Gold has traded between $1,191 and $1,210 so far today…as of 7:30 am Pacific, bullion is up $5 an ounce at $1,209…Silver, at $16.54, has added 27 cents…Copper is off a penny at $2.57…Crude Oil has retreated $1.54 a barrel to $49.26 on more supply concerns…a survey showed Friday that the number of rigs drilling for Oil in the U.S. fell by 37 last week, the smallest weekly drop this year…the overall rig count is now at its lowest level in more than 3 years, but U.S. production still hasn’t peaked…the U.S. Dollar Index is up one-quarter of a point to 94.58…
Gold could be impacted this week by comments from Fed Chair Janet Yellen during her biannual testimony before Congress…she starts tomorrow before the Senate Committee on Banking, Housing and Urban Affairs…the next day, she appears before the House Committee on Financial Services…one thing to watch for from Yellen (besides possible hints regarding a pending rate hike) is any talk regarding the strength of the U.S. dollar as it’s quite obvious that the surge in the greenback is counter productive to the Fed’s goal of boosting inflation, and the high dollar is also beginning to impact the bottom line of many U.S. corporations…the Fed doesn’t ignore charts, and it’s likely not interested in seeing the Dollar Index climb above the critical 96 level anytime soon…
Hedge funds and money managers cut their bullish positions in Gold futures and options to a 6-week low in the week to Feb. 17, U.S. Commodity Futures Trading Commission data showed on Friday…however, holdings in SPDR Gold Trust, the world’s largest Gold-backed ETF, rose 0.23% to 771.25 tons on Friday – its 2nd straight day of inflows…
The deadline for the Indian government to present its annual budget is quickly approaching and, at the same time, it’s expected the government will also announce a reduction in Gold tariffs. Comments from Barclays: “In our view, it is unclear whether a reduction in duty will lead to an immediate rise in imports, but it is likely to support interest in the coming months, particularly when seasonal buying resumes in April, and particularly if the cut is of a meaningful magnitude.”
Two Technical Perspectives On Gold
We have 2 Gold charts this morning that aren’t intended to predict the future but they should help immensely in terms of focusing investors on key levels and potential developments in the coming days and weeks…
20-Year Monthly Chart
What’s encouraging about this 20-year monthly chart is how Gold continues to maintain its uptrend support line going back to 2001…despite Gold’s weakness in November, and again during parts of December, the support line held…meanwhile, the RSI(14) and SS indicators actually broke above long-term downtrend lines last year…
As long as Gold’s uptrend line on this chart isn’t breached (based on the month-end price), then bullion is okay…$1,000 Gold (John’s 50% Fib. retrace) becomes a distinct possibility if the uptrend is broken…the $1,180-$1,200 area represents key support…the February monthly close is going to be important…
Gold 2.5-Year Weekly Chart
This look at Gold’s action over the last 2-and-a-half years is really fascinating…since the second quarter of 2013, Gold has been trading within a downsloping flag…eventually it will break either above or below that flag…
We emphasized this chart in November because when everyone was panicking as bullion tumbled to the $1,130 area, it was important to note that Gold would likely find support and rally from $1,130 as that level represented the bottom of both the downsloping flag as well as the RSI(14) channel…in fact, John postulated that a near-term move back up toward the top of the flag around $1,300 was a distinct possibility…of course that’s exactly what occurred in January…
The ease with which Gold fell through a support band between $1,240 and $1,260 this month is of concern…the $1,200 area (a support band between $1,180 and $1,200) is critical…this chart, like the one above, tells us that Gold is at a really very important juncture and it’s fair to say that downside risk has increased given the recent price action…from a fundamental standpoint, record valuations in global equities (and signs of even higher prices on the way) could act as a headwind for Gold going into the final month of Q1…
Today’s Equity Markets
Asia
Japan’s Nikkei average settled at a fresh 15-year high overnight, climbing 135 points to close at 18467, as the yen traded near 119…China, Taiwan and Vietnam are still closed for the Chinese New Year holiday…
Europe
The last-minute deal reached late Friday between Greece and the EU, a 4-month extension of Greece’s present financing package, has given most European markets a lift today…Greece, however, must present a list of reform proposals today (will those reforms satisfy the Germans, in particular?)…not surprisingly, Friday’s agreement has been met with some backlash in Greece after all the tough talk about scrapping the bailout plan from the hard-left new government in that country…a bunch of academics and communists got a lesson in real-world economics…
On the data front, Germany’s widely-watched Ifo Index showed that business confidence in the country rose once again in February, though it missed analysts’ expectations…
Frank Holmes, Chairman and CEO of U.S. Global Investors, gave a very upbeat appraisal regarding this year’s economic prospects for Europe in his weekly “Investor Alert” Friday (www.usfunds.com) which we encourage readers to check out. “We’re definitely starting to see the early signs that Europe is reflating its economy. Attractive PMI data, positive economic surprises and growing consumer confidence all point to a strong recovery, one that should bode well for global investors in general and our Emerging Europe Fund (EUROX) specifically.”
North America
The Dow is down 62 points as of 7:30 am Pacific…on Friday, the Dow surged 150 points for its first record close of the year while the S&P 500 ended the week at its third record close for the year…
Nasdaq Update
March 2000 is the only month in history when the Nasdaq ever laid eyes on 5000, peaking at 5136…a dot com fueled frenzy, and the momentum of a major technical breakout, doubled the value of the Index in just half a year, but by October 2002 (in Venture-style fashion) the Nasdaq crashed by nearly 80%…
It has taken a decade-and-a-half to recover that ground…is this time different?…it probably is…this move has been built on the solid foundation of important technological advances, a mature Internet, and some of the biggest and most successful franchises in the world…interestingly, tech companies that sold shares to the public in 2014 were valued at 6.2 times revenue compared with 31.7 in 2000 according to a report from CNBC…valuations got insanely out of hand in 1999-2000…
This 1-year weekly chart demonstrates that the Nasdaq has an impressive amount of “leg room” as it closes in on its all-time high…the Index has followed a steady, predictable pattern and made an important breakout at the beginning of this month above 4800…while there is Fib. and chart resistance in the low 5100‘s, we do expect that wall to come tumbling down still has plenty of room to move higher and could easily stay in overbought territory (like the U.S. Dollar Index) for an extended period…
The Nasdaq is off slightly this morning to begin the new week, about 50 points shy of the magic 5000 level…
In Toronto, the TSX is down 17 points while the Venture is off 2 points at 693 through the first hour of trading…
Interesting article by David Kaufman (“Why the TSX Venture Deserves A Second Look“) in Friday’s Financial Post. “Investors today (especially those with long-term horizons) have a rare opportunity to construct a portfolio of companies that are much less expensive than they either have been or ought to be…don’t let this one pass you by,” Kaufman wrote…he’s the President of Westcourt Capital Corp., a portfolio manager specializing in traditional and alternative asset classes and investment strategies…
Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update
Cannabix Technologies (BLO, CSE, BLOZF, OTC) has been our favorite non-resource stock in the speculative sector since last summer, and its huge run this month should have come as no surprise as BLO edges closer to unveiling its marijuana breathalyzer prototype (and news about testing) as reported February 2…development has been proceeding as planned with the mechanical design, circuit board layouts, firmware and printed circuit board designs all nearing completion…BLO is clearly beginning to gain traction but the “gloves may really come off”, to use a hockey analogy, once investors (and the media) can actually see the feature-rich initial version of this device…
This is a company that from Day 1 has shown the ability to execute on all fronts which puts it into an elite category as far as CSE or Venture-listed companies are concerned, and it’s reasonable to speculate that the excitement around BLO’s product is still only in the early stages given the recent trading action…this is primarily a U.S. story and the American market, in all respects, is massive…Cannabix is the front-runner in developing a much-needed marijuana breathalyzer for law enforcement and the workplace…
This is a powerful story, the company has the cash it needs for now, and management knows what it’s doing…they’re very capable and focused, following the game plan they had from the beginning…this is the perfect recipe for business success and market success…
Technically, the uptrend in Cannabix started last November and a slow but steady climb began in January, tracking the rising 20-day moving average (SMA)…the temporarily extreme overbought technical conditions at the 77-cent high February 11 have unwound significantly…the Fib. cluster has provided support, and a bullish pennant now appears to be forming as you can see in the chart below…
BLO opened at 50 cents on the CSE this morning but is currently up a penny at 54 cents as of 7:30 am Pacific…
This chart is in U.S. dollars from the OTC listing as Stockcharts does not yet provide chart for CSE-listed companies…
Canada Carbon Inc. (CCB, TSX-V) Update
As a follow-up to John’s chart January 30 showing Canada Carbon (CCB, TSX-V) poised for an imminent breakout, CCB enjoyed its highest volume day since October on Friday, gaining 3.5 cents to close at 28.5 cents…last Thursday the company reported that it was halfway through its first 1,500 m drill program at its Miller Property where it’s focused on expanding graphite mineralization and defining a resource…the company is also talking up the potential of Miller to host high quality dimensional stone…wide intersections of white marble were intersected in drill holes last year at the property, and this is being investigated further in the current program…
CCB is up a penny-and-a-half at 29.5 cents as of 7:30 am Pacific…
Silver Short-Term Chart Update
It’s an important week for Silver…this 9-month daily chart shows how the metal reacted in January at $18.50 (almost exactly at chart and Fib. resistance) and has been trading this month within a downsloping channel…it has now hit the bottom of that channel, so we’ll either get a breakdown here very shortly or a recovery back up toward the top of the channel…
RSI(14) is also now at support (the 50% level was resistance between August and November of last year), so that’s an indicator to watch closely as well…
In December, Silver finally staged a definitive breakout above a downtrend line that was in place since the summer (note how the downtrend line became new support in early December)…
The December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support was demonstrated at $15 and is also evident around $15.60…
Silver Long-Term Chart Update
This 34-year monthly chart continues to give hope that Silver could be in the very early stages of a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…the reasons for such a move are also not clear…
RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…
One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet – though that doesn’t necessarily mean that the price can’t still trend higher…nonetheless, it would be encouraging to see this sell pressure begin to abate…
Note: John and Jon both hold share positions in BLO.
Regoci may be smiling but GGI investors aren’t – not yet.
Comment by Dan — February 23, 2015 @ 7:49 am
Many BLO investors weren’t smiling at a nickel, either, Dan, except those who swooped in and took advantage of the emotional-driven mistakes of others. Always stay focused on the big picture…if you let minute-by-minute, hour-by-hour or day-by-day trading influence your emotions, that’s when market mistakes often occur.
Comment by Jon - BMR — February 23, 2015 @ 8:02 am
Re: GGI
BMR – if you let minute-by-minute, hour-by-hour or day-by-day trading influence
your emotions, that’s when market mistakes often occur.
Bert – I notice month-by-month, quarter-by-quarter wasn’t included.
Dan the man i am on your side.
Comment by Bert — February 23, 2015 @ 8:24 am
Yes I get that, but I see you fail to mention week to week and month to month which it has become, therefore you can’t blame anyone for getting a little nervous. I’m still being patient with ggi, but I must admit it has been tested several times.
Comment by Tombc — February 23, 2015 @ 9:10 am
Incredibly we are still waiting on the C of A for GBB. Have you had any contact with GBB and do you have a sense for why it is taking so longÉ
Comment by Peter — February 23, 2015 @ 9:26 am
Jon, did you get the email I sent you Saturday. I hit the contact bottun at the bottom and then attached that site. Did you get it. It’s ref: WRR and it paints a BLO picture for sure.
Comment by dave — February 23, 2015 @ 11:04 am
GGI – yeah, the inverted hammer didn’t hold either, and those are usually reversals – oh brother.
Comment by dave — February 23, 2015 @ 11:27 am
GGI Release after closing Tuesday?
Comment by freddy — February 23, 2015 @ 12:33 pm
Xmet Inc. (XME – TSXV)
Xmet Commences Drilling on Its Grasset Project
TORONTO, ONTARIO–(Marketwired – Feb. 23, 2015) – Xmet Inc. (“Xmet” or the “Company”) (TSX VENTURE:XME) is pleased to announce that it has commenced drilling on its 100% owned Grasset project located along the Detour Sunday Lake Deformation Zone and adjacent to Balmoral Resources Grasset Project.
Rouillier Drilling was engaged to complete the scheduled 2,200 metre program which includes ten diamond drill holes. The targets where delineated from the airborne VTEM recently completed by Xmet and previous ground IP work completed by Xmet. The drill program is expect to be complete towards the end of March 2015.
“We are fortunate to be in the unique position to be starting our second drill campaign of 2015 and we are looking forward to discovering the potential of our property along the Detour Sunday Lake Deformation Zone which Detour Gold and Balmoral Resources have developed so successfully,” said Alexander Stewart, Xmet’s Chairman and CEO.
Xmet would also like to invite its shareholders and interested parties to visit our Booth #2322 in the Investors Exchange at the Prospectors and Developers Association of Canada conference. The PDAC is being held at the Metro Toronto Convention Centre March 1-4, 2015.
Comment by Franky g — February 23, 2015 @ 1:06 pm
Keep an eye on ARY
Comment by dave — February 23, 2015 @ 1:12 pm
Freddy – 8.GGI Release after closing Tuesday?
Why do you say that?
Comment by Dan — February 23, 2015 @ 1:32 pm
Jon
I asked this a while back and did not get a response…. If a company is in negotiations to buy another company, can the acquiring company ask the company that they want to acquire to not release any information that would cause the company’s share price to rise while they are negotiating? is this something that would even be legal… and wouldn’t the company that is getting acquired want the share price to go higher so as they could hopefully get a higher price for their company? does this makes sense?
thanks
Comment by Greg — February 23, 2015 @ 3:50 pm
Jon, do you think GGI will have news out before the PDAC? With no news since Nov 2014, what could they possibly talk about?
Comment by Dan — February 23, 2015 @ 3:58 pm
Dan, GGI does have a booth at PDAC so I think it’s a very good guess we’ll be hearing from them this week in advance of PDAC…..and wouldn’t it be nice if they could make some noise DURING PDAC? They’re not going to PDAC without packing some heavy ammunition, I’m sure.
Comment by Jon - BMR — February 23, 2015 @ 4:26 pm
Hello everyone. Keep an eye on FNC this week. All warrants have expired as of today and they’re attending PDAC. President left for China a few weeks ago to meet with Pangang (multi billion dollar market cap) to discuss their successful metallurgy. Basically, FNC own’s 47% of a huge mountain of ore and own rights to the successfully-tested proprietary metallurgy (which Pangang has tested and everything meets their specifications!!)
Comment by Tony T — February 23, 2015 @ 4:31 pm
thats FNC.v
Comment by Tony T — February 23, 2015 @ 4:33 pm
Now that’s the best guess I’ve heard on a nr from ggi in a while now Jon, you would think they would have something out by then on a least one of three sites to draw more attention at PDAC.
Comment by Tombc — February 23, 2015 @ 4:54 pm
Makes all the sense in the world, Tom. Also, awesome news that GGI is one of the 10 companies written up by Ellsworth Dickson in the “Great Mineral Discoveries” piece in the Resource World PDAC issue (“10 Companies Enjoying Success In The Risky Exploration Business”). The list is Pretium, Goldspike, Premier Gold Mines, Corvus Gold, Balmoral, Vena Resources, Midas Gold Corp., Garibaldi, Carmax Mining, and Kootenay Silver. Doubleview should be there as well IMHO, but those are Ellsworth’s picks coming into PDAC.
Comment by Jon - BMR — February 23, 2015 @ 5:09 pm
Jon
can you please answer my question above? #12 please
thanks
Comment by Greg — February 23, 2015 @ 5:56 pm
Hi Greg, missed that earlier, sorry. That certainly gets into the hypothetical and legal spheres, and that scenario would be influenced by whether you’re talking about a hostile takeover vs. a friendly takeover. Have I seen examples over the last 30 years of one company asking another company to try to keep something quiet, if they can, for whatever reason? Yes…and stranger things have happened in this industry.
Comment by Jon - BMR — February 23, 2015 @ 8:48 pm
Thanks Jon
Obviously I’m referring to GGI and whoever is looking at them, it just makes no sense that they have not disclosed anything regarding the Mexico properties and drilling results and surely they have the results from the last holes by now, so it appears that they are not releasing those results because of the ongoing talks with a potential takeover, buyout or whatever, I just wonder if this is even legal and is it really in the best interest of the shareholders, I would much prefer a higher share price to negotiate from than a lower one…
Comment by Greg — February 23, 2015 @ 9:11 pm
Greg, who knows…sometimes as investors we run the risk of out-thinking ourselves…the bottom line is that in GGI there is tremendous value in both Mexico and B.C., and the probability by any measure is very good that 1 or more of their projects in those 2 jurisdictions will ultimately put dollars per share on this company…I firmly believe that. The quality of the projects and the people involved will mesh together to create that wealth building dynamic. Remember, wealth is created by thinking big. If you have 10 really well thought out stocks with that “big” potential, not every one of course will pan out, but you only need 1 home run….to get there you have to visualize, think big and ride the wave, like in BLO, and not play for pennies in these situations.
Comment by Jon - BMR — February 23, 2015 @ 9:36 pm
Jon – Remember, wealth is created by thinking big.
Bert – For goodness sake, i’ve been thinking BIG since i was born
& i ain’t wealthy yet, far from it. The sad part is, the one
chance that i have of getting rich, that is a GGI deal, may
linger til death do i part.
Comment by Bert — February 24, 2015 @ 3:57 am
To Bert- your hilarious, that was funny.
Comment by dave — February 24, 2015 @ 7:53 am
Jon
you mention 10 really well thought out stocks, do you think you could put out a list of BMR’s top ten? I think most of us here know the top 2-4… but a top ten list would be fun to watch this year and see how it unfolds…
thanks
Comment by Greg — February 24, 2015 @ 12:05 pm