysis and validation of the product specifications…the concentrate samples have a low iron content, which is specifically required by certain users…validation of the Rose project material by some of the largest consumers of lithium concentrate with low iron content is part of the process of setting up long-term off-take contracts…

Technically, CRE formed a bullish ascending triangle, as we previously pointed out, and appears well-positioned for an encouraging second half of 2014…as always, perform your own due diligence…CRE is off half a penny at 23 cents as of 7:15 am Pacific…

Pretium Resources Inc. (PVG, TSX) Update

British Columbia has to be on every investor’s radar screen this summer – not just because of the untapped Sheslay Valley and the strong possibility of important new discoveries in that emerging district, but there are significant developments elsewhere as well…

Pretium Resources (PVG, TSX) continues to vigorously advance its Brucejack Project with an updated and robust NI-43-101 Feasibility Study released last week, and more drilling to test Gold mineralization at depth in the Valley of the Kings…

Highlights of the updated Feasibility Study completed by Tetra Tech:

• Increase in mineral reserve Gold grade – Valley of the Kings proven and probable mineral reserves are 13.6 million tonnes grading 15.7 g/t Au (6.9 million ounces) based on a $180-per-tonne cut-off grade;
• West Zone proven and probable reserves of 2.9 million tonnes grading 6.9 g/t Au (600,000 ounces);
• Gold and Silver recoveries of 96.7% and 90% over mine life;
• Mine life of 18 years producing an estimated 7.27 million ounces of Gold;
• Average annual production of 504,000 ounces of Gold over the first eight years and 404,000 ounces of Gold over mine life;
• Estimated project capital cost, including contingencies, of $747 million (U.S.);
• Average operating costs of $163 per tonne milled over mine life;
• Pretax net present value (NPV5%) of $2.25 billion (U.S.), a pretax internal rate of return (IRR) of 34.7% and a pretax payback period of 2.7 years – based on low estimates of $1,100 U.S. per ounce of Gold, $17 (U.S.) per ounce of Silver and an exchange rate of 92 cents.

The plunge in Pretium late last year, due to an unfortunate squabble between geological consulting firms, was unwarranted as we stated at the time, and the share price has since recovered to levels seen just prior to that collapse…what’s interesting now is that Pretium has been forming a bullish ascending triangle and could soon push above a long-term downtrend line as shown on this 3.5-year weekly chart.

There’s a lot of value here, based on that Feasibility Study as the permitting process now ramps up, with strong potential for the discovery of more high-grade mineralization at depth…

Note:  John, Terry and Jon do not hold share positions in ABI, CRE or PVG.

TSX Venture Exchange and Gold

Venture momentum, not surprisingly, has picked up significantly following the confirmed breakout above a short-term downtrend line June 13 as explained in the June 14 Week In Review And A Look Ahead.  It’s critical to understand that this is not a bear market rally like the ones witnessed during the second half of 2011, the early part of 2012 and the summer of 2012.  A fundamental change has occurred.  This is a primary new uptrend, born late last year as John’s charts have repeatedly shown, and it’s now picking up steam in time for what should be a very robust third quarter. Investors who play their cards right could make fortunes during the second half of 2014.  Selectivity will be key as a rising tide will not lift all boats (more boats hopefully will sink and thus further reduce the clutter of garbage that remains floating on the sea of the Venture).

The many nervous nellies who were following the crowd out of Gold and Silver and the junior resource sector over the last year, even during the last couple of months on a normal and healthy pullback in the Venture, made a profound miscalculation, but that was the final capitulation that perhaps was necessary.  It was the mirror image of almost everyone “all in” in late 2010/early 2011 when the market topped out and then plunged by two-thirds in just over two years.

The Venture surged 29 points last week on increased volume to close Friday at 1026, its highest level in more than three months.  The Venture has been telegraphing a sentiment turn in Gold by out-performing the yellow metal for about a year – that was a very telling pattern change, and we’ve just started to see the significance of that with bullion’s fresh breakout.

The Venture, Gold, Crude Oil, the CRB – they’re all telling us the same thing: Inflationary pressures are finally starting to click in, and central banks around the world – in particular the Fed – are going to be caught behind the curve.  At some point, interest rates will have to increase, and that’s also going to cripple governments from Ontario (voters there just got sold down the river by a fiscally/economically illiterate Kathleen Wynne) to Washington to Japan, and Gold is going to skyrocket – but that’s another topic for another day.

Let’s look at where the Venture is currently at, both in terms of new support and resistance.

The rapidly increasing buy pressure and the volume uptick reflect a growing understanding among astute traders and investors that the Venture is indeed in a bullish new cycle that should result in stellar gains during Q3.  While RSI(14) on this 6-month daily chart is now in overbought territory at 75%, it’s very possible these conditions could persist for a while given the intensity of the momentum.  Keep in mind, the Venture’s 50-day and 300-day moving averages (SMA’s) are just now reversing to the upside – this is powerful confirmation of an impending bullish advance.  The bulls are in control and they are going to set the pace.

It could take a little time for the Venture to grapple with a resistance band between 1030 and 1040, but there is very strong support around 1010.  The possibility of a rapid surge through the 1050 March high certainly exists.  The 1050 area will be taken out – the only question is how soon, not if.

Venture 6-Month Daily Chart

Venture 5-Year Weekly Chart

John’s long-term weekly chart shows 1150 – 1350 as a reasonable target range for the CDNX during the second half of the year (probably Q3).

It’s important to point out that RSI(14) on this 5-year weekly chart found a “comfort zone” in the immediate vicinity of the 50% level, as expected.  A modestly overbought condition in the RSI(14) that emerged in March when the Index hit 1050 gradually unwound, with RSI(14) now on the upswing again at 60% (plenty of room to move higher).  The recent decline that took the Venture to important support at 968 May 20 came on light volume, and accumulation (CMF indicator) remains steady and strong – the most extended period of healthy accumulation we’ve seen, actually, in a few years.  This is a very bullish scenario, and includes a recent +DI/-DI crossover.  The bears need to run and hide very quickly.

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 carry out exploration or 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.

Gold

Gold put on a show last week, in particular Thursday following the Federal Reserve’s signal that it will stick with a near-zero interest rate policy to support the economy.  This disappointed traders who had bet on hints of policy tightening. A lower U.S. 2014 growth forecast by the Fed and lingering geopolitical tensions in Iraq and Ukraine also helped to ignite Gold which pushed through important resistance in the $1,280’s.

Gold’s $39 advance last week to $1,315 came on the heels of a $24 jump the previous week, so the bulls have clearly put the bears on the defensive.  The next important near-term Fib. resistance is $1,327 – a confirmed breakout above that area would be very significant.  A strong support band now exists between $1,294 and $1,310.

Silver has staged an important breakout above a long-term downtrend line, and we’ll explore that situation in more detail Monday.  Silver jumped $1.21 an ounce last week to finish at $20.88.  Copper gained 7 cents to $3.10.  Crude Oil retreated slightly to $106.83 while the U.S. Dollar Index lost one-fifth of a point to 80.33.

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.  The June 2013 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 the balance of 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.

Gold has traded between $1,306 and $1,317 so far today as some profit-taking is occurring after yesterday’s powerful advance…as of 7:00 am Pacific, bullion is down $5 an ounce at $1,315…Silver is up 12 cents at $20.88…Copper is up 3 pennies to $3.08…Crude Oil is 67 cents higher at $107.10 while the U.S. Dollar Index has gained one-tenth of a point to 80.42…

Gold surged in dramatic fashion yesterday, climbing over $40 an ounce in its biggest daily gain in nine months thanks to a combination of bullish factors…many investors were caught flat-footed by the Federal Reserve’s outlook for continued low interest rates, despite encouraging signs in the economy and some “noise” on the inflation front, while short covering, technical buying and geopolitical tensions (Iraq, Russia-Ukraine) all played a role as well…Gold has rebounded sharply after hitting a yearly low of $1,240 June 3, but it’s still well below the intra-day high of $1,393 set in March which came amid worries that the U.S. economy was losing its footing, a concern that has been dispersed by an upturn in economic data…the Fed likes the idea that inflation is kicking up a bit, but they might want to be careful what they wish for…many commodities, and this is being reflected in the Venture, are behaving in a manner that suggests inflationary pressures are going to intensify in the year ahead…this is very Venture-bullish…

Today’s Equity Markets

Asia

China’s Shanghai Composite stabilized after 3 consecutive losing sessions and added 3 points overnight to close at 2027…earlier in the day, shares fell on fears of tight liquidity after four IPO’s raised $290 million following Beijing’s four-month hiatus on offerings…the mood was also cautious ahead of HSBC’s preliminary manufacturing data for June, due Monday…Japanese shares ended near the previous day’s four-month highs, posting a 1.7% increase for the week – their fifth straight week of gains…

Europe

European markets are mostly mildly higher in late trading overseas…

North America

The Dow is up 38 points as of 7:00 am Pacific…no economic data is due today and no major companies are set to report quarterly earnings…the TSX is 7 points higher while the Venture, after yesterday’s impressive run, is up another point at 1023…

Updated Gold Chart

Gold broke above some important resistance yesterday, including a short-term downtrend line at the 50-day moving average (SMA) as you can see in this 6-month daily chart, and new support should now kick in around $1,295…what will be interesting in the days ahead is to see how the physical market responds to these higher prices…

A key level to watch now is around $1,330 – a confirmed breakout above that area would really put the bears on the defensive…some minor consolidation may have to occur before such an event…the Venture keeps telling us that Gold is going to surprise to the upside during the second half of 2014…

Updated Silver Chart

Silver closed above an important downtrend line yesterday, one that has been in place since 2013 on this long-term monthly chart…confirmation of this breakout is required…SS is showing a bullish “W”…based on this chart, we are extremely bullish regarding Silver at this point – especially when one considers the highly encouraging COT structure (commercials reducing their net short positions to extreme levels) that we referred to just recently…

Garibaldi Resources Corp. (GGI, TSX-V)

There are a multitude of potential triggers in place for another major upside move in Garibaldi Resources (GGI, TSX-V), not the least of which is continued drilling at the Silver Eagle target in Mexico with more assays pending…based on yesterday’s news, the first hole at Silver Eagle (7 m near-surface grading 2,010 g/t Ag or 65 oz/ton) was not a one-hole wonder…results from SE-14-02 and SE-14-03 are on the way…it appears Garibaldi geologists are defining a significant structure there, and keep in mind that GGI has two highly recognized experts on Mexico that are involved in figuring out Silver Eagle and the rest of Rodadero – Dr. Craig Gibson and Dr. Peter Megaw, who both have their share of discoveries under their belts…Megaw of course sits on the board of Mag Silver Corp. (MAG, TSX), which is soaring by the way, and is also a a frequent speaker at academic and international exploration conferences…

Between Rodadero, La Patilla and Iris in Mexico, and the Sheslay District in northwest B.C. which is sure to heat up over the summer, GGI has several potential “company builders” it’s actively working on – just one of them needs to connect to send GGI to a potential new all-time high during what should be a very bullish third quarter for the Venture…you can think “small” here or you can think “big”…we’re thinking “big” with this one (and we have since the beginning when it was trading at a nickel) because of the quality of both the projects and the management and geological teams…

John has two GGI charts to share with our readers this morning with the stock up half a penny at 26 cents through the first 30 minutes of trading…

GGI 10-Year Monthly Chart

RSI(14) continues to climb an impressive uptrend on this long-term monthly chart, and at 63% still has plenty of room to move higher…all the moving averages are in bullish alignment, and note the spread between the current price and the next Fib. measured resistance levels…

GGI Short-Term Chart

Again, this short-term GGI chart is highly intriguing with all sorts of bullish lights flashing including a breakout above an ascending triangle, a surge in buying pressure (CMF) and the RSI(14) which is moving up from a “W”…

Source Exploration Corp. (SOP, TSX-V) Update

We’ve mentioned this one before when it trading around 11 cents…Source Exploration (SOP, TSX-V) is another Mexico play worthy of our readers’ due diligence…the company has some major strength behind it with Chairman David Baker (he managed and grew Goldbrook Ventures until it was ultimately sold in 2012 to its Chinese joint venture partners for approximately $100 million) and a solid geological team…in April, Source reported some stellar drill results from its Santa Cruz target at its Las Minas Project 270 km east of Mexico City, and recently the company closed a $1.2 million private placement at 12 cents per unit…

Source is now initiating a follow-up drill program at Las Minas which will focus on expanding the higher grade skarn mineralization outlined by winter drilling at the Santa Cruz area, in preparation for an initial resource calculation…in addition, drill testing of high priority targets at the Juan Bran and Cinco Senores sites is also scheduled…

Technically, SOP held strong support around 10 cents…a significant band of resistance exists between 15 and 17 cents, but this is a stock in a primary uptrend so an eventual breakout above that area seems highly plausible…as always, perform your own due diligence…SOP closed at 13.5 cents yesterday…

Discovery Ventures (DVN, TSX-V) Update

More good news from Discovery Ventures (DVN, TSX-V) which continues to make progress in advancing its promising Willa-Max Gold-Copper-Silver Project in southeastern British Columbia…as announced Wednesday, DVN has signed a non-binding term sheet for a $12.1-million (U.S.) Gold prepayment agreement with a financing firm based in New York…the facility would bear interest at a rate of 9% per year on funds advanced and would be repaid by the delivery of 14,400 ounces of Gold and 900 tons of Copper over a maximum 36-month period starting no later than the 19th month following the closing date…the principal amount will be provided in two tranches, with the first tranche of $4.1-million provided at closing and the second tranche of $8 million to be financed no later than 12 months after closing, subject to certain conditions…

DVN has responded well to the release of a very positive Preliminary Economic Assessment May 28 based on measured and indicated resources (not reserves) at the Willa deposit…there are 495,784 tonnes designated in the measured category with an average grade of 7.18 g/t Au, 0.94% Cu and 12.16 g/t Ag at a cut-off grade of 3.5 g/t Au…the indicated category at the same cut-off grade is 262,415 tonnes grading 5.71 g/t Au, 0.67% Cu and 13.26 g/t Ag, for a total mineral resource of the measured and indicated categories of 758,199 tonnes grading 6.67 g/t Au, 0.85% Cu and 12.54 g/t Ag…

The Max mine and mill facilities, just 135 km haulage distance from the Willa deposit, are a critical component of this overall equation for Discovery…more on DVN and Willa-Max next week…

Technically, a confirmed breakout has occurred above the 27-cent level as shown in this 2.5-year weekly chart…DVN is up 2 pennies at 30 cents as of 7:00 am Pacific…

GoldQuest Mining Corp. (GQC, TSX-V) Update 

Keep an eye on GoldQuest Mining (GQC, TSX-V) as the company commenced drilling in early May at some very interesting targets within its Tireo Project concessions in the DR…eight large priority areas have been identified within four km of the Romero deposit…

Below is a 2+ year weekly chart…RSI(14) and SS are showing strong up momentum, and the 200-day SMA is just beginning to reverse to the upside…could be some interesting action in GQC over the summer given the quality of exploration targets they’re drilling…the company is in a strong cash position, and the stock has a history of very sudden and sharp moves to the upside…GQC is off a penny at 33 cents as of 7:00 am Pacific…

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

Gold has pushed through Fib. resistance in the $1,280’s this morning…as of 7:00 am Pacific, bullion is up $18 an ounce at $1,295…Silver has added 31 cents to $20.22…Copper is flat at $3.05…Crude Oil is down 51 cents to $105.46 while the U.S. Dollar Index has tumbled one-fifth of a point (helping Gold) at 80.18…

Fed Chair Janet Yellen said yesterday that the central bank, which is cutting bond purchases by another $10 billion to $35 billion, plans to keep its interest rate target low for a considerable time after it ends bond-buying.  “The FOMC policy statement did not contain major surprises, although at the margin, the general tone was probably more dovish than expected,” analysts including Edel Tully at UBS AG said in a report.  “In effect, the lack of an aggressive Fed is Gold-supportive.”

Yellen remains fairly optimistic, however, regarding the prospect of a U.S. economic recovery gaining momentum by 2015…when asked if the U.S. will be stuck in a period of lower growth, Yellen said that there are several factors that point to an improving economy: better household balance sheets, rising home prices, an improving labor market and a brighter global economy.  “I think there are many reasons why we should see above-trend growth in 2015 and 2016,” she stated.

Today’s Equity Markets

Asia

Japan’s Nikkei surged 245 points overnight to close at its highest level – 15361 – in over four months…China’s Shanghai Composite, however, fell 32 points or 1.5% to finish at 2024…the weakness came despite data showing that profit growth at state firms rose in the first five months of the year and Premier Li Keqiang’s optimistic comments on economic growth…

Europe

European markets are up significantly in late trading overseas, buoyed by yesterday’s Fed announcement and the perception of a dovish tone from Yellen despite her positive outlook regarding the economy…

North America

The Dow is down 5 points as of 7:00 am Pacific…the number of Americans filing new claims for unemployment benefits dipped slightly more than expected last week…initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000 for the week ended June 14, the Labor Department reported this morning…

The TSX is off slightly while the Venture has added 6 points to 1015 as of 7:00 am Pacific…

Venture 6-Month Chart Update

It has been a very good week so far for the Venture which continues to gather steam for an eventual assault on the March high of 1050, followed by what we believe will be a fresh 2014 high during Q3…

Buy pressure is rapidly increasing, as shown in this 6-month daily chart…there’s no denying the bullishness of the Venture at the moment, and the likelihood of a strong Q3, but the advance at this stage at least could be a two-steps-forward, one-step-back type scenario…it’ll be interesting to see how the Index handles near-term (temporary) Fib. resistance around 1020…strong new support now exists at 1000…

Garibaldi Resources (GGI, TSX-V) Update:  High-Grade Structure At Silver Eagle

One doesn’t even have to read between the lines of this morning’s news from Garibaldi Resources (GGI, TSX-V) to know that something very significant appears to be in the works at the company’s Rodadero North Project in central Sonora State, Mexico…the kind of high-grade mineralization at the Silver Eagle target is very distinctive in its look, as shown in drill core photos after the release of assays from discovery hole SE-14-01 (65 oz/ton Ag over 7-m near-surface), and GGI now states that a step-out hole drilled 50 m to the south of SE-14-01 has hit “exceptionally hard mineralized sulphide bearing quartz”…a heavy duty drill rig was brought in to replace GGI’s company-owned test rig, drilling continues and “pending additional assay results are eagerly anticipated.”  No one has a crystal ball, but if this hole runs in both grade and width, GGI’s stock price will obviously run with it…a fourth hole is in progress…

GGI is also now talking about potential “geometry and dimensions of a promising high-grade structure” at Silver Eagle, a sign that geologists do like what they see in the core.  “Mineralization at Silver Eagle consists of an apparently flat-lying silicified zone or cap of brecciated rock exposed on a hill. Mineralized structures cross this silicified zone and may form a tabular root or feeder zone to the silicification,” GGI reported…

Mineralization at shallow depths, “flat-lying” with feeder structures…in Mexico, the world’s largest Silver producer, this is a winning formula, a recipe for a deposit, so GGI definitely appears to have a tiger by the tail at Silver Eagle…

Hyperspectral remote sensing technology, which GGI used to identify a previous important discovery (the Temoris option) that was sold to Paramount Gold & Silver (PZG, NYSE & TSX), was instrumental in narrowing down targets at Rodadero North (Silver Eagle is just one of 8 prospects) along a 10-km NW-SE trend…hyperspectral, which is flown from miles in the sky and works like a scanner reading a bar code at the grocery store, detected promising mineralogical signatures at Rodadero, and this was followed up by boots on the ground…mapping and sampling confirmed the hyperspectral readings with high-grade numbers at surface…assays from the first drill hole then returned even better numbers within 30 m from surface…

A picture tells a thousand words…below is one of the new Silver Eagle drill core photos taken from the GGI web site…

GGI is up half a penny to 24 cents through the first 30 minutes of trading…

Kiska Metals Corp. (KSK, TSX-V)

We suggest readers perform their due diligence on Kiska Metals Corp. (KSK, TSX-V) which looks interesting from both a technical standpoint (see John’s chart below) and fundamentally as the company has a large portfolio of Gold and Copper projects (advanced and early-stage) in Canada, the U.S. and Australia…after climbing as high as nearly $2 a share in late 2010, KSK appears to have finally bottomed out below a dime (it touched 3 cents last December) and closed yesterday at 9 cents for a market cap of $10 million…

What actually reminded us of Kiska was Garibaldi’s recent news regarding its acquisition of the Red Lion Property (35 sq. km) adjoining Kiska’s Kliyul Project which interestingly was optioned late last year by Teck Resources Ltd. (TCK.B, TSX)…Kliyul is roughly 200 km southeast of the Sheslay district and 70 km southeast of the Kemess mine…Teck is gearing up for a drill program at Kliyul, and this is definitely an area of northwest B.C. that could really garner some attention later this summer…

The most recent drilling at Kliyul, in 2006, yielded very encouraging Copper and Gold intersections from two holes…in KL06-30, a 218-m intersection averaged 0.52 g/t Au and 0.23% Cu…KL06-31 returned a number of intervals of similar tenor, highlighted by 24 m of 0.44 g/t Au and 0.20% Cu, 32 m of 0.62 g/t Au and 0.21% Cu, and 20 m of 1.21 g/t Au and 0.14% Cu…these were the first deep holes drilled on the property and both ended in mineralization…

In 2011, Kiska completed a 30.6 line km IP survey to follow up the 2006 drilling and identified a zone of chargeability measuring 500 m x 1,400 m which underlies mapped pyrite-sericite alteration…the 2006 drill holes are located within this anomaly…the main chargeability high is flanked by zones of moderate chargeability that increase the lateral dimensions of the anomaly to 1,100 m x 1,800 m…

In October of last year, Kiska signed a “participation agreement” with Teck whereby the major can earn a 51% in Kliyul by spending $5.5 million over five years, and subsequently can earn a further 14% by spending an additional $6.5 million…

Technically, KSK finally broke above its 200-day moving average in late December, and that SMA has reversed to the upside and is now acting as strong support at 8 cents…RSI(14) at 51% on this 3-year weekly chart is moving up from a bullish “W, and all signs point toward a test of Fib. resistance levels at higher prices over the summer…

Panoro Minerals Ltd. (PML, TSX-V)

Panoro Minerals (PML, TSX-V) formed a classic double bottom and is certainly worthy of our readers’ immediate attention as it continues to advance important projects within the prolific Andahuaylis-Yauri belt in southeastern Peru…this is the same porphyry Copper belt that hosts the massive Las Bambas Project recently purchased by a Chinese consortium (a unit of state-controlled Minmentals Corp.)…

Panoro, which has just over 200 million shares outstanding, closed yesterday at 40 cents where there is some technical resistance…look for the rising 50-day SMA, currently at 34 cents, to act as a close supporting moving average…the now-rising 100-day SMA is immediately beneath that at 32 cents…below is a 3-year weekly chart from John…as always, perform your own due diligence…

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

The sudden resignation of North American Nickel (NAN, TSX-V) CEO and Chairman Richard Mark for personal reasons was a surprise, but that should not distract investors from the major opportunity we continue to see in NAN as the company prepares for the start of 2014 drilling at its potential world class Maniitsoq Ni-Cu-Co-PGE Project in southwest Greenland…

Technically, NAN has been moving along in textbook fashion since announcing its discovery at Maniitsoq last summer…currently, RSI(2) on the 1-year daily chart is at its most oversold level of 2014…the stock recently met resistance at 45 cents and closed yesterday at 42 cents…NAN has remained at or above its rising 100-day SMA, currently at 39.5 cents, throughout the entire year…buy pressure recently replaced sell pressure which was dominant since late 2012…

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

Gold has traded between $1,266 and $1,276 so far today…as of 8:20 Pacific, bullion is down $1 an ounce at $1,271…Silver is unchanged at $19.76…Copper is flat at $3.05…Crude Oil pushed higher this morning but has since backed off…WTIC is now down 32 cents a barrel to $106.04…militants in Iraq have attacked the country’s biggest Oil refinery and may have it largely under their control according to reports from Reuters…a British security company helped get Western workers out of the refinery just ahead of the attack…meanwhile, CNN reported militants have made big advances towards Baquba, which is less than 40 miles north of Baghdad…yesterday, the International Energy Agency revised downward its estimates for Iraq’s Oil output to 2019 to levels only roughly half as high as that targeted by the Iraqi government…the U.S. Dollar Index is off slightly at 80.54…

Holdings in EFTs backed by Gold touched 1,714.4 metric tons Monday, the lowest since October, 2009…in 2013, more than $73 billion was erased from the value of the funds, according to data compiled by Bloomberg…

Gold’s reaction to today’s Fed policy announcement (likely a further cut to its monthly bond-buying program) will largely depend on the tone of the accompanying comments by Federal Reserve Chairwoman Janet Yellen in a news conference…the biggest pickup in core consumer inflation in nearly three years makes the Fed’s job tougher and adds fuel to market speculation that it will move faster to raise interest rates, though the doves on the Fed are likely to prevail in our view…a Labor Department report yesterday showed consumer inflation rose 0.4% in May…inflation was up 2.1% over the past 12 months, compared to a 1% pace eight months ago, though the Fed will welcome that…the Fed was thought to be aiming for an inflation rate of around 2% to keep disinflation from hurting the economy…

With geopolitical tensions on the rise, and setbacks at home, public confidence in President Barack Obama’s leadership is eroding, according to a new NBC News/Wall Street Journal poll…the survey showed that just 41% of Americans now approve of Obama’s handling of his job, reversing an uptick this spring…the same proportion approve his handling of the economy, while just 37 percent approve his handling of foreign policy – the worst such rating of his presidency…

Today’s Equity Markets

Asia

China’s Shanghai Composite slipped 11 points overnight to close at 2056…China’s home prices rose at the slowest annual pace so far this year in May, official data showed today…average new home prices in China’s 70 major cities rose 5.6% from a year earlier, slowing from April’s 6.7% rise, according to Reuters’ calculations based on data released by the National Bureau of Statistics (NBS)…this was the first month-on-month decline in two years…a stabilization in home prices will give the Chinese government greater monetary flexibility…

Japan’s Nikkei finished at a one-and-a-half week high, up for a second straight day, as a weaker currency offset disappointing May trade data…

Europe

European markets were mixed in cautious trading today ahead of the Fed announcement…

North America

The Dow is down 39 points as of 8:20 am Pacific…the TSX is up 15 points while the Venture has added a point to 1007…the Venture’s 50-day moving average (SMA) is reversing to the upside, just one more bullish sign in a long list of technical indicators that underscore the case for a strong move in the CDNX…nervous nellies who were selling into the mild weakness in the Index since mid-March, rather than accumulating some of the great bargains that emerged, have made a profound miscalculation…they’ll be scrambling to climb on board as see plenty of upside potential in this market between now and the end of September…

Lumina Copper (LCC, TSX-V) jumped $1.82 a share yesterday to $9.62 on the announcement of a friendly takeover valued at $470 million by First Quantum Minerals (FM, TSX)…Lumina’s Taca Taca Cu-Au-Mo Project in Argentina, 120 km east of the world’s largest Copper mine in Chile, has an indicated resource estimate of about 21.1 billion pounds of Copper, 5.6 million ounces of Gold and 616 million pounds of molybdenum…

TSX 2.5-Year Weekly Chart

The TSX continues to flirt with all-time high territory, and the question now is whether it will break above an upsloping channel in place since the summer of last year…the rising 50-day SMA has been providing exceptional support during that time…a bullish “W” formation in the RSI(14) suggests higher prices are on the way…buy pressure is strong but volume has been disappointing – perhaps a spike in volume is on the way if more investors become convinced that this market has the potential to climb significantly higher…

TSX 10-Year Weekly Chart

Below is a long-term TSX chart…an important turning point for the Index came late last year when it broke above a 2-year ascending triangle (at the same time, the Venture pushed above its long-term downtrend line)…RSI(14) at 73% is in overbought territory but below levels seen during 2005, 2006 and 2011…

TSX Gold Index

The TSX Gold Index is up 7.6% so far this month…the 50-day SMA has flattened out just below 180 and a reversal to the upside does appear likely in the near future, implying new strength during Q3…the Gold Index has two important Fib. resistance levels to overcome – 182 and 190…

Ashburton Ventures Inc. (ABR, TSX-V) Update 

Keep a close eye on Ashburton Ventures (ABI, TSX-V) which has the lowest market cap ($1.4 million) of any Sheslay District play but controls very strategic ground with the Hackett Property and the Grizzly West Extension Project…we expect both areas to garner significant attention as the Sheslay district advances and moves into high gear over the summer…ABR sold off to just 3 cents the other day, but we attribute that to uninformed investors who simply don’t understand the value of the Hackett or the company’s newly-acquired ground contiguous to the western border of Garibaldi Resources‘ Grizzly Project (GGI, TSX-V)…it’ll be Ashburton’s job to get that message across in the coming weeks and we’re confident they will given our recent discussion with ABR President Kyler Hardy who has a strong familiarity with the entire area…

Interestingly, despite the recent drop in the share price, accumulation of ABR remains robust as indicated by the CMF…this shows that stock is moving from weak hands into strong hands…we see opportunity – not a cause for concern – during this period of weakness in ABR, and the same applies to Doubleview Capital Corp. (DBV, TSX-V) which we’ll be updating again shortly…

Santacruz Silver Mining Ltd. (SCZ, TSX-V)

A quality Silver play in Mexico worthy of our readers’ due diligence is Santacruz Silver Mining (SCZ, TSX-V) which is ramping up production at its Rosario Mine…SCZ is also working on two advanced-stage projects and one early-stage exploration play…the company expects to achieve lower costs during the second half of the year along with increased revenues, and that’s certainly a recipe for success…

Technically, what’s interesting about SCZ is that it’s closing in on a potential breakout above a downtrend line that you can see in this 2-year weekly chart from John…RSI(14) is also threatening to break above important resistance…

SCZ is off 2 pennies at 94 cents as of 8:20 am Pacific…

Pilot Gold Inc. (PLG, TSX) Chart Update 

Pilot Gold (PLG, TSX) continues to strengthen after finding strong support around the Fib. 50% retracement level at $1.20…PLG is a more compelling opportunity than ever in our view given the grades the company is reporting from its Kinsley Mountain Project in Nevada, and the kind of bullish environment we expect for quality Gold stocks during the upcoming third quarter…

PLG is unchanged at $1.54 as of 8:20 am Pacific…

Canada Carbon Inc. (CCB, TSX-V) Chart Update

Canada Carbon (CCB, TSX-V) continues to make noise with its Miller Graphite Project in Quebec.  “The results we report today reaffirm that the Miller hydrothermal lump/vein graphite is nuclear grade material, as we first reported on Oct. 15, 2013,” stated CEO Bruce Duncan in a news release yesterday…

One of our readers yesterday requested a CCB chart…”decision time” is fast approaching as CCB is moving quickly into the apex of a symmetrical triangle…CCB is off half a penny at 19.5 cents as of 8:20 am Pacific…

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

Gold has ranged between $1,263 and $1,270 so far today, easing from yesterday’s three-week high as traders await fresh developments in Iraq and Ukraine…as of 4:20 am Pacific, bullion is down $7 an ounce at $1,265…Silver is off 17 cents at $19.50…Copper is up a penny to $3.06…Crude Oil is off 69 cents to $106.21 while the U.S. Dollar Index has gained one-tenth of a point to 80.52…this is a slightly abbreviated edition of Morning Musings due to travel today…

Silver Outlook Improving? 

John’s updated Silver charts yesterday, plus the current bullish COT structure, suggest that a significant move to the upside in Silver is quite possible this summer, and it appears the move may already have started given last week’s 3% advance…high quality juniors with strong exposure to Silver should out-perform the metal, so those are situations to watch for…any dip in Silver over the near-term may provide one final highly favorable entry point in certain stocks…

The “longer-term path of least resistance” for Silver may be higher as the metal rallies with other cyclical commodities, according to ETF Securities. “With the most recent data from China showing signs of a  rebound and the reserve ratio cuts by the PBOC (People’s Bank of China) adding to potential momentum, we expect cyclical commodities like Silver to continue to benefit,” ETF Securities stated (source: Kitco).  “China is the world’s largest user of Silver and the cumulative data to April show China Silver imports are up 17% (year-on-year). Unlike Gold, Silver ETP inflows have been strong and sales of Silver coins are growing at a record pace. U.S. Mint Silver coin sales in 2014 are running about 6% above the record pace of 35 million ounces in 2013 – roughly equal to total U.S. Silver mine production. Most of the demand for Silver is for industrial purposes and the largest growing category is electronics related, notably solar panels. Total available Silver bullion inventories have declined substantially to about a year’s worth of mine production, compared to about seven times in 1990. The price of Silver has averaged about U.S. $20/oz in 2014, approximately a 15% discount from 2013, which is increasing demand and reducing secondary supply. Silver volatility recently reached the lowest levels in a decade, indicating a sharp price move soon. We expect that the longer-term path of least resistance is up.”

Today’s Equity Markets

Asia

China’s Shanghai Composite shed 1% or 19 points overnight after ending at its highest level in nearly a month yesterday…data out today showed that foreign direct investment fell to a 16-month low in May, and that weighed on sentiment…in Japan, the Nikkei climbed 43 points to finish at 14976…

Europe

European shares are up modestly today, tracking gains in U.S. stock markets and bouncing back from yesterday’s losses…

North America

Futures as of 4:20 am Pacific are pointing to a positive open on Wall Street in a couple of hours…fresh CPI numbers will be released at 5:30 am Pacific along with housing starts and building permits data…meanwhile, the Fed begins a two-day policy session this morning…

The TSX finished 39 points higher yesterday to close at 15040 while the Venture added a point to close at 998…

WTIC Seasonality Chart

We’re quickly approaching what has been the strongest month of the year (July) for Crude Oil prices over the last two decades…combined with current events in Iraq and Ukraine, the possibility of a spike in Oil prices has to be considered quite high…

WTIC Long-Term Chart

Following up on yesterday’s 1-year weekly WTIC chart, below is a look at the “Big Picture” with a 12-year monthly chart that has a decidedly bullish bias to it…a long-term symmetrical triangle has changed to an ascending triangle while RSI(14) at 58% has plenty of room to move higher and indeed is threatening to push above a downtrend line that formed after extreme overbought conditions emerged in mid-2008…

Modestly higher Oil prices would directly benefit certain nations’ coffers, and would also help to create some necessary inflation in various parts of the globe including the euro zone which is fighting deflationary concerns…however, momentum on a move through the $110 resistance would be hard to stop, and prices could end up going too high…

CRB Index 4-Year Weekly Chart

Another reason we’re so bullish on the Venture entering Q3 is the state of the CRB Index which broke out at the beginning of this year from a downsloping wedge…expect the CRB Index, which closed yesterday at 310, to push higher during the second half of the year…it has very strong support between 290 and 305…

Brazil Resources Inc. (BRI, TSX-V) Updated Chart

Familiar pattern?…John recently pointed out the opportunity in Brazil Resources (BRI, TSX-V) which hit exceptionally strong support in the mid-80’s…in a pattern very similar to the Venture, note how BRI broke above a long-term downtrend line early this year, retraced and tested that area as new support, and then resumed its primary uptrend…a bullish “W” has formed in the RSI(14) for BRI…

Highbank Resources Ltd. (HBK, TSX-V) Updated Chart 

WANTED Technologies Corp. (WAN, TSX-V)

While we remain focused almost exclusively on the resource sector, occasionally we come across a non-resource company that really intrigues us…a good example is WANTED Technologies Corp. (WAN, TSX-V) which we selected in late December as one of 20 plays to watch closely in 2014…late last month, WAN reported strong results (record revenues and net income of nearly $800,000) for its third quarter ending March 31…

Since 2005, WANTED has stored more than one billion detailed records on hiring activity throughout the U.S. and Canada…this proprietary database contains more than 100 billion data elements which are used for analytical applications throughout multiple business sectors…the company’s most recent significant license agreement is one of many applications of WANTED’s “big data” for the employment sector…the challenge for WANTED will be to remain innovative while pursuing its growth in a relatively new and competitive field…new players, new alliances and new technological solutions may very well emerge in this market…

John’s updated 2.5-year weekly chart for WAN shows a cleansing of the overbought RSI(14) condition that emerged late last year…important support held, and the next measured Fib. resistance is above the $2 level (not a price target, just a theoretical level based on Fib. and technical analysis)…

Note:  John, Terry and Jon do not hold share positions in BRI, HBK or WAN.