Gold has traded between $1,152 and $1,167 so far today…as of 8:20 am Pacific, bullion is unchanged at $1,162…Silver is also flat, trading at $15.68…Copper is off a penny at $3.04…Crude Oil has fallen $1.73 a barrel to $75.50 while the U.S. Dollar Index is off one-tenth of a point at 87.72…further to our piece yesterday regarding the greenback, Bank of America Merrill Lynch’s October survey of fund managers showed that 44% said that long dollar positions are the most “crowded” trades – extreme bullish sentiment that’s usually a red flag…
Total global Gold demand in the third quarter fell 2% to 929.3 metric tons, versus 2013’s third quarter, the World Gold Council reported today…
In its Gold Demand Trends report covering the third quarter of 2014, the WGC said total jewelry demand fell 4% in the third quarter, to 534.2 tons, versus the same quarter last year…technology demand fell 5% to 97.9 tons, and total bar and coin demand fell 21% to 245.6 tons…exchange-traded funds saw slowing outflows of 41.3 tons…however, total investment demand rose 6% year-over-year to 204.4 tons…central bank net purchases were down 9% to 92.8 tons but above the 5-year average of 87.5 tons…major buyers (officially) were Russia, Kazakhstan and Azerbaijan…
India’s jewelry demand was the engine behind global sales, the WGC said, as third-quarter Indian Gold jewelry demand was 182.9 metric tons, up from 114.5 tons in the third quarter of 2013 (BMR note, keep in mind, the Q3 rise in this demand reflects the unusual low base of Q3 2013 that was impacted by the introduction of a range of duty increases and restrictions in India, but buying is clearly picking up in India and this year’s final quarter sales are expected to exceed those in the July-August-September period)…
WGC reported that total global Gold supply fell 7% to 1,047.5 tons…mine output rose 1% to 812 tons, with total mine supply flat at 797 tons…recycled Gold supplies fell 25% to 250.5 tons, and net producer hedging was a negative 15 tons…
Russia-Ukraine Tensions Build
Ukraine is a powder keg – escalating tensions there do provide the possibility of giving Gold a significant boost in the immediate future…the director of the Organization for Security and Cooperation in Europe said today that the group’s drones monitoring military activity in eastern Ukraine have been shot at and jammed, part of a rapidly deteriorating situation in the region…earlier in the day, German Chancellor Angeala Merekl blamed Russia for undermining the peace agreement for the region after she had a phone conversation with Ukrainian President Petro Poroshenko…
IEA Releases World Energy Outlook
Global energy demand will dramatically increase over the next 20 years, but turmoil in many key producing regions and the difficulties in formulating the right energy policies mean the world may not be able to respond with adequate supply and meet its climate change goals, the International Energy Agency said today…in its annual World Energy Outlook, the Paris-based energy watchdog forecast that global energy demand will increase 37% by 2040…though global resources are adequate to meet the growth in consumption, significant investment and political action are needed to ensure the resources are developed, the IEA said…
Today’s Equity Markets
Asia
Japan’s Nikkei average soared to a fresh 7-year high overnight, gaining 196 points to finish at 17393…
Meanwhile, China’s Shanghai Composite fell 8 points to close at 2487 amid a deluge of economic data that continued to show an economy performing okay but struggling to gain momentum…
China released a set of monthly indicators for October in the afternoon trading session…industrial production rose 7.7% on year, below expectations for an 8% increase in a Reuters’ poll…retail sales rose 11.5% on year, slightly below expectations for an 11.5% rise…fixed asset investment for the January-October period increased 15.9%, in line with expectations…
Updated Shanghai Chart
Interestingly, the Shanghai has finally hit John’s measured Fib. resistance level on the weekly chart at 2500…the move to 2500 represented a major breakout (15+% move) from the neckline as John first predicted in a chart in July…
The Shanghai also appears to have reached the end of Wave #5 and is also at the top of an upsloping channel on the daily chart…tomorrow’s weely close will be interesting in addition to what unfolds next week…perhaps this bodes well for commodities as the CRB has performed horribly in this run-up in the Shanghai, moving in completely the opposite direction by almost the same percentage…
Europe
European markets are mixed in late trading overseas…
North America
The Dow is up 53 points as of 8:20 am Pacific…the TSX is off 26 points while the Venture has shed 2 points to 770…a weekly close tomorrow above resistance at 770 would be a positive sign for the Venture…
Cannabix Technologies Inc. (BLO, CSE) Update
Cannabix Technologies (BLO, CSE), currently part of a major industry event in Las Vegas, yesterday released its first publicly available device renderings and video presentation of its Cannabix Marijuana Breathalyzer…initial reaction has been very positive, judging by the action in the market, as the company continues to develop a patent-pending feature-rich, durable, hand-held THC breathalyzer device for law enforcement and the workplace…this is predominantly an American story and the word is getting out on BLO in the huge U.S. market…
Technically, the 12-cent area is now key after BLO surged through minor resistance at 10 cents on high volume…BLO is showing strong momentum, up 2 pennies at 13 cents as of 8:20 am Pacific…
Spectra7 Microsystems Inc. (SEV, TSX-V) Update
A few weeks ago (Oct. 24) we gave this technical update on Spectra7 Microsystems Inc. (SEV, TSX-V):
“Technically, strong buy pressure has emerged in SEV and the 200-day moving average (SMA) is reversing to the upside…key resistance remains in the mid-80’s – a breakout through that area would be a very bullish development…as always, perform your own due diligence…”
Spectra7 finally did bust through the key mid-80‘s area yesterday, thanks to news, and climbed as high as $1.04 in early trading today…as of 8:20 am Pacific, it’s up a penny at 89 cents…the company has released the VR7200, the industry’s first chip to enable next generation dual display virtual reality headsets…
On October 21 the company reported that it expected record quarterly revenue of approximately $1.7-million for the 3 months ended September 30, 2014…this would represent an increase of 45% over the prior quarter and a 170% jump compared with the same period last year…gross margins for the 3-month period ended Sept. 30 will exceed 80%, up from 76% in the previous quarter and from 69% in the same period last year, according to SEV…
Discovery Ventures Inc. (DVN, TSX-V) Update
Discovery Ventures (DVN, TSX-V) continues to advance its high-grade Willa-Max Copper-Gold Project in southeastern British Columbia…as we mentioned earlier this week, DVN found critical support at a long-term uptrend line as you can see on this 2.5-year weekly chart…a bullish “W” formed in the RSI(14), which is gaining momentum after hitting previous support, and a bullish engulfing candle pattern emerged last Friday as well…
DVN is up a penny at 25 cents as of 8:20 am Pacific…
Newstrike Capital Corp. (NES, TSX-V) Update
Another situation we like in Mexico is Newstrike Capital (NES, TSX-V) which has really outperformed the sector over the last few months, and can certainly be considered a potential takeover candidate…
On September 15, Newstrike announced results of a very robust Preliminary Economic Assessment for its Ana Paula Project in the prolific Guerrero Gold belt (NI-43-101 was filed on SEDAR October 30)…we urge our readers to check that out as the projected capital costs are relatively low and the IRR is 47.5% with a 2-year payback…the deposit at Ana Paula can be described as having a high-grade core, surrounding by a lower grade envelope of Gold and Silver mineralization…the high-grade nature of this Gold mineralization starts just below surface and extends to approximately 700 m deep…
(It’s worth noting that the geologist who has played a key role at Ana Paula, the highly respected Dr. Craig Gibson, is also busy overseeing Garibaldi Resources Corp.’s (GGI, TSX-V) Rodadero and La Patilla projects in Mexico…with Gibson’s proven insight and ability to identify a discovery and put a resource together, all the more reason we see success in store for GGI)…
Getting back to Newstrike, it formed a head-and-shoulders reversal pattern but critical resistance, which it has not been able to overcome yet, is around the $1.20 level…this is a very encouraging chart and if the Gold market cooperates, patient investors could be rewarded handsomely here…NES closed at $1.05 yesterday…
Calibre Mining Corp. (CXB, TSX-V)
A healthy technical consolidation occurred in Calibre Mining (CXB, TSX-V) during October and early November after quite a dramatic run that began near the end of May…support has held, as expected, between the 9 and 12-cent Fib. levels…
Results from a 5,000-meter Phase 1 drill program at the Eastern Borosi Gold-Silver Project, financed by IAMGOLD Corp. (IMG, TSX) have so far been very encouraging…as of 10 days ago, 32 holes of a planned 45-hole program had been completed, and results are still pending for about half of those holes, ensuring strong news flow through the balance of the year…
A couple of weeks ago, CXB announced commencement of a Phase 1 diamond drilling program (1,500 meters in up to 13 holes) on the Minnesota Gold Project within the B2Gold Corp. (BTO, TSX) joint venture on the Borosi concessions, northeast Nicaragua…Calibre controls a 49% interest in the JV while B2Gold has a 51% interest and is project operator…BTO has the right to earn an additional 19% per cent in Borosi by spending $6 million in additional project expenditures over 3 years…
CXB has been consolidating recently, a healthy development after RSI(14) extended well into overbought territory while an important Fib. level (18 cents) was also reached…a very strong band of support exists between 9 and 12 cents as shown in this 2.5-year weekly chart…
CXB is unchanged at 13.5 cents as of 8:20 am Pacific…
Note: John and Jon both hold share positions in BLO and GGI. Jon also holds a share position in DVN.
Any reason there has been no follow up commentary on the recent drilling results releases from Ascot Resources (AOT)?
Comment by CP — November 13, 2014 @ 9:08 am
It’s on the list, we will shortly…
Comment by Jon - BMR — November 13, 2014 @ 9:34 am
Thanks – recently discovered the site and enjoy your insights!
Comment by CP — November 13, 2014 @ 11:30 am
So Jon quick question. Are you a buyer or a seller of BLO at these levels? Can this march upwards continue?
Comment by Ed — November 13, 2014 @ 12:26 pm
I’m long on this, Ed, I’m convinced it has a lot of legs, and I mean a lot for a variety of fundamental and technical reasons. It has broken thru important resistance at .12, so that’s now an area of strong support on any minor pullback. But John and I are thinking very big on this one going into 2015. Keep in mind, the current market cap is only $5-6 million. A lot of U.S. exposure to come. There will be volatility but at this point, any pullbacks are very welcomed opportunities as when this unbelievably slid to a nickel. Those days are gone.
Comment by Jon - BMR — November 13, 2014 @ 12:31 pm
Yup the call on SEV posted here was mine thank you – Next up is DVG expecting news next week that testing of their game changing oilfield pumps to begin with results in 30 days at that time expect it to be trading at $1.00 + – also expecting Enpar ENP to breakout at anytime also with their water treatment technology it could be a big winner goiing forward
Comment by berrypolin — November 13, 2014 @ 1:00 pm
The conference must be going really well for BLO. Hell, 95% of the stock bought today was bought at the ask. Very few dumped into the bid. I don’t know about you, Jon, but my gut feeling is telling me there is a possibility we might see some real fireworks in these last two months. Looking at level 2, there isn’t much for sale (of course that can change). If a few investors with deep pockets step in they can clean half the float. If you look at several marijuana stocks, they have a share price between $1.50 and $4.00, and some of them are not even selling marijuana yet. Crazy valuations. The same thing can happen with BLO, even before they sell a single breathalyzer. This is a long term investment, I agree, but the potential for some big gains in the immediate future is there.
Comment by chris — November 13, 2014 @ 1:12 pm
BTW, I like how gold is trading, even though oil is getting beaten within an inch of its life. Feels like there is a change in the air. We’ll have to wait and see. On a final note- a cheap oil price does not bode well for the oil sands. If this continues, I am afraid oil sand workers will get a pink slip instead of a bonus for Christmas.
Comment by chris — November 13, 2014 @ 1:24 pm
Jon
based on Newstrike’s 43-101 so far, what kind of valuation would you expect for a buy out?
thanks
Comment by Greg — November 13, 2014 @ 1:44 pm
I’m thinking this could fetch $2+, Greg. IRR of nearly 50%; all-in sustaining costs of $567 per ounce gold, $526 per ounce gold net of byproduct credits; average annual production of 116,000 gold ounces and 239,000 silver ounces over an 8.2-year mine life. Very compelling numbers. The chart also says a lot with NES as we showed this morning.
Comment by Jon - BMR — November 13, 2014 @ 2:08 pm
Jon
Lukas Lundin and his Zebra Holdings co bought a lot of shares at $3.10, he owns a lot of shares of Newstrike, do you think he has influence over the co on what price they would sell for.?
Comment by Greg — November 13, 2014 @ 10:39 pm
Yes that would be a bummer Chris. Im not sure what part of the country you live in, but here where I live I am happy to see gas finally below 1.20 a litre. The 5.7 Hemi in my truck also likes the cheap gas 🙂
Comment by Tony T — November 14, 2014 @ 4:47 am
Influence over the direction of certain things, perhaps, Greg, but ultimately a take-out price would be a function of pure economics and market conditions.
Comment by Jon - BMR — November 14, 2014 @ 5:08 am
ZEN.v trading within range http://scharts.co/1BoXGrt
w4b/o either way
Comment by ChartTrader — November 14, 2014 @ 7:46 am