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Gold is under pressure today, falling as low as $1,176 after trading as high as $1,208 earlier this morning…Gold stocks are holding up well, however, and the Venture could even manage to eke out a small gain today…as of 9:15 am Pacific, bullion has retreated $25 an ounce to $1,180…Silver has lost 56 cents to $15.98…Copper has surged 8 cents to $2.87…Crude Oil has hit a 5-month high, adding another 54 cents to $59.12 while the U.S. Dollar Index has recovered from its lows of the morning and is now down just slightly at 95.16…

Following through on indications in March, the Federal Open Market Committee yesterday offered no changes to its zero interest rate policy, and interestingly removed all hints for what may lie ahead…calendar references were deleted completely from the post-meeting statement for the first time since 2009…at least the Fed is being consistent in its focus on being data dependent…the committee noted some progress in the economy, halting though it may be…the statement acknowledged that growth “slowed during the winter months,” though calling the factors leading to the slowdown “transitory”…we’ll find out soon enough if that’s true…many market participants believe the Fed is still on a tightening course beginning later this year, though the exact timing remains a question…the “tipping point” for the Fed is likely when (????) inflation finally starts to kick in…

Traders are now focused on the April jobs report Friday, May 8 – a key data point particularly after March’s stunningly low 126,000 non-farm payroll number…

Gold – Key Price Levels

From a near-term technical perspective, Gold’s critical 3 bullish steps as we outlined in yesterday’s chart would be 1) a move through a resistance band between $1,200 and $1,210; 2) overcoming Fib. resistance at $1,217; and 3) a breakout above the mid-$1,220’s, the March and April highs…if that is achieved, the path would be clear for a potentially strong advance, perhaps another challenge of the top of the downsloping flag (just below $1,300) that has been the dominant technical feature for more than 2 years…

Strong support for Gold exists at $1,180, $1,150 and at the bottom of the downsloping flag around $1,100…

Chinese Chasing Equities, Not Gold

Chinese investors, while still showing an appetite for Gold, are chasing returns in high-flying equity markets at the moment, a factor that is diverting at least some of their attention from the yellow metal according to analysts from UBS…

“Over the past 6 months, China’s Gold imports from Hong Kong and Switzerland have averaged around 100 tonnes. While this stability is in a sense reassuring, we do not think the volumes are large enough for the market to get excited.  Hong Kong’s Hang Seng Index has reached record highs and the Shanghai Composite Index is around the highest levels since 2007. Equities appear to be diverting investors’ attention away from Gold, and we think this has been augmented by the latter’s lacklustre performance and the overall absence of a clear price trend in the past couple of years,” UBS stated in a published report.

U.S. Dollar Index Updated Chart

Despite this morning’s rebound from a low just above 94 (a minimum target level in yesterday’s short-term chart given the right shoulder breakdown below the neckline of an H&S formation), the Dollar Index remains vulnerable to further consolidation given the unprecedented overbought conditions (RSI-14, SS, +DI) that exist on this 20-year monthly chart…

The mid-March high of 100.71 was clearly an important top for at least the short or medium term…a cluster of Fib. support ranges from 88 to 92 with the rising 200-day moving average (SMA) currently at 90…it’s also reasonable to expect the RSI(14) to retrace to the top of the downtrend line it broke above last year…

A period of technical weakness for the dollar is very supportive for the Venture given the exceptionally strong inverse relationship between the two…the trend in the greenback is a more important indicator for the Venture than Gold…

Today’s Equity Markets

Asia

Asian markets took a hit overnight, thanks to a mixed bag of corporate earnings and concerns over U.S. growth…Japan’s Nikkei average tumbled more than 500 points (2.7%) to close at 19520 while China’s Shanghai Composite slipped 34 points to 4442…

The Bank of Japan was forced to lower its price projections and push back the date for achieving its long-term inflation goal today, dealing the central bank a new setback in its fight to eradicate the deflationary pressures weighing on the world’s 3rd largest economy…the BOJ said in its semi-annual outlook for growth and prices that its 2% inflation target will likely be achieved in a period “around the first half of fiscal 2016″ – about 6 months later than its previous forecast for hitting the target, and the bank also shaved 0.2% from its inflation projections for both the current and next fiscal year…

Europe

European markets finished slightly higher today…euro zone consumer prices stopped falling in April, further easing fears that a slide into deflation could derail the currency area’s fragile economic recovery…

North America

The Dow is off 79 points as of 9:15 am Pacific…U.S. consumer spending rose moderately in March, rebounding after a sluggish winter but suggesting Americans remain somewhat cautious despite months of cheaper gasoline and rising confidence…

In Toronto, the TSX has declined 53 points as of 9:15 am Pacific while the Venture has slipped 2 points to 695…

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

Further to John’s chart Monday, an important technical breakout has been confirmed in Doubleview Capital (DBV, TSX-V) above a downsloping flag in place since last year…what’s even more significant about this breakout is that the top of the flag coincides with Fib. resistance at 15 cents and the 200-day SMA which is now beginning to reverse higher (always a positive sign)…

This change in technical posture is not surprising as it matches with some critical advances on the ground at DBV’s Hat Project in the Sheslay district, findings that suggest grades are going to continue to improve and that the Lisle Zone is merely the southeastern edge of a much larger Gold-rich Copper porphyry system that was originally believed…

More assay results from HAT-23 are imminent along with a fresh round of drilling that has an excellent chance of extending the Lisle Zone well to the north and northwest…

DBV is unchanged at 17 cents as of 9:15 am Pacific…

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

Kootenay Silver (KTN, TSX-V) released more solid results this morning from its Phase 2 drill program at its Promontorio La Negra Silver discovery in Sonora State including 68 g/t Ag over 146 meters from surface in LN-32-15…La Negra is showing great potential as an open-pit deposit approximately 6.5 km north of the company’s flagship Promontorio Silver resource…

Technically, the breakout recently above the ascending triangle was very significant as John pointed out, with strong support at 50 cents…KTN could continue to gain momentum and challenge higher Fib. resistance levels…

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

Investors responded well to yesterday’s news of a revised and improved Preliminary Economic Assessment for GoldQuest Mining’s (GQC, TSX-V) Romero Gold-Copper Project in the Dominican Republic…

GoldQuest has a history of powerful moves over short periods, typically from a spectacular drill hole in the DR…the company, of course, has a large and highly prospective land package that makes additional discoveries beyond Romero quite possible…

Technically, keep an eye on the downtrend line from the 2012 high of $2.03…that’s where GQC found resistance yesterday…strong new support at this morning’s low of 14 cents…

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

Surprisingly, Cannabix Technologies (BLO, CSE) broke down from its pennant formation in recent days and technical-related selling has taken BLO down to Fib. support at 30 cents…keep in mind, this can be a volatile play but the primary trend is still bullish and company is progressing exceptionally with its business model…

RSI(2) finished at an extreme oversold level yesterday of less than 1% (0.22%)…that’s certainly not a time to be pushing the panic button – quite the opposite, in fact…

The pennant has evolved into a downsloping flag which we’ll be watching closely in the days ahead…strong support is at the bottom of that flag, around 30 cents which coincides with last year’s resistance and the Fib. retracement level mentioned above…

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

Gold has traded between $1,204 and $1,214 so far today…as of 9:00 am Pacific, bullion is off $1 an ounce at $1,211…Silver is up 4 cents at $16.64…Copper has added 2 pennies to $2.78…Crude Oil has surged more than $1.50 a barrel to $58.70 after weekly data from the EIA showed U.S. Crude stocks rose less than expected last week as inventories at the Oil hub at Cushing declined for the first time since November…meanwhile, the U.S. Dollar Index has tumbled more than a full point to 94.82 (see updated chart below)…

Investors will be closely scrutinizing the Fed’s monetary policy statement later today for clues on how the central bank views the U.S. economic recovery, after a spate of unfavorable data in recent weeks including this morning’s initial report on Q1 GDP…most market participants expect the Fed to keep rates low into the summer, as it waits for the economy to bounce back from its recent soft patch…it’ll be interesting to see if the Fed attributes the weakness in the economy as backward looking, in which case the central bank could come across as a little more hawkish than generally expected…a detailed review earlier this month by CNBC of 30 years of government’s GDP data suggests a longstanding trend of lackluster 1st quarter growth…

In a note to investors, analysts at TD Securities stated, “On balance, we’d expect that Gold and the precious metals should receive some lift this week based on…more dovish (economic) expectations.”

U.S. Q1 GDP At A Snail’s Pace

The U.S. economy slowed sharply at the start of the year as businesses slashed investment, exports tumbled and consumers showed signs of caution, marking a return to the uneven growth that has been a hallmark of the nearly 6-year economic expansion…gross domestic product, the broadest measure of goods and services produced across the economy, expanded at a meager 0.2% seasonally adjusted annual rate in Q1, the Commerce Department reported this morning (well below expectations of a 1% increase)…this Q1 disappointment is a repeat of a common pattern in recent years:  1 or 2 strong readings followed by a big slowdown…the economy advanced at a 5% clip in the 3rd quarter last year and a 2.2% pace in the 4th quarter…

U.S. Dollar Index Updated Chart

The correction in the U.S. Dollar Index has deepened, as expected, with the uptrend line from last summer now being tested (note how the right shoulder of the H&S has fallen below the neckline in John’s 9-month daily chart)…today’s close will be important…a cluster of Fib. support exists between 92 and 95…

Continued weakness/consolidation in the Dollar Index would likely allow the Venture to finally push above critical resistance at 707 given the strong inverse relationship between the two…

$6 Million Trade Says Gold Breaks To Upside

An interesting trade today in options on the SPDR ETF (GLD) tracking Gold, a bet that bullion may suddenly spike to the upside…specifically, as reported by CNBC, a trader purchased 50,000 contracts (an amount that would normally trade in GLD call contracts in an entire day) of the 120-strike calls expiring in June for $1.18 each…as each contract controls 100 shares, the trader is wagering $5.9 million that the GLD will close above $121.18, or at least 4% higher from yesterday’s close by mid-June…John has a bullish-looking Gold chart this morning, but that wasn’t his $5.9 million wager (he hasn’t unloaded his Apple shares yet)…

El Salvador Dumps Its Gold

Analysts are not sure what to make of El Salvador’s recent move that saw its central bank sell about 80% of its Gold reserves in March, according to figures published by the International Monetary Fund (IMF)…the small Central American nation’s reserve bank sold 5.4 tonnes of Gold for $206 million, depleting its Gold reserves from its previous holdings of 6.8 tonnes, IMF data shows…an official from the bank told Reuters that the sale aimed to help diversify its risk and take advantage of appreciating Gold prices, which seems rather odd as the country’s official currency is the U.S. dollar and Gold is less than $100 U.S. off its November multi-year low…the impoverished nation made headlines recently with the fact that it could be forced to pay OceanaGold (OGC, TSX) $300 million in damages over the rejection of a mining lease application in 2013…the government of El Salvador, the most water-stressed nation in Central America, stopped granting mining licenses back in 2008 in an attempt to preserve its limited clean water supplies and safeguard the environment…

Gold Chart Update

El Salvador’s central bank would have been wise to be a little more patient in selling its Gold…this 6-month daily chart has a bullish near-term bias to it which could get confirmation later today following the Fed statement…

Three key levels Gold must overcome to put the bears on the defensive:

1.  A band of resistance between $1,200 and $1,210

2.  Fib. resistance at $1,217 (yesterday’s intraday high)

3.  Resistance in the mid-$1,220’s (the March and April highs)

These final 2 trading days of April should prove exceedingly interesting for bullion…

TSX Gold Index Update

After several attempts since mid-March, the TSX Gold Index is finally through resistance in the mid-160’s which includes its 50-day moving average (SMA)…the bullish “W” formation in the RSI(14) and the position of the SS indicator both support a continued move higher toward the next Fib. resistance which is 175…

The Gold Index is up 2 points at 170 as of 9:00 am Pacific…

Richmont Mines Inc. (RIC, TSX) Update 

Whether or not Gold producers are going to take off to the upside, one of the very best plays in this space – it continues to outperform its peers – is Richmont Mines (RIC, TSX)…the company enjoyed slightly better than expected 1st-quarter 2015 Gold production of nearly 26,000 ounces, a 23% year-over-year increase, and Gold sales of 24,791 ounces, a 21% increase over the prior year as reported April…RIC continues to benefit from a low Canadian dollar as its Q1 quarter average realized Gold price was $1,496 CDN per ounce, up 4% over the same period in 2014…

Accelerated development at the producing Island Gold Mine, where Richmont has outlined a substantial high-grade resource below existing workings, is progressing according to plan…

Richmont’s Quebec operations had an excellent 3 months, with Beaufor and Monique delivering significant Gold production increases over last year…

Thanks to a strong 1st quarter and the closing of a $38 million bought deal financing at $4 per share, Richmont’s cash position as of the end of March was approximately $71 million…

Technically, overbought RSI(14) conditions that emerged in RIC last year have unwound, with the stock now threatening to break out of a bullish downsloping flag…superb support held at $3.50 during Gold’s drop to the low $1,140’s last month…

RIC is certainly one to tuck away for the long haul…it’s up 6 cents at $4.05 as of 9:00 am Pacific…

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

Goldquest Mining (GQC, TSX-V) this morning released an updated Preliminary Economic Assessment for its Romero Project in the Dominican Republic, showing much improved economics including a pre-tax IRR of 46% (vs. 19.7% originally) and an after-tax IRR of 34% (vs. 15.1%)…payback of capital would be within 2.7 production years…the pre-production capital expenditure estimate has been reduced to $143 million, plus $92 million of sustaining and closure capital over LOM totaling $235 million (vs. $374 million earlier)…Romero would be a 9-year underground mine with an average production rate of 912,500 tonnes per year (2,500 tonnes per day), equating to 117,000 recovered AuEq oz per year…

GQC climbed as high as 20 cents in early trading but has since backed off to 18 cents on volume of more than 3 million shares (all exchanges) as of 9:00 am Pacific…

Today’s Equity Markets

Asia

China’s Shanghai Composite was unchanged overnight, closing at 4477…

Europe

European markets were down sharply today as the euro surged against the dollar…

North America

The Dow is off 68 points through the first 2-and-a-half hours of trading…in Toronto, the TSX has lost 42 points while the Venture is up 2 points at 698…

Venture Updated Chart

A healthy minor pullback to just below the rising 20-day SMA has unwound temporarily overbought RSI(14) conditions, with this indicator finding support around the 50% level and rising again…

Depending on today’s Fed announcement, the Venture’s current technical posture is now more supportive for a successful push through 707…

North Arrow Minerals (NAR, TSX-V) Update

The “trend is your friend”, as the saying goes, and the overall uptrend in North Arrow Minerals (NAR, TSX-V) shows no signs of abating, with plenty of room for speculation in the weeks ahead after the company’s news April 21 that its Q1–4 kimberlite contains “unaggregated nitrogen“, a defining characteristic of very rare, natural Type Ib diamonds…a critical moment will come later this spring or early summer when a formal valuation of the Q-1–4 diamond parcel is expected…

According to this 8-year monthly chart, a confirmed breakout in NAR has occurred above Fib. resistance at $1.18 which should now act as new support…

NAR is up a nickel at $1.28 as of 9:00 am Pacific…

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

Gold has traded between $1,199 and $1,216 so far today after yesterday’s strong rebound, bullion’s best single-day performance in 3 months…as of 9:00 am Pacific, as the Fed begins its 2-day policy meeting, the yellow metal is up another $11 an ounce at $1,213 on a host of factors…Silver has jumped 18 cents at $16.58 (updated charts this morning)…Copper has gained another 2 pennies to $2.76…Crude Oil is off slightly at $56.95 while the U.S. Dollar Index has fallen three-quarters of a point to 96.07, edging closer to strong support at 96…

Last week’s price action in Gold, and yesterday’s recovery, makes a little more sense given Venezuela’s $1 billion Gold swap with Citibank that was completed Friday…it seems forces were trying to keep Gold prices low while the two sides successfully negotiated the swap…the Venezuelan central bank is believed to have provided 1.4 million ounces of Gold in exchange for the cash (they have rights of first refusal to buy the Gold back), with interest on the funds rumored to be 6% to 7%…the deal removed an overhang from the Gold market which was also supported yesterday by some short-covering and the expiration of May options…

Gold is battling a resistance band between $1,200 and $1,210…the mid-$1,220’s (March-April highs) is another key hurdle bullion needs to overcome in order to put the bears on the defensive…

China Gold Production Up Nearly 15% In Q1

China’s Gold consumption was steady in the first 3 months this year, rising 1.1% to 326.68 metric tons compared to the same period in 2014 (this excludes banking activity) as relatively low bullion prices continue to attract Asian interest, especially in Gold jewelry…the country is likely to maintain this trend in demand growth for the rest of the year, according to China Gold Association (CGA) President Song Zin who spoke at an industry conference today..

The data show China’s demand for Gold is about 3 times the size of its domestic Gold production as the country continues to be the world’s biggest importer of the metal…China’s Gold production in Q1 this year also rose, by 14.7% to 110.7 tons, according to the CGA…overall, global demand and supply of the precious metal are likely to remain balanced, with consumption potentially showing slightly faster growth, most analysts say…

Although the macroeconomic environment is bullish for Gold, Barclays analysts say physical demand remains the key ingredient to support the market. “India’s festival-related buying was below expectations, and demand across Asia is broadly offering prices a soft floor,” they stated.

Gold Chart Update

This morning’s weaker-than-expected U.S. consumer confidence numbers were Gold-bullish, but tomorrow’s Fed policy statement as well as the initial reading on U.S. Q1 GDP will be critical in determining how Gold finishes the month…quite simply, the metal needs to start gaining traction above $1,200 – as it seems to be doing now – to build much-needed momentum…the bullish engulfing pattern in John’s 6-month daily chart this morning is a positive sign, along with the “W” formation (if it holds) in the RSI(14)…the nearest Fib. resistance is $1,217 which Gold came within 60 cents of this morning before backing off slightly…

Rising Middle East tensions could be in Gold’s favor as well…according to Saudi news network Al Arabiya, a U.S. vessel has been fired on today and steered to the Bandar Abbas port by Iran…Iran’s Fars News Agency also reported that an “American trade vessel” had been confiscated…however, senior U.S. Navy officials told NBC News these reports are false…the media will be following this story closely as the day progresses…

Today’s Equity Markets

Asia

China’s red-hot Shanghai Composite cooled off slightly overnight, falling 51 points to finish at 4476…Japan’s Nikkei average, meanwhile, climbed back above the 20000 level…

There’s no end to the innovation of central banks, and one has to wonder how this will all play out at some point down the road…The Wall Street Journal reported this morning (citing unnamed officials with “knowledge of the matter”) that China’s central bank is planning to launch its own version of innovative credit-easing programs adopted by its counterparts in developed countries…this flagship plan is aimed at overcoming the snags of restructuring trillions of dollars of local government debts, a potential major problem for the Chinese economy…

Under the plan, which could be put in place in the next couple of months, the People’s Bank of China will allow Chinese banks to swap local government bailout bonds for loans as a way to bolster liquidity and boost lending, the officials said…the strategy – dubbed Pledged Supplementary Lending – is similar to the long-term refinancing operations, or LTROs, used by the European Central Bank…

Europe

European markets were significantly lower today on profit-taking and mixed earnings reports…in addition, U.K. GDP came in below expectations this morning…the number hit 0.3% for the last period, below forecasts of 0.5%, and showed Britain’s economic growth slowed in the first 3 months of this year…

North America

The Dow is up 51 points as of 9:00 am Pacific…U.S. consumer confidence fell in April, giving back some of the strong gains seen in the previous month, according to the latest data from the U.S. Conference Board…the board said its monthly Consumer Confidence Index fell to 95.2 from March’s reading of 101.4…according to consensus forecasts, economists were expecting to see an increase to a reading of 102.6…

In Toronto, the TSX is off 33 points while the Venture has added 2 points to 692…

TSX Gold Index Update

The TSX Gold Index is at a critical level, and the odds seem to favor a breakout above Fib. resistance at 166 which coincides with a still-declining 50-day moving average but a rising 100-day SMA…the SS indicator shows up momentum is increasing – Gold could finally be ready to put on a show as April draws to a close…

The Gold Index is up 4 points at 168 as of 9:00 am Pacific…

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

An important technical breakout is unfolding in Doubleview Capital Corp. (DBV, TSX-V) which has finally pushed above a downsloping flag in place since last year…that breakout point also coincides with critical Fib. resistance at 15 cents…there is some potential explosiveness to this chart given the reversals to the upside now underway in both the 100 and 200-day SMA’s…

After 23 holes and a new round of drilling imminent, DBV’s Hat Project is now at a level of understanding that should allow for its rapid acceleration over the coming weeks and months…combined with the strong potential for a drilling discovery on adjoining ground held by Garibaldi Resources (GGI, TSX-V), the Sheslay district has its best opportunity yet to shine as one of Canada’s most promising exploration plays…

Silver Short-Term Chart

Silver found strong support last week in the mid-$15.50’s, as expected, and RSI(14) has broken above a downtrend line in place since the beginning of the month – this bodes well for a strong finish to April…

Silver got a boost around the middle of last month when it broke above a short-term downsloping flag that developed in February…the metal found support at the bottom of that flag which was critical, setting the stage for a move higher…temporarily overbought RSI(14) conditions then unwound…

The late March high of $17.41 is just below the next Fib. measured resistance at $17.86…

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

Gold is showing renewed vigor this morning, climbing as high as $1,205…as of 8:30 am Pacific, bullion is up $22 an ounce at $1,202…the $1,200 level is new resistance – we’ll see if it can decisively overcome that level this week…Silver, after falling 4 straight weeks, has surged 66 cents to $16.41…Copper is up 3 pennies at $2.76…Crude Oil has retreated 13 cents to $57.02 while the U.S. Dollar Index, continuing to show technical weakness, is off one-fifth of a point at 96.71…

The Fed will kick off a 2-day policy meeting tomorrow, with investors watching for comments Wednesday on the strength of the economy and the timing of potential monetary tightening…a dovish Fed Statement would likely give Gold a chance to gain traction above $1,200 as the month draws to a close…on the other hand, optimistic signals from the Fed would support the greenback and possibly put fresh downward pressure on the metal…

Nickel is rallying the most among the 6 main metals today, reaching a 1-month high above $6 a pound as workers staged a strike at a BHP Billiton Ltd. mine in Colombia…

Oil Update

How sustainable the rally in Oil prices will be in light of continued oversupply concerns remains to be seen…along with Saudi Arabia and others, Russia is now believed to be increasing production as well…meanwhile, Norway is also pushing to approve a $15 billion project in the North Sea that could be profitable even with Oil at $32 a barrel…while U.S. production has started to ease, it still remains high and companies are finding new ways to cut costs…

It’s worth noting that exchange-traded funds that invest in U.S. Oil futures, including the $3.1 billion United States Oil Fund LP, have registered about $2.7 billion of investor outflows this month, according to investment bank Macquarie…that reverses an inflow that started in January as Oil prices tumbled…these ETF’s took in roughly $6 billion this year through mid-March when WTIC hit a 6-year low, according to Macquarie…traders and analysts are closely watching weekly production and demand data for signs that the global glut of Crude Oil may start to shrink…they’re also watching the ETF trends closely as Crude prices are certainly vulnerable to a pullback following a more than 30% run-up since March 17…

Today’s Equity Markets

Asia

Retail money is obviously moving massively back into stocks in China as investors seem to have nowhere to go with yields going down from deposits to wealth management products, while the property market is not rebounding…the Shanghai Composite soared another 3% overnight, climbing 134 points to close at a new 7-year high of 4528…

Japan’s Nikkei closed down 37 points at 19983…

Europe

European markets were strong today to begin the new trading week…

North America

The Dow has added 55 points as of 8:30 am Pacific…the Nasdaq is up for the 6th straight day to a fresh all-time high,  while the S&P 500 has also hit another record high this morning…

In addition to Wednesday afternoon’s Fed policy announcement, there are some important economic reports this week such as 1st quarter GDP Wednesday morning followed by Thursday’s personal consumption expenditures data that includes an inflation measure…there are also dozens of earnings starting with Apple later today and some of the biggest names in the Oil patch later in the week including IBP, ExxonMobil and Chevron…

An interesting statistic…if it were a country, the Great Lakes-St. Lawrence region of North America would be ranked as the 3rd-largest economy in the world according to a study released today by BMO Capital Markets…as it is, this one area sitting in the northeastern portions of Canada and the United States accounts for 30% of the combined economies of both countries, and 31% of all employment, equivalent to 51 million jobs…the impact of that massive footprint is set to get even bigger, as manufacturers and exporters in Ontario and Quebec take advantage of a weak Canadian currency and stronger U.S. demand…

In Toronto, the TSX is down 16 points as of 8:30 am Pacific with the Gold Index rallying but up against resistance again at 166…the Venture is off slightly at 696…trading in GoldQuest Mining (GQC, TSX-V) has been interesting since Friday with the stock doubling in price on no news and strong volume…more results are pending from the company’s 5,000 m drill program at its 100%-owned, 50 km long Tireo Project in the DR which includes the Romero Gold-Copper deposits…GQC climbed as high as 17 cents this morning and is up 2.5 cents at 15.5 cents as of 8:30 am Pacific…

Venture 3-Year Weekly Chart Update

The Venture’s RSI(14) on this 3-year weekly chart, after reaching into deeply oversold conditions at the end of last year, continues to follow a very gradual uptrend in a fashion similar to the recovery that began in the spring of 2013…the downside risk in this market over the coming months has therefore greatly diminished, which is important, while it’s likely just a matter of time before resistance is overcome at 707…the next wall after that will be around 750…

A cluster of Fib. support between 654 and 680, shown in yesterday’s short-term chart, has held since the beginning of the year, and so has the 680 level on a monthly close basis since the mid-December post-Crash low of 637…

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

Cannabix Technologies (BLO, CSE) announced a high-profile addition this morning to its team of advisers as the company continues to develop relationships with law enforcement agencies, employers and other industry stakeholders…Rocco Iannapollo will advise Cannabix on global substance abuse programs in a range of industries…he’s a member of the Substance Abuse Program Administrators Association, the Drug and Alcohol Testing Industry Association, as well as a speaker and regular contributor to the International Forum for Drug and Alcohol Testing…Iannapollo also has more than 20 years’ experience working for Fortune 50 companies in the Oil and gas industry…

Ascot Resources Ltd. (AOT, TSX-V) Update

With the Sheslay district as well as other exploration hotspots, northwest British Columbia will be a strong focus of investor attention over the next several months…all the more reason to pay attention now to Ascot Resources (AOT, TSX-V) before it may explode to the upside again like it did last August…

A week ago, Ascot announced the start of its 2015 drill program at its high-grade Premier Property near Stewart…this property covers more than 100 sq. km and includes the old Premier mine, a past producer of 2.1 million ounces of Gold and 45 million ounces of Silver…

This year’s drilling will be concentrated in the Premier main zone and Premier west zone areas, following up on the  successful 2014 drilling campaign that returned many multi-ounce Gold intercepts, the most spectacular of which was 14,394.5 g/t Au over 0.75 of a meter…

Technically, Ascot has been trading in a bullish downsloping flag since late last year with strong support so far in 2015 around $1.40 which also represents the rising 300-day SMA (not shown on this 2+ year weekly chart)…a breakout above both the flag and Fib. resistance at $1.79 would be very significant…

AOT is up 3 pennies at $1.52 as of 8:30 am Pacific…

Tinka Resources (TK, TSX-V) Update

Tinka Resources (TK, TSX-V) has continued to edge higher since our last update nearly 2 weeks ago…Zinc is one of the most promising metals for 2015 given bullish supply-demand dynamics, which is just one reason we like this particular play for the potential of a strong speculative rebound as the year progresses…on April 13, the company announced that it has arranged a financing up to $7 million at 21.5 cents per unit…

International Finance Corp. (IFC), a member of the World Bank Group, is expected to subscribe for nearly two-thirds of that private placement…upon closing, IFC will become an insider of the company holding approximately 14.1% of Tinka on an undiluted basis…

As you can see on this 1.5-year weekly chart, TK broke out above a downtrend line late last year…support is very strong at 18 cents with Fib. resistance at 26 cents…

TK is unchanged at 25 cents as of 8:30 am Pacific…

Fission 3.0 Corp. (FUU, TSX-V) Update 

Fission 3.0 (FUU, TSX-V) is armed with $5 million in cash and a strategic portfolio of uranium properties in the Athabasca Basin upon which to build shareholder value in the coming months…

What we also really like at the moment with regard to Fission 3.0 is the bullish technical posture of the stock which includes increasing buy pressure (CMF), an RSI(14) “W” formation, and a breakout in February above a downtrend line that was later successfully tested as new support…excellent potential here over the next few months…

FUU is unchanged at 11.5 cents as of 8:30 am Pacific…

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

A major exploration breakthrough is unfolding in the Sheslay region of northwest British Columbia as evidenced by recent news out of Doubleview Capital (DBV, TSX-V) and an established pattern of higher grades and increasingly attractive overall results with each round of drilling (nearly 2 dozen holes to date).

In the latest video excerpt of our discussion with DBV chief geoscientist Dr. Abdul Razique (see below), we explore a certain characteristic of the Hat Gold-Copper porphyry system that illustrates just how massive it could be.

As Doubleview prepares for an imminent start to its 2015 drill program, final results from hole 23 – also expected very soon – could draw a lot of new eyes to an emerging district that clearly has the potential to give the entire junior exploration sector a much-needed lift.  Hot on the heels of DBV’s growing success at the Hat, Garibaldi Resources (GGI, TSX-V) is gearing up for fully-funded first-ever drilling at its huge Grizzly Project (270 sq. km) which displays similar geophysical, geochemical and geological features as those outlined at the adjoining Hat and Star properties.

Click on the arrow for the third part of our interview with Dr. Razique (in an upcoming segment, he’ll explain the “pinching” and “swelling” phenomena in the context of a structurally controlled mineralized system).

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

TSX Venture Exchange and Gold

The Venture challenged resistance last week but once again reacted at 707, finishing down 5 points for the week at 698.  Resistance is strong but so too is support, and the longer-term chart that we’ll post tomorrow clearly gives more weight to the possibility of a breakout as opposed to a collapse below the levels that have been tested since the beginning of the year.

As we mentioned a week ago, while an eventual breakout above 707 seems inevitable, exact timing is impossible to predict.  One scenario is an immediate catalyst that brings a surge of buy pressure into the market, giving it the necessary volume and momentum to conquer the 707 wall and take a run at the next resistance which is 750.  Another possibility is a modest retreat, perhaps to the 680 area that has held on a monthly closing basis December through March, followed by a fresh wave higher.  In the Venture’s favor at the moment is that the U.S. dollar is in the midst of a cooling off period – its surge from last summer to the middle of March took its toll on commodities and the Venture.

Venture 5-Month Daily Chart

Keep in mind that last week’s minor retreat came after 5 straight weekly advances by the Venture, and a climb of nearly 7% over just 22 trading sessions.  So after a modest pullback, which is healthy, the Index should be well-positioned to muster the strength to overcome the resistance it has been grappling with.  The rising 20-day moving average (SMA) is 693 while the nearest Fib. support is 680.

U.S. Dollar Index Update 

The greenback is clearly in a consolidation phase, catching its breath after a long, hard run, and that’s good news for the Venture given the strong inverse relationship between the two.  Temporarily at least, the Dollar Index has formed a top at the 100 level (also Fib. resistance on this 9-month daily chart) and RSI(14) has also fallen below 50% which underscores the current technical weakness.  The Dollar Index is overdue to test its uptrend support (dotted line), and a deeper correction this quarter to somewhat lower levels is certainly a strong possibility.

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 ended at its lowest level Friday since mid-March, falling $24 for the week to $1,180 as it wasn’t able to gain traction above $1,200.  This will be an important week for Gold given the Fed meeting Tuesday-Wednesday as well as initial Q1 GDP numbers Wednesday, just ahead of the release of the Fed statement.  And of course we’re coming into month-end – how bullion settles Friday will likely set the tone for how May will start.

Going back to 1996, Gold has finished higher for the month of April nearly 60% of the time – only September (68%) has been better in that respect.  So history is on bullion’s side going into the final 5 trading days of the month.  Gold is currently down $3 an ounce this April.

Below is an update of one of our favorite Gold charts as it gives the “Big Picture” of how this market has meandered within a downsloping flag for the past two-and-a-half years.  Quite simply, resistance is at the top of the flag and support is at the bottom, while RSI(14) – currently at 42% – has moved within a 30% to 60% channel.  At some point, Gold will either break out above the flag or crash below it.  At the moment it’s trading in the lower half of its range but near very strong support at $1,150.

Silver fell for the 4th straight week, losing 48 cents to finish at $15.75 (updated Silver charts in Monday’s Morning Musings as usual).  Copper was flat at $2.73.  Crude Oil enjoyed another good week, climbing $1.28 a barrel to $57.42 while the U.S. Dollar Index lost more than half a point to 96.86.