Gold has bounced around on this final day of the month with some important U.S. economic data released ahead of an updated Fed policy announcement slated for 11:00 am Pacific…the FOMC is expected to continue to wind down its monthly bond-buying program but investors will be looking for any subtle changes in language…U.S. first-quarter GDP came in lower than expected at an annual rate of just 1.0% (well below the Q4 2013 rate of 2.6%) which gave bullion a boost after the yellow metal dipped as low as $1,285…as of 8:15 am Pacific, Gold off $2 an ounce at $1,294…Silver is down 20 cents at $19.24…Copper has lost 4 cents to $3.03…Crude Oil has slipped nearly $1.50 a barrel to $99.79 while the U.S. Dollar Index is off one-third of a point to 79.46…
In its Silver Yearbook 2014 issued Monday, commodities consultants CPM Group will “consolidate” this year with “limited” downside potential…the top three Silver producing nations – Mexico, China and Peru – contributed two-thirds of the 4.1% increase in mine production last year…Mexico recorded the highest level of growth with output rising by 9.6 million ounces…Canada and Russia showed declines in Silver output last year, down 1.9 million and 1.3 million ounces, respectively, according to CPM…investment demand for Silver fell 42% to 105.3 million ounces last year to the lowest level since 2008 when investors bought 64.8 million Silver ounces…nevertheless, 2013 was still the 10th highest level of annual net Silver investment demand since 1960, CPM noted…
Investors remain positive on Platinum group metals, with holdings in Platinum and Palladium ETFs hitting all-time highs as of early this week, according to HSBC…the bank cites Bloomberg data showing that holdings in the top seven Platinum ETFs were at a record high of 2.66 million ounces as of Monday, up from 2.51 million at the start of the year…holdings in the top eight Palladium ETFs hit a record high of 2.58 million ounces, up from 2.16 million at the beginning of the year. “The gain in Palladium is largely attributed to the two newly created (South African) palladium ETFs, which have absorbed a total of 470,000 oz this year. We remain bullish on the PGMs,” stated HSBC.
China Set To Pass U.S. As World’s Largest Economy Sooner Than Expected
The Financial Times reported this morning that the U.S is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies…the U.S. has been the global leader since overtaking the U.K. in 1872…most economists previously thought China would pull ahead in 2019…
The figures, compiled by the International Comparison Program hosted by the World Bank, are the most authoritative estimates of what money can buy in different countries and are used by most public and private sector organizations, such as the International Monetary Fund…this is the first time they have been updated since 2005…with the IMF expecting China’s economy to have grown 24% between 2011 and 2014 while the U.S. is expected to expand only 7.6%, China is likely to overtake the U.S. this year…the figures revolutionize the picture of the world’s economic landscape, boosting the importance of large middle-income countries…
India becomes the third-largest economy having previously been in tenth place…the size of its economy almost doubled from 19% of the U.S. in 2005 to 37% in 2011…Russia, Brazil, Indonesia and Mexico make the top 12 in the global table…in contrast, high costs and lower growth have pushed the U.K. and Japan further behind the U.S. than in the 2005 tables while Germany improved its relative position a little and Italy remained the same…
Today’s Equity Markets
Asia
Japan’s Nikkei finished a weak month on a slightly positive note, climbing 16 points…as widely expected, the Bank of Japan left monetary policy steady by a unanimous vote in its first meeting since the consumption tax hike on April 1…
China’s Shanghai Composite gained 6 points overnight to close at 2026…trading was quiet ahead of a four-day weekend (China reopens Monday)…John’s 6-month daily chart for the Shanghai shows that the Index continues to find strong support between 1950 and 2000, and a rebound in May is likely after a 7% correction from the April high of 2147…
Europe
European shares were mixed today…euro zone inflation picked up in April, but remained below expectations, maintaining pressure on the ECB to stimulate the economy at its next monetary policy meeting…
North America
The Dow is relatively unchanged as of 8:15 am Pacific…the U.S. economy slowed in the first quarter to one of the weakest paces of the five-year recovery as the frigid winter appeared to curtail business investment and weakness overseas hurt exports…on an encouraging note, though, the closely-watched ADP National Employment report came out this morning and showed that the economy created 220,000 private sector jobs in April, a number well above market expectations…the Labor Department’s jobs report for April is due Friday…
The TSX is up 18 points while the Venture is in negative territory for the fourth straight day, down 4 points at 996…the Venture could still post a slight gain for the month of April after finishing March at 994…Doubleview Capital Corp. (DBV, TSX-V) reported this morning that it has completed an initial round of drilling to follow up on discovery holes HAT-11 and HAT-08 at its Hat Cu-Au Porphyry Property in the Sheslay Valley…results are expected by the end of May…the company has also raised an additional $575,000 from the exercise of warrants, bringing the total amount raised over the last three months to nearly $1.5 million…DBV is unchanged at 22 cents as of 8:15 am Pacific…
Probe Mines Ltd. (PRB, TSX-V) Drills 71 Metres Grading 3.5 g/t Au At Borden Lake
Probe Mines (PRB, TSX-V) reported a large batch of assay results (about 3 dozen holes from 19,000 metres of drilling) pre-market from its Borden Lake Project in northern Ontario…very solid results (BL14-611 returned 71 m @ 3.5 g/t Au) but nothing extraordinary in this morning’s numbers, and PRB is off 27 cents at $2.65 as of 8:15 am Pacific after opening at $3 and climbing as high as $3.10 in early trading…the winter drill program has expanded the high-grade zone by an additional 60% to over 1.6 km…significantly, this zone now appears to be leveling off where it’s still open to the southeast…the total strike length of the Borden Lake System is now a whopping 3.7 km…technically, Probe appears to be in a consolidation phase after a powerful 12-month climb from a low of $1.11 to a high of $3.95…John’s charts have shown a strong support area around $2.60, just above the rising 200-day moving average (SMA)…
Contact Exploration Inc. (CEX, TSX-V) Updated Chart
A breakout is occurring, as John’s latest chart indicated was highly likely, in one of our favorite energy companies, Contact Exploration (CEX, TSX-V)…Contact continues to accelerate its Kakwa Montney play, and is poised for further increases in production as East Kakwa pushes westward…technically, CEX has performed in textbook fashion – occasionally retracing to test the uptrend support – as you can see in our updated 2.5-year weekly chart…important resistance is around 38 cents, and CEX is now pushing above that to close the month…as of 8:15 am Pacific, CEX is up 4 cents to 42.5 cents…
Magor Corporation (MCC, TSX-V) Updated Chart
We continue to keep a close eye on Magor Corp. (MCC, TSX-V) which, quite simply, is changing the way people interact with video through its Aerus software platform…MCC is steadily increasing its client base and anticipates reaching the significant milestone of cash flow break-even during its upcoming fiscal year which begins tomorrow (May 1 through April 30, 2015)…
Below is a 1-year weekly chart update from John…since February, MCC has mostly traded within a horizontal channel between 28 cents and 37 cents (Fib. resistance)…given steady buy pressure and a positive overall trend as shown by the ADX indicator, a breakout above the horizontal channel appears to be the most likely scenario…a reversal to the upside appears to be brewing in the 50-day SMA, a potential bullish trigger…MCC closed at 35 cents yesterday…
Note: John and Jon both hold share positions in DBV. Jon also holds a share position in MCC.
Hello Jon!
When do you think that gold will rise? It goes up and down and its not going anywhere really! Do you think its manipulation or whats the reason? Venture is also going nowhere. Im a bit frustrated about this. How long can this go on? I think about Sheasley valley, can those companies live with this low goldprise much longer?
Comment by Yvonne Kindström — April 30, 2014 @ 7:56 am
Yvonne, if your time horizon is 24 hours, you might be able to say the Venture is going nowhere, but you can’t say that based on the technical facts and the overall chart. This is a market underpinned by great support and in a clear primary uptrend that could accelerate quite dramatically over the coming few months. Gold has been range-bound and may continue to be range-bound for a while, who knows. Don’t understand your comment about Gold and the Sheslay Valley – Copper is the key commodity for that district, it’s a discovery play that can even run counter to how indices and commodities perform, and the main participants have the financial strength for plenty of exploration and drilling.
Comment by Jon - BMR — April 30, 2014 @ 8:29 am
Jon!
Thank you for your answer. I have been waiting in a correction since 2011 therefore; but I know one must see the big picture. Sooner or later there will be a turnaround in this market!
Comment by Yvonne Kindström — April 30, 2014 @ 10:37 am
jon,i get that part,but for ggi in mexico that isn’t the case is it?gold is what thier after there correct? is it because this is virgin ground and it could take another round or 2 of drilling befour it grabs attention.i take it on those results the market is saying, hum,so what,show me more.i would have thought it would have moved to the upside a bit by now.wondering if dbv results, if good,will help ggi’s one two punch start landing a few.just a small potatoes guy trying to get understand it. thx.
Comment by tom — April 30, 2014 @ 11:14 am
Jon, what can you tell us about Cadillac Mining CQX…any updates?? Thanks
Comment by John — April 30, 2014 @ 11:17 am
@Tom: I sold my remaining GGI stock this week. Not because I don’t believe in the company, but I believe the market wants another set of results that are better than the ones just released. And their slow approach doesn’t help much either. Results don’t move venture stocks as much as they once did, unless they are spectacular. I’ll get back into GGI once they start drilling in BC; that is where we might see the stock price move upward. Good luck in your investment(s).
Comment by Chris — April 30, 2014 @ 3:28 pm
Tom, yes, Gold (and Silver) is what GGI is after in Mexico, and I think what’s coming together is a potentially very interesting dynamic with 3 properties being drilled, and all of that leading into the Sheslay…if you look at how GGI has traded since about a year ago when it was at a nickel, it doubled and retraced some, it doubled again and retraced some, and doubled yet again and retraced some – it’s reasonable I think to expect that pattern to continue which also jives with John’s Fib. analysis for GGI for the next move to be into the mid-30’s…dependent on results, of course, but it’s hard to imagine the Sheslay and Mexico won’t deliver…patience wins the day and those who have been patient with GGI since a year ago have done remarkably well…surely the best is yet to come, especially with the Sheslay just starting to wind up….
Comment by Jon - BMR — April 30, 2014 @ 3:29 pm
Jon, I own AIX and they are in the early stages so one cant expect any rise till they announce drill results right?
Comment by Yvonne Kindström — April 30, 2014 @ 9:12 pm
That’s not how it’s going to work with AIX, Yvonne, IMHO. It is a very direct play in particular on both Prosper Gold and Garibaldi. AIX is contiguous to the entire northern border of Prosper and much of the northwestern border of GGI with North Cap East and North Cap West, respectively. AIX recently announced the start of a work program, and when we were up in the area we could see some very encouraging signs of outcropping and plenty of evidence of iron from the air on both North Cap East and North Cap West – similar to that seen elsewhere on the trend, and excellent starting points for prospecting. With regard to Prosper, they’re expected to commence their drill program imminently. They’ll be stepping out north, in the direction of AIX’s ground a couple of km to the north. If Prosper starts to connect on these step-out holes, and there are strong reasons to believe they will, look out as far as AIX is concerned. At North Cap West, the trend is very pronounced and appears to extend right onto that ground. GGI’s Grizzly West porphyry target is large, well-defined and open in all directions with the boundaries just a couple of km away from North Cap West. If you accept the theory of a large mineralized corridor in the Sheslay Valley, AIX has an excellent chance of holding a piece of it with the stock gradually firming up I think on speculation surrounding the above and in the anticipation of AIX’s own drilling.
Comment by Jon - BMR — May 1, 2014 @ 4:41 am
jon,thanks for the info on that,i think i’ll hang on a bit,i dont have a problem with patience,i agree that ggi has been very slow on nr’s but i think with 3 areas being drilled and sheslay on the move shortly,nr’s comming from ggi will be more consistant,i think dbv’s results will kickstart the whole valley,i hold aix,abr and ggi,and they all have huge potential,you nailed it,patience.
Comment by tom — May 1, 2014 @ 7:33 am