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Check back later this morning for today’s Morning Market Musings!

1. Gold has traded between $1,221 and $1,233 so far today…as of 7:00 am Pacific, bullion is off $11 an ounce at $1,222…the Fib. resistance band Gold has been fighting on its 9-month daily chart ranges from $1,215 to $1,235…strong demand for Gold can be seen on COMEX where speculators raised their bullish bets on the metal to the highest in 2 months in the week to February 7 according to data issued Friday…Silver has slipped 13 cents to 17.81, Zinc has hit a new multi-year high around $1.35 a pound while the U.S. Dollar Index is up slightly at 101.05…

2. Global demand for Oil could outperform the 10-year average in 2017 as the health of the world economy improves and demand for road transport continues to grow, OPEC’s latest monthly report has forecast…the new data from the Oil cartel this morning expects demand to grow at 1.2 million barrels per day (bpd), comfortably above the 1 million bpd averages seen in the past decade…

3. The Venture, coming off its 2nd-best weekly performance of the year, is aiming for its 8th straight weekly advance as it closes in on last summer’s 848 high…the Index is up 1 point at 837 through the first 30 minutes of trading…

4. Silver Standard Resources (SSO, TSX) is the senior mining company that Eskay Mining (ESK, TSX-V) has struck a deal with on its SIB Property contiguous to the past producing Eskay Creek mine in the Heart of Gold Camp…it was announced this morning that ESK and SSO will now proceed to convert the LOI into a formal agreement for SSO to acquire an option to earn up to a 60% undivided interest in the SIB with Eskay Mining and St. Andrew Goldfields, a wholly-owned subsidiary of Kirkland Lake Gold (KL, TSX), holding the balance (KL has waived its first right of refusal on the SSO deal with ESK)…the SIB represents just under 10% of the entire ESK land package in the area…ESK has added a nickel to 40 cents as of 7:00 am Pacific, a doubling of the stock price since our alert following the initial news regarding SIB January 26…

5. Colorado Resources (CXO, TSX-V) announced this morning that it has commenced RC drilling at its newly-acquired Green Springs Gold Property in Nevada…10 holes totaling approximately 1,300 m will test stratigraphic and structural contacts over a combined strike length of approximately 3 km – the lower Chainmen Shale-Joana Limestone contact south of the historic mine workings, and the lower Pilot Shale-Guilmette Limestone contact well exposed to the north and east of the mine workings…

6. More impressive drill results this morning from Marathon Gold (MOZ, TSX) as its winter drilling campaign continues at its Marathon deposit in the Valentine Lake Gold Camp…hole #170 has intersected 3.9 g/t Au over 75 m, including 33.4 g/t Au (uncut) over 5 m, while hole #161 has returned 3.8 g/t Au over 60 m including 11.9 g/t au over 9 m…these new near-vertical drill holes, as well as previously released near-vertical drill holes MA-17–158 and MA-17–159, were designed to prove the continuity of the Gold mineralization both vertically as well as along strike through the deposit…Marathon now has a current well-defined strike length of over 550 m, has been traced to depth more than 500 m, and is open both along strike and to depth…the style of Gold veining is common to orogenic Gold systems like those that have formed in the Val-d’Or district…MOZ is up a nickel at $1.15 as of 7:00 am Pacific…

7. With $4 million invested in the Castle and Beaver properties since 2011, Castle Silver Mines (CSR, TSX-V) is unquestionably one of the most advanced (and undervalued) plays in the entire burgeoning northern Ontario Cobalt Camp with near-term Cobalt extraction potential – a fact the market is just beginning to pick up on given CSR’s ascent last week…CSR is up half a penny at 19 cents as of 7:00 am Pacific but sports a market cap of just $5.5 million, one-quarter of that of First Cobalt (FCC, TSX-V)…

Three excellent examples of how the market for Cobalt stocks is heating up and where it’s going, and a couple of quality plays (CSR and CPO) we find particularly attractive given their competitive advantages and very modest market caps ($5.3 million and $4.3 million, respectively).

1. First Cobalt (FCC, TSX-V) last week announced a doubling to $6 million of a recently announced financing of 7.5 million shares at 40 cents a share.  FCC has acquired privately-held Cobalt Industries which holds the South Lorraine Cobalt claim group (19.5 sq. km) adjacent to the past producing Keely Frontier mine in the former mining camp of Silver Centre, Ontario, 25 km south of Cobalt.  FCC closed at 69 cents Friday for a market cap of $20 million.

2. A total of 13 million shares from an October financing at 6 and 7 cents in Cobalt Power (CPO, TSX-V) became free-trading last week and were eagerly soaked up by the market with CPO gaining 4 pennies on the week to 13 cents (market cap $4.3 million).

3. CobalTech Mining (CSK, TSX-V) completed a hard dollar financing of $3 million at 20 cents per share at the end of December to advance its Duncan Kerr Project (past producer) in Cobalt.

Cobalt is called the “birthplace of Canadian hardrock mining”.   Silver was discovered in Cobalt in 1903 and the community quickly became world famous for its riches, far exceeding Klondike Gold towns!  Over 100 separate mines and prospects were active in the area in the early 1900’s.  Explorers followed the Cobalt, which they had little interest in back then, to get to what they really wanted – the exceptionally high-grade Silver (now, of course, technology is rapidly boosting the demand for Cobalt at a time when more than 50% of the supply of this strategic metal comes from an unstable source, the Congo).  Silver production continued at a high level until the mid-to-late 1920’s (with Cobalt as a by-product) when the price of the metal collapsed. 

Exploration expanded outward from Cobalt in the few years after the initial Silver discoveries and rich veins were found in other nearby areas such as South Lorraine Township and Gowganda, resulting in very significant historical production of both Silver and Cobalt – the last of which came from Agnico Eagle in the late 1980’s on a property now held by Castle Silver Mines (CSR, TSX-V).  That’s a company we alerted subscribers to last summer when the stock was trading around a nickel, and we reiterated the opportunity just recently following CSR’s January 31 news regarding impressive metallurgical recoveries of Silver and Cobalt from Castle as well as the Beaver Property, another past producer, just outside the town of Cobalt. 

In many ways, the Cobalt rush is simply starting to catch up with Castle Silver Mines which we view as the most advanced player in the district.  Funny how Mr. Market can sometimes overlook a few important things, if only temporarily.

Consider the following facts:

• A total of $4 million has been invested at Castle and Beaver since 2011 (90% toward Castle)
• CSR has immediate access to the main adit at Castle – critical!
• Besides sourcing mineralization left behind in the adit*, old mine tailings, waste and other rock piles on the surface at Castle offer potential for initial near-term Cobalt and Silver extraction
• CSR has already negotiated important agreements regarding Castle with First Nations and the Ontario government (a Closure Plan with the Ministry of Northern Development and Mines includes an advanced exploration permit)
• Silver and Cobalt recoveries at Beaver of 98.5% and 70.5%, respectively, produced an extremely high concentrate grade of 11,876 g/t Ag and 10.5% Cobalt using a simple flotation process – the mineralized material surface rock sample was a composite from the waste pile assaying 2,064 g/t Ag and 5.6% Cobalt!
• In 2013, a hand-cobbed 20 kg geological test sample from the historic waste pile at the Beaver mine had an average calculated assay of 7.98% Cobalt!
• Veins with high-grade Cobalt come to surface at Beaver and have never been touched – again, the oldtimers were after exceptionally high-grade Silver

*Cobalt mineralization at the entrance of the Castle adit is evidenced by the pinkish alteration as seen below (source: July 2015 Technical Report).

Entrance to Castle main adit.

The Castle-Beaver double play will be fascinating to watch (CSR also has a legitimate Gold opportunity on part of the Castle Property).  Everyone agrees – this Cobalt district is going to be red-hot but it will also quickly separate the men from the boys.  On that score, CSR has a northern Ontario Cobalt King at its side, Frank Basa.  More on that part of the story in the coming days.

Cobalt Power Group Inc. (CPO, TSX-V)

What impresses us about Cobalt Power Group (CPO, TSX-V) is how this company, with a sense of urgency, has taken a very systematic approach to exploration at its properties acquired near Cobalt last September/October.  No doubt that’s due to Dr. Andreas Rompel, an expert in structural geology who has a wealth of industry experience including more than a decade with Anglo American.

Dr. Andreas Rompel, Cobalt Power Group President & CEO.

It’ll be interesting to see what an expert in structural geology, aided by modern technology, can accomplish in terms of new Cobalt discoveries in this past producing and prolific Silver-Cobalt Camp where much must have been overlooked many decades ago.

CPO’s first acquisition was the Smith Property consisting of a modest 8 claims covering 72 hectares 4 km southeast of Cobalt.  However, what’s significant is that those are patented claims (greatly simplifies getting to the drilling stage) featuring some limited underground development and mining immediately west of the historic Deer Horn mine.  From the early 20th century to the mid-1960’s, Deer Horn produced a reported 11 million ounces of Silver and 100,000 pounds of Cobalt.  A review of historic data by CPO has confirmed that the adjoining Smith Property contains the southeast extension of the veins previously mined at Deer Horn.  All the necessary geological components of accepted mineralization models have been identified at Smith…

Cobalt Power has systematically carried out compilation of historical data, mapping, surface sampling and ground truthing at Smith, along with airborne and ground geophysical surveys including a recently completed IP program with results pending.  The company will also be looking to rehabilitate the Smith Cobalt shaft and underground workings to allow mapping and sampling of the veins.  With vast new knowledge of the property, CPO has put itself in an excellent position to enjoy success with the drill bit this spring.

Highlights of the sampling carried out to date included 6 samples averaging an impressive 0.50% Co from a muck pile (loose ore that has been fragmented as a result of drifting along the veins) originating from historic underground workings.  The muck pile covers an area approximately 50 x 20 m with a thickness of 3 to 4 m and is estimated to contain 5,000 to 10,000 tonnes of crushed rock.  The samples are considered to be representative of the bulk of the material within the pile.

“These grades compare favourably with those found at top Cobalt-producing mines worldwide,” stated Rempel.  “Copper and Nickel grades were promising as well and, along with Silver, may be converted into additional credits.”

In addition, 2 rock samples collected from a vein uncovered while clearing vegetation around the historic shaft assayed a whopping 7.9% and 3.8% Co.

Through staking and some deal-making, CPO expanded its land package 10-fold to 712 hectares with claims contiguous to and surrounding Smith.

Note:  John and Jon both hold share positions in CSR and CPO.  Jon also holds a share position in CSK. 

It was another fascinating week in the Eskay “Heart of Gold Camp” which we predict is going to be one of the key engines that powers the Venture above the 1,000 level again this summer with so many companies preparing for drill programs (watch for our special section coming soon at BMR, dedicated exclusively to the Heart of Gold Camp 24/7).

Arguably, when one considers the discoveries at Eskay Creek, Snip, KSM and of course Brucejack which is progressing ahead of schedule toward commercial production this year, this district – still incredibly under-explored – is the richest part of the entire planet.  Grades of large Gold-in-soil anomalies are even higher than the average values of today’s mined deposits!

Eskay Creek – production of more than 3 million ounces of Gold and nearly 160 million ounces of Silver at 49 g/t Au and 2,400 g/t Ag…

Snip – production of 1 million ounces of Gold at an average grade of 27.5 g/t Au with rich new veins now being discovered!…

KSM – the world’s largest Reserves of Gold and Copper…

Brucejack – one of the richest Gold mines in the entire world with estimated annual production of 500,000 ounces at an average grade of about 15 g/t Au (geologists predict more discoveries in the Valley of the Kings)…

Pretium announced earlier this month that it’s accelerating the commissioning of the Brucejack mine by 2-3 months. Economics are robust. Base case post-tax NPV (5% discount) is $1.53 billion (U.S.) while post-tax IRR is 28.5%

High-Grade Gold And Cu-Au Porphyry Surrounding High-Grade Nickel-Copper!

Geologically, the latest “shocker” about this district is that a magmatic Ni-Cu-rich massive sulphide system, with PGE’s, Gold and Cobalt, has been confirmed in the heart of this Camp, on trend and almost exactly halfway between Snip to the northwest and Brucejack to the southeast, about 15 km southwest of Eskay Creek (that’s not a coincidence).

Is this district prolific enough to have created a Voisey’s Bay West at the E&L?  Absolutely, and that’s why multiple Voisey’s Bay experts are reaching out to Garibaldi Resources (GGI, TSX-V).   Think about how “juiced up” a system would have to be in order for high tenors of 4.8% to 8% Nickel and 2.1% to 10.9% Copper (in 100% sulphide) to outcrop over a broad area at the top of a mountain more than 6,000 feet high, with massive sulphides intersected through drilling to depths of more than 100 m below the surface showings!  Scroll further down for an image BMR has created to demonstrate the potential scale of the E&L.

Mining analyst Dr. Raymond Goldie, who wrote the book on Voisey’s Bay (“Inco Comes To Labrador“) and prospected in the Eskay Camp in the 1970’s, is calling the E&L “the top Nickel sulphide prospect in Canada.”  On Friday he joined the GGI Board of Directors along with Everett Makela who has spent much of his geological career with Nickel leaders Inco and Vale.

Senior Mining Company Moves In On SIB

Recently, we alerted subscribers to the new opportunity in Eskay Mining (ESK, TSX-V) immediately following the company’s January 26 game-changing news of a deal with an unnamed senior mining company that will pour nearly $12 million into exploration at Eskay’s SIB in order to acquire up to a 60% interest in the property (the deal has some moving parts to it, including the fact Kirkland Lake Gold has a first right of refusal option for 21 days, but a major drill program will be carried out at SIB this summer and that’s huge).  Since that time, ESK has surged 75%!

The SIB is very much a jewel of British Columbia’s entire Golden Triangle – if there’s another Eskay Creek in B.C., it’s likely at the SIB for multiple sound geological reasons.

The deadline for Kirkland to make a decision is imminent, so watch for more news any day now from ESK.  There have been no leaks in terms of who the unnamed “senior mining company” is – we are as curious as you to find out!

Think about how rich Eskay Creek was – astronomical Gold and Silver grades made it one of the greatest mining discoveries of all time!   It was quickly put into production and in its life span delivered more than 3 million ounces of Gold and nearly 160 million ounces of Silver (5th largest Silver producer in the world), plus other metals.  Consider, therefore, the unbelievable leverage ESK investors have. 

We’re convinced, and so are some highly respected geologists, that there is another Eskay Creek (perhaps more than one) at SIB given all that’s now understood about this amazing property after more than $30 million in exploration expenditures since the 1980’s.  The rocks and stratigraphy at SIB match Eskay Creek.  There’s now a solid theory on where to find the “motherlode”, and that’s why a major has stepped in.  More on SIB (and the rest of ESK’s impressive land package) with geologist Charlie Greig in the near future.

Now, consider this for a moment…

A senior mining company has just agreed to invest $12 million in exploration at the SIB in order to acquire up to a 60% interest in an area that represents less than one-tenth of Eskay’s entire land package in the Heart of Gold Camp!

ESK has some fantastic targets to chase beyond the SIB where it controls another 450 or so sq. km!

That’s why we’re saying, ESK stands for Essential Stock to Keep!

Meanwhile, Over At The E&L…

The E&L Critical “Checklist”

• Known near-surface historical deposit (about 20 drill holes), not delimited in any direction
• No holes completed in nearly 50 years – easy to believe how the “oldtimers” missed the biggest and juiciest part of the system
• Much more is now known about Ni-Cu-rich massive sulphide deposits PLUS the district as all the area’s major discoveries (Eskay Creek, Snip, KSM and Brucejack) occurred AFTER massive sulphides were first discovered at the E&L
• Very impressive “tenors” – 4.8% to 8% Ni and 2.1% to 10.9% Cu in 100% sulphide!
• Critically important!! – source of sulphur for metal enrichment is interpreted to be the Hazelton Group shales
• The right mineral assemblage – pyrrhotite-chalcopyrite-pentlandite
• The “Q” anomaly – very broad and features a 600-m-long conduit shaped “keel” (big magma chamber?) south of original discovery
• Big gravity anomalies (regional scale), a must for major Nickel sulphide deposits
• Strong evidence for a powerful mafic-ultramafic intrusive event – that’s how “volume” can kick in
• District setting – one of the world’s most richly mineralized areas, no reason why a “Voisey’s Bay West” could not have formed
• Massive infrastructure build-up – power, new roads, etc. – huge advantage for GGI (consider the problems Noront has had!)
• Western Australia (Kambalda comparative) – high-grade Ni massive sulphide deposits discovered within a high-grade Gold camp decades after Gold mining commenced
• GGI has 100% ownership of the E&L at a “steal” of a price, just coming out of the bottom of the bear market when a claims holder was desperate for some cash and paper – wow, the deal of the year in this district!

About the only important thing not on the checklist at the moment – big conductors to chase!  That’s because no modern geophysics has been performed yet at the E&L.  We expect an extensive VTEM survey will be carried out by GGI while the weather is still cold (seasonal timing is important to get the best results).  A VTEM of course can read massive sulphides to a depth of 300 m or more.

Another important point to keep in mind which supports the case for the “Q” anomaly – big Ni-Cu-rich massive sulphide deposits don’t tend to occur in the most obvious place.   The oldtimers at the E&L, while they did an excellent job in the context of the times, were entirely focused on the “eye candy” at the top of Nickel Mountain.  They were hoping to turn this into a quick 10-million tonne near-surface deposit (they got one-third of the way there) that they could start mining ASAP.  It got more complex than they imagined and they didn’t have today’s modern tools to help them.  The ”Q” anomaly, perhaps the source of everything, wasn’t on their radar, nor were other potential areas.  It’s downslope in a treed area with limited outcrop.  Exactly the discreet, not-so-obvious place where the “motherlode” could be!

Great advances in technology, data processing and of course even “climate change” (glacial retreat) will give GGI’s team of experts an unusually strong chance of hitting a grand slam at Nickel Mountain, clearing the bases that were loaded up by historical prospectors.

The E&L Has Scale!

Below we have an interesting image that shows the Voisey’s Bay Ovoid (massive sulphides) and how it would fit (in scale) within GGI’s “Q” Anomaly.  This is simply for scale comparison – no drill holes have ever been put into the “Q” as the feature wasn’t even known to exist until about 2 decades after the Sumitomo exploration program was carried out in the 1960’s to about 1970.

The Ovoid, one of 3 zones at Voisey’s Bay, represents less than 25% of total tonnage but 43% of total metals given the high grades.

Keep in mind, the “Q” covers just a fraction of the 63 sq. km E&L Project and the depth potential for massive sulphides could also be very significant given what’s known about this district.

The VTEM is really the final piece of the puzzle given all the other facts at hand that suggest the oldtimers merely hit the tip of the iceberg when they found massive sulphides at the top of Nickel Mountain and drilled into them to depths of at least 120 m below the surface showings.  Limited underground drilling was toward the near-surface deposit and intercepted the host gabbro rocks but the geologists, not armed with today’s new technology or a full understanding of these rare type of deposits, misinterpreted how the pipe-like structures plunged at depth.  

Kirkham Will Kick!

We’ve stated this before and it’s worth re-emphasizing – Metallis Resources‘ (MTS, TSX-V) 100 sq. km Kirkham Property, directly below Garibaldi’s E&L, has tremendous geological potential that has so far been overlooked by Mr. Market.

Pay attention to Kirkham and Metallis…pay attention!

We have researched Kirkham extensively in recent months and we’ll be uncovering our findings in the near future.

Note:  John, Jon and Daniel hold share positions in GGI.  Jon also holds share positions in ESK and MTS.

It’s notable that Gold jumped $17 an ounce last week amid further ETF inflows while the U.S. dollar also gained ground at the same time as all the major North American stock indices hit new record highs.

Things are moving at “Trump speed”!

Given the behavior of the Venture, we predicted the $1,200 level for Gold would be a springboard rather than a brick wall.  So far, that call is looking good.  This morning we have a fresh chart for Gold that shows you what to watch for this week.

There’s too much chaos around the world, even just within the United States, for Gold not to behave bullishly this year.  Too many analysts have not been thinking “outside the box” – they’ve been fixated on the assumption that the Fed is going to raise interest rates 3 times during 2017 and Gold will suffer as a result.  End. Of. Story.

Of course it’s never that simple…

It’s going to be a tumultuous year in the United States, and around the world, as Americans and others adjust to the new Donald Trump era and how he’s introducing transformational change with respect to how government should operate.  Gold loves uncertainty and chaos, and it’s going to get plenty of it in 2017 throughout the globe thanks to a Trump Tsunami.  We also expect to see heightened tensions between the United States and Iran – undeniably bullish for both Gold and Oil.

Then there’s the issue of U.S. debt – one thing the mainstream media and the markets aren’t focused on right now.

While Trump will definitely find significant savings and new efficiencies in certain operations of the federal government, we don’t see how he can fulfill his agenda without expanding the budget deficit and pushing total debt above $20 trillion (currently $19.9 trillion) – at least during the next couple of years.  How can that not be Gold-bullish (it always has been in the past)?  The administration’s first budget could be an important catalyst for Gold – we’ll see.  Keep in mind, Trump isn’t afraid of debt.  In fact, he has described himself as the “King of Debt”.

We’re sometimes criticized for bringing politics into market analysis but investors must understand you can not separate the two, especially now given how transformational the Trump administration could be.  How the U.S. dollar, Gold and commodities in general behave in the coming months will be very much dependent on the new policies and approaches that flow out of Washington, like it or not, especially in areas such as government spending, regulations, trade, energy, health care and infrastructure.  Trump’s agenda will also create new trends around the globe.

Meanwhile, the current behavior of the Venture seems inconsistent with the idea that we’re currently seeing in Gold is a “dead cat bounce”.

ETF selling, the driving factor in Gold’s post-election swoon, has dried up and fresh inflows have started.  If that trend continues, and the physical market picks up in Asia, Gold could power north to $1,300 or higher in a hurry.  Then everyone will understand what last year’s accumulation was all about!

Gold 2-Year Weekly Chart

Gold is taking direct aim at its 200-day moving average (SMA) in the $1,260’s.

Importantly, Gold’s 50-day SMA has reversed to the upside which ends a decline that started last August.   On a shorter-term chart, we’ve demonstrated how Gold has been traversing recently within a resistance band between $1,215 and $1,235.  At some point, perhaps very soon, Gold is going to smash through the top of that band and challenge the 200-day in the $1,260’s.  Bullion gained $5 an ounce Friday to close at $1,233.  One can’t rule out a near-term test of the $1,215 level but the risk-reward ratio for Gold right now has to be considered highly favorable.

Sell pressure (CMF) on this 2-year weekly peaked late last year – watch for a transition into buy pressure, perhaps before the end of this quarter.

It’s dangerous to be a crowd follower and during the last couple of months of 2016 the masses turned very negative toward Gold because the uninformed mainstream (propaganda) media kept repeating the narrative that if the Fed is in a rate hike cycle mode, this is bad for bullion (despite historical evidence to the contrary).  The dollar, meanwhile, got a double whammy benefit from Fed hawkishness and new political leadership in Washington that markets initially interpreted as being very bullish for the currency.

U.S. Dollar Index

President Trump is determined to “win on trade” for the United States and that’s an approach a President should take.  As investors, what’s important for us to discern is that it’s going to be much more difficult for Trump to achieve that objective if the American dollar is surging.  Hence, just before assuming office, he took a swipe at the “high” dollar in a January interview with the Wall Street Journal.

The Dollar Index broke out aggressively in early October and momentum peaked in November, though price highs weren’t reached until December.  The best indication of a weakening trend was the divergence between RSI(14) and price after the index finally touched measured Fib. resistance at 103.69.

A breakout above 104 could lead to a runaway dollar, but we now see much less likelihood of that occurring anytime soon given Trump’s concerns about the currency.  That’s probably why the Venture is up nearly 18% from its December low.

In addition, investors who are currently trading on the idea that the central bank will raise rates 3 times in 2017 have very short memories – this is the same Fed that expected to raise rates 4 times in 2016!  They struggled to implement just 1 rate hike, something they may not have been able to do if the November 8 elections had gone a different way.  Keep in mind, as well, that U.S. 4th quarter GDP came in quite a bit less than expected at just 1.9% as soybean exports fell.  When the American economic performance is dependent on soybeans, you know something’s wrong.  Trump has a big mess to fix.

While the Trump administration’s plans for major regulatory relief as well as individual and corporate tax cuts is a welcomed pro-growth agenda after 8 years of Obama steering a path toward socialism, traders are probably over-estimating how quickly these new policies will actually contribute to GDP growth.  It took more than a year before the Reagan Revolution jump-started the economy in the early 1980’s, and Reagan didn’t face the kind of opposition that Trump does right now.  From repealing and replacing ObamaCare to “fixing” trade agreements, the blue collar billionaire and his team face some daunting challenges.  We predict that Trump will succeed – “winning” is in his DNA, but it’s going to take time for all of the administration’s changes to be implemented and work their way through the system.  Increasingly during 2018 we expect the economy will respond positively.  Most new Presidents have had to battle weak economies or even recessions at the beginning of their terms.

Weakness started creeping into the Dollar Index in December when an RSI-price divergence materialized, and now the index is fighting a declining 50-day SMA.  It’s quite possible there could be an RSI(14) breakout above a downtrend line in the coming days and a continuation of last week’s rally.  The bottom line, however, is that the Dollar Index is now constrained below the key 104 level – positive for both the commodity sector and the Venture.

The Venture has reeled off 7 straight weekly gains since its December 20 correction low of 711 as this fresh uptrend in an ongoing bull market accelerates.

It’s certainly not too late to ride this bull – still early in the game in terms of the “Big Picture”.  Last weekend we gave valuable information to profit from immediately including exclusive BMR research that revealed the potential for some startling near-term gains in key sectors and stocks, and indeed many of our subscribers took full advantage of those opportunities.  Watch for some important posts Sunday leading into the new trading new week as we highlight more key situations.

Venture Short-Term Chart

Momentum is always key, and the Venture continues to have that – this very bullish trend could certainly extend into the start of PDAC in early March.  The Index enjoyed its second-best week of the year last week, adding 19 points to close at 836 – just 12 points shy of last summer’s high!

• RSI(14) is at 77% and will likely remain very elevated this month at or above 70%
• Buy pressure is steady, at its highest levels on this 6-month chart since mid-August
• ADX indicator confirms a solid bullish trend and -DI has room to fall further
• The EMA(8), currently 824, is providing superb support
• The 100-day SMA (not shown on this chart) is now reversing to the upside

The Venture “Big Picture”

Overall, Gold and Oil are behaving constructively and that’s underpinning the Venture’s rise.  Combined with strength in Copper, Zinc, Cobalt, Uranium, etc., and encouraging exploration results from various companies, along with non-resource plays that are performing well, there’s no question the Venture has the “wind at its back” right now.  Technical factors are also bullish.

The “Big Picture” is that the 2nd leg of the Venture bull market is in progress and will carry the Index to the 900–1000 level (minimum)during the first half of this year.  Summer/early fall should be incredible.

1. The bull market that started almost a year ago, largely sparked by Gold and Lithium, has broadened out considerably – multiple sectors are now participating, and we expect some of them to really take off during 2017.  That’s what will lift the Venture above 1,000 again;

2. The “masses” typically don’t start to recognize a major Venture market shift until about 1 year after it actually begins.  This has been true with every bear market and every bull market going back to the days of the Vancouver Stock Exchange.  So increasingly over the coming weeks and months, we expect a wave of new buyers to jump on board.  Recently completed investor conferences (Vancouver Resource Show, Roundup) plus PDAC in early March should help in that regard;

3. We have a sense that Gold stocks on the Venture are about to wake up – they helped drive the early stages of the new bull market from February until early August, then cooled off as the Index underwent a healthy correction from a high of 848 to a December low of 711.  The Venture also features a large group of Oil plays that will benefit from anticipated higher Crude prices;

4. At some point during this bull cycle, a company is going to make a major discovery somewhere – hopefully that’ll be in Canada in a district where multiple companies are active (Heart of Gold Camp?).  When that does happen, the bull will go on a STAMPEDE!

Broadly speaking, after a 45% advance in 2016 to snap a 5-year bear market, the Venture has much going for it including technical factors such as rising long-term moving averages (200, 300 and 500-day SMA’s) that help confirm the bullish primary trend.

The Road To 1,000 Continues

Not shown on the above short-term chart, of course, are the Venture’s 300-day and 500-day SMA’s which recently reversed to the upside, confirming the primary trend.

The Venture bounced up and down repeatedly since early August through December, enough to make investors dizzy as a consolidation phase took hold following the 22-month intra-day high of 848 August 11.  What we saw was a healthy pullback in an ongoing bull market, no different than what occurred during the 1st half of 2010.  It’s always critical to stay focused on the “Big Picture”.  We’re traversing through a bull market that has much longer and much higher to run despite some bumps that will undoubtedly occur along the way.

Some key trading/investment tips to improve your odds of success on the Venture:

• Always have cash on hand to take advantage of sudden pullbacks in the broader market or individual stocks like we’ve experienced since August, or great new opportunities that “pop out of nowhere”;
• Don’t be 100% invested at any given time and never invest more than you can afford to lose;
• Locking in some profits along the way is critical during a Venture bull run (as the saying goes, bulls and bears make money but pigs get slaughtered);
• For the Venture, an ideal diversified portfolio would consist of about 20 stocks across some different sectors;
• Always aim to make money serve you – not the other way around;
• Never allow yourself to lose big on one stock – that means don’t be afraid to cut your losses short on a deal if it’s not working out the way it’s supposed to (you will always have some losses, limiting them is key);
• Liquidity and the ability to quickly adapt to changing circumstances are really important;
• When it comes to the Venture, long-term buy and hold strategies seldom work – stay on top of each stock in your portfolio, technically and fundamentally.

BMR is back online after a wild 24 hours!  You’ll soon see a full restoration of the BMR site with all previous postings and features.  In the meantime, we’ll be updating from this temporary set-up with the best view in Firefox.

Wow, what a crazy day yesterday and it wasn’t even Friday the 13th!  The Venture jumped another 10 points as it completed its 7th straight weekly advance and some of our latest selections continued to explode higher…all of this after the BMR server got knocked out just prior to market open!

We experienced a total site crash at approximately 8:00 am Eastern time Friday, a first in our nearly 8-year history.  This occurred after an unprecedented surge in BMR traffic over the last several weeks to an all-time high.  Fortunately, we had daily back-up systems in place that will allow us to recover all of our information and data.  We apologize for the inconvenience and we greatly appreciate the understanding, patience and support of our valued readers and subscribers.  A day without BMR is like a day without a morning coffee, a snack and a meal for energy!

What this all confirms, beyond any doubt, is that we are in one amazing bull market – one that should have a lot of legs.  Interestingly, for 5 years we dodged every bullet from an apocalyptic bear market, then a raging bull busts our server!  That never even happened during 2009, 2010 and 2011, so that’s a sign of great things to come.

We have stated repeatedly over the past number of months that it usually takes about a full year after the end of a bear or bull market for the masses to begin to accept that a new market cycle has commenced.  Now the masses are beginning to wake up after we called the start of a new bull cycle in Q1 2016.

Check back regularly through the rest of the weekend for fresh market updates. 

STAY TUNED:  Something BIG is in the works at BMR later in the coming week  – sorry, but we have to keep you in suspense until then!  In a way, yesterday’s system crash could not have come at a better time as we’ve now completed an upgrade to accommodate maximum traffic.

Gold has traded between $1,230 and $1,245 so far today…as of 10:45 am Pacific, bullion is up $4 an ounce at $1,237…Silver is flat at $17.68…Copper is up 3 pennies to $2.65…Nickel has added 4 cents to $4.72…Crude Oil has reversed higher, gaining 23 cents to $52.40 while the U.S. Dollar Index is off marginally at 100.29…

Holdings of SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, climbed 1.01% to 826.95 tons yesterday for the 5th straight day of gains…

Guess who’s back into Gold?…after exiting his entire Gold position by the night of the U.S. elections November 8, widely followed billionaire investor Stanley Druckenmiller said he started buying Gold in December and January.  “I wanted to own some currency and no country wants its currency to strengthen,” he said in an interview with CNBC yesterday. “Gold was down a lot, so I bought it.”

When Druckenmiller sold all of his Gold by early November, and let the world know about it, he undoubtedly took some bullion followers with him…the metal plummeted from a high of $1,340 on the night of Trump’s victory to a low of $1,124 in early December as extreme oversold conditions gripped the market…the sell-off, though, did not impact the broader positive trend that started after the bear market low in late 2015…one only has to look at the behavior of the Venture to understand that Gold remains in a strong bull cycle and that the November-December weakness was merely a “head fake” that fooled a lot of investors…

Oil Update

A big increase in U.S. Crude inventories, reported yesterday by the American Petroleum Institute (API), and a slowdown in Chinese demand for 2016, revealed in statistics released this morning, put some downward price pressure on WTI yesterday and this morning but astute traders bought the dip…this is a very bullish market but some haven’t figured that out yet…

Crude inventories rose by 14.2 million barrels in the week to February 3 to 503.6 million barrels, according to API, compared with analysts’ expectations in a Reuters‘ poll for a 2.5 million barrel increase…Goldman Sachs‘ analysts said that the data pointed to “U.S. gasoline demand falling sharply by 460,000 barrels per day (bpd) year-on-year in January, with such declines only previously (seen) during recessions”…the Goldman group has a flair for trying to stoke fear into a market, usually when they want to be buyers…

Inventory data from the Energy Information Administration, released just a short while ago, wasn’t quite as negative as API’s and Crude quickly rebounded…

Yesterday, the EIA said that it expects U.S. Crude production to grow by 100,000 bpd to 8.98 million barrels this year, 0.3% less than previously forecast, but expects production to jump by 550,000 bpd in 2018…

OPEC, for the time being at least, is not greatly concerned with rising American output.  “The market is gradually accommodating for shale Oil as well as shale gas – the demand is healthy. With that continuous demand increase I think all available oils are going to be accommodated,” Qatari Energy Minister Mohammed al-Sada told Reuters today…

Meanwhile, China’s 2016 Oil demand grew at its slowest pace in at least 3 years according to Reuters‘ calculations based on official data…China’s implied Oil demand growth eased to 2.5% to 2016, down from 3.1% in 2015 and 3.8% in 2014, led by a sharp drop in diesel consumption and as gasoline usage eased from double-digit growth…

In Today’s Morning Musings…

1. Another sign of the “frenzy to come” in Cobalt stocks… 

2. Updates on the TSX Gold Index and the HGU…

3. Daniel’s Den – “doing the hard things” makes you money!…

SAVE 25% on a BMR subscription with our Winter Special, extended for a few more days to accommodate reader requests…subscribe risk-free to a BMR Basic, Gold or Pro Subscription TODAY – and we’ll show you our proprietary strategies that have delivered unbeatable documented triple-digit returns…

New subscribers receive an industry-leading 100% money back satisfaction guarantee, so try us out and super-charge your portfolio with the best speculative picks and commodity analysis you’ll find anywhere!…

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Check back later this morning for today’s Morning Market Musings.

1.  Gold has hit a 3-month high of $1,241 as investors continue to hedge currency and political uncertainty…holdings of Gold by ETFs remain in a nice uptrend…as of 7:00 am Pacific, bullion is up $8 an ounce at $1,242…base metals are up across the board with Copper leading the way, adding a nickel to $2.67…the U.S. Dollar Index is off one-fifth of a point at 100.22…

2. The key takeaway in the Oil market today is how prices are holding up reasonably well despite a massive increase in U.S. fuel inventories, reported yesterday, and a slowdown in Chinese demand, based on new figures for all of 2016…the mainstream media’s take is that global Crude markets remain oversupplied despite OPEC’s recent production cuts…WTI is off 35 cents at $51.82 as of 7:00 am Pacific…

3. The Venture is aiming for its 7th straight winning session…as of 7:00 am Pacific, the Index is up a point at 828…the broader equity markets are down modestly but the Dow is holding above 20,000 as it tries to close above that level for a record 4th straight session…

4. Metals Creek Resources (MEK, TSX-V) is the Venture’s 2nd-most active stock in early trading, up a penny-and-a-half at 11 cents…volume has ramped up considerably in MEK as the company continues to intersect high-grade Gold mineralization over appreciable widths to expand its Thomas Ogden zone within 10 km of Goldcorp’s Dome mill complex in the heart of the Timmins Gold Camp…the company is gaining a much better understanding of the down-plunge projection of the TOG zone and it’s also integrating the 15–40 zone located 500 m west of TOG into the current geological model…drilling resumes this month…the latest results included 4.4 g/t au over 12.4 m…

5. Klondex Mines (KDX, TSX) reported high-grade Gold intersections this morning from underground drilling at its Fire Creek mine in Nevada…the results, not part of the mineral reserve and resource update issued by the company last September, included 3,323 g/t Au over 0.5 m (FCU-0714); 50.3 g/t over 2.4 m (FCU-0692); 37 g/t over 5.6 m (FCU-0689); 28.9 g/t over 10.1 m (FCU-0709); and 15.3 g/t over 16.4 m (FCU-0716)…the Fire Creek resource continues to show significant potential for expansion as Klondex steps out along strike and vertically…KDX is up 15 cents at $7.33 as of 7:00 am Pacific…

6. Wesdome Gold Mines (WDO, TSX) continues its accelerated underground drill program with the goal of determining the extent, continuity and geometry of the Kiena Deep Gold system in northwest Quebec…fresh results released this morning included 125 g/t Au over 4.3 m uncut (14 g/t cut) in hole #6154 and 20.28 g/t Au over 7.3 m uncut (10.2 g/t cut) in hole #6156…the new drilling continues to trace the Kiena Deep mineralized system along an altered and deformed N-NW trending basalt-komatiite contact zone…to date, it has been traced 550 m NNW along strike and over a depth range of 400 m…it remains open at depth and along trend…WDO has gained 18 cents to $3.00 as of 7:00 am Pacific…

7. Almaden Minerals (AMM, TSX-V) is up slightly on additional assay results from the continuing exploration and development program at its Tuligtic Project in Mexico…multiple drill holes intersected significant mineralization and veining inside or immediately outside of the amended PEA pit including the previously defined subvertical Ixtaca North vein zone, as well as potential new zones of veining…highlights included 41.5 m @ 1.5 g/t au and 117.3 g/t Ag in the Ixtaca North Zone…