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Gold has traded between $1,193 and $1,211 so far today…as of 8:30 am Pacific, bullion is up $13 an ounce at $1,207 as it attempts to finish the week on a positive note (against the euro, Gold is now at a 9-week high)…Silver has added 33 cents to $16.48…Copper is up 3 pennies at $2.75…Crude Oil has gained 49 cents a barrel to $51.28 while the U.S. Dollar Index is poised to register its 5th straight daily advance though it has backed off somewhat from its morning highs…it’s currently up one-third of a point at 99.28…

The case for the Federal Reserve to raise U.S. interest rates in June remains “strong”, a top Fed official said today, dismissing the impact of a rising dollar and falling Oil prices as temporary…Reuters reported that Richmond Fed President Jeffrey Lacker, a voting FOMC member who has long called for a prompt tightening of monetary policy, repeated his views that consumer spending, the labor market and other economic conditions have improved significantly over the last year.  “Unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting,” Lacker said in prepared remarks for a Global Interdependence Center event…

U.S. Dollar Index Updated Chart

The surprise in the markets this week has been the strength of the greenback following last Friday’s much weaker than expected U.S. jobs report…after dipping to strong support at the 50-day moving average (SMA) near 96 last Friday, the Dollar Index has rebounded sharply back toward resistance at 100…

If a bad jobs report can’t slow down the dollar, one wonders what can – speculation regarding a potential Fed rate hike (whenever that may come) continues to underpin the greenback along with diverging monetary policies between the U.S. and most other central banks around the world…

Ironically, the higher the dollar climbs, the chances of a Fed rate hike this year likely diminish given the deflationary impact of a strong currency among other potential negatives including a decline in U.S. exports…

Support at 96 is obviously very strong but so too is the resistance band between 100 and last month’s 12-year high of 100.71, so we’ll have to see how this plays out…for now, we’re still of the opinion that the Dollar Index is in the midst of a corrective phase that may persist for a number of weeks or a few months…

The near-term direction of the dollar is obviously key in gauging how the Venture and commodities will behave over the coming weeks…

Today’s Markets

Asia

Japan’s Nikkei average crossed the 20000 milestone for the first time since April 2000 at Friday’s open, but quickly pulled back on profit-taking…the Nikkei closed down slightly at 19908…

China’s Shanghai Composite, meanwhile, roared ahead another 77 points to a 7-year high as the latest inflation data signaled a favorable environment for further government stimulus…the Shanghai closed at 4035, just 43 points below a Fib. resistance level…

China’s consumer inflation held steady in March, but wholesale prices remained entrenched in deflation, signalling a favorable environment for fresh stimulus measures…the CPI rose 1.4% on year, above expectations of a 1.3% rise predicted in a Reuters poll and following a 1.4% rise in February…wholesale prices, or the PPI, fell 4.6% in March, better than the average forecast of a 4.8% decline, and after dropping 4.8% in February…

Europe

European markets were generally strong again today, hitting new long-term highs…

North America

The Dow is up 90 points as of 8:30 am Pacific…prices of U.S. imported goods fell last month, suggesting the weak global economy and moves by foreign central banks are holding back U.S. inflation…import prices declined a seasonally adjusted 0.3% in March from February (in line with expectations), the Labor Department reported this morning…prices have fallen for 8 of the past 9 months and are down 10.5% in the past year…

Dow Transportation Average

The Dow Transportation Average is generally a reliable guide for future overall market behavior, and it’s important to note that this index has managed to hold key Fib. and chart support…RSI(14), at 43%, is also now moving up from a bullish “W”, so a new uptrend appears to have commenced…

In Toronto, the TSX is up 68 points as of 8:30 am Pacific and appears poised for a confirmed breakout above the 15250 level…the Venture, meanwhile, has added 5 points to 696…

Canadian Finance Minister Joe Oliver said today that the federal government now projects 2% economic expansion for 2015, down from the 2.6% growth forecast in the annual fall fiscal update released last November…the 2% forecast represents the average of economists polled and will form the backbone of fiscal and economic assumptions in the budget plan, to be released April 21…

The Globe and Mail reported this morning that Canada’s biggest Uranium producer is in advanced talks with India on a deal to supply the country of 1.2 billion with fuel for nuclear power plants as Ottawa prepares to welcome Indian Prime Minister Narendra Modi next week…Modi has made it clear that obtaining a commercial supply of Uranium from Canada’s Cameco Corp. (CCO, TSX) is a major goal for him as he gets ready to visit Canada on April 14-16…

Venture Update

The Venture has enjoyed an encouraging week, breaking above resistance around 680…the next key level, of course, is just under 710 where the Index reacted on January 2 and again on February 27…

The tech and health sectors (just as speculative as the resource sector) continue to help underpin the current rally in the Venture as investors chase the potential of quick returns in liquid issues…a good example is the activity in Vancouver Pharmaceuticals Inc. (NPH, TSX-V) which soared from below 20 cents in mid-February to a high of 94 cents March 12…

We’ve had a few requests for an NPH chart…below is a 6-month daily that shows NPH rebounding from its 50-day SMA with a bullish “W” formation in the RSI(14)…for this move to gain momentum, NPH will need to overcome resistance between the downtrend line (around 50 cents) and the Fib. 50% level (54 cents)…

NPH is off 1.5 cents at 46 cents as of 8:30 am Pacific…

International Montoro Resources (IMT, TSX-V) Update

There aren’t many but there are some incredibly interesting exploration developments unfolding in North American jurisdictions – most notably, Mexico, British Columbia, Saskatchewan, Quebec and Ontario…

News yesterday from International Montoro Resources (IMT, TSX-V) has us even more intrigued with the Pecors target near Elliot Lake, west of the Sudbury Nickel camp, where IMT appears to be drilling into a previously overlooked Ni-Cu-PGE system in Canada’s only mining camp to have achieved commercial production of rare earth oxides (in addition to more than 300 million pounds of Uranium oxide)…

At depths never previously tested in this area, under the Huronian sediments, IMT could be drilling its way into a rich Archean Nickel sulphide deposit, thanks to a valuable re-interpretation of local geology by both the Ontario Geological Survey and IMT’s technical team…

As reported yesterday, IMT is extending its first drill hole at the Pecors anomaly to a depth of 1200 meters…what’s notable is that visible sulphide mineralization, containing disseminated pyrite, chalcopyrite and pyrrhotite, started in a gabbro unit at a depth of 600 m and has continued in these rocks through 900 m…drilling remains on target and this initial hole should be completed within a few days, hopefully cutting into a long section of massive sulphides…

This is an excellent example of geologists and geophysicists thinking “outside the box” and coming up with fresh theories…

A 3D interpretation of the target has allowed geophysicists to see how the structure at Pecors appears to be laying and the direction it’s pointing…based on the intensity of the airborne survey, IMT’s technical team was able to pinpoint what appears to be the center of the anomaly with the first drill hole…

The first hole is being extended and a second one is coming up – early results, mystery and speculation are driving investor interest in this play, and what appears to be a large mafic intrusive body located beneath the Huronian rocks could certainly host rich concentrations of Nickel and Copper…

IMT has found some “smoke” – and that’s exactly what was postulated following the review of a very large, intense geophysical anomaly at Pecors combined with a high-density, lake sediment and geochemical survey by the OGS that revealed robust levels of Nickel and Copper…

Based on a compelling set of geophysical, geochemical and other data, the OGS concluded that “the potential for magmatic Cu-Ni-Cr-PGE mineralization is very high” at Pecors (Open File Report 6251) and surrounding areas…

Just the geophysical anomaly itself is believed to be more similar to those observed at Nickel mines in the Sudbury basin than those related to the Uranium and REE deposits in the Elliot Lake district…

There are never are guarantees in the risky exploration business which requires not only a high level of skill but also a healthy dose of good luck…assays will ultimately determine the significance of what IMT has hit, but we do like how this one is shaping up in the early going…it’s a story with legs that have grown longer with yesterday’s news…everyone should be rooting for any company with a decent chance at an important discovery that could breathe fresh life into the junior resource sector…

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

Gold has traded between $1,191 and $1,203 so far today…as of 9:00 am Pacific, bullion is down $8 an ounce at $1,194…Silver is off 30 cents at $16.21…Copper is flat at $2.73…Crude Oil, after sliding nearly 7% yesterday, is up 65 cents to $51.07 while the U.S. Dollar Index has climbed nearly a full point to 98.88…

Minutes released yesterday from the Federal Reserve’s most recent meeting in mid-March showed that “several” officials judged that the economic outlook warranted monetary policy tightening in June…that level of “hawkishness” took some investors by surprise yesterday, giving a boost to the U.S. Dollar and pressuring commodities as a result, but keep in mind those minutes were recorded before a spate of disappointing data in recent weeks…last Friday’s jobs report followed a string of other soft economic numbers, including readings on manufacturing activity and retail sales…strong evidence that the U.S. recovery has hit a snag has put a Fed rate hike off the table, in our view, until at least late this year, or perhaps not even until 2016…

Precious metals consultancy GFMS today released its annual analysis of the Gold market (Gold 2015)…no major surprises in the report…they contend that further downside in prices is relatively limited, and that geopolitical conflicts have the potential to pressure bullion to the upside…GFMS is forecasting a 2015 average Gold price of $1,170 per ounce, increasing to $1,250 next year…they place China as the world’s #1 consumer of Gold, slightly ahead of India (this excludes banking activity, otherwise China would be the runaway leader)…

TSX Gold Index Updated Chart

A key area to watch in the TSX Gold Index is the mid-160’s…producers have been in a recovery since early March, but the Index features Fib. resistance at 166 on this 6-month daily chart which is also 6 points below the declining 50-day and 200-day moving averages (SMA’s) which have joined together at 172…

The band of resistance between 166 and 175 (another Fib. level) is quite strong…it’ll be interesting to see if the Index can overcome that in the near future…

Despite some softness in bullion this morning, the Gold Index is holding up well…it’s unchanged at 162 as of 9:00 am Pacific…

Oil Update

A huge buildup in Crude supplies sent U.S. prices to their biggest loss in 2 months yesterday…however, WTIC appears to have re-established support at the $50 level as our charts have shown, and that was evident again yesterday…one thing is for certain – Crude has been unusually volatile and that trend will likely continue…after jumping 3.5% Tuesday, WTIC slid 6.6% yesterday….prices have moved more than 2% up or down on 42 trading days this year, more than the total number of such moves in any of the past 3 years, according to The Wall Street Journal…

Plan Nord Update

Quebec Premier Philippe Couillard has unveiled a scaled-down version of the Plan Nord to tap into the mineral bounty in the remote northern reaches of the province…despite a deep slump in global metal prices, the plan calls for the province to invest about $1.3-billion in infrastructure and other projects over the next 5 years in hopes of attracting $22-billion in private-sector investment…by 2035, the Liberal government anticipates a total of $50-billion in private and public investments, of which at least $2.5-billion will be public money…

China & Uranium

Chinese authorities have unveiled the results of study into the nation’s Uranium deposits, which puts its reserves at over 2 million tonnes, according to a report from the government’s Xinhua News Agency…the country’s uranium deposits have apparently doubled in the last 15 years to more than 350 across the nation…the news comes as China continues to expand its nuclear program, officially resuming construction of new plants after a 15-month hiatus, beginning with the 5th unit at the Hongyanhe nuclear plant in Liaoning…with the move, Beijing intends to become self-sufficient not just in nuclear power plant capacity, but also in the production of fuel for those plants…

Domestic uranium mining currently supplies less than a quarter of China’s nuclear fuel needs, according to data from The World Nuclear Association…exploration and plans for new mines have increased significantly since 2000, and state-owned firms are also acquiring uranium resources internationally…

Today’s Markets

Asia

China’s Shanghai Composite fell 36 points overnight on profit-taking, closing at 3959…in Japan, the Nikkei Japan’s Nikkei finished at its highest level since June 2000, within just 62 points of the 20000 milestone…

Europe

European markets finished up strongly today, helped by a jump in auto sales…other data showed German exports recovering in February and industrial output for the country also edged higher in the same month…

North America

The Dow is off 24 points as of 9:00 am Pacific…in Toronto, the TSX has climbed 117 points while the Venture has added 4 points to 693…highly encouraging news just out from International Montoro Resources (IMT, TSX-V) which has hit a gabbro unit, starting at a depth of 600 meters, with visible sulphide mineralization (disseminated pyrite, chalcopyrite and pyrrhotite) at the Pecors anomaly in northern Ontario’s Elliot Lake mining camp…the hole is still in that unit at over 900 meters and is being extended to a depth of 1200 meters…this adds great credence to the theory that the intense Pecors anomaly, in an area known for uranium and rare earths, is the result of a deep seated Ni-Cu-PGE system which would be an important new discovery…some outstanding exploration work on the part of IMT with this initial hole, and the significance should sink in with investors over the coming days…as of 9:00 am Pacific, IMT is unchanged at 9 cents…

TSX Chart Update – Bullish Patterns

The TSX is attempting a significant breakout above chart resistance at 15250, so trading through the rest of today and tomorrow will be crucial…this is a highly interesting 2-year weekly chart showing, among other things, an inverted head and shoulders bottom within an ascending triangle…

Probe Metals Inc. (PRB, TSX-V)

Readers would be wise to keep David Palmer’s Probe Metals (PRB, TSX-V) on their radar screens…the company, which was a spin-out from the recent Probe Mines–Goldcorp deal, now has over $19 million in cash after confirming this morning that it has received a payment of $4 million from the sale of the 5% NSR royalty on a portion of the Goldex mine to Agnico Eagle Mines (AEM, TSX)…

Pursuant to the arrangement agreement between Probe Mines Ltd. and Goldcorp Inc. completed last month, the right to receive the final payment for the sale of the royalty was transferred to Probe Metals…with only 33.7 million shares outstanding, PRB’s current market cap (based on yesterday’s 37-cent close) is 35% below its cash position…PRB is up 2 pennies at 39 cents as of 9:00 am Pacific…

Eskay Mining Corp. (ESK, TSX-V) Update

We’re approaching what should be an exciting several months of exploration in northwest British Columbia, and one company we suggest our readers continue to keep on their radar screens is Eskay Mining Corp. (ESK, TSX-V) which has performed tremendously well since we initially introduced it about a year ago when it was trading at just 6 cents…

ESK controls 40 sq. km surrounding the prolific past producing Eskay Creek mine, and they have some giant neighbors – Pretium Resources (PVG, TSX) and Seabridge Gold (SEA, TSX), with Seabridge just completing a $17 million bought deal for a major upcoming drill program…

While it was in operation, Eskay Creek was the second richest deposit in North America and the 5th largest Silver producer in the world…a technical adviser for ESK is the highly respected James Rogers who was Chief Geologist at the Eskay Creek mine between 1994 and 2003…Rogers prepared an ESK corporate presentation last summer which is available on their web site – we suggest our readers check it out…

Recently, Eskay added well-known geologist Charlie Greig to its technical team…Greig is a master at his craft and consults for Pretium as well as Garibaldi Resources Corp. (GGI, TSX-V)…

Technically, ESK broke out above a long-term downtrend a year ago and that’s initially what caught our attention along with a surge in volume…

Below is an updated 3-year weekly ESK chart from John…little news but this stock has been under heavy accumulation for a reason, we suspect…very strong support in the low teens…

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

Gold has traded between $1,201 and $1,213 so far today…as of 8:30 am Pacific, bullion is off $5 an ounce at $1,203…Silver has lost 34 cents to $16.49…Copper is down 3 pennies at $2.73…Crude Oil has fallen $2.39 a barrel to $51.59 while the U.S. Dollar Index is flat at 97.89…

Despite Gold’s minor pullback since Monday, HSBC analysts say the near-term outlook is encouraging given the prospect for further consolidation in the U.S. dollar…another factor supporting the Gold market are mixed messages from Federal Reserve officials, like Minneapolis Fed President Narayana Kocherlakota, on when a rate hike may be put in motion by the central bank. “Mr. Kocherlakota said that it would be appropriate for the Federal Open Market Committee to defer the initial interest rate hike until the second half of 2016,” HSBC analysts wrote, adding that market watchers will be keeping a close eye on the FOMC minutes due for release this afternoon…

Gold Bandits

McEwen Mining (MUX, TSX, NYSE) has reported an armed robbery at its El Gallo 1 mine, located in Sinaloa, Mexico…the company said an “estimated 900 kilograms of Gold-bearing concentrate containing approximately 7,000 ounces of Gold were stolen from the refinery.  The crime is being vigorously investigated by the Mexican authorities.”

Using current U.S. Gold prices, the theft translates into roughly $8.5 million…while McEwen Mining said they are insured, the full loss won’t be fully covered…fortunately, no employees were seriously injured and mining operations have not been halted…

Oil Update

Oil prices have weakened this morning due to continuing supply concerns…the EIA (Energy Information Administration) reported that U.S. Crude inventories rose by 10.9 million barrels in the week ending April 3…analysts surveyed by Reuters expected an increase of 3.4 million barrels…U.S. commercial stocks extended their record build for a 13th consecutive week, putting total inventories at 482.4 million barrels…adding to concerns is that Saudi Arabia reported record output in March…

Today’s decline in prices followed a rally yesterday when WTIC approached 2015 highs following government forecasts for lower U.S. Crude production growth and higher global demand for Oil…

Technically, despite this morning’s weakness, strength is still apparent in John’s WTIC 2-year weekly chart…the 50-day moving average (SMA), currently $49.77, is reversing to the upside and new support has been established at the $50 level…

RSI(2), at 94% after yesterday, needs to unwind but the possibility of this rally extending further from last month’s low of $42.41 can’t be ruled out over the coming weeks…there’s still no guarantee, however, that we’ve seen the final low in Crude prices based on technical and fundamental factors…short positions will likely ramp up again if WTIC were to rally to the $60 area…a Goldman Sachs report yesterday warned that prices need to remain low for months to slow U.S. Oil output growth…

Updated Euro Chart

Yesterday, we examined the U.S. Dollar Index which is clearly in a consolidation phase…this morning, a 7-month euro chart adds more weight to the analysis that the greenback is likely going to trend lower in the near future as it continues to digest its large gains since last summer…

A euro rally started last month after the currency hit long-term support amid extreme oversold conditions at 105…it closed yesterday at 108…a continuation of this rally, which seems likely given the current indicators, could easily take the euro up into a cluster of Fib. resistance between 112 and 117…that would mean the Dollar Index would break below 96, a bullish dynamic for commodities and the Venture…

Today’s Equity Markets

Asia

Markets in China and Japan roared to new multi-year highs overnight…the Shanghai Composite gained another 34 points to close just shy of 4000, while Japan’s Nikkei added 149 points to finish at 19790…

This is what can happen when a market breaks out like the Shanghai did last summer…next measured Fib. resistance is just below 4100, so expect the Shanghai to power higher within the upsloping channel…

Europe

European markets were modestly lower today…

North America

The Dow has gained 27 points as of 8:30 am Pacific…Fed minutes will be released at 11:00 am Pacific…in Toronto, the TSX has added 34 points while the Venture is off 2 points at 687…NexGen Energy (NXE, TSX-V) has retreated 3 pennies to 54 cents as of 8:30 am Pacific…John has an updated NXE chart at the bottom of today’s Morning Musings following yesterday’s unconfirmed breakout above resistance at 52.5 cents…NXE continues to make excellent progress at its 100%-owned Rook 1 Property in the Athabasca Basin…

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

Interesting news just out from Fairmont Resources (FMR, TSX-V) this morning, a company we’ve been tracking closely since the beginning of the year with excellent growth potential in the industrial minerals sector…

Fairmont has completed the first blast (15–20 tonnes) at its Buttercup Property (a Certificate of Authorization from Quebec authorities for the Buttercup was received last December, allowing for the annual production of up to 300,000 tonnes of titano-magnetite aggregate from the property)…some of this material has been sent to a “large private Canadian industrial minerals company for dense aggregate testing”, so FMR appears to be making inroads as far as courting potential customers is concerned – that is certainly key…

With less than 20 million shares outstanding, and a market cap of just $2 million based on yesterday’s closing price (12 cents), we see plenty of upside potential here as the company’s business model gains traction through the rest of this year…Fairmont has a suite of industrial mineral properties in Quebec, all surrounded by excellent infrastructure, and we’ll be educating our readers on these in the weeks ahead…

International Montoro Resources (IMT, TSX-V) Update

Fundamentally and technically, International Montoro Resources (IMT, TSX-V) is uniquely positioned as April unfolds with a fully-funded drill program in progress, 24/7, that’s taking aim at an “intriguing” Ni-Cu-PGE target as confirmed by the Ontario Geological Survey…IMT has broken out of a 7-month horizontal channel (see updated chart below) at the same time as drilling is nearing the potential “sweet spot” of what’s postulated to be a large mafic intrusive body, beneath Huronian rocks, hosting Ni-Cu-PGE mineralization similar to that found to the east at Sudbury…geological theories, of course, don’t always prove to be correct, but the evidence here is highly compelling…juniors often move on mystery and speculation, and there is a mountain of that here…

The intense and massive Pecors anomaly (7 km long, 3 km wide and 2 km deep) in the heart of northern Ontario’s Elliot Lake mining camp (now drawing some interest from the Chinese, by the way) was initially identified through a geophysical survey (VTEM) conducted in part by IMT…importantly, the OGS, fascinated by this anomaly, then conducted a high-density lake sediment and geochemical survey in the region which led to the interpretation that the Pecors anomaly is very likely the result of contact style Ni-Cu-PGE mineralization, as opposed to an iron formation as initially thought…

“The geochemical evidence from this lake survey indicates excellent potential for the discovery of new mineral occurrences,” the OGS stated in its 2010 report (Open File Report 6251).  “In particular, the potential for VMS and magmatic Cu-Ni-Cr-PGE mineralization is very high.”

A 3D interpretation of the target has allowed geophysicists to see how this structure appears to be laying and the direction it’s pointing…based on the intensity of the airborne survey, IMT’s technical team was able to pinpoint what appears to be the center of the anomaly with the first drill hole…

Pecors has never been properly drill-tested – of course, the geophysical anomaly wasn’t even known to exist until just a few years ago…interestingly, however, when Rio Algom was drilling for Uranium in the district more than half a century ago, log data shows they did drill a few holes at Pecors that terminated around 600-700 meters within wide intercepts of gabbro, including rock described as “quartz gabbro”, which the OGS says helps validate their theory…again, Rio Algom was looking for Uranium and completely missed the possibility they were actually closing in on a new Nickel-Cu-PGE discovery…that’s often how it works in the business of exploration…

IMT 1.5-Year Weekly Chart

What’s most significant about this IMT chart is the confirmed breakout above the horizontal channel that has been in place since October of last year…RSI(14) at 60% has formed a “W” and has plenty of room to move higher, while all the moving averages are in bullish alignment…the technicals match up with the momentum this company has on the ground right now…

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

As we continue our series on Garibaldi Resources’ (GGI, TSX-V) high-grade discovery at its Rodadero Silver-Gold Project in central Sonora State, it’s interesting to note how the development of Rodadero has mirrored that of Yamana Gold’s (YRI, TSX) Mercedes mine to the northwest in north central Sonora State when it was in its early discovery stages in the 1990’s…

By 2000, surface and underground mapping and sampling had revealed 11 separate target areas (several of them had small-scale historic mining activities) at Mercedes, vs. the 12 that now exist at Rodadero including 1 (Silver Eagle) where a high-grade drilling discovery has been made near-surface…

What really kick-started Mercedes was when drilling went to depth and a bonanza grade ore shoot was discovered in 2005 (M05–031 returned 21 m grading 28.44 g/t Au and 245 g/t Ag between a depth of 186 m and 207 m)…Yamana took control of the project in 2007, quickly outlined a substantial Gold and Silver resource, and now Mercedes is in production as mostly an underground operation…

Four main vein systems (Mercedes, Barrancas, Klondike-Rey de Oro and Duluvio-Lupita) have been discovered in that district within a 4 km by 6 km block…3 of those areas outcrop, while the discovery of the Barrancas vein under the post-mineral Baucarit Formation is a significant advance for Sonora exploration…interpretation of aeromagnetic survey data indicates that there are multiple untested targets within a 25 km by 20 km block around the property, mostly in covered areas…

Gold-Silver mineralization at Mercedes is hosted within low sulphidation veins, stockwork and breccia zones…

At Rodadero, so many possibilities currently exist given the types of mineralization found throughout the property and the extent of mineralization (the number of targets) as Dr. Craig Gibson emphasized in our recent interview (see Monday’s Morning Musings)…

Garibaldi continues to have success with shallow drilling but it’s the deeper drilling that potentially could unlock the kind of discovery that compares to Mercedes to the northwest…

“Our geological consultants have looked at all those different mineralized centers and they’re confidently appreciating the fact that these may very well be surface expressions of a much larger system at depth, – that’s the kind of framework we’re developing,” President and CEO Steve Regoci told BMR.

“The secret to Rodadero is the scale of it,” Regoci continued.  “We’re in a discovery process.  A lot of people suggested that we made a discovery with the first hole at Silver Eagle.  Yes, but we’re in a very, very large system as our latest news states.  There are going to be a number of bodies I think that are all connected at depth.  The structures are there.  Everything’s lined up along these crosscutting structures.  There has been a huge amount of pressure and fluid driven through here.  I’m really excited about what this is going to evolve into.  It’s not just about Silver Eagle.  It’s not just about Tarichi.  It’s about Rodadero.  It looks to me like a mineral complex that could be a world class situation for our shareholders.”

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

NexGen Energy (NXE, TSX-V) has been pushing higher since announcing March 31 that it has drilled off-scale radioactivity (greater than 10,000 counts per second) approximately 3.7 km northeast and along trend from the Arrow zone on its 100%-owned Rook I Property in the Athabasca Basin…a 4th drill rig, recently mobilized to the property, has joined 1 other drill rig in testing this new discovery, named Bow, which is coincident with a recently located radon anomaly that tracks the strike of a VTEM conductor for approximately 730 m and is up to 140 m wide (this particular radon anomaly has the highest reading of all known radon anomalies in the area)…

NexGen has been quite volatile over the last year but has been following a general uptrend featuring higher lows…note how the RSI(14) has broken above its downtrend line, while the previous strong resistance around 53 cents may become new support…

Note:  John and Jon both hold share positions in IMT and GGI.  Jon also holds a share position in FMR.

Gold has traded between $1,206 and $1,215 so far today after yesterday’s confirmed breakout above $1,200 resistance…as of 8:40 am Pacific, bullion is down $3 an ounce at $1,211 (see updated chart below)…Silver is off 14 cents at $16.82…Copper is up 4 cents at $2.77…Crude Oil has reversed higher, up nearly $1 a barrel at $53.05 while the U.S. Dollar Index has rallied two-thirds of a point to 97.72…

Bullion hit a 7-week high yesterday and is clearly benefiting from the fact that the U.S. Dollar Index is now in the midst of its most significant correction since its huge move began last summer…with yesterday’s rally, Gold is now up 2.5% this year, outpacing the S&P 500‘s modest 1% gain…the last time Gold beat the S&P’s price appreciation in a full year was in 2011, when Gold rose 16% while stocks were flat…

HSBS analysts believe that with a Fed rate hike off the table until probably September, and a cooling off of the dollar, “There may be more scope for bullion to rally.  Gold’s break over the technical 50-day moving average of $1,209 and the 100-day moving average of $1,212 may have invited buying from momentum investors,” they stated in their assessment of yesterday’s activity…

Gold Chart Update

Friday’s bleak U.S. non-farm payrolls data has fueled expectations that the Federal Reserve will delay an anticipated rate increase this year, boosting Gold’s safe-haven appeal…New York Fed President William Dudley said the timing of the U.S. rate hike, which would be the first in nearly a decade, is unclear and policymakers must watch that the U.S. economy’s surprising 1st quarter recent weakness does not signal a more substantial slowdown…

Gold is poised to move higher this month, and a contributing factor could be a “short squeeze” as we pointed out yesterday (some short covering has already occurred over the last week, and more will likely kick in if Gold starts accelerating through the $1,220’s)…support should hold at $1,200…resistance areas to watch now are $1,217, $1,240 and $1,264 – those are all Fib. levels as per John’s 6-month daily chart…$1,240 come could rather quickly on a climb through $1,217 and yesterday’s intra-day high of $1,224…

This chart shows how the “turning point” for Gold came late last month as RSI(14) emerged out of oversold conditions from support and broke above a downtrend in place since late January…a bullish +DI/-DI crossover also occurred as the RSI(14) pushed higher…

U.S. Dollar Index Updated Chart

The Dollar Index clearly hit an important temporary top in mid-March at 100.71, a 12-year high…this pullback is different in its character than the ones witnessed during October, December, and late January into February as shown in this morning’s 1-year daily chart…

For the first time since the dollar surge began, RSI(14) has fallen below 50% while the ADX indicator confirms a bearish trend has materialized…keep in mind, it’s wise to assume at this point that the weakness in the dollar – which will give commodities and the Venture some much needed breathing room – is likely only a healthy correction within a primary bull market…King Dollar could certainly reassert itself at a later point, depending on a variety of factors…

A break below the 50-day SMA and support at 96 could scare away some speculators and cause a further drop into the low 90’s or possibly even to the 200-day SMA…

Copper Update

Supply disruptions have been benefiting Copper recently…unforeseen events, ranging from flooding and mudslides in northern Chile (described as the worst rain disaster in 80 years) to an electrical failure in Australia, have caused significant disruptions to supply…many experts were predicting that Copper output from mines would exceed demand in 2015 for the first time in 6 years…some are now forecasting a deficit…

After betting against Copper for 23 weeks in a row, money managers as a group turned bullish on Copper futures and options in early March, according to the U.S. Commodity Futures Trading Commission…

The demand side of the equation for Copper is less clear given the uncertain state of the global economy…according to CRU Group, a London-based metals consultancy, China’s Copper usage is set to expand at the slowest pace in 9 years as the biggest industrial-metals user cuts spending on everything from housing to washing machines…however, CRU Group still expects global Copper demand to exceed supply this year with balances tightening because of supply disruptions as opposed to a burst in demand…

The outlook for consumption will be one of the key topics discussed by miners, consumers and traders gathering at CRU’s 14th World Copper Conference that starts next Monday in Santiago, Chile…

CRB Index Updated Chart

The current pattern in the CRB Index supports the case for additional weakness in the greenback…the CRB certainly has room to rally higher this quarter…

A few key “takeaways” with this chart…

1.  A bullish “W” has formed in the RSI(14) after extreme oversold conditions persisted from near the end of Q4 last year through late last month

2.  Critical support held during the 1st quarter above the 2009 low

3.  The -DI indicator, which has formed a bearish “M”, may have peaked at the beginning of this year as it did near the end of 2008

Today’s Markets

Asia

China’s Shanghai Composite surged nearly 100 points or 2.5% overnight to a fresh 7-year high, closing at 3961…Japan’s Nikkei average was also strong as it climbed more than 1% to finish at 19641…the Bank of Japan began its 2-day policy meeting today…

Europe

European markets, closed Good Friday and Easter Monday, were up significantly today…on the data front, a second reading of March euro zone composite PMI came in at 54.0…while this was slightly below expectations, it was above the 53.3 seen in February…the trend of improving PMI numbers in the euro zone is a positive sign…

North America

The Dow is up 88 points as of 8:40 am Pacific…

Merrill Lynch analysts say big dollar moves of the kind we’ve seen since last summer have historically caused “earnings recessions” because foreign sales and earnings are worth less when translated back into dollars…as of last month, nearly one in five S&P 500 companies had warned of weaker earnings, many of them citing the strong dollar as the culprit…for the first time in 3 years, analysts project earnings per share for the S&P 500 will decline – by 3% in the first quarter, according to S&P Capital IQ, with only a 0.3% expected gain for the year…while the Oil sector does make up a major component of the S&P, other sectors are facing earnings declines as well…

In Toronto, the TSX is up 139 points through the first 2 hours of trading…the Venture (see updated chart below) has added 2 points to 691…

Due to unexpected travel, this is a slightly abbreviated edition of Morning Musings…tomorrow we’ll be following up on the fascinating Ni-Cu-PGE target (Pecors) that International Montoro Resources (IMT, TSX-V) is currently drilling in the Elliot Lake area west of Sudbury, while we’ll also expand on what could be unfolding at Garibaldi Resources‘ (GGI, TSX-V) Rodadero discovery in central Sonora State, Mexico…

Venture 6-Month Daily Chart

The Venture confirmed a breakout yesterday above the 680 resistance area…this coincides with a rapid increase in buy pressure as demonstrated by the CMF…the Index can now be expected to take another run at the 707 resistance encountered January 2 and February 28…

Keep an eye on the Dollar Index – if it breaks below 96, the Venture will surely blast through the 707 area given the exceedingly strong inverse relationship between the two…

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

Copper Fox (CUU, TSX-V) nearly doubled in the month of March, posting a gain of 86%, as Teck Resources (TCK.B, TSX) committed to a significant increase in program expenditures this year ($4.8 million vs. $2.2 million in 2014) at the Schaft Creek Cu-Au-Mo-Ag Project in northwest British Columbia (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)…

Wouldn’t it be interesting if Teck starts seeing higher grades and large tonnages developing 100 km to the north in the Sheslay district where it holds a large chunk of ground contiguous to the southern border of the Grizzly (that’s for a later analysis)…

In the meantime, 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…

Fib. resistance levels are important to understand…CUU reacted last month at the 35-cent Fib. level as expected following a breakout above the 200-day SMA…CUU has since fallen back in a healthy manner toward strong support at 19 cents, just a penny above the 200-day which has flattened out and appears poised to reverse to the upside this quarter…

CUU is up 1.5 cents at 22.5 cents as of 8:40 am Pacific…

Cannabix Technologies Inc. (BLO, CSE) Update

What an interesting chart this is – Cannabix Technologies (BLO, CSE, BLOZF, OTC), our favorite non-resource play since last summer, closed near the apex of a bullish pennant yesterday that started forming following the dramatic surge in February…remember, pennants are continuation patterns that usually break out in the direction of the previous trend that started…

What this chart is telling us is that BLO is well-positioned for another important move, probably to the upside, sometime this month…the potential catalyst for that is anyone’s guess but the company continues to make progress with its marijuana breathalyzer prototype and seems to have little trouble attracting positive media attention…

Below is a chart based on BLO’s OTC listing (CSE charts still not available)…RSI(14) has found strong support around the 50% level…

BLO is off half a penny at 44.5 cents on the CSE as of 8:40 am Pacific…

Note:  John and Jon hold hold share positions in IMT, GGI and BLO. 

With a gap-up this morning, Gold has traded between $1,215 and $1,224 so far today…as of 7:50 am Pacific, bullion has climbed $19 an ounce to $1,221…Silver is up 48 cents to $17.25…Copper is flat at $2.73…Crude Oil has jumped $1.91 a barrel to $51.05 as a technical rally is gaining stream (in addition, Saudi Arabia has raised prices for Crude sales to Asia for a 2nd month, signalling better demand in the region)…the U.S. Dollar Index, meanwhile, is down one-fifth of a point at 96.43 after Friday’s big drop following release of a much weaker than expected March jobs report…

Friday’s non-farm payrolls report from the Labor Department confirmed what many analysts already knew:  The U.S. economy slowed markedly in the 1st quarter, and that virtually guarantees that a Fed rate hike is off the table until at least late this year (in fact, in some circles, there are even whispers of the possibility of QE4)…on Thursday, the day prior to the release of the jobs report, JPMorgan’s economic research team cut their 1st quarter GDP growth forecast to a mere 0.6%, citing poor consumer spending data…some economists, meanwhile, argue that weakness during the 1st quarter was merely a short-term aberration due mainly to the negative affects of cold weather and West Coast port strikes…

Chinese Gold flows, as represented by withdrawals from the Shanghai Gold Exchange, will hit record levels for the 1st quarter of the year…year-to-date withdrawals stood at 561.2 tonnes as of March 20…if this is indicative of the rest of the year, Gold flows could reach 2,300 tonnes or more in 2015, a new record…

It’s worth noting again that SPDR Gold Trust, the world’s largest Gold-backed ETF, recorded its biggest monthly outflow in March since December 2013…as we commented last week, this can actually can be interpreted as a bullish sign from a contrarian standpoint as the Gold price jumped by more than 15% in the two-and-a-half months following that large December 2013 outflow that pressured bullion down to a low around $1,180…

Gold Short Squeeze On The Way?

Gold last night had its first chance to react to Friday’s jobs report and the corresponding plunge in the U.S. Dollar Index, and the reaction was positive as expected…technically, a confirmed breakout above resistance at $1,200 seems almost certain today…Fib. resistance levels to watch, as outlined in John’s 6-month daily Gold chart Saturday, are $1,217, $1,240 and $1,264…

The possibility of a “short squeeze” in Gold is very real…as Zero Hedge (zergohedge.com) points out in the chart below, there has never been this many investors on the short side of the Gold bet…

Today’s Equity Markets

Asia

Asian markets were mostly higher overnight, though Japan bucked the trend as the Nikkei fell slightly to close at 19398…China’s Shanghai Composite continued to plow higher, adding another 38 points to finish at 3864…

Europe

European markets were closed Good Friday and again today for the Easter long weekend…

North America

The Dow was under pressure in early trading today but has since reversed…as of 7:50 am Pacific, the Dow is up 81 points…

Earnings season begins this week and analysts are concerned about what looks to be a tough stretch, perhaps the toughest since the financial crisis, according to Bloomberg data (a record run by the U.S. dollar will certainly take a bite out of many company’s earnings)…approximately 30% of S&P 500 companies are expected to suffer a drop in Q1 earnings led, of course, by the energy sector…sectors that are expected to do well are financials, health care and consumer discretionary…

In Toronto, the TSX has added 61 points as of 7:50 am Pacific while the Venture is 7 points higher at 690…it appears the Venture will confirm a breakout today above resistance in the low 680’s…

News this morning that drilling is proceeding smoothly and on schedule, 24/7, at International Montoro Resources‘ (IMT, TSX-V) Pecors Ni-Cu-PGE target in northern Ontario…the high-grade discovery potential at depth, given the character of a massive geophysical anomaly and other supporting data, is what has numerous geologists (including those at the Ontario Geological Survey) excited about this project…drilling is now getting into the beginning of the targeted “sweet spot”…we’ve been conducting some revealing additional research on the geological dynamics at work at Pecors, and we’re looking forward to presenting that as part of tomorrow’s Morning Musings…

Venture Long-Term Monthly Chart

This Venture long-term chart certainly seems to suggest that 637 in mid-December marked an important low for this market – hopefully, the final bottom of a vicious bear cycle that started in early 2011…

At the very least, a significant rally is a distinct possibility given the current position of all the indicators…the 680 level is particularly key – this represents long-term support on the monthly chart that interestingly held in December, January, February and March, despite dips during each of those months below 680…

680 is also critical from a short-term chart perspective – if the Index can start to gain immediate traction above 680 on decent volume, as it’s showing so far today, the near-term technical picture would improve dramatically…the Venture is currently on the edge of a potential breakout that could take many investors by surprise with the possibility of a 10% advance this quarter to test resistance around 750 (a major hurdle to clear first would be chart and Fib. resistance at 707)…a weaker greenback and a commodities rally would underpin this move…it’ll be fascinating to see how April unfolds…

Venture 10-Year Monthly Chart

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

Over the past few weeks, since the news of Garibaldi Resources‘ (GGI, TSX-V) latest high-grade hit at its 100%-owned Rodadero Project in central Sonora State, Mexico, we’ve conducted interviews and fresh research to get an even better understanding of this intriguing area and how it could evolve over the coming months…what is now increasingly apparent, as we first mentioned late last year, the early stage “road map” that led Yamana Gold (YRI, TSX) to a major Gold-Silver discovery in 2007 at the Mercedes Project in north-central Sonora State (Mercedes is now in commercial production) looks remarkably similar to the road map Garibaldi is currently following at Rodadero…

Keep in mind, Garibaldi already has a proven track record in Mexico…this company was the first junior in that country to use hyperspectral remote sensing technology on a wide scale…hyperspectral “hot spot” signatures have been instrumental in the discovery at Rodadero, just like they were several years ago when GGI identified the Don Ese target at San Miguel and sold that optioned ground to Paramount Gold & Silver (PZG, NYSE)…the rich Don Ese vein system is what convinced Coeur Mining (CDE, NYSE) to recently buy out Paramount in a deal that closes later this month…in addition, Garibaldi’s head geologist in Mexico is Dr. Craig Gibson who is highly respected for his 20+ years of work down there – he has been involved in several major discoveries over his distinguished career on a variety of deposit types…

We (and others) would describe Dr. Gibson as a “conservative” geologist – by that, we mean if he says he thinks a particular deposit may have half a million ounces, you can be sure it has at least half a million and probably a whole lot more…he’s not promotional, he just tells it like it is…

Which is why, after our conversation with him, we’re even more fascinated with Rodadero…

“Rodadero is very interesting because there are so many mineralized areas,” Dr. Gibson stated.  “It seems to be at this point that all these targets are potentially part of a large mineralized system.  With the type of mineralization, and the wide spectrum of metals, these systems do tend to be large.  There are numerous examples in Mexico.  None of them are exactly the same but this style of mineralization is known in many places.  What’s a little bit different is the number of targets and the fact that one company (Garibaldi) controls much of the district.”

And the number of targets continues to grow with 2 of them now confirmed to be structurally linked – Silver Eagle and Reales…they form what’s now called the “SR High-Grade Zone” which features mostly near-surface Silver at Silver Eagle and then Silver with Lead and Zinc at Reales…the last reported hole at Silver Eagle, SE-14–15, hit bonanza grades at a very shallow depth in a hole collared 150 m north of discovery hole SE-14–01…that was the biggest step-out yet at Silver Eagle, and SE-14–15 returned an impressive 1,307 g/t Ag over 1.5 m within a broader interval of 6 m grading 346 g/t Ag…

While Dr. Gibson is impressed with the shallowness of the high-grade mineralization (generally within 50 m) encountered in drilling so far at Silver Eagle, and sampling results throughout the district that also show the presence of high-grade Gold in addition to Silver to the east, southeast and north of Silver Eagle and Reales, it’s the number of total targets and the fact that they all could be connected somehow at depth that has him so intrigued as a geologist…

One point that we (BMR) overlooked from Garibaldi’s March 5 news is the existence of a large ENE, WSW-trending vein system near the northern edge of Rodadero, approximately 4 km north of Silver Eagle…sampling by Garibaldi has confirmed that this system, which was exploited historically, extends both east and west onto claims (Dolores and El Rey) held by Garibaldi…

Below is a map of the Rodadero Project, taken from the GGI web site, with a couple of our own notes added…the widespread nature of the mineralization, over a 45 sq. km area, speaks volumes about the potential of Rodadero to indeed emerge as an important new mineral camp in central Sonora…tomorrow, we’ll examine how the Rodadero “road map” looks strikingly similar to the one followed by Yamana at Mercedes…

Pretium Resources Inc. (PVG, TSX) Update

Robert Quartermain’s Pretium Resources (PVG, TSX) has much in its favor right now including recent B.C. government approval of its $450 million Brucejack Gold Project, native support, and the strong financial backing of Zigin, China’s largest Gold producer…assuming federal approval, which seems almost certain, construction of the underground mine is expected to begin this summer with commercial production targeted for 2017…the project will create approximately 500 jobs during the 2-year construction period and 300 permanent jobs during its projected 16-year life…

The focus of the Brucejack Project, of course, is the Valley of the Kings which comprises high-grade visible Gold stringers within a lower grade Gold quartz stockwork system…a feasibility study completed in June of last year outlined proven and probable mineral reserves in the Valley of the Kings of 6.9 million ounces of Gold (13.6 million tonnes grading 15.7 g/t Au)…

Technically, Pretium is well-positioned to benefit from an uptick in Gold prices…note the breakout that’s now unfolding above the downtrend line in place since late January on this 6-month daily chart…a bullish “W” in the RSI(14) and a +DI/-DI crossover confirm the direction of the trend…

PVG is up 55 cents at $7.68 as of 7:50 am Pacific…

Niogold Corp. (NOX, TSX-V) Update

With Sean Roosen and Robert Wares at the helm, it’s hard to believe that Niogold Mining (NOX, TSX-V) won’t continue to be a leader in this market…drilling continues to uncover high-grade shoots surrounded by lower-grade halos that characterize the wider, mineralized shear zones at Niogold’s 100%-owned Marban deposit in northwest Quebec…recent results included 15.8 m @ 4.95 g/t Au, including 4.2 m grading 12.58 g/t Au, in hole MB-14–372 at a vertical depth of 120 m…the infill program has been expanded from 40,000 m to 50,000 m as drilling density is being increased on the eastern part of the pit shell…

Technically, NOX has performed exceptionally well in turbulent markets since the beginning of last year…look at the steady uptrend in the 2+ yearly chart below…consistently, NOX has found strong support at its rising 200-day moving average (SMA), currently 30 cents…

Buy pressure remains strong as indicated by the CMF…excellent possibilities here for the balance of 2015 – likely just a matter of time before NOX overcomes resistance at 44 cents as a more robust resource model for Marban appears to be on track for later this year…

NOX is off 1.5 cents at 40 cents as of 7:50 am Pacific…

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

Another high-quality play that investors should have on their radar screens as this 2nd quarter progresses is Columbus Gold Corp. (CGT, TSX-V)…

An updated resource estimate for the company’s Montagne d’Or deposit in French Guiana is expected by the end of June after more than 25,000 m of Phase 2 drilling that was completed late last year…all expenditures were financed by London-listed NordGold (the world’s 13th largest Gold producer) as part of a $30 million exploration and development program pursuant to which they can earn a 50.01% interest in the project by completing a bankable feasibility study by no later than March, 2017…the deposit is presently defined over 2,500 m x 400 m and to an average depth of 250 m from surface, so a significant open-pit operation is being targeted here…

Meanwhile, Columbus announced a week ago that it expects to commence a 250-hole, 64,000 m drill program at its Eastside Project in Nevada sometime in May or June…

Technically, CGT held up impressively well through the Venture’s 40% sell-off from September to December last year…the rising 500-day SMA, not indicated on this chart, coincides with Fib. support at 39 cents…strong chart resistance exists in the low-to-mid-50’s – if and when that area is cleared, CGT has the potential to power much higher…

CGT is up a penny at 46 cents as of 7:50 am Pacific…

Silver Short-Term Chart

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

Following the brief pullback from the late March high of $17.41 to unwind temporarily overbought conditions, Silver is showing new strength as April begins given the weakness that has crept into the greenback…

A key area to watch over the near-term will be the first of 4 Fib. resistance levels on this 9-month daily chart – $17.87…

The metal reacted in January at $18.50  – almost exactly at another key resistance level – and then went into a consolidation phase within the downsloping channel…we were waiting for a move above or below that channel, and it came immediately after the Fed policy statement…

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

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 GGI and IMT.

It’s Easter Sunday – Resurrection Day.  A day that should give everyone hope because it’s the day when over 2,000 years ago Jesus rose from the dead to claim victory over death – the greatest victory, the most incredible comeback, mankind has ever witnessed.  The Resurrection is what underpins the Christian faith and makes it unique.  The Resurrection is an irrefutable fact of history, and it’s why Jesus is indeed the way, the truth and the life.  And the same Spirit who allowed Him to conquer death can dwell in each one of us, if we so choose.  That’s a message of hope for everyone this morning as we all face challenges in our lives.  With Jesus, all things are possible, as scripture repeatedly states.

As investors, as exciting as it is to see our favorite stocks explode to the upside, or as gut-wrenching as it has been to experience the most recent severe decline in the resource sector, we should never let money or our stocks control our happiness or joy. And true happiness – peace and lasting joy – can only be found in our view by knowing God and serving Him through His son, Jesus Christ, who suffered and died on the cross and rose from the dead 3 days later on this day (Easter Sunday).  He is risen, indeed.  This is why we celebrate Easter.  This day is not about the Easter bunny or chocolates or Easter egg hunts or enjoying a day off work. It’s about Jesus and what He did.  He suffered and died for us at Calvary, out of His love and mercy for us, and actually conquered death.  That is so powerful and should give hope to us all.  Think about it.

Nothing is more important in our view than one’s relationship with God through Jesus. He is the creator of all things, including every mineral deposit we write about here at BMR, and He has also provided us, through His precious Word, all the guidance we need for our daily lives, including of course how we should approach the handling of money,  investment matters and relationships – business and personal.

This special day is a great opportunity for each of us to put some time aside and reflect on what Easter Sunday is really all about and why we celebrate it.  And draw closer to God in the process.

We wish all of our readers a very special and joyous Easter.

Below is Terry’s annual Easter Message.

Happy Easter From BMR!

At Christmas time Christians can be heard saying, “Jesus is the reason for the season” or “Keep the Christ in Christmas.” These sayings are clichés to remember that Christmas is a celebration of the birth of Jesus Christ. Christmas is a celebration that commemorates that God the Father sent his Son in the form of a baby to walk with and to teach His people about Himself. While this is very true, God had much bigger plans for His Son Jesus Christ when he sent Him in the form of a baby. In Jesus, God was creating a plan to have all His children (all humanity) reunited to himself.

When Adam and Eve sinned they were banished from God’s garden and no longer had community with God in the way He desired. Adam and Eve’s sin was only the beginning of humanity’s sins and all humanity has been sinning ever since, “For all have sinned and fall short of the glory of God” (Romans 3:23 New International Version). Sin is no little matter in the eyes of God. In fact, there is only one punishment for sin and that is death, “For the wages of sin is death” (Romans 6:23 NIV). There is no redemption for sin other than death without Jesus. God wanted to have relationship with His people but was unable due to their sin.  They had chosen sin over God. They could do nothing as sinners to avoid the penalty of death. It was and is the destiny of sinners. It breaks God’s heart to have any of His children not have the ability to come to him and in this He devised a plan to have someone pay the death penalty for all of His children. God chose to have His Son pay that price.

If any of you are fathers or mothers, can you imagine sending your son or daughter to die? Mothers and fathers shelter their children from much less cruel things than that but God needed somebody that could pay that price and he chose His one and only son, “For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life” (John 3:16 NIV). Jesus paid in full the price for the sins of the world. With this His people now have full access to God. They can now approach the Heavenly Father.

Over 2,000 year ago, Jesus died a horrific death on the cross.  His body was wrapped in cloth and placed in a burial cave. On the third day Jesus rose from the dead, defeated death, and went to sit at the right hand of God. Jesus has secured the eternal life of all that call on His name, all that believe in the Son of God, Jesus Christ. He paid the price for your sins and will save you from spiritual death if you choose Him. Just as Jesus is the reason for the Christmas season, Jesus is also the reason for the Easter season.

This Easter BMR invites you to invite Jesus into your heart and accept His gift of life, His gift of salvation. It isn’t a complicated process. If you feel compelled to make a choice like this today or in the days to come just pray this simple prayer:

“Dear God in heaven, I come to you in the name of Jesus. I acknowledge to you that I am a sinner; I need your forgiveness. I believe that your only Son Jesus Christ shed His precious blood on the cross and died for my sins, and I am now willing to turn from my sin. Right now I confess Jesus as the Lord of my soul. With my heart, I believe that God raised Jesus from the dead. This very moment I accept Jesus Christ as my own personal Savior and according to His Word, right now I am saved. Thank you Jesus for dying for me and giving me eternal life. Amen.”

From my family to yours, Happy Easter.

Terry Dyer

TSX Venture Exchange and Gold

In a shortened trading week due to Good Friday, the Venture continued to display some positive signs as it inched slightly higher to finish at 683 Thursday.  As markets reopen Monday, the Index may have a couple of major factors in its favor as it attempts to gain traction above 680 resistance – a weakening U.S. Dollar Index and higher Gold prices following Friday’s disappointing U.S. jobs report.

It’ll be interesting to see how the Oil market, with an opportunity for reflection over this long weekend, reacts to the “framework” nuclear agreement with Iran (this deal, which is still at least a few months away from being finalized, is already facing stiff opposition from members on both sides of the aisle in the U.S. Congress).  Technically, WTIC appears poised for a rally, and that would be another immediate supportive factor for the Venture.  Iranian Oil sanctions aren’t being lifted anytime soon.  Even if a final agreement does emerge and actually gets implemented (Congress has to agree to lift American sanctions), energy experts believe that any appreciable impact on an already glutted global Oil market is highly doubtful for at least 6 months and probably more than a year.  It’s estimated that Iran has approximately 20 million barrels of Crude in storage that it could potentially release on the market.  But that’s a longer-term issue.

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 rally in Crude is almost certain to give the Venture a lift.

Venture-Dollar Index Dynamic 

It’s no coincidence that the Venture turnaround started Wednesday, March 18, when the Fed emerged from its 2-day policy meeting with a statement that was dovish enough to take the wind out of the sails of the greenback.  The Dollar Index clearly hit a temporary top last month of just under 101 after its fastest rise, since last summer, in 40 years.  The likelihood of an extended greenback correction has now increased substantially after Friday’s dismal jobs report which confirms that U.S. economic growth slowed considerably during Q1.  This most certainly puts a Fed rate hike off the table until at least late this year.

Additional dollar weakness this month would create the conditions for a Venture breakout through important chart resistance around 707.

If some companies can also show some success on the exploration front – there’s nothing like a blockbuster drill hole to get investors excited, that’s what this market needs – then the Venture has a chance to snap out of a 7-month slump in a powerful way.

Significantly, Venture support in the 650’s (Fib. level) held during a rocky first half of March as it did during January.  John’s 4-month daily chart shows RSI(14) with solid up momentum and plenty of room to move higher at 54%.  The breakout above resistance at 680 still requires confirmation. 

Note the increasing buy pressure (CMF) and the bullish trend as shown by the ADX.  In addition, the Venture is now almost 10 points above its 20-day moving average (SMA) which is in an excellent position to reverse to the upside this coming week.

Venture 6-Month Chart

This 6-month chart shows how the Venture is still grappling with its 50-day SMA, currently at 684.  This SMA has flattened out and is threatening to imminently reverse to the upside.  Since pushing above a downtrend line in January, the Venture has traded within a narrow range of 51 points which includes very strong support around 660.  This market just needs a catalyst to take off to the upside and clear critical resistance slightly above 700.

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 kicked off April on a positive note Wednesday, rebounding from a low of $1,179 as the market responded well to a weaker than expected ADP monthly private payrolls report which obviously foreshadowed Friday’s much weaker than expected March jobs report from the Labor Department.  Bullion’s first chance to react to Friday’s numbers will come during electronic trading Sunday night.

For the week, Gold was up $4 an ounce as it closed at $1,202.  Confirmation of a potential breakout above $1,200 must be confirmed Monday.  Fib. resistance levels to watch on the 6-month daily chart are $1,217, $1,240 and $1,264.

Silver slowed down slightly last week, losing 22 cents to close at $16.75 (updated charts Monday morning).  Copper fell 3 cents to finish at $2.73.  Crude Oil added 27 cents a barrel to finish at $49.14 while the U.S. Dollar Index fell more than half a point to 96.74.

The “Big Picture” View Of Gold