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TSX Venture Exchange and Gold

The Venture has climbed in 9 out of the last 10 weeks and is now above 600 for the first time since July of last year after a 23-point weekly gain to 604.  The ease with which the Venture pushed through Fib. resistance at 591 Thursday and Friday suggests the Index has enough momentum to power at least another 5% higher this month to the next Fib. level, 629.

As we’ve been mentioning, all of John’s charts strongly indicate that the Venture is on track for its best year since 2010.  The bear market is over, and we’re now in a new cycle when we can invest in this market with much greater confidence.  Selectivity as always is critical, but wise investing and trading should yield very solid if not spectacular returns this year.  Fundamentally, a few critical things are in the Venture’s favor in 2016: 1) a dovish Fed; 2) a weak U.S. dollar; and 3) a bullish Gold market.  Furthermore, it appears Oil bottomed early in the year.

There are many companies with outstanding project portfolios that are still very undervalued and will help the Venture attain significantly higher levels as 2016 progresses.  We’ll be seeing more moves like the one Thursday when Probe Metals (PRB, TSX-V) launched a friendly takeover of Adventure Gold (AGE, TSX-V), now up 129% this year.

Tomorrow, we’ll highlight some more up-and-coming 100% gainers in our Sunday Sizzler Report for Pro subscribers, including a couple of plays under a nickel.  The BMR Top 50 Opportunities List is now up a staggering 60% since early December with no less than 20% of those companies at least doubling in value including one that has soared 392%.  Our 7 new additions since late February have already gained nearly 50%.

In today’s Week In Review And A Look Ahead…

1.  Latest Venture chart shows one of the most beautiful uptrends in years…

2.  The greenback proves the old Wall Street adage:  Bulls make money, bears make money, pigs get slaughtered…

3.  Bet against Gold right now at your peril…

Plus more…to view the rest of today’s Morning Musings, login with your username and password, or click here to gain full access to this and other exclusive BMR content and features…

Gold has traded between $1,229 and $1,239 so far today…as of 6:50 am Pacific, bullion is down $2 an ounce at $1,238…Silver is up 7 cents at $15.30…Copper is flat at $2.12…Crude Oil has surged $2.00 a barrel to $39.26 while the U.S. Dollar Index has fallen one-fifth of a point to 94.35…

Credit Suiise has upped its Gold and Silver forecasts, looking for Gold to climb to $1,350 an ounce in the 1st quarter of 2017…that’s still on the low side according to our take on the Gold market, but further upgrades from bank analysts as the year progresses can only be bullish for the yellow metal…Credit Suiise has hiked its 2016 forecast by 10% to an average of $1,270 an ounce and by 12% in 2017 to $1,313…

“We do not believe a return to sub-$1,150 per ounce is likely or a sustainable price for the Gold market as it would accelerate the existing mine-supply issue,” the bank said. “Reserve life has declined from 14 years to 10 years and we forecast supply declining by 8% from 2016-18. Meanwhile, central-bank and Gold-bar purchasers have as good a reason as ever to diversify into fungible assets whose value cannot be printed away by other central banks.”

Gold is on track to enjoy its best week out of 5 as “Brexit” fears mount while the U.S. dollar remains under pressure following last week’s dovish comments from Fed Chair Janet Yellen…analysts attribute part of yesterday’s jump in Gold to Dutch voters overwhelmingly rejecting a Ukraine-European Union treaty that would see closer political and economic ties between the two sides….this was viewed as a test of EU sentiment ahead of the key June 23 vote in Britain…

Oil Update

Oil is getting a lift today on fresh hopes over a proposed freeze in production and firm economic indicators from the U.S. and Germany that cast a positive light on growth in fuel demand…Crude touched strong new support in the mid-$30’s earlier this week…

Iraq continues to increase its Oil production, though some analysts believe that a range of factors could lead to supply disruptions in that country by the summer…Iraq said yesterday that exports from its southern ports had hit almost 3.5 million bpd in April, up from an average of 3.29 bpd in March…major producers including Iraq meet April 17 in an effort to freeze output levels…

Russia’s Oil production could fall in April, sources say, while the country’s energy minister expressed confidence that producer nations will agree to an output freeze…

Capital spending in the Canadian Oilpatch sector is set to drop by $50 billion since 2014 – the largest two-year-decline since at least 1947 — thanks to the protracted plunge in Oil prices, the Canadian Association of Petroleum Producers said Thursday, although the election of the NDP in Alberta in the spring of last year (and the Liberals at the federal level in October) did not help matters in our view along of course with President Obama’s rejection of Keystone…Canada urgently needs new pipelines to move product to tidewater…investments were expected to decline 62% to $31 billion in 2016, from a record $81 billion in 2014, and $48 billion in 2015, according to CAPP, which represents the Oil and gas industry…the oilsands may see investments drop to around $17 billion this year, half of the figure spent in 2014…

An Over-Regulated United States

In a great example of why the U.S. economy can’t push beyond 2.5% growth, the Wall Street Journal reported this morning how the Obama administration is racing to make final a flurry of regulations affecting broad swaths of the economy, further hamstringing U.S. businesses with moves across labor, health, finance and the environment…the expected burst of new regulations follows an intense few weeks in which the administration has targeted corporate tax inversions, imposed new rules on brokers and advanced restrictions on company relations with union organizers…

In today’s Morning Musings…

1.  What yesterday’s news of a “merger” with Adventure Gold (AGE, TSX-V) means for Probe Metals (PRB, TSX-V)…

2.  Integra Gold (ICG, TSX-V) makes a “strategic investment” in Eastmain Resources (ER, TSX) following a Columbus Gold (CGT, TSX) attempt to unseat the Eastmain board…

3.  Venture surpasses another key Fib. level…

4.  Copper erases its 2016 gains – updated chart on what to expect next…

Plus more… to view the rest of today’s Morning Musings, login with your username and password, or click here to register and gain full access to this and other exclusive BMR content and features…

Gold has traded between $1,225 and $1,244 so far today…as of 7:05 am Pacific, bullion is up $19 an ounce at $1,241…Silver has added 24 cents to $15.30…Copper is off a nickel at $2.12 due to global growth concerns…Crude Oil is down 33 cents at $37.42 while the U.S. Dollar Index is up slightly at 94.53…

Holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, ended a recent slump and rose 0.51% to 819.60 tonnes yesterday…

Central banks slowed their Gold purchases in February, snapping up 25 tons of the yellow metal against a combined 41 ton purchase in January, according to data today from the World Gold Council…the purchases were also outweighed by monthly sales by certain banks, pushing collective Gold holdings of global central banks to decline by 16 tons on a net basis in February, the first decline since January 2015…seasonal factors may have been at play…most of the purchases in February were by China and Russia who added 10 and 11 tons of the precious metal to their holdings, respectively…

Bullard:  U.S. Should Rely Less On Monetary & Fiscal Stimulus

St. Louis Federal Reserve President James Bullard spoke some common sense yesterday in an economic address at the St. Louis Fed…he said the United States needs a long-term economic plan including tax and education reform to revive growth, not rely on more monetary or fiscal stimulus for a short-term boost.  “The U.S. needs a medium-term growth strategy that is less oriented towards stabilization policy, stimulus, and is more oriented to what kinds of things would improve the long-term and medium-term growth prospects,” Bullard said. “Tax reform is in that category. Education reform is in that category. Immigration reform is in that category. There are a host of things that would not have immediate impact…but if you look out 5 to 10 years would have handsome payoffs.” 

Oil Update

The U.S. Energy Department’s weekly Oil data release yesterday showed its estimate of domestic production edged down yet again last week, but continues to cling stubbornly above the 9 million barrel level…U.S. output fell to 9.008 million barrels a day last week, down from 9.022 million the week before, the department said…U.S. Oil production has now fallen about 7% from its peak last year, a decline of nearly 700,000 barrels a day, but still remains 62% above its level 5 years ago…

Meanwhile, WTIC got a strong boost yesterday when it was announced by the Energy Information Administration (EIA) that U.S. Crude supplies unexpectedly fell by 4.9 million barrels in the week ended April 1 (vs. estimates of a rise of more than 3 million barrels)…the prior week, Crude stockpiles stood at the highest level in more than 80 years…the inventory drawdown was due to a decline in imports and an increase in refinery activity, the EIA said…

Bad Call By Wall Street?

Wall Street is overwhelmingly anticipating that Hillary Clinton will be the next U.S. President, so it’s probably wise to take a contrarian approach and expect a different outcome in November…more than 70% of respondents to a recent Citigroup poll of institutional clients viewed the former Secretary of State, first lady and New York senator as the likely 45th President…just over 10% give Donald Trump the nod, while fellow Republican John Kasich is a few points behind…Republican Ted Cruz and Democrat Bernie Sanders barely register (the poll was taken before Cruz and Sanders scored big primary wins Tuesday in Wisconsin)…

In today’s Morning Musings…

1.  Lithium plays continue their torrid pace – new one for consideration this morning…

2.  Pure Energy (PE, TSX-V) mobilizes for fresh drilling at Clayton Valley South…

3.  The latest addition to the BMR Top 50 Opportunities List on new stirrings in a prolific high-grade area of NW British Columbia…

Plus more… to view the rest of today’s Morning Musings, login with your username and password, or click here to register and gain full access to this and other exclusive BMR content and features…

Gold has traded between $1,217 and $1,233 so far today…as of 10:30 am Pacific, bullion is down $9 an ounce at $1,222…Silver is off a dime at $15.05…Copper has slipped a penny to $2.17…Crude Oil has surged $1.78 a barrel to $37.68 as U.S. Crude stocks unexpectedly fell last week according to a report today from the Energy Information Administration (EIA)…the U.S. Dollar Index has reversed lower this morning, now down one-quarter of a point to 94.38…

“There appears to be enough uncertainty to prop up Gold and the financial markets are no longer focused on the possibility of a near-term Fed rate hike,” HSBC stated today. “This relieves Gold of a major weight, at least for the moment. All this is supportive, but there are a few negatives that may curb or restrain the rally.” 

HSBC pointed to Gold ETF inflows that have stopped in recent days after an accumulation of more than 9 million ounces since the start of the year…also, the net bullish position of speculators in the futures market is now so large that “it may be difficult to sustain further increases…the cumulative impact of this leaves us supportive of Gold but cautious regarding further (immediate or near-term) upside.” 

Despite Gold’s jump yesterday, holdings in the world’s largest Gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, fell 0.28 tonnes to 815.44 tonnes…the fund reported this year’s first weekly outflow last week…

However, Gold’s technical posture at the moment remains strong while bullish signals are very evident in the TSX Gold Index and the Venture…

Court Orders Chavez To Pay Canadian Miner $1.4 Billion

An arbitration tribunal has ordered the Venezuelan government to pay a whopping $1.4 billion (U.S.) to Canadian miner Crystallex International Corp., saying the state caused all of Crystallex’s investments “to become worthless”…the award relates to the rich Las Cristinas Gold project in Venezuela…Crystallex had a contract to develop the mine, but Hugo Chavez’s government refused to issue a key permit and informed the company in 2011 that the contract was “unilaterally terminated”…no reasonable explanation was provided…Crystallex quickly launched an international arbitration case at the World Bank’s investment dispute centre, and the tribunal finally ruled in its favour this week.  “We are pleased that the tribunal has recognized Venezuela’s unlawful expropriation of the company’s investment in the Las Cristinas mining project,” Crystallex chairman and chief executive Robert Fung said in a statement. “The company looks forward to collecting on the award on behalf of all of its stakeholders.”

Unfortunately, the reality is that Crystallex will likely never collect even a cent from the Venezuelan government…this is just another lesson for investors to stay away from companies conducting business in risky jurisdictions, of which there are many, with risk taking different forms (government and non-government)…

In today’s Morning Musings…

1.  Cordoba (CDB, TSX-V), Pure Gold (PGM, TSX-V) and GoldQuest (GQC, TSX-V) hit new 52-week highs…

2.  TSX Gold Index – ready for another strong push higher?…

3.  Blackbird Energy (BBI, TSX-V) takes steps to transition into a producer…

Plus more… to view the rest of today’s Morning Musings, login with your username and password, or click here to register and gain full access to this and other exclusive BMR content and features…

Gold has traded between $1,224 and $1,238 so far today…as of 9:30 am Pacific, bullion is up $13 an ounce at $1,228…Silver has jumped 21 cents to $15.12…Copper is unchanged at $2.18…Crude Oil is flat at $35.69 while the U.S. Dollar Index tried to rally in early trading but is now essentially unchanged at 94.59…

Gold is getting a lift “from significantly higher risk aversion among market participants this morning,” Commerzbank analysts commented…holdings in Silver ETFs continue to be built up, the bank also noted this morning, by 164 tonnes last week and another 52 tonnes yesterday…while March saw 38,000 ounces of (U.S. Mint American Eagle) Gold coins sold in the U.S., which is 18% down on the year-on-year figure, Silver coin sales surged by 17% to 4.1 million ounces…

Global market spillovers from China’s economic shocks will only increase in the coming years as the country’s financial influence grows and the yuan’s use as a funding currency broadens, the International Monetary Fund said yesterday…the IMF noted that markets have become extremely sensitive to the economic signals coming from China and that policymakers there must not send mixed messages.  “As China’s role in the global financial system grows, clear and timely communication of its policy decisions, transparency about its policy goals, and strategies consistent with achieving them will be increasingly important to avoid volatile market reactions with wider reverberations,” the IMF stated in its report, adding that developments in emerging markets now account for one-third to 40% of the variation between stock market returns and exchange rate fluctuations worldwide…

ISIS Issues More Threats

ISIS supporters have released a video calling for new terror attacks in London, Berlin and Rome…the video, called “Fight Them, Allah Will Punish Them By Your Hands”, calls on extremists to “kill (infidels) wherever you find them”…after showing footage of the attacks in Paris and Brussels, as well as 9/11, the narrator called the previous atrocities a “cautionary message” to nations fighting the Islamic State.  “If it was Paris yesterday, and today in Brussels, Allah knows where it will be tomorrow,” a narrator said in English. “Maybe it will be in London or Berlin or Rome.”

We can’t fix a problem if the President of the United States, the leader of the free world, can’t even acknowledge what it is – radical Islamist terrorism…

Regional Fed President Notes Political Uncertainties

Federal Reserve Bank of Chicago President Charles Evans, who will note on monetary policy next year, said the U.K.’s “Brexit” vote and the U.S. presidential elections are fueling uncertainty, complicating decisions for policy makers as well as businesses and investors…speaking in a Bloomberg Television interview today in Hong Kong, Evans cited the U.K. referendum on leaving the European Union and the surge of refugees entering Europe…he added there’s also a “large uncertainty” about November’s U.S. elections.  “It’s hard to know what risks might be hitting us.  We’re in a period where there are more uncertainties than you would normally have.”

Socialists Thrashed Again In Saskatchewan

Brad Wall’s conservative Saskatchewan Party made history in that province last night, becoming the first non-socialist party to win 3 consecutive elections since 1925…Saskatchewan voters, like those elsewhere in western Canada, know from current (Alberta) and past experience (Saskatchewan, Manitoba and B.C.) that Big Government, high taxes and socialism simply don’t work…Wall also gave an indirect message to Prime Minister Justin Trudeau last night when he boldly declared, “You can expect a government that will stand up for Saskatchewan’s interests in every sector of the economy every time it’s challenged…you can expect a government that is proud of Oil and gas in this province…these are our commitments to those in Saskatchewan and those outside Saskatchewan who may want to participate in the Saskatchewan advantage.”

In today’s Morning Musings…

1.  Updates on Gold, Oil, Copper and Uranium…

2.  Pure Gold Mining (PGM, TSX-V) shoots higher following impressive results from Madsen…

3.  Brazil Resources (BRI, TSX-V) highlights its large holdings in the Western Athabasca Basin after identifying a 1.8 km EM conductor…

Plus more… to view the rest of today’s Morning Musings, login with your username and password, or click here to register and gain full access to this and other exclusive BMR content and features…