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Gold has traded between $1,212 and $1,228 (3-month high) so far today after yesterday’s strong move…as of 9:00 am Pacific, bullion is up another $8 an ounce at $1,223…Silver has climbed 29 cents to $17.38 (see updated Gold and Silver charts below)…Copper is off 2 pennies to $2.90…Crude Oil is down nearly $1 a barrel to $59.63 while the U.S. Dollar Index almost touched 93 this morning, its lowest level since the launch of euro zone quantitative easing in January as concerns mount that the U.S. economy has not just been suffering from a winter chill…the Dollar Index is rebounding modestly and is now off just one-tenth of a point at 93.60…

As John’s charts have been pointing out since late March, the Dollar Index is clearly in a corrective phase that could easily take it down into the upper 80’s…this helps explain why we’re seeing a shift into commodities, which of course bodes well for a Venture breakout above 707…

Bullion is also benefiting from government bond market jitters given the wave of turmoil that has swept through these markets across the world…it’s estimated that investors are nursing approximately half a trillion dollars in paper losses in 2 weeks in what has been one of the most dramatic bond market moves in recent years…rising yields can be a healthy development if the global economy is picking up speed…it’s a different matter, however, if they suddenly jump at a time of sluggish growth and disappointing U.S. figures…

The S&P GSCI index, which tracks the prices of 2 dozen commodities, is near its highest level since December, as raw materials such as Crude Oil, Copper and sugar have bounced from multi-year lows…Copper is up 14% from its March bottom…the rebound in assets such as the euro, Oil and other commodities began after a spate of weak U.S. data made it appear increasingly unlikely that the Federal Reserve would raise rates in June (in fact, will the Fed raise rates at all in 2015?)…this has reduced the appeal of the dollar as an option for investors seeking assets with a respectable yield…with the dollar expected to languish, perhaps for several more months, many traders have been shifting into assets that had been flattened by the dollar’s record run from last summer to March…

Updated Gold Chart

Gold has broken out above resistance at $1,200 and the next key area is the $1,220’s which it’s trying to fight through now…what’s becoming increasingly apparent is that bullion could be in the process of taking another run toward the top of the downsloping flag formation that it has been trapped in for the past 2 years…the top of that channel is currently around $1,275 as you can see below…RSI(14), 51% entering today on our 2.5-year weekly chart, may also test resistance at the 60% level…

Keep in mind, as we pointed out Tuesday, Gold has posted 3 straight months of losses, the longest slump since December 2013, but bullion took off to the upside after that previous 3-month slide and quickly shot up by about 15%…contrarians will also point to last Friday’s largest drop of the year in reserves in the SPDR Gold Trust, the world’s biggest Gold-backed ETF, as a bullish sign…the bears are being put on the defensive and short-covering could intensify this move…

Updated Silver Chart

Silver will confirm a breakout today above a downtrend line as shown in this 9-month daily chart…next Fib. resistance is just below $18, and momentum is in Silver’s favor to test that level in the near future…

How Governments Can Destroy Wealth

Ecuador’s socialist President, Rafael Correa, said yesterday he was not planning any additional overhaul of the country’s mining laws, disappointing investors who have been pushing for lower taxes…the government has introduced a series of reforms since 2009, but foreign Gold, Silver and Copper mining companies say heavy taxation works against Ecuador’s aim of attracting $5 billion worth of mining investment over the next 5 years…

“If to render mining investment attractive I have to give away the country’s natural resources, go look for another country,” Correa stated yesterday…

Well, that’s exactly what many companies and investors have done and will continue to do…

Meanwhile, over in Alberta(stan), the newly-elected NDP isn’t backing away from its election pledge to review the province’s energy royalty structure…this is spooking the industry…Premier-designate Rachel Notley said Tuesday the royalty review will go ahead in this term of the incoming NDP government, though the exact timing is uncertain…the review is intended to determine whether Albertans, as owners of the resources, are receiving an “appropriate share” of the benefits from Oil and natural gas…the first sentence of the NDP platform criticized the PC’s for “refusing to implement realistic Oil royalties that the people who own the resources – all of us – deserve…the people of Alberta as a whole are deprived of much of the benefit of our own resources.”

Really?…that’s very strange…how can that possibly be when Alberta has been the engine of economic growth across the nation since the Ralph Klein days with no debt, no provincial sales tax, and extremely low unemployment rates? (despite the fact the PC’s in recent years strayed off course in many ways)…

Whenever governments (typically socialist ones) start talking in terms of “our people are being deprived of much of the benefit of our own resources”, it’s almost always a recipe for disaster…one company in Alberta is already publicly threatening to invest elsewhere (Saskatchewan or B.C.) because of the NDP’s upcoming review, and many more are sure to follow…unfortunately, the NDP mindset in Alberta is the same as NDP thinking elsewhere in Canada, historically and presently…Notley’s incoming band of union leaders, environmentalists, “community organizers”, students, social workers, teachers and yoga instructors are not focused on the creation of wealth, but the redistribution of it and a major expansion of government – an approach that ultimately destroys wealth…Albertans should brace for tough times ahead with this group at the helm of a province blessed with 173 billion barrels of Oil…human and investment capital are guaranteed to flow to more attractive jurisdictions…

Today’s Equity Markets

Asia

China’s Shanghai Composite was relatively unchanged overnight, closing at 4379, while Japan’s Nikkei fell 1% to 19570…

Europe

European markets were up significantly today…

North America

The Dow has climbed within less than 90 points of a new all-time high…it’s up 155 points as of 9:00 am Pacific…a gauge of U.S. business prices fell in April, the latest sign of persistently low inflation across the economy…the PPI for final demand, which measures prices that businesses receive for their goods and services, decreased a seasonally adjusted 0.4% last month from March, the Labor Department said today…core prices, which exclude volatile food and energy categories, fell 0.2%…when excluding food, energy and trade services, the index rose 0.1%…economists surveyed by The Wall Street Journal had expected both overall and core prices would increase 0.1%…

In Toronto, the TSX is up 30 points while the Venture has edged 3 points higher to 696…

Gold Standard Ventures (GSV, TSX-V) Update

Gold Standard Ventures (GSV, TSX-V) has a big drill program lined up and also just announced a $16 million financing with OceanaGold Corp (OGC, TSX), expected to close by the end of next week…this will give GSV just under $20 million in working capital, a large war chest to rapidly advance and derisk its Railroad-Pinion Project in Nevada…OGC is subscribing for 25 million units of GSV at 65 cents per unit which will give it approximately 14.9% ownership of GSV on an undiluted basis…

Technically, GSV has broken out above resistance at 60 cents and appears poised to finally claw its way above a downsloping channel in place since 2013 on this 2.5-year weekly chart…accumulation in GSV since February has been impressive as indicated by the CMF…

GSV is up 3 pennies at 69 cents as of 9:00 am Pacific…

Integra Gold Corp. (ICG, TSX-V) Update

Integra Gold Corp. (ICG, TSX-V) continues to make significant progress with its high-grade Lamaque Gold Project in Val-d’Or…the pace of activity is impressive…since the beginning of the year, Integra has completed 44,500 m of diamond drilling in 99 holes with up to 8 drill rigs operating on several key targets…of this drilling, approximately 11,668 m in 21 holes has been completed at the Triangle deposit where 5 rigs are active…more results from Triangle were released recently and included 14.32 g/t Au over 4.5 m (TM-15–7) in the T-10/C4 zone, approximately 190 m west of the closest previous intersection…the company has expanded its 2015 drilling plans from 50,000 m to 75,000 m…

ICG was able to hold critical base support (15 to 17 cents) late last year when markets were getting pulverized, and support is currently strong in the low-to-mid-20’s which includes a Fib. level (24 cents) and the rising 200-day SMA (25 cents)…keep in mind, stock from a late December flow-through financing became free-trading at the beginning of May…as long as volume and buy pressure remain strong, soaking up loose paper from that PP shouldn’t be a major problem but that is still a process…

ICG is off half a penny at 27 cents as of 9:00 am Pacific…

Doubleview Capital Corp. (DBV, TSX-V) Update 

As Doubleview Capital (DBV, TSX-V) gets set to resume drilling at the Hat Project in the Sheslay district, the stock’s technical posture has improved dramatically since the middle of April with a confirmed breakout above a downsloping flag and resistance at 15 cents (now support)…the 200-day SMA, currently at 15 cents, is also reversing higher, a sign that a major trend change is in its early stages…strength in Gold and Copper can only help DBV and other juniors working on promising discoveries…

DBV is off 2 pennies at 15.5 cents as of 9:00 am Pacific…

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