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February 2, 2015

BMR Morning Market Musings…

Gold has traded between $1,265 and $1,282 so far today…as of 7:00 am Pacific, bullion is down $12 an ounce at $1,271…Silver is off 2 at $17.21…Copper is up 3 pennies at $2.53…Crude Oil has added 68 cents to $48.92 while the U.S. Dollar Index is off one-tenth of a point at 94.58

Gold locked in its biggest monthly gain in 3 years with Friday’s $25 advance after U.S. government data showed the economy expanded at a slower pace than forecast in the 4th quarter…bullion jumped $100 an ounce or 8.5% in January, its best 1-month performance since January 2012

Gold in Canadian dollars is now over $1,600 an ounce with a long-term chart (see below) that suggests the metal is in the grips of an explosive new phase that may take prices to record highs in loonie terms over the next 1-2 years…this is why we see such huge opportunities in Canadian producers and near-producers especially…

Assets in exchange-traded Gold products reached their highest level since October late last week…through Thursday, investors had added 65.6 metric tonnes so far this month, the most since September 2012

Mineweb’s Lawrence Williams reported this morning that the latest withdrawals from the Shanghai Gold Exchange (70.62 tonnes for the week ending January 23, even larger than the previous week’s 70.00 tonnes which was until now the 3rd highest weekly figure ever) indicates “massive internal demand” leading up to this year’s Chinese New Year February 19

Gold demand out of Greece is 10 times the average number since the election of the far-left Syriza Party on January 25, according to London-based Gold dealer Coin Invest…

Speaking of Greece, its energy minister announced on Friday that the new government (not surprisingly) is opposed to a Canadian mine that is one of the biggest foreign investment projects in the country…Eldorado Gold’s (ELD, TSX) high-grade Skouries Gold-Copper porphyry deposit in northern Greece is slated to commence production in 2016 with the initial phase consisting of a small open-pit operation (followed by underground)…Skouries was the flagship project of the previous government’s foreign investment drive and was considered a test case that would reveal whether Greece could protect foreign investors despite local opposition…

Speculation is high that the Reserve Bank of Australia (RBA) will be the next central bank to ease monetary policy at its meeting this week following a month of surprise policy changes across the globe…last week, Singapore joined a long list of central banks that are trying to encourage higher inflation and stronger economic growth by loosening monetary policy and depreciating their currency…

Today’s Equity Markets

Asia

China’s Shanghai Composite tumbled 81 points or 2.5% overnight following the release of weaker-than-expected economic data…China’s factory sector unexpectedly shrank for the first time in nearly 2-1/2 years in January and firms see more gloom ahead, raising expectations that policymakers will take more action to forestall a sharper slowdown…

Europe

European markets are mostly modestly higher in late trading overseas…final January manufacturing PMI data for the euro zone came out this morning…it showed factor activity grew slightly last month and the figure of 51.0 was in line with a previous estimate…

North America

The Dow is off 60 points as of 7:00 am Pacific after Friday’s 250-point plunge…U.S. consumer spending recorded its biggest decline since late 2009 in December, with households appearing to save the extra cash from cheaper gasoline…

Yesterday’s bizarre finish to the Super Bowl, with the Patriots prevailing over the Seahawks, may weak a weaker S&P 500 this year according to 49 years of Super Bowl history…on the 26 occasions when an NFC team has won, the S&P 500 went on to record an average gain of 11.1% in each of those years…when an AFC team won, prior to yesterday, the Index’s average yearly gain over 22 years was only 5.1%…

In Toronto, the TSX is up 113 points while the Venture is 2 points higher at 679 as it once again flirts with 680 resistance…that’s a key level the Venture needs to overcome in order to gain fresh upside momentum…

Cannabix Technologies Inc. (BLO, CSE) Update

Cannabix Technologies (BLO, TSX-V), which is developing a feature rich, durable, hand-held marijuana breathalyzer device for law enforcement and the workplace, provided an update on its activities this morning…the company stated that its prototype is proceeding as planned with the mechanical design, circuit board layouts, firmware and printed circuit board designs all nearing completion…

“We expect our prototype to be complete in the coming weeks and we’ll be sharing news about testing,” stated Kal Malhi, President of Cannabix.   “Our team is working hard to deliver a prototype for trial testing as quickly as possible.”

BLO is up a penny at 18 cents as of 7:00 am Pacific

Gold In Canadian Dollars – En Route to $1,900? 

Below is a fascinating chart showing Gold in Canadian dollars and how a bullish new phase actually began in the spring of 2013 when the metal hit a low of $1,242 CDN…since then, bullion has climbed 31.6% to $1,635 CDN with RSI(14) now showing powerful up momentum at 62%…chart resistance is at $1,880

Interestingly, a convincing and bullish +DI/-DI crossover has also occurred in this long-term CDN dollar Gold chart for the first time since 1999

Quite simply, expressed in Canadian dollars, Gold is in the grips of an explosive bull market that could lead to significantly higher prices as the year progresses…this is why Canadian Gold producers and near-producers are really starting to take off and could still see some spectacular gains over the next 12 months…

GOLDCAD

New Gold Inc. (NGD, TSX) Update

New Gold (NGD, TSX), which has some of the lowest all-in-sustaining costs in the industry, is inching closer to a potentially major technical breakout above resistance at $6 as you can see in the 1-year daily chart below…

Notice how a symmetrical triangle has formed in the RSI(14) which has been trending higher since it formed a bullish “W” in early November…”decision time” is drawing near, and the odds favor an RSI(14) breakout as opposed to a breakdown…

NGD has been climbing within an upsloping channel since November, and is also approaching a downtrend line near $6 which is also Fib. resistance…

Last Thursday, New Gold announced that it has received the key environmental approvals for its Rainy River Project in Ontario…preliminary development work at the site will commence in the coming weeks…the company will be holding a webcast and conference call to discuss its fourth quarter and full-year 2014 operational results, as well as 2015 guidance, this coming Thursday (Feb. 5) beginning at 7:00 a.m. Pacific…

NGD is off 18 cents at $5.39 as of 7:00 am Pacific

NGD1(2)

Copper Updated Chart

This 13-year Copper chart shows how the metal, like the Venture, has been under pressure since peaking in early 2011…the good news is, unless the very worst-case scenario unfolds in the global economy, ordinary trading would strongly suggest that Copper will not fall below $2.25 a pound as that’s where its long-term uptrend line currently intersects…overall, a powerful band of support exists between $2.25 and $2.50…RSI(14), currently at previous support, is trying to find a bottom along with the price…

COPPER4(1)

Silver Short-Term Chart

Silver in December finally staged a definitive breakout above a downtrend line that was in place since the summer on this 9-month daily chart (note how the downtrend line became new support in early December)…

The December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support was demonstrated around $15

The metal climbed as high as $18.50 in January, just a few pennies of the the Fib. 50% resistance level…while doing so, RSI(14) edged into overbought territory but has since unwound to 51%…

Chart support exists around $17 and in the $15.60’s

SILVER14

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be in the very early stages of a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…the reasons for such a move are also not clear…for now, Silver is going along for the ride with Gold

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15

One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet – though that doesn’t necessarily mean that the price can’t still trend higher…

SILVER15

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

11 Comments

  1. DBV opened strong today…not necessarily indicative of how the day will turn out, but certainly leads one to wonder if it has something to do with the pending results from H-23.

    Comment by Steve A. — February 2, 2015 @ 7:06 am

  2. Visuals looked great, and even better going to depth as DBV last reported. Based on that, I’m expecting very good results.

    Comment by Jon - BMR — February 2, 2015 @ 7:12 am

  3. Thanks for the NGD chart! Looks very promising!

    Comment by Cam — February 2, 2015 @ 7:18 am

  4. Looking really good, and I think that’s a clue as to what Gold is gearing up for.

    Comment by Jon - BMR — February 2, 2015 @ 7:43 am

  5. Jon
    When you visit the Granada site (GBB), I
    hope you do an interview with Frank, as I
    found those you did previously with him,
    quite informative.

    Comment by Bob — February 2, 2015 @ 10:48 am

  6. National Bank is a relentless seller on GBB over the past 4 days. How many shares do they have and WHY are they selling?

    Comment by dave — February 2, 2015 @ 2:59 pm

  7. Jon, I am pretty confident given there hasn’t been anything reported from your site visit more than 3 weeks ago, that it was Rodadero. Why? Because GGI has been very quiet as well with no news. Clearly something significant has happened with GGI, whether it is some sort of corporate development, something on the ground at Rodadero, or both. The lack of news and redirection of funds to Grizzly was a dead give away that something changed at Rodadero. What is it? Hopefully we will find out soon.

    Comment by Dan — February 2, 2015 @ 5:00 pm

  8. Hi Dave, National Bank is related to the flow-thru PP last fall. It’s not unusual to see flow-through come back into the open market, no matter what the circumstances, as the brokers will then simply ride the warrants. That’s the nature of the beast – with the tax advantages, they’re actually making a tiny profit here I suspect at 0.045 to .05. That’s why this has been the best time to accumulate GBB – while there is supply available, otherwise you run the risk of chasing this at higher prices, perhaps as early as next week. I prefer a bargain now at .045 to 5. Our math shows that National Bank will likely be out of this paper this week, at the current rate. So their selling has nothing to do with GBB’s prospects or where it’s headed, near-term or longer-term. This stock is going higher, IMHO, and very soon, especially when National Bank’s selling has dried up. That’s all that’s holding it back right now.

    Comment by Jon - BMR — February 2, 2015 @ 6:35 pm

  9. I think that this month just has to be the start of action on the tsx. For example, Dans thoughts on GGI just might be bang on or very close to reality. the lack of much waited for mid December assays, the PP for the sheslay, Jons visit to a site( I thought at first GBB and others in Quebec).Then dead silence all around. DBV probably doing a PP with hopefully greatindications coming forth. PGX slowly crawling up, the promoters dream stocks, now, low number of shares outstanding with properties right in the shelay mix, pennies from heaven people. BLO moving along nicely, waiting for the exchange to lift the stupid halt on naturally splendid enterprises, another potential big winner. Just some food for thought. Richard l

    Comment by richard l — February 2, 2015 @ 8:28 pm

  10. good morning bmr boys. again I bring to your attention heron resoures (HER TXH) most recent press release mon feb 2 2015 “WOODLAND DRILLING UPDATE-FURTHER SHALLOW HIGH-GRADE RESULTS” regards walter emond

    Comment by walter emond — February 3, 2015 @ 1:30 am

  11. Technical breakout for the Venture…details ahead.

    Comment by Jon - BMR — February 3, 2015 @ 7:22 am

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