Gold has traded between $1,165 and $1,179 so far today…as of 9:20 am Pacific, bullion is off $3 an ounce at $1,177…Silver has also reversed from its lows and is now up a penny at $15.77…Copper is flat at $2.61…Crude Oil has added 65 cents to $58.98 while the U.S. Dollar Index has rebounded more than one-third of a point to 95.44…

Investors bought the most Gold through physically-backed funds in almost 5 months last week as Greece and its creditors headed for last-ditch talks…holdings in Gold ETF’s rose 6.9 metric tons as of last Thursday, the most since February 2, for a total of 1,598.7 tons, according to data compiled by Bloomberg…assets rose in 7 out of 8 days, rebounding from the lowest level since 2009…

Greece has requested a new bailout amid a last-minute diplomatic push before the country’s current rescue deal expires and it defaults on a payment to the International Monetary Fund…the Greek government submitted a proposal for a 2-year agreement with the euro zone bailout fund to cover its financing needs and restructure its debt, according to a statement issued this morning by Prime Minister Alexis Tsipras’s office…the proposal says Greece wants the new rescue package to cover €29.15 billion in debt repayments between 2015 and 2017…

Greece makes up just 2% of the euro zone economy and investors have to also keep in mind that the country has been “ring-fenced” because the private sector holds little Greek debt these days…so even in the worst-case scenario of a Greek default and departure from the euro zone, the world including the euro zone will keep moving forward…the euro zone could very well be better off without Greece…

Euro Weekly Chart

Interestingly, the euro staged its biggest reversal in history yesterday according to CNBC…

The currency dropped as much as 1.89% overnight Sunday to $1.095 as investors digested news that the Greek government would close the country’s banks and hold a referendum in order to evaluate its creditors’ proposals on solving the country’s debt…however, the euro recovered strongly as the day progressed and finished up more than one-half of 1% at 112.35…previously, the largest single-day turnaround occurred January 23, 2009, when the euro fell as much as 1.70% but then eked out a gain of 0.04%…

Technically, the euro has been looking quite bullish since a March-April double bottom which also corresponded with a double top pattern in the U.S. Dollar Index…there’s every reason to believe that based on this chart, and how the currency responded yesterday to the situation in Greece, the euro should continue to strengthen in Q3 at the expense of the U.S. dollar…that provides a much more positive backdrop for the Venture and commodities, and should allow the Venture to maintain critical support and eventually push through resistance just above 700 at some point during the upcoming quarter – likely not until the typical mid-August “turn”, however…

U.S. Dollar Index 9-Month Daily Chart

The Dollar Index met stiff resistance between 96 and 97 yesterday, as expected, and quickly retreated to close near the low of the day at 94.95…the Dollar Index is clearly entering Q3 on a bearish note and that could be a signal that the Fed won’t increase interest rates in September as many expect…

A test of strong support around 88 in the coming months seems likely before the Dollar Index may regain momentum…

Today’s Equity Markets

Asia

Asian markets were strong overnight with China’s Shanghai Composite rebounding 225 points or 5.5% to finish a volatile session at 4278…intra-day, it fell as low as 3847 before the recovery set in…yesterday’s close at Fib. support and the bottom of a downsloping channel on the 2-year weekly chart, and the turnaround from 3847 overnight, are important lows the Shanghai must hold…

Europe

European shares were down significantly again today as Greece remained firmly in the spotlight…

North America

The Dow is up 27 points as of 9:20 am Pacific…U.S. consumer confidence increased more than expected in June, according to the latest data from the U.S. Conference Board…the Index rose to 101.4, up from May’s revised reading of 94.6…this is giving the greenback a boost…

In Toronto, the TSX is up 70 points as of 9:20 am Pacific…Canada’s economy began the 2nd quarter of 2015 the same way it finished the previous 3-month period, continuing to contract as the collapse of Oil prices squeezed output in the energy sector and the hoped-for turnaround in manufacturing again failed to materialize…Statistics Canada said GDP, the widest measure of goods and service produced in the country, declined 0.1% in April – the 4th straight monthly contraction in the economy…expect more stimulus from the Bank of Canada…

The Venture has added 4 points to 671 as of 9:20 am Pacific…

TSX Energy Index 3-Year Weekly Chart

Nervousness regarding the NDP in Alberta has had a significant impact on the TSX energy index since that party assumed power May 6 as you can see in the following chart…the drop has been nearly 20%…

The energy index is up a point at 205 as of 9:20 am Pacific…a double bottom around the 182 Fib. level is a distinct possibility, especially if investors become more skittish on Canada’s largest Oil-producing jurisdiction…

Meanwhile, more startling revelations yesterday regarding the NDP team in Alberta…last week, we learned that Environment Minister (and Minister for the Status of Women) Shannon Phillips co-wrote the introduction of a book a decade ago by Alberta Greenpeace organizer Mike Hudema titled “An Action A Day Keeps Global Capitalism Away”…yesterday, Ezra Levant at therebel.media reported that Phillips’ chief of staff, Brent Dancey, “is a convicted violent criminal who was sentenced to nine months in jail, and banned for a further ten years from owning firearms and explosives, after he mercilessly beat a Regina man so badly (in 1993) he was sent to hospital.” 

Had this individual (chief of staff for the Minister for the Status of Women) been convicted of assaulting a woman, would that have been enough to disqualify him from being one of the province’s highest public officials?…the Alberta NDP has some serious explaining to do here, and this is yet another example of how weak their talent pool is…they recruited Dancey from Manitoba where the NDP is in total disarray)…

It speaks volumes that the Alberta government has launched a “royalty review” but has said nothing about a “spending review”, and that’s the province’s biggest problem…already, during its first 2 months, the NDP has hiked spending and taxes (plus of course they’ve added a jobs-killing 10% to the minimum wage which will give Alberta the 3rd-highest minimum wage in the country effective October 1)…it’s going to get much worse in Alberta, which means financial and human capital will be fleeing the province just like what happened in B.C. in the late 1990’s when the NDP there pursued exactly the same course of higher taxes, over-regulation and bigger government (Bob Rae’s Ontario years ago is another example)…

The NDP sees wealth and all they want to do is redistribute it, which in turn chases capital away and destroys wealth…it’s hard not to believe that a real tragedy will unfold in Alberta over the next couple of years, and investors need to be prepared…

Construction Permit Granted For B.C.’s Silvertip Mine

British Columbia has approved a construction permit for a proposed $50-million Silver, Lead and Zinc mine just south of the Yukon border after the project’s economic and environmental plans helped win support from an area First Nation…Mines Minister Bill Bennett said yesterday that the underground Silvertip mine could create up to 200 jobs and could be in operation for more than 20 years…privately-held JDS Silver Inc. said the mine will be one of the most environmentally responsible operations in the province…

“JDS Silver has committed to dry-stack tailings versus a conventional tailings pond, resulting in very little post-closure impact on the environment,” COO Kevin Watson stated.  “The company intends to leave the land with minimal impact while maximizing benefits to all of our stakeholders and our partners, the Kaska First Nation.”

Columbus Gold (CGT, TSX-V) Update

Columbus Gold Corp. (CGT, TSX-V) has commenced a Phase 3 drill program, financed by Nordgold (NORD, LSE) at its 100%-owned Montagne d’Or Gold deposit in French Guiana…the program will support the completion of a bankable feasibility study for Montagne d’Or and will consist of a combination of RC and diamond drilling…meanwhile, Columbus has also added a 2nd drill rig at its 100%-owned Eastside Gold project in Nevada…approximately 45,000 meters of drilling are expected to be completed this year…depending on results, a 3rd rig could be added in the fall…

TSX Gold Index 5-Year Weekly Chart

Back up the truck, load up with high-quality Gold producers, and be a little patient…this chart provides further evidence that the TSX Gold Index is headed for a strong finish to 2015 given the rounding bottom formation and the growing likelihood of a breakout above the downtrend line at some point during the last half of the year…keep in mind, traditionally, Q3 is one of the strongest periods of the year for Gold producers…

Claude Resources Inc. (CRJ, TSX) Update

Despite challenging market conditions, there have been several outstanding success stories among producers including smaller-scale ones…we’ve pointed out how Richmont Mines (RIC, TSX) turned the corner financially last year, with that stock tripling in value since last summer, while Claude Resources (CRJ, TSX) has also experienced a similar turnaround with superb results in the market…

Recently, as anticipated, CRJ has backed off from temporarily overbought conditions to its uptrend support line…

Yesterday, CRJ announced that it has expanded its land position at the Seabee Gold operation in northeastern Saskatchewan by approximately 3,000 hectares to 19,950 hectares…the additional 3,000 hectares are located east and north of the Santoy region, where the company is currently expanding production from the Santoy mine complex and conducting 35,000 m of underground drilling in 2015…

CRJ‘s 2nd quarter Gold production results are expected to be announced prior to market open July 7…

On May 7, CRJ recently reported 1st quarter net profit of $5.1-million, or 3 cents per share, a $10.2-million difference from the 1st quarter of 2014…this is related to improvements in Gold production, sales volumes, ore grades and operational efficiencies at its flagship Seabee mine…a declining all-in sustaining cost per ounce profile for the remainder of the year bodes well for the company…

This chart shows a bullish primary trend, so any pullbacks should be considered accumulation opportunities…

CRJ is off 2 pennies at 67 cents as of 9:20 am Pacific…

Richmont Mines (RIC, TSX) Update

Richmont Mines (RIC, TSX) continues to “flirt” with a breakout above a downsloping flag…the fundamentals with RIC are extremely encouraging and this 4-year weekly chart shows superb support at the Fib. retracement level of $3.48 (touched in April) and the rising 200-day moving average, currently $3.67…strong RSI(14) support as well at the 50% level…

While the masses aren’t paying attention to Gold stocks, this is exactly the time to be considering high-quality companies like Richmont that could deliver spectacular returns over the next 6-12 months…

RIC is off 4 cents at $4.00 as of 9:20 am Pacific…

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

This shortened trading week in Canada and the U.S. has started off on a volatile note for global equity markets with the deteriorating situation in Greece…Gold has generally ignored the noise, however, trading between $1,173 and $1,186 so far today…bullion is up $4 an ounce at $1,178 as of 9:00 am Pacific…Silver has lost 4 cents to $15.71…Copper is flat at $2.62…Crude Oil is off more than $1 barrel to $58.48 while the U.S. Dollar Index has slid to 95.15…the euro is holding up well today despite the Greece flap – not good news for dollar bulls…

“Greece brought us democracy centuries ago, now they’re about to bring us chaos,” commented billionaire Wilbur Ross, who has a large interest in Greece, during an interview on CNBC’s Squawk Box this morning.  “I don’t see how Mr. Tsipras and the Syriza Party survives this,” he added.

Greek banks and the country’s main stock exchange will stay closed until next Monday, and the central bank has also moved to impose capital controls in a bid to prevent a severely battered banking system from collapsing completely…over the weekend, Greek’s socialist Prime Minister Alexis Tsipras shocked European policy makers by announcing the country will hold a referendum on whether to accept the terms of Greece’s creditors to unlock desperately needed financial aid…it now looks almost inevitable that the country will go into default tomorrow on a €1.54 billion ($1.69 billion U.S.) payment due to the IMF…

Investor Dennis Gartman, who publishes the Gartman Letter, doesn’t believe the Greek Tragedy will play out as badly as some are speculating…

“If we’ve learned anything in more than four decades in the capital markets we’ve learned that nothing is forever. Mexico devalued and was allowed to return to the capital markets within months. Russia defaulted and it is now a fully fledged participant in the global capital market. Argentina has defaulted too many times to count, and will again, but it it will be re-admitted to the markets within months…perhaps even weeks…of so doing,” Gartman stated.

Reuters took a poll of more than 70 economists and traders today that showed a continuing, albeit declining, consensus (55% vs. 45%) that Greece will remain in the euro zone…

Puerto Rico On Verge Of Financial Collapse

Puerto Rico can no longer make payments on its $73 billion in debt, according to Governor Alejandro Garcia Padilla, who warns the island is perilously close to entering a “death spiral”…Padilla told the New York Times in an interview published last night, “The debt is not payable…there is no other option. This is not politics, this is math.  But we have to make the economy grow. If not, we will be in a death spiral.”

Global Consumption of Copper Poised To Increase

Interesting observations as usual from Frank Holmes, CEO and Chief Investment Officer for U.S. Global Investors in his weekly alert that we suggest investors check out at www.usfunds.com.

“Here’s a bit of energizing news,” Holmes wrote.  “In 2014, for the first time in four decades, the global economy grew along with energy demand without an increase in global carbon emissions.

“That’s according to energy policy group REN21’s just-released Renewables 2015 Global Status Report, which attributes this stabilization to ‘increased penetration of renewable energy and to improvements in energy efficiency’.

“What this means is that as the world’s population continues to grow, and as more people in developing and emerging countries gain access to electricity, the role alternative energy sources such as wind, solar and geothermal play should skyrocket. Between now and 2040, a massive $8 trillion will be spent globally on renewables, about two-thirds of all energy spending, according to Bloomberg New Energy Finance. Solar power alone is expected to draw $3.7 trillion.

“This is good news indeed for Copper, necessary for the conduction of electricity in all energy technologies, whether they be traditional or alternative. The use of some carbon-emitting fossil fuels – coal, for instance – will likely drop off over the years, but Copper will remain an irreplaceable component in our ever-expanding energy needs.

Global Copper consumption is poised to increase not just because electricity demand is growing. New energy technologies typically require more of the red metal than traditional sources. Each megawatt of wind power capacity, for instance, uses an average of 3.6 tonnes of Copper. Electric trolleys, buses and subway cars use about 2,300 pounds of Copper apiece. Where we’ll see the most significant growth, though, is in the production of hybrid and electric cars, which use two to three times more Copper than internal combustion engines.”

Today’s Equity Markets

Asia

Shanghai 2-Year Weekly Chart

After more than a week of a brutal sell-off in Chinese stocks, the country’s central bank on Saturday took a rare easing step, cutting both its benchmark interest rates – the 4th reduction since November – and the amount of reserves certain banks are required to hold…the central bank has rarely cut both interest rates and the reserve-requirement ratio on the same day…the last time it did so was in October 2008 at the height of the global financial crisis…

Interestingly, the Shanghai closed exactly at the bottom of a downsloping channel Friday and then Chinese authorities stepped in over the weekend in an effort to prop up not just a slowing economy but a stock market that had fallen 20% after a spectacular surge…

But the central bank’s actions failed to lift the market overnight amid concerns over investors’ debt levels, while nervousness surrounding Greece also contributed to another slide in the Shanghai…the index sank 138 points or 3.4% to close at 4055 – putting it exactly at Fib. support and just slightly below the upsloping channel in place since last summer…

The Shanghai will either move back higher from here or test the next critical support around 3400…

Japan’s Nikkei average tumbled 596 points or 2.9% overnight to close slightly above 20000…

Europe

European markets were sharply lower today as bank stocks in particular got hit hard due to the situation in Greece…Germany’s DAX suffered its worst day since 2011…

North America

The Dow has fallen 200 points as of 9:00 am Pacific…U.S. pending home sales rose 0.9% in May from April, slightly below expectations, according to the National Association of Realtors, after a downward revision to April’s reading…the May figure, however, is still the highest level on the Association’s index since April 2006…

Other important economic data this holiday-shortened trading week will feature Thursday’s employment report from the Labor Department (June’s non-farm payrolls are coming out a day earlier than usual due to Independence Day Friday)…  consumer confidence data will be released tomorrow followed by private employment and national manufacturing data both for June on Wednesday…

In Toronto, the TSX has tumbled 285 points as of 9:00 am Pacific while the Venture has slid 5 points to 674…a very strong Fib. band of support on the Venture exists between 654 and 681…

Mapan Energy (MPG, TSX-V) is this morning’s Venture leader, jumping 49 cents to $1.38 on high volume following an all-stock takeover offer announced by Tourmaline Oil Corp. (TOU, TSX)…Castle Mountain Mining Company (CMM, TSX-V) has changed its name to NewCastle Gold Ltd. with the change expected to be effective tomorrow on the Venture…”NCA” will be the company’s new ticker symbol…

Skeena Resources Ltd. (SKE, TSX-V) Receives 3-Year Drill Permit For Spectrum

Skeena Resources (SKE, TSX-V) has mobilized 2 drills to its Spectrum high-grade Gold Project in northwest B.C., approximately 75 km southeast of the Sheslay district…the company has received a 3-year drilling permit and has started fieldwork and camp construction…drilling is expected to begin within several days…a total of 10,000 to 12,000 m of drilling in 50 to 60 holes is planned with holes averaging 200 m and varying from 50 to 350 m in depth…the program has been designed to expand the historic resource at the 500 Colour and Central zones, the latter of which includes the QC 1, QC 2, Porphyry 1, and Porphyry 2 structures…other holes will test the East Creek Zone, believed to be a possible extension of the Central Zone, and other outlying targets…a 43-101 resource estimate will be completed by the end of the year…

More Companies Using Drones As Important Exploration Tool 

More junior explorers – at least those with money – are making effective use of drone technology…Adventure Gold (AGE, TSX-V) reported this morning that following channel sampling over mineralized zones at its Val d’Or East Project, the company utilized an unmanned aerial vehicle (UAV or drone) to survey the area…the purpose of this survey was to acquire an accurate 3D-like terrain model and high-quality aerial orthophoto data set…all the information acquired from the drone will be processed to create a 3D map (centimeter accuracy) that will be integrated into the company’s geological and block models…details obtained from the orthophoto data set will also significantly enhance the precision of the geological mapping of the strip zones and will help to better understand the structural control on the Gold mineralization…

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

NexGen Energy (NXE, TSX-V), now with an aggressive summer drill program in progress at its emerging world class high-grade Uranium discovery in the Athabasca Basin, has backed off this morning due to overall market weakness after hitting a fresh all-time high Friday of 86 cents…

Any recent pullbacks in NXE have been accumulation opportunities given events on the ground and a highly encouraging technical pattern…in situations like this, RSI(14) conditions tend to become very overbought for an extended period – so there clearly appears to be more upside here…while not shown on this 2-year weekly chart, the next measured Fib. resistance level after 83 cents is $1.20…

NXE is off 2 pennies at 84 cents as of 9:00 am Pacific…

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

Garibaldi Resources (GGI, TSX-V) appears to have turned the corner after surviving an onslaught of indiscriminate fund selling from Sprott Securities (SII, TSX) which has affected nearly 100 companies in the resource sector…

Non-resource assets now make up more than three-quarters of Sprott’s actively managed funds, up from 27% in 2012…Sprott’s funds held just over 10 million GGI shares (about 20% of the total outstanding) entering 2015, and it’s now believed that Sprott is out completely after a deluge of selling linked to them over the last couple of weeks…

Given very oversold technical conditions, and plenty of activity coming up in B.C. and Mexico over the summer, GGI has an excellent opportunity to rebound strongly during Q3…more later in the week…

Silver Short-Term Chart

As expected, Silver continues to test new support at a downtrend line (dotted blue, near $16) where it broke out from in May…

Silver is about to enter a traditionally strong period of the year, so it’s reasonable to expect the downtrend line support and chart support at $15.66 to hold…

Silver Long-Term Chart

An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that appears to be in the works here…

It seems quite possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce…RSI(14) has managed to hold support which goes back to 2001…

Sell pressure continues to remain strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which could continue for a while yet, should therefore be viewed in a larger context as a bullish contrarian indicator…

Several fundamental factors are currently in Silver’s favor…industrial demand for the metal is growing, and global supplies are poised for a deficit of 57.7 million ounces this year, according to Thomson Reuters…

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

After 23 drill holes, increasing success, and the emergence of a dynamic deposit model, it was no surprise that Doubleview Capital’s (DBV, TSX-V) Hat Project – and the entire Sheslay district for that matter – recently landed in the middle of Chad Norman Day’s northwest B.C. radar screen.

Just weeks earlier, the Tahltan Central Council President secured an historic agreement with Imperial Metals (III, TSX) on the operation of its Red Chris mine, the 6th new mine to open in the province since 2011.

Combined deposits in the Sheslay district could ultimately dwarf the size of the Red Chris given the drill hole success ratio to date and the abundance of targets with astonishingly similar signatures over a NW-SE mineralized corridor extending for at least 30 km.

Video Interview Helps Explain The Hat’s Immediate Promise

Below is the first in a new series of excerpts from our latest interview with Dr. Abdul Razique, Doubleview’s chief geoscientist recruited early this year.  He’s a Cu-Au porphyry specialist who performed extensive and extraordinary work on one of the world’s largest such deposits (Reko Diq) with Copper giant Antofagasta.

When he says the Hat is “like an ocean of hydrothermal magnetite,” that’s not a description to be taken lightly given this individual’s knowledge and experience.  Abundant hydrothermal magnetite is known to be associated with Gold-rich Copper porphyry systems.

Dr. Razique sees ample evidence that the Lisle Zone discovery area is merely a southeastern edge of one very large alkalic porphyry system, and we’re exploring that model in detail over the next couple of weeks beginning today.

Click on the link below for an informative look in less than 90 seconds at the Hat’s hydrothermal magnetite and other features that strongly suggest this property is ready to attract many fresh eyes and advance to an exciting new level.

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

The Venture Exchange and Gold

As summer officially began, it was a light volume week for the Venture as it dipped 5 points to close Friday at 679.  For the month, the Index is currently off 1.9% but that’s not surprising considering that June has been the weakest month of the year for the Venture going back to its inception with an average decline of 2.6%.  So in fact, June 2015 has been slightly better than normal entering the final two trading sessions of the month.  July can be slow, but by the middle of August is when this market usually “turns a corner” – one way or the other.  And there’s no technical evidence to suggest that the last four months of this year will be anything like the final four months of 2014. 

There will be individual success stories in July in both the resource and non-resource sectors.  One of our favorites, NexGen Energy (NXE, TSX-V), hit another new all-time high Friday of of 86 cents as the company ramps up drilling at its emerging world class Uranium discovery in Saskatchewan’s Athabasca Basin.  There are other areas of the country we’re watching very closely and we’ll expand on that Monday.  British Columbia will be a key jurisdiction to watch with rigs turning or about to turn in central and northern parts of the province.

Interestingly, despite the dramatic late 2014 sell-off and the added difficulties the junior resource market has faced since, the Venture has been able to hold critical support (Fib. and chart) around 680 on a monthly basis.  Note the uptrend line from the December low.  We predict that the band of Fib. support between 654 and 681 will hold.

So the Venture’s upside potential, looking ahead through Q3, definitely appears to exceed its downside risk, a very different scenario than the one that existed last September when the Index simply fell apart technically, driven largely by the collapse in Crude prices and the record rise in the greenback.  Yes, the resistance just above 700 is frustrating but the Venture has also been building a strong base this year.  Non-resource issues of course have performed the best since last September.  But quality resource stocks could pick up strongly over the last half of 2015.

U.S. Dollar Index

A key market to watch, of course, is the U.S. Dollar Index which faces strong resistance in the mid-to-upper 90’s given the double top pattern that formed in March and April.  As long as a weak to neutral trend continues in the greenback over the coming months, the risk factor is limited at current levels for the Venture given the inverse relationship between the two. 

The Dollar Index clearly lost momentum as soon as it fell below an uptrend line in late April going back to the start of last summer’s rally.  As expected, the Index rallied back to the top of the uptrend line (98) where it reacted at fresh resistance.  This could take a few months to play out, but the Dollar Index may ultimately have to test Fib. support around 88.  Much will hinge on Fed policy and how the U.S. economy behaves.  The Fed appears reluctant to act on an interest rate hike this year.

Technically, a repeat of last year’s dramatic rise in the Dollar Index over the final months of the year simply doesn’t appear to be in the cards.  Fundamentally, the U.S. economy simply can’t afford another greenback surge.

A key piece of data coming up is the non-farm payrolls report for June on Thursday, a day earlier than usual given that Friday is the U.S. holiday (Canadian markets of course are closed Wednesday).

Gold

Gold faces strong resistance at the moment between $1,200 and $1,210, as we’ve been pointing out, so last week’s $26 tumble to $1,174 was no big surprise.  On the bright side, seasonality factors will soon be in Gold‘s favor as Q3 traditionally is the metal’s strongest quarter of the year.

On this 2.5-year weekly chart, which has proven to be a very reliable guide, Gold continues to meander within a downsloping flag.  A breakout above or a breakdown below this flag will really be significant.  Important chart support exists at $1,150 and there’s certainly a good chance this level could be tested again.   If it fails, the first line of support is at the bottom of the flag (around $1,100).

Encouragingly, RSI(14) has continued to climb a gently sloping uptrend since last fall.

Silver fell 33 cents last week to close near support at $15.75.  Copper added 4 cents to $2.60, and could get some help in the coming week from today’s interest rate cut by China’s central bank – its 4th reduction since November to prop up a slowing economy.  Crude Oil added 26 cents to $59.65 while the U.S. Dollar Index climbed a point-and-a-half to 95.40.

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion and will continue to support prices.   Despite Gold’s largest annual drop in 3 decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors:

Gold has traded between $1,167 and $1,180 so far today…as of 9:00 am Pacific, bullion is flat at $1,173…Silver is off 7 cents at $15.76…Copper has gained 2 pennies to $2.61…Crude Oil is down slightly at $59.60 while the U.S. Dollar Index has added one-third of a point at 95.53…

Terrorist attacks on 3 fronts this morning – France, Kuwait and Tunisia…dozens dead in shootings, bombings and a beheading…ISIS has claimed responsibility for at least one of these attacks (Kuwait)…in France, a U.S.-based gas factory was the target in which one man was decapitated by terrorists who left his severed head atop a fence, inscribed with Arabic phrases and next to the flag of ISIS…

Still, the American President denies we’re in a war against Islamic extremists…

Alberta’s Destructive Path 

The socialists now running Alberta continue to take the province down a very dangerous road that is guaranteed to drive away both investment capital and human capital over the next couple of years…investors need to be prepared for that…

The so-called “climate change regulation upgrades” announced yesterday are part of a broad economic “reform” and social engineering agenda by this far left, inexperienced government that’s determined, among other things, to redistribute wealth…in part, this means punishing what has been successful – energy extraction – through higher taxation and regulation, and reward what has been less so, like government-favored “green” industries and more refining and upgrading…

Yesterday, the Canadian Association of Petroleum Producers, which represents large Oil sands players, warned that its members were facing $800 million in added costs over 2 years because of higher carbon levies and corporate taxes – at a time of course when Crude prices are well below what they were last year…

That’s just the beginning, we’re sure…

“If we get it right, our environmental policy will make us world leaders on this issue instead of giving us a black eye around the world,” Alberta Environment Minister Shannon Phillips stated yesterday.  “We were not taken seriously on the national or international stage; with this, that will change.”

Alberta had a “black eye” around the world?…among who, radical environmentalists who just hate fossil fuels?…who cares?…what an absurd comment…

But that shouldn’t be surprising coming from this new Environment Minister for Albertastan…Philips is a former policy analyst at the Alberta Federation of Labour…in recent days she was put on the spot by revelations she co-wrote the introduction of a book a decade ago by Alberta Greenpeace organizer Mike Hudema titled “An Action A Day Keeps Global Capitalism Away” – a twisted manifesto that outlines strategies for activists to protest government and business actions and get media attention…

“At the time I was one of Mike Hudema’s employees. I helped him with some grammar and that’s really the extent of my involvement,” Phillips told the CBC…

Oh, really…that’s not how Hudema described it…he wrote, “It would not have been possible to put this book together without her.  She pushed me to write it, edited my work and contributed to the content.”

Good luck, Alberta…B.C. and Saskatchewan are waiting with open arms…

Gold Surprise Coming?

In an analyst report titled “Debunking the Bearish Case for Gold(s)”, Canaccord Genuity stated, “Interestingly, the 1986-87 experience teaches us that despite a Fed hike in December 1986, Gold equities surged until the second Fed hike which occurred in April 1987. So, if the Fed were to pre-emptively hike rates in September, the Fed could take a pass in December and the second hike could only happen next year if a ‘gradual’ approach is implemented. This scenario could maintain or open the door to a cyclical rally in Gold and Gold equities.”

Canaccord also sees the possibility of a weaker U.S. dollar during the last half of 2015 which would also aid the Gold sector.  “Our point is not to say that the U.S. dollar is about to crash but a phase of liquidation upon a break of the DXY (Dollar Index) below its 200-day average would likely confirm a price-range pattern for the U.S. dollar over the next year.”

What if the Fed doesn’t raise rates at all in 2015?…they do seem to be afraid to act…

Will Chinese Investors Turn From Equities To Gold?

China’s consumption of Gold in 2015 may still post an increase over 2014, especially if the country’s stock market reverses its rally during the 2nd half of the year, according to the World Gold Council…

“We will be more confident to say China’s demand in 2015 will beat 2014 if we see an end of the stock market rally and a start of a Gold price surge,” stated Roland Wang, China director of the WGC.  “Chinese investors usually seek asset tools to prevent risks in stock markets and chase rallies in Gold.”

Today’s Equity Markets

Asia

Another indication of a Chinese equity market that has become over-extended…Guotai Junan Securities shares soared nearly 50% in their Shanghai debut today after the company raised 30.1 billion yuan ($4.85 billion U.S.) in the country’s biggest initial public offering (IPO) in 5 years…China’s 3rd-largest brokerage by profit saw its stock open at 28.38 yuan- up from its IPO price of 19.71 yuan…

The performance of the stock reflects the “herd mentality” of Chinese investors, Francis Lun, CEO of Hong Kong brokerage Geo Securities, told CNBC.  “That’s typical of Chinese markets. You have an issue and everybody jumps on it.”

Shanghai Composite Updated Chart

The Shanghai suffered its worst day in 5 months, tumbling 334 points or 7.4% to close the week at 4194 which has brought the index down to the bottom of the upsloping channel it has been in since last summer…it hit Fib. resistance bang-on at 5132…the question is, will support within the channel hold?…it may not given the bearish RSI(14) divergence with price, so a further correction to strong support around 3400 can’t be ruled out…

After being the worst performing stock market (other than the Venture) for 6 years, the Shanghai caught up with a vengeance a rise of 150% in a short period of time is excessive by any standard…this has been a move driven by momentum and greed (the average hold period for a stock has been 1 week) with extremely high margin levels (more than 2% of total China GDP)…those margin levels are unwinding and that could easily bring this market down further in the upcoming quarter (the chart below is based on yesterday’s close)…

Europe

European markets were stable today…European Commission President Jean-Claude Juncker said in a Reuters report he was “quite optimistic but not over-optimistic” of a deal with Greece on a cash-for-reform deal at a crucial meeting of euro zone finance ministers tomorrow…

North America

The Dow has climbed 76 points as of 9:00 am Pacific…in Toronto, the TSX is off 60 points while the Venture is flat at 680…

Savary Gold Corp. (SCA, TSX-V) Update

People make the difference…Ross Beatty’s investment into Savary Gold (SCA, TSX-V) in March was a major turning point for the company which commenced a 15,000 m drill program at its Karankasso Gold Project in Burkina Faso (65% Savary) in April with very encouraging initial drill results released 10 days ago…

Savary has been a big winner so far this year, climbing from a low of 2 cents to a high of 11 cents…as we noted previously, a cup-with-handle pattern formed on this 2+ year weekly chart, so the minor pullback from the 11-cent high was not surprising…the handle has been taking shape with a band of Fib. support between 6 and 7 cents, along with a rising 200-day SMA at a nickel…

SCA is off a penny at 7 cents as of 9:00 am Pacific…good potential for the 2nd half of 2015…

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

The technical outlook for Noront Resources (NOT, TSX-V) continues to be positive, and that’s encouraging for the Venture as NOT has proven itself to be a reliable leading indicator for this market…NOT‘s 2nd quarter slump appears to be over with critical Fib. support holding, and a 200-day moving average (SMA) now starting to trend higher again…

On Monday, Noront announced that it has received a notice of approval from the Ontario Ministry of Environment and Climate Change on the terms of reference for its Eagle’s Nest Nickel-Copper-PGE Project…the terms of reference, approved with a number of amendments, allows the company to move forward on the environmental assessment (EA) process for what is expected to be the first mine in the Ring of Fire…

NOT is off 1.5 cents at 48 cents as of 9:00 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V) Update

After more than doubling in just under a month, thanks to some positive news, Discovery Ventures (DVN, TSX-V) has pulled back to strong support at its rising 50-day SMA at 16 cents…given the history of DVN over the last 3 summers, and the recent announcement regarding the recruitment of a major new investor who will also become the company’s new CEO, this is another junior to watch closely during the upcoming quarter…

DVN is up half a penny at 16.5 cents as of 9:00 am Pacific…

Note:  John and Jon do not hold share positions in SCA, NOT or DVN.    

Gold has traded between $1,171 and $1,179 so far today…as of 8:45 am Pacific, bullion is down $1 an ounce at $1,174…Silver is flat at $15.87…Copper is up a penny at $2.60…Crude Oil has fallen 65 cents at $59.62 while the U.S. Dollar Index is flat at 95.25…

U.S. gasoline demand in the week to June 19 hit the highest seasonal level since 1991, according to data released this morning by the U.S. Energy Information Administration…

Molycorp Inc. (MCP, NYSE) filed for bankruptcy protection today as the long-struggling rare-earths miner turned a page on one of the most dramatic commodities busts in recent years…the only U.S. miner and producer of rare-earth elements – 15 elements used as niche ingredients in magnets, batteries, catalytic converters and other high-tech products – says it had secured an agreement with creditors to restructure its $1.7 billion in debt…the deal also provides $225 million in new financing to continue operations…the stock is off sharply this morning, down about 40% to 22 cents…MCP surged to $80 a share in early 2011…

China will invest 500 billion yuan ($80 billion U.S.) in 193 major domestic aviation projects this year, the country’s aviation regulator has announced, to meet growing demand from travelers and to bolster growth as the world’s 2nd-largest economy slows…the announcement comes amid a wider effort by Beijing to increase overall infrastructure spending after economic growth slowed to a 6-year low in Q1…

Another example of judicial liberal activism and how judges are also now drunk on climate change Kool-Aid…Dutch environmentalists scored a major victory yesterday that could have global repercussions as a court ordered the government to cut the country’s greenhouse gas emissions by at least 25% by 2020…the ruling by The Hague District Court could lay the foundations for similar cases around the world, said the director of the organization that took the government to court on behalf of 900 Dutch citizens…

The plaintiffs argued – and the court agreed – that the government has a legal obligation to protect its people against looming dangers, including the effects of climate change on this low-lying country, much of which is below sea level and vulnerable to rising sea levels caused by “global warming”…

Platinum Long-Term Chart

Interesting Platinum chart…has it hit bottom?…the metal this week has bounced off important Fib. support at $1,062 with RSI(14) at 30%, slightly under the late 2008 RSI(14) low…sell pressure in Platinum has increased steadily since early 2012…next major support below the $1,060 area is $800…

But the

Today’s Equity Markets

Asia

China’s volatile Shanghai Composite sank 161 points or 3.4% overnight to close at 4529…in Japan, the Nikkei retreated nearly 100 points from yesterday 18-year high as traders took profits after the recent rally…

Europe

European markets were slightly lower today…talks between Athens and Greece’s international bailout supervisors are yet to yield results, raising the risk of a Greek debt default and potential exit from the euro…

North America

The Dow has climbed 23 points as of 8:45 am Pacific…U.S. consumer spending surged in May with the biggest monthly increase in nearly 6 years…the Commerce Department says consumer spending rose 0.9% last month after ticking up a revised 0.1% in April…

Yesterday’s revised U.S. GDP figures, while showing the economy contracted less than previously estimated during Q1, nonetheless highlighted several areas of concern…business investment – spending on construction, machinery, and research and development – fell at a 2% pace last quarter, still the worst reading for the category since 2009…

Other recent data show manufacturers have struggled through the 1st half of the year…factories are facing headwinds from a strong dollar that makes U.S.-made goods relatively more expensive overseas…exports fell at a 5.9% pace from January through March, led by an 11.6% decline in goods exports…imports, which subtract from GDP, rose at a 7.1% rate last quarter…

In Toronto, the TSX is off 19 points while the Venture is up slightly at 682 as of 8:45 am Pacific…

Osisko Gold Royalties Ltd. (OR, TSX) Update

Osisko Gold Royalties (OR, TSX) released an update this morning on drilling progress at its Coulon Project in James Bay, Quebec, which is already the largest undeveloped Zinc and Copper resource in the province…

Notably, hole CN-13–271W4 returned 2 impressive intersections from the middle of the mineralized zone in Lens 257 – 7.98% Zn, 1.57% Cu and 27.41 g/t Ag over 14.85 m, and 6.67% Zn, 4.25% Cu, 73.32 g/t Ag and 0.70 g/t Au over 14.2 m, respectively…the latter is the best intercept to date on the Coulon Project…work continues in Q3…

Meanwhile, it was also announced this morning that Osisko has completed a private placement of post-consolidation common shares with Unigold  (UGD, TSX-V) for $1 million at a price of 20 cents per share…in addition, Unigold has executed an investment agreement with Osisko providing for certain participation, nomination and royalty/stream rights…OR now holds 17.3% of UGD…

Tweed Marijuana Inc. (TWD, TSX-V)

While we are not supporters of the legalization of marijuana, there were nonetheless a couple of important developments in this space yesterday that command the attention of investors…

In a deal that’s very much a “game changer” and legitimizes the sector, two of Canada’s largest medical marijuana firms are combining in a deal that will create a dominant domestic producer…

Tweed Marijuana (TWD, TSX-V) and Bedrocan Cannabis (BED, TSX-V) have agreed to merge, the companies said, in an all-stock acquisition by Tweed that values Bedrocan at about $58 million, or 84 cents a share, nearly 30% above its closing price Tuesday…

This is the first merger to occur in Canada’s medical marijuana space since the sector got off the ground last year after the federal government implemented new rules…the combined company (each one represents different market segments) will be the industry’s undisputed leader, with more than 25% of all the registered patients and production capacity across the country…it will have 3 production facilities in Ontario, and a total licensed sales capacity of roughly 6,000 kilograms of medical pot per year…

The new entity will be scaled up for revenue and some analysts believe it could become profitable within approximately 12 months…

TWD 6-Month Daily Chart

Tweed enjoyed its highest volume day yesterday since it began trading in the spring of 2014 and quickly soared to $5 a share…it has strong base support around $1.75, as shown in this 6-month daily chart, but the declining 200-day moving average (SMA) – currently $2.12 – has provided resistance throughout 2015…

TWD is off 2 pennies at $2.03 as of 8:45 am Pacific…

Vancouver Becomes First Canadian City To Regulate Illegal Marijuana Dispensaries

Vancouver has become the first city in Canada to regulate illegal marijuana dispensaries, a move that has “deeply disappointed” the federal government but was declared a common-sense approach by the mayor…medicinal pot shops in Vancouver have grown from 6 to 94 in the past 2 years…

“We’re faced with a tough situation, a complicated situation,” Gregor Robertson said Wednesday after councilors voted 8-3 to impose new regulations.  “We have this proliferation of dispensaries that must be dealt with.”

The city has blamed Ottawa’s restrictive medical marijuana laws for the rise of pot dispensaries…

Health Minister Rona Ambrose had sent strongly worded letters to the city and police warning against the plan…yesterday, she said she was disappointed with the decision to regulate an illegal industry…

“Marijuana is neither an approved drug nor medicine in Canada and Health Canada does not endorse its use,” Ambrose said in a statement.

“Storefronts selling marijuana are illegal and under this Conservative government will remain illegal. We expect the police to enforce the law.”

Cannabix Technologies Inc. (BLO, CSE) Update

The company that stands to benefit enormously from the growing social acceptance of marijuana is Cannabix Technologies (BLO, CSE) which has been extremely volatile since debuting on the CSE early last summer…development of BLO’s groundbreaking technology – a marijuana breathalyzer – is proceeding methodically (though never quickly enough for investors) with an alpha protoype recently unveiled…the company continues to work toward a beta version acceptable for 3rd party testing to assess the operability and measurement precision of the device for use by law enforcement…

BLO raced from a low of a nickel late last year to a high of 77 cents in February…it has since plunged back to strong support in the mid-teens with a possible bullish engulfing reversal pattern after yesterday’s intra-day low of 13 cents followed by a strong close at 17 cents…

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

A junior explorer with a good chance of success over the summer is Equitas Resources (EQT, TSX-V)…in mid-May, Equitas released encouraging results from a VTEM plus airborne survey completed on its Garland Property, 30 km southeast of the Voisey’s Bay mine in Labrador…9 areas of conductivity prospective for Nickel-Copper sulphides have been identified with most responses at the very limit of, or significantly deeper than, detection limits of historic surveys…this is certainly a speculative play to watch closely over the next several months…exploration on the target areas is expected to commence shortly…evaluation of the anomalies will include mapping and prospecting, 30 line km of large-loop EM surveys, and up to 4,000 m of diamond drilling…

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…

Yesterday, EQT announced the appointment of Raymond Goldie to its board of directors…Goldie is currently a vice-president and senior mining analyst with Salman Partners Inc…

EQT has been in a gradual uptrend since its restructuring late last year as you can see on this 2+ year weekly chart…the uptrend line and the rising 200-day SMA at 7 cents are providing strong support…

EQT is unchanged at 9.5 cents as of 8:45 am Pacific…

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

Discovery plays will generate investor interest over the summer, no matter how the overall market performs…and a great quarter could be shaping up for NexGen Energy (NXE, TSX-V) which has demonstrated the world class potential of the high-grade Arrow Zone at its Rook 1 Uranium Project in the Athabasca Basin…5 drill rigs will keep results pouring in…

Technically, key resistance is around 82 cents following the powerful breakout from the low 50‘s…this 2+ year weekly chart shows a very bullish trend…momentum could easily create extended overbought RSI(14) conditions throughout the summer…

NXE is up 2 pennies at 78 cents as of 8:45 am Pacific…

Note:  John and Jon do not hold share positions in OR, UGD, EQT or NXE.