Gold has slid to a 6-month low as its losing streak continues, but the oversold condition of bullion and Gold equities suggests a turnaround – or at least a relief rally – is imminent…as of 7:00 am Pacific, Gold is off $18 an ounce at $1,586…Silver is down 64 cents at $28.80…Copper is down a penny at $3.62…Crude Oil is flat at $96.65 while the U.S. Dollar Index has gained one-fifth of a point to 80.64…
The Dow and the S&P 500 are very close to new all-time highs, and Gold has been trading in the opposite direction of both in recent months…as we mentioned yesterday, commercial traders have trimmed their short positions in Gold to levels not seen since before last summer’s rally – a clear sign that Gold is nearing a bottom as the commercials are rarely on the wrong side of the trade…in addition, we also find it helpful to examine the condition of the double short TSX Gold Index ETF (HGD) and the HGU double long Gold Index ETF for clues that the Gold stocks are ready to reverse…John has charts on both below…
HGD TSX Gold Index ETF
The HGD, the double exposure short ETF, is as overbought now as it was oversold last September…it was a great buy last September, as we pointed out, when everyone was scrambling to buy Gold stocks…the reverse is now the case with investors throwing their Gold stocks off the boat…note how the RSI(14) has hit the level it was at last May when the HGD topped out at $15.89…as of 7:00 am Pacific, the HGD is up another 40 cents at $13.85…
HGU Gold Index ETF
Let’s now take a look at the HGU, the double exposure long Gold Index ETF which closed yesterday at $5.66…RSI(2) is at a low extreme, and the HGU is also now trading within a strong support band between $4.50 and $6.50…this could dip a little lower but an astute contrarian would see a buying opportunity around current levels…through the first 30 minutes of trading today, the HGU is down another 17 cents to $5.49…
Today’s Markets
Asian markets were higher overnight with China’s Shanghai Composite gaining 14 points to close at 2397…European shares are mixed…The U.K.’s FTSE 100 Index climbed above 6400 for the first time since January, 2008, after the minutes for the Bank of England’s last committee meeting were released…the Dow is down 14 points as of 7:00 am Pacific (Fed minutes are due at 11:00 am Pacific) while the Venture Exchange has slipped another 8 points to 1164…
TomaGold Hits High-Grade At Monster Lake Property In Discovery
TomaGold (LOT, TSX-V) is strong this morning after discovering a high-grade Gold zone at vertical depths of 175 to 275 metres at its Monster Lake Property near Chibougamau, Quebec…previously, the property had never been drilled to a depth of more than 125 metres, so this is certainly a legitimate discovery that should be followed closely…M-13-93 cut 5.85 g/t Au over 33.6 metres…M-13-94 returned 5.30 g/t Au over 11.5 metres….and M-13-94 intersected a very impressive 7.20 g/t Au over 42 metres at a vertical depth of 278 metres…LOT opened up 4.5 cents at 16 cents this morning…as of 7:00 am Pacific, it’s 3 pennies higher at 14.5 cents on volume of nearly 1 million shares…high-grade discoveries are rare these days, so this warrants attention…LOT has just 54 million shares outstanding…Quinto Real Capital (QIT, TSX-V) has an option to earn up to a 70% interest in the project and is also up sharply in early trading today…it has a more attractive share structure than LOT…
Mart Resources (MMT, TSX-V)
Mart Resources (MMT, TSX-V) has continued its upward climb since John’s last chart…it hit a new all-time high of $2.31 yesterday on total volume (all exchanges) of nearly 5 million shares…it’s unchanged in early trading today at $2.26…MMT remains in an impressive upsloping channel as shown in this 2.5-year weekly chart…
Note: Jon holds a position in the HGU.
HEY Jon/John, any ‘support’ levels to watch out for on the Venture?
Comment by STEVEN — February 20, 2013 @ 7:11 am
It’s amazing how wrong u guys have been and yet u still post everyday like u actually know what is going on.
Comment by OldMan — February 20, 2013 @ 7:22 am
Venture breaks 1166 support. Let’s hope it doesn’t close below this because if it does, we in big trouble.
Comment by Tony T — February 20, 2013 @ 7:41 am
Yeah…and it is amazing how much you critiize and mock them Old Man but you keep coming back. Something doesn’t add up here. Seems like a waste of time on your part doesn’t it? LOL
Comment by Rob — February 20, 2013 @ 8:01 am
These guys are that arrogant that I really don’t care. I pop up here every now and then to give a little dose of reality who follow BMR like they are investing gods. These guys have a horrible track record.
Comment by sean — February 20, 2013 @ 8:29 am
New Low on the Venture. Beauty. Last year was not the bottom.
Comment by Andrew M — February 20, 2013 @ 9:04 am
This is actually a 3 yr low for the venture. Wow. Unreal.
Comment by Tony T — February 20, 2013 @ 10:03 am
EXTREME LEVELS!
Comment by STEVEN — February 20, 2013 @ 10:19 am
One last cleanse!!! Hang on folks!!
Comment by Andrew M — February 20, 2013 @ 10:46 am
Let’s hope the FOMC minutes don’t mention anything about the end of QE. If they do…yikes…gonna be ugly.
Comment by Tony T — February 20, 2013 @ 10:51 am
Well, Fed is considering changing its QE program. The Gravy train has entered the station for repairs. Not good.
marketwatch.com/story/fed-to-consider-qe-changes-in-march-minutes-2013-02-20-13915947
Comment by Tony T — February 20, 2013 @ 11:05 am
Dont worry, I am sure BMR will say that there is support at 1100, then 1050, then 1000 etc….you get the picture. Then somewhere down the road, they will get it right and tell the world that they called the bottom
Comment by sean — February 20, 2013 @ 11:20 am
GOLD looks like its bounced from the 1558$ low….AMW/FIS/LOT/ all having good volumes…..
Comment by STEVEN — February 20, 2013 @ 12:08 pm
i see everyone seems to be blameing bmr for whats going on,but no one is actually saying why this happening,shit or get off the pot,now,is there someone smart enough besides bmr to explain why this is happening or are you just going to whine about it,maybe i’ll just wait till the morning musings to hear from the smart people to why this is unfolding on this terrible day.
Comment by tom — February 20, 2013 @ 12:49 pm
BMR = SMART PEOPLE?
Comment by sean — February 20, 2013 @ 1:10 pm
Has any body know why SFF is still on hold. May be reports are not true.
Comment by Eric Benson — February 20, 2013 @ 1:25 pm
@Eric… Remember BER’s case! The result was erroneously stated and it ended up with cancelling all day’s transaction. SFF’s result might be further scrutinized and therefore, tighten your seat belt as it may go down the drain. DGY slowly picked up at 3.5 cents, it is coming with the great news in China project.
Comment by Theodore — February 20, 2013 @ 1:30 pm
What Tom said. No one here is a prophet
Comment by Cam — February 20, 2013 @ 5:57 pm
There is more news coming from Seafield. Sometimes you have to be careful what you ask for. Seafield had a nice drill result and figured they would build some excitement in the story over the long weekend with a trading halt, followed by news Friday afternoon (two separate releases) and with trading resuming Tuesday. Things didn’t quite work out that way, however. I don’t believe the halt was necessary, especially in the current market environment. My sources tell me the Exchange started asking some questions and found out there was other important news imminent, hence the stock remains halted. So this was handled rather sloppily by Seafield. What that news is, can’t say for sure——my best guess is it could be related to a major financing of some sort. Nothing wrong with the news they put out last Friday. How long this will continue to be halted for – anyone’s guess…….probably not much longer.
Comment by Jon - BMR — February 20, 2013 @ 6:40 pm
Sean, you can attack BMR or me, John and Jon personally – we’re easy targets and none of us cares, we each have thick skin. What our readers appreciate from other readers, though, are thoughtful, helpful and constructive comments in this forum. So if you have any, by all means—–our readers would love to hear from you in that regard. Maybe it’s an undervalued play or an analysis of what’s happening in the gold market. We encourage everyone to contribute in a positive way to this forum. Criticizing others is the easiest thing in the world. It may make you feel good but it adds nothing to this forum.
Comment by Terry - BMR — February 20, 2013 @ 7:03 pm
Danny deadlock had a good article the other weekend on what is happening. Don’t have time to explain. Go back and research. Bankers shorting gold doesn’t help. BUT, with the summer months away, this could get real ugly. 2008 anyone.
Comment by dave — February 20, 2013 @ 8:01 pm
If there was a like button I would like terry’s comment right now.. but this isn’t facebook.
@Theodore, did you actually hear something about dyg’s China project or just speculating?
Comment by cam — February 21, 2013 @ 4:30 am
was that capitulation.?…feels like it to me!!! glta
Comment by natalie — February 21, 2013 @ 5:27 am
from 321gold
At every top in a market, any market, there are 100 reasons to buy. That’s why you should sell. When everyone knows how good the story is, there are no more buyers and the market can only go down.
At every bottom in a market, any market, there are 100 reasons to sell. That’s why you should buy. When everyone knows how terrible things are, there are no more sellers, only buyers and the market can only go up.
For the last month there have been no rational sellers of junior mining stocks or gold or silver. What has happened is that people with margin accounts and some big name mutual funds have been caught short and were forced to sell at any price.
Wednesday February 20 was a day of total capitulation with sentiment matching the record lows of late 2008. 2011 was a disaster, 2012 was a disaster and 2013 even more so.
But 2009 and 2010 were wonderful.
It’s a bottom.
Comment by natalie — February 21, 2013 @ 5:31 am