Gold has traded between $1,214 and $1,224 so far today…as of 8:00 am Pacific, bullion is unchanged at $1,219…Silver is off a dime at $17.56…Copper is flat at $3.07…Crude Oil has reversed and is up slightly at $93.60 while the U.S. Dollar Index, which has posted a record 11 straight weekly gains, is off one-tenth of a point at 85.64…
Down 12% in Q3, commodities are poised for the biggest quarterly decline since the financial crisis…weak global growth data from Europe and China as well as a strong dollar have created severe headwinds for the asset class…
“Equities and a strong dollar are set to remain key hurdles for Gold amid a broader background of rising rates,” said analysts at Barclays in an analyst note published Friday…the firm is also maintaining its call that Gold prices will average $1,220 an ounce in the fourth quarter of 2014…
The fact that Gold has managed to hold above its 2013 lows amid a major surge this month in the Dollar Index is an encouraging sign, and a clue that an October rally could be in the works…bullion actually gained slightly last week as the Dollar Index, overbought technically at the moment, broke out above the 85 level (see updated U.S. Dollar Index charts below)…
Lower prices this month are fueling demand for U.S. Gold coins…sales of American Eagle bullion Gold coins have nearly doubled in September over total sales last month…
A couple of positive contrarian indicators regarding Gold…holdings of SPDR Gold Trust, the world’s largest Gold-backed ETF, fell 1.20 tonnes Friday to 772.25 tonnes, their lowest since December 2008…meanwhile, this is very encouraging – hedge funds and money managers have cut their bullish futures and option bets in Gold to their smallest since January in the week up to Sept. 23, according to the latest COT data…the ingredients are in place for an October rally, though perhaps not after another test of key support around $1,200…
Today’s Equity Markets
Asia
China’s Shanghai Composite gained 11 points overnight to close at 2359 despite a report that Chinese industrial profits fell in August by 0.6% from a year ago, a far cry from last month’s 13.5% rise…interesting developments in Hong Kong where pro-democracy protests are intensifying…the Hang Seng Index lost 2% overnight, falling to its lowest level in more than 2 months…the central bank stated that it will inject liquidity into the banking system if needed following the weekend’s violent clashes…the protests by the pro-democracy activists opposing Beijing’s election plan for Hong Kong have expanded to larger parts of Hong Kong today, with some roads blocked and banks and retailers in the affected areas shutting their doors…Japan’s Nikkei average added 81 points to finish at 16311…
Europe
European markets are down modestly in late trading overseas…more weak economic data out of the euro zone…an economic sentiment index posted a figure not seen since late 2013 and showed a deterioration from the month before…meanwhile, the European Commission’s estimates showed that inflation expectations for the bloc had also decreased…
North America
The Dow is off its lows of the day but down 85 points as of 8:00 am Pacific…the TSX is 88 points lower while the Venture has retreated 5 points to 914…
Kalimantan Gold Corp. (KLG, TSX-V)
Even in these challenging market conditions, there’s still hope for some stocks trading at just a penny – or companies with a potentially valuable resource…Kalimantan Gold Corp. (KLG, TSX-V) is higher again this morning after a huge move Friday when the stock closed up 7 cents to 8 cents (a gain of 700%) after the company released a maiden inferred resource of 47 million tonnes averaging 0.6% Cu for the Main Zone of its Beruang Kanan deposit in Indonesia…the estimate is based on assays from 74 diamond drill holes that were completed between 1998 and 2007 and then from 2012 to 2013…the mineral resource is contained within a near-surface, shallow-dipping and strongly mineralized system that extends over an area of 1,000 m (north-south) and 950 m (east-west) with depth extents ranging from surface to between 100 m and 350 m below surface…mineralization remains open in multiple directions…KLG, with about 175 million shares outstanding, is up half a penny at 8.5 cents as of 8:00 am Pacific…
Doubleview Capital Corp. (DBV, TSX-V) Update
Encouraging news from Doubleview Capital Corp. (DBV, TSX-V) this morning with the company announcing that it has drilled 7 more holes at the Hat Property…while assays are still pending, geologists must have seen something they liked in the core as Doubleview boldly stated that “the Lisle Zone discovery has been extended laterally and to depth”…
A key factor of course will be grade – have they been able to find higher grades within the Sheslay “red stock”?…the fact that respected geologist Pat McAndless has entered the picture – he’s now the company’s senior technical adviser – is a sign to us that there could certainly be very good news to come from the Hat…McAndless has a track record of nailing down deposit types like this and we don’t believe he’d take on the Hat Project if he didn’t see strong upside…
The Hat is already showing impressive volume potential with nearly 1 km separating important drill holes HAT-06 and HAT-08…the discovery of higher Copper and Gold grades in this system could be a major catalyst for DBV and the district as a whole…Doubleview has been able to advance this property systematically through each round of drilling, thereby increasing the odds, in our view, that this next set of assays and more drilling could provide the major breakthrough investors are hoping for…
This DBV weekly 3-year chart shows a bullish primary trend with a rising 300-day moving average (SMA) forming part of the exceptional chart support at 15 cents…DBV opened lower to successfully test that support again this morning, but has since stabilized and is now off 1.5 cents at 16 cents as of 8:00 am Pacific…
Cannabix Technologies Inc. (BLO, CSE) Update
Cannabix Technologies (BLO, CSE) has enjoyed a strong month, both fundamentally (see Sept. 9 news) and on the market side as interest in this company continues to grow in the United States as predicted…
Excitement over the company’s patent-pending marijuana breathalyzer technology (BLO is a first-mover in this space, no one else has what they’re developing) drove the share price as high as 32 cents within 7 days of BLO trading on the CSE in late June…over the summer, company officials were focused primarily on BLO’s business model and behind-the-scenes efforts to introduce this technology and the BLO story to the critical U.S. market…the proof is there that BLO is on track…
Below is a chart of how BLO has traded since late June on the CSE (trading volumes on the OTC are picking up significantly)…you can see how the retreat from the 20-cent level was on low volume (good sign) and how the the recent breakout occurred on very robust volume…the 10 and 20-day moving averages (not on this chart) have reversed to the upside, and these rising SMA’s should provide strong support going forward…importantly, the 50-day SMA has flattened out and appears ready to reverse – that’s always a bullish sign…
BLO is up half a penny at 18.5 cents in early trading…
Mission Ready Services Inc. (MRS, TSX-V)
An interesting company to put on your radar screen…Mission Ready Services (MRS, TSX-V) was up 7 cents last week to 37 cents after announcing that it has been awarded a $1.5 million contract to perform research and development for “next generation” body armor for the U.S. Marine Corps…MRS announced a $3.5 million financing at 25 cents per unit earlier this month…as always, perform your own due diligence…MRS is off a penny at 35 cents as of 8:00 am Pacific…look for support at the rising 10 and 20-day SMA’s at modestly lower levels…
U.S. Dollar Index 2.5-Year Weekly Chart
The move in the U.S. dollar since July has been parabolic, allowing it to hit a 4-year peak against a basket of major currencies…plenty of important economic data, culminating in the release of September non-farm payrolls, could influence the Dollar Index positively or negatively this week…
This 2.5-year weekly chart paints an excellent picture of how powerful the greenback has been since touching long-term support at 79 in the second quarter…at 84%, RSI(14) is now clearly “stretched” and at some point – probably early in this upcoming quarter – current overbought conditions will need to be cleansed…
The Dollar Index has cleared all Fib. resistance levels from 80.31 to 84.52…it’s possible it could run further over the near-term to test the next measured Fib. resistance at 88 before a correction sets in…
34-Year Monthly U.S. Dollar Index-Gold Comparative Chart
This long-term U.S. Dollar Index-Gold comparative chart going back to 1980…what happened just recently is that the Dollar Index broke out above an RSI(14) trend line (it’s now at 65% as you can see near the top of this chart) as well as a triangle formation on the chart in place for over 8 years…this explains the power of the current move in the greenback – a major trend change, suggesting the Dollar Index will likely ultimately challenge its long-term downtrend line above the 95 level…that process could take two or three years – who knows – but the bulls have really grabbed control of the greenback…
Silver Short-Term Chart
Since the beginning of last month, Silver’s RSI(2) on this 6-month daily chart has spent most of its time in oversold conditions below 30, reversing the extreme overbought situation that persisted through much of June…at a minimum, an October rally up to previous Fib. support (now near-term resistance) around $18.60 seems very possible…
Silver Long-Term Chart
The next obvious major support for Silver is $16, a level it breached during the 2008 Crash but reclaimed as support in late 2009 as you can see in this 11-year monthly chart…the $17.50 area – holding up at the moment – provided good support during a basing period in 2010 before the metal took off to the upside…the $16 to $17.50 area, then, is where Silver should rebound from…
Note: John and Jon both hold share positions in BLO. Jon also holds a share position in DBV.
Jon, it’s very encouraging to see American investors stepping up and buying BLO. That is a very good sign. A lot of people are waiting for this breathalyzer.
Comment by chris — September 29, 2014 @ 7:07 am
It shows they’re on track with their game plan, Chris. BLO will succeed – and perhaps hugely – to the extent it can penetrate the massive U.S. market, both in terms of its technology and the investment community. It’s an American story, and management definitely understands that.
Comment by Jon - BMR — September 29, 2014 @ 7:17 am
Hey Jon…what are your thoughts about all the DBV selling today? Seems as though there is a bit of manipulation at play, based on some strange trades today.
Comment by KevinMc — September 29, 2014 @ 8:18 am
Kevin, half of the DBV selling is from just 1 house (BMO), so the selling is not widespread, if that’s what you’re referring to. A market brings together buyers and sellers, and they battle it out on both sides. There’s usually one reason for buying a stock – you think it’s going to go up – and there can be a multitude of reasons for selling a stock. In the specific case of DBV, everyone should at least be hoping that they hit big at the Hat as such an event would be positive for the entire market. They appear to be making good progress on the ground, that’s what’s important right now. Don’t get too caught up in the minute-by-minute, hour-by-hour gyrations in the stock as volatility is a sure thing.
Comment by Jon - BMR — September 29, 2014 @ 9:00 am
Thanks Jon, makes sense. Kind of hard to explain the unexplainable I guess! Good opportunity to pick up some cheapers shares hopefully. As always, I appreciate your input.
Comment by KevinMc — September 29, 2014 @ 9:02 am
Not very often i feel uncomfortable about an area, but
today i just don’t have it for Sheslay. Although i am gambling
by averaging down on PGX, i must remind myself, that not too
long ago, folks bought it at over 0.50. Today, we received a NR
from DBV, which make’s one wonder, why would a company, who
could be struggling for cash, pay to scatter below average news.
Then there’s AIX & ABR, need i remind everyone what they are
trading at. We may have to change our investing ways, as it
looks like buy & hold is a thing of the past. We just can’t
assume that what’s in the ground will light up the market,
PGX crew, even with their past performance didn’t have it right ,
otherwise we would not be trading at a dime, i doubt if one
can buy a stick of gum for a dime. I am forever thinking
about RBW & the rock the CEO proudly displayed, what did it
get us ? deeper in debt.
Comment by Bert — September 29, 2014 @ 9:27 am
Today selling on DBV is manipulation !
Comment by Guy Delisle — September 29, 2014 @ 9:37 am
Pgx is taking it on the chin, downtown . 095,Dbv will be the leader in the area
Comment by Paul — September 29, 2014 @ 9:37 am
Yup mission ready is a nice littlevinteresting trade but nothing compared to sev and dvg !
Comment by berrypolin — September 29, 2014 @ 10:10 am
Prosper is getting bashed as well. Seller is BMO and anonymous, same as DBV. Is Prosper starting to look like decent value at these low prices? Between the appalling NR and the selling by one house, it feels like there are funny goings on occurring with the companies up at the Sheslay Valley.
Comment by Tom UK — September 29, 2014 @ 10:24 am
Jon, I may seem impatient with GGI regarding Sheslay drilling, but why haven’t we heard from them regarding the drill program at the Grizzly. I am pretty sure the targets are selected as Regoci stated about a month ago that they will drill right into the core of this thing. Also, we should be hearing from Mexico soon one would think?
Comment by Dan — September 29, 2014 @ 12:24 pm
Jon
I am being negative in my last post regarding Sheslay. I feel it may be
unfair of me, since you are high on the area, therefore if you want to,
you do not have to post it. Better days ahead. Thanks !
Bert
Comment by Bert — September 29, 2014 @ 12:49 pm
Jon, no doubt in my mind that BLO will succeed. I also forgot to point out that the majority of the shares sold are from anonymous. It seems everybody is holding on to their shares real tight. This stock can go parabolic once they have the breathalyzer in their hands and go on to the clinical trials.
Comment by chris — September 29, 2014 @ 12:50 pm
Bert, I too am somewhat apprehensive of the situation at Sheslay. However, when I look at todays selling on DBV and Prosper, it comes from the same broker. As for the PR from DBV, I think it could be a smart move. Prosper’s PR was a disaster as it was so muddled. DBV have covered the role of Pat and his staff with today’s PR, so the next PR will concentrate on the assays of the 7 holes. It will be clear and to the point, which suggests to me that Farshad wants to focus people’s minds on the numbers, so I conclude that the results will be good.
I’m not sure what the game is with Prosper, but someone apparently took a short position before the results were announced. Will the same people go long before the next results are out? I am suspicious of such a badly written PR that actually contained reasonable results.
Comment by Tom UK — September 29, 2014 @ 6:41 pm
Bert, below average is what pgx put out as a news releases and the thought that some are still interested in that company turns my stomach. Peter has seriously caused a lack of trust with some of the large investors, I know that first hand. What you missed with Dbv, but Jon caught on, is that Dbv has expanded on the discovery, that in itself is huge! In my opinion pgx still has a lot of room to go down, as far as Dbv, results are due out any day now and rumours are flowing that results with impress the market. Today’s sell off was pure manipulation.
Comment by Paul — September 29, 2014 @ 7:25 pm
As i type Gold trading at 1212.00, let’s keep our fingers crossed
that it doesn’t go below 1200.00, otherwise watch out below.
Comment by Bert — September 30, 2014 @ 5:39 am
Gold just turned green, after being down over $12.00.. Forgive me
for posting often, but if it helps to cheer anyone up, it’s well
worth it.
Comment by Bert — September 30, 2014 @ 5:51 am