Gold is firmer this morning on this U.S. Election Day…as of 6:15 am Pacific, the yellow metal is up $6 an ounce at $1,691…Silver is 15 cents higher at $31.33…Copper, which just hit a 2-month low, is up a penny at $3.48…Crude Oil is up $1 a barrel to $86.65 while the U.S. Dollar Index is off slightly at 80.63…
Updated Copper Chart
The recent weakness in Copper has pretty much run its course after overbought conditions emerged in September, and this bodes well for the equity markets including the Venture Exchange which lately has been outperforming Copper (and Gold)…John’s 6-month daily chart shows a support band between $3.45 and $3.50 while RSI(14) is expected to find support around current levels…
Today’s Markets
Asian markets were slightly lower overnight with investors’ risk appetite curbed by uncertainty over the outcome of the tight U.S. presidential election and renewed doubts over Greece’s political ability to push through severe fiscal reforms and the European Union…European shares are moderately higher today with the market taking in stride a raft of economic data and some renewed doubts over Greece’s political ability to push through severe fiscal reforms (the government is due to vote on further austerity measures tomorrow in order to receive more aid from the International Monetary Fund)…services PMI for Spain showed a contraction for the 16th consecutive month…in Italy, the services PMI contracted by a smaller than expected amount, but it was still the 17th straight month of contraction for the economy…services PMI for Germany and France also both showed a decrease…for the euro zone as a whole, composite PMI fell to 45.7 for October from a figure of 46.1 in September…
Stock index futures in New York are pointing to a positive open on Wall Street…all eyes of course are on today’s critical U.S. election…no Republican candidate has ever taken the White House without winning Ohio, so the Buckeye state is absolutely crucial for Mitt Romney and that’s why he’s campaigning there today…without winning Ohio, the math simply doesn’t add up for Romney in the electoral college, and polls there indicate Obama has the edge albeit by a fairly narrow margin…Ohio potentially could become the “hanging chad” of 2012 as tens of thousands of provisional ballots will not be counted until November 17…if the race in Ohio is extremely tight, we may not know the winner of this election for another couple of weeks or maybe even beyond depending on possible legal challenges…the best result for the market is a clear winner tonight, either way…the ideal scenario for Gold bugs is an Obama victory and a few more Democrats in the Senate and in the House, and right now that appears to be the most likely scenario after examining all the polls…conceivably, Obama could lose the national vote but still hang on to the Presidency by taking the electoral college…he has the edge in the swing states…
U.S. Debt “An Extraordinarily Dangerous Situation” – Former Fed Chairman Alan Greenspan
Neither candidate for President has shown a credible plan for tackling the U.S. deficit and debt problems…”It’s an extraordinarily dangerous situation,” former Federal Reserve Chairman Alan Greenspan told the Wall Street Journal, describing the growth of the nation’s debt and a lack of consensus about how to address it…”I believe we underestimate the size of current financial imbalances and how difficult it will be to resolve them…we’re trying to do this without pain…there’s just no credible scenario in which that happens”…
What the U.S. needs to do in our view is likely introduce a national consumption tax like Canada’s GST, reduce personal and corporate income taxes, close loopholes and generally simplify the tax system, sharply reduce the regulatory burdens on business in order to unleash the full potential of the private sector and the U.S. entrepreneurial spirit, and shrink the size of government…that kind of agenda would involve some initial pain and it would take true and dynamic leadership to advance it, and that’s what’s missing in the United States right now…
Indian Gold Demand Expected To Heat Up
In a run-up to the Diwali festival next week and the marriage season which is around the corner, leading jewellers and bankers in India are already quoting positive signs on Gold sales…bullion houses have said that while there has been a bit of volatility in prices, consumer sentiment remains unaffected…”Though the key presidential elections in the U.S. are set to give further direction to global financial markets on Tuesday, Indian consumers are waiting for Dhanteras, a day considered auspicious for Gold buying according to the Hindu calendar,” said Gitanjali group chairman Mehul Choksi…he added that sales were expected to leap frog 40% this Dhanteras (to fall on November 11), with most consumers opting for Gold coins to usher in the auspicious day…sales of Gold coins of different denomination have already risen by over 30% as compared to last year, he added…Indian Gold demand was weaker than expected for the first 9 months of the year…
Golden Goliath Resources (GNG, TSX-V)
John has two very interesting charts this morning on Golden Goliath (GNG, TSX-V) which holds a dominant position in Mexico’s Uruachic Mining District, though it doesn’t quite control the entire camp as we found out last week when upstart Alliance Mining (ALM, TSX-V) announced it had signed a binding letter of intent with a private Canadian company to acquire several thousand strategic hectares including claims within a few kilometres of Fresnillo PLC’s huge Orisyvo Gold deposit…
GNG closed at 17 cents yesterday, well below its early 2011 high of nearly 80 cents…both of John’s charts clearly demonstrate that this is a good time to be buying into weakness with GNG…as always, perform your own due diligence…
GNG 12-Year Monthly Chart
GNG 2.5-Year Weekly Chart
Abcourt Mines (ABI, TSX-V)
Abcourt released a very robust PEA for its Elder Mine yesterday, yet the stock gained just half a penny on over 2 million shares…for those holding ABI, we simply suggest patience as the stock still needs to break above its down trendline as shown in John’s chart below…the company holds high quality assets featuring the Elder/Tagami Project in addition to the Abcourt-Barvue Silver Property, so there are much better days ahead for ABI in our view – especially looking out to early 2013 when we expect overall market sentiment to be much better…
Vantex Resources (VAX, TSX-V)
Vantex Resources (VAX, TSX-V) is coming to life, and that must mean the Venture must have really turned the corner…VAX announced last Friday that it has restarted drilling at its Galloway Project west of Rouyn-Noranda, and that Rob McEwen has increased his stake in the company to 7.8 million shares which gives him 12.4% of the total currently outstanding…we’ve been to this area and it’s not a project we’re particularly excited about, and it also faces some potential environmental hurdles…nonetheless, VAX has formed an interesting cup-with-handle pattern as John shows in the chart below…with VAX on the move, this does give us even greater confidence that the worst is over for the Venture and that we’re actually in the very early stages of a new bull cycle…
Note: John, Jon and Terry do not hold positions in GNG, ABI or VAX.
Hi John,
What do you think about everton optioning some dominican properties, and have you ever asked what happened to their shoal lake property that at one time they had sold for 7 million to a now defunct entity that could not go public in this bad market. Everton still is supposed to have this asset and it would be very helpful cash flow wise to sell it to someone even if at a discount to the 7 million. Please ask about it on your next interview.
Comment by John — November 6, 2012 @ 6:41 am
As far as the Dominican properties go, what they’re looking at doing is an option on the APV at least…..that property is going to require a significant exploration expenditure due to deep drilling, plus the fact they’ve only explored about 10% of that package….
Comment by Jon - BMR — November 6, 2012 @ 7:44 am
Do you have any comment on that Ontario Property ?
Comment by John — November 6, 2012 @ 7:52 am
No I don’t, not until I have all the facts. EVR’s focus of course is on the DR and moving fwd that’s obviously what they’ll be relying on to drive value.
Comment by Jon - BMR — November 6, 2012 @ 7:55 am
Thanks Jon, I sure hope they still have and are agressively pursuing the sale or marketing of this asset.
Comment by John — November 6, 2012 @ 8:11 am
John & Jon, thanks for the info on GNG. Of all my stocks, I believe this one has the most potential for Home Run or possibly Grand Slam potential. GNG is still awiting drill results from the drill program preformed by Agnico Eagle earlier this summer. I met Sean Boyd (CEO of AEM) at a Mining Trade Show once and he told me that he thought GNG had the potential be one of the best land packages and growth stories in Mexico.
The 80 cent ceiling on GNG was before AEM signed their joint venture. So I still believe wholeheartedly in GNG and I think it is just a matter of time before this company takes off and becomes another multibagger, that we who invest in the sector hope and pray for. The CEO Paul Sorbara is very accesible and is a wealth of info and understanding of the area as I believe he staked the ground in the 90’s when very few has an interest or clue about the land potential, so that is how he was able to amass such a huge chunk of fertile ground. Again I thank BMR for the hard work and effort that goes into this website. KD
Comment by KD — November 6, 2012 @ 9:05 am
BMR what’s your take on the venture’s lackluster performance as of late? This is supposed to be a big month for gold and the ventures in general – it greatly worries me that both gold and the cdnx are down to start the month and is lagging behind the major indices.
I’m no analyst, but this cannot be a bull market run. It’s been the same song and dance about the beginning of a major run, but NOTHING is really happening. In fact all the indices are faring better than the ventures, that’s what’s happening. Enter RBW: it’s trading at 19.5, which is where it was on Jan 23rd, 10 months ago! I’ll admit this company has made substantial progress in its exploration efforts, but what is Mr. Market telling us? That it’s strictly results oriented – that is why RBW hasn’t seen visible gains in its equity price.
There is no more speculative money being injected into the ventures. Those days are long over but BMR doesn’t seem to think so and I can’t quite figure out how you’re not grasping the market’s language and behavior towards the ventures.
Add to all this the most powerful QE ever announced, and the ventures have struggled to retain any real gains. And don’t tell me going from 1100-1300 has been a great ride, becuase we also went from 2400 – 1100, which was an outright bloodbath. No other index freefell like the ventures.
Good luck.
Comment by rick — November 6, 2012 @ 10:00 am
RBW
Are you kidding me? this is the week we’re expecting probably the most crucial news release to date, and it’s down and traded 50k shares? What sort of pathetic excuse for a stock is this.
Jon, you’re like my safety blanket – let’s hear it lol I want to hear about all good things they have coming, and why the stock would do this the week we’re expecting news? You can’t possibly tell me that people are sitting on the sidelines waiting. That tells me there’s no excitement surrounding this stock.
Comment by Bill — November 6, 2012 @ 10:40 am
@jon. Why is everyone running for the door with so much excitement going on on RBw???
Comment by Heath stockford — November 6, 2012 @ 11:23 am
RBW – It seems that some are nervous. I feel like a little kid on Christmas Eve. Hope news is coming out this week. I know that patience is the key but it feels that I’ve waited long enough.
Comment by Kalkan - Sweden — November 6, 2012 @ 11:36 am
God help us all if Romney is elected. What Bush started in destroying the world economy Romney will finish.
Comment by Mark — November 6, 2012 @ 3:05 pm
My take on RBW is that assays will be good and RBW is gearing up for a PP. richard l
Comment by richard l — November 6, 2012 @ 4:15 pm
BMR – time to bring back real-time comments?
Comment by Steve French — November 6, 2012 @ 7:55 pm
You know, Kalkan, I’m sometimes amused and amazed by some of the comments I read in the BMR comments section on occasion. RBW has done remarkably well in a difficult market environment this year (the progress they’ve made over the last 12 months has been impressive by any standard) and you’ve got a company that has results coming not just from the International, which is a great prospect, but two other properties as well that are currently being drilled. What amazes me is how some investors get so sidetracked and emotional and get completely thrown off the big picture based on a few trades in the stock that may knock it down a penny or two. Their faith is so weak, they have such little confidence in their own investment decisions, that they need a “pep” talk every other day. If RBW isn’t mentioned in Morning Musings, they start to panic. My bet is, RBW along the way here is going to catch some investors with their pants down. The reason we have been aggressive in highlighting Rainbow this year is because we feel so strongly this company has the right properties and the right people to make a discovery. If you’re holding this stock and you don’t believe that, then perhaps you should sell and move on. The market is very good at moving stock from weak hands into strong hands.
Comment by Jon - BMR — November 7, 2012 @ 11:40 am
Hi Jon, thanks for your reply.
Yes I’m holding the rbw stock and I’m not planning to sell in the nearest future. I understand your point. Maybe you misunderstood me, I’m from Sweden so my knowledge in english might not be the best. By saying i feel like a little kid at christmas eve I meant that I’m very eeger to see their news. I think rbw Will perform well. And I do not understand those who’s dumping smaller post either. Like your site, your postings. I follow it daily. Keep up the good work guys!
Comment by Kalkan - Sweden — November 7, 2012 @ 12:13 pm