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Gold has traded between $1,255 and $1,274 so far today…as of 8:30 am Pacific, bullion is down $11 an ounce at $1,258…Silver is off 34 cents at $16.99…Copper is down 2 pennies at $2.59…Crude Oil has jumped $2.43 a barrel to $50.88 while the U.S. Dollar Index has retreated two-thirds of a point to 93.83…Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said in an interview on the Fox Business network yesterday that it would be “very tough” for the Federal Reserve to lift interest rates this year because of the stronger greenback.  “That would exacerbate the problem,” he said.  “I don’t think it’ll be very feasible to do. I think it would have a lot of international repercussions.”

January’s U.S. non-farm payrolls report from the Labor Department is due tomorrow and could certainly impact both Gold and the dollar, though keep in mind that both have been moving together recently…the current positive correlation between Gold and the dollar has lasted since November…the last time they moved upward in tandem for a prolonged period was after Greece, in 2009, disclosed its budget deficit would likely soar…between Jan. 11 and June 10, 2010, the U.S. Dollar Index rose almost 16%, while Gold climbed nearly 12%…since the turn of the century, Gold and the Dollar Index have both finished higher year-over-year 5 times – in 2001, 2005, 2008, 2010 and 2011…

Bloomberg reports that holdings in ETPs backed by Silver fell 0.3% last month, after declining 3% in December, while Gold holdings jumped 4.1% January…retail investors account for 80% of U.S. purchases, according to estimates by ETF Securities LLC…

A report issued by UK-based research firm Capital Economics is bullish on Gold’s prospects in a deflationary environment.  “Overall, our view is that the wider implications of a lengthy period of deflation, even one triggered by a favorable shock such as cheaper Oil, should strengthen rather than undermine the price of Gold.  Indeed, it is not difficult to think of circumstances in which deflation could be positive for Gold, many of which apply now. For a start, interest rates are more likely to be held close to zero or even cut into negative territory, minimizing the opportunity cost of holding Gold.”

WTIC 2-Year Weekly Chart

WTIC continues to try to conquer resistance at $50 in what has been a normal unwinding of temporarily extreme oversold conditions (a “dead cat” bounce), as opposed to a change in the primary trend which remains bearish in our view…Crude will need time to heal its wounds from the last several months and overcome the supply problem in the market, meaning a fresh low is still very possible this quarter…if support can’t hold around $45, then $35 to $40 becomes the new target area…

RSI(2) on this 3-year weekly has moved up to 62% and may reach into overbought territory shortly…

Sell-Off In Greece

Greek stocks and bonds took a beating today after the European Central Bank fueled an increasingly tense standoff between the Greek government and its international creditors by declaring that it would stop accepting Greek bonds as collateral for central bank loans…Athens’ main stock index plummeted 9% in early trade before recouping marginally, while the country’s 2-year debt yield soared by more than 3 percentage points to around 19.3%.  “It is currently not possible to assume a successful conclusion” of Greece’s current bailout, the ECB said late yesterday, just hours after its president, Mario Draghi, met with Greece’s new finance minister, Yanis Varoufakis in Frankfurt…

Today’s Equity Markets

Asia

Asian stocks were mostly lower overnight with Greece in focus…China’s Shanghai Composite fell 37 points to close at 3137, while Japan’s Nikkei average slipped 174 points…

Europe

European markets are mixed in late trading overseas…

Wishful thinking or a legitimate emerging turnaround?…the EU’s official economists say the sharp drop in global Oil prices and a weaker euro should boost growth in the euro zone this year, so they’ve raised their forecasts for the currency area’s largest economies…the economists at the European Commission, the EU’s executive arm, say the euro zone should grow 1.3% this year and 1.9% in 2016…in November, they expected growth of 1.1% this year and 1.7% next…the commission raised its growth estimates for most of Europe’s largest economies, including Germany, France and Spain…

North America

The Dow has climbed 156 points through the first 2 hours of trading ahead of tomorrow’s all-important jobs number…the U.S. trade deficit in December jumped to the highest level in more than 2 years as American exports fell and imports climbed to a record level..

In Toronto, the TSX is up 143 points while the Venture has added 7 points to 694…

February – One Of The Venture’s Strongest Months

The Venture is off to a good start in February which is consistent with historical patterns as over the last 14 years this has been the 4th best performing month of the year (the PDAC curse usually then strikes in March)…

NioCorp Developments Ltd. (NB, TSX-V) Update

NioCorp Developments (NB, TSX-V) continues to make progress with its high-grade, large tonnage Niobium Project in Elk Creek, Nebraska, and the final results of the company’s 3-phase 2014 drilling were released January 19…the infill drilling that was carried out should allow the company to elevate the resource to the measured and indicated category (Niobium has physical and chemical properties similar to those of Tantalum, it’s a rare and a soft transition metal primarily used in the production of high-grade steel such as that used in gas pipelines)…

Technically, NB in the fourth quarter of last year unwound an overbought condition that emerged in May…since then, the stock consolidated in a horizontal channel between the low 50’s and the high 70’s until a confirmed breakout this week…

NB is up 3 cents at 84 cents as of 8:30 am Pacific…

Doubleview Capital Corp. (DBV, TSX-V) Update 

Through sheer grit and determination, and some good luck as well, Doubleview Capital (DBV, TSX-V) President and CEO Farshad Shirvani has put his company in a position to define British Columbia’s newest world-class porphyry deposit in the emerging Sheslay District in 2015, a highly notable achievement considering 2 major factors in particular: 1) The exceptionally challenging market environment the junior resource industry has had to deal with; and (2) the fact that the Hat Property was merely at the grassroots stage only a year-and-a-half ago with no previous drill holes…the latter point speaks to the immense opportunities the Sheslay District offers…

Any property that advances to the deposit stage (not many do) will produce several “game-changing” holes along the way…H-23 completes the “hat trick” for Shirvani…the first 2 of course were H-8 and H-11 in January 2014, the latter delivering 451 m grading 0.33% CuEq…each round of drilling has returned better results at the Hat, a trend one looks for in the successful evolution of a deposit (by contrast, Colorado Resources – CXO, TSX-V – could never match the success of its first hole at the North ROK Project in the spring of 2013…ironically, that first hole was a catalyst that ignited fresh interest in the Sheslay District)…

As revealed this week, H-23 has hit at least 3 important mineralized zones with more assays on the way…it has extended the Lisle Zone by over 100 m to the north, and has also confirmed that strong mineralization is present about 220 m below the zone encountered in drill hole H-22, the nearest drill hole…

The market has plenty to speculate about as assay results are pending for the final 250 m of core (so far) from H-23.  “A third, wider chalcopyrite-pyrite zone was visually observed to extend for at least 120 m beginning at a depth of 402 m,” as DBV reported yesterday…we take that to mean that the final 130 m has not yet been viewed by a QP, raising the possibility that this 3rd zone may continue beyond 522 m…

H-23 may not even be complete as there’s still a chance DBV may extend it beyond 650 m where it was halted just prior to the Christmas break…the grades in H-23 (a 278-m interval returned 0.53% CuEq) are substantially better than those found in the first 2 discovery holes as DBV appears to be edging closer to the “juiciest” part of the system at the Hat which potentially could even be another anomaly, such as “E”, which hasn’t even been drilled yet…

Something very special appears to have been cooked up at the Hat, so it’s difficult to imagine there isn’t a high-grade Gold-Copper core somewhere in this system…the Lisle Zone currently measures 1 km long and half a km wide, and mineralization is extending several hundred km to depth…this is already a very significant deposit, though DBV must cut into some higher grades to make the Hat economic…they are clearly making progress in that regard…

The Big Picture

Below is a map we first posted last year, adapted from the DBV web site, that shows how the Lisle Zone (in target “B”) is quite possibly just 1 part of a much bigger system…we’ll have an updated map Monday in conjunction with the first part of an interview…the various targets cover an area 4 km x 3.5 km…there is so much to still learn and discover at the Hat, and that process will be fascinating to watch unfold over the coming months…

Updated DBV Chart

Below is another check-up on DBV’s technical health, and it’s getting stronger despite the minor pullback this morning…what’s encouraging is the bullish “W” in the RSI(14) which is now above 50% and gathering momentum…the 50-day moving average (SMA) is also just beginning to reverse to the upside – this has happened on 2 other occasions since the start of 2014, and the results were very bullish…

DBV is off 2 pennies at 14.5 cents on light volume as of 8:30 am Pacific…

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

Next up to bat in the Sheslay District is Garibaldi Resources (GGI, TSX-V), which strategically armed itself with over $1 million in a financing just before Christmas to target primarily the Grizzly as its flagship property in British Columbia…GGI’s sense of timing in that regard couldn’t have been better, given developments at the Hat, plus the fact that GGI is set to become the first company in the district to come out with a NI-43–101 technical report since the staking rush of early last year…speculatively, that document could contain powerful new information supporting both the district and of course the Grizzly where Garibaldi has outlined multiple targets spanning at least 15 km…drill permits are in hand as GGI gears up for first-ever drilling at the Grizzly…

In the meantime, Mexico should be taking center stage for GGI in the very near future as investors anxiously await updates on both the Rodadero high-grade discovery in Sonora State and the La Patilla Property in Sinaloa State…core photos proved to be a reliable guide for investors with regard to drilling at DBV’s Hat Property…we believe the same will hold true for GGI’s Rodadero…

Technically, John is excited by what he sees in this 3-year weekly chart which hints at a pending reversal to the upside following a consolidation on declining volume and a triple bottom formation…note how the RSI(14) held just above support and is now turning higher…

GGI is off half a penny at 16.5 cents in light trading as of 8:30 am Pacific…

Reservoir Minerals Inc. (RMC, TSX-V) Update 

A company investors should definitely keep on their radar screens for 2015 is Reservoir Minerals (RMC, TSX-V)…

Reservoir, which had just over $40 million in working capital at the end of August, reported at the end of October that diamond drilling had resumed with 5 rigs operating on its Cukaru Peki deposit and other Copper-Gold targets as part of the exceptional Timok Project in eastern Serbia…Freeport-McMorRan (FCX, NYSE) is the operator of the JV and picking up the tab on all exploration expenses (RMC also has 100%-owned permits it’s exploring in the area)…

Reservoir climbed as high as $7.43 last year before falling by more than half as the overall market tanked in Q4…recent very oversold conditions (September to early November) mirrored the overbought conditions that emerged in February/March when it was a good time to take profits…

Over the last few months, RMC has found its footing and appears to be gearing up for a solid 2015 that could include a test of last year’s high or, potentially, even a breakout to a new all-time high…

Sell pressure has been declining steadily, and the stock is now approaching its still-declining 200-day SMA…note the breakout in December above the RSI(14) downtrend line – such an event is usually quite significant from a TA perspective…

RMC is down slightly at $4.61 as of 8:30 am Pacific…

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

Gold has traded between $1,261 and $1,272 so far today…as of 6:50 am Pacific, bullion is up $7 an ounce at $1,267…Silver has climbed 15 cents to $17.42…Copper is off a penny at $2.59 after a strong move yesterday…Crude Oil has slipped $2.43 a barrel to $50.62 after 4 straight days to the upside (a 19% surge, the largest 4-day gain since January 2009) while the U.S. Dollar Index has added one-tenth of a point at 93.94…

Copper posted its biggest daily gain in nearly 2 years yesterday, lifted by recovering Oil prices, expectations that China would use stimulus measures (1 move was announced this morning) to kick-start its economy, and short-covering…speculation is mounting that a persistent slowdown in China’s manufacturing sector may push the country to launch a series of infrastructure projects in a bid to buoy the economy, as they have done in the past…in January, China’s gauge of factory activity recorded its first contraction in more than 2 years…

To date, from its recent lows hit in November last year, Gold has risen by up to 13% against the greenback, 18% against the pound, 26% against the loonie, 30% against the euro, and 32% against the yen…and the rise against weaker emerging market currencies has been even more significant…

Bank of Montreal has launched a new way for investors to buy physical Gold…BMO’s new Gold deposit receipt program (GOLDR) allows investors to buy and sell shares that are backed by physical bullion stored in Canada and which track the price of spot Gold (unlike ETFs that trade at either a discount or premium to the spot market…BMO will charge a 1-time upfront fee of 2% and allows Gold to be delivered in amounts as small as 1 ounce)…each share represents 1 ounce of Gold, and the bank said the program will issue $500 million worth of shares to start with…the product is aimed at 4 types of investors – private ones that store their bullion in vaults, broker dealers, investment advisers as well as existing users of ETFs…

Total holdings in Gold ETFs have recovered to around 46 million ounces, worth $58 billion based on current prices, up from near 5-year lows of around 44.3 million ounces 2 weeks ago…

Oil Update

Crude gains in recent days have been stoked by developments that point to an eventual slowdown in production…several large companies in recent days have announced major spending cutbacks…however, reduced investment in new drilling usually takes months or even years to translate to lower Oil output…meanwhile, the demand side of the equation is mixed at best…though the U.S. economy appears has been gradually coming out of its malaise, it faces increased risks due to a surging dollar, while growth in China is slowing and the European economy remains moribund…moreover, Crude inventories continue to build up…in the U.S. alone, storage facilities currently house the largest amount of Oil in 84 years, and the American Petroleum Institute late yesterday said that U.S. Crude stockpiles rose again last week…

Doubleview Draws Closer To Sheslay “Sweet Spot”

While Doubleview Capital’s (DBV, TSX-V) technical team was already first-rate, it’s no coincidence that what has turned out to be a potentially game-changing drill hole at the company’s Hat Project in the Sheslay district (more impressive results announced after the close yesterday) came under the guidance of Patrick McAndless who was appointed DBV’s senior technical adviser late last summer…

McAndless is recognized as 1 of the foremost authorities on Gold-Copper porphyry systems in British Columbia through his many years with Imperial Metals (III, TSX), and has a reputation for finding higher-grade zones…it didn’t take him long to make an impact at the Hat…

Yesterday, DBV announced its best drill results yet from the Hat as H-23 cut 74 m of nearly 1% CuEq (0.46 g/t Au and 0.62% Cu) between a depth of 271.9 and 346.2 m…

And there’s more to come as only 400 m of this “hole to China” has been assayed (mineralization started just below 60 m and a 278-m interval returned 0.53% CuEq)…interestingly, H-23 also features the highest elevated levels of Molybdenum, Zinc and Cobalt that DBV has found in any drill hole so far at the Hat…

H-23 is is the deepest hole ever drilled in the Sheslay district (from north to south) and confirms the theory that there is strong potential for the discovery of high-grade Gold-Copper zones somewhere under the Hat or elsewhere in the district…Garibaldi Resources‘ (GGI, TSX-V) massive Grizzly Project is expected to come back into play shortly as GGI has loaded its treasury with funds directed toward an abundance of drill-ready targets, and what should prove to be a highly interesting NI-43–101 technical report on the Grizzly is also on the way…GGI ground is less than 2,000 m south of H-23, and even DBV President and CEO Farshad Shirvani is predicting a discovery at the Grizzly based on improved knowledge of the overall area.  “We love what we have,” Shirvani told BMR last night, “but I’m confident that Garibaldi is going to make some noise right next to us.  Steve Regoci and his crew have been working exceptionally hard and we are in communication.”

At Least 3 Significant Zones Hit In H-23

H-23 hit a 40-m pyrite zone between 186.3 and 226.7 m averaging 0.61 g/t Au and 0.35% Cu (0.79% CuEq)…

A wider pyrite zone (110.9 m) was encountered between 270.6 m and 381.6 m and returned 0.36 g/t Au and 0.47% Cu…

And a third, even wider pyrite-chalcopyrite zone was hit beginning just below 400 m and extending to at least 520 m…assays for that section, plus another 130 m of H-23, are pending…the hole was halted just before Christmas at a depth of 650 m, and could be extended as soon as crews return to the property for the next round of drilling…

Keep in mind, every round of drilling at the Hat has produced better results…after just 23 holes, the Lisle Zone measures nearly 1 km east-west and half a km north-south…mineralization is extending to impressive depths and is open in all directions…major tonnage is building here, and several other anomalies at the Hat have yet to be drill-tested…

H-23 provides strong evidence that Doubleview is drawing closer to the core of the Hat system, a potential “sweet spot” where grades could climb dramatically…is a potential world class deposit in the making here?…absolutely, and this is still very early in the game for Doubleview…getting a proper handle on the geometry of a porphyry system often takes at least 40 drill holes…

The fact that DBV has taken the Hat from a grassroots stage to where it is now, in less than 2 years, is a very notable achievement – a real success story – in any market environment…

Updated DBV Chart

Technically, DBV has several bullish factors in its favor at the moment including an RSI(14) on this 2-year weekly chart that has pushed above 50% for the first time since last October after forming a bullish “W”…significantly, the 50-day moving average (SMA) has flattened out at 13 cents and is now beginning to reverse to the upside…interestingly, the CMF shows modest accumulation of DBV since late September following a period of extended, albeit weak, sell pressure…major technical breakout possible this week…

DBV is up half a penny at 16.5 cents as of 6:50 am Pacific…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 30 points overnight, closing at 3175, following data that showed the country’s services sector grew at the slowest pace in 6 months in January…meanwhile, the People’s Bank of China (PBOC) decided today to cut banks’ reserve requirement ratio (RRR) by 50 basis points to 19.5%…the move is the first such cut since May 2012 and will lower the amount of deposits that each lender is required to hold as reserves…the measure will help keep the economy “stable”, the PBOC said…

Japan’s Nikkei powered 343 points higher overnight, a gain of 2%…

Europe

European markets are down modestly in late trading overseas…

North America

The Dow is up 7 points as of 6:50 am Pacific…

U.S. private employers added 213,000 jobs in January, falling short of the median forecasts of analysts, according to this morning’s ADP National Employment Report…economists surveyed by Reuters had forecast the ADP Report would show a gain of 225,000 jobs…

In Toronto, the TSX is down 91 points while the Venture is steady at 693 as of 6:50 am Pacific…

Venture 5-Year Weekly Chart

The Venture’s oversold technical conditions have abated significantly since the Index hit a record low of 637 in mid-December…the RSI(14) has now climbed above oversold territory and will likely continue to trend higher, especially after yesterday’s important confirmed breakout in the Index above resistance at 680…

Whether the bear market is now over is anyone’s guess, but at the moment the Venture is looking healthier than it has from a technical standpoint since last year’s slow but steady climb higher through the first half of the year…

Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update

Our favorite non-resource play in the speculative space continues to be Cannabix Technologies (BLO, CSE) which is inching closer to unveiling its marijuana breathalyzer prototype as reported by the company Monday…since last summer, BLO has been developing this feature rich, durable, hand-held device for potential use by law enforcement and in the workplace…the company says the prototype is proceeding as planned with the mechanical design, circuit board layouts, firmware and printed circuit board designs all nearing completion…

“We expect our prototype to be complete in the coming weeks and we’ll be sharing news about testing,” stated Kal Malhi, President of Cannabix.   “Our team is working hard to deliver a prototype for trial testing as quickly as possible.”

This is a company that has so far shown the ability to execute on all fronts which puts it into an elite category as far as CSE or Venture-listed companies are concerned…

The overall trading pattern in Cannabix since November remains highly encouraging as shown in the 4-month daily chart below (note that this chart is in U.S. dollars – based on BLO’s OTC listing – as Stockcharts.com does not yet provide charts for CSE listings)…

For the first time since it was launched in June of last year, Cannabix has been forming an exceptionally solid base and has been rising very gradually in step with its 20-day supporting moving average currently at 16 cents CDN…not shown on the chart below is the 100-day SMA which has just reversed to the upside, another bullish development…

Volume also remains impressive and has been trending higher in recent sessions, both in the U.S. (critical as this is primarily an American story) and Canada…

BLO is up a penny at 19.5 cents on the CSE as of 6:50 am Pacific…

Columbus Gold Corp. (CGT, TSX-V) Update 

More good news from Columbus Gold (CGT, TSX-V) recently as the company reported January 22 that the government of France had no objections to Columbus ‘s agreement with Nordgold (NORD, LSE)…the world’s 13th largest Gold producer can earn a 50.01% interest in CGT’s Montagne d’Or Gold deposit and the Paul Isnard mineral claims in French Guiana by financing a minimum of $30 million (U.S.) in expenditures and completing a feasibility study no later than March, 2017…

The Montagne d’Or deposit is presently defined over 2,500 m x 400 m and to an average depth of 250 m from surface, so a significant open-pit operation is being targeted here…

An updated resource estimate and a Preliminary Environmental Assessment are on track for completion in the coming weeks, and a Preliminary Economic Assessment is expected this spring…

Columbus also has a very interesting project in Nevada, and news on that just came out this morning…

Technically, CGT has broken out above Fib. resistance at 45 cents and a downtrend line in place since last spring…very strong support in the mid-40’s with resistance in the low 50’s…

CGT is unchanged at 49 cents through the first 20 minutes of trading today…

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

Gold has traded between $1,255 and $1,287 so far today…as of 8:00 am Pacific, bullion is down $17 an ounce at $1,256…Silver is off 7 cents at $17.11…Copper has jumped 7 cents to $2.58…Crude Oil continues to rally, up $1.50 a barrel to $51.07, while the U.S. Dollar Index has declined more than two-thirds of a point to 93.88…

Gold’s current uptrend remains firmly intact as long as the $1,240 to $1,260 support band holds as it did last Thursday when bullion hit $1,252 before rebounding…Gold’s rising 20-day moving average (SMA), currently at $1,258, is at the high end of that band…

U.S. Mint American Eagle Gold coin sales in January rose from December but, surprisingly, were the lowest for that month since 2008 as a rally in prices discouraged collector buying in what is typically a period of peak demand…the U.S. Mint sold 81,000 ounces of Gold bullion coins in January, down from 91,500 ounces in the first month of last year and the lowest since 2008 when 26,000 ounces were sold…sales were still more than 4 times December’s total of 18,000 ounces…Silver also had a slow start to the year, with 5.53 million ounces sold in January, more than double December’s total but the lowest for January since 2010…

Rob McEwen, chairman of McEwen Mining (MUX, TSX), sees a bullish new phase underway in Gold producers and predicts investors will return in a big way to the sector that has been so unloved over the last few years.  “As bullion dropped from a record of almost $2,000 an ounce, Gold miners have dumped old management, slashed exploration spending, lowered operating costs and shifted to high-grade ore to focus fully on restoring cash flow,” McEwen stated in an interview with Robert Gibbens (Montreal Gazette story yesterday).

“You’ve got a serious gap developing between declining global output and steadily mounting demand from Asia where millions of new middle-class consumers are emerging.  That gap could last several years,” McEwen added.

Australia cut its benchmark interest rate to a record low of 2.25% today, joining a procession of central banks that have eased policy settings this year in response to the deflationary impact of tumbling Oil prices…

Oil Update

Crude Oil continues to rebound and is trading above resistance this morning at $50…this is an overdue rally given the most extreme oversold technical conditions ever witnessed in WTIC, but the primary trend remains bearish with a strong likelihood of a new low later this quarter…

Oil prices are getting some relief at the moment thanks to the number of companies in recent days who have announced significant cuts in capacity expenditures and reductions in rig counts…in fact, Baker Hughes reported that U.S. drillers have taken a record number of Oil rigs out of service amid the price slump…last week alone, Oil rig counts tumbled by 55 to 1,366…in the week ended January 30, the total number of rigs drilling for Crude Oil in the U.S. came in at 1,223, compared with 1,317 in the prior week and 1,422 a year ago…

This industry is probably the best in the world at cutting costs when it has to reduce spending, and this will certainly help to cut into the supply surplus…however, analysts at Morgan Stanley noted that the relationship between rig count and production can be deceptive…and 1 of the big questions, of course, is how the demand side will look going through the rest of the year – global economic growth has been weaker than expected, hence the moves by various central banks in recent weeks…

WTIC Long-Term Chart

Below is an updated WTIC long-term chart, and you can see how RSI(14) became incredibly oversold during December and into January…so what we’re seeing now is an easing of those extreme conditions, though this doesn’t necessarily mean that we’ve seen the bottom yet in Oil prices…this rally appears to be the “B” phase in an A-B-C move that ultimately could push WTIC to long-term support in the mid-30‘s or even lower, depending on global developments…

CRB Index Updated Chart

The CRB Index is also in rally mode now with the downward pressure from sliding Oil prices lifted, temporarily at least…the divergence between price and RSI(14) was quite striking on this 3-month daily chart when the Index hit a recent multi-year low of 211 (again, we may not have seen the bottom yet in the CRB which may still have to test the 200 level)…

The bounce in the CRB should help the Venture here in February…

Today’s Equity Markets

Asia

China’s Shanghai Composite snapped a 5-session losing skid overnight and closed at a 2-week high after a powerful gain of 77 points or 2.5%…the energy and financial sectors led the charge…Japan’s Nikkei average, meanwhile, bucked the Asian trend and fell 222 points or 1.3%…

Europe

European markets are solidly higher in late trading overseas…

Greek stocks rallied the most in 2-and-a-half years today, inspiring solid gains for the rest of Europe…the moves in Greek assets came after Finance Minister Yanis Varoufakis late Monday reportedly backed down from demanding a haircut on Greece’s debt and instead laid out a plan that includes debt swaps…the plan, dubbed “smart debt engineering” by Varoufakis, according to the Financial Times, is aimed at lifting the burden of repaying the debt to international lenders by replacing some of the current debt with growth-linked bonds and perpetual bonds…an EU official said yesterday that there may be some “wiggle room” regarding the EU accommodating Greece’s new proposals…

North America

The Dow has climbed 130 points through the first 90 minutes of trading today, thanks to strength in energy stocks and encouraging news out of the euro zone…in Toronto, the TSX is up 133 points while the Venture appears poised to confirm a breakout today above 680 resistance…it’s 6 points higher at 691 as of 8:00 am Pacific…

TSX Updated Chart

Interesting multi-year chart for the TSX with the RSI(14) having formed a bullish “W”…the Index survived 3 sell-offs in recent months to the rising 500-day moving average (SMA), currently just below 14000, and now it appears headed toward Fib. resistance around 15800…it wouldn’t be wise to bet against this market given its current technical posture, and support of course from the Bank of Canada which is now in a monetary easing mode…

Venture Updated Chart

Critical support between Fib. levels 654 and 664 has held, and the Venture now appears to be in the process of confirming a breakout today above resistance at 680 and the 50-day SMA…this is supported by a bullish +DI/-DI crossover…

The next key resistance is 706 followed by 750…

Calibre Mining Corp. (CXB, TSX-V) Update

Calibre Mining Corp. (CXB, TSX-V) has clearly been one of the top Venture exploration stories since the spring of last year with the stock significantly outperforming the Index…the company is working strategically with strong partners in the prolific northeastern part of Nicaragua, and has some 100%-owned ground…

Overbought technical conditions last September/early October unwound in November and December, and the now-rising 50-day moving average (SMA) at 14.5 cents is providing new support…

On January 21, Calibre announced final assay results from Phase 1 drilling at the Eastern Borosi Gold-Silver Project being financed by IAMGOLD Corp. (IMG, TSX) under an option agreement…5 Gold-Silver vein systems were tested over a combined strike length of 3 km through 40 drill holes (5,500 m), and drilling encountered high-grade zones on each of the structures…results included 5.07 m grading 13.44 g/t Au (GP14–028) and 2.76 m @ 26.48 g/t Au (GP14–030), testing the down dip portion of the Guapinol and Vancouver structures…

IAMGOLD was encouraged enough by the results to decide to launch a 5,500-m Phase 2 program to commence this quarter…

CXB responded well to the news and pushed through resistance at 15 cents…more success in Nicaragua this year could turn 2015 into an even better year than 2014 for Calibre…

CXB is off half a penny at 18 cents as of 8:00 am Pacific…

InZinc Mining Ltd. (IZN, TSX-V) Update

InZinc is an emerging mid-tier Zinc producer with its 100%-owned West Desert Project in Utah…a positive PEA was released in May of last year, and excellent opportunities for resource expansion exist…importantly, the project benefits from all-weather road access, on-site grid power, proximity to natural gas pipelines and is just 90 km from multiple transcontinental rail networks servicing western U.S. ports and major North American markets…

This is project with excellent potential but management needs to put the “pedal to the metal” and create some excitement here – hardly any news flow over the last 9 months, though volume has picked up noticeably in the stock over the last 5 trading sessions…volume is usually a reliable indicator that something positive could be brewing…

Technically, IZN is a very interesting position which is the reason for this morning’s update…notice last year’s cup-with-handle pattern and double bottom…what may unfold here is a re-test of the top of the cup around the 20-cent level…as always, perform your own due diligence…

IZN is up half a penny at 12 cents through the first 90 minutes of trading…

Note:  John and Jon do not hold share positions in CXB or IZN.

Gold has traded between $1,265 and $1,282 so far today…as of 7:00 am Pacific, bullion is down $12 an ounce at $1,271…Silver is off 2 at $17.21…Copper is up 3 pennies at $2.53…Crude Oil has added 68 cents to $48.92 while the U.S. Dollar Index is off one-tenth of a point at 94.58…

Gold locked in its biggest monthly gain in 3 years with Friday’s $25 advance after U.S. government data showed the economy expanded at a slower pace than forecast in the 4th quarter…bullion jumped $100 an ounce or 8.5% in January, its best 1-month performance since January 2012…

Gold in Canadian dollars is now over $1,600 an ounce with a long-term chart (see below) that suggests the metal is in the grips of an explosive new phase that may take prices to record highs in loonie terms over the next 1-2 years…this is why we see such huge opportunities in Canadian producers and near-producers especially…

Assets in exchange-traded Gold products reached their highest level since October late last week…through Thursday, investors had added 65.6 metric tonnes so far this month, the most since September 2012…

Mineweb’s Lawrence Williams reported this morning that the latest withdrawals from the Shanghai Gold Exchange (70.62 tonnes for the week ending January 23, even larger than the previous week’s 70.00 tonnes which was until now the 3rd highest weekly figure ever) indicates “massive internal demand” leading up to this year’s Chinese New Year February 19…

Gold demand out of Greece is 10 times the average number since the election of the far-left Syriza Party on January 25, according to London-based Gold dealer Coin Invest…

Speaking of Greece, its energy minister announced on Friday that the new government (not surprisingly) is opposed to a Canadian mine that is one of the biggest foreign investment projects in the country…Eldorado Gold’s (ELD, TSX) high-grade Skouries Gold-Copper porphyry deposit in northern Greece is slated to commence production in 2016 with the initial phase consisting of a small open-pit operation (followed by underground)…Skouries was the flagship project of the previous government’s foreign investment drive and was considered a test case that would reveal whether Greece could protect foreign investors despite local opposition…

Speculation is high that the Reserve Bank of Australia (RBA) will be the next central bank to ease monetary policy at its meeting this week following a month of surprise policy changes across the globe…last week, Singapore joined a long list of central banks that are trying to encourage higher inflation and stronger economic growth by loosening monetary policy and depreciating their currency…

Today’s Equity Markets

Asia

China’s Shanghai Composite tumbled 81 points or 2.5% overnight following the release of weaker-than-expected economic data…China’s factory sector unexpectedly shrank for the first time in nearly 2-1/2 years in January and firms see more gloom ahead, raising expectations that policymakers will take more action to forestall a sharper slowdown…

Europe

European markets are mostly modestly higher in late trading overseas…final January manufacturing PMI data for the euro zone came out this morning…it showed factor activity grew slightly last month and the figure of 51.0 was in line with a previous estimate…

North America

The Dow is off 60 points as of 7:00 am Pacific after Friday’s 250-point plunge…U.S. consumer spending recorded its biggest decline since late 2009 in December, with households appearing to save the extra cash from cheaper gasoline…

Yesterday’s bizarre finish to the Super Bowl, with the Patriots prevailing over the Seahawks, may weak a weaker S&P 500 this year according to 49 years of Super Bowl history…on the 26 occasions when an NFC team has won, the S&P 500 went on to record an average gain of 11.1% in each of those years…when an AFC team won, prior to yesterday, the Index’s average yearly gain over 22 years was only 5.1%…

In Toronto, the TSX is up 113 points while the Venture is 2 points higher at 679 as it once again flirts with 680 resistance…that’s a key level the Venture needs to overcome in order to gain fresh upside momentum…

Cannabix Technologies Inc. (BLO, CSE) Update

Cannabix Technologies (BLO, TSX-V), which is developing a feature rich, durable, hand-held marijuana breathalyzer device for law enforcement and the workplace, provided an update on its activities this morning…the company stated that its prototype is proceeding as planned with the mechanical design, circuit board layouts, firmware and printed circuit board designs all nearing completion…

“We expect our prototype to be complete in the coming weeks and we’ll be sharing news about testing,” stated Kal Malhi, President of Cannabix.   “Our team is working hard to deliver a prototype for trial testing as quickly as possible.”

BLO is up a penny at 18 cents as of 7:00 am Pacific…

Gold In Canadian Dollars – En Route to $1,900? 

Below is a fascinating chart showing Gold in Canadian dollars and how a bullish new phase actually began in the spring of 2013 when the metal hit a low of $1,242 CDN…since then, bullion has climbed 31.6% to $1,635 CDN with RSI(14) now showing powerful up momentum at 62%…chart resistance is at $1,880…

Interestingly, a convincing and bullish +DI/-DI crossover has also occurred in this long-term CDN dollar Gold chart for the first time since 1999…

Quite simply, expressed in Canadian dollars, Gold is in the grips of an explosive bull market that could lead to significantly higher prices as the year progresses…this is why Canadian Gold producers and near-producers are really starting to take off and could still see some spectacular gains over the next 12 months…

New Gold Inc. (NGD, TSX) Update

New Gold (NGD, TSX), which has some of the lowest all-in-sustaining costs in the industry, is inching closer to a potentially major technical breakout above resistance at $6 as you can see in the 1-year daily chart below…

Notice how a symmetrical triangle has formed in the RSI(14) which has been trending higher since it formed a bullish “W” in early November…”decision time” is drawing near, and the odds favor an RSI(14) breakout as opposed to a breakdown…

NGD has been climbing within an upsloping channel since November, and is also approaching a downtrend line near $6 which is also Fib. resistance…

Last Thursday, New Gold announced that it has received the key environmental approvals for its Rainy River Project in Ontario…preliminary development work at the site will commence in the coming weeks…the company will be holding a webcast and conference call to discuss its fourth quarter and full-year 2014 operational results, as well as 2015 guidance, this coming Thursday (Feb. 5) beginning at 7:00 a.m. Pacific…

NGD is off 18 cents at $5.39 as of 7:00 am Pacific…

Copper Updated Chart

This 13-year Copper chart shows how the metal, like the Venture, has been under pressure since peaking in early 2011…the good news is, unless the very worst-case scenario unfolds in the global economy, ordinary trading would strongly suggest that Copper will not fall below $2.25 a pound as that’s where its long-term uptrend line currently intersects…overall, a powerful band of support exists between $2.25 and $2.50…RSI(14), currently at previous support, is trying to find a bottom along with the price…

Silver Short-Term Chart

Silver in December finally staged a definitive breakout above a downtrend line that was in place since the summer on this 9-month daily chart (note how the downtrend line became new support in early December)…

The December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support was demonstrated around $15…

The metal climbed as high as $18.50 in January, just a few pennies of the the Fib. 50% resistance level…while doing so, RSI(14) edged into overbought territory but has since unwound to 51%…

Chart support exists around $17 and in the $15.60’s…

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be in the very early stages of a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…the reasons for such a move are also not clear…for now, Silver is going along for the ride with Gold…

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…

One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet – though that doesn’t necessarily mean that the price can’t still trend higher…

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

TSX Venture Exchange and Gold

The Venture was under some mild selling pressure through most of the week, as expected given the technical posture of the Index after January 23, but critical support held and a recovery began intra-day Thursday – despite a sell-off in the Gold market – after the Index touched 662.   This reversal carried into Friday when the Venture enjoyed its best day of the month since January 2 with a gain of 10 points on increased volume to close at 678.  Gold quickly regained its lost ground from Thursday and shot up $25 an ounce.

Sell pressure (CMF indicator) is showing signs of reversing, and the Venture is now looking a lot healthier from a short-term technical standpoint than it did a week ago.  Key resistance is still 680.  The odds have increased that this level will be overcome during this first week of February.  Higher Gold prices could be the catalyst, and Oil would help if it were to show further signs of stabilizing (at least for now).

Historically, February tends to be a favorable month for the Venture.  With some success stories on the exploration front, and a further jump in Gold, the Index would have an excellent chance for a significant breakout above its still-declining 50-day moving average (SMA) currently at 694.

Importantly, during the last half of January the Index did manage to push above a downtrend line in place since last September.  This does set the stage, potentially, for a much stronger February.

Venture 2-Month Daily Chart

What we see in this 2-month daily chart, including a bullish +DI/-DI crossover, gives us added encouragement.  The last +DI/-DI crossover came during the reversal in mid-December.

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 eventually create a supply problem and therefore great opportunities in Gold and quality Gold stocks.  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 became a little overbought on a short-term basis going into last week, so a healthy pullback to very strong support between $1,240 and $1,260 was probably just what it needed to get revved up for February.  Sure enough, after some profit taking Thursday that shook some loose apples off the tree, bullion roared back on Friday and climbed $25 an ounce to close at $1,283.  For the month, Gold soared $100 an ounce or 8.5%.  What’s even more impressive is that this occurred against the backdrop of a rising U.S. dollar.

The credibility of central banks took a hit in January with the surprise Swiss decision to end the cap on the franc-euro rate.  Currency wars have erupted all over the globe, and of course the euro zone has finally succumbed to the QE drug.  Increasingly, central banks are starting to look desperate.  It seems the Fed would like to raise interest rates for the first time in nearly a decade at some point during the second half of the year, but will they actually get the chance?

Temporarily overbought RSI(14) conditions have quickly reversed on this 6-month daily chart, and up momentum is clearly evident again.  Gold appears to be gearing up for a test of resistance around $1,340.

Silver fell by over $1 an ounce last week to close the month at $17.22, but it was still a strong January for Silver with a gain of better than 10%.  Copper closed a penny higher for the week at $2.50, Crude Oil rallied by nearly $3 a barrel to finish at $48.24, while the U.S. Dollar Index was relatively unchanged at 94.85.

The “Big Picture” View Of Gold