BullMarketRun.com

Updated – 9:00 am Pacific

Gold has bounced around today but has stayed within the resistance band between $1,320 and $1,350…this could be a volatile week for bullion given the Federal Reserve meeting (Tuesday and Wednesday) and an abundance of economic data…Gold has posted 3 consecutive weekly gains and is up 8% so far this month as it tries to snap a 3-month losing skid… as of 9:00 am Pacific, bullion is down $2 an ounce at $1,332…Silver is 3 pennies lower at $19.96…Copper is up a penny at $3.11…Crude Oil is relatively unchanged at $104.77 while the U.S. Dollar Index is up one-tenth of a point at 81.71…further down in today’s Morning Musings, John has a fresh and revealing Gold chart along with his regular Monday Silver charts…

COMEX open interest in Gold options surged to a new record high of about 5,600 tons, or about 2 years’ total annual mine production, last week…this move is indicative of still very strong trading interest in Gold, and suggests that speculators are taking a view on potentially higher prices later in this 3rd quarter…

Rising WTIC prices have been a supportive factor for Gold recently, and may remain so throughout the summer – especially if long-term resistance at $110 is breached…also coming up later this quarter is another chapter in the debt ceiling debate that 2 years ago led to the downgrade of the U.S. credit rating and a powerful rally in Gold to an all-time high of just over $1,900 an ounce…many analysts have little confidence that this next debt ceiling debate will be resolved in a manner that satisfies the rating agencies…

Much has been written about the big outflows in Gold ETF’s listed in the U.S. this year – certainly a major contributing factor to Gold’s decline – but investors in their newer Asian counterparts are a different story as Frank Holmes pointed out in his Weekly Investor Alert over the weekend…a net $33.5 million was added to Asian Gold and precious metals miners’ funds in the 2nd quarter…the inflows are not very large in size, but they do serve to reinforce the idea that the Asian appetite for Gold is relentless…on another note, Russia, the world’s 4th-largest Gold producer, has announced plans to set up a stock exchange for junior Gold and other mining companies to encourage exploration…

Today’s Markets

The Dow is off 67 points at 15492 through the first two-and-a-half hours of trading today…about one-fifth of the S&P 500 companies report earnings this week…about half of the S&P 500 has reported earnings so far, with 68% beating estimates and 56% topping revenue forecasts, according to data from Thomson Reuters…

Interesting story in the Wall Street Journal this morning…the WSJ examined more than 700 predictions made between 2009 and 2012 in speeches and congressional testimony by 14 Fed policy makers – and scored the predictions on growth, jobs and inflation…the most accurate forecasts overall came from Janet Yellen, now the Fed’s vice chair…she was joined in the high scores by other Fed “doves,” policymakers who wanted aggressively easy money policies to confront a weak U.S. economy and low inflation…collectively, they supported Fed Chairmen Ben Bernanke’s strategy to pump money into the U.S. economy…the least accurate forecasts came from central bank “hawks,” those who feared Fed policies would trigger rising inflation…the “doves” are firmly in control at the Fed and, so far at least, have history on their side…

The TSX is down 4 points as of 9:00 am Pacific while the Venture is up 2 points at 927…Fission Uranium Corp. (FCU, TSX-V) and Alpha Minerals Inc. (AMW, TSX-V) reported more positive results this morning from their Patterson Lake South joint venture…2 holes (PLS13-073 and PLS13-075) successfully tested the eastern and western extensions of the R390E Zone with PLS13-075 returning the largest accumulation of discrete off-scale mineralized intervals in any drill hole at PLS to date…FCU hit $1.10 this morning (Fib. level) and is currently off a penny at $1.04…AMW climbed as high as $5.80 but is now down a penny at $5.59…Macro Enterprises Inc. (MCR, TSX-V) continues to push higher and hit a new all-time high this morning of $4.39…it’s up 15 cents at $4.35 as of 9:00 am Pacific…

European markets closed modestly higher today…meanwhile, Japanese stocks fell to a new 4-week low overnight on the back of a stronger currency…the Nikkei average plunged 469 points or 3.3% to close at 13661…China’s Shanghai Composite fell 35 points to finish at 1976…bank lending conditions in emerging Asian nations have tightened the most since the global financial crisis, according to the latest survey from the Institute of International Finance (IIF)…the IIF’s index of bank lending conditions in emerging Asia fell in the 2nd quarter to 45.7, below the key 50-level that divides easing and tightening territory and its lowest level since the beginning of the survey in 2009…Asia also showed the tightest lending conditions of global emerging regions…

New Gold Chart Gives Encouragement

This 5-year weekly Gold chart from John uses 3 trend indicators (Vortex, Aroon and ADX) to show that the current rally in bullion may have some legs…what these indicators tell us is that the down trend in Gold has clearly weakened, setting up the possibility of an even stronger rally than what we’ve seen so far which has been 13% off the $1,180 low near the end of June…while the primary trend is still bearish, at least for now, Gold could be readying itself to test resistance during the 2nd half of this year in the $1,550 area (previous strong support)…

When it comes to teaching about panning for Gold and why exploration and mining are so integral to our everyday lives, there’s no one better in our view than “Yukon Dan” who was once again booked solid each day in the months of April, May and June with classroom presentations in British Columbia from grades 1 through 12…during the rest of the year, he spreads his message at fairs, festivals, rock and gem shows, birthday parties – you name it…he was also a big hit at January’s Cambridge Resource Show in Vancouver where we first interviewed him…

“I’m very proud to say with my teaching at schools and educating kids, I’ve had students leave the school system who are now in the mining field,” Dan told us during a breakfast get-together last Friday…

The story of  Yukon Dan is a fascinating one and we’ll be dedicating our Morning Musings this Friday with a special article on him…BMR is also pleased to announce that it has become an official sponsor of the upcoming Fraser River Gold Panning Championships (August 22-25) and Dan’s overall efforts at educating the young people of B.C. (and elsewhere) about the mining industry in general…his impact has been incredible, and his work is hugely important – especially at a time when the mining industry is hurting and also under attack from “environmentalists”…

The upcoming Fraser River Gold Panning Championships at the Anderson Creek Campground are expected to attract about 170 participants (all ages from 2 and up, beginners to pros) and lots of onlookers as well…on August 22 and 23, Yukon Dan will be be teaching the art of Gold panning to all competitors for free in the town of Yale on the Fraser River from 1 pm until 4 pm…metal detecting competitions will take place August 23 while the Gold Panning competitions will be August 24 and 25 (Saturday and Sunday)…check out Yukon Dan’s web site for more details – www.yukondan.com….campground spots are filling up very quickly, and competitors will be coming from as far away as Austria…this Friday, as mentioned, we’ll be posting a special article on Yukon Dan as the main focus of Morning Musings…

British Columbia – The Land Of Gold, Copper, And So Much More

Yukon Dan’s excitement over the Gold and mineral potential of British Columbia is shared by many, including the new sheriff in town for the Sheslay River Valley in the northwest corner of the province – Pete Bernier, assisted by his very capable deputy, Dirk Tempelman-Kluit…the dynamic duo of Bernier and Tempelman-Kluit made themselves and many investors very wealthy

through the discovery of the massive Blackwater Gold-Silver deposit that resulted in New Gold’s buy-out of Richfield Ventures for half a billion dollars in 2011…after 2 years of searching the globe for their next best opportunity, they’ve landed in the Sheslay River Valley where they’ve re-named Firesteel Resources‘ (FTR, TSX-V) Copper Creek Property the Sheslay River Porphyry Project which we believe will become an immediate exploration hotspot given historical results and the immense untapped geological potential this area has…

As announced July 18, a definitive deal has been struck between Bernier’s Prosper Gold (PGX.H, TSX-V) and Firesteel, and field exploration has already commenced at Sheslay River with a 5,000-metre drill program slated to begin early next month…this qualifying transaction for Prosper Gold still requires Exchange approval but given the credibility of the players involved, this is expected imminently…

“Since the sale of our last company, Richfield Ventures in 2011, it has taken us two years to identify a multiple bulk-tonnage Copper-Gold target area, with historical drill confirmed discoveries that met our exploration criteria for Prosper Gold,” Bernier stated in the July 18 news release. “The Sheslay project area is close to infrastructure, drill permitted and drill ready. We look forward to advancing the project in the near term.”

Tempelman-Kluit has a plethora of targets to chase at Sheslay which has never been properly tested at depth and includes some impressive surface mineralization as you can see in the picture below…4 of the 5 porphyry bodies identified to date at the Sheslay (more will likely be discovered) are clustered within a 12 sq. km target area (Star)…the Pyrrhotite Creek porphyry, according to Prosper Gold, appears to be located in a 2nd distinct multiple target area to the southwest…of course adjoining the western and southern borders of the 68-sq. km Sheslay Project is Garibaldi Resources‘ (GGI, TSX-V) 170-sq. km Grizzly Property which hosts a major intrusive (Kaketsa Pluton) that’s interpreted to be an important “heat engine” driving mineralizing fluids on both properties…

Garibaldi Resources (GGI, TSX-V) Update

Investors are starting to see huge opportunities for Garibaldi with its Grizzly Property given 2 important catalysts – Colorado Resources‘ (CXO, TSX-V) discovery in the spring, of course, which generated fresh interest in the general area, and – even more importantly – Bernier’s arrival on the the scene at Sheslay…Garibaldi is already anchored by some strong projects in Mexico and has its own very capable management team that knows how to execute…GGI blasted through important resistance Friday on strong volume, hitting a new 52-week high and closing at 15 cents…it has tripled since we first introduced it to our readers several weeks ago…but the good news is, the Sheslay River Cu-Au play is just getting started…it’s still in its infancy and many investors aren’t even aware of it yet…Sheslay River has superb potential to quickly become northwest B.C.’s next major Cu-Au discovery given historical results and the highly respected team that is now developing this property…and the impact on Garibaldi could be immense…Garibaldi also has the ability and the capacity to unlock the value of the Grizzly through its own exploration…GGI is catching its breath today after running at a frantic pace on Friday…as of 9:00 am Pacific, GGI is off 2 cents at 13 cents on volume of more than 500,000 shares…this is positive action from a technical standpoint and an opportunity for bargain-hunters in our view given how we see this play unfolding in the coming weeks…

As always, perform your own due diligence…below are 10 important factors that we believe are in Garibaldi’s favor…

• Game-changing event – Pete Bernier and his former Richfield Ventures‘ team options the Sheslay River Porphyry Project;

• Exploration has started at Sheslay with 5,000-metre drill program commencing in early August;

• GGI’s Grizzly Property is 170 sq. km and adjoins the western and southern boundaries of Sheslay;

• The Grizzly and the Sheslay appear to be intimately connected geologically with a major intrusive in the NW corner of the Grizzly;

• The Grizzly displays similar geophysical signatures to mineralized zones already identified at the Sheslay;

• Share structure – Garibaldi has not done a financing since 2009, no cheap paper overhanging the market;

• Management – Garibaldi has a strong team that has proven it can execute given its success in Mexico;

• Working capital – GGI is in solid financial shape, unlike most juniors at the moment;

• Year-round activity – exceptional projects in Mexico, 2 B.C. properties in addition to the Grizzly;

• Technical strength – major breakout, one of the best charts on the Venture.

Probe Mines (PRB, TSX-V) Updated Chart

Besides Zenyatta Ventures‘ (ZEN, TSX-V) graphite deposit that has captured investors’ hearts, one of the really promising and exciting exploration stories in Ontario continues to be Probe Mines‘ (PRB, TSX-V) Borden Lake Gold Project…we have written about Borden Lake on numerous occasions and the incredible work that Probe is doing under the strong guidance of President and CEO David Palmer…Agnico Eagle Mines (AEM, TSX) took a position in Probe a couple of months ago and for good reason…Borden Lake, which already boasts a significant resource, is evolving in a major way with a dramatic improvement in Gold grades in the expanding southeast extension of the deposit…Probe is actually reclassifying the deposit as a more traditional high-grade, Archean lode Gold system, amenable to underground recovery, which is also bounded by significant ancillary lower-grade mineralization, the latter ideally suited to potential open-pit mining techniques…drilling continues at Borden Lake, Probe is sitting on piles of cash and has only 75.4 million shares outstanding for a current market cap of $143 million based on Friday’s closing price of $1.90…still plenty of upside potential as exploration continues, especially if Gold and Gold stocks in general continue to strengthen as this 3rd quarter progresses…below is an updated 2.5-year weekly PRB chart…

Silver Chart Updates

An important support band has held between $17.50 and $19.50 with Silver now trying to close above the $20 level and gain some traction from there…near-term resistance is at $20.60 and then at $22…iShares Silver Trust (NYSE: SLV), the world’s largest Silver-backed ETF, said it saw the biggest daily inflows in holdings since mid-January last Wednesday…according to reports, holdings in SLV increased by 144 metric tons…year-to-date SLV has seen an increase in holdings of more than 3% while year-to-date holdings in GLD have declined by 31%…at the same time, Silver prices have underperformed vs. the yellow metal which analysts say is mostly due to Silver’s more volatile nature…while Gold is currently down about 21% this year, Silver has dropped 34.5% so far in 2013…

Short-Term Silver Chart

Long-Term Silver Chart

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