Gold has traded between $1,273 and $1,293 so far today…as of 7:00 am Pacific, bullion is down $17 an ounce at $1,275…Silver is off 31 cents at $19.13…Copper is up a penny at $3.18…Crude Oil is down 53 cents at $103.82 while the U.S. Dollar Index has risen one-tenth of a point to 80.34…
Gold has struggled to break consistently above the $1,300 level for the past two weeks, indicating a lack of conviction from investors and speculators, some analysts are saying…
China’s Gold imports from main conduit Hong Kong fell to a 14-month low of 67.040 tonnes in April from 85.128 tonnes in March, as a weaker yuan and local discounts apparently curbed demand…however, keep in mind that China has started to allow Gold imports through its capital Beijing, in a move that helps keep purchases by the world’s top bullion buyer more discreet…the opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong’s pole position in China’s Gold trade, as the mainland can get more of the metal it wants directly rather than through a route (Hong Kong) that discloses how much it is buying…
Global Gold Exchange In Shanghai?
Reuters reported this morning that China has approached foreign banks and Gold producers to participate in a global Gold exchange in Shanghai, people familiar with the matter said, as the world’s top producer and importer of the metal seeks greater influence over pricing…the Shanghai Gold Exchange (SGE) got the go ahead from the central bank last week to launch a global trading platform in the city’s pilot free trade zone, a move that could challenge the dominance of New York and London in Gold trade and pricing…Beijing’s plans to open up Gold trading comes at a time when the benchmark price-setting process for precious metals is under scrutiny…Barclays Plc became the first bank to be fined over attempted manipulation of the 95-year-old benchmark London Gold market daily “fix” last week…
State-backed SGE has asked bullion banks such as HSBC, Australia and New Zealand Banking Group, Standard Bank, Standard Chartered and Bank of Nova Scotia to take part in the global trading platform, two people approached by the exchange said…SGE, the world’s biggest physical Gold exchange, where domestic banks, miners and retailers buy and sell Gold, could also open up the international platform to foreign brokerages and gold producers, they said…
“China wants to have more voice in Gold prices,” Reuters quoted Jiang Shu, an analyst with Industrial Bank, one of 12 banks allowed to import Gold into China. “The international exchange is the first step towards gaining a say in Gold pricing.”
“If you don’t allow foreign players to participate in your market actively, or do not push Chinese financial institutions to participate in the international market, then China’s strong Gold demand is only a number, not a power,” he said.
Today’s Equity Markets
Asia
Asian markets were lower overnight with the exception of Japan’s Nikkei average which climbed 34 points…Japanese shares ended at a fresh seven-week high for the second day in a row, posting a fifth session of gains, as the yen traded near a one-week low against the dollar…China’s Shanghai Composite fell 7 points to finish at 2035…
Europe
European markets are modestly higher in late trading overseas…expectations for a rate cut from the European Central Bank (ECB) rose after president Mario Draghi said in a speech yesterday that the central bank must be prepared to take action if risks posed by low inflation emerge…
North America
The Dow has climbed 56 points through the first 30 minutes of trading after yesterday’s Memorial Day holiday, thanks to some upbeat economic data…the TSX is off 48 points while the Venture has slid 4 points to 991…Edge Resources Inc. (EDE, TSX-V), an energy company we mentioned yesterday that’s in the midst of an important turnaround and very worthy of our readers’ due diligence, is up 1.5 cents at 20.5 cents through the first 30 minutes of trading…
Garibaldi Resources Corp. (GGI, TSX-V) Update
John’s charts have been amazingly accurate in terms of Fib. measured resistance levels for Garibaldi Resources (GGI, TSX-V), so this morning’s updated chart screams for attention (see below)…
From Mexico to British Columbia, Garibaldi has a lot going for it right now which explains why the stock has broken out above previous resistance at 24 cents and has been trading at nearly three-year highs…not only is GGI ready to attack the Grizzly in the Sheslay District, an area in northwest B.C. that is destined to heat up in a major way over the summer, but the company is hitting high-grade Gold and Silver in Mexico – the latest success being the first drill hole at the Silver Eagle target at Rodadero (central Sonora State) which returned a stunning 65 oz/ton over 7 m or 23.1 feet at shallow depths (19.5 m to 26.5 m)…at La Patilla in Sinaloa State, GGI also came up with impressive numbers including 10.4 g/t Au over 8.5 m…a follow-up drill program is planned for La Patilla in addition to first-ever drilling at the Iris Project adjacent to two significant producing Gold mines in Chihuahua State…
What’s critical to understand is that SE-14-01 at Rodadero North wasn’t simply a “lucky hit” in our view…no less than 8 high-grade targets (Silver and Gold) have been outlined by Garibaldi over a NW-SE trending distance of 10 km from La Guata near the northern tip of this project to La Colorada in the southeast corner…
How have these targets been identified?…initially, through the use of Hyperspectral Remote Sensing Technology…GGI was the first junior in Mexico to use this technology on a wide scale, and the company developed a valuable proprietary database that even drew keen interest from Agnico Eagle Mines Ltd. and other producers…this technology, deployed from the air, picks up mineralogy signatures on the ground like a scanner reads a bar code at the grocery store (this is what allowed GGI to cash in big with the sale of its Temoris option in 2009)…not all of these signatures, of course, will lead to the discovery of an ore body, but this cutting-edge exploration methodology has proven to be highly effective. “All of these (signatures at Rodadero) lit up like a light bulb,” stated GGI President Steve Regoci in an interview at the end of last week with Agoracom…
Importantly, mineralogy signatures at Rodadero picked up by the Hyperspectral have been confirmed by boots on the ground through extensive mapping and sampling…
“The targets that we have at Rodadero, including Silver Eagle, have been getting some exceptionally high grade numbers at surface from trenching and chip sampling. It was very, very exciting…to actually find those kind of numbers in drill core over that kind of width,” Regoci told Agoracom…
Technology + traditional boots-on-the-ground work + drilling = RESULTS…if the second hole at Silver Eagle, a 50-m step-out to the south of SE-14-01, is successful, we see the strong possibility of an immediate expanded drill program at Rodadero North which covers 45 sq. km…
Not only has GGI shown investors some amazing results and spectacular drill core from Rodadero North, but what also excites us is the fact that this project features road access and electricity as confirmed by pictures on the GGI web site…
Updated GGI Long-Term Chart
The technicals and fundamentals are both match up here – the bullish trend is gaining strength, as shown by the ADX, and RSI(14) is showing increasing up momentum in this 10-year “Big Picture” monthly chart…GGI is clearly on a path that could take it to new all-time highs over the summer…one of GGI’s huge advantages – a clear sign of the quality of its management team – is share structure…this is one of the very few Venture companies that hasn’t had to dilute its stock with cheap financings over the past five years…the Law of Supply and Demand very appropriately applies to the GGI market…with a limited amount of paper, there is very little to hold this down on more positive news…
Highbank Resources Ltd. (HBK, TSX-V) Update
Lots happening in British Columbia, from the Sheslay District to the Port of Prince Rupert and beyond…aggregate rock may sound boring, but it’s a much-needed resource for looming LNG projects in the province as well as the expansion of the Port of Prince Rupert…Highbank Resources (HBK, TSX-V) continues to make progress with its Swamp Point North aggregate project which has an impressive NI-43-101 resource of 72 million tons of measured and indicated aggregate rock…the key, however, is the deposit’s proximity to tidal waters (it sits on the edge of the Portland Canal) which gives HBK an advantage over competitors who have to move material by truck over significant distances…with the permit now in hand to proceed to production, and a recently completed financing, HBK is in an excellent company-building position…as the saying goes, location, location, location – Highbank has it with Swamp Point North…
Technically, as we’ve pointed out earlier, HBK has broken out above long-term resistance at 15 cents which was support from 2005 until late 2009 as you can see in this 10-year monthly chart from John…HBK is unchanged at 17 cents as of 7:00 am Pacific…
Abcourt Mines Inc. (ABI, TSX-V) Update
Abcourt Mines (ABI, TSX-V) has been making steady progress with initial production at its Elder Mine near Rouyn-Noranda, so we like the odds of a potential breakout in ABI during the second half of the year…
Below is a 2.5-year weekly chart from John – look how the share price is once again testing the top of the downsloping channel…with the progress that Abcourt is making – transforming itself into a small-scale producer while controlling costs – we see much better days ahead for this company, and that should translate into an important chart breakout at some point…ABI is off half a penny at 7 cents as of 7:00 am Pacific…
Note: John and Jon both hold share positions in GGI and EDE.
