Markets are weak across the board this morning…as of 6:05 am Pacific, Gold is off $16 an ounce at $1,627…Silver is 87 cents lower at $30.83…Copper is off 7 cents at $3.66…Crude Oil is $1.07 lower at $102.81 while the U.S. Dollar Index is up one-third of a point to 79.53…
Today’s Markets
Stock index futures in New York are down sharply as of 6:05 am Pacific with the Dow likely to open down more than 100 points…European stock markets are off between 1.7% and 2.7% as a result of PMI’s for Germany, France and the euro zone that signaled a much faster rate of contraction than had been expected (Germany’s manufacturing sector shrank at the fastest pace in nearly three years in April), dampening hopes the region will secure the growth needed to overcome the impact of planned government austerity measures…”Business confidence slumped lower and companies cut head counts at the fastest rate since early 2010 in order to reduce capacity to meet lower workloads,” said Chris Williamson, chief economist at data compiler Markit…
The weak economic numbers came as investors were adjusting to the strong showing by Socialist challenger Francois Hollande in the first round of France’s presidential election, and as a budget crisis in the Netherlands has brought down the government there…Dutch Prime Minister Mark Rutte will tender his government’s resignation today, clearing the way for elections…
The amount of money thrown at rescuing the world economy since 2008 is truly staggering, probably more than $14 trillion, and the financial spigots are still open…industrialized and emerging nations pledged another $430 billion to boost the International Monetary Fund’s lending power over the weekend, doubling the size of its crisis-fighting war chest in case Europe’s problems worsen and engulf more countries…three weeks earlier, European Union leaders set aside $1 trillion for Europe’s bailout fund in an effort to create a firewall to prevent the euro zone’s sovereign debt woes from spreading…
Major central banks are certainly not finished pumping money into the global economy…investors will be paying close attention as the Federal Reserve meets tomorrow and Wednesday while the Bank of Japan meets Friday…meanwhile, the IMF has recommended more action from the European Central Bank…
Chinese Manufacturers See Slight Pick-Up In April
Business conditions in China improved for manufacturers in April from levels seen in the previous month, although activity in the sector continued to decline according to data released by HSBC this morning…HSBC’s preliminary “flash” PMI rose to a two-month high of 49.1, compared with a final reading of 48.3 in march, as the the rate of output, new-order booking and employment all eased at a slower pace…it’s clear that earlier easing measures from Beijing have started to work, with more expected, which will likely enable the Chinese economy to achieve a “soft landing”…
Venture Exchange
The Venture Exchange has fallen for eight consecutive weeks and a bottom has got to be near at hand based on oversold chart conditions…the CMF(20) – Chaikin Money Flow Indicator – is very close to important lows set in December of last year, the fall of 2008 and at the climax of the early 2005 sell-off that sent the Index down 20% after a strong January and February…this could be “capitulation week” for the Venture before a reversal in May…
One of the most biggest mistakes investors make is selling out of panic into a market bottom…this is a time to be looking for opportunities, not dumping stocks overboard out of fear the sky is about to fall…
Kaminak Releases First Results For 2012 Drill Program
Kaminak Gold (KAM, TSX-V) has released results from the first 14 RC holes drilled this year at its Coffee Project in the Yukon…they included 3.6 g/t Au over 32 metres…2.1 g/t Au over 36.6 metres…2.1 g/t Au over 21.3 metres and 2.4 g/t Au over 18.3 metres…nothing spectacular but solid nonetheless for this project, and they include the discovery of a new oxide-rich Gold zone….Kaminak is drilling 50,000 metres this year (30 holes have been completed so far in the 2012 program) and a fourth rig is expected to be on the property by mid-May…an initial resource estimate is expected by early next year…
We’ve had some inquiries regarding Canaco Resources (CAN, TSX-V) which is expected to produce an initial resource estimate for its Handeni Project in Tanzania by the middle of next month…Canaco broke the $1 level March 23 and that’s approximately where it’s going to face immediate resistance…recently, it has been basing between 80 cents and 95 cents…the stock has been under intense selling pressure in recent months with the exception of February when it climbed as high as $1.85…the company has nearly 50 cents per share in cash (almost $100 million)…
Note: John, Jon and Terry do not hold positions in CAN.
Gold Stocks vs. Gold
Below is a chart going back to 2009 that shows how Gold stocks are now seriously under-performing bullion…a 32% drop in the TSX Gold Index since last summer has left Gold stocks in their most oversold position relative to the broad market since the Crash of 2008…CIBC commented last week on the extreme disparity between Gold stocks and the metal, saying the minor drop in bullion compared with the huge drop in Gold stocks suggests that “a massive oversold position for the equities has occurred in the last month”…this is an “unprecedented” period for Gold stocks, said CIBC…
The silence here this morning is deafening & it tells me a lot, there’s
sadness is in the air. I don’t see the markets coming back in the green
today, but i do see them coming back, as the bad news gets priced in.
No doubt, there’s panic out there. Regarding the French election, the
runoff will not happen for a month, so why cave now. Regarding the
Venture, we have to turn around, because there’s a limit to the selling,
the folks who have faith, will gather in the shares from those, who can’t
control their emotions. R !
Comment by Bert — April 23, 2012 @ 6:05 am
selling is slowing Bert…. hi percentage losses on very very low volume… technical damage.. and emotional damage being caused by a few… we need the herd to puke… but only a few are…
Comment by Jeremy — April 23, 2012 @ 6:27 am
Very interesting when you look at the volume, very low in just about every stock I own, so I am not seeing some huge sell off, I am wondering if we really will see a huge sell off or if this is it? This is not how Bull markets end imo. So we have a long way to go, glad I did not go all in this time and have some cash to pick up the bargains. Kaminack at a 1.73, didn’t think I would see that again, Richmont at 6.49, one of my favorites Newstrike at 2.15, could they all go lower? if so I will be ready.
Comment by Greg — April 23, 2012 @ 7:44 am
Excellent interview, must see and here.
James Rickards on Central Banks Obsession
with Gold and Why more QE is Imminent!
thetrader.se/2012/04/21/james-rickards-on-central-banks-obsession-with-gold-and-why-more-qe-is-imminent/
Comment by mikomi — April 23, 2012 @ 7:52 am
everything am reading Greg suggest we are going down like the titanic!! well not quite that dramatic.. but 1450-1490 gold and silver to 23-26… no argument that the fall will be better times.. but some are calling for a re-inflated DOW to 20000 but not until it drops to 11000 or so… Bernanke can change it all… but odds are he wont..
even tho the little guy is bailing, they arent all at once… and if gold drops to those levels… then what..?? does RIC go to 2 bucks???? or lower?? remember back in 2008 there were many stocks trading below there cash value.. logic and common sense gets thrown overboard as well …
my main concern is for those companies that have no value, no cash, and thus will disappear cause they dont have any dough to even file financials… then they get halted, and then yr stuck.. with some companies only doing true reporting yearly (Jon .. am I right with this??) you only get a true picture of how much cash they really have once a year….
again… how can anyone justify a price of sub 90 for avion.. a producer… regardless of the crap in Mali which is now settled… and CAN under 90 as well with their asset… and cash…
no sense to it at all… but they have an underlying asset… unlike ones like HAO, BKT, CAJ, and the like…
Comment by Jeremy — April 23, 2012 @ 8:12 am
Jeremy
what and who are you reading? I have not seen any predictions that low for gold? Doesn’t mean it won’t happen though?
Comment by Greg — April 23, 2012 @ 8:41 am
Jeremy
Whomever you are listening to, who is to say they actually know
what they are talking about. Two so called experts, with
opposing views, tells me that only one has a 50/50 chance that
he/she will be right. I don’t listen to anyone, because they know
not with certainty what tomorrow may bring. I keep going back to
Doris Day, “the future is not ours to see”. Another important
factor to keep in mind, many of the so called experts have their
own agenda.. If i am going down, it won’t be because i will be
swayed by others, i have my own mind & it’s been with me a long
while now & i am not willing to trade it in just yet. R !
Comment by Bert — April 23, 2012 @ 9:03 am
real wealth report was one.. some ‘guys’ on 321gold.com… 1420 is the major support level at the time… most dont believe that it ‘should’ but that doesnt matter eh!!:)
on a more positive note, I subscribe to smartmoneytrackerpremium… hope I havent violated any rules here.. but based on BPGDM on an upswing, sentiment at puking levels based on the responses in his blog, hui below the 200ema by 20%, and this paragraph …
The selling has fed on itself to the point where valuations in the sector have reached ridiculous levels. Gold would literally have to collapse to $900 for miners to be fairly valued at current levels. This kind of extreme undervaluation can’t last forever. Eventually regression to the mean is going to trigger a violent rally. With an intermediate cycle low coming due (if it hasn’t already formed) that regression should be right around the corner.
makes one wonder … he also states that the US dollar will begin a downward trend in the next 2 weeks… guess it all depends on the fomc stuff….
I always use my own emotion to gauge things.. my buddy and I always talk and when I am ready to throw in the towel is the time to buy:) I wanted to share my thoughts to gauge others.. and of course I am not alone… Hulbert sentiment chart is at levels of previous major bottoms…. so I’m in good company!!
as Jon said… (or was it John:)) buy in May and stay…. maybe some truth to that!!
Greed will always win…. and when peeps see stocks rising then they will chase….
John – the watch list and other lists… where are you hiding those???? thx in advance…
Comment by Jeremy — April 23, 2012 @ 9:13 am
IAMGOLD CEO Steve Letwin commented in The Globe and Mail that the company would be looking to complete a $400-500 million acquisition in the Americas within the next couple months.
So that means a producer, anyone have a list of targets worth $400-500m? Would RIC fall into that range?
Comment by Andrew — April 23, 2012 @ 9:27 am
TODAYS SMILE . IN CANADA WE SAY EH (A) IN THE U.S. THEY SHOULD SAY B BECA– USE IN MEXICO THEY SAY SI (C)
Comment by gil — April 23, 2012 @ 10:24 am
Bert – totally agree…. noone knows… it is all about statistics, and probability… and the agenda that I feel that most have is to protect their own sandbox… a consensus is good tho… along with your own vision… mine is blurry right now… why I need some guidance!!:) a seeing eye stock dog:)
Comment by Jeremy — April 23, 2012 @ 10:37 am
RBW – for anyone else who doesn’t visit the website too often there is a “Quarterly Report” on Rainbow’s home page. Dan Marsman, who I assume is a BC based IR guy, has advised that the first Kootenay property to be worked will be Referendum and International the last.
Comment by Andrew — April 23, 2012 @ 12:02 pm
That is crap. They should have started with the International. That is what it’s all about, the International. I guess they have a problem getting the permits for drilling there otherwise they would have started with the International. Now it will be dessert-time for this stock a looong time. IMO there are far more interesting near cash flow juniors out there.
Comment by Marky — April 23, 2012 @ 10:23 pm