Gold has traded between $1,190 and $1,210 so far today…as of 9:00 am Pacific, bullion is down $8 an ounce at $1,195…Silver is off 32 cents at $15.90…Copper has retreated 3 pennies to $2.70…Crude Oil, continuing its uptrend, has gained 67 cents to $56.41 while the U.S. Dollar Index has added one-third of a point to 97.74…
Timing of the Federal Reserve’s U.S. rate hike remains the dominant driver of Gold prices in the short term, according to analysts from Barclays who expect a first move by the Fed in September…they say the current macro economic environment is generally supportive of Gold prices which they predict will average $1,190 per ounce this quarter and $1,183 for the year…
Meanwhile, analysts at Bank of America Merrill Lynch believe the worst is over for Gold, forecasting a price of $1,500 an ounce by 2017…although the U.S. economy seems to be moving forward, the analysts expect delayed and more muted rate hikes which would help Gold break out of recent ranges..
Oil Update
Crude Oil, like the Venture, has made gains for 5 weeks in a row, but some analysts are warning that the rally has unfolded on a false premise of sputtering production…U.S. producers aren’t shutting down rigs as quickly as they once were, and several countries around the world, led by Saudi Arabia, are putting more of their Crude onto the market…
The Saudis produced 10.3 million bpd of Crude in March, eclipsing a previous record of 10.2 million bpd, in what is seen as a shot against arch-rival Iran and a move to defend market share against non-OPEC competition, particularly the United States and Canada…
“I have said many times we will always be happy to supply to our customers with what they want. Now they want 10 million,” Saudi Oil minister Ali al-NaimiNaimi told Reuters in an interview today…
Barclays noted that “current supply/demand dynamics…are not firmly moving in the direction to tighten market balances in Q2.”
Technically, though, as we’ve noted, WTIC is definitely in rally mode, at least, after building strong support at $50 and then overcoming important resistance recently at $54…
Oil ETP Buying Surges
Interestingly, since the beginning of this year, and following the 60% plunge in Oil prices, inflows into U.S. and European-listed Crude Oil exchange traded products (ETPs) have surged…according to recent data, assets under management (AUM) of U.S.-listed Oil ETPs has more than doubled from $2.25 billion at the end of last year to $5.1 billion as of this month…in Europe, AUM in Oil ETPs has risen by a similar magnitude in percentage terms, from just under $1 billion to $2.5 billion over the same period…based on previous patterns, as shown in this chart from www.usfunds.com, what this surge may signal is that WTIC finally found a bottom in the low $40’s…the Oil industry has to hope that these bets don’t start to unravel for some reason…
CRB Index Updated Chart
Historically extreme (record) oversold technical conditions emerged in the CRB Index late last year into January, and the divergence between RSI(14) and price in mid-March suggests that the Index may have hit an important low at 207 (a final bottom? – perhaps)…
The CRB has pushed above its 50-day moving average (SMA) which has flattened out and appears ready to reverse to the upside which would add fresh fuel to the current move…if the Index can overcome chart resistance at 229, then the next level it will likely challenge is near 250 – a Fib. level that’s also in the immediate vicinity of the declining 200-day SMA…
The CRB is off a point at 223 as of 9:00 am Pacific…
Today’s Equity Markets
Asia
China’s central bank come to the rescue once again, while securities regulators do some back-peddling…
Thanks to a wider than expected cut over the weekend in the RRR for Chinese banks, the second reduction in 2 months, China’s Shanghai Composite slipped less than expected today following measures announced late Friday by Chinese authorities to tighten rules on margin lending and promote the use of short-selling…Friday’s news contributed to a sell-off in global equities and drove Chinese’s stock futures down sharply…
In an interesting statement published Saturday evening, the China Securities Regulatory Commission (CSRC) said measures rolled out on Friday aren’t aimed at clamping down on a red-hot market…the measures are about “maintaining the healthy development of the market…the market shouldn’t over-interpret the measures,” it stated…
Beijing is using the stock market to stimulate innovation and entrepreneurship and channel liquidity to the real economy to hedge economic downside risk, as well as to facilitate deleveraging of state-owned enterprises, according to an HSBC report. HSBC stated, “The RRR cut is a political goal to create wealth effects.”
What we’re looking below is an incredible chart with the Shanghai doubling in just 9 months…keep in mind, this move coincides not only with a series of central bank stimulus measures but a major drop in commodity prices as well, and China is a major net importer of Oil and other commodities…
On Friday, the Shanghai closed near the top of the upsloping channel at 4287, so today’s pullback of 69 points to 4218 could represent the beginning of a minor correction that brings the Index toward support at or near the bottom of the channel…technically, the Shanghai is clearly in an overbought state but it’s clear that Chinese authorities want a strong equity market in part to counter slowing economic growth…
Europe
European markets finished strongly higher today, buoyed by the fresh stimulus announced by China…
North America
The Dow has jumped 241 points as of 9:00 am Pacific…
This week’s first U.S. economic report won’t be released until Wednesday when the National Association of Realtors releases its March existing home sales data…preliminary manufacturing data and new homes sales data are also due this week, but the highlight will come on Friday with the release of U.S. durable goods for March…
In Toronto, the TSX is up 58 points while the Venture has added 3 points to 706 as of 9:00 am Pacific…
CDNX 3-Year Weekly Chart
Several indicators including RSI(14) in this 3-year weekly chart help confirm that the Venture is now in a recovery phase that so far looks quite similar to the one that developed after the late June low of 2013…in other words, upside potential over the coming months clearly seems to outweigh downside risks but selectivity remains key – many companies have been so weakened by the intensity of the bear market that they will have a very difficult time bouncing back…under certain conditions (i.e., a major new discovery, stronger than expected commodity prices, a major cooling off in the U.S. dollar), this recovery in the Venture could surprise investors with a sudden acceleration…we’ll have to wait and see…
The heavy lifting will be carried out by the strongest companies, the ones that fall into the top 20% category based on quality of management, share structure, projects, working capital, the ability to raise money, and market communication skills…
Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update
Cannabix Technologies (BLO, CSE) this morning has released the first publicly available images of its marijuana breathalyzer Alpha prototype and an updated video presentation of its Cannabix Marijuana Breathalyzer…this will be showcased at the Marijuana Investor Summit and Business Expo beginning tomorrow in Denver…
Cannabix is the front-runner in the development of a potentially game-changing marijuana breathalyzer.
The Alpha device testing is well underway with medical marijuana users with the goal of maximizing THC sensitivity, detection and reliability of the device for use as a roadside or workplace drug impairment tool…a Beta version is being developed for trial testing with external organizations…
Updated BLO Chart
Technically, this is very bullish – BLO appears poised to confirm a near-term breakout above a pennant formation that started in February following the run from 17.5 cents to 77 cents on the CSE in just 9 trading sessions (the chart below is in U.S. dollars, based on BLO’s OTC listing, as Stockcharts.com does not yet provide charts for CSE-listed companies)…
International Montoro Resources Inc. (IMT, TSX-V) Update
Montoro Resources (IMT, TSX-V) has nearly completed the 1st hole at its promising Pecors anomaly in the Elliot Lake area west of Sudbury, and what’s highly encouraging is that this hole, with assays pending, has already demonstrated through visual analysis that Pecors is indeed an ideal environment for hosting potential high-grade Ni-Cu-PGE mineralization at the base of a very thick gabbro unit…disseminated sulphides have been intersected in 2 zones, and what has been observed beneath the Huronian sediments is really a geological “first” in an area known for Uranium and Rare Earths…this qualifies as an important technical discovery, confirming geophysical and geochemical evidence, and now the task is to hone in on where there could be massive concentrations of Nickel and Copper that have formed somewhere within the gabbro…
The first hole has reached a depth of 996 meters and will continue just beyond 1000 meters…the second hole will begin shortly and is targeting an area approximately 650 m to the northwest…with this first hole, Montoro appears to have discovered the edge of a system that should feature some feeder dikes…this is an extremely interesting exploration story with legitimate major upside potential…we’ll have more as the week progresses…
IMT is off a penny at 7.5 cents as of 9:00 am Pacific…
Silver Short-Term Chart
Silver got a boost last month when it broke above a short-term downsloping flag that was in place since late January…the metal found support at the bottom of that flag which was critical, setting the stage for a move higher…
Following the pullback from the late March high of $17.41 to unwind temporarily overbought conditions, Silver should find strong support around the mid-$15.50’s and has the potential to recover robustly from there…
RSI(14) recently unwound from its high in March to support at 40%…a move above 50% would bring some momentum back into this market with key Fib. resistance just below $18…
Silver Long-Term Chart
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 possible move are also not clear at the moment…
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…it has eased off only very slightly in recent months…
Note: John and Jon both hold share positions in BLO and IMT.
The venture has tried to break above 707 the last 4 sessions. My guess is we blow past it after feds announce budget tomorrow.
Comment by tony t — April 20, 2015 @ 9:36 am
It has been more than 6 weeks since we had drilling results from Garibaldi’s Rodadero site. I believe that they have only had their own drill turning so we cannot expect too much in the way of rapid results, but I hope that we get another update soon, especially if they decide to go deeper. The cash they have in the bank is earmarked for Grizzly and an announcement on drilling commencing there would be good, so I assume they will ramp up drilling at Rodadero once they get some cash flowing from La Patilla operations. The SP seems to be coming under pressure at the moment.
Comment by Tom UK — April 20, 2015 @ 9:56 am
Opposite moves today for GGI and DBV, and similar volumes- did one person move from GGI to DBV?
Comment by terry — April 20, 2015 @ 11:36 am
Make that 5 attempts to break above 707 pts.
Comment by tony t — April 20, 2015 @ 1:51 pm