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Gold has traded between $1,306 and $1,317 so far today as some profit-taking is occurring after yesterday’s powerful advance…as of 7:00 am Pacific, bullion is down $5 an ounce at $1,315…Silver is up 12 cents at $20.88…Copper is up 3 pennies to $3.08…Crude Oil is 67 cents higher at $107.10 while the U.S. Dollar Index has gained one-tenth of a point to 80.42…

Gold surged in dramatic fashion yesterday, climbing over $40 an ounce in its biggest daily gain in nine months thanks to a combination of bullish factors…many investors were caught flat-footed by the Federal Reserve’s outlook for continued low interest rates, despite encouraging signs in the economy and some “noise” on the inflation front, while short covering, technical buying and geopolitical tensions (Iraq, Russia-Ukraine) all played a role as well…Gold has rebounded sharply after hitting a yearly low of $1,240 June 3, but it’s still well below the intra-day high of $1,393 set in March which came amid worries that the U.S. economy was losing its footing, a concern that has been dispersed by an upturn in economic data…the Fed likes the idea that inflation is kicking up a bit, but they might want to be careful what they wish for…many commodities, and this is being reflected in the Venture, are behaving in a manner that suggests inflationary pressures are going to intensify in the year ahead…this is very Venture-bullish…

Today’s Equity Markets

Asia

China’s Shanghai Composite stabilized after 3 consecutive losing sessions and added 3 points overnight to close at 2027…earlier in the day, shares fell on fears of tight liquidity after four IPO’s raised $290 million following Beijing’s four-month hiatus on offerings…the mood was also cautious ahead of HSBC’s preliminary manufacturing data for June, due Monday…Japanese shares ended near the previous day’s four-month highs, posting a 1.7% increase for the week – their fifth straight week of gains…

Europe

European markets are mostly mildly higher in late trading overseas…

North America

The Dow is up 38 points as of 7:00 am Pacific…no economic data is due today and no major companies are set to report quarterly earnings…the TSX is 7 points higher while the Venture, after yesterday’s impressive run, is up another point at 1023…

Updated Gold Chart

Gold broke above some important resistance yesterday, including a short-term downtrend line at the 50-day moving average (SMA) as you can see in this 6-month daily chart, and new support should now kick in around $1,295…what will be interesting in the days ahead is to see how the physical market responds to these higher prices…

A key level to watch now is around $1,330 – a confirmed breakout above that area would really put the bears on the defensive…some minor consolidation may have to occur before such an event…the Venture keeps telling us that Gold is going to surprise to the upside during the second half of 2014…

Updated Silver Chart

Silver closed above an important downtrend line yesterday, one that has been in place since 2013 on this long-term monthly chart…confirmation of this breakout is required…SS is showing a bullish “W”…based on this chart, we are extremely bullish regarding Silver at this point – especially when one considers the highly encouraging COT structure (commercials reducing their net short positions to extreme levels) that we referred to just recently…

Garibaldi Resources Corp. (GGI, TSX-V)

There are a multitude of potential triggers in place for another major upside move in Garibaldi Resources (GGI, TSX-V), not the least of which is continued drilling at the Silver Eagle target in Mexico with more assays pending…based on yesterday’s news, the first hole at Silver Eagle (7 m near-surface grading 2,010 g/t Ag or 65 oz/ton) was not a one-hole wonder…results from SE-14-02 and SE-14-03 are on the way…it appears Garibaldi geologists are defining a significant structure there, and keep in mind that GGI has two highly recognized experts on Mexico that are involved in figuring out Silver Eagle and the rest of Rodadero – Dr. Craig Gibson and Dr. Peter Megaw, who both have their share of discoveries under their belts…Megaw of course sits on the board of Mag Silver Corp. (MAG, TSX), which is soaring by the way, and is also a a frequent speaker at academic and international exploration conferences…

Between Rodadero, La Patilla and Iris in Mexico, and the Sheslay District in northwest B.C. which is sure to heat up over the summer, GGI has several potential “company builders” it’s actively working on – just one of them needs to connect to send GGI to a potential new all-time high during what should be a very bullish third quarter for the Venture…you can think “small” here or you can think “big”…we’re thinking “big” with this one (and we have since the beginning when it was trading at a nickel) because of the quality of both the projects and the management and geological teams…

John has two GGI charts to share with our readers this morning with the stock up half a penny at 26 cents through the first 30 minutes of trading…

GGI 10-Year Monthly Chart

RSI(14) continues to climb an impressive uptrend on this long-term monthly chart, and at 63% still has plenty of room to move higher…all the moving averages are in bullish alignment, and note the spread between the current price and the next Fib. measured resistance levels…

GGI Short-Term Chart

Again, this short-term GGI chart is highly intriguing with all sorts of bullish lights flashing including a breakout above an ascending triangle, a surge in buying pressure (CMF) and the RSI(14) which is moving up from a “W”…

Source Exploration Corp. (SOP, TSX-V) Update

We’ve mentioned this one before when it trading around 11 cents…Source Exploration (SOP, TSX-V) is another Mexico play worthy of our readers’ due diligence…the company has some major strength behind it with Chairman David Baker (he managed and grew Goldbrook Ventures until it was ultimately sold in 2012 to its Chinese joint venture partners for approximately $100 million) and a solid geological team…in April, Source reported some stellar drill results from its Santa Cruz target at its Las Minas Project 270 km east of Mexico City, and recently the company closed a $1.2 million private placement at 12 cents per unit…

Source is now initiating a follow-up drill program at Las Minas which will focus on expanding the higher grade skarn mineralization outlined by winter drilling at the Santa Cruz area, in preparation for an initial resource calculation…in addition, drill testing of high priority targets at the Juan Bran and Cinco Senores sites is also scheduled…

Technically, SOP held strong support around 10 cents…a significant band of resistance exists between 15 and 17 cents, but this is a stock in a primary uptrend so an eventual breakout above that area seems highly plausible…as always, perform your own due diligence…SOP closed at 13.5 cents yesterday…

Discovery Ventures (DVN, TSX-V) Update

More good news from Discovery Ventures (DVN, TSX-V) which continues to make progress in advancing its promising Willa-Max Gold-Copper-Silver Project in southeastern British Columbia…as announced Wednesday, DVN has signed a non-binding term sheet for a $12.1-million (U.S.) Gold prepayment agreement with a financing firm based in New York…the facility would bear interest at a rate of 9% per year on funds advanced and would be repaid by the delivery of 14,400 ounces of Gold and 900 tons of Copper over a maximum 36-month period starting no later than the 19th month following the closing date…the principal amount will be provided in two tranches, with the first tranche of $4.1-million provided at closing and the second tranche of $8 million to be financed no later than 12 months after closing, subject to certain conditions…

DVN has responded well to the release of a very positive Preliminary Economic Assessment May 28 based on measured and indicated resources (not reserves) at the Willa deposit…there are 495,784 tonnes designated in the measured category with an average grade of 7.18 g/t Au, 0.94% Cu and 12.16 g/t Ag at a cut-off grade of 3.5 g/t Au…the indicated category at the same cut-off grade is 262,415 tonnes grading 5.71 g/t Au, 0.67% Cu and 13.26 g/t Ag, for a total mineral resource of the measured and indicated categories of 758,199 tonnes grading 6.67 g/t Au, 0.85% Cu and 12.54 g/t Ag…

The Max mine and mill facilities, just 135 km haulage distance from the Willa deposit, are a critical component of this overall equation for Discovery…more on DVN and Willa-Max next week…

Technically, a confirmed breakout has occurred above the 27-cent level as shown in this 2.5-year weekly chart…DVN is up 2 pennies at 30 cents as of 7:00 am Pacific…

GoldQuest Mining Corp. (GQC, TSX-V) Update 

Keep an eye on GoldQuest Mining (GQC, TSX-V) as the company commenced drilling in early May at some very interesting targets within its Tireo Project concessions in the DR…eight large priority areas have been identified within four km of the Romero deposit…

Below is a 2+ year weekly chart…RSI(14) and SS are showing strong up momentum, and the 200-day SMA is just beginning to reverse to the upside…could be some interesting action in GQC over the summer given the quality of exploration targets they’re drilling…the company is in a strong cash position, and the stock has a history of very sudden and sharp moves to the upside…GQC is off a penny at 33 cents as of 7:00 am Pacific…

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