Gold has hit another new all-time high of $1,484.50…as of 8:00 am Pacific, the yellow metal is up $6 an ounce at $1,482…Silver has hit a fresh 31-year high and is currently up 50 cents at $42.68…crude oil is 34 cents higher at $108.45 while the battered U.S. Dollar Index has jumped one quarter of a point to 74.92…as John outlined in his chart last night, critical support for the Dollar Index is at 74…plenty of economic numbers for investors to chew on this morning…U.S. consumer sentiment (preliminary April reading) rose more than expected as worries about the impact of higher oil prices on economic growth eased slightly…meanwhile, the U.S. consumer price index for March rose 0.5%, in line with February’s gain, while core CPI rose 0.1% (less than expectations) after gaining 0.2% the month before…Fed officials will look at the core CPI number and argue that underlying inflation remains subdued…it’s a different story in China where that country’s turbo-charged growth eased only slightly in the first quarter while inflation jumped to a 32-month high, putting pressure on the government to do more to rein in prices and keep the economy on an even keel…China’s gross domestic product increased by an annual rate of 9.7% in the first quarter, down from 9.8% in the final three months of 2010 but ahead of an expected 9.5% pace…inflation in China, meanwhile, jumped to 5.4% in March, topping market forecasts for a 5.2% increase…more increases in reserve requirements and interest rates can be expected in China as that country deals aggressively with the inflation threat…after all that chest-thumping by some U.S. political leaders a week ago over the budget deal and an “historic” cut to the deficit, a Congressional Budget Office reports shows the package only saves a paltry $352 million from non-war accounts this year – compared with the $38.5 billion in cuts that were claimed…the CBO study confirms the measure trims more than $38 billion in new spending authority relative to current levels, but many of the cuts come in slow-spending accounts like water-and-sewer grants that don’t have an immediate deficit impact…other cuts come in areas where the government was unlikely to spend the money anyway, the CBO suggested…the bottom line is that President Obama and many American politicians have simply not come to grips with the deficit and debt issues and aren’t prepared yet to make the really difficult choices necessary to effectively address the problem…the ensuing battle over the debt ceiling and the 2012 budget will be fascinating to watch…Gold is going higher as a result of the financial mess the U.S. is in…the CDNX is unchanged at 2301 after dropping as low as 2295…an intra-day reversal appears to be in the works today but it has been a disappointing week for the CDNX which has been down each day and has given up all the gains it made (91 points or 4%) last week…this highly speculative market can be very unpredictable at times…however the CDNX has strong technical support at 2280 which is also just above the rising 100-day moving average (SMA)…in a market such as this, a takeover or some spectacular drill results (not to mention a big move in Gold) could very quickly produce a wave of buying…it’s encouraging to see that Everton Resources (EVR, TSX-V) seems to have finally overcome the 40-cent resistance area…EVR got as high as 45 cents this morning and is currently up half a penny at 42 cents…the other company in the Dominican Republic we remain very excited about is GoldQuest Mining (GQC, TSX-V)…initial drill results are pending from its La Escandalosa Property…GQC has been hovering in the low 30’s, a strong support area, over the past couple of weeks…while this has not been a great week for the overall market, the weakness in Visible Gold Mines (VGD, TSX-V) has been a mystery…VGD is off another penny-and-half this morning at 36 cents and is clearly oversold…buying solid companies on weakness is always a recipe for making money…we know we have identified a winner in VGD which is emerging as one of the most aggressive explorers along the Cadillac Trend and elsewhere in northwest Quebec…it’s not often a Venture Exchange company gets a buy recommendation on CNBC but that’s what happened yesterday with Spanish Mountain Gold (SPA, TSX-V) which enjoyed one of its best volume days ever (3.1 million on the CDNX)…SPA is developing a multi-million ounce deposit in the Caribou of B.C. which is a high tonnage, low-grade system and a favorite as well of investment guru Jim Slater who we interviewed last year…not only are the fundamentals interesting with this situation, but a very bullish technical picture has suddenly emerged with a reversal in both the 50 and 100-day moving averages…good things appear to be on the horizon for Spanish Mountain…the stock is currently off a penny at 67 cents…Gold Canyon Resources (GCU, TSX-V) is recovering after yesterday’s “sell on news” reaction…GCU is up 8 cents to $3.50…the company delivered more stellar drill results yesterday from its Springpole Property in Ontario…deeper drilling has now commenced and results are still pending for 10 more holes from the winter program…
April 15, 2011
16 Comments
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Hi Jon
What are the chances of getting Roodenburg back for another interview?
Thanks Herb
Comment by Herb — April 15, 2011 @ 7:06 am
John,
Just wondering from a technical standpoint, if the CDNX falls through the support @ 2280 how far could it fall? Are we in the clear as far a a major correction happening in your opinion? There are still many reports I’ve read who believe that even though the gold bull market is going strong that the CDNX is due for a major correction regardless of the gold strength. Do you believe that to be true? Can this market continue to go straight up with only minor corrections?
Thanks for your time
Aaron
Comment by Aaron — April 15, 2011 @ 7:14 am
Hello Jon, What did you think of Manitou’s (MTU) assay reports this morning? The market has not reacted do you think it is attractive at it’s current price of .60? Thanks
Comment by Andrew — April 15, 2011 @ 7:36 am
Hi BMR,
please can somebody tell me what is happening with Abcourt? It’s actually one of your top picks that actually have proven resources. Please help me understand why the marker reacting this way.
Comment by Peyman — April 15, 2011 @ 7:46 am
Hello Peyman (Peter?), Jon may have a different take on ABI but if you look at the shareholders/insiders you’ll get some insight, also look at the insider selling. Until the culprit has reduced their insider status it is likely to continue trading in high teens to low 20s. I no longer hold ABI but if I do find myself with a stock that has heavy insider selling I try to match the pattern and then it may be possible to bounce back and forth between 5 – 10% gains – a pain but if you feel the stock has promise at least it’s earning for you while you wait for it to break out of restraint.
Comment by Andrew — April 15, 2011 @ 8:07 am
Can’t disagree with Andrew in terms of that dynamic at play at the moment with ABI……our view with ABI is more “big picture” and longer-term oriented….a company with the assets ABI has will eventually succeed in a big way….and those assets help underpin the value, so the downside risk is very limited….traders can play these moves between 16-17 cents and the low 20’s….we’d like to see ABI change its focus to strictly being an “exploration play” which strategically I believe would lift ABI out of the trading range it has been in….
Comment by Jon - BMR — April 15, 2011 @ 8:13 am
I wouldn’t describe the correction in March as “minor” – that was an 18% pullback over a 7-day period….I was of the opinion at the time, and so was John, that the risk of a three-wave correction was quite significant, but as you know the market kept strengthening…the push thru 2330 was a buy signal and the Index ran up as high as 2400 (a 350 point gain from the March low) Monday morning of this week…historically with the CDNX, that type of a sharp sell-off over such a brief period – if it’s not followed soon after by a three-wave correction – is usually followed by a powerful advance that is typically be 30% or more…so at this point I’m of the opinion that a major break to the downside in this market over the near term is not in the cards…perhaps later this year we could be looking at a more normal 25% to 35% correction over a longer period…..as long as the Fed keeps doing what it’s doing, I think commodities will be strong and the overall markets will stay strong…the CDNX long-term moving averages continue to rise so that’s very positive from a technical standpoint….it’s hard to ever be “in the clear” for a major correction but I think the trading activity of the past month negates the 3-wave correction fear…postponing another major fall until sometime later in the year or early next year……right now, 2050 in mid-March looks like an important low (bottom)….
Comment by Jon - BMR — April 15, 2011 @ 8:28 am
That’s a good suggestion…..I will make some inquiries about that….
Comment by Jon - BMR — April 15, 2011 @ 8:29 am
Interesting results….I think if you’re going to invest in Manitou, you have to approach that with a longer term view……it’s not a situation I would attempt to trade…..it appears they’re closing in on some ore shoots based on this morning’s results…….I really do like their property package – I have right from day one when this started trading last spring – and with the money they have (more than $10 million), they have a great opportunity to make a major discovery at some point….the only question is when……….one of those stocks that if you buy, you simply tuck away…..not without risk of course but the long-term odds are pretty decent with this one IMHO….
Comment by Jon - BMR — April 15, 2011 @ 8:36 am
Great idea having Tony Roodenburg back for another interview, only this time can we get him to explain the situation at VGN with a little more detail. Also, with Medoro and Gran Colombia merging, do you think SFF will garner more attention, or is the LACK of news that was PROMISED keeping a lid on things?
Comment by john — April 15, 2011 @ 8:41 am
Jon, thank you for your comments on Manitou. 🙂
Comment by Andrew — April 15, 2011 @ 9:07 am
Thank you guys for the answears.
Jon will you be interviewing Renaud Hinse in the near future? The management lacks marketing skills and I hope this will change soon.
Have a great week-end guys.
Brgds
Comment by Peyman — April 15, 2011 @ 9:13 am
Hi Aaron, Sorry but I am under the weather today but will be answering Qs and updating the CDNX chart over the week-end.
Comment by John - BMR — April 15, 2011 @ 9:47 am
Hey Greg, looks like you’ll be able to pick up GCU under 3.00 on Monday. My holdings hit the stop loss and I don’t think I’ll buy back until precious metals stocks are on the move upwards.
Comment by Andrew — April 15, 2011 @ 11:46 am
Andrew
yea I have been watching it pretty close may get it at under 3 bucks yet, something just does not seem right about this market, gold going up and my juniors going down or doing nothing, I think this is the time to just hold your good companies, and watch for buying opportunities.
Comment by GREG H — April 15, 2011 @ 9:18 pm
I spoke to Renaud several weeks ago. I believe he has a strategy and the financing will help him carry it out.
Comment by Jon - BMR — April 16, 2011 @ 10:15 am