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Gold has traded between $1,175 and $1,197 so far today, hitting a 6-week low on technical selling…Gold stocks, however, are holding up quite well which is a positive sign…as of 9:15 am Pacific, bullion is off $16 an ounce at $1,177…Silver has retreated 15 cents at $15.70…Copper had added 4 pennies to $2.74…Crude Oil is off 71 cents at $57.03 while the U.S. Dollar Index has fallen half a point to 96.90…

Physical Gold demand saw considerable pick up in March, according to commodity analysts at UBS, quoting trade statistics from Switzerland…this likely helps explains the turnaround in Gold that started around the middle of last month…according to the Swiss data, 223.3 tonnes of Gold was exported out of the country, the highest since November…

“This was largely driven by strong growth in flows headed for China and India, which looks broadly consistent with anecdotal evidence,” UBS stated…they added that China imported 46.4 tonnes of Gold from Switzerland while India imported 72.5 tonnes…Chinese demand was stronger in March as business restocked their supplies after the Lunar New Year celebrations, UBS contends, while Indian demand was aided by the Akshaya Tritiya festival…

China’s Gold Reserves:  When Will The Cloak Of Secrecy Be Lifted?

There’s growing speculation that at some point this year, perhaps even as early as next month, China will update its Gold reserves…according to data from the IMF, China’s official Gold reserves have not changed since 2009 when they were reported to be 1,054 tonnes…next month, China will be meeting with the International Monetary Fund (IMF) to make a case for including the yuan in the IMF’s Special Drawing Rights (SDR), a basket of currencies made of U.S. dollars, Japanese yen, pound sterling and euros…it’s quite possible, some analysts are speculating, that the cloak of secrecy over China’s Gold reserves may be lifted if the country wants to bolster its case for being included in the SDR…

Sprott Makes Hostile Bid For Two Competing Funds

Sprott Asset Management has announced an $898 million hostile bid for 2 competing funds backed by Gold and Silver…in a news release yesterday, Sprott announced its intention to acquire the Central Gold Trust (GTU) and Silver Bullion Trust (SBT), two funds similar to its own physical Gold and Silver funds…the offer would entail GTU and SBT unitholders to trade their units for units into Sprott’s funds…

“Through our Physical Trusts, Sprott is committed to providing unitholders with access to a secure, convenient and exchange-traded way to hold physical Gold and Silver. We have the proven track record and the best-in-class platform needed to address the persistent trading discounts experienced by GTU and SBT unitholders,” said John Wilson, CEO of Sprott Asset Management LP. “Sprott is offering GTU and SBT unitholders an opportunity to move into investment vehicles that have consistently outperformed GTU and SBT, while also benefiting from increased liquidity, physical redemption features and significantly larger asset bases.”

Today’s Equity Markets

Asia

China’s Shanghai Composite cooled off slightly overnight, falling 20 points to close at 4394…the “greed” phase is definitely gaining momentum in China…margin lending has more than tripled in the past year to a record 1.7 trillion yuan ($274.6 billion U.S.), according to WIND Information Co., a provider of financial data…the upsurge echoes past investment crazes among Chinese speculators, who have long shown a penchant for rushing into whatever is yielding the highest returns, from real-estate and wealth-management products, to bitcoin and online money-market funds…

Japan’s Nikkei average closed the week just above 20000…

Europe

European markets were modestly higher today…

North America

The Dow is up 26 points as of 9:15 am Pacific…this morning’s U.S. durable goods report beat on the headline number but showed a disappointing decline in the core figure…stripping out the volatile transportation sector, demand for manufactured goods fell 0.2% to $159.9 billion last month, following February’s revised decrease of 1.1%…ahead of the report, consensus forecasts were calling for a 0.2% rise…

Nasdaq Updated Chart

It took just over 15 years but the Nasdaq finally eclipsed its 2000 high yesterday as it closed at 5056…in the past 6 years, the Nasdaq has nearly quadrupled – a rapid rise, for sure, but the index covered the same ground in less than half the time from 1997 through early 2000…and it looks far less speculative than it did in 2000 as many of its most prominent companies have matured into global behemoths grounded in real products, sales and profits…

The new all-time high for the Nasdaq is no big surprise – John’s 1-year weekly chart has shown a consistent bullish bias with important Fib. resistance just above 5100 at 5134…ultimately, the index could propel significantly higher (we’ll look at those possibilities next week) but for now let’s see how it handles this next Fib. level…

In Toronto, the TSX is up 16 points while the Venture is off a point at 698 as of 9:15 am Pacific…Mega Precious  (MGP, TSX-V), which has been developing the Monument Bay Gold-Tungsten Project in Manitoba, has doubled this morning on a friendly takeover by Yamana Gold (YRI, TSX)…

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

Interest in NexGen Energy (NXE, TSX-V) continues to build after the release of more high-grade results yesterday from the company’s promising Rook 1 Project in the Athabasca Basin…

Below is an updated 2-year weekly chart from John…what’s significant here is the breakout above the ascending triangle, and how the RSI(14) has also pushed above its downtrend line in place since last year…in a market with a narrow focus on important new discoveries, momentum is definitely in NXE’s favor…

NXE is up 2 pennies at 63 cents on total volume (all exchanges) of more than 11 million shares as of 9:15 am Pacific…

North Arrow Minerals Inc. (NAR, TSX-V) Update

North Arrow Minerals (NAR, TSX-V) has backed off modestly from this week’s multi-year high of $1.34 which came on news that the yellow diamonds in the company’s Q1–4 kimberlite in Nanavut contain “unaggregated nitrogen”, a defining characteristic of exceptionally rare, natural Type 1b diamonds with fancy canary yellow colors…with such a proven management team, we’ve maintained all along that North Arrow could emerge as a huge winner in 2015, no matter how the markets behave…a critical moment will come later this spring or early summer when a formal valuation of the Q-1–4 diamond parcel is expected…in the lead-up to that, speculation could certainly intensify…

An unconfirmed breakout occurred yesterday above Fib. resistance at $1.18 – that’s an important level to watch today as shown in this 8-year monthly chart…

NAR is off 3 pennies at $1.20 as of 9:15 am Pacific…

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

Monday, we’ll have Part 3 of our segment with Doubleview Capital (DBV, TSX-V) chief geoscientist Dr. Abdul Razique who sees a growing likelihood of discovering a much larger mineralized system at the Hat Project than what has already been outlined in the Lisle Zone, just 1 of 6 key areas that are generally trending NW-SE along a 4-km corridor…

After some intensive study, and with a fresh drill program almost ready to commence to test new theories, Razique believes the Lisle Zone is “just hitting the southeastern edge of a bigger system”.   A couple of key indicators are the alteration footprint throughout the project, he says, and the sulphide distribution evident in drill core.  “We have chalcopyrite in the Lisle Zone, chalcopyrite in Anomaly A, and we got bornite in hole 6 which is in between.  So this sulphide distribution, from pyrite in the margin into chalcopyrite into bornite – that gives you a very good indication, it’s in fact one of the vectors to target the core of mineralization.”

Final assays are pending for hole 23 which has the potential to deliver the longest, highest-grade interval yet reported in the Sheslay district…

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

Copper Fox (CUU, TSX-V) has retraced as expected after nearly doubling last month…it posted a March gain of 86%,  fueled by Teck Resources’ (TCK.B, TSX) announced increase in program expenditures this year ($4.8 million vs. $2.2 million in 2014) at the Schaft Creek Cu-Au-Mo-Ag Project (proven and probable reserves are 940.8 million tonnes grading 0.27% Cu, 0.19 g/t Au, 0.018% Mo and 1.72 g/t Ag), 100 km south of the Sheslay district…

Technically, temporarily overbought conditions have unwound in CUU with the stock pulling back, not surprisingly, to its 200-day moving average (SMA) at 18 cents where it broke out from so dramatically…this should be a favorable accumulation area given the overall chart pattern…

The Schaft Creek JV is focusing on geotechnical/geometallurgical modelling and domain definition, evaluation of key economic drivers, and exploration of the LaCasse Zone – a new zone of Copper and Gold mineralization discovered in field work last year north of the main discovery area…

CMC Metals Ltd. (CMB, TSX-V)

Some of our readers have shown an interest in CMC Metals (CMB, TSX-V) which is finally beginning to gain some traction with the high-grade Radcliff mine in California…we’ll expand on that next week…in the meantime, this 3-year weekly chart does show potential as CMB is now threatening to overcome a downtrend line as well as chart resistance…

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

Gold has traded between $1,184 and $1,194 so far today…as of 9:20 am Pacific, bullion is up $4 an ounce at $1,192…Silver has added 4 pennies to $15.80…Copper is flat at $2.70…Crude Oil has surged nearly $2 a barrel to $57.92 on rising Middle East tensions, while the U.S. Dollar Index has declined two-thirds of a point to 97.37 after some disappointing economic data…

Further to information we posted yesterday, another interesting article from Mineweb’s Lawrence Williams this morning – we suggest readers check it out at www.mineweb.com (“Does Any Nation Hold The Gold It Says It Does?)…

“Bloomberg has recently made quite an impact in other media in suggesting that its analysts reckon Chinese reserves are, in reality, around 2,500 tonnes higher than China says they are,” Williams stated.  “This is not really news in that it is just updated research from calculations from over a year earlier. But it has had a strong impact this time due to speculation that China is indeed about to announce a new higher Gold reserve figure. The suggestion is that the country may need to uproot its official reserve holding as a positive element in trying to get the yuan recognized as being part of the make-up of the IMF’s Special Drawing Right when this comes up for re-assessment this year. This is perceived as an interim measure in getting the yuan ever more acceptable as a fully tradable currency in major global business transactions – a role currently dominated by the U.S. dollar.”

According to reports, Gold sales in India picked up during the Akshaya Tritiya festival after what was believed to have been a relatively slow start…ahead of the festival, jewelry industry experts were looking for Gold sales to increase about 20% compared to 2014.  “Several Indian Gold traders report that Gold demand around the festival, which took place yesterday, was as much as 25% higher than last year,” said commodity analysts from Commerzbank.

Oil Update

Oil remains firm above fresh support at $54 despite continued supply concerns overseas and in North America…yesterday, U.S. government data showed Crude stockpiles rose by 5.3 million barrels last week, well above the consensus estimate of 2.9 million barrels, to a record 489 million barrels…it was the 15th consecutive weekly build for Crude stocks and pushed U.S. commercial inventories almost 100 million barrels above their level a year ago…

U.S. domestic production has stalled for the moment, according to the EIA, but executives at an industry conference in Houston this week said the cost of drilling wells in the U.S. has fallen much faster than expected, allowing producers to work Oilfields that just months ago looked uncompetitive…

Technically, WTIC continues to show strength and appears to be in a new trading range that could extend from $50 to as high as the mid-$60’s or even the 200-day moving average (SMA) around $70 a barrel…rising Middle East tensions are obviously helping the bid side…however, this remains a volatile market with multiple variables and competing agendas among major producers…

Geopolitical Fires Intensify

More concerns on the geopolitical front – The Wall Street Journal reported this morning that China’s top nuclear experts have increased their estimates of North Korea’s nuclear weapons production well beyond most previous U.S. figures, suggesting Pyongyang can make enough warheads to threaten regional security for the U.S. and its allies…the latest Chinese estimates, relayed in a closed-door meeting with U.S. nuclear specialists, showed that North Korea may already have 20 warheads, as well as the capability of producing enough weapons-grade uranium to double its arsenal by next year, according to people briefed on the matter…the Chinese estimates reflect growing concern in Beijing over North Korea’s weapons program and what they see as U.S. inaction while President Obama focuses (strangely) on a nuclear pact with Iran, a potential deal that would effectively reward an untrustworthy regime actively etending its influence in the Middle East and destabilizing the region in the process…

More Evidence of Strong Dollar Impacting U.S. Economy

Procter & Gamble Co. reported this morning that sales fell 7.6% in the March quarter because of the strong greenback, which also pushed down volume…the consumer products giant called the widespread weakening of foreign currencies against the U.S. dollar unprecedented and said it led to declines in all of its main business segments…in the latest quarter, foreign exchange reduced sales by eight percentage points…

Today’s Equity Markets

Asia

Markets in China and Japan pushed higher again today, hitting new multi-year highs…a private survey showed China’s manufacturing activity at a 1-year low as HSBC’s preliminary reading for April below expectations at 49.2…bad economic news is good news for China’s stock market which is on steroids thanks to increasingly aggressive stimulus measures including last weekend’s steepest drop in the RRR ratio for banks since 2008…

The Shanghai has soared about 80% over the past 6 months, even as the country’s economy slowed to a 6-year low of 7% growth in the 1st quarter…according to a commentary published by state media People’s Daily newspaper, China’s bull market “has just begun” and the surge in share prices “has support from China’s grand development strategy and economic reforms.”

Europe

European equities were mixed today after sluggish euro zone and German purchasing manager data…Greece can scrape together enough cash to meet its payment obligations into June, euro zone and Greek officials said yesterday, playing down fears of an imminent default even as hopes receded of a deal with its creditors to release fresh aid…

North America

The Dow is up 54 points as of 9:20 am Pacific amid a deluge of earnings reports including a significant miss by GM…

According to a CNBC report, based on research by STA Wealth Management, reported U.S. earnings per share have grown 204% between 2009 and 2014…meanwhile, revenue, reported in sales per share, has increased only 34% – an interesting and potentially problematic divergence, largely the result of the unprecedented degree of corporate share buybacks…

In Toronto, the TSX has gained 73 points, thanks to strength in Golds and Oil, while the Venture has added 2 points to 700…

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

NexGen Energy (NXE, TSX-V) is strong this morning after announcing robust results from its 2015 winter drill program at its 100%-owned Rook 1 Uranium Property in the Athabasca Basin…angled drill hole AR-15–44b has substantially expanded the high-grade core of the A2 shear, intersecting 190.7 m total composite mineralization including 40.5 m off-scale radioactivity (>10,000 to >61,000 cps) within a 519 m section (430.5 m to 949.5 m)…

The high-grade core of the A2 shear is now defined by an 88 m strike length, 340 m vertical extent, and true widths ranging from approximately 11 m to 48.3 m…meanwhile, the high-grade core of the A3 shear has a current strike length of 73 m, a vertical extent of 420 m, and true widths ranging from approximately 30 m to 78.6 m…

The market likes what’s shaping up here, particularly the high-grade nature of this growing deposit…the Arrow zone  currently covers 515 x 215 m with the vertical extent of mineralization commencing from 100 to 920 m, and it remains open in all directions and at depth…

NXE is up 2 cents at 57 cents as of 9:20 am Pacific…

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

The odds of a major technical breakout in Doubleview Capital (DBV, TSX-V) continue to increase as another round of drilling draws near at the Hat Project, while final numbers from hole 23 have an excellent chance to confirm the longest and highest-grade interval ever drilled in the Sheslay district (based on preliminary results and visuals below 400 m)…

There are several important takeaways with this 3-year weekly chart…what could be unfolding here is a huge sentiment shift based on previous patterns and TA theory…as always, perform your own due diligence…

1.  A breakout is pending above the downsloping flag, the top of which is also Fib. resistance at 15 cents

2.  The 200-day SMA, currently 15 cents, has flattened out and is now poised to reverse to the upside

3.  RSI(14) is showing strong up momentum at 57%

Not shown on this chart are the 50 and 100-day SMA’s which have already reversed higher…

More on the situation at the Hat and the Sheslay district tomorrow…

Equitas Resources Corp. (EQT, TSX-V) Update

Equitas Resources (EQT, TSX-V), a Nickel play we introduced our readers to last week, has broken out above chart resistance at 10 cents where there should now be fresh support as demonstrated yesterday…this is a company that went through a positive restructuring late last year…it’s now preparing for a busy summer of exploration, and speculation should ramp up as a result…insiders control just over 50% of the 35 million shares outstanding…

The company’s key asset is the 25 sq. km Garland Nickel Property, 30 km south of the Voisey’s Bay mine…since the discovery of the Voisey’s Bay deposit in the early 1990’s, small parcels of Garland have been owned by 9 separate companies…this is the first time that this large property has been consolidated under 1 owner…after adding some technical and capital markets expertise, EQT has a decent chance of enjoying some success in the coming months…

EQT is up a penny at 11.5 cents as of 9:20 am Pacific…

VANC Pharmaceuticals Inc. (NPH, TSX-V) Update 

We continue to keep an eye on some select non-resource issues that have speculative potential, particularly those with favorable chart patterns…

VANC Pharmaceuticals (NPH, TSX-V) is strongly supported by a rising 50-day SMA just beneath a Fib. level (46 cents) that has also held recently, and key current resistance is in the mid-50’s…

Significantly, a breakout has occurred this month above a short-term downtrend line…

NPH is up a penny at 55 cents (Fib. resistance) as of 9:20 am Pacific…

Antibe Therapeutics Inc. (ATE, TSX-V)

Antibe Therapeutics (ATE, TSX-V) appears to be back on track after resuming development of its lead drug, ATB-346…

ATE is following an uptrend in place since last month…Fib. 50% resistance on this 6-month daily chart – 22 cents – is a key area to watch…a confirmed breakout above this Fib. level would provide some fresh fuel for a continued advance…the last 4 sessions have formed a bullish candle pattern as noted by John…

ATE is off 1.5 cents at 22.5 cents as of 9:20 am Pacific…

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

Gold has traded between $1,184 and $1,205 so far today…as of 9:00 am Pacific, bullion is down $13 an ounce at $1,189 after stronger than expected U.S. existing home sales…Silver is off 21 cents at $15.78…Copper is flat at $2.69…Crude Oil has retreated 16 cents to $56.45 while the U.S. Dollar Index is up slightly at 98.02…

China’s push to challenge American dominance in global trade involves growing amounts of Gold…according to Bloomberg Intelligence, based on trade data, domestic output and China Gold Association figures, The People’s Bank of China may have tripled its holdings of bullion (to 3,510 metric tonnes) since it last updated them in April 2009 – and that figure is probably on the conservative side…such a stockpile would be second only to the 8,133.5 tonnes held by the United States…

China became the world’s second-largest economy in 2010 and has dramatically stepped up efforts to make the yuan a viable competitor to the dollar…that has led to speculation the government has stockpiled Gold as part of a plan to diversify nearly $4-trillion in foreign-exchange reserves…

“If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies,” TD Securities commodity strategy head Bart Melek says. Gold is “certainly viewed as a viable store of value for an up-and-coming global power.”

TD Securities:  Gold On Its Way $1,300 In Q2

Analysts at TD Securities says that consistently weaker data will force the Federal Reserve to push back the lift-off of potential interest rate hikes until later in the year, a positive for Gold which has been trading in a narrow range recently around $1,200 an ounce. “The combination of U.S. economic growth concerns along with the rising risk that Greece will default on its debt obligations in the coming months, should see Gold rally to highs near $1,300/oz sometime in Q2–2015 – monetary policy trends, safe-haven buying should prompt specs to cover short exposure and build new longs, with technical positioning providing the path to the higher target,” they stated.

Today’s Equity Markets

Asia

Japan’s Nikkei average closed above 20000 today for the first time since 2000, the result of a rally this year driven in part not only by international exporters but also by lesser-known companies selling everything from potato chips to household appliances…

China’s Shanghai Composite closed up 106 points or 2.5% at 4400 to rewrite its highest trading level since February 2008 on the back of last weekend’s stimulus measures…

Europe

European markets were mixed today…Reuters reported that Greek Finance Minister Yanis Varoufakis stated yesterday that he was confident Greece would reach a deal with its international lenders although this may not happen at Friday’s meeting of euro zone finance ministers…

Meanwhile, European Union anti-trust regulators charged Russian gas giant Gazprom today with abusing its dominant position in Poland, Hungary and 6 other countries in Eastern Europe following more than 2 years of investigation…

North America

The Dow is up 42 points points as of 9:00 am Pacific…

U.S. home buyers flooded back into the real estate market in March, pushing up sales and prices at the start of the spring buying season…the National Association of Realtors says sales of existing homes jumped 6.1% last month to a seasonally adjusted annual rate of 5.19 million, the highest level since September 2013…the percentage increase was the largest since December 2010…

In Toronto, following federal budget day, the TSX is off 72 points while the Venture has declined a point to 699 as of 9:00 am Pacific…Doubleview Capital (DBV, TSX-V) is up another penny at 17 cents after announcing it has received an expanded 5-year exploration and drilling permit for the Hat Project in the Sheslay district…what’s notable about this permit is that it will allow Doubleview to use equipment at the Hat that’s expected to “significantly reduce drilling and exploration costs”, which we interpret to mean less reliance on helicopters…we’ll have a first-hand look at the evolving situation on the ground in the Sheslay district during a planned upcoming visit…final results from DBV’s hole #23 are due shortly along with the start of the company’s 2015 drill program…with Garibaldi Resources (GGI, TSX-V) gearing up to launch a first-ever drill program at the Grizzly, where the odds of another district discovery appear very strong, the Sheslay’s time to shine is quickly approaching…

Canadian Dollar Update

The Canadian dollar, trading at 81.64, continues to rally modestly after managing to hold critical support, temporarily at least, between 78 cents and 80 cents as shown in John’s updated 20-year monthly chart…key resistance is 85 cents, a level the loonie broke down from at the beginning of January as Oil prices sank below $50 a barrel…

Ultimately, if the support band between 78 and 80 cents does not hold, the loonie would be very vulnerable to a “capitulation” collapse to the low 70’s where it last traded in 2004…

On a positive note, the 20-year low in the RSI(14) mirrors the 20-year high in this indicator reached in late 2007 when the loonie topped out at $1.10 to the U.S. dollar…in other words, it’s possible that an important trend reversal may have started which seems to match the technical patterns we’re seeing in Crude Oil, the CRB Index and the Venture…

Keep in mind, the Venture performs best when the loonie is in an uptrend as was the case from 2003 to late 2007, 2009 to early 2011, and again through most of 2014…

North Arrow Minerals Inc. (NAR, TSX-V) Update

North Arrow Minerals (NAR, TSX-V) continues to push higher today after yesterday’s encouraging news regarding analysis of 41 representative yellow diamonds from the Q1–4 kimberlite…all but 1 of the diamonds were determined to contain unaggregated nitrogen, characteristic of exceptionally rare Type 1b diamonds…

Final processing and diamond sorting of the Q1–4 bulk sample are on track for completion within the next week to 10 days…

Technically, NAR remains in a very strong uptrend as John has consistently pointed out over the last couple of months…a confirmed breakout has occurred above Fib. resistance at $1.00, and this morning NAR has pushed above the $1.18 Fib. level after opening at $1.10 and trading as high as $1.30…speculation seems to be in NAR’s favor as investors wait for a formal valuation of the diamond parcel, expected by later this spring or early summer…

NAR has jumped 18 cents to $1.28 as of 9:00 am Pacific…

TSX Gold Index Update

Producers are under some pressure this morning with Gold again dropping below $1,200 an ounce, but what matters more is where the TSX Gold Index closes Friday and of course how the metal finishes the week…U.S. durable goods data will be released Friday morning and those important numbers could potentially impact a broad range of markets…

As you can see in this 6-month daily chart, the Gold Index closed yesterday right at Fib. resistance (166-167) where it has repeatedly attempted to push through for more than a month…this is a very critical area as it’s also where the 50 and 100-day moving averages (SMA’s) have converged…the 50-day is flattening out, while the 100-day is still rising…

Friday may set the tone for the balance of the month…the overall trend in the Gold Index since late last year has been very positive with a series of higher lows…

The Gold Index is down 5 points at 162 through the first 2-and-a-half hours of trading today…

Richmont Mines Inc. (RIC, TSX) Update

Our favorite Gold producer remains Richmont Mines (RIC, TSX) which 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 this morning…the company’s Q1 quarter average realized Gold price was $1,496 CDN per ounce, up 4% over the same period in 2014 thanks to the drop in the value of the loonie…

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…the main access ramp has been extended to a depth of 675 m, the exploration/definition drift to a length of 290 and the secondary eastern ramp to a depth of 470 m…

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 trading within a bullish downsloping flag…what to watch for here is a potential breakout above the flag through the $4.00 level…

RIC is down a nickel at $3.88 as of 9:00 am Pacific…

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

Gold has traded between $1,192 and $1,203 so far today…as of 9:00 am Pacific, bullion is up $2 an ounce at $1,197…Silver is flat at $15.91…Copper has fallen 4 pennies to $2.69…Crude Oil is relatively unchanged at $56.27 while the U.S. Dollar Index is now off slightly at 97.80 after jumping half a point earlier today…

After a 2-month hiatus, Russia’s central bank jumped back into the Gold market last month…according to media reports, the Russia bought 28 tonnes of Gold in March, its biggest 1-month purchase since September…in January the central bank sold 0.5 tonnes of Gold and didn’t purchase anything in February…

A bullish report regarding the Gold sector in India was released yesterday with credit rating agency ICRA forecasting robust growth in the country’s Gold jewelry industry of 8% to 10% over the medium to long-term…

“Over the near-term, ICRA expects improvement in Gold availability coupled with the re-introduction of low cost Gold metal loans, rising consumer sentiments and aggressive store expansion by organized retailers to drive volume growth,” the report said.  On a longer term basis, Gold jewelry demand in India will be supported by cultural underpinnings in the country and growing disposable income, “especially in tier 2/tier 3 rural markets which account for a major chunk of the demand.”

Oil Update

Middle East tensions, a leveling off of U.S. production, and concerns regarding OPEC spare capacity are factors contributing to Crude Oil’s strength in recent weeks…

Some analysts are warning that OPEC’s ability to cope with an unexpected surge in demand is diminishing fast due to limited spare capacity…

“If the demand and non-OPEC supply responses to lower prices are similar to what was experienced in the 1980’s, the very low level of spare capacity carries a risk of a price spike in the not too distant future,” according to analysts at PIRA Energy (source: CNBC)…OPEC’s spare capacity could halve to as low as 1.7 million bpd this year, far below the level of more than 10 million bpd in the 1980’s when Saudi Arabia last opted for market share over price..

WTIC Long-Term Chart

As we pointed out yesterday, inflows into U.S. and European-listed Crude Oil exchange traded products (ETPs) have surged this year given the perception that Crude prices bottomed during Q1 after a rapid 61% plunge, just as they did during Q1 2009 following a quick 77% decline brought on by the financial crisis…

One cannot rule out the possibility that what we’re witnessing now, based on this long-term monthly chart, is another major trend reversal…this increases the likelihood of a trading range over the short to medium term of $50 to approximately $70 a barrel, as opposed to a $30 to $50 range…this would bode well for the Venture which has actually shown a higher correlation with Oil than Gold for an extended period…

Today’s Markets

Asia

Asian markets were strong overnight, led by a 2% advance in Shanghai’s Shanghai Composite…over the weekend, the People’s Bank of China (PBoC) made the deepest single reduction since 2008 in the reserve requirement ratio (RRR) for all banks – the second industry-wide cut in 2 months…

Europe

European markets were higher today, with the notable exception of Greece, as investors reacted positively to a slew of corporate earnings reports…yesterday, Greece ordered state bodies to send cash balances to the country’s central bank as it scrambles to pay its bills…

North America

The Dow is down 71 points as of 9:00 am Pacific…the Nasdaq, meanwhile, is back above the 5000 level (5019) with a 20-point advance through the first 2-and-a-half hours of trading…

In Toronto, the TSX is off 92 points as of 9:00 am Pacific with the federal budget to be delivered following the market close…the Venture reacted again at resistance (707) and is now down 2 points at 702…

North Arrow Minerals Inc. (NAR, TSX-V) Update

Very encouraging news from North Arrow Minerals (NAR, TSX-V) this morning, and the stock has responded well as a result…yellow diamonds from the company’s Q1–4 kimberlite in Nanavut contain “unaggregated nitrogen”, a defining characteristic of rare, natural Type 1b diamonds with fancy canary yellow colors…Type Ib diamonds are exceptionally rare, estimated to make up less than 0.1% of natural diamonds globally…

A total of 41 representative yellow diamonds from the Q1–4 kimberlite, ranging in color from very pale yellow to intense yellow, were analyzed by Apex Geoscience Ltd. at the University of Alberta’s diamond research laboratory…all but 1 of the diamonds were determined to contain unaggregated nitrogen…

To put the importance of this into proper context, NAR President and CEO Ken Armstrong stated, “Less than 1% of over 24,000 fancy yellow diamonds investigated by the Gemological Institute of America as part of a 2005 study were classified as Type 1b diamonds, indicating that Type 1b diamonds are rare, even among natural fancy yellow diamonds. This rarity highlights the significance of today’s result: all but one of the analyzed Q1-4 yellow diamonds contain unaggregated nitrogen and yellow diamonds make up over 21%, by carat weight, of the diamonds recovered so far from the Q1–4 bulk sample.”

NAR is up 18 cents at $1.10 as of 9:00 am Pacific…

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

It’s reasonable to assume, based on results to date and visual analysis reported by Doubleview Capital (DBV, TSX-V), that DBV’s hole 23 at the Hat Project will likely produce the longest, highest-grade intercept ever drilled in the Sheslay district…given a much better understanding of the overall geological framework and orientation of the Hat system that has developed in recent months, the odds of even better results (and new discoveries) in the next round of drilling – slated to begin soon – have increased substantially…just 2 years ago, the Hat was just a grassroots project that had never been drilled, so the progress that has been made after just 23 holes is truly impressive and underscores the extent of both the near-term and long-term potential…

On the ground and in the market, we see big possibilities with DBV (and the entire Sheslay district) over the next few months as exploration ramps up and more results pour in…

What excites us about this latest DBV chart is how the stock is well-positioned for a breakout above a bullish downsloping flag that started to form after last year’s 40-cent high…keep in mind, that was a 10-fold price increase over just 6 months, so a healthy consolidation out of very overbought conditions was a very normal development – aided, of course, by a dramatic plunge in the Venture from September into mid-December…

Each round of drilling at the Hat since 2013 has produced better results…that’s a key sign one looks for to know that a project is on the right track…

To view Part 2 of our video feature (just over 1 minute) with Dr. Razique on hole 23, click on the arrow below.

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

Kootenay Silver (KTN, TSX-V) is another company enjoying exploration success, and this is also reflected in a strong chart (see updated version below)…drilling continues at KTN’s La Negra Silver discovery in Sonora State…a 30-hole follow-up drill program commenced in late February with more encouraging results released 3 weeks ago…La Negra is approximately 6.5 km north of KTN’s flagship Promontorio Silver resource…

As expected, KTN has been gradually gaining traction following a confirmed breakout above resistance at 44 cents and an ascending triangle…this bodes well for the balance of Q2 – significant gains could be in the works given how the fundamentals and technicals are matching up here, and RSI(14) on this 3-year weekly chart still has plenty of room to move higher…

KTN is up 2 pennies at 50 cents as of 9:00 am Pacific…

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

Over the past year, Calibre Mining (CXB, TSX-V) has been a standout performer in the challenging junior resource market…the company is working strategically with strong partners in the prolific northeastern part of Nicaragua, and also has some 100%-owned ground which it is now drilling as announced yesterday…

Calibre’s Phase 1 program at its Montes De Oro Gold Project will consist of 2,000 m in 8 to 10 drill holes, designed to test 2 subparallel Gold-mineralized structures defined by surface exploration including trenching results of 52.3 m grading 7.1 g/t Au, 27.5 m grading 4.92 g/t Au, and 33.5 m grading 2.10 g/t Au…

Overbought technical conditions in CXB last September/early October unwound during November and December…Fib. support held between 9 and 12 cents held as expected…

The rising 200-day SMA (not shown on this 2.5-year weekly chart) is now providing excellent support at 13 cents…based on its current technical posture, and continued positive exploration developments, CXB is poised to continue to be an “out-performer” as this year progresses…

CXB is off a penny at 13.5 cents as of 9:00 am Pacific…

The Not So Fortunate – A Sign Of The Times

The languishing shares of Global Minerals Ltd. (CTG, TSX-V) rose in price yesterday after the company struck a deal to get a liability off its books…CTG has agreed to transfer and write down 100% of its interest in the Strieborna Silver-Copper Project in Slovakia to a private local investor group in exchange for the group assuming all of the associated liabilities that include, among other things, mine dewatering, mine site security and local regulatory costs…the estimated costs to maintain the mine are approximately $1.2-million per year…Global currently has approximately $120,000 in cash and does not have sufficient funds to maintain Strieborna…upon the project transfer completion, subject to all approvals, the company will have no material assets…the stock is trading at a penny this morning…

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

A Canadian exploration success story should start gaining increased traction with an intense period of exploration just around the corner, and final results due shortly from what’s shaping up as possibly the best hole ever drilled in the emerging Sheslay district of northwest British Columbia.

Doubleview Capital (DBV, TSX-V) has been grinding its way to an important breakthrough at the Hat Project where hole 23 has sparked a reinterpretation of a growing system that’s now the sole focus of attention for one of the world’s leading Gold-Copper porphyry experts, Dr. Abdul Razique.

The last set of results are pending from hole 23, specifically from a chalcopyrite-pyrite zone below 400 m visually estimated to continue to a depth of at least 520 meters (the 110.9-metre section beginning at 270.6 m included 74.2 m grading nearly 1% CuEq).

To view Part 2 of our video feature (less than 90 seconds) with Dr. Razique on hole 23, click on the arrow below.

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

Gold has traded between $1,190 and $1,210 so far today…as of 9:00 am Pacific, bullion is down $8 an ounce at $1,195…Silver is off 32 cents at $15.90…Copper has retreated 3 pennies to $2.70…Crude Oil, continuing its uptrend, has gained 67 cents to $56.41 while the U.S. Dollar Index has added one-third of a point to 97.74…

Timing of the Federal Reserve’s U.S. rate hike remains the dominant driver of Gold prices in the short term, according to analysts from Barclays who expect a first move by the Fed in September…they say the current macro economic environment is generally supportive of Gold prices which they predict will average $1,190 per ounce this quarter and $1,183 for the year…

Meanwhile, analysts at Bank of America Merrill Lynch believe the worst is over for Gold, forecasting a price of $1,500 an ounce by 2017…although the U.S. economy seems to be moving forward, the analysts expect delayed and more muted rate hikes which would help Gold break out of recent ranges..

Oil Update

Crude Oil, like the Venture, has made gains for 5 weeks in a row, but some analysts are warning that the rally has unfolded on a false premise of sputtering production…U.S. producers aren’t shutting down rigs as quickly as they once were, and several countries around the world, led by Saudi Arabia, are putting more of their Crude onto the market…

The Saudis produced 10.3 million bpd of Crude in March, eclipsing a previous record of 10.2 million bpd, in what is seen as a shot against arch-rival Iran and a move to defend market share against non-OPEC competition, particularly the United States and Canada…

“I have said many times we will always be happy to supply to our customers with what they want. Now they want 10 million,” Saudi Oil minister Ali al-NaimiNaimi told Reuters in an interview today…

Barclays noted that “current supply/demand dynamics…are not firmly moving in the direction to tighten market balances in Q2.”

Technically, though, as we’ve noted, WTIC is definitely in rally mode, at least, after building strong support at $50 and then overcoming important resistance recently at $54…

Oil ETP Buying Surges

Interestingly, since the beginning of this year, and following the 60% plunge in Oil prices, inflows into U.S. and European-listed Crude Oil exchange traded products (ETPs) have surged…according to recent data, assets under management (AUM) of U.S.-listed Oil ETPs has more than doubled from $2.25 billion at the end of last year to $5.1 billion as of this month…in Europe, AUM in Oil ETPs has risen by a similar magnitude in percentage terms, from just under $1 billion to $2.5 billion over the same period…based on previous patterns, as shown in this chart from www.usfunds.com, what this surge may signal is that WTIC finally found a bottom in the low $40’s…the Oil industry has to hope that these bets don’t start to unravel for some reason…

CRB Index Updated Chart

Historically extreme (record) oversold technical conditions emerged in the CRB Index late last year into January, and the divergence between RSI(14) and price in mid-March suggests that the Index may have hit an important low at 207 (a final bottom? – perhaps)…

The CRB has pushed above its 50-day moving average (SMA) which has flattened out and appears ready to reverse to the upside which would add fresh fuel to the current move…if the Index can overcome chart resistance at 229, then the next level it will likely challenge is near 250 – a Fib. level that’s also in the immediate vicinity of the declining 200-day SMA…

The CRB is off a point at 223 as of 9:00 am Pacific…

Today’s Equity Markets

Asia

China’s central bank come to the rescue once again, while securities regulators do some back-peddling…

Thanks to a wider than expected cut over the weekend in the RRR for Chinese banks, the second reduction in 2 months, China’s Shanghai Composite slipped less than expected today following measures announced late Friday by Chinese authorities to tighten rules on margin lending and promote the use of short-selling…Friday’s news contributed to a sell-off in global equities and drove Chinese’s stock futures down sharply…

In an interesting statement published Saturday evening, the China Securities Regulatory Commission (CSRC) said measures rolled out on Friday aren’t aimed at clamping down on a red-hot market…the measures are about “maintaining the healthy development of the market…the market shouldn’t over-interpret the measures,” it stated…

Beijing is using the stock market to stimulate innovation and entrepreneurship and channel liquidity to the real economy to hedge economic downside risk, as well as to facilitate deleveraging of state-owned enterprises, according to an HSBC report.  HSBC stated, “The RRR cut is a political goal to create wealth effects.”

What we’re looking below is an incredible chart with the Shanghai doubling in just 9 months…keep in mind, this move coincides not only with a series of central bank stimulus measures but a major drop in commodity prices as well, and China is a major net importer of Oil and other commodities…

On Friday, the Shanghai closed near the top of the upsloping channel at 4287, so today’s pullback of 69 points to 4218  could represent the beginning of a minor correction that brings the Index toward support at or near the bottom of the channel…technically, the Shanghai is clearly in an overbought state but it’s clear that Chinese authorities want a strong equity market in part to counter slowing economic growth…

Europe

European markets finished strongly higher today, buoyed by the fresh stimulus announced by China…

North America

The Dow has jumped 241 points as of 9:00 am Pacific…

This week’s first U.S. economic report won’t be released until Wednesday when the National Association of Realtors releases its March existing home sales data…preliminary manufacturing data and new homes sales data are also due this week, but the highlight will come on Friday with the release of U.S. durable goods for March…

In Toronto, the TSX is up 58 points while the Venture has added 3 points to 706 as of 9:00 am Pacific…

CDNX 3-Year Weekly Chart

Several indicators including RSI(14) in this 3-year weekly chart help confirm that the Venture is now in a recovery phase that so far looks quite similar to the one that developed after the late June low of 2013…in other words, upside potential over the coming months clearly seems to outweigh downside risks but selectivity remains key – many companies have been so weakened by the intensity of the bear market that they will have a very difficult time bouncing back…under certain conditions (i.e., a major new discovery, stronger than expected commodity prices, a major cooling off in the U.S. dollar), this recovery in the Venture could surprise investors with a sudden acceleration…we’ll have to wait and see…

The heavy lifting will be carried out by the strongest companies, the ones that fall into the top 20% category based on quality of management, share structure, projects, working capital, the ability to raise money, and market communication skills…

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

Cannabix Technologies (BLO, CSE) this morning has released the first publicly available images of its marijuana breathalyzer Alpha prototype and an updated video presentation of its Cannabix Marijuana Breathalyzer…this will be showcased at the Marijuana Investor Summit and Business Expo beginning tomorrow in Denver…

The Alpha device testing is well underway with medical marijuana users with the goal of maximizing THC sensitivity, detection and reliability of the device for use as a roadside or workplace drug impairment tool…a Beta version is being developed for trial testing with external organizations…

Updated BLO Chart

Technically, this is very bullish – BLO appears poised to confirm a near-term breakout above a pennant formation that started in February following the run from 17.5 cents to 77 cents on the CSE in just 9 trading sessions (the chart below is in U.S. dollars, based on BLO’s OTC listing, as Stockcharts.com does not yet provide charts for CSE-listed companies)…

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

Montoro Resources (IMT, TSX-V) has nearly completed the 1st hole at its promising Pecors anomaly in the Elliot Lake area west of Sudbury, and what’s highly encouraging is that this hole, with assays pending, has already demonstrated through visual analysis that Pecors is indeed an ideal environment for hosting potential high-grade Ni-Cu-PGE mineralization at the base of a very thick gabbro unit…disseminated sulphides have been intersected in 2 zones, and what has been observed beneath the Huronian sediments is really a geological “first” in an area known for Uranium and Rare Earths…this qualifies as an important technical discovery, confirming geophysical and geochemical evidence, and now the task is to hone in on where there could be massive concentrations of Nickel and Copper that have formed somewhere within the gabbro…

The first hole has reached a depth of 996 meters and will continue just beyond 1000 meters…the second hole will begin shortly and is targeting an area approximately 650 m to the northwest…with this first hole, Montoro appears to have discovered the edge of a system that should feature some feeder dikes…this is an extremely interesting exploration story with legitimate major upside potential…we’ll have more as the week progresses…

IMT is off a penny at 7.5 cents as of 9:00 am Pacific…

Silver Short-Term Chart

Silver got a boost last month when it broke above a short-term downsloping flag that was in place since late January…the metal found support at the bottom of that flag which was critical, setting the stage for a move higher…

Following the pullback from the late March high of $17.41 to unwind temporarily overbought conditions, Silver should find strong support around the mid-$15.50’s and has the potential to recover robustly from there…

RSI(14) recently unwound from its high in March to support at 40%…a move above 50% would bring some momentum back into this market with key Fib. resistance just below $18…

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 BLO and IMT.

TSX Venture Exchange and Gold

The Venture has posted 5 consecutive weekly gains, though the most robust activity has occurred in non-resource issues.  As expected, the Index tested key Fib. and chart resistance last week at 707 – intra-day Wednesday, Thursday and Friday, actually, and then backed off slightly each time before closing Friday at 703.

The Venture has climbed an impressive 6.8% over the last month (22 trading sessions) since the March 18 low of 658.  A potential acceleration of this uptrend through 707 will likely require additional weakness in the greenback (the U.S. Dollar Index does appear to be in the grips of its first major correction after a record run) as well as continued strength in commodities (the CRB Index is up over 8% since its March low).

While an eventual breakout above 707 seems almost 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 from current levels, perhaps to the rising 10, 20 or 50-day moving averages (SMA’s), followed by a fresh wave higher and another breakout attempt.  Importantly, very strong support exists around 680 and this area also held on a monthly closing basis December through March.

Venture 6-Month Daily Chart

The Venture recently broke loose from its 50-day SMA (currently 687) which is also now rising gently.  In addition (not shown on the chart below), the Venture has pushed above its 100-day SMA for the first time since last summer.

Volume and buy pressure (CMF) both need to pick up in order for the Venture to overcome resistance at 707 and climb higher from there.  This will require some fundamental factors to come into play to create fresh excitement and help restore overall investor confidence, especially on the resource side where selectivity remains key.

Venture-WTIC Comparative Chart

The rally in Crude Oil has been very helpful in stabilizing the Venture.  The correlation between the Venture and WTIC has been extremely high in recent months as seen in this 15-year monthly comparative chart, so any additional strength in Crude prices is sure to translate into more gains for the Venture.

On another note, it’s interesting to compare the current pattern in WTIC with the one in late 2001/early 2002 – look how amazingly similar they are.  Sometimes history does repeat itself.  There are many sound reasons to be cautious about Crude, given the current supply-demand dynamics, but the Middle East is like a power keg at the moment and one cannot rule out the possibility of a near-term explosive conflict in that troubled part of the world that somehow disrupts supplies and brings a risk premium back into the Oil market.

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 was essentially unchanged for the week, trading slightly on either side of $1,200 before closing at $1,204.  It’s encouraging from a technical standpoint that the yellow metal is managing to hold support at $1,200, but downside risk increases the longer it takes for bullion to push through an important band of resistance between last week’s high ($1,210) and the mid-$1,220’s.

RSI(14) is holding support at 50% and has formed a bullish “W”.  That’s the only obvious clue we see on the 6-month daily chart that points toward the possibility of higher prices in the coming week.  Further technical deterioration in the U.S. Dollar Index would likely give Gold a lift.

Gold 2.5-Year Weekly Chart

This is 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 47% – has moved within a 30% to 60% channel.  At some point, Gold will either break out above the flag or crash below it – right now, it’s roughly in the middle.

Two positive signs – Gold has pushed slightly above its 50-day SMA which is beginning to flatten out, while a %K/%D bullish cross has occurred in the SS indicator.  Bullion’s recovery since mid-March does have a good chance to strengthen toward the top of the flag in the coming weeks.

Silver fell 24 cents last week to close at $16.23 (updated Silver charts in Monday’s Morning Musings as usual).  Copper lost 2 pennies to $2.73.  Crude Oil had another big week, climbing more than $4 a barrel to $56.14 while the U.S. Dollar Index fell nearly 2 points to 97.45.