A strong day for Gold and more weakness in the greenback following dovish signals from the Fed yesterday…as of 9:00 am Pacific, bullion is up $14 an ounce at $1,199 after climbing as high as $1,207…Silver is up 6 cents to $16.18…Copper is flat at $2.60…Crude Oil has added 20 cents a barrel to $60.20 while the U.S. Dollar Index has fallen one-third of a point to 93.86…as John’s charts have been suggesting for more than 2 months, the Dollar Index is in trouble and that’s positive for both commodities and the Venture over the second half of this year…

Gold has two immediate technical challenges – 1) overcoming a band of resistance between $1,200 and $1,210, and 2) pushing through the mid-$1,220‘s…the bears will be put on the defensive IF those walls come down anytime soon…

Even after yesterday’s Fed statement and Janet Yellen’s news conference, commodity analysts at Commerzbank insist that Gold will remain under pressure over the summer, an interesting view for several reasons including the fact that Q3 traditionally is Gold‘s strongest quarter of the year.  “Our economists continue to expect the cycle of rate hikes to begin in September. Until then, the Gold price is unlikely in our opinion to make any significant gains because of the uncertainty surrounding this question. What is more, the currently weak investment demand and subdued physical demand are likely to prevent Gold rising lastingly above the $1,200 per troy ounce mark,” they stated…

“Lazy Commentators” On Gold

Another excellent article this morning by Mineweb’s Lawrence Williams that we suggest readers check out at Mineweb.com (“Nonsensical Gold Commentary)…Williams writes about how “lazy commentators” in the mainstream media are still overstating the importance of Hong Kong Gold exports to China, while he challenges the general media assumption that “any rise in U.S. interest rates will immediately mean a sharp decline in the price of Gold…

“Indeed,” Williams continues, “so strongly held is this ‘truism’ that any hint that the U.S. Fed may be bringing forward the first interest rate rise for a number of years immediately knocks the Gold price backwards as the theory is that because Gold is a non-interest earning asset, people may switch to assets which give a greater rate of return. Well, true in concept but no one seems to take account that any rise in interest rates will almost certainly be extremely small and still leave them in real negative territory.

“But even more important is that in any case U.S. demand for Gold bullion nowadays is tiny in relation to demand elsewhere in the world where interest rates may still be falling and which should in reality be the true price setters. But this significant fact seems to be totally ignored and, unfortunately for the pro-Gold lobby the prime Gold commodity market is largely being driven by what we see as the plethora of what could be regarded as basically misleading information emanating from the media – reporting the views of the bank economists who, in any case may have their own hidden agenda. However, in recent months, any such consequent Gold price dips have been remarkably short-lived as investors in parts of the world, which understand this, bring the price back to its previous levels, but aren’t yet prepared to chase prices upwards.”

Fed Afraid To Act? 

As part of its release yesterday, the Fed suggested it might raise rates only once in 2015 by a quarter percentage point, rather than twice as many officials previously anticipated…by December 2017, the Fed expects its benchmark short-term interest rate to remain below 3%, far lower than it has been for the past half century this long into an economic expansion…

“Economic conditions are currently anticipated to evolve in a manner that will warrant only gradual increases in the target federal-funds rate,” Fed Chairwoman Janet Yellen said in her news conference following the Fed’s 2-day policy meeting…

Net exports remain a “substantial drag on growth”, Yellen stated, a direct shot at the negative affects of the record dollar surge from last summer (tech giant Oracle blamed the dollar yesterday on disappointing Q1 results)…inflation continues to run below the Committee’s longer-run objective, this year’s wage growth remains “relatively subdued”, and the Fed continues to be concerned about diminished growth in worker productivity which has restrained the economy’s capacity to grow quickly…

In economic projections accompanying the Fed’s statement, the central bank revised down its estimate of growth for 2015…in March the Fed saw economic output expanding by 2.3% to 2.7%…in the latest estimate it revised output growth to 1.8% to 2.0%…

“I want to emphasize sometimes too much attention is placed on the timing of the first increase in the federal-funds rate,” Yellen stated in her news conference.  “What should matter to market participants is the entire expected trajectory of policy.”

In other words, Yellen is doing some more back peddling on the potential timing of the Fed’s first rate hike since 2006…September?…likely not…

Drunk On Climate Change Kool-Aid 

With a decision looming on the Keystone XL pipeline, President Barack Obama is scheduled to appear at a fundraiser tomorrow in California (guests will reportedly pay as much as $33,000 each) hosted by the so-called “green” billionaire, Democratic activist Tom Steyer, a bitter opponent of fossil fuels who has promoted and donated heavily to anti-pipeline campaigns including of course Keystone…Steyer is extremely adept at using his government connections to produce subsidies and mandates that make his “green” energy investments profitable, but that’s a story for another day (ironically, he amassed a fortune while investing in the types of energy projects that he now decries…it’s just that “green” is more sexy right now)…

Yesterday, White House Press Secretary John Earnest couldn’t resist the opportunity to “talk up” Steyer, the Democrats’ ATM Machine that dispenses massive amounts of cash every single day…

“Mr. Steyer,” Earnest stated, “is a well-known advocate for policies that are good for the environment.  Particularly policies that will limit carbon pollution, and other contributors to climate change. And obviously the President has a historically strong record in confronting these issues.”

Getting back to Keystone for a moment, isn’t it interesting how Obama and newly-elected Alberta Premier Rachel Notley have gotten so drunk on climate change Kool-Aid, they’ll say anything to their respective constituencies – Obama to Americans and Notley to Albertans – to try to undermine public support for this critical project?…

Obama’s most recent strategy, of course, has been to dismiss’s Keystone job-producing benefits for Americans (no more than “2,000” jobs, the President stated, incorrectly), while Notley told the Alberta legislature Tuesday, “First of all, our position on the Keystone (pipeline) was that if we ship unprocessed bitumen to Texas, according to this government and to the American government, we will give tens of thousands of Alberta jobs to Texas – not to Albertans – and that’s not what Albertans want to see.” 

So the Alberta premier is against Keystone because it’s going to “ship tens of thousands of Alberta jobs to Texas” (not just thousands of jobs, but “tens of thousands”) while Obama downplays the job-producing benefits for Americans and (in addition) falsely claims that Keystone is really all about Canadian “tar sands” companies exporting their product overseas through the United States…

During the election campaign, another one of Notley’s weak arguments against Keystone was that “we need to look towards being more than simply drawers of water and hewers of wood (hmm, hasn’t the extraction of natural resources made Canada one of the wealthiest nations on earth?)…

Politicians and activists drunk on climate change Kool-Aid, though God has assured us in His Word that variations in climate should not alarm us…the hangover from this foolishness won’t be pleasant as governments and environmental groups make it harder for companies to extract resources…

Thomas Pyle of the Institute of Energy Research makes an effective point:  “The simple reality is that energy is the essential building block of the modern world.  The application of affordable energy makes everything we do – food production, manufacturing, health care, transportation, heating and air conditioning – better.”

Euro Updated Chart

A clear sign of a reversal in the U.S. dollar trend is evident in how the euro continues to behave – very bullishly…after putting in a double bottom in March-April, the opposite of what occurred in the Dollar Index, the euro has now importantly broken out above its downtrend line resistance in place since last summer…this is a major technical development…

Today’s Equity Markets

Asia

China led Asian markets lower overnight as the Shanghai Composite tumbled 182 points or 3.7% to close at 4786…

Europe

European markets were modestly higher today ahead of a key meeting of euro zone finance ministers…the could present a “take-it-or-leave-it” plan to Greece which should have been booted out of the euro zone long before now…

North America

The Dow has surged 176 points as of 9:00 am Pacific while the NASDAQ has finally hit a new all-time high, eclipsing the 5132.52 mark it hit on March 10, 2000 at the height of the tech bubble…

U.S. consumer prices posted the largest monthly increase in May in more than 2 years, but the numbers also weren’t as high as expected…the CPI, which reflects what Americans pay for everything from cars to cans of tuna, rose a seasonally adjusted 0.4% in May (vs. expectations of 0.5%) from a month earlier, the Labor Department reported this morning…that was the largest gain since February 2013…higher gasoline prices pushed up the overall index…excluding volatile food and energy categories, so-called core prices increased 0.1% (vs. expectations of 0.2%)…

In Toronto, the TSX is up only slightly while the Venture has added 3 points to 685 as of 9:00 am Pacific…Fission Uranium (FCU, TSX) has started site preparation for an aggressive 60-hole (20,000 m) summer drill program at its PLS Property in the Athabasca Basin…the program, expected to commence during the first week of July, will follow up on the successful winter drilling which greatly expanded the Triple R deposit’s footprint and high-grade area and also identified multiple prospective regional targets…

Venture 6-Month Daily Chart

Venture support at the 680 level is rock-solid, making the risk-reward ratio for this market more attractive than it has been that at anytime since the end of 2013…investors who are bold but very selective should be rewarded handsomely over the next few months as the Venture takes what we believe will be the path of least resistance and finally pushes through 707…

Notice the uptrend line from the December low on this 6-month daily chart…the recent minor pullback has successfully tested this strong chart and Fib. support…

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

As we mentioned the other day, a powerful summer is 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…

NexGen’s aggressive summer drill program will be expanded to 5 rigs by next week…

Technically, the minor pullback to 70 cents Tuesday was an accumulation opportunity as this 2+ year weekly chart shows a very bullish trend…momentum should create extended overbought RSI(14) conditions…

NXE is up a penny at 79 cents as of 9:00 am Pacific…

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

Discovery Ventures (DVN, TSX-V) has pulled back to an attractive support area after hitting a 7-month high of 25 cents on Monday…a recent game-changing development for Discovery has been the recruitment of a major new investor, Winnipeg entrepreneur Dan Omeniuk, who is also slated to take over as CEO…Omeniuk, who heads up a successful transport business, brings a lot of new synergies to Discovery as it advances its Willa-Max high-grade Gold-Copper Project in southeast British Columbia…

There’s every reason to believe DVN will enjoy another strong summer as it did in 2013 and 2014 based on its current technical posture and the addition of Omeniuk who is also providing $7 million in credit facilities to the company…

DVN is up half a penny at 21 cents after touching support at 19 cents during yesterday’s trading session…

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

It’s highly encouraging for the overall junior resource market to see a chart like this for Copper Fox (CUU, TSX-V), a clear trend change than began in March…CUU has finally overcome its 200-day SMA which is now reversing to the upside after being in decline and providing stiff resistance since late 2011…strong new chart support at 19 cents…

Copper Fox 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)…

Crews have commenced mobilization for drilling at Schaft Creek at the promising LaCasse Zone…they will test a geological setting similar to that in the Paramount Zone of the deposit located approximately 3 km to the south…approximately 2,500 m of drilling (5 holes) will test the depth extension of the impressive Copper-Gold mineralization located in potassic-phyllic altered outcrop and in hydrothermal breccia…this could mark a potentially important new discovery…

CUU is off 3 cents at 20.5 cents as of 9:00 am Pacific…

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

There’s lots happening in British Columbia…we do expect the Sheslay district to heat up profoundly with the strong potential for near-term new discoveries…not only of course is Doubleview Capital (DBV, TSX-V) on the cusp of a major breakthrough, but Garibaldi Resources (GGI, TSX-V) has a phenomenal opportunity at the Grizzly…

Further south in the Cariboo region, meanwhile, keep an eye on Amarc Resources (AHR, TSX-V) with regard to potential developments at its Ike Property after highly encouraging initial drill results late last year…

John’s 4-year weekly AHR chart shows a “Big Picture” bullish trend with a confirmed breakout late in Q1…excellent support exists around 10 cents which was previous resistance…note the rising 200-day SMA at 11 cents…RSI(14) is at previous support…

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

Gold has traded between $1,174 and $1,182 so far today…as of 9:10 am Pacific, bullion is off $5 an ounce at $1,176…Silver is flat at $16.00…Copper is unchanged at $2.60…Crude Oil, higher earlier in the session, is now off 71 cents a barrel to $59.26 as details of weekly inventory data overshadowed strong U.S. demand…the U.S. Dollar Index is steady at 95.02…

A Chinese bank will help set prices in London’s $20 billion Gold market for the first time as the nation increases its influence in the world’s financial system…

Bank of China Ltd. will join lenders including Goldman Sachs Group Inc. and Barclays Plc that run the twice-daily auction system for pricing Gold, according to a statement from the London Bullion Market Association yesterday…the process, which dates back to 1919, sets a benchmark level for Gold that’s used by mining companies, refiners and hedge funds…

Oil Update

Government data released this morning showed U.S. Crude stockpiles fell for a 7th consecutive week, while gasoline stocks and distillate inventories rose…Crude inventories fell by 2.7 million barrels in the last week, compared with analysts’ expectations for an decrease of 1.7 million barrels…however, Crude stocks at the Cushing, Oklahoma, delivery hub rose by 112,000 barrels, the first increase since mid-April, EIA said…

Meanwhile, gasoline stocks rose by 460,000 barrels, compared with analysts’ expectations in a Reuters poll for a 314,000 barrel drop…

Fed Policy Decision Coming Up

All eyes are on the Fed today which concludes its 2-day meeting with a policy statement at 11:00 am Pacific, followed by Janet Yellen’s news conference starting at 11:30 am…no one expects a rate hike today, but the market will be looking for signals from the Fed about its intentions for later in the year…

The Fed last raised rates in June 2006…it has kept its benchmark federal funds rate pinned near zero since December 2008….

The Fed’s mandated goals are maximum employment and stable prices, so the inflation and unemployment projections today are important to watch…

Pay close attention to the updated “dot plot” of policy makers’ predictions for the level of the benchmark federal funds rate over the next few years…in March, officials signaled a less aggressive path for rates by lowering those estimates…the median forecast in March for the end of 2015 was 0.625%, implying 2 rate increases this year – from the current range of zero to 0.25%, to a range of 0.25% to 0.5%, and then up to 0.5% to 0.75%…a significant shift down in the 2015 dots could instead imply more support for a single rate increase this year…

Policy makers today will release updated projections for GDP growth, inflation and the U.S. unemployment rate through 2017 and in the long run…

Will there be any dissenting votes today?…the January, March and April policy decisions all were unanimous, the Fed’s longest run without a dissenting vote since 2011…

The last time the Fed hikes interest rates from zero was 1937, and what followed in the markets wasn’t pretty…will they remain haunted by the ghost of 1937?…

U.S. Dollar Index 4-Month Daily Chart

The Dollar Index remains constrained by its declining 50-day moving average (SMA) and Fib. resistance around 95.50…clearly, from the chart below, the Dollar Index completed at least a short-to-intermediate term top in the spring with a classic double top formation, and there was a major RSI(14) divergence with price in that second run in April (circled in blue) that stopped at 100.27 (as predicted)…

The dramatic surge in the greenback that began last summer was extremely damaging to commodities and the Venture Exchange, hence the nearly 40% decline in the Venture from September through mid-December…

The likelihood of this happening again over the second half of this year is remote…a neutral to modestly weak greenback through the balance of 2015 substantially reduces the risk in the Venture given the strong inverse relationship between the two…

In the event of a Dollar Index “dive” into the mid-to-upper 80‘s during the last half of the year, which is certainly possible, the Venture and commodities would break out to the upside…

Copper 20-Year Monthly Chart

Copper is once again at long-term uptrend support after getting knocked down by a dime yesterday…the first 3 circled RSI(14) lows marked important bottoms for the metal in 1999, 2001 and late 2008/early 2009…RSI(14) touched those support levels again at the end of 2014/beginning of this year when the metal hit a multi-year low of $2.42, also at Fib. support and the long-term uptrend line…based on this chart, there’s every reason to believe we’ve seen a bottom in Copper and an important turnaround will be confirmed during the second half of the year…

B.C. Marches Forward

Globe and Mail business reporter Brent Jang wrote last night that a liquefied natural gas consortium led by Royal Dutch Shell PLC is expected to receive B.C. environmental approval within days as the group positions itself to be one of the first LNG exporters in the province…LNG Canada’s plans to export from Kitimat are being reviewed by two B.C. cabinet ministers, who are slated to announce by Monday whether they will grant a provincial environmental assessment certificate…

Jang added, “Industry observers predict the two provincial cabinet ministers will attach several conditions to their anticipated approval of LNG Canada’s application. The broad goal is to decrease potential adverse environmental impacts and emphasize opportunities with First Nations.”

Today’s Equity Markets

Asia

Asian stocks were mostly higher overnight, led by a turnaround in China’s Shanghai Composite which closed 81 points or 1.7% higher at 4969…

Europe

European markets were mixed today…talks between Greece and its international creditors remain in deadlock as Athens faces a $1.8 billion repayment to the IMF by the end of this month…

North America

The Dow has erased earlier gains and is now relatively flat at 17906 as of 9:10 am Pacific…in Toronto, the TSX is down 5 points while the Venture is bucking the trend, up 2 points at 681…

Drilling Starts Shortly At Schaft Creek

BMR has confirmed that crews have commenced mobilization for drilling at Schaft Creek, 100 km south of the Sheslay district in northwest B.C., which may explain the strength in Copper Fox Minerals (CUU, TSX-V) the last couple of days…drilling on the LaCasse zone will test a geological setting similar to that in the Paramount Zone of the Schaft Creek deposit (JV between CUU and Teck, TCK.B, TSX) located approximately 3 km to the south…approximately 2,500 m of drilling (5 holes) will test the depth extension of the impressive Copper-Gold mineralization located in potassic-phyllic altered outcrop and in hydrothermal breccia…this could mark a potentially important new discovery…

To the north, meanwhile, the fireworks will soon commence in the Sheslay district…one rig, we have confirmed, is on site…

Richmont Mines Inc. (RIC, TSX) Update

Richmont Mines (RIC, TSX-V) continues to be an earnings machine and is holding up impressively given the recent weakness in Gold…Q1 2015 net earnings were $4.6 million, or 9 cents per share, against a Q1 2014 net loss of $1.9 million, or negative 5 cents per share…Q1 revenues were $37.2 million vs. $29.5 million during the same period last year…

Richmont’s accelerated development of its Island Gold Mine in northern Ontario is on schedule and on budget, while RIC’s Quebec assets performed robustly during Q1 with cash costs and all-in-sustaining costs less than expected…

The company has maintained 2015 production guidance of 77,000 to 88,000 ounces, but our guess is that they will beat those expectations…Richmont had $71 million in cash ($1.22 per share) at the end of March and long-term debt of only $5.2 million…a tremendous turnaround for Richmont and the long-term outlook has to be considered exceedingly positive given the expansion of the Island Gold Mine into a deep high-grade zone…

RIC has been trading within a bullish downsloping flag since the beginning of the year with the rising 200-day moving average (SMA) at $3.58 coinciding with Fib. support…watch for another important breakout in RIC over the summer…

RIC is off 2 pennies at $3.88 as of 9:10 am Pacific…

Biorem Inc. (BRM, TSX-V) Update

As we indicated June 3 when it was at slightly lower levels, readers may wish to perform their due diligence on Biorem (BRM, TSX-V), an environmental biotechnology company that designs, manufactures and distributes a comprehensive line of high-efficiency air emissions control systems used to eliminate odors, volatile organic compounds and hazardous air pollutants…BRM, which has only 13 million shares outstanding, has reported a strong turnaround in its financial performance over the last 2 quarters, including Q1 2015 as June 3 (revenue of $4.8 million and net earnings of $528,000)…

Last Thursday, the company announced it has received several new orders totaling $2.5-million…the orders are for air emission abatement projects in North America, the Middle East and Asia…

“These recent orders are a reflection of our customers’ desires for reliability and the ability to achieve stringent performance targets,” said Derek S. Webb, President and CEO.  “Each of these orders are from repeat customers who are accustomed to having their projects successfully completed on time and on budget. These projects are in the semiconductor, petrochemical, as well as the food and beverage sectors, and represent a cross-section of the potential applications where our advanced biological solutions can be effectively applied.”

BRM hit a new 52-week high of 38 cents Monday…it’s unchanged at 35 cents in early trading today…

iSign Media Solutions Inc. (ISD, TSX-V) Update

Below is an updated chart for iSign Media Solutions (ISD, TSX-V) which has confirmed a breakout above a downsloping channel, while RSI(14) continues to follow an uptrend…

On Monday, the company announced the signing of asset purchase agreements with Graphic Media Inc. and Engage Mobile Media Solutions LLC – a step that has the potential of doubling ISD’s revenues…

ISD is unchanged at 25 cents as of 9:10 am Pacific…

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

Gold has traded between $1,175 and $1,189 so far today…as of 9:15 am Pacific, bullion is off $6 an ounce at $1,180…Silver has fallen 7 cents to $16.00…Copper has tumbled 10 cents to $2.60…Crude Oil has added 45 cents to $59.97, supported by warnings that a tropical storm is threatening to hit the coast of Texas…the U.S. Dollar Index is up one-fifth of a point at 95.06…

Gold traders shed their long positions at the fastest pace in 3 months while Silver longs fell at their fastest pace in more than 5 years, according to the latest data from the Commodity Futures Trading Commission (CFTC)…

As the Fed begins its 2-day policy meeting, leading to a fresh statement tomorrow afternoon and a Janet Yellen news conference, FOMC members could very well continue to be haunted by the ghost of 1937…that year was the last time the Federal Reserve hiked interest rates from zero, and what followed wasn’t pretty – a severe recession and a 49% collapse for the Dow…economic conditions, of course, are different now than they were in 1937…however, the Fed has nonetheless been reluctant to pull the trigger on a rate hike due to a variety of domestic and global factors…

Wall Street remains convinced that the Fed will initiate its first rate in 9 years in September, based on respondents to the latest CNBC Fed survey…while 92% see a Fed rate rise later this year, up from 84% in the April survey, the central bank is seen hiking only modestly after August through the balance of 2015…the Fed funds rate is forecast to end the year at just 53 basis points, which would be 2 hikes of 0.25% each…for 2016, respondents forecast a funds rate of 1.56%…that could mean four increases of 0.25% each, or a rate hike just every other meeting…

Trump Announces Presidential Bid

New York real estate mogul and reality TV star Donald Trump declared himself a candidate this morning for the Republican nomination for President…he would certainly add some much-needed business sense to the White House…the 69-year-old Trump joins the field of 11 other GOP candidates, with Wisconsin Gov. Scott Walker expected to enter the race in mid-July and several other hopefuls still considering…former Florida Gov. Jeb Bush announced his bid a day earlier…

“Our country needs a truly great leader, and we need a truly great leader now. We need someone who can take the brand of the United States and make it great again,” Trump said this morning.   “I am officially running for President of the United States and we are going to make our country great again.”

Trump flirted with a White House run in 2012 but ultimately did not enter the race…though he’s a first-time political candidate, he has become an influential voice in conservative political circles…while the odds of him winning the Republican nomination are slim, his views on how to improve the “brand” of the United States will be a positive contribution to the national political discourse…

Gold 6-Month Daily Chart

This 6-month Gold chart shows what bullion needs to do in order to build fresh momentum and put the bears on the defensive…the primary pattern since December is a bearish descending triangle, and the downtrend line currently cuts through the $1,210 level…to get investors excited, Gold is going to have to break out above the downtrend line and then overcome significant resistance around $1,225…

A strong band of support exists between $1,150 and $1,170…based on the current technical posture, the path of least resistance at the moment appears to be another test of the support band…

Historically, June is one of Gold’s weakest months of the year…the outlook is much better for Q3, traditionally Gold’s strongest quarter…

Today’s Equity Markets

Asia

China’s Shanghai Composite slumped 174 points or 3.7% overnight, closing at 4889, its biggest fall in nearly 3 weeks amid worries of a fresh clampdown on margin financing and a new wave of IPO’s…

Technically, the Shanghai is certainly in very overbought territory and likely needs some time to digest the 2000-point advance since the beginning of March…the Index has hit the near-term Fib. target of 5132 on this 2+ year weekly chart, and has also been trading in recent days at and just slightly above the top of an upsloping channel going back to last summer…

This chart is an excellent example of what market “momentum” can do…keep in mind that Chinese authorities appear to be using the stock market as a form of economic stimulus, so any significant correction could easily be followed by another push to new highs during the 2nd half of the year…

Europe

European markets were mostly higher today despite concerns over Greece (Greek stocks remained under pressure, slipping nearly 5%)…

North America

The Dow is up 83 points as of 9:15 am Pacific…in Toronto, the TSX has lost 30 points while the Venture is flat at 679 as it continues to hug support…

Discovery Ventures (DVN, TSX-V) Update

Discovery Ventures (DVN, TSX-V) released impressive initial results this morning from ongoing metallurgical test work from 2004 Willa drill core samples…these first results were from intermediate-grade Gold and Copper samples and showed recoveries of 84.7% for Gold and 95.8% for Copper, exceeding the recovery rates from historical metallurgical test work…importantly, current information indicates that the tailings discharged to the tailings pond will contain extremely low sulfide content, a condition seldom met by other mining operations…the next tests will be conducted on the high-grade category of samples, followed by tests on the sub-grade category…

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

A powerful summer is shaping up for NexGen Energy (NXE, TSX-V) which came out with more great drill results yesterday (from its winter program), demonstrating the world class potential of the high-grade Arrow Zone at the Rook 1 Project in Saskatchewan’s Athabasca Basin…

NexGen’s aggressive summer drill program (20,000 m) started June 8 with 2 rigs and will be expanded to 5 rigs by next week…technically and fundamentally, NXE in our view is one of the smartest plays in the entire junior resource market – especially on any immediate and minor pullback/profit taking (which should be expected) from the 40% jump in the share price between last Wednesday and Monday…strong support in the mid-60‘s…

NXE is off a penny at 73 cents as of 9:15 am Pacific…given the latest results from the Arrow Zone and the potential for heightened speculation, it’s reasonable to anticipate that the RSI(14) on this 2+ year weekly chart will ultimately push well into overbought territory…

Integra Gold Corp. (ICG, TSX-V) Update

Integra Gold Corp. (ICG, TSX-V), poised to continue to be a strong market out-performer, has made significant progress with its high-grade Lamaque South Gold Project in Val-d’Or…the pace of activity is impressive…since the beginning of the year through mid-May, Integra had completed 44,500 m of diamond drilling in 99 holes with up to 8 drill rigs operating on several key targets…the company has expanded its 2015 drilling plans from 50,000 m to 75,000 m…3 weeks ago, the company received the certificate of authorization necessary for underground decline development work at the Triangle zone…

ICG was able to hold critical base support (15 to 17 cents) late last year when markets were getting pulverized, and support is currently strong at the 30-cent level which was previous Fib. resistance…

ICG is unchanged at 31.5 cents as of 9:15 am Pacific…

Macro Enterprises Inc. (MCR, TSX-V) Update

As John’s recent charts pointed out, the $2.40 to $2.50 area was an ideal accumulation zone for Macro Enterprises (MCR, TSX-V) which a few weeks ago reported its 15th consecutive profitable quarter with net income of $1.4 million or 5 cents per share for the first 3 months of 2015…this was despite a 66% drop in revenue from 2014‘s record 1st quarter, which demonstrates how activity has slowed in the Oil and gas industry – particularly in Alberta where there is also now the added uncertainty of an NDP government…

As part of its overall strategy, MCR is seeking out pipeline and facilities construction contracts in connection with the LNG projects being planned in British Columbia, an industry that is anticipated to bring substantial economic activity to the province over the next 30 years…Macro has completed bid processes and has entered into discussions with LNG project owners regarding future pipeline and facilities construction…

MCR is off a nickel to $2.99 as of 9:15 am Pacific…note how the MA(40) – the 200-day SMA on this weekly chart – is flattening out and preparing to reverse to the upside…this bodes well for a strong second half of 2015 for MCR…

Note:  John, Terry and Jon do not hold share positions in DVN, NXE, ICG or MCR.

Gold has traded between $1,172 and $1,191 so far today…as of 9:15 am Pacific, bullion is up $7 an ounce at $1,189…Silver has added 22 cents to $16.17 (see updated charts at the bottom of today’s Morning Musings)…Copper has fallen a nickel to $2.63…Crude Oil is off 43 cents to $59.53 while the U.S. Dollar Index is down one-tenth of a point to 95.00…

Texas Governor Greg Abbott signed a bill into law last Friday that will allow the state to build a Gold and Silver bullion depository…in addition, Texas will repatriate $1 billion worth of bullion from the Federal Reserve in New York to the new facility once completed…on the surface, the bill may look rather innocent but its implications are far-reaching…

Why does the state of Texas want to go through the trouble of building its own bullion storage facility?…there are two important reasons…one involves distrust in the current storage system…the second threatens the paper money system as a whole…

“Today I signed HB 483 to provide a secure facility for the State of Texas, state agencies and Texas citizens to store Gold bullion and other precious metals,” the Governor stated.  “With the passage of this bill, the Texas Bullion Depository will become the first state-level facility of its kind in the nation, increasing the security and stability of our Gold reserves and keeping taxpayer funds from leaving Texas to pay for fees to store Gold in facilities outside our state.”

The Texas legislature seems to be following a national trend of a growing number of citizens removing their savings and wealth from the federal banking system and into precious metals that they can store in a private depository or at home…the bill was introduced by state Rep. Giovanni Capriglione…the depository will also be able to establish agents to act as intermediaries between financial institutions…this would allow consumers to open up a Gold account in one bank and use it to pay for goods…Capriglione said that he doesn’t believe in replacing the U.S. dollar with Gold as a currency, but this initiative gives consumers additional options…instead of just sitting in a vault doing nothing, Gold can play an important role in stabilizing an economy, but it needs to be utilized, he said…

“You can now choose, do you want to pay for your items with dollars or pay with Gold,” he stated. “People should have as many options as possible when it comes to bartering for items.”

Capital Economics Bullish On Gold Due To Central Bank Buying

A new research report by analyst Simona Gambarini of Capital Economics suggests official sector buying can take much of the credit for establishing something of a floor for Gold this year…central banks have upped their share of overall Gold demand from around 2% in 2010 to as much as 14% last year…Gambarini expects this trend to strengthen, thereby pushing up the Gold price…Capital Economics has a year-end Gold forecast of $1,400 per ounce…

Greece Talks Collapse

Talks aimed at reaching an 11th-hour deal between Greek ministers and their bailout creditors collapsed last night after a new economic reform proposal submitted by Athens was deemed inadequate to continue negotiations…

The breakdown is the clearest sign yet that differences between the two sides may be too wide to breach, increasing the possibility that Athens will not secure the bailout aid it needs to avoid defaulting on its debts – including a loan repayment due to the IMF in just 2 weeks…

Oil Update

Low Oil prices and economic growth have helped drive up consumer demand for energy across the world in 2015, the International Energy Agency said last last week, a phenomenon seen from U.S. gasoline stations to Chinese auto dealerships…

The IEA’s closely watched Oil-market report lent some support to an idea pushed by OPEC and other producers – that collapsing Oil prices would spur more consumer demand and eventually send prices back up…WTIC hit a 6-month high last week…

The IEA said world demand for Oil would increase by 1.4 million barrels a day this year, 300,000 barrels a day faster than it previously forecast, to a daily average of 94 million barrels this year…global demand in 2014 was about 92.6 million barrels a day, the IEA said…

HGD 3-Year Weekly Chart – Looking At The TSX Gold Index Upside Down

The Horizons BetaPro S&P/TSX Global Gold Bear+ ETF seeks daily investment results equal to 200% the daily performance, or inverse daily performance, of the S&P/TSX Global Gold Index™, before fees and expenses…the Index, of course, consists of securities of global Gold sector issuers listed on the TSX, NYSE, NASDAQ and AMEX…

It’s helpful to regularly look at the HGD for additional technical perspective on the direction of Gold producers in the market…given declining sell pressure and a short-term uptrend pattern (notably on lower volume), it wouldn’t be surprising to see the HGD once again challenge its 200-day moving average (SMA, currently $13.41) as it did in March ($13 on the HGD would equate to about 150 on the TSX Gold Index where there is strong support) …

The HGD‘s upside appears limited, however, and it has generally remained within a downsloping channel since peaking at just over $31 in the 2nd quarter of 2013 as you can see in the chart below…in addition, the 200-day SMA (MA-40 on this weekly chart) will likely be pressured to the downside over the 2nd half of this year given the strength the HGD showed from September through December last year…

The HGD was a low-risk long trade in late 2011 and throughout 2012 into early 2013…that has changed…

Today’s Equity Markets

Asia

China’s Shanghai Composite led Asian markets lower overnight, declining 103 points or 2% to 5063…the country’s securities regulators published rules late Friday that would further margin limit trading…

Europe

European markets were down significantly today due to uncertainty surrounding Greece…

North America

The Dow is down 106 points as of 9:15 am Pacific…the manufacturing sector in the New York region lost momentum this month, reversing all the gains recorded in May, according to the latest data from the New York Federal Reserve…the general business conditions index in the Empire State manufacturing survey fell to to a reading of negative 2.0 in June, compared to May’s reading of 3.1…this is the 2nd negative reading in 3 months…according to consensus estimates, economists were expecting to see a strong rise in the region’s manufacturing sector, forecasting a reading around 5.8…

In Toronto, the TSX is up 14 points as of 9:00 am Pacific while the Venture has retreated 2 points at 680…

A Biotech Bubble?

A biotech company with a single unproven drug candidate and a 29-year old CEO went public last week and already has a market cap of close to $3 billion, raising some concerns the sector may be in a bubble…

Axovant (AXON, NYSE), headed by entrepreneur Vivek Ramaswamy, is a clinical-stage biotech focused on dementia treatment…its sole drug candidate is RVT-101, a treatment for Alzheimer’s disease that Ramaswarmy acquired from GlaxoSmithKline PLC in late 2014 for $5 million, according to its IPO prospectus…

Axovant sold 21 million shares in the IPO last Wednesday at $15 a pop to raise $315 million…shares just about doubled on their first day of trading Thursday to close at $29.90…AXON is up by nearly $1 a share as of 9:15 am Pacific to just above $23…

John Carroll of the Fierce Biotech newsletter said investors should be scared.  “The fact that someone can make something of this size out of virtually nothing should be of concern to everyone in the industry,” he wrote in a posting…

Axovant said it would use $95 million to $105 million of the IPO proceeds to finance a Phase 3 trial of RVT-101 that it aims to start in the 4th quarter…if the trial is successful, the company will apply for regulatory approval in the U.S., European Union, Japan and other major markets…

Axovant is a unit of Roivant Sciences, another company started by Ramaswarmy and which still owns about 80% of Axovant…the 29-year-old Ramaswarmy, who graduated from Harvard with a biology degree and from Yale with a law degree, is also chairman of Tekmira Pharmaceuticals Corp. (TKMR, NASDAQ), a company that is testing an Ebola drug that has a market cap of about $800 million…

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

An outstanding drill hole result reported this morning by NexGen Energy (NXE, TSX-V) from the Arrow Zone of its Rook 1 Project, demonstrating the world class potential of this growing Uranium discovery in the Athabasca Basin…drilled during the winter program and located on the current southwestern edge of the high-grade core zones of the A2 and A3 shears, AR-15–44b has delivered the most continuously mineralized intersection of any hole drilled at the Arrow Zone to date, with superb grades…the hole featured 56.5 m @ 11.5% U3O8 (499.5 to 556.0 m) including 20 m @ 20.7% U3O8 (499.5 to 519.5 m) and 1 m @ 70.0% U3O8 (503.0 to 504.0 m)…

Summer drilling has commenced and NXE will be stepping out further to the untested southwest…the Arrow Zone is currently 515 m by 215 m with the vertical extent of mineralization commencing from 100 m and extending down to 920 m, and is open in all directions…

NXE has climbed 3 pennies to 70 cents on total volume (all exchanges) of more than 5 million shares as of 9:15 am Pacific…this is looking exceptionally good…

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

Discovery Ventures (DVN, TSX-V) has clearly created exciting new synergies with the addition of a major new investor, Manitoba entrepreneur Dan Omeniuk who has agreed to provide 2 secured credit facilities to Discovery – a $2-million convertible credit facility and a $5-million credit facility…Omeniuk brings not only new financial strength to Discovery, but other important synergies to the equation as he runs a successful transport company in Winnipeg…he has powerful business contacts, access to equipment, labor and services…he’s a tremendous strategic fit for Discovery, and is expected to be appointed as President and CEO of the company in the near future…

The combination of the high-grade Willa deposit and the nearby Max mill has similarities to the successful model built by Klondex Mines (KDX, TSX) in Nevada…keep in mind that Willa features a NI-43-101 resource with nearly 600 drill holes (57,000 m) and 2,600 m of underground workings…Max, meanwhile, is a former producing molybdenum mine about 80 miles to the north that operated from 2007 until late 2011 when depressed metal prices led to its closure…DVN picked up Max at a bargain-basement price…it includes an underground moly mine, crushing, milling and concentrating facilities, tailings storage facilities, mineral claims, mining leases and other holdings located near Trout Lake in the Revelstoke mining division (and it comes with $50 million in tax loss pools)…

The Willa-Max Project has significant new momentum…technically, as John showed last week, DVN has staged a powerful breakout…it’s up another 1.5 cents to 24 cents as of 9:15 am Pacific…

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

We’ll have more on the Sheslay district later this week and how this is shaping up to be an extraordinary summer on the exploration front in this important region of northwest British Columbia…as we’ve reported, the stakes have increased dramatically in recent weeks and the two near-term beneficiaries will be Doubleview Capital (DBV, TSX-V) and Garibaldi Resources (GGI, TSX-V)…

DBV has broken above a downsloping flag on this 2.5-year chart…that’s just one of several bullish technical indicators supported by how we see events unfolding on the ground very quickly…

DBV is unchanged at 14.5 cents as of 9:15 am Pacific…

Quantum International Income Corp. (QIC, TSX-V)

A non-resource play to keep an eye on is Quantum International Income (QIC, TSX-V) which announced Friday that it has signed a definitive agreement to acquire Columbus Hospital LTACH LLC, a company operating a long-term acute care hospital (LTACH) in New Jersey…the LTACH is currently running on a 4-month unaudited annualized basis of approximately $40-million (U.S.) in revenue and approximately $13.5-million of earnings before interest, taxes, depreciation and amortization…

This 6-month QIC chart is interesting, to say the least…note the uptrend line, the rising 50-day SMA, and the breakout above the downsloping flag…as always, perform your own due diligence…

QIC is off 3.5 cents at 45 cents as of 9:15 am Pacific…

Silver Short-Term Chart

As expected, Silver is now testing support at the top of the downtrend line (dotted blue, $16) where it broke out from in May…it’ll be interesting to see if this holds…if not, next support is around $15.65…

Silver is about to enter a traditionally strong period of the year, so it’s reasonable to expect the downtrend line support 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 DBV and GGI.

TSX Venture Exchange and Gold

The Venture declined for the 3rd straight week, falling 8 points to finish near strong support at 682.  The upcoming Fed meeting Tuesday and Wednesday will prove to be critical to all markets and will include a post-statement news conference from Janet Yellen.  Notably, her last news conference came at the March policy meeting and that’s when the greenback finally cooled off, commodities reversed, and the Venture started an 8% move to the upside that lasted for a month.  Impossible to say if history will repeat itself in this case, but the Venture’s overall risk-reward ratio continues to look favorable.

Interestingly, despite the dramatic late 2014 sell-off and the challenges the junior resource market has faced since, the Venture has been able to hold critical support at the 680 level on a monthly basis.  This support, as you can see in the chart below, is now more solid than ever.

A key market to watch, of course, is the U.S. Dollar Index which rallied during the last half of May – certainly not unexpectedly after it sold down to temporary support.  It has since pulled back again.  The Dollar Index faces strong resistance in the upper 90’s given the double top pattern that formed in March and April, in addition to some other bearish indicators.  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. 

Some strength in the CRB Index over the next few months seems likely, as John has shown in recent charts, and Copper (a reliable leading indicator) is looking very interesting as well from a broad perspective, despite its recent pullback into the high $2.60‘s.  Crude Oil probably found its bottom in the low $40’s while resilience in Gold producers suggests a 3-year correction in the yellow metal may indeed have ended last November.

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.  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.

6-Month Daily Venture Chart

What’s encouraging about this chart is that strong sell pressure through most of May has been replaced by weak buy pressure, and this pattern is typically a prelude to gains in the Index.  In addition, the Index is now resting at Fib. support and an uptrend line from last December’s all-time low.  Going into the summer, the Venture’s current technical posture is such that the chances of a breakout above 707 exceed that of a breakdown below key support defined by the Fib. band between 654 and 680.

Exact timing of a breakout, however, is the issue, and what would the catalyst be?  The junior resource market needs a confidence boost from higher commodity prices and/or discovery excitement.

U.S. Dollar Index Update

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.  A declining 50-day SMA, currently just above 96, is applying further downward pressure on the Index.  Ultimately – and this may take a few months to play out – the Dollar Index may have to test Fib. support around 88 before it commences a possible new uptrend.  Much will hinge on Fed policy and how the U.S. economy behaves.

The current consolidation in the Dollar Index is a healthy development given the record run it made over such a short period.  Technically very overbought RSI(14) levels peaked in early-mid March.  A mirror image of that could unfold at some point during the second half of this year.  There is still no shortage of greenback bulls, just like there was no shortage of Gold bulls even a year after the metal hit an all-time high.

Gold

Gold rose the first week in a month, adding $9 an ounce to finish at $1,181.  On the 20-year monthly chart we updated recently, bullion finished May at its uptrend support line going back to the beginning of the bull market in 2001.

On this 2.5-year weekly chart, which has also proven to be a very reliable guide, Gold appears destined to test the $1,150 support.  Notice that the right hand of the downsloping flag forms a bearish descending triangle with the base at $1,150.  Thus, the $1,150 area is critical.  If $1,150 fails, the first line of support is at the bottom of the flag.

Encouragingly, RSI(14) has continued to climb a gently sloping uptrend since last fall and is very close to support.  However, this chart paints a mixed (confusing) picture for the near-term given the bullish uptick in the RSI(14) whereas the SS %K is moving lower.

Historically, June is one of Gold’s most challenging months of the year – but this is also followed by the strongest 3-month period which is July-August-September.

After a 52-cent fall the previous week, Silver tumbled another 69 cents last week to close at $15.96.  Copper slipped a penny to $2.68.  Crude Oil gained $1 a barrel to $59.94 while the U.S. Dollar Index slipped one-and-a-half points to 94.91. 

The “Big Picture” View Of Gold

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 $1,175 and $1,185 so far today…as of 8:30 am Pacific, bullion is down $2 an ounce at $1,180…Silver is off 16 cents at $15.87…Copper is down 2 pennies at $2.67…Crude Oil has slipped 62 cents to $60.15 while the U.S. Dollar Index has retreated one-fifth of a point to 94.87…

While weak physical demand and outflows from exchange-traded funds continue to weigh on the metal, bullion is nonetheless headed for its 1st weekly rise in 4…

U.S. producer prices in May recorded their biggest increase in more than two-and-a-half years as the cost of gasoline and food rose, suggesting that an Oil-driven downward drift in prices could be nearing an end…the Labor Department said this morning Friday its PPI for final demand increased 0.5% last month, slightly above expectations and the largest gain since September 2012…that followed a 0.4% decline in April…

In the year to May, the PPI fell 1.1%, marking the 4th straight 12-month decrease…prices dropped 1.3% in the 12 months through April, the biggest fall since 2010…

Oil Update

Should we be surprised?…word has come out that the Alberta NDP energy minister’s top staffer, Graham Mitchell, is a radical Toronto-based anti-pipeline activist who, among his many “credentials”, was (until just a few days ago) the Executive Director for LeadNow, an environmental lobby group that’s aggressively opposed to Canada’s energy sector and its ambitions…

What a horrible message this sends to Alberta’s Oil and gas industry…

From wrong-headed energy policies to corporate tax hikes and a host of other economically damaging plans, the Alberta “Advantage” is gone under the NDP – your capital and skills, Albertans, are more than welcome in neighboring British Columbia and Saskatchewan…

CRB Index 10-Year Monthly Chart

This long-term CRB Index chart gives us hope that the 2nd half of this year for the commodity space will be much different than last year’s second half which of course featured a major sell-off from September through December…

Historically oversold RSI(14) conditions are gradually beginning to unwind, -DI has formed a bearish “M” and is in decline (bullish), and an unusual gap still exists between the current level of the CRB (224) and the long-term downtrend line…we expect this gap to narrow over the coming months…

Today’s Equity Markets

Asia

China’s Shanghai Composite finished at a new 7-year high overnight, climbing 45 points or nearly 1% to finish the week at 5166 – its highest close since January 2008…

Europe

Greek stocks led European markets lower Friday after the latest setback in the country’s financing talks…the Athens stock market, which closed before the IMF announcement, declined 2.8% Friday, after climbing more than 8% yesterday…

“The [IMF] news has put a clear dent in what was the now false optimism that appeared to be building in the previous few days,” said Deutsche Bank strategist Jim Reid in a Wall Street Journal report.  “Greece and its creditors still appear to be no closer to aligning views,” he added.

North America

The Dow is off its lows of the morning but has still shed 108 points as of 8:30 am Pacific…in Toronto, the TSX is off 72 points while the Venture is down a point at 681…

Everyone knows there’s a lot of “monkey business” on the Venture Exchange…now there’s actually a “Flying Monkey”…a new capital pool shell, Flying Monkey Capital Corp. (FMK.P, TSX-V), is now listed on the Venture…it’s the 1st shell to arrive this month and the 8th this year, up from 6 by this time last year…Canaccord Genuity Corp. sold Flying Monkey’s $300,000 IPO of 3 million shares at 10 cents…

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

Yet another interesting B.C. story that’s heating up again is Discovery Ventures (DVN, TSX-V) which announced Wednesday that it has solidified an agreement with a major new investor (Dan Omeniuk) for $7 million in credit facilities to advance the company’s high-grade Willa-Max Gold-Copper Project near Castlegar…

The synergies between the Max mill and mine facilities and the Willa deposit 130 km to the south are obvious…the Willa deposit has been around for a while, and also has excellent expansion possibilities, but it lacked a cost-effective mill solution until the Max came into the picture…the company was able to acquire it for a fire-sale price after a previous molybdenum operation there couldn’t survive a price downturn…Omeniuk brings other powerful synergies to the equation – not only financial strength, but he runs a successful transport company in Winnipeg…he has powerful business contacts, access to equipment, labor and services…he’s a tremendous strategic fit for Discovery…

The company’s PEA for the Willa-Max Project, released in May of last year, was highly robust, and of course since then Oil prices have declined substantially while the Canadian dollar has also dropped…

Technically, this 3-year chart is strongly bullish and points to another very active summer for DVN…SS and RSI(14) are showing increasing up momentum, and the 100-day moving average (SMA, not shown on this chart) has flattened out and appears ready to reverse to the upside…big possibilities for this over the next few months given this week’s developments…

DVN is up another penny at 20.5 cents as of 8:30 am Pacific…

Canada Zinc Metals Corp. (CZX, TSX-V) Update

Field crews have mobilized to Canada Zinc Metals Corp.’s 100%-owned Akie Zinc-Lead-Silver Property located in northeast British Columbia to initiate a summer drill program…the planned 5,000 m of diamond drilling will target the Cardiac Creek deposit with a focus on resource growth…holes will target the lower elevations of both the indicated and inferred sections of the mineral resource…CZX is unchanged at 23.5 cents as of 8:30 am Pacific…

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

Calibre Mining (CXB, TSX-V) released another set of results yesterday from its 2015 drilling program on the Eastern Borosi Gold-Silver Project in Nicaragua, which is being financed under an option agreement with Iamgold (IMG, TSX)…

Diamond drilling on the Guapinol vein system has further extended to depth (300 vertical m) the high-grade mineralization including 1.4 m grading 98.7 g/t Au and 49.1 g/t Ag (GP15–034) on the Guapinol vein (the deepest intercept and the highest grades yet from the 2014–2015 drilling), and 7.1 m grading 6.2 g/t Au and 41.4 g/t Ag (GP15–037) on the Vancouver vein…

Drilling continues on Iamgold-optioned ground (in green)…

Technically, CXB is attempting to overcome Fib. resistance at 15 cents…it’s underpinned by a rising 50-day SMA at 14.5 cents…CXB has strongly outperformed the Venture since the spring of last year, and that trend appears likely to continue…the stock is unchanged at 15.5 cents through the first 2 hours of trading…

Probe Metals Inc. (PRB, TSX-V) Update

We’ve been pointing out the opportunity in David Palmer’s Probe Metals (PRB, TSX-V) since the spin-out began trading in March and was hovering in the mid-30’s, well below cash value…the company, which was formed out of the recent Probe Mines-Goldcorp deal, is evaluating opportunities while sitting on nearly $20 million – a great time in the market cycle to be sitting on that amount of cash…

With only 34 million shares outstanding, PRB’s current market cap now more closely approximates its cash value with the stock having moved from the mid-30’s to the 50-cent level where it could meet temporary technical resistance…PRB has 3 properties in Ontario, including the Black Creek chromite deposit, but an exciting new story – whenever that comes – should give this a nice lift…

Bacanora Minerals Ltd. (BCN, TSX-V)

Bacanora Minerals (BCN, TSX-V), which just 2 years ago was trading below 20 cents, is having success with Lithium and Borate projects in Mexico, and is certainly worthy of our readers’ due diligence…a key technical level to watch is $1.80 where is both chart and Fib. resistance…BCN closed at $1.70 yesterday…

Western Lithium USA Corp. (WLC, TSX)

Western Lithium (WLC, TSX) closed an $8 million bought deal this week, priced at 70 cents and led by Dundee Securities…

There are good reasons to be bullish on Lithium, and WLC is developing its Kings Valley Lithium deposit in Nevada into potentially one of the world’s largest strategic, scalable and reliable sources of high quality lithium carbonate…

This 2-year weekly chart shows WLC in an ideal position, resting just slightly above an uptrend trend, Fib. support and and its still-rising 200-day SMA…

WLC is off 3 cents at 69 cents as of 8:30 am Pacific…

Note:  John, Terry and Jon do not hold share positions in DVN, CZX, CXB, PRB, BCN or WLC.