Gold has firmed up today…as of 8:10 am Pacific, the yellow metal is up $22 an ounce at $1,616, the 200-day moving average (SMA) and an important immediate technical hurdle…Gold however will face resistance right through the 1600’s…Silver has jumped 76 cents to $29.56…Copper is up 7 cents to $3.36, Crude Oil has climbed $3.26 to $97.14 while the U.S. Dollar Index has been knocked down two-thirds of a point to 79.69…
Given technical indicators, we could be looking at a significant rally going into year-end but the outlook for January remains uncertain at best…volatility reigns supreme and there’s no indication that will change as the calendar flips into 2012…
Market sentiment improved this morning after the IFO survey of German business confidence defied the gloom-mongers by rising sharply in December…this was followed by a well-received auction of Spanish short-term debt (5.6 billion euros) which reduced fears about sovereign funding difficulties across the euro zone…so it’s a “risk-on” day and markets are also rebounding out of oversold conditions…what January will bring is a big question mark but the possibility of a very sharp downside move, likely followed by central bank intervention, has to be considered high given the technical patterns and some shaky fundamentals, in particular surrounding the euro zone and growth concerns in China and India…
U.S. housing starts surged to a 1-1/2 year high and permits for future construction were the highest since March, 2010, as demand for rental apartments rose, offering hope for the weak American housing sector…this has given some added juice to American markets today with the Dow up nearly 300 points…the TSX has climbed 203 points while the CDNX is 22 points higher at 1429…
The news yesterday regarding Cap-Ex Ventures (CEV, TSX-V) is extremely bullish in our view as Forbes and Manhattan, with proven successful experience in the iron ore space, is essentially taking control of the company…we hope some of our readers were able to take advantage of the recent share price weakness as CEV could really begin to kick into gear after Christmas…as of 8:10 am Pacific, CEV is up 3 cents at 96 cents…the CEV chart points to a strong finish for the year…
The direction of the U.S. Dollar will be key to watch as 2012 unfolds…as John’s chart shows below, the greenback entered a new bullish phase at the beginning of September and this has been be a problem for Gold…there has also been a very close correlation between the U.S. Dollar Index and the CDNX…in otherwords, the CDNX performs best when the greenback is weak and vice-versa – the Venture is in trouble when the U.S. Dollar Index is charging higher…the chart below was completed by John yesterday – there’s a lot in it, but try to grasp the “big picture” which is a U.S. Dollar trending higher…
Canada’s housing market shows the “classic signs of over valuation, speculation and over supply,” but Bank of America Merrill Lynch says that’s no reason to think that there will be an epic crash of American proportions…In a report issued yesterday, the bank’s Canadian analysts said record Canadian household debt and increased joblessness are cause for concern over the next year…there will likely be fewer sales, and prices could slip as much as 5% in the next year…that’s obviously not a good sign for the equity market, especially in the context of the overall global outlook…
Bad day for Visible Gold Mines:-(!
Martin
Comment by Martin — December 20, 2011 @ 12:03 pm
Eldorado EGO looking cheap today.
Comment by Hugh — December 20, 2011 @ 12:16 pm
Martin – that’s two in a row. Today TD have slaughtered VGD. Surely not tax-loss selling with news imminent? Maybe a news leak and the news is not good? RBW held up well yesterday – I’m likely going to take a position but I’d like to see VGD’s drill assays sooner rather than later. Selling VGD now would just decimate the SP. 🙁
Passe une bonne journee.
Comment by Andrew — December 20, 2011 @ 12:27 pm
VGD – Martin Dallaire says it’s tax-loss selling no news leak because they don’t have the assays. Must be using the slowest lab in Canada or maybe they sent them to Timbuktu – is there a lab there? 🙂
Comment by Andrew — December 20, 2011 @ 12:37 pm
Interesting trading in RBW the last half hour…and in CEV with massive bids…both charts look great…
Comment by Jon - BMR — December 20, 2011 @ 12:53 pm
CIBC had large bids earlier in the day but took them down. Jon – do you think VGD is tax-loss selling; its just two houses?
Comment by Andrew — December 20, 2011 @ 1:13 pm
With VGD there are definitely some tax-loss selling issues, and as a result it has also gotten quite oversold on the charts. I expect a rebound shortly.
Comment by Jon - BMR — December 20, 2011 @ 4:07 pm
Thanks, Jon. Hope gold continues its upward trend to support VGD and RBW – the latter seems resistant to downward pressure.
Comment by Andrew — December 20, 2011 @ 5:01 pm
Stocks usually find resistance at even dollar levels & because
CEV pushed though $1.00 yesterday, we stand a good chance of
moving up again today. With 13/4 hours left before open, i feel
somewhat disappointed, as i watch the different European indices
& the futures give up most of their gains, in fact, red is the
dominant color right now. Hopefully, things turn green again before
the open. Good luck !
Comment by Bert — December 21, 2011 @ 4:52 am
Good morning Bert! – I checked London at the open and then DAX and all looked good with the funding boosting the open but then, I think, the afterthoughts came and more banks than anticipated took the funding and an extra 179 billion euros! So, now the analysts are saying more banks than initially thought were in need of capital. Probably later in the day or tomorrow the sentiment will change and analysts and investors will realise that the banks are now well funded for 3 years.
Futures are largely red – we need the greenback to weaken and gold to strengthen. In any event CEV is looking good and a decent hedge for gold stocks. Maybe they will announce closing of the financing today? 🙂
Comment by Andrew — December 21, 2011 @ 5:56 am