After surging nearly $40 an ounce yesterday, Gold has hit another new all-time high today of $1,674.10 on the Spot Market…as of 8:45 am Pacific, the yellow metal is up $9 an ounce at $1,669…some analysts are suggesting Gold might be ready now to go “parabolic”…eventually we believe Gold will go parabolic but we don’t believe that time has arrived just yet…at the moment Gold is still trading within its upsloping trendline…however, it’s now testing resistance near the top of that trendline as John’s updated one-year weekly chart shows below…a sustained move through that resistance in the immediate future appears highly unlikely given the current overbought conditions (RSI and Stochastics), so a corrective pullback shortly is what we’re expecting…that would certainly not change the very bullish overall outlook for Gold…
There is not one easy answer as to why Gold is performing as well as it is…this is truly a “Perfect Storm” for Gold bugs with a wide range of factors (the “Fear Trade” and the “Love Trade” as Frank Holmes has so eloquently written about) pushing Gold higher…U.S. debt ceiling/debt reduction legislation yesterday didn’t fool the markets – the Americans have a major problem on their hands which they may have to “grow” themselves out of which has inflationary implications…worries about euro zone fiscal difficulties continue….Italian and Spanish politicians are rushing to formulate a response to the growing debt problems engulfing those two countries….Italian/Spanish bond yields are now at euro-era record highs…there appeared to be a bit of a “short squeeze” in the Gold market yesterday as well – some traders expecting Gold to go down on a U.S. debt deal were caught off guard…and this morning, news that central banks of emerging market countries such as Korea and Thailand have added more than $10 billion of Gold to their reserves this year is yet another sign of waning faith in fiat currencies, “toilet paper” money…International Monetary Fund data for June today showed that Thailand bought Gold for the second time this year, raising its reserves by nearly 19 tonnes to over 127 tonnes…Russia, meanwhile, bought another 5.85 tonnes, bringing its reserves to 836.7 tonnes, the world’s eighth largest official stash of the metal…so far in 2011, emerging market central banks have bought nearly 180 tonnes of Gold, more than double the roughly 73 tonnes purchased by central banks globally in all of 2010….that speaks volumes about where Gold‘s “big picture” direction…Mexico has been the largest buyer of Gold this year with $5.3 billion worth of purchases or 98 tonnes, followed by Russia which has bought 48 tonnes…earlier this week, South Korea confirmed it had bought 25 tonnes of Gold in June and July, its first foray into the Gold market in more than a decade…the trend of central banks in the developing world buying Gold really got started in 2009 when China bought 454 tonnes in April that year and India purchased 200 tonnes in November, 2009…these purchases were viewed as adding to the bullish case for the metal, especially if China wished to increase the percentage of Gold in its total reserves, currently just 1.6% compared to almost 75 percent for the United States…China’s reserves total 1,054.1 tonnes, making it the sixth largest holder, but still well behind the 8,133.5 tonnes held by the top-ranked United States…we should certainly expect China to increase its Gold reserves and the government is also encouraging its own citizens to purchase Gold…
The Dow is in danger of posting its ninth consecutive losing session today, thanks to more gloomy economic data…how long will it take for Fed Chairman Ben Bernanke to try to pull another rabbit out of the hat?…it doesn’t take a rocket scientist to figure out the Dow and the TSX have each become quite oversold and are probably close to reversing…the HIX (Horizons BetaPro S&P/TSX 60 Inverse ETF) shot up to $11.37 this morning and is clearly technically overbought based on RSI(14) and Stochastics…the pace of growth in the U.S. services sector ticked down unexpectedly in July to the lowest level since February of last year as new orders received by U.S. factories also fell in June, according to reports released this morning…in addition, while private sector payrolls in the U.S. rose at a faster pace than expected in July, a surprising increase in layoffs in the sector helped push the number of announced U.S. jobs cuts to a 16-month high, according to separate reports released today…an important July jobs report from the Labor Department is due Friday…the market is anticipating non-farm payrolls of 85,000 and a 9.2% unemployment rate…the U.S. has to find an effective way to tackle its jobs and growth deficit but that’s difficult to do when there’s no leadership on this issue from the top – President Obama is a “community organizer” who lacks an entrepreneurial mindset or vision…he is of the same mold as Pierre Trudeau or Jimmy Carter, a Prime Minister and a President whose policies were economically disastrous for their respective countries in the 1970’s…one major advantage for the United States right now is that the emerging market growth story continues…China, India and other countries are still galloping along and there are no reasons to believe that’s going to change anytime soon…that’s why Copper has been such a stellar performer…it’s looking healthy from a technical standpoint though it’s down a nickel at the moment to $4.34 a pound…
Despite Gold’s new record high today, the CDNX is being dragged down by the drop in the broader markets…as of 8:45 am Pacific, the CDNX is off 20 points at 1959…as we mentioned last week, this market has strong support in the 1930 to 1960 area…our overall bullish stance continues as we firmly believe the CDNX has started a new uptrend though not without some choppiness…the strong exploration stories are continuing to do well and those are the companies investors should be focusing on…we believe we have highlighted many of them in recent weeks, leaders within the BMR “model portfolio” group as well as companies outside of that group such as Silver Quest Resources (SQI, TSX-V), Kaminak Gold (KAM, TSX-V), Pacific Ridge Exploration (PEX, TSX-V), Northern Tiger (NTR, TSX-V), and Ethos Capital (ECC, TSX-V) in the Yukon…two British Columbia plays we like a lot are Spanish Mountain Gold (SPA, TSX-V) and Romios Gold (RG, TSX-V), and both have performed well recently…on the TSX, Golden Predator (GPD, TSX) is finding success with its Brewery Creek Project in the Yukon and Richmont Mines (RIC, TSX) has powerful earnings momentum (Q2 financials should be coming out very soon) and one of the next major deposits in northwest Quebec at Wasamac…RIC is up another 35 cents this morning to $8.32 – it has tremendous potential in our view…within the BMR “model portfolio”, the best-looking plays at the moment (based on technicals and fundamentals) appear to be Currie Rose Resources (CUI, TSX-V), Visible Gold Mines (VGD, TSX-V), Adventure Gold (AGE, TSX-V), Gold Bullion Development (GBB, TSX-V) and Seafield Resources (SFF, TSX-V)…Cadillac Mining (CQX, TSX-V), with a JV with VGD and 100% ownership of strategic claims adjoining Wasamac to the north, appears to be stirring along with Greencastle Resources (VGN, TSX-V)…GoldQuest Mining (GQC, TSX-V) and Abcourt Mines (ABI, TSX-V) both have strong fundamental value but are suffering technically…Sidon (SD, TSX-V) is hurting and very quiet…
Jon, do you think yesterday’s news release from ABI coupled with the previous one does any harm to the fundamentals? Renaud states that they are continuing to find “excellent” silver results and some “decent” ones (previous nr). I think there were only a couple of good holes in yesterday’s release? I realise that they are building on their resources which is obviously good. Thanks
Comment by Andrew — August 3, 2011 @ 7:59 am
It is obvious that speculative Gold stocks in particular, are not
following the rise in gold, the question remains, will they follow
gold, if & when gold turns down, more than likely. R !
Comment by Bert — August 3, 2011 @ 8:14 am
Thanks Jon, for your comments to my original post on yesterday’s page addressing my above question – much appreciated. I will look forward to your Quebec site visit reports.
Comment by Andrew — August 3, 2011 @ 8:14 am
What I think is that Abcourt is not very good at telling its story. That’s the problem with a lot of companies on the Venture in particular – many are run by geologists and engineers who don’t understand the art of communication and how to market, and they don’t know that they don’t understand that, so they don’t find people and surround themselves with people who are good at that…I met Renaud for the first time last January….I like him, he’s a nice guy and he of course knows a lot about mining….I think he understands that “getting the message out” is his weakness but he hasn’t done anything to fix that…..perhaps he’s a “micro-manager” type and wants to control everything, I don’t know….I love this company’s assets but Renaud needs to bring in some fresh blood to tell the story, and take more of a behind-the-scenes role….that’s just my opinion and observation…many people I’ve talked to in the industry out in Quebec really like this company’s assets……
Comment by Jon - BMR — August 3, 2011 @ 8:16 am
Bert, how I’m reading the current market, for what it’s worth, is that we’re going to see equities bounce back significantly starting any day now…….if Gold retreats somewhat, no problem……in otherwords, I really wouldn’t be worrying about a pullback in Gold……the producers the last couple of days have done well with the substantial gold price increase…the speculative exploration plays have not done as well obviously because of the drop in the equity markets……good gold stocks is a great place to be right now….
Comment by Jon - BMR — August 3, 2011 @ 8:29 am
Jon – Good gold stocks is a great place to be right now….
Bert – The thing is, one can’t always be in a great place at the right time,
all the time. Anyway thanks for responding, which is much better
than “you’re fired”, (smiling this end.) R !
Comment by Bert — August 3, 2011 @ 8:49 am
So i am negative but mildly so, if one were to compare me to
Peter Schiff. Anyway, for those who are having trouble coping
with my comments, i will take a break, to show that i do have
a heart. R !
Comment by Bert — August 3, 2011 @ 9:02 am
Bert
no need to aplogize, most of us are feeling what you are saying, you are just saying it, it is very surprising to see the stocks lag the metals, I do not remember who said this but I think it is true most of the time
“there are no markets anymore, only interventions”
at some point when the general public catches on to what is going on in the metals and the mining companies, they , whoever they are, will not be able to intervene imo.
I work in a very large real estate office and back in the dot com boom, the only thing I heard anyone talk about in my office was how much money they were making with their dot com stocks, it was unbelievable, they did not talk about real estate at all, we, me included all thought we were going to retire way early, well I am still there. lol, (greed got me, learned a very valuable lesson btw), and today no one in my office talks about the price of gold or silver and I am sure they do not know the names of any mining companies, when they start talking about gold and silver I just hope I am in the right companies, because the ride could be unbelievable! imo. I hope.
Comment by GREG H — August 3, 2011 @ 9:42 am
That’s right Greg. Yesterday while visiting my father in law I watched fox news with him for an hour and saw 3 gold comercials, one featuring G. Gordon Liddy. When these idiots start piling into bullion and then gold stocks the miners will catch up to physical gold. No more jr’s like gbb trading at 25 bucks an ounce in ground. Maybe around QE4.
Comment by mike — August 3, 2011 @ 12:44 pm
What happend with vgd today, really strange move there..
Comment by Kalkan — August 3, 2011 @ 12:59 pm
You’re right, sort of bizarre trading at the end of the day but the overall new uptrend remains intact – closed quite close to the rising 50-day SMA which seems to be the new supporting moving average……I see a really good month shaping up for VGD as we learn more about Joutel (drilling starts there soon) and Lucky Break where they have been doing some aggressive drilling………
Comment by Jon - BMR — August 3, 2011 @ 1:39 pm
last call on CJC. Look at GMA if your not familiar. Then do some DD.
Comment by dave — August 3, 2011 @ 7:31 pm
Check out Newstrike today – NES, you’ll thank yourself later.
120 metres of 4.6 g/t au reported after the close yesterday, infill from last hole 317 metres @ 5.8 g/t au, worth a look.
Could be highest grade new find this year.
Other results also 113 m @ 2.51 g/t au, 190 m @ 3.52 g/t au, 116 m @ 4.71 g/t au, 214 m @ 3.00 g/t au, 275 m @ 1.43 g/t au.
The next Ventana possibly with these grades located 22 km northwest of Goldcorp on the Guerrero Gold Belt in Mexico, worth a hard look!
Comment by Taylor — August 4, 2011 @ 5:05 am
BMR
CAN YOU PLEASE DELET THAT LAST POST I REALLY SCREWED UP
THANKS
Comment by GREG H — August 4, 2011 @ 6:36 am
Trueclaim continues to get very encouraging results from the Scadding Gold Project,located 50 kms northest of Sudbury. SRK Engineering is compiling the
data from the 8,000 metre drill program to date for the purpose of building a
compliant resource model. Last news release omitted one important fact, the company mentioned no drilling in the Central Zone to date, the reason being is because that’s the old mine area where 30,000 oz au was mined in the late 80″s,
and a historical resource of approx. 165,000 oz au exists today. So if you look at the results from the other 4 zones, add the Central Zone, you can see the company is adding greatly to their gold ounces. You have a person in John Carter, president
of Trueclaim who has put 200+ mines ( processing and fabrication equipment ) into
production globally, and you have a story.
Work is presently underway, mapping, samplying in preparation for drill on their
Arizona Black Diamond Silver Property. Recent discovery of a large copper-gold showing could make this property even more interesting in terms of ” large potential “. Smart people buy when things are depressed. They will be rewarded down the road. This business requires patience. Have a look and do your dd.
george
Comment by George Pesut — August 4, 2011 @ 8:22 am