Gold has traded between $1,286 and $1,296 so far today…as of 8:30 am Pacific, bullion is down $3 an ounce at $1,287…Silver is off 11 cents at $19.04…Copper is unchanged at $3.07…Crude Oil is 50 cents higher at $100.78 while the U.S. Dollar Index has rallied more than one-third of a point to 79.83…Nickel, which climbed above $9 a pound this morning, is heading for its biggest weekly gain since June, 2010…Nickel prices are up 45% since January, making it by far the best performing industrial metal this year…
After rallying to three-week highs at the beginning of the week, thanks to elevated tensions in Ukraine, Gold has failed to maintain those gains after a softening in rhetoric from Russian President Vladimir Putin who said he was willing to negotiate with European officials over the crisis…pro-Russian separatists in eastern Ukraine have ignored a public call by Putin to postpone a referendum on self-rule, however, declaring they would go ahead on Sunday with a vote that could lead to war…there’s little doubt that Russia is doing all that it can to help destabilize Ukraine, so it’s hard to imagine this situation is not going to escalate in the weeks ahead which should – at the very least – limit any selling pressure in Gold…in comments that weakened bullion yesterday, ECB President Mario Draghi strongly hinted that the ECB will cut interest rates next month which helped the U.S. Dollar Index reverse at critical support at 79 (perhaps just a temporary reprieve for the struggling greenback)…
Where American Millionaires Are Putting Their Money
The first-ever CNBC Millionaire’s Survey, which polled 514 people with investable assets of $1 million or more (which represents the top 8% of American households), found that millionaires plan to put nearly half their new investment dollars into equities this year and only 14% in cash…since the top 10% of Americans own more than 80% of stocks, the positive mood of millionaire investors could bode well for the market…the online survey was conducted in March by SpectrumGroup on behalf of CNBC..it polled wealthy individuals from across the country that were split between Democrats, Republicans and Independents…the survey also found that wealthier investors (those with $5 million or more in investable assets) are slightly more bullish on stocks and the economy, and are more likely to invest in tech stocks…
Today’s Equity Markets
Asia
China’s Shanghai Composite fell 4 points overnight to close at 2011…China continues to battle with deflationary pressures…the country’s annual consumer inflation rose at a rate of 1.8% in April, slower than March’s 2.4% rise, data today showed…the reading was below expectations for a 2% rise in a Reuters poll…on a month-on-month basis, CPI fell 0.3%, below expectations for a 0.1% decline…meanwhile, producer prices fell for the 26th straight month, dropping an annual 2%. “The continued downside surprise in CPI inflation suggests room for further policy easing,” stated Barclays Capital China economist Jian Chang. “We maintain our view that the PBOC [People’s Bank of China] will likely ensure sufficient liquidity in the second quarter. We think interest rate cuts are likely if growth disappoints further in Q2, and that RRR cuts are likely but would require a further worsening in economic conditions.”
Japan’s Nikkei climbed 36 points overnight but still finished down 1.8% for the week…
Europe
European shares were modestly lower today to finish the week…
North America
The Dow is down 22 points as of 8:30 am Pacific while the TSX has shed 44 points…the Canadian economy unexpectedly lost 28,900 net jobs in April (the employment drop struck Quebec, New Brunswick, Newfoundland, Labrador and Prince Edward Island)…Stats Canada’s Labour Force Survey found the unemployment rate remained at 6.9% for the second straight month, suggesting that some Canadians had given up looking for work…economists had anticipated an increase of 12,000 jobs for April, according to Thomson Reuters…
Venture Updated Chart
The Venture has declined each day this week and is down another 15 points at 977 as of 8:30 am Pacific…but don’t let that rattle you…below is an updated 9-month daily CDNX chart from John…as we’ve stated repeatedly, this is a market underpinned by tremendous support – particularly within about 10 points of 970 which was key resistance for many months last year…the rising 100-day moving average (SMA) is currently at 985 which coincides with Fib. support at 982…a short-term downtrend line has formed, providing resistance around the 50-day SMA at 1013, but a superb support band stretches all the way from the 940’s through the 980’s….the key point is that the primary trend remains bullish while the Index tests support…
CRB Index Updated Chart
Like the CDNX, the CRB Index broke above a long-term downtrend line and is now consolidating with strong support…this 20-year monthly chart is very effective at showing the “Big Picture”…commodities do look bullish overall…
Garibaldi Resources Corp. (GGI, TSX-V) Updated Chart
Sheslay Valley plays heated up again this week with Doubleview Capital (DBV, TSX-V) and Garibaldi Resources (GGI, TSX-V) posting the strongest gains…we’ll have more on DBV next week as well as Ashburton Ventures (ABR, TSX-V), Alix Resources (AIX, TSX-V), Romios Gold (RG, TSX-V) and of course Prosper Gold (PGX, TSX-V) which announced last night that it has closed a $3 million financing and is mobilizing for drilling…
As Garibaldi prepares to attack the Grizzly, one advantage it has over its Sheslay peers is ongoing drilling in Mexico which has already produced solid results from La Patilla…with momentum building in both Mexico and northwest B.C., and a tight share structure, the probability of a GGI breakout through resistance at 24 cents is clearly increasing not only for fundamental reasons, but given the current technical posture of the stock…below is an updated 10-year monthly chart that by every measure is exceedingly positive…GGI is unchanged at 22 cents as of 8:30 am Pacific…
Midlands Minerals Corp. (MEX, TSX-V)
A company worthy of our readers’ due diligence is Midlands Minerals (MEX, TSX-V) which has optioned the Parlozi Project in Serbia from one of our favorites, Reservoir Minerals (RMC, TSX-V)…MEX is starting the first phase of an exploration and drill program this month…the 91 sq. km Parlozi Project covers an extensive area of ancient mining that has received limited modern exploration…the Phase 1 program will test two out of six targets at Parlozi, searching for high-grade, Silver-rich, Zinc-lead veins and larger replacement zones in carbonate rocks – including an area with historic resources…MEX is well-funded with nearly $3 million in its treasury…it also has nearly 200 million shares outstanding, but at just 2.5 cents there is certainly significant upside potential here for patient investors…
Below is a 4-year weekly MEX chart…buy pressure has recently replaced sell pressure (dominant through most of 2013) as indicated by the CMF…fundamentally and technically, MEX is showing good potential entering the summer…
Ceiba Energy Services Inc. (CEB, TSX-V)
Energy stocks remain hot, and Ceiba Energy Services (CEB, TSX-V) is worth having on one’s radar screen after a confirmed breakout above 60 cents…the overall bullish trend is gaining strength as you can see on this 2.5-year weekly chart…CEB is down a penny at 62 cents as of 8:30 am Pacific…
Note: John and Jon both hold share positions in GGI, PGX, AIX and ABR. Jon also holds a share position in DBV.
wow. Kinda hard not to let this huge drop rattle the nerves. Any reason as to why this huge sell off in the venture?
Comment by Tony T — May 9, 2014 @ 7:49 am
I wouldn’t refer to it as a “huge sell-off”, Tony – just normal retracement…the support band will hold, and if you look at the 1-year daily chart, RSI(2) is at an extreme oversold level consistent with the March low and the February low…this is when TA is so important, and John can speak better on this than I…but you cannot allow yourself to get rattled on what I would consider healthy drops like this…the Venture wants to test support, so let it do its thing…stock is moving from weak hands into strong hands in a situation like this…stay calm, cool and collected…
Comment by Jon - BMR — May 9, 2014 @ 8:12 am
Thanks Jon. What has me a little worried is that the venture attempted to break above the 50 day ma twice and failed both times. Could it be the ” sell in may go away” playing a factor here? Regardless, I think i’ll just turn my screens off and return once summer is over ;P
Comment by Tony T — May 9, 2014 @ 8:35 am
Hi guys,
The technicals for the TSX V look great as you have mentioned many times in the past. You can not ignore the fundamentals though which will lead to a lower TSX V. I predict at least 900 (~10% correction) by the end of August possibly much lower. Pretty simple investors need to be super selective and focus on high quality names and save some cash for bargains. Enjoy your weekend!
Comment by James — May 9, 2014 @ 8:46 am
Jon- did I miss the DBV part 2 or is it still in the making? If its still in the making, when do you think it will be released?
Things are going to heat up in the valley soon with all the activity starting up!
Thanks!
Comment by D4 — May 9, 2014 @ 1:47 pm
D4, obviously we’re in a continuously “evolving” situation with DBV (and other Sheslay plays), hence the area visit and Hat Property visit and video interview with John Buckle, and other content including the audio interview with Farshad. Much more to come. But yes, there will be an “official” DBV Part 2 at the appropriate time when we try to tie everything together – exact timing of that, I’m not certain. As busy as things have been up to this point, it almost scares me to think how crazy it’s going to get as activity ramps up here quickly and 3 or more drill programs are going on at the same time with different companies. Get ready for a wild summer.
Comment by Jon - BMR — May 9, 2014 @ 3:39 pm
was there a major reversal on the Venture today in the 2nd half of the day? I thought it was down 16 pts at one time??? closed almost even?!
Comment by STEVEN1 — May 9, 2014 @ 4:21 pm
Yes, major end-of-day reversal, was down as much as 17 points, finished off just 1 point…another sign of the underlining strength in the Venture. Superb support.
Comment by Jon - BMR — May 9, 2014 @ 4:38 pm
Jon, what kind of drill program could we expect from ABR, 2000m drilling. 2 deap holes of 500m and 4 x 250m?
Comment by Martin — May 9, 2014 @ 5:21 pm
biv.com/article/20140506/BIV0108/305069941/-1/BIV/companies-rush-to-stake-claims-in-the-sheslay-valley
Comment by Martin — May 9, 2014 @ 5:35 pm
Good point, Martin; this will depend on the numbers ABR gets from surface sampling and what the IP survey shows when they run that. The IP will be critical in terms of targeting. Given the experience of Prosper and DBV to date, it’s probably wise for ABR to look at drilling 300 m holes initially. Half a dozen of those would be an excellent test of the Hackett. Deeper drilling could be done through a potential Phase 2 program, based on Phase 1 results. They’ve got a very capable team to figure this all out. I’m very curious as to what they may see at surface on the Hackett in this initial pre-drilling stage of exploration – if they’re seeing the same type of stuff as elsewhere, look out. They are right on trend, there’s a mag high on the southern part of the Hackett, and the fault structures in the area are highly intriguing. The Hackett is a really interesting (and strategic) piece of ground and we know from historical reports that there are high-grade gold showings alongside the western border of the property (and I saw some of that outcropping for my own eyes on my recent site visit when I was able to spend an hour on the Hackett). What those gold showings may mean, I guess we should begin to find out soon enough. I’ll happily take my chances on this at 5-6 cents because the potential upside far outweighs the downside IMHO. A 10-bagger+ possibility? Absolutely.
Comment by Jon - BMR — May 9, 2014 @ 5:55 pm
Boy what a turn around for the venture yesterday.
Comment by tony t — May 10, 2014 @ 3:36 am
Pete Bernier and Dirk Tempelman-Kluit took down a combined 22.5% (or $676,500) of PGX $3 million PP, Sedar reports confirm. Together they control nearly 25% of the current 31 million O/S following the PP. Sends a strong message. This is going to be another Bernier-Tempelman-Kluit home run to follow up on Richfield. Follow the money.
Comment by Jon - BMR — May 10, 2014 @ 9:28 am
Whoa… That it does!!…”sends a strong message”.
Comment by Greg J. — May 10, 2014 @ 12:44 pm
Whoa is right. Money talks. They didn’t just invest another nearly 3/4 million $ of their own money for no reason. They know what they have and they know what they’re likely going to develop at the Star Project, and they could easily make 10X their investment IMHO.
Comment by Jon - BMR — May 10, 2014 @ 12:59 pm