Gold has traded between $1,285 and $1,306 so far today, reaching its highest level since August…as of 7:30 am Pacific, bullion has backed off to $1,287, a loss of $7 for the day…Silver, at $18.05, is still up 7 cents after nearly touching $18.50…Copper has rebounded and is now up 4 cents at $2.62…Crude Oil has climbed $1.38 a barrel to $47.85 while the U.S. Dollar Index has declined one-third of a point to 92.75, reacting at resistance as expected at 93…
Gold has posted 7 straight winning sessions (through yesterday), gaining 7.1% during that time…it’s up 9.3% in January (vs. a 29% jump in the TSX Gold Index this month)…holdings in Gold ETFs tracked by Bloomberg increased by 26.2 tons last Thursday and Friday combined – the highest inflows on 2 consecutive days since November 2011…
“Gold is not overbought for the past 60 trading days based on our quantitative model,“ stated Frank Holmes, CEO of U.S. Global Investors, in an interview on Kitco.com. Holmes says last Thursday’s surprise decision by the Swiss National Bank to lift the cap on the franc vs. the euro was clearly a game-changer. “This creates trepidation, this creates a lack of confidence (in central banks). Gold is safe money. It has always been safe money.”
Yet another currency that is unravelling – Egypt’s pound has fallen to an historic low against the dollar…
Gold Updated Chart
Gold definitely has momentum right now but nonetheless faces strong resistance around $1,300…importantly, a confirmed breakout has occurred above Fib. resistance at $1,263 – so the $1,260 area is new support on any pullback to unwind temporarily overbought conditions that do exist according to our charts…
With the ECB meeting tomorrow – they’re expected to unveil a full-scale QE program – flash PMI’s on Friday and Greek elections Sunday, the potential is high for significant volatility across numerous markets over the coming days, not just Gold…
While Gold’s RSI(14) is at 73% on this 6-month daily chart, markets do tend to “overshoot” during periods of strong upside or downside momentum, which is why it’s very possible we could see Gold challenge resistance at $1,340 before the week it out…that’s merely 1 possibility…from short-covering to more ETF buying to further Chinese purchases (the Lunar New Year is just a few weeks away), there is plenty of potential firepower still on the sidelines to drive bullion higher…
However, keep in mind that Gold is also vulnerable to a sudden pullback – especially if it’s seen to be stalling around $1,300 – but within the context though of what is increasingly looking like a new bull phase in the metal after November’s low of $1,130…
Gold Stocks On The Move
One of the major themes we’ve been emphasizing over the last couple of months is how Gold stocks – in particular producers and near-term producers – tend to perform exceptionally well in a low Oil price environment…Canadian companies also benefit from a very weak loonie (the Gold price is rising even more dramatically in Canadian dollars)…
Among major North American Gold miners, Newmont Mining (NEM, NYSE), Kinross Gold (K, TSX) and Yamana Gold (YRI, TSX) stand to benefit most from cheap Oil, according to analysts from Cowen and Company. “By our estimates, for NEM, K, and YRI, every $10/bbl decrease in Oil price should lower operating costs by $28/oz, $38/oz, and over $23/oz, respectively,” they wrote. Given the fact that Oil has plunged by more than $50 a barrel over the last 6 months, the savings these companies are going to make in 2015 will be substantial and will go right to the bottom line…
Broadly speaking, those companies more reliant on open-pit operations will enjoy the greatest benefits from the drop in Oil prices…and of course this doesn’t include just the major producers…
A 5-cent junior like Gold Bullion Development (GBB, TSX-V) could become a cash cow with fuel costs now 30% below estimates and a Gold price $150 CDN above the base case for the company’s high-grade (4+ grams) rolling production start at the open-pit Granada Project…prior to the collapse in both Oil and the Canadian dollar, GBB’s 3-year rolling start already featured robust economics with a pre-tax payback period of just 6 months and an IRR of 169.4% (Preliminary Feasibility Study, based on proven and probable reserves)…those are just some of the reasons we’ve turned so bullish on GBB, and other near-term producers…those investors who are giving away GBB for a nickel right now will be kicking themselves in fairly short order…they are completely missing the changing economic equation, not to mention the strong possibility of many more ounces to be discovered yet in the LONG Bars Zone…
Another near-term producer with great potential is Castle Mountain Mining Company (CMM, TSX-V) which also reported some spectacular assay results the other day (33.3 m grading 30.31 g/t Au)…CMM is advancing a multi-million ounce resource toward production at its Castle Mountain Project in San Bernardino…
Our favorite producer, Richmont Mines (RIC, TSX), announced a $30 million bought deal at $4 a share after yesterday’s close, and then increased that to $34 million this morning…this is a smart move by Richmont which didn’t really have to do a financing but this will give them a cushion and some flexibility in a year in which they will be incurring additional capital expenditures for the development of their Island Gold high-grade deep resource…
TSX Gold Index Updated Chart
The TSX Gold Index put in a double bottom in November-December and has cut through key Fib. resistance levels between 147 and 175 like a knife through butter…momentum could take the Index above 200 over the near-term, with a strong band of resistance between 203 and about 215 where rallies ended in 2013 and 2014…
Today’s Equity Markets
Asia
China’s Shanghai Composite soared 150 points overnight, or 4.7%, to close at 3323…yesterday’s economic data appears to have quashed fears of a hard landing, though managing a slowdown will nonetheless be challenging for Chinese authorities…
Japan’s Nikkei average slipped 86 points on a stronger yen to close at 17280…meanwhile, the Bank of Japan maintained its massive monetary stimulus and expanded a loan program aimed at encouraging banks to boost lending, signalling its resolve to achieve its ambitious 2% inflation target…
Europe
European markets are mixed in late trading overseas…
North America
Wall Street remains jittery ahead of tomorrow’s ECB decision…the Dow fell by over 100 points in early trading but is now down just 18 points as of 7:30 am Pacific…
Dow Updated Chart
This 4-month Dow chart shows a lot of “indecision” in the market at the moment…it seems a major move, one way or the other, is imminent…of concern is how buy pressure declined rapidly since mid-November, turning into weak sell pressure, while the RSI(14) has remained below a downtrend line through all of January so far…stocks overall, however, have proven to be very resilient as aggressive buying has consistently come in on the dips thanks in large part to a very accommodating monetary policy…
In Toronto, the TSX is up 217 points on a surprise Bank of Canada interest rate cut (the loonie is getting hammered) while the Venture has added 3 points to 675 as of 7:30 am Pacific…
Venture Updated Chart
The balance of this week is critical for the Venture which is struggling trying to get back above its SMA(20) as shown on this 2-month daily chart…key resistance is 675–680 followed by 707…some Gold stocks are performing well, but the Index is hurting from the continued weakness in Oil…so investors have to be more selective than ever at the moment as it’s still too early in our view to go bargain hunting in the Oil and gas space…
Calibre Mining Corp. (CXB, TSX-V) Update
One Gold stock with continued strong potential over the coming months is Calibre Mining (CXB, TSX-V) which has found exploration success, on its own and with partners, in the prolific northeastern part of Nicaragua…
Overbought technical conditions last September/early October unwound in November and December, and the now-rising 50-day moving average (SMA) at 14 cents is providing new support…
This morning, Calibre announced final assay results from Phase 1 drilling at the Eastern Borosi Gold-Silver Project being financed by IAMGOLD Corp. (IMG, TSX) under an option agreement…5 Gold-Silver vein systems were tested over a combined strike length of 3 km through 40 drill holes (5,500 m), and drilling encountered high-grade zones on each of the structures…results included 5.07 m grading 13.44 g/t Au (GP14–028) and 2.76 m @ 26.48 g/t Au (GP14–030), testing the down dip portion of the Guapinol and Vancouver structures…
IAMGOLD was encouraged enough by the results to decide to launch a 5,500-m Phase 2 program to commence during this first quarter…
CXB is under some mild pressure on the news, down half a penny at 15 cents through the first hour of trading…
Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update
Cannabix Technologies (BLO, CSE) continues to gradually move higher, overcoming 2 Fib. resistance levels this month and touching an intra-day 4.5-month high of 18 cents on the CSE yesterday…investor interest has been picking up, as expected, as the company draws closer to unveiling its marijuana breathalyzer prototype…
Below is a updated chart for BLO in U.S. currency (BLOZF on the OTC as Stockcharts.com does not yet provide charts for CSE listings)…buy pressure remains strong…next Fib. resistance is 19 cents U.S. while new support is at 14 cents U.S. (16 cents CDN)…
Note: John, Terry and John each hold share positions in GBB. John and Jon both hold share positions in BLO.
Sanatana Resources V.STA could be very close for a takeover agreement by IAMGold.
Read:
Dec 9, 2013
Mar 6, 2014
Jun 14, 2014
Nov 11, 2014
Dec 24, 2014
Check these at 321Gold website…
Do your own DD. Glta :o)
Comment by Sebastian — January 21, 2015 @ 8:38 am
Sebastian – funny you mentioned this. I don’t own STA, but I said yesterday that I was watching 5 stocks right now and one of them is right in the Cote deposit mix.
Comment by dave — January 21, 2015 @ 9:06 am
volume seems to be picking up for GGI a little at a time.
is encouraging I guess
Comment by BRIAN — January 21, 2015 @ 9:28 am
Dave – I bought my shares at 4c. This stock could explode from these levels with a positive NR. I am so excitied :o) Glta
Comment by Sebastian — January 21, 2015 @ 9:31 am
sebastian – great entry for you. She is looking to correct a little today. Heavy volume, I will have to see if its a correction candle at end of day. I know the asks got big at .09. I’m waiting for drill results on the one next to STA
Comment by dave — January 21, 2015 @ 12:27 pm
Dave – Do you mean GLD? :o) Well today the market depth was not to much help because most of the selling came from nowhere, seemed like someone was trying to hold the SP below 7c. We’ll see if there will be any correction, actually the stock has been in correction mode after the big selling by Pinetree Capital. It’s so crazy that this stock was trading above 20c a couple of months ago.
Comment by Sebastian — January 21, 2015 @ 1:46 pm
today NGD closed above it’s 200 day moving average, if gold pops tomorrow it should hopefully break $6.00
Comment by Cam — January 21, 2015 @ 4:22 pm
GGI – Volume picked up a little but SP stagnant. Maybe they are waiting for more assays with better visuals before releasing news. Surely they have received assays since the last release on Aug 5th? There have been two sets of assays released from Rodadero in 2014. The first one on May 22nd and the second set August 5th. It has been 6 months since last results and drilling was supposed to be ramping up – don’t believe there hasn’t been results since Aug 5th. So, what is GGI’s strategy? They were eagerly waiting for results just prior to Christmas – we are late into January and still nothing. What gives?
Comment by Dan — January 21, 2015 @ 4:41 pm
Sebastian – No correction candle. Solid white candle, bodes well. The only thing that concerns me with the buyout rumor is that IMG is closing on an aquasition end of month. I doubt they will do another one so close together so soon. My guess is STA does its little momo dance and run but then comes back down to earth. Then again, you never know. Yes on GLD. Talked to the CEO last week. He said they are awaiting the results from IMG and it could be any day. I think IMG wants that whole area and I can see both STA and GLD being bought out down the road.
Comment by dave — January 21, 2015 @ 6:14 pm
9. GGI (Dan)
I was feeling the same way initially but then I let my mind wander to speculate. It seemed like they were bursting at the seams with excitement re: Rodadero with great drill results, expanding of the exploration area, a site visit from a major and a Chinese company, new financing, even Regocci seemed to be doing a dance in the promo videos! And then we find delays in reporting and the money that was supposed to fast track Rodadero is now going to be spent on Grizzly. Why? Because something big is around the corner! All IMHO of course but they don’t need to spend the money on Rodadero now because someone else is going to – either via a JV or a takeover of the Mexico assets or of GGI with a spin off company focused on BC. This is what is taking time. Big win for us. I was thinking of coming back to reality but this is my happy place. 🙂 Frank (GLTA).
Comment by Frank — January 21, 2015 @ 7:17 pm
Frank – I was thinking the same thing. A spin out of the grizzly with a new company name and GGI gets bought out.
Comment by dave — January 22, 2015 @ 5:56 am
Couldn’t have said it better myself frank, I agree with you, no longer waiting for results, waiting for whatever deal is going on behind closed doors, yes, I believe it’s a win, win for shareholders.
Comment by Tombc — January 22, 2015 @ 6:35 am
I agree with STA. I think that things could unfold quickly here, its dirt cheap at the current levels. CEO owns 5M shares
Comment by Jimmy — January 22, 2015 @ 7:49 am
Goldcorp’s (TSE:G) proposed C$526 million takeover of Probe Mines (CVE:PRB)
Would u think that Agnico Eagle mines needed cash for the purchase of GGI.
Comment by Bob — January 22, 2015 @ 7:51 am