Gold has traded between $1,305 and $1,319 so far today…as of 7:15 am Pacific, bullion is down $4 an ounce at $1,313…a strong support band ranges from $1,294 to $1,310…Silver has reversed, now up 2 pennies at $21.04…Copper is off a penny at $3.14…Crude Oil is down 85 cents a barrel to $105.65 while the U.S. Dollar Index has added one-tenth of a point to 80.31…in Iraq, militants seized control of the Joint Base Balad airbase yesterday, one of the country’s largest, as well as the Ajeel Oil site, located east of Tikrit…receiving less attention at the moment but of growing significance are increasing attacks by Islamic extremists (Bo Haram) in Nigeria…the five-year-old insurgency has the potential to spread beyond northern parts of the country and threaten Oil supplies, and Nigeria has the second-most sought after light crude (very high quality) in the world…
“While Gold’s recent rally is impressive, and the uncertainty surrounding the Iraq crisis can keep prices elevated relative to where Gold was trading in early June, we struggle to justify significantly higher prices,” said UBS precious metals strategist Edel Tully. “As continued selling by exchange-traded funds and a lack of demand from China weigh, we expect this to pressure Gold.”
The Financial Times reported this morning that Chinese companies have used fake Gold transactions to obtain more than $15 billion (U.S.) in loans, according to the country’s national auditor…the alleged fraud, which dates back to 2012 and involved 25 unidentified Gold processing companies, was cited in the National Audit Office’s annual report to legislators earlier this week and has raised further concerns about the integrity of China’s metal markets…earlier this month it emerged that companies in the northeastern port city of Qingdao had obtained loans secured against non-existent stocks of the metal…
The World Gold Council and Singapore’s government will launch a 25-kilo Gold bar contract, the WGC said yesterday…the contract is expected to debut in September and will be the first wholesale 25 kilobar contract, WGC said, and it will introduce centralized trading and clearing of a physically delivered Gold contract in Singapore…the new contract will allow Gold suppliers to “connect more effectively with their Asian clientele,” the WGC said…there will be six daily contracts, which will give physical users access to competitively priced kilobars, they added…Asian Gold demand has increased nearly 250% in the past 10 years, the WGC said.
Today’s Equity Markets
Asia
China’s Shanghai Composite gained 13 points overnight to close at 2039…Japan’s Nikkei average, meanwhile, gained 42 points to finish at just over 15300…
Europe
European markets are down moderately in late trading overseas…
North America
The Dow has slipped 91 points through the first 50 minutes of trading…personal spending rose a less-than-forecast 0.2% in May, after holding flat in April, while personal income rose 0.4%…meanwhile, U..S. jobless claims declined by 2,000 to 312,000 last week, in line with expectations…
The TSX is down 1 point at 14974 while the Venture is also off a point at 1014 as of 7:20 am Pacific…
Very encouraging results from Adventure Gold (AGE, TSX-V) this morning from the first three holes of a 3,000-m drill program at its advanced-stage Val d’Or East Gold Project (Pascalis Property) which intersected mineralized dikes 150+ m west of the main dike hosting the Gold mineralization at the former L.C. Beliveau mine…hole PC-14-70 returned 12.4 g/t Au over 7 m at 11 m from the surface and 32 m grading 2.6 g/t Au at 142 m from the surface…meanwhile, hole PC-14-69 intersected 6 g/t Au over 4 m at 9.5 m from the surface, and 2.3 g/t Au over 8 m at 61.5 m from the surface…we’ve visited this property before, it has excellent potential as a future Gold producer and the 12.4 g/t Au over 7 m is one of the richest intercepts ever drilled on the property…the management/geological team is strong…AGE is unchanged at 18.5 cents as of 7:20 am Pacific…
West Point Resources (BLO, CSE) began trading on the CSE this morning – very interesting company that’s working on developing a marijuana roadside breathalyzer for commercial use by law enforcement…they’re at the leading edge of this technology, and it’s certainly a concept we can support…we’ll have more on BLO in the coming days…it’s off to a flying start on the CSE after switching from the Venture following a change of business…
Venture Updated Chart
The Venture has declined slightly each day this week but the mild pullback is healthy and fits nicely within the overall chart pattern…strong new Fib. supports exists at 1000, 4 points above the rising 50-day moving average (SMA)…RSI(14) is meeting support at an uptrend line on this 6-month daily chart…buy pressure remains strong, and the rising 10 and 20-day SMA’s (1013 and 1000, respectively) can be expected to provide excellent support…
Since the Venture broke above its long-term downtrend line last October, the successful strategy has been to buy into any dips on the Venture – but “nervous nellies” who simply don’t understand the “Big Picture” have been doing the opposite…but that’s okay…they’ll also be the ones jumping on the bandwagon and chasing stocks later this summer…
TSX Gold Index Long-Term Monthly Chart
The other day we posted a 20-year Gold chart…this morning, we thought it would be interesting to examine the TSX Gold Index going back 15 years…
We’ve noted how the Venture has broken above its long-term downtrend line, but this hasn’t occurred just yet in the Gold Index as you can see below…the Venture, generally, has proven to be a more reliable indicator of future Gold prices, so it’s not surprising it’s a step ahead of the Gold Index in this regard…
A few key points about the Gold Index:
1. Note the RSI(14) uptrend following the bottoming pattern in 2013;
2. There is major chart resistance at 210 which at the moment coincides with the downtrend line – KEY AREA for the Gold Index to break above;
3. A bullish ascending triangle appears to be forming.
A confirmed move through the 210 area would suggest the next major target would be the Fib. 38.2% resistance level of 255, about a 30% jump from current levels…
Great Panther Silver Ltd. (GPR, TSX)
Just one of many reasons we’re encouraged by the outlook for Silver prices is the action we’re seeing in some Silver stocks, and Great Panther Silver (GPR, TSX) is no exception…
GPR, like Silver, broke above its long-term downtrend line early this year, and a bullish pattern has clearly developed in the RSI(14)…the ADX trend indicator was predominantly bearish from mid-2011 until reversing at the beginning of this year…
Quite simply, GPR is telling us that we’re going to see higher Silver prices in Q3…GPR is off 2 cents at $1.29 as of 7:20 am Pacific…
Cypress Development Corp. (CYP, TSX-V)
We like the direction of Zinc and Silver prices, so keep an eye on Cypress Development (CYP, TSX-V) which announced plans yesterday for a Phase 2 drill program to follow up on strong Phase 1 results at its 100%-owned Gunman Zinc-Silver oxide project in Nevada…the 1,140-acre property is located directly west of Barrick Gold’s (ABX, TSX) Bald Mountain Gold mine complex on the southern Carlin mineral trend in White Pine County…
On June 12, CYP reported results from a Phase 1 program that included RC hole GMRC-9 which returned a 175-foot downhole interval of 12% Zn and 121 g/t Ag, and hole GMRC-5 which returned a 55-foot section of 21% Zn and 147 g/t Ag…
CYP is up half a penny at 3.5 cents as of 7:20 am Pacific…
Calibre Mining Corp. (CXB, TSX-V) Update
Calibre Mining (CXB, TSX-V) is very active with excellent geological prospects in Nicaragua including the Eastern Borosi Project which was recently optioned by Iamgold Corp. (IMG, TSX)…Eastern Borosi hosts Gold-Silver resources in two deposits and a series of well-defined low-sulphidation epithermal Gold-Silver targets…a 3,400-m drill program was recently announced and will commence next month…
CXB closed at 5.5 cents yesterday – 6 cents is the top of the a downtrend channel in place for two years, as you can see in this 2.5-year weekly chart…watch for a potential breakout (timing uncertain of course) above that important resistance…
Note: John, Terry and Jon do not hold share positions in AGE, GPR, CYP or CXB. Jon holds a share position in BLO.
Do you have an updated Integra (ICG) chart? The stock is in the low 20s but they have just raised $10m in order to progress the project. There appears to be good fundamentals and a newish management board but some comment that the number of share in issue is getting a bit bloated. I think that by the time they have spent the $10m progressing the project this will be less material.
Comment by Tom — June 26, 2014 @ 6:47 am
Hey guys, any idea on a timeline for the DBV update you mentioned a while ago? Drilling must be getting close to finishing. It’s been REALLY quiet at the Sheslay…
Comment by Steve S. — June 26, 2014 @ 7:05 am
Hi Steve, yes, the lull before the storm at the Sheslay…July is when investors should expect things to ramp up there again, new discoveries are going to be made in our view based on all that has been learned to date, and two drill programs of course are currently in progress (PGX and DBV) with GGI on the way…we’re continuing to compile more research and we’ll be reporting much more fairly soon…
Comment by Jon - BMR — June 26, 2014 @ 7:56 am
Jon
Thanks for bringing CYP to our attention. With the grades of Zn and Ag they are getting,
if they can show continuity between the Main Zone and the new North Zone (6000 ft) from the
Main Zone, they could be onto something. As you alluded to, the expected shortfall in global Zinc supply,can’t hurt.
Comment by Bob — June 26, 2014 @ 8:49 am
Jon
any idea when or if GGI will start a drill program in the Shesley this year,I know they have mentioned they would, but they have been very quiet re: the Shesley… or do you think their focus is on the mexico properties for the rest of the year?
thanks
Comment by Greg — June 26, 2014 @ 9:03 am
Greg, GGI was quite specific about its plans for the Grizzly in its news back in March, and this is a company that does what it says it’s going to do, and delivers. I’m not surprised they’ve been quiet about the Grizzly in recent weeks given the discovery in Mexico and the temporary chill that DBV gave investors, but behind the scenes I’m sure they are working vigorously toward the drilling stage. They have an enormous amount of prospective ground to cover in terms of deciding where to sink the drill bit. The Sheslay district is going to be huge over the summer and GGI is going to play a major role in that, IMHO. In fact, I believe GGI’s chances for a discovery are very significant – look at their track record in terms of drill holes and hits down in Mexico. This group knows what it’s doing. I’m personally thinking very big on GGI, and that means better than $1 a share.
Comment by Jon - BMR — June 26, 2014 @ 10:35 am
Thanks Jon
just impatient, what is the latest weather wise they could drill up there?
thanks
Comment by Greg — June 26, 2014 @ 10:54 am
You can drill year-round in the Sheslay district if you wish, Greg, with a proper winter set-up (unlike some other areas like Stewart). But normally, drilling up to mid-October is no problem. DBV was drilling into mid-November last year without a proper winter camp.
Comment by Jon - BMR — June 26, 2014 @ 11:24 am
Jon,
Don’t you think they should have already have the results of hole 2 in Mexico?
Comment by Tran — June 26, 2014 @ 12:15 pm
I’m thinking GGI must be very close, Tran, in terms of more results from Silver Eagle, and I have a hunch based on what they last reported that they are on to a discovery there – and that’s just one of 8 targets, I might add. Between Rodadero, La Patilla, Iris, Tonichi, and of course the Grizzly and other B.C. properties, all of that is going to drive GGI thru the roof these next couple of months IMHO. The fundamentals are speaking to that, and so is the chart.
Comment by Jon - BMR — June 26, 2014 @ 12:31 pm
Thanks Jon. I am with you on this one!!!
Comment by Tran — June 26, 2014 @ 12:47 pm
Jon said : Jeremy, the fact the Venture has been “taking its time” coming off the breakout above the downtrend line in October makes the bullish case that much stronger IMHO…incredible support has been built into this market, and this kind of gradual advance is typical of what one would expect to see prior to a very accelerated move which I’m certain we’ll see during Q3…if you look closely at John’s 3-year weekly chart this morning, which has been so accurate over these last 9 months, I think what we’re moving toward (as the summer progresses) is extreme overbought conditions…RSI(14) is far from overbought at current levels, lots of room for this to head much higher…that’s the trend…and when the Index is in those overbought conditions, you don’t want to jumping on the bandwagon at that point – you want to be selling into that kind of intense buying pressure…September might be a good time for that…right now, continued accumulation is what makes sense…the bulls have wrestled control from the bears, there’s no question about that, and Gold has bottomed as well…
Jeremy said: thank you for your wisdom… you used the word expect… which most of us lowly peons are aware of expectations other than go higher please:)
a 2 year basing pattern, sentiment at the lowest level on record, and many companies in the revesre split dumper one ‘expects’ a turn-around sometime. we are hoping for a takeoff much stronger than that of July 2009 yes?? managing expectations is the hardest thing ever…
thank you for helping me manage mine!!
Comment by Jeremy — June 27, 2014 @ 2:04 am