Precious metals are soft again this morning (everyone will be happy to get January out of the way) but the TSX Gold Index is slightly higher and the CDNX is also stronger…a turnaround in Gold appears to be close at hand based on numerous indicators…as of 8:45 am Pacific, the yellow metal is off $6 an ounce at $1,327 while Silver has declined 11 cents to $26.70…the U.S. Dollar index is essentially unchanged at 77.91…the Dow topped 12,000 this morning for the first time since 2008…the CDNX is 13 points higher at 2216 after yesterday’s nearly 50-point plunge to support at 2200…the U.S. budget deficit will hit 1.5 trillion in 2011, according to the Congressional Budget Office’s report this morning…in its economic outlook, the CBO predicts the U.S. economy will grow by 3.1% this year while unemployment will remain stubbornly high (above 9%)…Federal Reserve officials are wrapping up their two-day meeting…in a statement due at 11.15 am Pacific, they are expected to announce they will press on with their program to buy $600 billion in Treasury securities…the market of course will be paying close attention to the language in the Fed statement…there are many excellent opportunities in the group of companies we follow most closely at BMR, but one of the best near-term and longer-term situations is unquestionably GoldQuest Mining (GQC, TSX-V) which has been a market out-performer this month…technically, the stock is looking very strong with excellent support in the upper 30’s…a recent reversal in the 20-day moving average (SMA) is one of several bullish technical indicators with GQC…the fundamentals are impressive to say the least as this is a company with growing precious and base metal resources in the mineralization-rich Dominican Republic, and a zinc-lead-silver deposit in Spain…with Bill Fisher now Chairman of GoldQuest, we see an increased likelihood of a possible takeover of GoldQuest down the road as the company continues to develop its assets…GQC is currently off 3 cents at 39 cents…embracing any weakness in GQC recently has been a successful strategy…Richfield Ventures (RVC, TSX-V) reported more excellent drill results yesterday from its Blackwater Gold Project in central British Columbia…RVC is quieter this morning, up 2 pennies at $4.02…Richfield has more than tripled since we introduced it to BMR readers just over a year ago…Gold Bullion Development (GBB, TSX-V) has been trading between 74 and 77 cents this morning as it continues to hold up well during this turbulent market period…Cadillac Mining (CQX, TSX-V) is unchanged at 31 cents…we don’t often mention TSX companies but one silver play we have followed and continue to like is Great Panther Silver (GPR, TSX)…we brought GPR to the attention of our readers in November prior to a major upside move…there are few pure silver producers in the market but Great Panther is one of them…the weakness in silver recently has knocked more than $1 off the GPR share price which hit a high of $2.90 last month…yesterday, GPR traded as low as $1.79, just above its rising 100-day moving average (SMA) where there is strong support…this is definitely a company to keep an eye on with significantly expanding silver production out of its operations in Mexico…GPR is currently unchanged at $1.85…the extent of the weakness in Kent Exploration (KEX, TSX-V) this morning is a mystery, so we can only view it as a sale to take advantage of…Kent is off 3 cents at 13 cents…we find Kent very attractive at these levels where there is plenty of technical support…the primary trend with Kent is up as confirmed by its rising 50 and 100-day moving averages…shareholders in Kent through yesterday receive one share of the spin-off company Archean Star Resources for every four shares of Kent held…Kent will hold a significant percentage of Archean Star, allowing Kent shareholders to still participate in the development of the Gnaweeda Gold Project in Western Australia which Archean will hold…
January 26, 2011
15 Comments
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KEX went ex-dividend today with A-Star now out of the way.. most stayed in KEX to get the date of record, then dump.. I respectfully submit!!:)
Comment by Jeremy — January 26, 2011 @ 10:20 am
That’s part of it, Jeremy…I also understand there was some institutional selling this morning to exercise 15-cent warrants…regardless, investors shouldn’t forget two things…#1, Kent’s chart is looking a lot better than it did a few months ago…and #2, Kent will hold a substantial interest in Archean…..so it’s not like Kent shareholders (without Archean stock) will not participate in the development of Gnaweeda now that that asset is being spun out….
Comment by Jon - BMR — January 26, 2011 @ 11:32 am
I am wondering if it’s not time to get out of gold stocks. I see a scenario like Uranium stocks in 2006-2007 where many ventur stock where trading over 1.50 and finish the year under 10 cents. There are to many conflictings reports on where the price of gold will end up. Some analyst have it back to under 1000 $ and some see it over 1500 $ .
Comment by Andre — January 26, 2011 @ 11:50 am
Andre, sorry——–read the signs…….the weakness we have seen the last few weeks has presented an incredible opportunity to LOAD UP on gold stocks at more favorable prices…the CDNX continues to confirm that we are in the midst of an incredible bull market…..and I believe the bottom of this recent downtrend was achieved yesterday. The CDNX is the LEADING INDICATOR of the future of Gold prices, that is what you need to follow. That is what has allowed our readers to make a bundle of money over the last year+. The line in the sand on Gold was $1,300. It got as low as about $1,320.
Comment by Jon - BMR — January 26, 2011 @ 12:15 pm
Thx Jon… things are making sense and the other point to make ia the CDNX bounced off 2200…. and roared ahead today… are we out of the woods tho????
Comment by Jeremy — January 26, 2011 @ 1:15 pm
Starting to look like a very good call on the bottom Jon. You got it almost to the day on the July 2010 pullback so this could be 2 in a row. You guys have a great insight into how the CDNX works and this looks a very safe area to add to some positions.
Comment by Patrick — January 26, 2011 @ 1:48 pm
HI
I appreciate all the knowledge and advise you so generously share. Most of your picks have stood up very well through this time of consolidation. I am concerned about Sidon. It has not held up well and appears to be breaking down. I would appreciate any insights you can share.
Thanks for all you patient explanations and honest expertise.
Andrea
Comment by Andrea — January 26, 2011 @ 2:07 pm
Budget deficit to hit $1.48 trillion,
WASHINGTON | Wed Jan 26, 2011 4:01pm EST
WASHINGTON (Reuters) – The U.S. budget deficit this year will jump nearly 40 percent over prior forecasts, mostly due to the mammoth tax-cut package brokered by President Barack Obama and lawmakers last month, the Congressional Budget Office said on Wednesday.
The CBO said the fiscal 2011 deficit will hit $1.48 trillion, up from last August’s $1.07 trillion estimate, which was crafted before Bush-era tax rates were extended at a cost of $858 billion over 10 years.
The CBO “estimates that the act (renewing tax cuts) will increase the deficit by $390 billion in 2011, by $407 billion in 2012 and by $120 billion in 2013,” according to the report.
While a deficit of nearly $1.5 trillion in the fiscal year that ends September 30 would be an all-time record in dollar terms, as a percentage of the overall economy it would be slightly below the $1.41 trillion deficit in the 2009 fiscal year.
The $1.48 trillion deficit, CBO said, would be about 9.8 percent of GDP, higher than the 8.9 percent of GDP in 2010.
Comment by Forb — January 26, 2011 @ 2:27 pm
When golds turns up again and the bullride continues, will CQX recover and continue it’s pattern or will we need some news from them to validate a higher Mcap than $10-15M? And do you know if they will start drilling on their wasamac property first or their new landpackage? Or maybe both at same time? Anyways, thanks again for your great work with these juniors(!)
Comment by J.C. — January 26, 2011 @ 2:47 pm
I’ll get John to offer his comments on this as well, but I don’t think Sidon is doing anything different than it did back in October and November – just prior to a major upside move….you’ll notice that back then, SD dipped below its 100-day SMA but held above support at its 200-day SMA. This time should be no different. The stock is currently oversold based on Stochastics and RSI, so I would say 13.5 is very close to a bottom. The primary trend remains up with the long-term moving averages continuing to rise. Sidon has been volatile – 5 cents to 18 cents, 18 cents to 9 cents, 9 cents to 26.5 cents, 26.5 cents to 16.5 cents, 16.5 cents to 23.5 cents, 23.5 cents to 13 cents, 13 cents to ???????
Comment by Jon - BMR — January 26, 2011 @ 3:26 pm
Hi Jon
You guys have been doing a wondeful job, just wondering when your interview with Frank Basa might be. I’ve heard assay results are still a month away will your interview be at the end of Feb. after results or sooner. Thanks
Comment by Derrick — January 26, 2011 @ 4:53 pm
Thanks, Derrick….the way I see it, there’s no sense interviewing Frank until more hard news (results) comes out. So the timing of our interview will depend on when GBB comes out with more results. Last Friday’s news suggests we’ll see something within a week or two I would say. We’ll definitely be interviewing Frank and he has agreed to an interview.
Comment by Jon — January 26, 2011 @ 5:18 pm
Thank you Jon I hope we see results before the end of Feb. as well.
Comment by Derrick — January 26, 2011 @ 5:30 pm
Thank you for the response to my concerns with Sidon. It is so volatile I find it unnerving at times… but we will hope for good results.. sooner than later!!!
I appreciate your insights.
Andrea
Comment by andrea — January 26, 2011 @ 6:09 pm
Thank you, Andrea, you’re welcome. Quite often the best way to approach volatile stocks like Sidon (and most of these stocks are quite volatile) is to have both a core position and a trading position, if you’re comfortable with trading on a frequent basis. Not everyone has the time or the stomach for that, of course, but it is an effective strategy. The profits you make in trading can in effect give you a zero cost core position.
Comment by Jon - BMR — January 26, 2011 @ 7:12 pm