BullMarketRun.com

Gold has traded between $1,186 and $1,201 so far today…as of 8:30 am Pacific, bullion is up $4 an ounce at $1,197…Silver is up 8 cents at $17.02…Copper is flat at $2.78…Crude Oil is 31 cents higher at $47.82 while the U.S. Dollar Index has fallen one-third of a point to 96.92 (see updated charts below)…

The factors that weighed on Gold’s decline in 2014 are expected to carry over this year, according to CPM Group, a widely followed New York-based consultancy that has just released its annual Gold yearbook…in 2014, Gold prices faced relatively weaker fabrication demand from China, ongoing selling by shorter-term investors, a stronger U.S. dollar, equity markets scaling record highs, and Oil prices slipping lower in the final part of the year, CPM said…

“Gold prices may weaken based on investors’ likely negative views toward Gold and commodities in the face of imminent U.S. interest rate increases (interesting assumption).  Such speculation could drive Gold prices to their lows for the year,” the research firm stated in a news release.

However, the firm expects Gold prices to rebound from losses relatively quickly. “The downside is limited as much of the impact from these issues already is baked into the price of Gold. In fact, any significant weakening of investor enthusiasm for U.S. stocks, or the dollar, could prove supportive of higher Gold prices, the reverse of 2014’s trends.”

Rule:  “Extremely Frustrated By The Lack Of Issuer Capitulation”

Interesting comments from Rick Rule in “Sprott’s Thoughts” the other day by Henry Bonner, remarks that many companies would be wise to pay attention to…

Rule:  “I have felt extremely frustrated by the lack of issuer capitulation (in the junior resource sector). 

“By that, I mean that Sprott’s ability to invest money on behalf of investors in projects that are suitable has been constrained. The mining industry wails and moans about the lack of capital and their inability to go forward. Those same people in the mining industry aren’t willing to offer equity or debt at market-clearing prices.

“The last time we saw capitulation was in the summer of 2000. That was concurrent with issuer capitulation. The very best issuers decided that they had to raise capital at almost any terms that they could. The attractiveness of the returns they could get from deploying capital at a market bottom overcame the near-term pain that they suffered to their egos for issuing at prices below previous issuance prices.

“In the issuer market today, you see these really luminary financiers, like Robert Friedland, willing to issue full warrants in order to attract capital. Financiers and promoters with, let’s say, less established reputations than Mr. Friedland’s, aren’t willing to do that. I think that the irony there is apparent to everyone.”

Oil Update

U.S. Oil magnate T. Boone Pickens, who wrote a recent article apologizing to Canadians for President Obama’s stance on Keystone and attacks against the Canadian Oil industry, is still standing by his bullish longer-term outlook for Crude, though he has lengthened his time frame for prices returning to the $100 level…he’s now saying that could occur by the end of next year, not by the end of this year as he predicted a few months ago…Pickens said the idea of “Peak Oil” – the point in time at which Oil production will go into an irreversible decline – shouldn’t be dismissed on account of the increase in U.S. production…other regions are seeing their output decline, he said…

Stockpiles of U.S. Crude rose by 8.2 million barrels to record highs in the week ending March 20, according to data released this morning by the U.S. government’s Energy Information Administration…

A Reuters poll of eight analysts forecast the EIA report would show a crude stock build of 5.1 million barrels on average last week…initial data yesterday from the American Petroleum Institute, an industry group, indicated that U.S. Crude Oil inventories rose by 4.8 million barrels in the week to March 20…

U.S. Dollar Index Updated Chart

A temporary top has occurred in the U.S. Dollar Index…the question now is, are we about to see the first major correction in the Dollar Index (within the context of an ongoing bull cycle) since its record move started last summer?…

This 1-year daily chart shows very solid support at the 96 level, previous important resistance…this area also coincides with the rising 50-day moving average (SMA)…a -DI/+DI bearish cross has occurred, and RSI(14) is trying to hold support at the 50% level…

A breach of support around 96 can’t be ruled out at anytime over the next few weeks, and such an event would certainly be bullish for commodities and the Venture…

Gold Bullish? Twisted Foreign Policy And A Vacuum Of Leadership

With developments in the Middle East, Ukraine and elsewhere, the world has never been a more dangerous place – especially given the vacuum of leadership on the international stage created by a U.S. foreign policy that is aloof and growing increasingly bizarre…ultimately, an American national security strategy in shambles will have implications across a broad spectrum of markets including of course Gold…understanding geopolitical dynamics is critical as these dynamics can profoundly dictate the narrative and realities, including economics, that drive markets in volatile ways in the year ahead…

Just one more chapter in the very strange Obama foreign policy story came yesterday when it was reported that the President will not meet with NATO’s new secretary general while he’s in Washington this week, despite requests from the alliance chief’s staff for a discussion…Bloomberg View stated yesterday that Jens Stoltenberg’s office requested a meeting with Obama in advance of his scheduled visit, but did not get any response from the White House…instead, Bloomberg View reported that Stoltenberg had to settle for a last-minute meeting with Defense Secretary Ashton Carter…

Stoltenberg is scheduled to be in Washington through tomorrow, primarily so he can attend a strategic brainstorm session involving military officials and experts from the U.S and NATO…

Stoltenberg, however, did receive the courtesy of a visit with Canadian Prime Minister Stephen Harper Monday, the day before Harper announced that Canada would expand its participation in the war against ISIS in Iraq and Syria…significantly, the report of Obama’s snub comes amid Russia’s growing willingness to test NATO’s military readiness on different fronts…

Meanwhile, it seems the President has put his personal relations with Israeli Prime Minister Benjamin Netanyahu on par with Russia’s Vladimir Putin.  “I have a very businesslike relationship with the Prime Minister,” Obama declared Tuesday, as reported by the Associated Press (Obama has previously described his relationship with Putin as “businesslike”), as this President continues to put further distance between the United States and its historically staunch ally, Israel…

An American observer summed things up very effectively this way:  “The President and his staff have a very troubling tendency to treat our allies like adversaries and adversaries like allies, which is why we are both less trusted by our friends and (less) feared by our enemies today,” said Josh Block, President of the Israel Project, a pro-Israel education group based in Washington…

Today’s Markets

Asia

China’s red-hot Shanghai Composite broke a 10-session winning streak overnight as it fell 29 points to close at 3662…Japan’s Nikkei average edged up slightly…

Europe

European markets were generally moderately lower today…Germany, Europe’s largest economy, saw business morale rise for the 5th month in a row in March, hitting its highest since July 2014, according to Ifo’s latest business climate index…business morale also rose in France to its highest for nearly 3 years…

North America

The Dow is down 73 points through the first 2 hours of trading…

Demand for big-ticket manufactured goods sank unexpectedly last month, a sign U.S. companies are still cautious about spending amid weak global demand…orders for durable goods – products such as lawn mowers and washing machines designed to last at least 3 years – declined a seasonally adjusted 1.4% in February from a month earlier, the Commerce Department reported today…excluding the volatile transportation sector, orders fell 0.4%, the 5th consecutive monthly decline…

One of Apple Inc.’s biggest believers on Wall Street is getting even more bullish…Cantor Fitzgerald analyst Brian White this week boosted his price target on Apple to $180 per share, a $20 increase…that rockets him far ahead of his peers, and sets his 12-month outlook for the shares more than 40% above where they’re currently trading…if Apple hits White’s target, it’ll become the world’s first $1 trillion company…

In Toronto, the TSX is up 32 points as of 8:30 am Pacific while the Venture has gained 3 points to 678…

Klondex Mines (KDX, TSX) this morning reported net income of $18.3 million or 16 cents per share in its inaugural year of production…KDX expects to produce between 125,000 and 130,000 AuEq ounces in 2015 with all-in-sustaining costs (on a AuEq basis) of U.S. $800 to $850…

International Montoro Resources Inc. (IMT, TSX-V) Update

International Montoro Resources (IMT, TSX-V) enjoyed its highest-volume day in 8 months yesterday as the company announced mobilization of drill crews to test the fascinating Pecors anomaly near Elliot Lake that has caught the attention of not only IMT, but the Ontario Geological Survey…

Originally, Uranium was the focus at this property but some important work by the OGS has provided strong evidence that this massive anomaly (Pecors) could be the result of contact style Ni-Cu-PGE mineralization similar to that found to the east at Sudbury…significantly, that’s the independent interpretation of the OGS…sediment sampling has also shown high levels of Nickel and Chromium, lending further weight to the new analysis…in other words, IMT has every reason to state that it’s aiming for Ontario’s next major Nickel, Cu and PGE deposit…the drill rig – the ultimate “truth machine” – should provide some initial answers shortly, but the mere potential for a significant high-grade hit in this drill program is likely to attract the attention of speculators…the market could use an exciting success story on the exploration front…Pecors is 1 possibility…

IMT’s first drill hole will be right into the heart of this anomaly as shown below…

IMT is a very capable group led by President and CEO Gary Musil who has done an admirable job of moving Highbank Resources (HBK, TSX-V) forward during challenging market conditions the last couple of years…

Technically, IMT has been trading within a horizontal channel between 5.5 cents and 9 cents over the last 6 months, and is showing the same breakout possibilities as John correctly identified recently in Noront Resources (NOT, TSX-V)…

IMT is up half a penny at 8.5 cents as of 8:30 am Pacific…

Noront Resources Ltd. (NOT, TSX-V) Chart Update

A confirmed breakout has occurred in Noront Resources (NOT, TSX-V) above Fib. resistance in the mid-40’s as shown in this 2+ year weekly chart…RSI(14) is also showing strong up momentum…NOT has added another 5.5 cents as of 8:30 am Pacific to 54 cents…

Kootenay Silver Inc. (KTN, TSX-V) Update

Kootneay Silver (KTN, TSX-V) has a high-quality exploration play unfolding with its La Negra Silver discovery, contained within the Promontorio mineral belt in Sonora, Mexico…we all know how prolific Sonora is as a mineral region…the La Negra breccia discovery is situated approximately 6.5 km north of Kootenay’s flagship Promontorio Silver resource, and a 30-hole follow-up drill program commenced about a month ago…

Technically, a significant breakout appears to be unfolding here as KTN has pushed above both a downtrend line (in place since late 2012) and an ascending triangle on this 3-year weekly chart…confirmation is required…

Note:  Jon holds a share position in IMT.

Gold has traded between $1,185 and $1,196 so far today…as of 8:30 am Pacific, bullion is unchanged at $1,189 as it aims for its 5th straight day of gains…Silver is off a nickel at $16.93…Copper is flat at $2.78…Crude Oil is up 22 cents at $47.67 while the U.S. Dollar Index dipped to about 96.50 this morning but has since recovered to 97.32 for a gain of one-third of a point…very strong support at 96 could be tested over the near-term…a confirmed breach of that area would clearly be bullish for commodities and the Venture…

Consensus expectations for a bump in U.S. interest rates has shifted, with most of Wall Street’s top banks now looking for the central bank to hold off until at least September rather than making a move in June, according to a Reuters’ poll…

The U.S. federal funds rate will likely increase before the end of this year, but the Federal Reserve has “no plans” to hike regular interest rates, Fed Vice Chairman Stanley Fischer said yesterday…speaking before the Economic Club of New York, Fischer said that a rate increase will occur when the benefits outweigh the costs…a hike will be appropriate when the Fed sees “further improvement in the labor market” and (our emphasis) is “reasonably confident” that inflation is moving back to 2%…

February CPI In Line With Expectations

U.S. consumer prices rebounded in February as gasoline prices rose for the first time since June, and there were also signs of an uptick in underlying inflation…whether that trend continues will be critical in terms of potential timing of the first Fed rate hike since 2006…

The Labor Department said this morning that the CPI increased 0.2% last month – matching economists’ expectations – after declining 0.7% in January…that ended 3 straight months of declines in the index…excluding volatile food and energy components, core prices also climbed 0.2%…over the past year, overall prices are flat while core prices have risen 1.7%…

However, the Fed prefers a separate measure – the Commerce Department’s price index for personal consumption expenditures – as it targets annual inflation of 2% to determine that prices are stable and the economy is growing healthily…that index has run below the central bank’s target since spring 2012…the Fed projects the PCE price index to hit 0.6% to 0.8% by the end of this year and to reach 1.7% to 1.9% by the end of 2016…

More Stimulus On The Way In China?

China’s economy is showing further signs of slowing, with an indicator of factory activity this month falling to an 11-month low…the indicator showed new orders, employment, and prices all weakening in the manufacturing sector and suggests that 4th-quarter weakness in the world’s No. 2 economy extended into the beginning of 2015…the preliminary HSBC China Manufacturing PMI fell to 49.2 in March, compared with a final reading of 50.7 in February…

Euro Zone Recovery Picks Up But Deflation Concerns Persist 

The euro zone’s modest economic recovery gathered further momentum in March, as Germany led the fastest increase in private sector activity since May 2011, according to surveys of purchasing managers released today…the surveys add to other signs that the euro zone economy is finally emerging from a long period of near stagnation, aided by lower Oil prices, a weakening euro, and firming confidence following the ECB’s launch of a new stimulus program…

However, the surveys underlined the scale of the challenge facing the ECB, since they showed that businesses continued to cut their prices as 2015 began, an indication that the euro zone won’t soon escape a lengthening period of deflation…

Copper Update

Copper prices have climbed more than 10% since hitting a 5.5-year low in intra-day trading January 26…the metal is believed to be getting a boost from the strong possibility of more stimulus measures from China, as officials there take steps to shore up growth…previous stimulus efforts have involved funding infrastructure projects and easing monetary policy to spur consumer spending…China accounts for about 40% of global Copper consumption…

Oil Update

WTIC is holding critical support in the immediate vicinity of $45…fundamentally, risks appear skewed to the downside given supply-demand factors and seasonal considerations…technically, what’s required to produce some upside momentum is a confirmed breakout through resistance at $50 combined with a reversal to the upside in the 50-day SMA…

The direction of the greenback is also a major factor of course in determining where the price of Oil is headed…a breakdown in the Dollar Index below 96 (possible but far from a sure thing) would certainly serve as a bullish catalyst for Crude…

Today’s Markets

Asia

Asian markets were mixed overnight with China’s Shanghai Composite adding 4 points while Japan’s Nikkei slipped 41 points to close at 19713…

Europe

European markets were up moderately today…

North America

The Dow is up 24 points through the first 2 hours of trading…the U.S. manufacturing sector continued to expand last month, hitting a 5-month high, according to the latest PMI data…private research firm Markit said its March flash estimate PMI rose to a level of 55.3, compared to February’s final reading of 55.1…according to consensus reports, economists were expecting to see a reading at 54.9.  “The latest reading signaled the strongest overall improvement in manufacturing business conditions since October 2014,” the report said.

New U.S. single-family home sales surged in February to their highest level in 7 years despite harsh winter weather, in a hopeful sign for the housing market…

In Toronto, the TSX has climbed back above the 15000 level…it’s up 99 points as of 8:30 am Pacific, while the Venture has edged 4 points higher to 674…after a big day yesterday, on news regarding the Ring of Fire, Noront Resources (NOT, TSX-V) is unchanged at 48.5 cents…

International Montoro Resources Inc. (IMT, TSX-V) Update

Another Nickel play in Ontario that investors should have on their radar screens is International Montoro Resources (IMT, TSX-V) which is gearing up (imminently) to begin drilling its promising Pecors magnetic anomaly at the Serpent River Project near Elliot Lake…

It’s not just the very capable technical team at IMT that’s excited about this target – the Ontario Geological Survey is intensely interested in what may unfold here based on information they uncovered, which has been immensely helpful to IMT…this is a legitimate and exciting discovery opportunity that could quickly attract a lot of speculators…

Technically, IMT is on the cusp of a potential major breakout – a situation not much different than what John charted recently with NOT…volume is on the increase, and what seems very possible here is a near-term push above a 6-month horizontal channel between 5.5 and 9 cents…

IMT is unchanged at 8 cents as of 8:30 am Pacific…

Copper Fox Minerals Inc. (CUU, TSX-V) Update

Benefiting from the the stabilization and firming up of Copper prices, and fresh interest from Teck Resources Ltd. (TCK.B, TSX) in advancing Schaft Creek, Copper Fox (CUU, TSX-V) has really turned the corner this month with a 136% increase in its share price from the end of February…that’s a positive sign for all major porphyry projects in British Columbia, including of course the emerging Sheslay district to the north of Schaft Creek…

CUU is now grappling with Fib. resistance in the mid-30’s, where it reacted yesterday and again this morning with a healthy pullback, but what’s really significant about the chart below is the reversal to the upside in the 200-day moving average (SMA)…CUU’s 200-day went into decline in late 2011, and finally – almost 4 years later – it has turned higher which suggests a major trend change…in our view, this is not only a positive statement regarding porphyry plays in B.C., but it’s a sign that perhaps we’ve seen the bottom in the overall junior resource market…

CUU is off 3 pennies at 30 cents through the first 2 hours of trading…

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

Importantly, Doubleview Capital (DBV, TSX-V) is now cashed up ($620,000) to jump-start activity at the Hat Project in the Sheslay district…that also means a likely resumption of drilling in the very near future, perhaps beginning first with a deepening of hole #23 which was halted at 650 meters just prior to Christmas…that hole has produced the best grades encountered to date at the Hat, and more assays are pending from #23 which in our view is a major game-changer for the project…

In addition, based on new maps and fresh interpretations of the Hat Gold-Copper Porphyry Complex released by Doubleview, it now appears that the Lisle Zone is merely the southeastern edge of a much broader system…if that’s the case, tonnage possibilities will increase dramatically…higher grades are also extremely important, but after nearly 2 dozen holes Doubleview’s technical team is gaining a much greater understanding of this system and why and where the higher grades may exist…

Experience has taught us that quite often in this sector, you’ll find that the market will either be ahead or behind actual developments on the ground concerning a company’s major project…with regard to the Hat, the market has a lot of catching up to do in our view, and that provides savvy investors with an enormous opportunity at the moment…

DBV 3-Year Weekly Chart

Our interpretation of this 3-year weekly DBV chart is that there’s a strong likelihood of a “Wave 3” move to the upside in DBV over the coming weeks, concurrent with a major breakout above the top of the downsloping flag and Fib. resistance at 15 cents…DBV closed at 13.5 cents yesterday…

Note the rising 500-day SMA which has been providing support recently…it also confirms that the bullish long-term trend remains intact…

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

This update on Cannabix Technologies (BLO, CSE) is mostly chart-related as “decision time” is drawing near with regard to a bullish pennant that started forming last month…the “accumulation zone” has proven to be accurate, to this point at least, and the odds of a breakout above the pennant seem high…

John’s TA on BLO dating back to last year has been extremely helpful to many of our readers…as always, understand the risks associated with these speculative plays and always perform your own due diligence…however, BLO remains our favorite in the non-resource space – they have disruptive technology (marijuana breathalyzer), an attractive share structure, money in the bank, and a management team that knows how to execute in every way…

Below is an updated chart based on the U.S. market price (Stockcharts.com does not yet provide charts for CSE-listed companies)…

BLO is up half a penny at 45.5 cents (CDN) on the CSE as of 8:30 am Pacific…

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

Gold has traded between $1,179 and $1,189 so far today…as of 8:00 am Pacific, bullion is up $3 an ounce at $1,185…Silver has added 16 cents to $16.89…Copper is up 2 pennies to $2.77…Crude Oil has erased earlier losses this morning and is now up 38 cents at $46.95 while the U.S. Dollar Index is off two-thirds of a point to 97.09…

As of last Monday, total holdings in Gold-backed ETF funds fell to 1,638.4 tonnes…investors sold their holdings for each of the prior 14 days, making it the longest selling streak in over a year – clearly, the general bullion market was anticipating a more hawkish Fed…

With the Dollar Index in the midst of a consolidation phase, Gold has an opportunity over the final 7 trading sessions of March to test the psychologically important $1,200 level…the greenback has been under pressure since last Wednesday when the Fed sounded a cautious note on the health of the economic recovery in the U.S., and slashed its median estimate for the federal funds rate…

Market players’ consensus expectation for a U.S. interest rate increase has shifted, with most of Wall Street’s top banks now expecting the Fed to hold off until at least September and the odds for a June hike fading, according to a Reuters’ poll…it’s a slow week for economic data…markets will be closely scrutinizing tomorrow’s release of February’s CPI…

Physical Gold demand in India is set to pick up on the back of festival related buying ahead of Akshaya Tritiya, which falls April 21, Barclays said today…

Geopolitical Hotspots And Gold

Will Gold start responding again to geopolitical events?…eventually it probably will as there are simply too many hotspots throughout the world…over the weekend it certainly became clear that the situation in Yemen is spiraling out of control as hard-core terrorists, who are a direct threat to Western security, are rapidly increasing their foothold on that country, chasing away a limited number of American special forces…keep in mind, Yemen was held up as an example of U.S. “success” in the war on terror by President Obama just 6 months ago (though he doesn’t want to acknowledge that we are even in a “war on terror” or, more specifically, a war against Islamist extremists)…unfortunately, America’s national security strategy is in shambles and that’s a point that Canadian-born U.S. Senator Ted Cruz (R-Tex) will be making forcefully in the weeks and months ahead as today he became the first official candidate for the U.S. Republican nomination…

CRB Index Updated Chart

Despite a cloudy outlook at best for Oil, the CRB Index is showing signs that it’s in the early stages of a rally that could pick up steam over the next couple of weeks…this theme is consistent with other charts (Gold, Silver, Venture, Dollar Index, euro) we’ve posted since Saturday…

A bullish candle last week, a double bottom reversal pattern, and an RSI(14) divergence with price are all clues that the CRB could be gearing up to once again test resistance at its 50-day SMA, currently 221…

The Venture typically responds well when the CRB is in an uptrend, so a sudden climb by the CRB would be a welcome development after a more than 35% plunge in the Index since June of last year…the only significant rally during that time was the bounce (9%) from late January into mid-February…

The CRB, up a point at 215 as of 8:00 am Pacific, had an upward bias last year from late March to late June as seen in this 2+ year weekly chart…

Today’s Markets

Asia

Equity markets in Tokyo and Shanghai outperformed the region to hit fresh multi-year highs overnight, drawing strength from a strong finish on Wall Street last week…the Shanghai added 70 points or nearly 2% to close at 3688…

Europe

European markets are lower in late trading overseas amid rising tensions and heated exchanges between Greece and its euro zone neighbors and creditors, particularly Germany…

North America

The Dow has gained 44 points through the first 2 hours of trading…the TSX has added 3 points while the Venture is up a point at 672…

Noront Resources Ltd. (NOT, TSX-V) Doubles Down On Ring Of Fire

Noront Resources (NOT, TSX-V) has firmed up considerably this morning after announcing that it has entered into an agreement to acquire 2 indirect wholly owned subsidiaries of Cliffs Natural Resources Inc., which holds strategic mining claims in northern Ontario’s Ring of Fire, for an acquisition price of $20-million (U.S.)…

Upon closing, Noront will hold roughly 65% (80,000 hectares) of this emerging mining camp 500 km northeast of Thunder Bay which features Noront’s existing Eagle’s Nest Ni-Cu-PGE deposit and its Blackbird chromite deposit.

“This purchase consolidates the world-class discoveries made in the Ring of Fire,” said Noront President and CEO Alan Coutts. “It also underscores Noront’s long-standing belief and commitment to the region. We have made significant investments in the Ring of Fire and our team has become experts in the region from both a technical and social point of view. We also believe in the considerable exploration upside which we are eager to develop.”

NOT is up 10.5 cents to 46 cents as of 8:00 am Pacific…technically, NOT appears to be on the cusp of a breakout, and such an event would be a positive sign for the Venture…

Fission Uranium Corp. (FCU, TSX) Update 

Fission Uranium (FCU, TSX) released results this morning from 19 additional holes from the R780E zone of its Triple R deposit at PLS…nothing blockbuster, but 17 of those holes were mineralized including PLS15–368 (line 480E) which intercepted 8.98 m total composite greater than 10,000 cps radioactivity with peaks up to 65,500 cps in a 57-m zone…

Fission has also expanded its winter exploration budget by an additional $3 million…this equates to approximately 6,270 m (28 holes) of additional drilling for a total of 26,500 m in 91 holes…the additional meters will be used to test high-priority areas within the R780E Zone where specific step-out targeting of the high-grade domain is prospective….additional drilling is also planned to further test the recent discovery of high-grade mineralization at the R600W zone, located 555 m on strike to the west of the Triple R deposit…

FCU is unchanged at $1.22 through the first 90 minutes of trading…

NexGen Energy Ltd. (NXE, TSX-V) Update

NexGen Energy (NXE, TSX-V) is mobilizing a fourth rig to its Rook 1 Property in the Athabasca Basin where fresh results this morning show continued strong potential of this growing system…mineralization at Fission’s world class Triple R deposit is shallower, thicker and more consistent…however, NXE is effectively outlining potentially higher grades in vertical shear zones at Rook 1…

The high-grade core of the A2 shear is thus far defined by an 88-m strike length, 340-m vertical extent, and true widths ranging from approximately 11 to 27.5 m…the high-grade core of the A3 shear is thus far defined by a 73-m strike length, 420-m vertical extent, and true widths ranging from approximately 30 to 78.6 m…the Arrow zone covers an area of 515 x 215 m with the vertical extent of mineralization commencing from 100 to 905 m, and it remains open in all directions and at depth…40 of 42 drill holes completed at Arrow to date have intersected uranium mineralization…

NXE is up 2 pennies at 44 cents as of 8:00 am Pacific…

Fairmont Resources Inc. (FMR, TSX-V) Update

We’ve mentioned Fairmont Resources (FMR, TSX-V) on several occasions since the beginning of the year, and we’ll be increasing our focus on it in the near future given what we see as a very capable management team progressing well with its plan to take some key properties in its industrial mineral portfolio in Quebec to the production stage…

The extraction of industrial minerals may not seem as exciting to some investors as traditional precious metals exploration, or whatever the flavor of the day might be, but in terms of practicality and the opportunity to build near-term cash flow and profits for shareholders, a company like Fairmont has us really intrigued given its assets and game plan…we see the company’s 2 main value drivers this year being the Buttercup Property (C-of-A from Quebec authorities was received just recently which allows for up to 300,000 tonnes annually of titano-magnetite production) and the nearby Lac Bouchette Property, a past producer which has high-purity quartz possibilities…

Technically, this is a no-brainer…FMR has been in an overall primary uptrend since late 2013, and the stock has merely retraced since September of last year to its rising 500-day SMA and Fib. support…FMR has just 18 million shares outstanding, giving it a market cap of only $2.5 million based on Friday’s 14-cent close…

Silver Short-Term Chart

Significantly, Silver has broken out of a short-term downsloping flag…the metal found support at the bottom of that flag last week which was critical…we’d prefer to see a more gradual rise, but we’ll see how this plays out over the coming days..

The metal reacted in January at $18.50 (almost exactly at chart and Fib. resistance) and then went into a consolidation phase within the downsloping channel…we were waiting for a move above or below that channel, and it came at the end of last week…

RSI(14) is rising rapidly…

In December, Silver finally staged a definitive breakout above a downtrend line that was in place since the summer (note how the downtrend line became new support that month)…this gave Silver the fuel it needed to test higher levels…

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 possible move are also not clear at the moment…

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…nonetheless, it would be encouraging to see this sell pressure begin to abate…it has eased off only very slightly in recent months…

Note:  Jon holds a share position in FMR.

TSX Venture Exchange and Gold

After declining in 10 of the first 12 trading sessions this month through last Tuesday, the Venture showed signs Wednesday of turning a corner following a more dovish than expected Fed statement that drove the U.S. Dollar Index down sharply.  Confirmation of this short-term trend change occurred over the final 2 trading days of the week, and the Venture closed Friday at 671.  That snapped a 3-week losing skid and represented a modest 6-point gain over the previous Friday.

For now at least, the red-hot greenback, which has been a major negative influence on commodities and the Venture Exchange, has entered a “cooling off” or consolidation period that should see it test strong support around 96 after its recent very brief attempted breakout above 100.  The possibility of a more substantial dollar correction exists but that will hinge on economic data to be released over the next couple of weeks.

For the third time already this year, the Venture has successfully tested Fib. support in the 650’s.  The first challenge for the Index now will be to overcome resistance at the declining 50-day moving average (SMA), currently 683.

RSI(14) on this 4-month daily chart has bounced off the 30% level and is gaining momentum, while weak buy pressure has replaced the sell pressure evident since early this month.  Be patient – it could take several more days for a potential rally in the Venture to become more obvious to most investors.

Venture 6-Month Daily Chart

This 6-month Venture chart shows how the Index was able to break above 2 important resistance levels over the last few months – the downtrend line (in December) and the 50-day SMA (in early February) – before some March mayhem took the Index down 7.2%.   The immediate technical picture is looking better now, however, and that includes a bullish “W” in the RSI(14).

What this market could really use is some exceptional news on the drilling front, a discovery of magnitude that injects fresh money and new hope into the sector.  There are certainly possibilities in that regard – not a lot, but some.  They often tend to occur near the bottom of a cycle, catching many participants by surprise.

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.

6-Month Daily Gold – 10-Yr. Treasury Note Yield Comparative

The U.S. 10-Year Treasury note yield is declining again, after meeting resistance at its falling 200-day SMA early this month, and that’s positive for Gold which jumped $26 an ounce last week to break out of a slump and finish at $1,182.  The 12.7% drop in the price of bullion between late January and last week came after a 16% swing to the upside that started immediately following the early November low of $1,130.

Gold will likely attempt to test the $1,200 level again soon, given its current momentum, and how it behaves around that area will be interesting.

Silver surged by 7% last week, gaining $1.09 an ounce, to close at $16.73.  Copper strengthened again, adding 8 cents to finish at $2.74.  Crude Oil fell to new multi-year lows early in the week but recovered to close at $46.57, snapping a 4-week losing skid.  The Dollar Index, meanwhile, got hurt by Wednesday’s Fed statement and Janet Yellen’s comments, and fell more than 2 points to close at 97.80.   The 100 level is clearly critical near-term resistance while strong support exists at 96.

The “Big Picture” View Of Gold

Gold traded between $1,168 and $1,189 yesterday and closed up $11 an ounce at $1,182 thanks to weakness in the volatile greenback as the U.S. Dollar Index tumbled by more than a full point to finish the week at 97.80…Silver soared 62 cents yesterday to close at $16.73…Copper enjoyed its biggest daily gain since May 2013, jumping nearly 4% to close at a 10-week high of $2.74…Crude Oil added more than $1 a barrel to $46.57…

Commodity gains yesterday were aided by a sharp rise in the Chinese yuan…it enjoyed its best week against the dollar in more than 7 years after China’s central bank reportedly drove the currency higher in a bid to squeeze out speculators…

A sentiment shift in Gold has occurred, so a positive finish to the month is likely in the cards, thanks primarily to the dovish tone from the FOMC Wednesday…this is reflected in charts (see below) and through a Bloomberg survey that shows Gold traders are the most bullish since the week ending January 2…

This is a special Saturday morning “Market Musings” due to travel yesterday…our regular Week-In-Review And A Look Ahead will be posted tomorrow, followed by BMR Morning Market Musings during its regular time slot again Monday…

Oil Update

Not that this will translate into production decreases anytime soon, but U.S. drillers cut the number of rigs drilling for Oil by 41 this past week to 825, the lowest total rigs since March 2011, according to the latest survey by Oil services firm Baker Hughes…the number of Oil rigs this week declined for a 15th week in a row, matching the longest streak for Oil rig reductions set in March 2009…

Meanwhile, this should come as no surprise – the increasingly radical Obama administration yesterday issued comprehensive rules on hydraulic fracturing, trying to set a national standard for the controversial drilling practices that have helped fuel the U.S. Oil and natural gas boom…yesterday’s move sparked immediate criticism from energy companies that claimed the rules, regarding federal lands, are too onerous…two industry groups filed a lawsuit minutes after the announcement, seeking to block the rules in a federal court…

U.S. Dollar Index On The Retreat

The key theme in the markets since last summer has been the fastest rise in decades in the U.S. Dollar Index which finally seems to have hit a wall – temporarily at least – at the psychologically important 100 level…the pullback started Wednesday after the Federal Reserve surprised many traders with a less optimistic assessment of the country’s economic health, throwing into serious doubt expectations of a June increase in interest rates and pushing the dollar lower…

The Fed’s statement didn’t specifically address the dollar but took an indirect swipe at the greenback by highlighting the fact that “export growth has weakened…inflation has declined further below the Committee’s long-term objective”…and the “Committee continues to monitor inflation developments closely.”  

Importing Deflation

With such a huge move in the Dollar Index since last summer, the U.S. is now importing deflation or “disinflation” which runs counter to the Fed’s objective of seeing inflation ramp up to the 2% level…ironically, it seems that the higher the Dollar Index goes due to the anticipation of a Fed rate hike, and the perception that the U.S. and the rest of the world are on very different monetary paths, the less likely a rate hike might actually be this year…the Fed is clearly concerned about the potential negative affects of a runaway dollar, so will they be able to keep the greenback in check?…that remains to be seen…

Chart Developments

Technically, the dollar has started a consolidation pattern that may resemble the ones that occurred last October and from late January through most of February this year…it’s possible the correction could be deeper than the previous two, but that will be dependent on economic numbers that flow in over the coming weeks including upcoming important CPI data…

Superb support for the Dollar Index exists from the rising 50-day moving average (SMA), currently at 95.31, and the 96 level which earlier was important Fib. resistance…look for the RSI(14) to find support at the 50% level as it has throughout its run…a break below that mark would signal the likelihood of a deeper correction…

Rebound In Euro Underway

The latest euro chart confirms that the Dollar Index has put in a temporary top (we emphasize “temporary” because the dollar bulls could easily go on the march again in a few weeks or a month or two)…

This 20-year monthly chart shows the euro in a downsloping flag for the past 7 years…this past week, it found support – as expected – at the bottom of that flag with oversold RSI(14) conditions also at previous support…

So a rally in the euro appears to be in the works…it closed Friday at 108, enjoying its best week in more than 3 years, and the next Fib. resistance levels on this chart are 113 and 122…

Gold 2.5-Year Weekly Chart

The $1,150 support level for Gold has held, for now at least, and a near-term rally to the 50-day SMA in the mid-$1,220’s can’t be ruled out…RSI(14) is on the upswing – Gold is emerging out of a downtrend that started at the late January high of $1,308 when bullion hit the top of the downsloping flag on this 2.5-year weekly chart…

Yesterday’s Markets

Asia

China’s Shanghai Composite made a sudden surge in the afternoon session, charging 1% to close at its highest level since May 2008 – 3617…Japan’s Nikkei, meanwhile, edged closer to the 20000 level as it finished up 86 points at 19560…

Europe

European markets posted broad-based gains yesterday with the FTSE closing above 7000 for the first time…

North America

The Dow climbed 169 points yesterday to close at 18128 while the Nasdaq finished above the 5000 level, just 23 points shy of matching its 15-year high…

In Toronto, the TSX gained 68 points while the Venture added 4 points to close at 671…very late in yesterday’s session, Doubleview Capital (DBV, TSX-V) reported that it has closed the first tranches ($570,000) of a financing, so this should allow DBV to immediately get back to work on the Hat Project and follow-up on Hole #23 and an emerging reinterpretation of the Gold-rich Copper porphyry system there…

Copper Fox Metals Inc. (CUU, TSX-V) Update

Intriguing activity in Copper Fox Metals (CUU, TSX-V) which has doubled over the last 12 sessions after closing yesterday at 28 cents…this certainly demonstrates that “bargain hunters” have undervalued northwest B.C. porphyry plays on their radar screens…last Tuesday, Copper Fox announced a $4.8 million 2015 program to advance its Schaft Creek joint venture project which features nearly 1 billion tonnes of proven and probable reserves…this year’s work will focus on geotechnical/geometallurgical modelling and domain definition, evaluation of key economic drivers, and exploration of the LaCasse Zone (1,500-m drill program)…

Suddenly, for the first time in 3 years, Copper Fox has convincingly broken out above its 200-day SMA which has also reversed to the upside…this represents a major trend change…the question is, why now?…

Kootenay Silver (KTN, TSX-V) Update

Kootneay Silver (KTN, TSX-V) has a high-quality exploration play unfolding with its La Negra Silver discovery, contained within the Promontorio mineral belt in Sonora, Mexico…we all know how prolific Sonora is as a mineral region…the La Negra breccia discovery is situated approximately 6.5 km north of Kootenay’s flagship Promontorio Silver resource, and a 30-hole follow-up drill program commenced about a month ago…

Technically, KTN is on the edge of a potential significant breakout as you can see in this 3-year weekly chart…

Note:  John holds a share position in CUU.  Both John and Jon hold share positions in DBV.

Gold has traded between $1,159 and $1,174 so far today…as of 8:30 am Pacific, bullion is up $2 an ounce at $1,169…Silver has added 16 cents to $16.05…Copper has surged 8 cents to $2.65…Crude Oil is off 86 cents a barrel at $43.80 while the U.S. Dollar Index has rebounded more than a full point to 99.05…

As expected by most observers, the Fed yesterday removed the word “patient” from their forward guidance on interest rates (essentially irrelevant), but the overall tone of their fresh policy statement, and Janet Yellen’s briefing immediately afterward, was cautious and more dovish than generally anticipated…the dollar sold off sharply as a result…however, it remains to be seen if the Fed has effectively put the dollar into a much-needed “cooling off” period after the currency’s parabolic move since last summer…

The Fed tripped up the dollar bulls yesterday, but perhaps only temporarily…the Fed’s statement didn’t comment directly on the greenback but highlighted some of the affects of a stronger dollar…“export growth has weakened…inflation has declined further below the Committee’s longer-run objective”, and the “Committee continues to monitor inflation developments closely.”

The Fed modestly lowered its overall economic growth forecast and also moved the goalposts for employment, suggesting there is much slack in the labor market in spite of a 5.5% unemployment rate…

In her news conference, Yellen did state, “We are taking into account international developments” in currencies, and cited the “depressing influence” of the dollar’s rise on inflation, as well as exports…

And in typical Fedspeak (what American economist Alan Blinder called a “turgid dialect of English” used by Fed chairmen in making wordy, vague and ambiguous statements), Yellen made sure to add, “Just because we removed the word ‘patient’ does not mean we will become impatient.”

Good grief…we can only hope the Fed really knows what it’s doing and has a proper handle on things because the Fed, along with other central banks around the globe, are playing with fire…

Before the Fed “moment” yesterday, futures were pricing in a 55% chance of a rate rise in September…the probability of a move is now put at 40.3%, according to Bloomberg calculations…those numbers will likely bounce around a lot in the coming weeks as fresh economic statistics are released…

What the dollar bulls still have in their favor, however, is the broad perception that a rate hike is very possible, especially during the second half of this year, and the fact that the U.S. central bank is on a monetary path that is quite different than the one being followed by so many other central banks across the globe…

How the dollar and commodities close the week will be important and revealing…

Oil Update

Kuwait’s Oil minister said today that he’s concerned by the 50% drop in Oil prices since last summer because of the impact on the Gulf Arab state’s budget, but Ali al-Omair reiterated to reporters that OPEC had no choice but to keep output steady…in a very telling quote, the Oil minister stated, “We don’t want to lose our share in the market.”

Key OPEC countries are focused on market share and if that means significantly lower prices to squeeze out American and other producers, so be it…Crude Oil is battling extremely challenging fundamentals and technicals, not to mention the prospect of an even higher greenback…

Gold 6-Month Daily Chart And 10-Year Treasury Yield Comparative

The sharp increase in the U.S. 10-Year Treasury yield from the end of January to the beginning of March was a major headwind for Gold, but that pattern may now have reversed with the yield falling back below 2% and trending lower (the yield reacted very close to its declining 200-day moving average)…

The other encouraging aspect of this chart for Gold bulls is the “W” pattern – what appears to be a classic reversal formation – in the RSI(14)…weekly closes are important, so how bullion behaves the rest of today and tomorrow will provide valuable clues as to how it may finish the month of March…a band of support between $1,130 and $1,150 is very strong – then there’s also the bottom of a downsloping flag around $1,100 that should protect Gold in the event of a breach of last November’s low…

CRB Index Update

The CRB Index, though it’s off a couple of points this morning, may have touched at least a temporary bottom yesterday when it swung between a wide range, reversing at the 207 level and closing up more than a point at 212…

Again, trading today and tomorrow will be critical in assessing if an imminent recovery could be in the works after a 10% decline since mid-February…the double bottom reversal pattern, the bullish hammer, and the RSI(14) divergence with price are all positive indicators at the moment – there needs to be some follow-through in the coming days to confirm a change in trend…

Today’s Markets

Asia

China’s Shanghai Composite hit a fresh 7-year high overnight, closing up 5 points at 3583…Japanese stocks were down slightly due to a stronger yen…

Europe

European stocks were mixed today…the ECB’s recently launched full-blown QE program has already eased financial conditions and should contribute to a gradual recovery in the euro zone, the bank said in its economic report today.  “Growth in activity is expected to increase on account of the recent improvements in business and consumer confidence, the sharp fall in oil prices, the weakening of the effective exchange rate of the euro and the impact of the ECB’s recent monetary policy measures,” the ECB said.  “The accommodative monetary policy stance—substantially reinforced by the (asset-purchase program)—is expected to support real GDP growth in both the short term and beyond,” it said.

North America

The Dow is down 83 points as of 8:30 am Pacific after yesterday’s intra-day reversal and big run-up following the Fed announcement and Yellen’s news conference…in Toronto, the TSX has fallen 48 points while the Venture is down a point at 655 through the first 2 hours of trading…

Venture 4-Month Daily Chart

No dramatic changes in this Venture chart, but the bearish short-term trend is weakening (ADX indicator) at the moment…RSI(14) has bounced off the 30% level while critical Fib. support in the low 650’s has held so far this month despite several negative influences…the Dollar Index remains the key – Venture support is not likely to hold if the Dollar Index takes off above resistance at 100…

Amarc Resources Ltd. (AHR, TSX-V) Update

If one looks hard enough, quality opportunities on the Venture do exist in the current market climate…Amarc Resources (AHR, TSX-V) is an excellent example as we’ve been stating for the last few months and as recently as a week ago when AHR was trading at 11 cents…

In British Columbia, we expect the Sheslay district to heat up profoundly with the potential for near-term new discoveries and a major reinterpretation of what’s unfolding at Doubleview Capital’s (DBV, TSX-V) Hat Project…

Further south in the Cariboo region, meanwhile, Amarc is garnering increased attention as predicted following its announcement in late November that was overshadowed by the overall market turmoil at the time…

Volume has picked up significantly in AHR this month, and the company has the funds to carry out a follow-up round of drilling…AHR traded as low as 6.5 cents in December and touched 17 cents in early trading this morning (for those following the Sheslay district, keep that in mind – a fireworks show like we haven’t seen there yet is going to light up the northwest B.C. skies)…

In late November, Amarc reported highly encouraging results from an initial 9-hole drill program at the company’s IKE Project in the Cariboo region…this is an early-stage bulk-tonnage porphyry Copper-Molybdenum-Silver discovery in the heart of a producing area…all 9 holes intersected chalcopyrite and molybdenite mineralization from surface and over a broad area measuring 1,200 m east-west by 600 m north-south and to depths of approximately 500 m…

Interval highlights included 247 m grading 0.42% CuEq in IK-14–001; 234 m @ 0.43% CuEq in IK-14–002; and 308 m @ 0.41% CuEq in IK-14–006…these results, along with post-drilling geological, geochemical and geophysical surveys completed outward from the drilled area, indicate that the IKE porphyry system has the potential to host a significant resource…this is still early in the game…AHR can be expected to aggressively follow up on this discovery…

John’s 3-year weekly AHR chart shows a “Big Picture” bullish trend with a confirmed breakout above the 10-cent level with the stock now threatening to overcome chart resistance at 15 cents…buy pressure has recently replaced a long period of sell pressure…

AHR is up 1.5 cents at 16.5 cents through the first 2 hours of trading today…

International Montoro Resources (IMT, TSX-V)

We suggest our readers perform their due diligence on International Montoro Resources (IMT, TSX-V) which has a very compelling Nickel target (about to be drilled) at its Serpent River-Pecors Project near Elliot Lake in northern Ontario…originally, Uranium was the focus at this property but some important work by the Ontario Geological Survey has provided strong evidence that a large anomaly (Pecors) could be the result of contact style Ni-Cu-PGE mineralization similar to that found to the east at Sudbury…significantly, that’s the independent interpretation of the OGS…sediment sampling has also shown high levels of Nickel and Chromium, lending further weight to the new analysis…

IMT is a very capable group led by President and CEO Gary Musil who has done an admirable job of moving Highbank Resources (HBK, TSX-V) forward during challenging market conditions the last couple of years…

Technically, IMT has been trading within a horizontal channel between 5.5 cents and 9 cents over the last 6 months, setting up a potentially bullish scenario…the company has the funds to imminently commence drilling the intriguing Pecors anomaly…

IMT is off half a penny at 7.5 cents as of 8:30 am Pacific…

Note:  John, Terry and Jon do not hold share positions in AHR or IMT.

Gold has traded between $1,145 and $1,153 so far today…as of 8:00 am Pacific, just 3 hours before a fresh and much anticipated Fed policy statement, bullion is unchanged at $1,148 an ounce…Silver is off a nickel at $15.48…Copper has fallen 7 cents to $2.56…Crude Oil is down nearly $1 a barrel to $42.50 while the U.S. Dollar Index (see this morning’s updated chart) is up slightly at 99.64, preparing for either an explosion through the 100 level or a “cooling off” period – depending on the Fed’s statement and Janet Yellen’s news conference that follows shortly thereafter…

SPDR Gold Trust, the world’s largest Gold-backed ETF, said its holdings dropped 0.4% to 747.98 tonnes yesterday…

Gold hit its lowest level yesterday in 4 months on speculation the Fed will drop the word “patient” from their forward guidance on interest rates, potentially paving the way for the first rate hike since 2006 as early as June…what’s more important to watch for today, in our view, is whether the Fed directly addresses the parabolic move in the greenback…Marc Faber, the man known as “Dr. Doom”, believes markets are in for a surprise as he predicts the Fed will not raise interest rates this year, pointing to dollar strength and recent disappointing economic data.  “The economy simply (is) not taking off, so I don’t see there will be interest rate increase,” he stated this morning on CNBC’s “Squawk Box”…

Others have a different take on what could unfold…

The Federal Reserve risks causing a 1937-style stock market slump when it finally moves to raise interest rates, one of the world’s most powerful hedge fund managers has warned…Ray Dalio, founder of the $165 billion hedge fund group Bridgewater Associates, said in a note to clients and followers, as reported by various media outlets, that he was avoiding large bets on the financial markets for fear that the Fed’s expected change of policy could have unintended consequences…

“Clearly the Fed has created expectations that it will tighten in either June or September, and such expectations are difficult to deviate from,” Dalio wrote.  “For those reasons, we expect a Fed tightening and are cautious about our exposures.  To be clear, we don’t know – nor does the Fed know – exactly how much tightening will knock over the apple cart. What we do hope the Fed knows, which we don’t know, is how exactly it will fix things if it knocks it over. We hope that they know that before they make a move that could knock over the apple cart.”

Dalio’s note emerged as Christine Lagarde, head of the International Monetary Fund, warned yesterday that U.S. rate increases could trigger instability in emerging markets, leading to a re-run of the Fed-induced “taper tantrum” of 2013…

Oil Update

Stored supplies of Crude Oil in the U.S. are at the highest level in about 80 years, according to the U.S. Energy Information Administration…concerns are mounting that Oil inventories could reach maximum storage capacity in some locations during the 2nd quarter, which could put further downward pressure on prices…

U.S. government data this morning showed inventories of U.S. commercial Crude rose for the 10th straight week ending March 13…

Copper:  Antofagasta Cautious Short-Term But Bullish Medium To Long-Term

Antofagasta, the large Chilean-based Copper mining group, said it’s “cautious” about the Copper market for the next 2 years as 2014 profit declined 30% because of lower metal prices.  “I am cautious on the short-term, this year and next,” CEO Diego Hernandez said in an interview on Bloomberg TV.  “From then on, Copper supply-demand will be very tight and I am optimistic on the medium to long-term.”

U.S. Dollar Index Updated Chart

The U.S. Dollar Index recently broke out above important resistance at 96…it’s now poised to surge powerfully through 100 if the Fed doesn’t immediately throw a lot of cold water on this fire…

What has occurred since last summer, as demonstrated in our 1-year daily U.S. Dollar Index chart, is one of the fastest moves in the history of the greenback, fueled by the anticipation of higher interest rates and increasingly divergent monetary paths being followed by the U.S. and the rest of the world…

The Fed’s strategy of trying to prepare the markets for a “normalization” of interest rate policy is endlessly driving speculation in the greenback which in turn is impacting commodity markets and causing other distortions and stresses in the global financial system…it’s like when investors are expecting great drill results from a junior exploration company – the stock price keeps running and the bullish trend remains intact until the actual results come out…at that point, the anticipation and mystery are over and the trend sometimes reverses violently, at least temporarily…

The dollar likely won’t settle down until a) the market comes to the realization that an expected interest rate hike is actually not going to happen, at least not until much later than originally anticipated; or b) the Fed finally makes its move, and the “sell on news” effect comes into play…

This chart shows an extremely powerful Dollar Index trend that’s going to be hard to stop…next measured Fib. resistance is 106…RSI(14) is in overbought territory at 79% but could easily remain around that level for a couple more months at least…exceptionally strong support exists at 96, so traders still see the risk-reward ratio as very favorable with the Dollar Index at 100, especially if the Fed keeps signalling it wants to start raising rates…

More “Bibi” For Obama

Despite the best efforts of the Obama administration, Benjamin Netanyahu has won a 4th term as Israel’s Prime Minister, with his conservative Likud party seizing a decisive and unexpected 5-seat advantage in parliament over the main opposition Zionist Party…Netanhayhu should have little difficulty in cobbling together a majority coalition over the next couple of weeks, and his re-election will certainly complicate the efforts of President Obama to secure his goal of a “nuclear agreement” with Iran that many believe will actually make it easier for that regime to become a nuclear-armed state…

On another note, President Obama will be facing increasing questions from both Democrats and Republicans over the role in the Israeli elections of the American non-profit OneVoice Movement…the group received $350,000 from the State Department and allegedly violated its tax-exempt status when it began backing the virulently anti-Netanhayhu Victory 15 campaign which was advised by former Obama campaign aides including his top field organizer, Jeremy Bird…

As Canadian-born Senator Ted Cruz (R-Texas) stated, also noting Obama’s well-known adversarial relationship with Netanhayhu, “What does it say about the President of the United States when he’s more concerned about undermining and attacking the Prime Minister of Israel than he is standing up to the mortal threat a nuclear Iran poses?”

Today’s Markets

Asia

Markets in China and Japan hit new multi-year highs overnight as monetary policies in both countries continue to fuel rising stock prices…the Shanghai Composite jumped another 2% (74 points) to close at 3577 while the Nikkei average added 107 points to finish less than 500 points shy of the 20000 level…

Europe

European markets are mixed in late trading overseas…

North America

The Dow is off 67 points as of 8:00 am Pacific…the behavior of the markets over the final 2 days of the week, not today’s “knee-jerk” instant reaction to the Fed statement and Yellen’s subsequent comments, will be the best guide as to what may unfold over the coming weeks and in Q2…

The TSX is down 25 points as of 8:00 am Pacific while the Venture is flat at 659…key Venture Fib. support is in the low 650’s…

NioCorp Developments (NB, TSX) Update

NioCorp Developments (NB, TSX) has really gained momentum since it moved from the Venture and started trading on the TSX March 9…

Technically, John’s call on the breakout last month above 80 cents was bang-on with NB soaring as high as $1.90 last Thursday before a quick retracement to previous Fib. resistance (now support) at $1.13…

On February 23, NioCorp released an updated NI-43–101 resource estimate for its Elk Creek Niobium deposit…as a result of positive indications from the company’s continuing metallurgical testing and development program, Titanium (TiO2) and Scandium (Sc) were added to the mineral resource statement…both of these metals can be recovered with simple additions to the existing process flowsheet, according to NioCorp, and would provide additional revenue streams that would complement the planned production of Ferroniobium…the company is currently assessing these prospective revenue contributions, and plans to announce the results of a preliminary economic assessment for the project shortly…

This updated 2-year weekly chart shows Fib. measured resistance at $1.73 and RSI(14) at 73%, continuing to follow an uptrend line…whenever a stock breaks out of an extended horizontal pattern, as NB did after pushing through 80 cents, the possibility of an explosive upside move increases substantially…

NB is up 13 cents at $1.47 as of 8:00 am Pacific…

Agnico Eagle Mines Ltd. (AEM, TSX) Update

This Agnico Eagle (AEM, TSX) chart is interesting as it shows an ongoing bullish trend despite the approximate 10% drop in Gold and the 20% decline in the TSX Gold Index since the beginning of February…

If AEM can hold around current levels in the mid-$30’s (Fib. support coinciding with a still-rising 50-day SMA), then this would be a sign that Gold stocks could surprise investors with an imminent or near-term sudden reversal after a 6-week downtrend…

AEM is down 59 cents at $35.31 as of 8:00 am Pacific…

Richmont Mines (RIC, TSX) Update

On the “razor’s edge” is Richmont Mines (RIC, TSX), our favorite producer, which entering today’s Fed statement is resting exactly at its uptrend support line that has held since last summer (great buying opportunity each time it has hit this line)…like with AEM, the action in Richmont over the next couple of sessions – can it hold this uptrend line? – will be a valuable clue as to the near-term direction of Gold stocks…

RIC is off 2 cents at $3.73 through the first 90 minutes of trading…

Note:  John, Terry and Jon do not hold share positions in NB, AEM or RIC.

Gold dipped as low as $1,142 this morning but is trying to claw its way back…as of 8:50 am Pacific, bullion is down $4 an ounce at $1,150…Silver is off 6 cents at $15.57…Copper has slid 4 cents to $2.62…Crude Oil has fallen 81 cents a barrel to $43.07 while the U.S. Dollar Index is off its lows and now down just slightly at 99.54..

According to the latest COT report for the week ending March 10, money-managed speculative long positions of Comex Gold futures dropped by 8,247 contracts to 107,032…this is the 6th consecutive decline in gross longs, reportedly the longest slump since 2010…but the track record of this particular group is such that their positioning should be viewed from a contrarian perspective…they are typically the most bullish when prices peak, and the most bearish when prices are at or near a bottom…hopefully they’ll become a little more negative – then Gold will be ready for a turnaround…bullion over the near-term may still have to test the bottom of a downsloping channel around $1,100, but the $1,130-$1,150 support zone is holding for the moment…the rest of this week obviously could be volatile given tomorrow’s Fed policy announcement followed by Janet Yellen’s briefing…

Platinum, the worst performing precious metal of the year, tumbled to a 5.5-year low today as a stronger dollar, weaker Gold prices and growing supplies continue to take a toll on prices…Platinum is down 8% this year…

Will The Crowd Be Right?

Almost 90% of economists surveyed by Bloomberg predict that Fed officials will drop the “patient” pledge from their statement released at the conclusion tomorrow of their 2-day meeting…some 45% saw this as a step toward a June increase in rates, which have been held near zero since December 2008, according to the poll of 49 respondents conducted March 12 and 13…37% saw rate liftoff in September…

While investors broadly expect the Fed this year to raise its federal-funds overnight bank-lending target rate for the first time since 2006, the timing of that move has been clouded by a surge by the U.S. dollar, concerns about economic growth around the globe and fresh signs that the U.S. expansion is slowing…just yesterday, new data showed that U.S. industrial production inched up just 0.1% in February on a seasonally adjusted basis, missing expectations…

“The Fed has to move slowly or it runs the risk of destabilizing global financial markets with a surging dollar,’’ said Ward McCarthy, chief financial economist in the fixed-income group at Jefferies LLC, in a Wall Street Journal report…

Yes, that surging dollar…what the Fed does or doesn’t say about the greenback tomorrow will be more important in our view than whether or not they remove the word “patient” from their language…

Deflationary Pressures In Japan

The Bank of Japan stood firm today, leaving its QE program unchanged even as it acknowledged for the 1st time that prices might start falling in coming months…Gov. Haruhiko Kuroda expressed confidence in the nation’s economy, reiterating that dramatically lower Oil prices which have driven the inflation rate to a 16-month low will later this year fuel a rebound in private consumption, returning inflation on a path toward the central bank’s goal of 2%…

“A dip into negative territory (for the core CPI) can’t be ruled out”, he stated during a news conference, but the longer-term price trend remains intact…

Why is it that central banks around the globe continue to insist that inflation is going to return to more normal levels over the next year?…do they really have a handle on what’s going on, or are they just engaging in wishful thinking?…it’ll be interesting to get Fed Chair Yellen’s latest take on inflation-deflation tomorrow…

Today’s Markets

Asia

China’s Shanghai Composite eclipsed the 3500 level overnight to finish at a new 5-year high, fueled by expectations for further stimulus in the world’s second-largest economy…the Shanghai surged another 54 points or 1.6%…

Japan’s Nikkei continued its march higher as well, adding 191 points to close at 19437…

Europe

Bullishness toward European stocks, which were mixed today, has reached unchartered territory according to Bank of America Merrill Lynch’s regular fund manager survey taken between March 6–12, 2015…a total of 207 panelists with $565 billion of assets under management participated in the survey…they have trimmed their exposure to U.S. stocks to the lowest levels since 2008, while a net 63% of respondents said Europe was the region they would most like to overweight in over the coming 12 months – a record since the bank first asked the question in 2001…interestingly, the reading has spiked from a net 18% preferring Europe in January…

North America

Volatility across North American markets continues ahead of tomorrow’s Fed decision…the Dow is off 171 points as of 8:50 am Pacific…U.S. housing starts fell 17% in February to the lowest level in a year as harsh winter weather took its toll…more encouragingly, building permits rose 3% and January housing starts were revised slightly higher to 1.08 million…

The TSX is down 112 points while the Venture has slipped 5 points to 659…

TSX Updated Chart

This morning’s weakness in the TSX could be a “head fake”…Fib. support just below 14700 has been strong this month, and the market is staying within the margins of an upsloping channel in place since mid-December…there are downside risks, of course, but the current correction (so far) is very similar to the one in January that was followed by a 10.5% advance…

TSX Gold Index Update

The TSX Gold Index continues to hover around key support and has stabilized around current levels, as expected…the balance of the week will be critical in determining if this support can hold and a new uptrend can commence…certain indicators are flashing positive signals, but the weekly close has got to be positive for this Index to start to gain traction and emerge out of its recent pullback including 8 down sessions out of the last 11…

The Gold Index shot up by just over 50% from early November to early February, a very robust move, and about half of those gains have been given up which can be described as a normal and healthy retracement…

The Gold Index is off 2 points at 156 as of 8:50 am Pacific…

Visible Gold Mines (VGD, TSX-V) Update

Visible Gold Mines (VGD, TSX-V) has generated a lot of interest, and deservedly so, for its astute strategy in assembling its 167 Project land package (600 sq. km) in Quebec’s Plan Nord territory and using a road building program to identify the potential existence of Gold deposits over this vast virgin ground…an extensive drill program that started at the end of January, just off new Provincial Road 167, is attempting to locate the source of impressive mineralized boulders, some of which returned exceptionally high grades…

Instant drilling discoveries in a grassroots situation such as this are relatively rare, so who knows at what point VGD may hit something big, but anything is possible and 1 thing is probable in our view – the rocks are “cooked up” in this district and that tells us there are some exciting discoveries to be made…aggressive drilling is the only way to go at this, and the odds get better with each hole…VGD is attacking this the right way and has an exceptional geological team that includes Robert Sansfacon, 1 of the best in the business in Quebec…

Keep in mind, the last major discoveries in the James Bay area, Goldcorp’s (G, TSX) Eleonore mine and Stornoway’s (SWY, TSX) Renard diamond project, were both found by boulder tracing in glaciated terrain…

Initial drill results are pending from VGD which announced on February 25 that 10 holes in the program had been completed up to that time over a broad area…

Technically, VGD has remained within an upsloping channel since December…support has been strong at the bottom of this channel which also coincides with some Fib. levels…results, of course, will dictate whether VGD breaks out of this current pattern to the upside or the downside…nothing would be better for the junior exploration market than a major grassroots drilling discovery in Canada, so all investors should be rooting for VGD’s success…

VGD is up half a penny at 19 cents as of 8:50 am Pacific…

Takara Resources Inc. (TKK, TSX-V)

Juniors aren’t the only ones who follow “boulder trains”…Globe and Mail mining reporter Rachelle Younglai, in an online story Sunday night, commented:  “Agnico Eagle Mines Ltd. is expanding its exploration team in Nunavut after it found Gold on boulders near its mine in the territory. ‘We have a lot of evidence that there is Gold in the area,’ said Sean Boyd, Agnico’s chief executive. The company is moving 8 drill rigs and about 80 miners to its arctic camp, in order to locate the source of the Golden boulders.”

Agnico’s strategy in Nunavut is interesting because this is exactly what’s motivating Takara Resources (TKK, TSX-V) with regard to (ironically) a past producing Agnico Eagle property in northern Ontario…last week, Takara and Gold Bullion Development (GBB, TSX-V) announced the signing of an LOI whereby GBB in the coming weeks can elect to “spin out” its Castle Silver Mines Inc. asset into TKK in an all-share transaction…GBB, of course, is focusing on taking its Granada Gold Property to the production stage…spinning out the Castle asset has certain advantages, including the potential near-term ability of Takara to immediately follow up on a boulder train discovery late last year that provided evidence that a Gold-Copper system may exist at Castle which historically produced over 20 million ounces of Silver…

Following boulder trains, as mentioned earlier, has led to some major discoveries, and VGD soared from a penny into the 20‘s and is now in the drilling process…the Castle Property is a substantial past producer with a lot of under-explored ground, so this is a situation to watch closely in our view as events could unfold quickly…

TKK 9-Year Monthly Chart

Technically, what’s critical about this chart is TKK’s breakout (could be confirmed today) above a long-term downsloping channel…we’ve observed this extremely reliable and bullish pattern in numerous situations over the past couple of years…

TKK is up half a penny at 3 cents as of 8:50 am Pacific…

Note:  John and Jon both hold share positions in GBB.  Jon also holds a share position in TKK.