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Gold prices hit their highest levels in three weeks today amid escalating tensions in Iraq with bullion trading between $1,272 and $1,286 so far today…as of 8:30 am Pacific, bullion is down $1 an ounce at $1,275…how Gold handles near-term Fib. resistance in the mid-$1,280’s will be interesting – it reacted at that level this morning…Silver is up a penny at $19.68 (see updated Silver charts near the bottom of today’s Morning Musings)…Copper is higher for a second straight session, up 2 pennies at $3.05, after the central bank in China extended a reserve-requirement cut in an effort to support economic growth…Crude Oil is up slightly at $106.98 while the U.S. Dollar Index is down nearly one-fifth of a point at 80.44…

Gold is coming off one of its best weeks of the year, aided by the situation in Iraq and a slew of data from China on Friday that showed that the economy is stabilizing, supported by targeted stimulus measures from Beijing…China, the largest global Gold consumer, nearly doubled its first-quarter Gold imports relative to the same period last year, according to a recent study by data provider Global Trade Information…

New Zealand decides this week whether to approve an underwater iron-ore operation that would likely become the world’s first commercial metals mine at the bottom of the sea…a green light to allow New Zealand’s Trans Tasman Resources to start iron-ore dredging off the country’s west coast will encourage others looking to mine Copper, Cobalt, Manganese and other metals deeper on the ocean floor…along the Pacific Rim of Fire, as deep as 6,000 meters underwater, volcano crusts, “black smoker” chimneys and vast beds of Manganese nodules hold promise for economic powers like China and Japan as well as many poor island states busy pegging stakes on the ocean floor.  “A lot of people are watching the Trans Tasman Resources outcome,” said Michael Johnston, CEO of Nautilus Minerals Inc. (NUS, TSX) which is working on a deep-sea project off Papua New Guinea and is also in talks with New Zealand…

Crude Oil (WTIC) Update

Is an Oil shock on the way this summer?…an underlying fear in the Oil market is that the fighting in Iraq will spread to the country’s main Oil producing areas in the south…most of Iraq’s Oil flows from terminals in the Shiite-dominated south where a majority of reserves are located as you can see in the chart below…Iraq has been suffering a low-level civil war for three years and production has still remained consistent at around 3 million barrels a day, but the threat of supply disruptions in the coming months has certainly increased given the emergence of the militant group (that’s a polite term) ISIS…most analysts believe that the immediate threat to Iraq’s Oil supplies – most of which are hundreds of miles to the south of the fighting – remains limited…northern exports have run at a trickle for months, and few had expected a rapid recovery…

Technically, the strong resistance band between $108 and $110 is a key area to watch in WTIC…a confirmed breakout above $110 a barrel would be a very bullish development given the posture of this 1-year weekly chart and some longer-term charts…

Today’s Equity Markets

Asian markets were mixed overnight…China’s Shanghai Composite gained 15 points to close at 2086 while Japan’s Nikkei average slipped 165 points…

HSBC’s June flash PMI for China will be reported Friday…the bank’s final reading for May rose to 49.4, lower than a preliminary reading of 49.7 but up from 48.1 in April…

China has more outstanding non-financial corporate debt than any other country, according to Standard & Poor’s, having overtaken the U.S. last year…in a report published today, S&P estimates that non-financial corporate debt in China reached $14.2 trillion at the end of 2013, compared with a U.S. figure of $13.1 trillion…from now until the end of 2018, Chinese companies are expected to borrow $20 trillion, a third of corporates’ debt requirements globally, a trend supported by the increased willingness of the Chinese authorities to allow more government-related entities to issue debt securities.  “The concern is that if China did experience a faster slowdown, property prices came off and there was an issue in the shadow banking sector, that would have significant knock-on effects globally,” said Paul Watters, head of corporate credit research at S&P.

Europe

European markets were down slightly today…

North America

The Dow has retreated 37 points as of 8:30 am Pacific…U.S. stock markets suffered their biggest losses in two months last week, which also snapped the longest weekly rally this year…

The U.S. industrial sector showed some signs of life in May as the Federal Reserve reported an increase of 0.6% in industrial production today, in line with estimates…the Federal Reserve revised April’s data, reporting a decline of just 0.3%, up from its initial drop of 0.6%…

The Fed is widely expected to announce another $10 billion monthly reduction in QE in Wednesday’s FOMC statement, which will be followed by a Janet Yellen news conference…the focus will be on the Fed’s economic assessment, and investors will be looking for any clues that the first interest rate hike may come earlier than mid-2015…

“With inflation still below target, albeit rising, and unemployment still high, but falling, the committee faces a classic monetary policy challenge,” stated James Bullard, the president of the St Louis Fed, in a recent speech…

New figures out this morning from the IMF which foresees the U.S. economy growing a modest 2% this year, below its previous estimate of 2.7%…that would be nearly identical to the economy’s 1.9% growth in 2013…

The TSX is up 34 points through the first two hours of trading while the Venture has added 2 points to 999…ATAC Resources Ltd. (ATC, TSX-V) has commenced Phase I drilling at its 100%-owned Rackla Gold project in the Yukon…work will focus on recent Carlin-type Gold discoveries at the Osiris and Anubis areas within the Nadaleen Trend…ATC is up 6 cents at $1.15 as of 8:30 am Pacific…

CDNX Relative To Gold

Below is an update to a recent fascinating 10-year monthly chart from John that shows how the Venture’s out-performance vs. Gold is a bullish indicator for both…on the chart below, you’ll see three uptrend lines – one that’s currently in progress – and two downtrend lines…the best time to be positioned in the Venture (and Gold for that matter) is when the Index (the black line on this chart) is out-performing the yellow metal…this Venture uptrend vs. Gold has been established since the second quarter of last year and should continue for an extended period, during which time we also expect Gold to ultimately push higher…

Venture 3-Year Weekly Chart

The Venture 3-year weekly chart has been an extremely valuable guide, and shows a primary uptrend that’s regaining momentum approaching Q3…note how the Venture broke above its long-term downtrend line in October of last year, tested that area as new support, then took the path of least resistance and climbed as high as 1050 in March…a mild pullback from that level was predicted and merely took the Index down to exceptional support around 970…the primary trend is bullish, and on Friday there was a confirmed breakout above a short-term downtrend line in place since March…the CMF shows the longest period of buy pressure since the bear market started in early 2011…

Venture 5-Year Weekly Chart + Gold Comparative

Below is another, more extended technical look at the Venture in comparison with Gold…the Venture’s extreme oversold RSI(14) condition that emerged in the second quarter of last year, coinciding with the bear market bottom at 859, was essentially a mirror image of the extreme overbought levels that existed in late 2010/2011…

Edge Resources Inc. (EDE, TSX-V) Update

Edge Resources (EDE, TSX-V), a very promising Oil and gas play we strongly encourage our readers to check out, hit a new 52-week high recently at 28.5 cents before pulling back to support in the low 20’s last week…with the possibility of a hot Oil sector over the summer, and rapidly improving fundamentals, EDE appears to be on track for a strong second half of 2014…EDE is up half a penny at 25 cents as of 8:30 am Pacific…

Silver Long-Term Chart

This 11-year monthly chart confirms that the metal has exceptional support in the high teens…note that Silver has two downtrend lines it needs to break above on this particular chart – in the immediate future we’ll be watching for a potential confirmed breakout above the first downtrend line…

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 last week, has become very favorable, suggesting Silver is gearing up for a strong move over the summer…

Silver Short-Term Chart

Silver gained 3.5% last week and pushed above a support band between $17.50 and $19.50…this “breakout” does require confirmation…

Early this year, Silver broke above a downtrend line in place since late 2012 on this 3-year weekly chart…similar to the Venture pattern during the fourth quarter of last year, Silver has found support at the top of this downtrend line…a bottoming pattern has been forming in the SS…overall sell pressure has been in decline since early 2013…these are encouraging signs…the support band between $17.50 and $19.50 should therefore hold while the next major chart resistance is $22…

Note:  John holds a share position in EDE.

TSX Venture Exchange and Gold

The Venture‘s technical dynamics remain EXTREMELY favorable, and in fact the Index confirmed a breakout Friday above a short-term downtrend line in place since the mid-March high of 1050 (see chart below).  Thanks to an upturn in Gold and Oil prices, the Venture posted a 10-point gain last week to close at 997.

What we’re focused on now is the 1150 resistance level, a powerful 15% potential move from here.  Within that kind of bullish environment expected immediately leading up to and during Q3, similar to the advance between late December and mid-March in Q1, astute investors will profit handsomely as a significant number of stocks should experience rather dramatic gains.  The doomsayers, those who became discouraged and threw in the towel with this market after the very healthy and normal pullback from the March high to the rock-solid support around 970, have made a profound miscalculation.  Yes, those are strong words but the technical case for the Venture right now is unusually strong – it has been that way, in fact, since the breakout above the long-term downtrend line last October as we have pointed out on so many occasions.  A vast majority of investors typically lag behind – they don’t realize a bull or bear market is over until well after the fact.

For those who lament about the “weak” fundamentals of so many companies in the context of working capital, keep this in mind:  Yes, there are many Venture listings at the moment that are dealing with working capital deficits, but that doesn’t mean they’re all about to disappear (some will which is good).  Within this group there remains a good percentage with very attractive upside share price potential, companies with impressive human capital that are also sitting on valuable assets.  Pilot Gold (PLG, TSX) recognized this in Cadillac Mining Corp. (CQX, TSX-V) and announced a friendly all-share buyout Friday that drove CQX all the way up to 20.5 cents after it was trading as low as 5.5 cents June 5.  Cadillac’s latest financials showed a working capital deficit of more than $1 million, but it was nonetheless a superb opportunity for investors given the value and potential of its Goldstrike Project in southwestern Utah.  There are a lot of other “Cadillacs” out there.

Venture 6-Month Daily Chart

On increasing volume and buy pressure, the Venture has pushed above a short-term downtrend line with confirmation of this breakout Friday.  The next stage of the primary uptrend is under way and should begin to accelerate either immediately or very soon.  Significantly, the Venture’s 300-day moving average (SMA) is slowly starting to reverse to the upside after being in decline since late 2011.  Momentum is now clearly on the bulls’ side and a lot of money could come surging into this market over the next few months.  It’s time for the bears to go into hibernation.

Venture 5-Year Weekly Chart

It’s important to point out that RSI(14) on John’s 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.  The recent decline that took the Venture to a monthly intra-day low of 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.

In the not-too-distant future, investors will look back at the correction from 1050 as an incredible buying opportunity.  The nervous nellies who were sellers as opposed to buyers in recent weeks – well, they bet on the highly improbable which was a breakdown of superb Venture support.  The Venture will take the path of least resistance which means a significantly higher market over the coming months – perhaps not the mainstream view, but you don’t make big money by following the crowd.

The Venture’s rising 200-day moving average (SMA) on this weekly chart is at 971.  The third quarter for the Venture is shaping up to be a very dynamic period.  Patience and a game plan, as always, are key.

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 pushed above resistance at $1,260 last week and closed Friday at $1,276 for a weekly gain of $24.  Events in Iraq were certainly the catalyst with Crude Oil surging to a new 9-month high.  This morning in Ukraine, a Ukrainian military plane was shot down (49 people killed) by pro-Russian separatists using anti-aircraft guns, likely courtesy of Vladimir Putin (the flow of heavy weapons and militants from Russia into Ukraine continues).  There are hot spots in different areas of the globe, and a Jimmy Carter clone in the White House at the worst possible time.  So it’s quite possible that geopolitical instability will be a major theme in the months ahead, and at the very least this should put a floor underneath Gold prices to keep them above last year’s lows.  Potentially, bullion could surprise to the upside, especially if Crude Oil (WTIC) busts through major resistance around $110 a barrel.

In the week ahead, it’ll be interesting to see how Gold handles Fib. resistance in the $1,280’s as you can see in John’s 6-month daily chart.

Silver jumped 66 cents last week to close at $19.67.  Copper fell another 2 pennies to $3.03.  Crude Oil climbed $4.25 a barrel to $106.91 while the U.S. Dollar Index was up one-fifth of a point to 80.61.

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.

Gold has traded between $1,270 and $1,278 so far today…as of 9:30 am Pacific, bullion is up $1 at $1,274…Silver has added a dime to $19.63…Copper has gained 2 pennies to $3.03…Crude Oil remains firm, up 31 cents to a 9-month high at $106.84…major problems brewing in Iraq, OPEC’s second-largest producer…reports are that heavily armed Islamist militants flush with $450 million in stolen cash pushed toward Baghdad today, sending thousands fleeing in fear from the Iraqi capital…al Qaeda-linked insurgents who overran large parts of the north of the country earlier this week seized about $450 million during a bank heist, Mosul Mayor Athier Nujaifi told NBC News this morning…that makes the Islamic State of Iraq and al-Sham (ISIS) the world’s richest terrorist group…Sunni-Shiite tensions in Iraq have the potential to drive Oil prices through critical resistance around $110 over the summer, and this would obviously drive Gold higher as well…if these tensions in Iraq spread to the south or threaten the south, anxiety in the Oil market will grow significantly…

Today’s Equity Markets

Asia

China’s Shanghai Composite gained 19 points overnight to close at 2071…investors digested a raft of May economic data from China…Retail sales rose 12.5% on year, beating expectations for a 12.1% increase, while industrial output increased 8.8% on year, in line with estimates…fixed asset investment rose 17.2% on year for the January-to-May period, just above expectations for a 17.1% rise…

Japan’s Nikkei surged 124 points to close the week at 15098…as expected, the Bank of Japan left monetary policy unchanged…speaking at a news conference, Governor Kuroda said the economy will continue its moderate recovery despite the decline in demand from April’s sales tax hike…

Europe

European markets were down slightly today…

North America

The Dow is up 35 points as of 9:30 am Pacific…in economic news, U.S. producer prices unexpectedly sank in May…the PPI retreated a seasonally adjusted 0.2%…economists polled by MarketWatch had forecast a 0.1% gain for the PPI index…meanwhile, consumer sentiment fell modestly in June as views by consumers with the lowest incomes soured, according to a closely-watched survey released this morning…the Thomson Reuters/University of Michigan’s preliminary June reading on the overall index on consumer sentiment came in at 81.2, down from 81.9 the month before…it was below the median forecast of 83.0 among economists polled by Reuters…

The TSX is up 82 points while the Venture has fallen 4 points to 994…

Venture Updated Chart

As we mentioned yesterday, the Venture appears to be on the verge (immediate or near-term) of a confirmed breakout above the downtrend line in place from the mid-March high of 1050 (see updated 6-month chart below)…more accurately, this “downtrend” was a healthy pullback to exceptional support within the context of a primary uptrend which appears ready to soon resume in earnest, setting up a distinct possibility for very bullish conditions in Q3…

In our view there are a multitude of outstanding opportunities for selective investors in this market at the moment, and this morning’s takeover by Pilot Gold Inc. (PLG, TSX) of Cadillac Mining Corp. (CQX, TSX-V) is the latest example…

This short-term chart shows the current situation with the Venture…wouldn’t be surprising to see the Index reverse intra-day and confirm the breakout – if not today, then likely next week…

Long-Term Gold Chart Update

The Venture is behaving in a manner that tells us we’ve seen the low (last year) in Gold prices, and that the $1,200 floor will hold…

This 20-year monthly Gold charts shows that bullion remains in a long-term bull market with the $1,200 area an important Fib. (61.8%) retracement level…the bearish trend since late 2011/early 2012 has been weakening…Goldman Sachs continues to try to “talk” Gold down (while they continue to accumulate it) but whether they’ll be able to talk it down below last year’s low ($1,180) is highly questionable…

Brazil Resources Inc. (BRI, TSX-V) Update

Interesting chart from John which should also help readers understand the value of technical analysis (including Fibonacci), and how important it is when a stock (or an Index in the case of the Venture) breaks above a long-term downtrend line (the Venture did so last October)…

BRI took off sharply to the upside after pushing through a downtrend line early this year…it became technically overbought (see the extreme RSI levels), and has since retreated to Fib. support levels and the the top of the downtrend line which is also very strong new support…BRI is unchanged at 90 cents as of 9:30 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V) Update

Discovery Ventures (DVN, TSX-V) has been advancing an interesting project (Willa deposit) in southeast British Columbia since late 2012 and continues to make significant headway, especially since its announced acquisition of the past producing Max mine and mill facilities about 135 km from the Willa deposit…recently, we alerted our readers to DVN when it was trading in the high teens following its release of a very positive Preliminary Economic Assessment for the Willa based on measured and indicated NI-43-101 resources (not reserves)…a lot of hard work and skill have gone into pulling this project together, and it would certainly be a boost for the mining industry in southeast B.C. (and the communities in the immediate area of this project) if the Willa can be put into production…

DVN is up another 2.5 cents this morning to 30 cents…below is a 2.5-year weekly chart from John…as always, perform your own due diligence…

 Note:  Jon holds a share position in DVN.  

Gold has traded between $1,260 and $1,269 so far today…as of 6:40 am Pacific, bullion is up $6 an ounce at $1,266…Silver is 10 cents higher at $19.30…Copper is flat at $3.03…Crude Oil, aided by escalating violence and instability in Iraq, has surged $1.63 a barrel to $106.03…Islamist militants swept out of northern Iraq yesterday to seize their second city in two days, threatening Baghdad and pushing the country’s besieged government to signal it would allow U.S. airstrikes to beat back the advance…the U.S. Dollar Index is down slightly at 80.73…

Concern over the potential market impact of a metals-financing probe in China may be overblown, however, said Bank of America Merrill Lynch…“Assuming that around 300,000-400,000 tons of copper stocks in China are locked up in financing deals at present, the tonnages affected in Qingdao are worth no more than a day of national demand,” said the bank…furthermore, Merrill Lynch added, the chance that Chinese banks will withdraw from metals financing as a result of the probe is extremely small, and while uncertainty over the situation is likely to damp market sentiment in the short-term, the impact of the probe should be negligible in the longer term…

China’s Bureau of Raw Materials states that Chinese domestic Gold resources grew strongly in recent years and at 8,200 tonnes (264 million ounces) are now the world’s second largest, exceeded only by known South African resources of 31,000 tonnes (close to 1 billion ounces)…these latest figures suggest that China will be able to at least retain its current output levels and comfortably maintain its global No. 1 producer status…it currently produces around 65% more Gold annually than global No.2 miner, Australia, and almost 140% more than South Africa’s current production…South Africa dominated world Gold output for most of the last century…

Palladium prices have hit a 13-year high, propelled by investors’ worries that supplies of the precious metal are dwindling amid a nearly five-month-old miners’ strike in South Africa…

Today’s Markets

Asia

The mainland’s benchmark Shanghai Composite dipped 3 points to 2052 despite news of another “mini-stimulus”…yesterday, premier Li Keqiang said the government should develop a transportation network in order to form an “economic belt” along the Yangtze river…Japan’s Nikkei fell 96 points overnight to

Europe

European markets are mixed in late trading overseas…

North America

After its first triple digit loss since May 20, the Dow is off another 35 points through the first 10 minutes of trading…U.S. retail sales rose less than expected in May, but that probably will do little to change expectations of an acceleration in growth this quarter as data for the prior months was revised higher…the Commerce Department reported this morning that retail sales, which account for a third of consumer spending, gained 0.3% last month and rose by a revised 0.5% in April…economists polled by Reuters had forecast May sales gaining 0.6% after a previously reported 0.1% rise in April…

The TSX is 10 points higher while the Venture is flat at 989…

Updated Venture Chart

We’ve posted numerous very bullish longer-term Venture charts in recent weeks (and months), pointing to a potentially surprisingly robust second half of 2014…below is a 6-month daily chart that shows the Venture poised for a possible near-term breakout above a temporary downtrend line (within the context of a primary uptrend) that formed after the March high of 1050…the broader uptrend, of course, is supported by many indicators, not the least of which is a rising 200-day moving average (SMA) currently at about 970…

Note how RSI(14) found support at 30% and a bullish “W” formed after the May 20 intra-day low of 968…buy pressure is now increasing and the 50-day SMA has flattened out just below 1000…the Venture will gain significant near-term momentum in the event of a breakout above this downtrend line and the 50-day SMA…

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

After reporting bonanza grade Silver results from the very first hole at the Silver Eagle target at the Rodadero North Project in Mexico May 14, it’s likely safe to assume that an update from GGI regarding Rodadero can’t be far off…we’re optimistic regarding Rodadero given the science behind the selection of targets there, and confirmation of promising Hyperspectral signatures from surface sampling…keep in mind, it was through the use of Hyperspectral Remote Sensing Technology that allowed GGI to cash in on the Temoris option in 2009 (sold to Paramount Gold & Silver, PZG, TSX & AMEX) which has emerged as an important piece of ground for Paramount with impressive high-grade drill intercepts…

The 10-year GGI chart remains potentially very explosive with the overall bullish trend continuing to gain strength…Fib. support has held at 21 cents (immediately above the rising 50 and 100-day SMA’s which have converged at 20 cents) on the healthy pullback from the recent multi-year intra-day high of 28 cents (May 20-21)…RSI(14) at 60% on this long-term chart is following an uptrend line and has plenty of room to head higher…for various technical and fundamental reasons, it appears that GGI’s 475% move from last year’s low of 4 cents could be just the first stage of a very dramatic run if success continues in both Mexico and B.C. for this well-run company…as always, perform your own due diligence…

TSX Gold Index Updated Chart

A strong TSX Gold Index support band between 160 and 165 has held, so far, and that has to be encouraging for Gold bugs…the Index closed yesterday above Fib. resistance at 175 but exactly at its declining 200-day SMA, so it’ll be interesting to see what develops in the coming days…the 6-month daily chart features increasing buy pressure and a bullish +DI/-DI crossover…

Crude Oil Updated Chart

Crude Oil (WTIC) continues to climb an RSI trendline in place since late last year as you can see on this 1-year weekly chart…key areas to watch are $104-$105 (resistance) and of course strong resistance around $110…

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

Calgary-based Contact Exploration (CEX, TSX-V) has been one of our favorite oil and gas plays over the last year, especially after a confirmed breakout above a horizontal channel in early December…a week ago, the company announced the closing of a non-brokered private placement for total gross proceeds of approximately $10 million, and yesterday CEX closed at another multi-year high of 48 cents…below is an updated 2.5-year weekly chart…as always, perform your own due diligence…

Kaminak Gold Corp. (KAM, TSX-V) Update

Investors responded favorably to results from a NI-43-101 Preliminary Economic Assessment for Kaminak Gold’s (KAM, TSX-V) Coffee Project in the Yukon…this 2.5-year chart is interesting as you can see how KAM broke above a long-term downtrend line early this year…it retraced to test that new support, and then moved sharply higher yesterday on the news…a possible inverted head-and-shoulders pattern could be forming here which would be bullish…KAM is down 7 cents at 86 cents as of 6:40 am Pacific…

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

Gold is trading at a two-week high as it tries to penetrate resistance at $1,260…as of 8:30 am Pacific, bullion is up $2 an ounce at $1,262…Silver is a nickel higher at $19.24…Copper is flat at $3.04…Crude Oil has added 30 cents a barrel to $104.65…OPEC delegates have agreed to roll over the group’s production quota, maintaining the current official production output…the decision comes despite concerns over adequate global supply…Libya has struggled to lift its output amid political turmoil in the country…meanwhile, there are signs that Oil demand is picking up…the U.S. Dollar Index has retreated slightly to 80.78…

Palladium prices are closing in on a 13-year high, reflecting investors’ concerns that a mining strike in the No. 2 producer South Africa will choke off supplies…the metal, which is mainly used in car-exhaust filters, continues to gain traction as investors bet that a prolonged interruption in supplies out of South Africa will lead to a shortage for auto makers this year…

Global economic growth in 2014 is likely to be weaker than expected, with the poor weather in the U.S., financial market turbulence and the Ukrainian issue serving as drags, the World Bank said in its latest World Economic Prospects report released late yesterday…the bank lowered its global economic growth forecast for 2014 to 2.8% from the 3.2% it estimated earlier…at the same time, it left its forecast for 2015 and 2016 broadly unchanged at 3.4% and 3.5%, respectively…

Today’s Equity Markets

Asia

China’s Shanghai Composite added 2 points overnight to close at 2055…Japan’s Nikkei rebounded from yesterday’s one-week closing low after the head of the country’s public pension fund, the world’s largest, said the fund will announce a boost to stock and foreign bond investments later this year…

Europe

European markets were down modestly today…

North America

The Dow is off 90 points through the first two hours of trading…politically, big news out of the U.S. last night as House Majority Leader Eric Cantor lost his GOP Virginia primary race in a stunning upset to Tea Party-backed challenger Dave Brat…Brat, an economics professor and political novice, had latched onto the increasingly hot-button issue of immigration and accused Cantor, the No. 2 Republican in the GOP-led House, of supporting immigration legislation that would give “amnesty” to millions of people living illegally in the United States…

Politics take center stage in Canada tomorrow as Ontario voters go to the polls in an election that will likely impact the mining industry in that province, one way or the other…hopefully the good people of Ontario will finally decide that it’s time to replace an inept Liberal government that has wasted billions in taxpayers’ money, through economic mismanagement and corruption, and has put the province’s credit rating at risk with the highest debt-to-revenue ratio in the entire country…nowhere in Canada is there a political party more deserving of a long spell in the wilderness…unfortunately, none of the leaders running for Premier has shown exceptional qualities, so the choice comes down to who’s the best of a disappointing bunch…a Forum Research survey conducted Monday found the Liberals at 42%, the Conservatives at 35% and Andrea Horwath’s New Democrats at 19%…the findings are within the poll’s margin of error so the race could be tighter…Tim Hudak will have to resign as leader of the Progressive Conservatives if he can’t win the favor of Ontario voters this time around…

The TSX is down 39 points while the Venture is off 5 points at 982 as of 8:30 am Pacific…a weak currency will help buoy Canada’s economy this year and next, though a slower pace in the housing market will temper the recovery according to a forecast released today by the Royal Bank…its study projects that the economy will expand by 2.4% this year and 2.7% in 2015, driven by heightened demand in the U.S. for Canadian exports…RBC is predicting an 85-cent dollar by the end of next year, which would certainly be a boon for Canadian Gold producers…

From Charles Lammam and Milagros Palacios at the Fraser Institute…Tax Freedom Day was Monday (June 9) for the average Canadian family (with two or more people)…it is only from that day on that you start working for yourself and family instead of the government…

The Fraser Institute’s annual Tax Freedom Day calculation is a handy measure of the total tax burden imposed on Canadian families by the federal, provincial and local governments…if you had to pay all your taxes up front, you would give government each and every dollar you earned before tax freedom day…the later the Tax Freedom Day, the heavier the tax burden…

In 2014, the Fraser Institute estimates that the average Canadian family will pay $43,435 in total taxes…that works out to 43.5% of annual income, which, on the calendar, translates into Tax Freedom Day falling on June 9…

Updated Copper Chart

Copper encountered resistance as expected around $3.20 and has “unwound” to just above the $3 a pound level where it should bottom out above the important mid-March low…below is an updated 6-month daily chart from John…

Kaminak Gold Corp. (KAM, TSX-V) Delivers PEA For Coffee Project

Kaminak Gold (KAM, TSX-V) is stronger this morning, buoyed by robust data in an initial Preliminary Economic Assessment for its 100%-owned Coffee Project south of Dawson City…at a Gold price of $1,250 per ounce (U.S.) and using a 95-cent exchange rate, Coffee generates a pre-tax NPV at a 5% discount rate of more than $500 million and an IRR of 33%…further, the mine could become a significant Yukon Gold producer, yielding close to 450,000 ounces in the first two years and producing an average of 167,000 ounces annually over the life of mine at an all-in sustaining cash cost of $688 (U.S.) per ounce of Gold…KAM is up 13 cents at 85 cents as of 8:30 am Pacific…

Abcourt Mines Inc. (ABI, TSX-V) 

Abcourt Mines (ABI, TSX-V) continues to make progress with its Elder Mine near Rouyn-Noranda, Quebec…the company expects to reach full production (150,000 tonnes per year) in the second half of this year, as reported Monday…in the lead-up to commercial production, from July last year to March of this year, Abcourt has generated total revenue from Gold and Silver sales of just over $7 million…

Technically, Abcourt continues to threaten to break out of a long-term downsloping channel…with a further ramping of production at Elder, which is showing high Gold recoveries in excess of 96%, it’s reasonable to expect ABI to be a strong performer during the second of this year…

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’ve mentioned in this space…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 has formed a bullish ascending triangle 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 20.5 cents as of 8:30 am Pacific…

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

Gold has traded between $1,251 and $1,265 so far today…as of 8:30 am Pacific, bullion is up $9 an ounce at $1,261…Silver has gained 16 cents to $19.22…Copper is up a penny to $3.04…Crude Oil is 9 cents higher at $104.50…Oil exports from Libya have dropped to a trickle in recent months, removing as much as 1.4 million barrels per day (bpd) of high-quality, light crude from the oil market…sanctions on Iran and turmoil in several other Oil producers have also reduced supply, pushing Oil prices towards the top of recent ranges…at the same time, Oil demand appears to be picking up again after a long period of below-par global economic growth…the U.S. Dollar Index has added one-fifth of a point to 80.81…

Gold has been steadying lately and could benefit from a short-covering rally, according to HSBC…the yellow metal has held up despite a strong U.S. jobs report late last week, plus recent euro weakness and a stronger stock market, HSBC notes. “The heavy net speculative short positions on the Comex – almost the highest this year – leaves Gold open to a short-covering rally, but we do not see an immediate or obvious catalyst,” the bank stated. “Gold appears to be steadying after the May slump, which we attribute to an unwinding of long positions in reaction to the easing in geopolitical tensions in Ukraine.” For now, the physical market looks “moderately positive at best,” HSBC says.

The monsoon season in India is off to a low start, which may negatively impact Gold demand which is significantly dependent upon the wealth of Indian farmers…

Today’s Equity Markets

Asia

China’s Shanghai Composite jumped 22 points overnight to close at a two-week high of 2052…financials led the way after the People’s Bank of China cut the reserve ratio requirement for rural banks yesterday…meanwhile, Chinese consumer inflation picked up in May following a dip in April that had raised concerns about the danger of deflation in the world’s second-largest economy…the headline consumer price index rose 2.5% from a year earlier, compared with a 1.8% increase in April, but remained well below the government’s “upper limit” target of 3.5% for the year…producer prices also ticked higher but remained in deflationary territory, where they have been for more than two years…

Japan’s Nikkei fell 129 points overnight to close at 14495…

Europe

European markets were mixed today, though the German DAX hit an all-time high…the ECB’s easy money continues to lift up the euro zone bond market…yields on some European 10-year bonds are now trading lower than the yield on the 10-year U.S. Treasury note…some analysts are concerned that the rallying European bond markets have reduced the urgency for policy makers to tackle long-term economic issues such as the region’s competitiveness and structural overhauls…

North America

The Dow is down 12 points as of 8:30 am Pacific…small business owners were more upbeat about the U.S. economy in May, according to a monthly industry survey…the National Federation of Independent Business on Tuesday said its Optimism Index rose 1.4 points to 96.6 in the month, the highest reading since September 2007…the NFIB cautioned, however, that while the survey has showed an improvement in sentiment for the third straight month, the index remains far below readings that have normally accompanied an expansion in the U.S. economy…

The TSX is off 7 points while the Venture is down 1 point at 987 as of 8:30 am Pacific…

TSX Chart Update

The TSX continues to climb within an upsloping channel, though this has also been accompanied by a notable decline in volume during 2014…the MA-10 on this 5-year weekly chart (the 50-day SMA) has been a close supporting moving average and currently sits at 14613…

Euromax Resources Ltd. (EOX, TSX-V)

Euromax Resources (EOX, TSX-V) has demonstrated how individual stocks (in this case, a company with a Gold-Copper porphyry deposit) can post enormous gains, even in slow markets…pre-market last Thursday, EOX released results of a Prefeasibility Study, including a maiden mineral reserve, for its 100%-owned owned Ilovitza Gold-Copper porphyry Project in Macedonia…the stock opened at 17 cents that morning and climbed as high as 75 cents intra-day yesterday for a better than 4-fold jump…EOX has 85 million shares outstanding…

Ilovitza is a Gold-Copper porphyry with total sulphide probable reserves of 209 million tonnes at an average grade of 0.34 g/t Au and 0.20% Cu…oxide probable reserves are 16 million tonnes at 0.33 g/t Au…over a 23-year mine life, Ilovitza is expected to produce 95,000 ounces of Gold and 16,000 tonnes of Copper annually…the project has a pre-tax NPV(5%) of $675 million and a pre-tax IRR of 18.6%…initial capital expenditures are estimated at just over $500 million…

Ilovitza is surrounded by excellent infrastructure and would be the first major modern mine in Macedonia…it’s also one of the few permitted mining projects in all of Europe with very strong local and national support…

Technically, EOX is yet another classic example of a Venture stock that has broken above a long-term downtrend line…when this kind of event occurs, the upside momentum can be very significant…entering the upcoming third quarter, astute investors should pay particular attention to stocks that are on the verge of breaking out above their long-term downtrend lines…we’ll point out some of those situations in coming weeks…

Below is a 3-year weekly chart for EOX…note the 67-cent Fib. resistance level, and what should now be a strong support band between 40 and 60 cents…EOX is down 20 cents at 55 cents as of 8:30 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V) Update

As witnessed with EOX, positive Prefeasibility Studies can produce major upside returns for investors…that’s why we turned so bullish recently on Discovery Ventures (DVN, TSX-V) when it trading in the high teens after releasing its Prefeasibility Study for the Willa-Max Gold-Copper-Silver Project in southeast British Columbia…this high-grade project has the makings of a potential cash cow for DVN given the low capex ($12.8) million and projections for revenue and operating expenses…the IRR for Willa-Max (4.25-year mine life) is a stunningly impressive 412%…we encourage readers to check this one out as DVN should attract increased attention with those kind of robust numbers…DVN is up half a penny at 24 cents as of 8:30 am Pacific…

Midlands Minerals Corp. (MEX, TSX-V)

Keep an eye on Midlands Minerals (MEX, TSX-V) which started Phase 1 drilling at its Parlozi Project in Serbia a couple of weeks ago…MEX, which had about $3 million in cash and working capital at the end of March, optioned Parolzi from Reservoir Minerals (RMC, TSX-V) at the beginning of this year…Parlozi is a Silver-Lead-Zinc-Gold prospect with an historical (non-compliant) resource in an area featuring excellent infrastructure…the 1,500-m Phase 1 drill program has several objectives:

• Extend the validation of the historical resource, and the presence of both vein and carbonate replacement mineralization over wide intervals at the Parlozi prospect;
• Test the extrapolation from depth toward surface of the historical resource at the Parlozi prospect;
• Test the downdip extension of mineralization beneath the underground workings at the Plandiste prospect where the company recently released the analytical results of underground chip sampling, which provided a true width of 6.0 m grading 671 g/t Ag, 20.8% Pb, 0.13 Zn and 0.44 g/t Au);
• Identify additional targets for exploration drilling in Phase 2.

MEX 4-Year Weekly Chart

MEX has nearly 200 million shares outstanding which gives it a current market cap of $5 million, but that still leaves room for upside over the summer if speculation intensifies and drill results are good…a Fib. resistance band exists between 2.5 and 4 cents, but strong support has built up at 2 cents which coincides with the rising 100-day SMA…as always, perform your own due diligence…

Edge Resources Inc. (EDE, TSX-V) Updated Chart

Edge Resources (EDE, TSX-V), a growing Western Canadian oil and gas play that we recently introduced to our readers when it was trading below 20 cents, has pulled back slightly from a new 52-week intra-day high yesterday of 28.5 cents…EDE’s fundamentals have been gaining strength along with the share price, so this is a high quality situation that is certainly worthy of any investor’s attention…

EDE has had a strong run recently and may need to take a slight breather, so keep that in mind – especially with RSI(14) on this weekly chart in overbought territory at 81%…technical support, however, should be very strong in the low-to-mid-20’s…EDE is off 3.5 cents at 24.5 cents as of 8:30 am Pacific…

Note:  John holds a share position in EDE while Jon holds a share position in DVN.