Gold has traded between $1,313 and $1,326 so far today…as of 8:30 am Pacific, bullion is down $5 an ounce at $1,313 (John has an updated Gold chart below)…Silver has reversed 11 cents lower to $20.94…Copper is up a penny at $3.24…Crude Oil, on its longest losing skid (7 sessions) since December 2009, is off a penny at $103.52…expectations that halted Libyan exports would return to the global market have been the key factor in the recent softening of Oil prices…the U.S. Dollar Index is down slightly to 80.16…
Gold prices continue to defy bearish forecasts…money managers increased net-long positions for a fourth straight week through July 1 and holdings in exchange-traded products are climbing at the fastest pace since 2012, according to COT data from Bloomberg…assets in bullion-backed global ETPs increased by 12.6 metric tons last week, the most since November 2012…holdings are rebounding after six straight quarterly declines that began in early 2013…
Bloomberg also reports that Gold sales from Australia’s Perth Mint climbed to 39,405 ounces in June, a four-month high…sales of American Eagle Gold coins by the U.S. Mint totaled 48,500 ounces in June, up 37% from May and the most since January…
Today’s Equity Markets
Asia
China’s Shanghai Composite added 4 points overnight in cautious trading as investors await a raft of data due this week, including consumer price inflation tomorrow and trade balance figures on Thursday…Japan’s Nikkei average slipped 65 points to 15314…
Europe
European markets were generally down about 1% today…the “Quote of the Day” from Europe – “[Europe] cannot be the only economic zone of the world that doesn’t consider its currency as a weapon…as a key asset to promote its economy,” Fabrice Bregier, chief executive of Airbus passenger jet business, told the Financial Times in an interview as he said the ECB should intervene to push the value of the euro against the dollar down by 10% from an “excessive” $1.35 to between $1.20 and $1.25…
North America
The Dow is off 149 points as as of 8:30 am Pacific…traders are interpreting the weakness yesterday and today as a breather following last week’s brisk rally, with market participants awaiting further insight into Federal Reserve officials’ thinking on interest rates later in the week, as well as the start of the second quarter earnings season…corporate earnings will certainly provide a test for this buoyant equity market…
Goldman Sachs on Sunday moved up its forecast for the first interest rate hike to the third quarter of 2015 from the first quarter of 2016, based on the strong improvement in the labor market and overall financial conditions over the past few months…the non-farm-payrolls report for June, published last Thursday, showed 288,000 jobs were added to the U.S. economy last month, far beating analysts’ expectations – though it’s important to note there were still some underlying weaknesses in that report which we’ll get into tomorrow…things aren’t looking quite as bright underneath the shiny exterior of President Obama’s job creation record…
The TSX has lost 148 points while the Venture is 7 points lower at 1024 through the first two hours of trading…as John’s charts showed Saturday, the Venture faces minor near-term resistance at 1039, so this mild pullback isn’t surprising…great support between 1000 and the 20-day SMA just below 1020…given the overall technical posture of the Venture, these soft retreats which we’ll see from time to time will be buying opportunities…
Gold Chart Update
Below is a very interesting 2-year weekly Gold chart from John that shows how bullion is very close to a potential significant breakout…this could unfold imminently or may take a few more weeks – exact timing is impossible to predict, but the bullish case is strong…
First, note how bullion broke above a short-term downtrend line early this year and then surged higher before encountering resistance at a long-term downtrend line…it pulled back to an area of support, and in June (historically the metal’s worst month of the year) Gold took off to the upside again…it’s now threatening once more to push through that long-term downtrend line…RSI(14) at 55% on this 2-year weekly chart has plenty of room to move higher…
The 50-day SMA has recently reversed to the upside while the 200-day SMA at $1,288 has flattened out, perhaps gearing up to turn higher sometime this quarter…
The Proven Success of Garibaldi Resources’ (GGI, TSX-V) Use Of Technology
Further to our comments yesterday, Garibaldi Resources’ (GGI, TSX-V) effective use of hyperspectral remote sensing technology and proprietary data generated from that have been a key factor in identifying a minimum of eight high-grade Silver targets (some with Gold potential as well) including Silver Eagle along a 10-km NW-SE trend at Rodadero North…it’s important to point out that this same technology was instrumental in the discovery of the Don Ese area (the Temoris option) in another part of Mexico that became a home run for Garibaldi in 2009 when it sold that option to Paramount Gold & Silver (PZG, TSX and NYSE) for cash and 6 million shares of PZG…this morning, PZG came out with a revised resource estimate for its San Miguel deposit, and resources at the high-grade Don Ese portion increased substantially to 599,000 tonnes at 2.88 g/t Au and 254 g/t Ag in the measured category, and 2,807,000 tonnes grading 2.81 g/t Au and 206 g/t Ag in the indicated category for a total of more than 300,000 ounces of Gold and more than 23 million ounces of Silver – that’s just the Don Ese part of San Miguel…in total, in the new model, Paramount’s estimated global measured and indicated ounces of Gold increased a robust 76% to 1,123,000 while estimated measured and indicated ounces of Silver rose 44% to 77.1 million…GGI’s proven track record of highly effective exploration in Mexico bodes well for a near-term important discovery at Rodadero, plus of course in northwest B.C. where GGI controls more than of the large mineralized corridor in the prolific Sheslay district which should heat up again shortly…
Condor Resources Inc. (CN, TSX-V) Update
Condor Resources (CN, TSX-V) reported a very interesting drill result last Thursday from its Soledad Property in Peru which is under option to Mariana Resources Ltd. – CN nearly doubled to close at 13 cents on volume of more than 6 million shares after the first deep hole (SDH-009) returned 174 m of mineralized breccia (from 92 m to 266 m) that averaged 4.4 g/t Au Eq (0.74 g/t Au, 114 g/t Ag and 1.2% Cu)…
As we showed in John’s chart Friday, CN faced resistance around 14 cents and indeed it reacted after touching a high of 15 cents…the stock got a little ahead of itself after such a quick climb…the retreat has been quite normal from a technical perspective with a strong band of Fib. support between 8 and 11 cents…it’s worth watching this one closely as results for two more holes are due shortly…of particular significance could be SDH-012, another deep hole that visually may have been intriguing given the language used in the news release (this was a near-vertical hole, drilled to 437-m depth in breccia No. 5, to also test for possible higher-grade feeder zones and indications of underlying mineralized porphyry)…the results of this hole will be critical…
Below is an updated chart from John showing the Fib. support…CN is off half a penny at 10.5 cents as of 8:30 am Pacific…
Discovery Ventures Inc. (DVN, TSX-V) Update
There’s a lot of merit to what Discovery Ventures (DVN, TSX-V) has put together in southeastern B.C. – a synergistic package that includes the high-grade Willa deposit (Cu-Au and some Ag) and the nearby Max mine and milling facilities (fully permitted)…the recently released PEA shows a very high IRR (412%) for the WillaMAX Project, though this is not based on proven mineral reserves but measured and indicated resources…
WillaMAX has some significant advantages including a very low capex, and it appears the company has secured the financing it needs…as the wheels go into motion in an attempt to put the Willa into production, DVN has a chance to turn into a star performer this summer if the Venture behaves as expected and metal prices continue to increase…
Technically, DVN recently staged a confirmed breakout above 23 cents which becomes new support…DVN is off 1.5 cents at 24 cents as of 8:30 am Pacific…as always, perform your own due diligence…
Adventure Gold Inc. (AGE, TSX-V) Update
Another company worthy of our readers’ attention during this third quarter is Adventure Gold (AGE, TSX-V) which broke above its long-term downtrend line earlier this year, and is now supported by a rising 200-day SMA at 16 cents…the company has a strong management and geological team, and an assortment of quality properties, not the least of which is the Val d’Or East Project (Pascalis)…initial results from an ongoing 3,000 m drill program at Val d’Or East were very encouraging…volume has been light in AGE but has a good chance of picking up significantly as the summer progresses and more results flow in…
Technically, the first support level is 22 cents as shown on the 2.5-year weekly chart below…a very strong support band also exists between 16 and 19 cents (19 cents is also where the rising 50-day SMA currently sits)…
Note: John and Jon both hold share positions in GGI.
