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Gold has traded between $1,309 and $1,319 so far today…as of 8:30 am Pacific, bullion is unchanged at $1,311…Silver is up 2 cents at $20.92…Copper has added 2 pennies to $3.18…Crude Oil has gained 82 cents to $103.95 while the U.S. Dollar Index is slightly higher at 80.56…

Holdings in SPDR Gold Trust, the world’s largest Gold ETF, rose 1.8 tonnes to 805.14 tonnes on Friday…they also stand more than 1% higher for the year overall after 2013’s sharp decline…the drying up of ETF selling is a major factor in Gold holding up better than most analysts expected…

Morgan Stanley characterizes Copper as the “most compelling metal” for the second half of 2014…the firm says the outlook has improved in recent weeks, with demand in Europe and the U.S. picking up pace against a backdrop of re-accelerating industrial activity…

OPEC said Friday that its Crude production and market share fell last year as a boom in U.S. shale dents demand for its Oil…in an annual statistical report, OPEC said its collective Crude production was down 2.5% during 2013 on an annual basis…its share of total global production in 2013 averaged 43.4%, down from 44.6% in 2012…global Oil production and demand rose last year but was largely captured by OPEC’s rivals, notably a rise in non-conventional U.S. production…the group said earlier this month that demand for its Oil will continue to decline next year, when it’s likely to fall by 300,000 barrels a day…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 5 points overnight to close at 2054…Japan was closed for a public holiday…

There are some positive indications from China that support global growth prospects…Chinese fiscal spending rose 26% in June, year-over-year…meanwhile, in a sign that the central government is attempting to stimulate the economy, Chinese banks lent out about 20% more than expected in June…Chinese economic data in July beat many projections from economists – most importantly was the surge in financing…money supply grew 14.7% against the 13.6% estimate and aggregate financing was 1.97 trillion yuan against a 1.43 trillion estimate…the higher than expected growth in financing may correlate into stronger demand for Copper due to economic expansion…

Europe

European markets were down modestly today with Ukraine in focus…European leaders threatened harsher sanctions against Russia over the weekend in the wake of the downing of Malaysian Airlines Flight MH17, departing from initially muted tones in reacting to the disaster but leaving uncertainty over how quickly they would be able to make good on their threats…EU leaders meet tomorrow in Brussels…the evidence is compelling that pro-Russian separatists, with assistance from Russian military personnel, shot down the plane, by mistake, with a Buk-M1 surface-to-air missile launcher from eastern Ukraine…not only is Russia complicit in this horrible act, but Vladimir Putin is cranking up his propaganda machine with the Kremlin brazenly asserting that it bears no responsibility whatsoever for how a civilian airliner and 298 bodies ended up strewn across eastern Ukraine…in addition, the handling of the crash scene – with rebels also preventing full access by investigators – has been disgusting to say the least…

British Prime Minister David Cameron didn’t mince words on who is to blame…in an op-ed in The Sunday Times, he called the plane crash and its aftermath “an outrage made in Moscow”…Putin fired back with a video statement posted on the Kremlin’s official website early today, arguing that his country has been pushing for peace in Ukraine…he criticized attempts to “politicize” the crisis…

The Wall Street Journal reported over the weekend that U.S. officials suspect that Russia supplied the rebels with multiple SA-11 anti-aircraft systems by smuggling them into eastern Ukraine with other military equipment, including tanks…WSJ also reported that officials believe the systems were moved back into Russia following Thursday’s crash, buttressing speculation that the Russians were attempting to remove evidence of their involvement in the tragedy…

U.S. Secretary of State John Kerry, speaking on news shows yesterday, said it was clear that Russia “supports the separatists, supplies the separatists, encourages the separatists, trains the separatists.”

Not surprisingly, Russia is getting some support from China…since the weekend, Chinese media have been highly critical of the approach of Western nations to this crisis, saying in editorials that these countries have been too quick to point fingers at Moscow-backed rebels and implicate Russia for escalating violence…

North America

The Dow is off its lows but down 84 points as of 8:30 am Pacific…the Consumer Price Index (CPI) is scheduled for release tomorrow, while it’s another important week for Q2 earnings…companies reporting this week include Haliburton, Apple, Biogen Idec, Facebook and Starbucks…

The TSX has shed 41 points through the first two hours of trading while the Venture has fallen 4 points to 1008…Condor Resources (CN, TSX-V) is off 3 pennies at 11 cents after the release of assay results from hole SD-012 at the company’s Soledad Project in Peru (under option to Mariana Resources Ltd.)…SDH-012 intersected 161 metres of mineralized quartz-tourmaline breccia (from 87 m to 248 m) that averaged 2.1 g/t AuEq (1.3 g/t Au, 13 g/t Ag, and 0.38% Cu) – encouraging, but those results and the lack of immediate additional drilling will chase away the speculators…Discovery Ventures (DVN, TSX-V) continues to look very solid and is up a penny at 25 cents on volume of more than 1 million shares as of 8:30 am Pacific…John will have an updated DVN chart tomorrow…

TSX Gold Index Relative To Silver

Gold/Silver stock investors have pplety of reasons for encouragement as this quarter progresses, given the behavior of the TSX Gold Index and the Venture Exchange…

Below is a new chart (1-year weekly) from John that shows the TSX Gold Index relative to the price of Silver…when the trend is bullish, like it is now, stock prices are outperforming the price of Silver…at present, the chart shows the start of Wave #3, usually the most powerful wave, with an end at a ratio of 12.35 (29% higher than Friday’s close)…RSI(14) is moving up from a bullish “W”, and note the rising MA(40) which is the 200-day SMA…

This chart doesn’t tell us what the TSX Gold Index will do today, tomorrow or later this week, but it serves as further confirmation that an overall bullish pattern is in place and stocks are likely to outperform metal (Gold-Silver) prices…

Highbank Resources Ltd. (HBK, TSX-V) Update

Highbank Resources (HBK, TSX-V) hit a new 7-year high of 38 cents this morning after announcing late Friday that it’s proceeding with the closing of the second tranche ($1.3-million) of a $4 million convertible debenture financing with “expressions of interest” for an additional $500,000…the company closed the first tranche of $2.7 million on April 15…the financing is going toward continued development of the Swamp Point North aggregate project on tidewater south of Stewart…

HBK has more than doubled since we introduced it to our readers in March after the company received its NOW permit approval for Swamp Point North from the Ministry of Mines…the initial breakout above long-term resistance at 15 cents was a key technical event along with the recent push through resistance at 20 cents…this is why technical analysis, combined with an understanding of fundamental factors impacting a company (positively or negatively), can be so useful…

John’s updated HBK 10-year chart shows Fib. measured resistance at 35 cents and 43 cents…after climbing as high as 38 cents in early trading, HBK is up a penny at 34 cents as of 8:30 am Pacific…

Garibaldi Resources Corp. (GGI, TSX-V) Update

Garibaldi Resources (GGI, TSX-V) remains on a powerful trajectory, technically and fundamentally…despite a fabulous chart, what impresses us the most about GGI – and why we believe it’ll be a summer star on the Venture – is its highly compelling combination of fundamental factors related to management, share structure, and immediate/near-term discovery opportunities at no less than three different properties from Mexico to northwest British Columbia…

The really “sweet season” has now arrived for Garibaldi with the Sheslay district getting ready to heat up while projects in Mexico continue to gain momentum…in such a scenario, with the wind at its back in terms of a primary Venture uptrend, GGI is incredibly well-positioned in our view to reward shareholders handsomely (again) this quarter…Garibaldi gained 46% in Q1 and another 37% in Q2…it’s up 19% so far in Q3…the trend, as they say, is your friend…

Given the proven effectiveness of the company’s hyperspectral remote sensing technology, we’re anticipating a significant breakthrough at GGI’s Rodadero Project in central Sonora State, Mexico, where more drill results are pending…the first hole at the Silver Eagle target returned exceptionally high grades over a 7-meter intersection…if GGI can show that a well-mineralized near-surface system indeed exists at Silver Eagle – the first of only 8 targets tested at Rodadero – then the potential scale of Rodadero will really start to come into play…hyperspectral data, surface sampling and mapping have revealed intriguing targets over a NE-SW trending distance of 10 km…

Isaac Newton’s First Law of Motion is that an object in motion stays in motion until acted upon by an outside force…this concept can certainly be applied to the stock market…Garibaldi has been hugely successful because it has managed to stay in motion – on the ground and in the market – and that motion is accelerating with no outside force in sight to stop it…that puts GGI in an elite category…

Garibaldi continues to exhibit the perfect combination of characteristics that are found only in a small percentage of publicly traded junior resource companies:

• Superb management and geological group with focus and determination
• Outstanding properties/”blue sky” potential
• Proven record of success
• Financial strength
• Highly favorable share structure
• Market awareness and the ability to communicate

Yes, all of the above qualities are rarely found in a junior exploration company…these features separate the wheat from the chaff in this business, and investors who understand that point can build incredible wealth by selecting the right company…

This sector is littered with junk – poor management, share structures that have been obliterated, etc. – but there are nonetheless exceptional opportunities at the moment.  GGI is one of them…its success on the ground is accelerating…importantly, the company has also developed a brand and continues to deliver on that brand…

10-Year Monthly GGI Chart

A picture tells a thousand words and so does this long-term monthly chart…GGI is still significantly below measured Fib. resistance levels after a confirmed breakout above previous Fib. resistance at 25 cents…RSI(14) is at just 65% (plenty of room to move higher) and continues to climb an uptrend line…

Pine Cliff Energy Ltd. (PNE, TSX-V) Update

We’ve been tracking Pine Cliff Energy (PNE, TSX-V) for more than a year now, and the company continues to progress with increasing production and record cash flow…Q1 earnings were $3 million on production of 6,276 barrels of Oil equivalent per day…last week, PNE hit a new all-time high after announcing that it has entered into a binding agreement to acquire certain shallow natural gas assets in Alberta and Southern Saskatchewan from a senior oil and gas producer for cash consideration of $100-million…the deal is expected to be financed by a combination of working capital and debt…

Below is a weekly PNE chart going back to mid-2012…note how the share price has been trading in an upsloping channel supported by a consistently rising 200-day moving average (SMA)…this bodes very well for the second half of 2014…PNE is off a nickel at $1.68 as of 8:30 am Pacific…

Silver Short-Term Chart Update 

This 6-month daily chart shows how extreme RSI(2) conditions persisted over nearly two weeks in June…RSI(2) is currently at a much more modest 39% but could still unwind a little more…chart support exists at $20.75 while John has also highlighted three Fib. support (retracement) levels – $20.33, $20.08 and $19.82…

Silver Long-Term Chart Update

Silver has broken out above one important downtrend line but remains susceptible to a minor pullback given temporarily overbought conditions…RSI(2), for example, closed last week at 75% with the metal still marginally below strong resistance around $22…Fib. support levels on the 6-month daily chart range from $19.50 to $20.33, so a retrace into that range is certainly possible…

Note how the SS is moving up from a low bullish “W” while the ADX indicator shows the growing potential for a bullish +DI/-DI crossover this quarter…bottom line – Silver is looking very attractive…

Note:  John and Jon both hold share positions in GGI.  Jon also holds a share position in DVN.