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Gold has traded between $1,129 and $1,141 so far today…as of 8:00 am Pacific, bullion is down $8 an ounce at $1,132…Silver is up a nickel at $15.23…Copper has added 2 pennies to $2.39…Crude Oil has jumped $1.24 a barrel to $45.92 while the U.S. Dollar Index has gained two-thirds of a point to 95.90…

China remains an aggressive buyer of bullion as Gold deliveries from the Shanghai Gold Exchange continue to set record highs…SGE volumes were up 14.2% in August vs. the same month in 2014, and are on pace to reach almost 2,600 metric tons this year…the planned establishment of a yuan-based Gold fix by the SGE by the end of December further demonstrates that China wants to have its say in the global pricing of the metal…

U.S. Commodity Futures Trading Commission data showed on Friday that hedge funds and money managers slashed their net long positions in COMEX Gold to a 5-week low in the week ended September 15, just before the Fed policy meeting, while increasing their short positions (these groups are usually reliable contrarian indicators)…

New research from JP Morgan shows an uptick in confidence in bullion and Gold equities based on investors polled in its latest Gold and Precious Metals Survey…JP Morgan itself has turned more bullish on the sector…

Silver is clearly finding support from China again, Commerzbank stated in a note today, adding that last month’s imports of 353 tonnes “constituted the highest imports since February 2014“…

China’s imports of refined Nickel dropped to the lowest level in 4 months in August, underscoring flagging demand as the stainless-steel industry slowed…Nickel is one of China’s most important metals with that country comprising just over 50% of global demand according to a report today from Credit Suisse…

BNP Paribas believes the U.S. dollar will have especially strong sensitivity to upcoming comments from Federal Reserve officials after the central bank left interest rates unchanged last week…over the weekend, 3 regional Fed presidents reiterated their expectation to raise rates this year, including San Francisco Fed President John Williams (2015 voter), Richmond Fed President Jeffrey Lacker (2015 voter) and St. Louis Fed President James Bullard (2016 voter)…focus will now shift to the other Fed speakers this week, starting with Atlanta Fed President Dennis Lockhart (2015 voter) later today and leading up to Chair Janet Yellen on Thursday…

Oil Update

Asia

China’s Shanghai Composite gained 59 points or 2% overnight to close at 3157…Japan’s Nikkei went in the opposite direction, however, losing 2% to finish near support at 18070…

China’s top economic planner has announced the implementation of mixed ownership reforms in electricity, Oil, rail and airlines sectors as part of Beijing’s overhaul of its inefficient state-owned enterprises, Reuters cited state media reports today…meanwhile, current market perceptions of China are “thoroughly divorced” from the reality on the ground, according to the latest China Beige Book (CCB) Survey, which has found that while the economy slowed in Q3, there are no signs of an impending growth collapse…

Europe

European markets are up moderately in late trading overseas…Alexis Tsipras is once again Greek prime minister after a decisive victory in yesterday’s snap election in that country…he’ll return to power in a coalition government…speaking to cheering crowds in a central Athens square, Tspiras promised a period of stability and said he “felt vindicated” after quitting in August to start on a clean slate with voters…if Tsipras and Ontario’s Kathleen Wynne can get their respective shaky governments re-elected, Stephen Harper more than deserves another majority in October…

North America

The Dow is up 174 points as of 8:00 am Pacific…after 3 consecutive months of positive gains, the U.S. housing market cooled last month, with sales of existing homes falling more than expected, according to latest data from the National Association of Realtors…

In Toronto, the TSX has added 176 points while the Venture is up 2 points at 552..the Venture is trading above its 20-day moving average (SMA) for the 5th session in a row, the longest such streak since May…

Why Garibaldi Resources’ (GGI, TSX-V) Grizzly Central Could Soon Draw Major Attention

In January 2014, Doubleview Capital (DBV, TSX-V) confirmed a Cu-Au porphyry discovery at its grassroots Hat Project – never previously drilled – on just its 8th drill hole…as low as 4 cents in late December 2013, DBV became a 10-bagger within 4 months…the discovery – critically the second in the district, 10 km southeast and on trend from the Star porphyries – sparked a major staking rush, and helped breathe fresh life into the struggling junior resource sector…each round of subsequent drilling at the Hat has delivered even better results, and now the Association for Mineral Exploration for British Columbia refers to the Sheslay district as “the #1 greenfield project in B.C.”…

This district packs enormous geological punch, and some veteran observers believe it has the potential to literally change the economic landscape of northwest British Columbia…hence, the political gamesmanship we’ve seen from Tahltan Central Government President Chad Day…investors, however, can take comfort in the fact that almost the entire Sheslay district is backstopped by the 2011 Atlin Taku Land Use Plan, a landmark agreement that involved multiple stakeholders and was co-managed by a First Nations group (Taku River Tlingits) and the provincial government…Premier Christy Clark heralded the deal, stating it “will bring certainty for economic development”…

Fast-forward to today, and Garibaldi Resources (GGI, TSX-V) has an even greater opportunity than DBV had in 2013 as first-ever drilling rapidly approaches at Grizzly Central…we say “greater” because the knowledge of the district has literally increased exponentially over the last 2 years after 50 new drill holes – even over the last 6 months given the incredible work that DBV chief geoscientist Dr. Abdul Razique has done to put together the “puzzle” of the Hat…in fact, it wouldn’t be an exaggeration to state that Dr. Razique has written “The Dictionary” for the Sheslay district…

Garibaldi has not only learned from the success and mistakes of others in the district, but they’ve also applied their own impressive expertise to uncover some mysteries surrounding Grizzly Central…led by a team featuring C.J. Greig & Associates (Charlie Greig, M.Sc. P.Geo., is highly regarded in B.C. geological circles and is also a senior geologist for Pretium Resources‘ Brucejack Project (PVG, TSX), Garibaldi has identified a large area of “intense interest” and high geological merit at Grizzly Central that has been “hidden” for decades by a relatively thin but widespread (95%) overburden cover…

Click on the arrow below for the first excerpt of Jon’s interview the other day with GGI President and CEO Steve Regoci:

Last Thursday’s news from Garibaldi regarding Grizzly Central tells us the following:

1.  It shares similar geological, geophysical and geochemical signatures as those observed at the adjoining Hat and Star properties;

2.  Classic discovery set-up – the drill targets at Grizzly Central are defined by NNE striking signatures producing a series of magnetic highs and geochemical anomalies that run parallel to sizeable magnetic lows…significantly, these features appear to cross-cut the dominant NW-SE striking regional fabric;

3.  Soil samples at Grizzly Central show a strong correlation between copper and other pathfinder elements including Silver.

Two other critical observations on our part:

a)  The drill hole “hit” ratio in the district is remarkable, better than 70% (approximately 90 holes altogether, historically and over the last 2 years);

b)  Once a second discovery is made in a district – the Hat system is nearly 10 km on trend from the Star deposit – this really helps validate the “multiple” deposit theory…some of Canada’s best geologists are looking at the Sheslay district and they’re saying it’s “pregnant” with mineralization from one end to the other…while anything’s possible and there are never any guarantees in this business, it’s almost unimaginable that with deposits on the Hat and the Star, there would be none on the Grizzly which is nearly 3 times the size of those properties combined and has the same rock types, geophysical and geochemical signatures…

The Grizzly is also host to the Kaketsa “heat engine”, a dominant topographical feature that has obviously played some sort of a key role to help form this geological paradise…while each property in the district shares certain common features with its neighbors, no deposits are expected to be exactly the same in terms of character or size…different “domains” appear to exist in the district…new discoveries could be made in this region for many years to come…

This Map Says It All

Below is a map showing airborne magnetic data from the Grizzly and part of the Star (available on the GGI web site)…in consultation with geologists, we’ve added the fault structures around Grizzly Central in dashed white lines, and divided Grizzly Central into 3 major “hot spots” which roughly cover the 25 sq. km Garibaldi defined in its news last Thursday…

The dashed lines represent interpreted fault structures around Grizzly Central…given what’s known about the Sheslay district, the areas bounded by the faults at Grizzly Central are exceptionally high value targets for Cu-Au porphyry deposits…

Our guess is that GGI will drill initially somewhere within “Area 1” (far left corner near cross-cutting fault structures?), just off from a mag high and into a strong geochemical anomaly…

Pure Energy Minerals Ltd. (PE, TSX-V) Update

Pure Energy Minerals (PE, TSX-V) announced this morning that it has initiated the permit applications for fall and winter exploration drill programs on the company’s Clayton Valley South Lithium Brine Project in Nevada…

Robert Mintak, Pure Energy’s CEO, commented: “Priority target areas have been defined for the next phase of drilling that will target expected depths of approximately 500 metres, subject to approval by the BLM. With the recent exercise of warrants, the company is well funded for this next phase of exploration drilling to further delineate and expand upon our recently published inferred resource report, completed in accordance with National Instrument 43-101.”

Technically, PE remains in a consolidation phase following the rapid run-up to a multi-year high of $1.03 last week which added to already technically overbought conditions in the RSI(14) and other indicators…the rising 20-day SMA, not shown in this 2.5-year weekly chart, provides support in the mid-60’s…even stronger support exists around the 50-cent level which was important previous resistance…

PE is off 2 cents at 68 cents as of 8:00 am Pacific…

Sernova Corp. (SVA, TSX-V) Update

Last month (August 7), we suggested readers take a close look at Sernova Corp. (SVA, TSX-V), a speculative non-resource play in the health sector…SVA is a clinical-stage company developing products for the treatment of chronic diseases using therapeutic cells transplanted into an implanted medical device to replace missing proteins or hormones…last week, the company announced the signing of a licence agreement with the University Health Network (UHN) of Toronto to gain exclusive worldwide rights to certain patent-pending technologies that relate to the development of stem cells into glucose-responsive therapeutic cells for the treatment of patients with insulin-dependent diabetes…

John’s first chart on Sernova August 7 showed a strong Fib. support band between 20 and 23 cents that coincided with rising 200 and 300-day SMA’s, an ideal “entry point”…SVA has made a significant climb since then and is now threatening to break out from chart resistance at 31 cents…it’s up 2 cents at 33 cents as of 8:00 am Pacific after touching a high of 37 cents in early trading…as always, perform your own due diligence…

Silver Short-Term Chart Update

Silver has been quite volatile since the beginning of last month, swinging between strong Fib. resistance just below $16 and solid support around $14…the band of Fib. resistance between $15.30 and $16.60 has proven to be very stubborn since early June, certainly due to the reality of a slowing global economy with Silver having a lot of industrial uses…

Silver’s immediate challenges are to overcome Fib. resistance at $15.29 and $15.79…RSI(14) continues to trend higher which is encouraging…

Silver Long-Term Chart Update

An explosive push higher (eventually) – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that could develop…

Have we seen the  bottom of “Wave 4”?…that’s quite possible, but still too early to tell…encouragingly, RSI(14) has so far managed to hold support which goes back to 2001…

Sell pressure continues to remain very strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which started modestly in early 2013, could continue for a while yet…this should be viewed in a larger context as a bullish contrarian indicator given historical patterns…it doesn’t necessarily mean, however, that Silver has found a bottom just yet…

Note:  John and Jon both hold share positions in GGI.  Jon also holds a share position in DBV.