BullMarketRun.com

Gold has traded between $1,180 and $1,193 so far today…as of 10:30 am Pacific, bullion is down $5 an ounce at $1,189…Silver has bounced off its lows and is now up 12 cents at $16.69…Copper has slid a nickel to $2.59…Nickel has retreated 16 cents to $5.01…Crude Oil has fallen $1.93 a barrel to $45.15 ahead of tomorrow’s critical OPEC meeting in Vienna while the U.S. Dollar Index is off slightly at 100.99…

TD Securities describes the precious metals complex as “down but not out” after Gold’s fall below $1,200 an ounce.  “Much of the move can be traced to the now 100% certainty that the Fed delivers another rate hike in December, while the risks to faster rate hikes in 2017 have grown substantially,” TDS says. “Many point to rising inflation expectations as cause for concern and that for now has driven real rates quite a bit higher.  However, if inflation does continue to creep higher, and the FOMC remains dovish in their approach to normalizing rates, real rates are likely to fall lower again, and 2017 would set up to likely surprise the current pessimism.”

Stronger-than-expected U.S. economic data was released this morning…

• Consumer Confidence Index hit 107.1 in November, up from 98.6 in October, and well above expectations of 101.2…
• Q3 GDP increased at a 3.2% annual rate instead of the previously reported 2.9% pace, though a surge in soybean exports contributed to approximately one-third of that growth…
• U.S. home prices came in 5.5% higher in September, up from the 5.1% annual gain in August, according to the S&P CoreLogic Case-Shiller Index which has surpassed its previous peak of July 2006…

Uprisings In India

Tens of thousands of people have taken to the streets of cities throughout India to protest Prime Minister Narendra Modi’s new economic policy of demonetization…Modi estimated that forcing people to exchange the country’s largest currency bills for new banknotes would allow the government to crack down on “black money” – unaccounted-for cash holdings that haven’t been taxed but, under the law, should be (the government recently released data that showed that in 2013, merely 1% of Indians paid taxes – obvious this is a country still in need of major reforms)…

Modi’s agenda, beyond the broad approach that he wants to push India toward a cashless society, is to force people with “illegal” cash holdings to deposit their money into bank accounts and pay taxes on them…his advisers thought this plan would work just fine, but the Law of Unintended Consequences always applies when governments act in such fashion…

Just one problem is that the supply of new banknotes has been far smaller than the supply of old ones…average Indians have been hit hard, and the country itself may pay a heavy price – many economists expect the growth of India’s booming economy to slow substantially in the final quarter of 2016…farmers looking to sow their next set of crops can’t buy the full quantity of seeds they need…property sales, which typically require huge cash investments, are slowing…weddings, which can cost millions of rupees, are taking a serious hit…

Most “black money” in India, however, doesn’t actually take the form of cash held in the country but is rather in Gold, Silver, real estate, and overseas bank accounts – what does Modi plan to do about that?…

How current events in India may impact the Gold market in the coming months remains to be seen…rumors have circulated that a ban on Gold imports is next…India has tried that before and it hasn’t worked…Modi’s policies should further solidify the value of Gold in the minds and hearts of Indians…

Mining Shares Are Cheap!

While some investors say the bull market in mining stocks is over after Gold’s $200 drop, a more than 30% collapse in the TSX Gold Index and a 15% fall in the Venture from its August high of 848, the chart below shows that mining shares as a percentage of global market cap is still fairly depressed with the overall trend remaining very positive…

Venture Long-Term Monthly Uptrend/Downtrend Periods

Now’s a great time to review some Venture history through an updated chart from John that carves the Index into 6 distinct trading periods going back to 2001…we’re currently in “Period 6” – a confirmed bull cycle that should last for at least a couple of years…

Period 1 (2001 into early 2003) is best described as “neutral” – mostly range trading as the Venture gauged developments including 9/11 and the war and recession that followed…

Period 2 (early 2003 to early 2007, a bull cycle) delivered a stellar return of 280%…

Period 3 (early 2007 to the end of 2008) was nasty – an 80% wipe-out thanks to the Great Crash…

The gain during Period 4 (2009 to early 2011, another bull cycle) was staggering, similar to Period 2 but over a shorter time frame, at 264%…

Period 5 (early 2011 to early 2016) was an ugly bear market as we all know, and the Venture declined a whopping 81% (same percentage decline but worse in many ways than Period 3 because it dragged on for 5 years)…

If Period 6 is similar to Periods 2 and 4, we can expect the Venture to make its way to at least 1700 during this cycle…

Steady buy pressure has replaced sell pressure which was dominant since mid-2012…the 300 and 500-day SMA’s – not shown on the chart below – have reversed to the upside, while the ADX indicator confirms the bear market peaked in late 2015/early 2016…RSI(14) has made a big move this year out of extreme oversold conditions and should find support around 50% on this monthly chart…note the critical breakout, as well, above the downtrend line on a jump in volume…

All those signals confirm a new bull market…

In Today’s Morning Musings…

1. Another Zinc play ready to leap with a resource and a whole bunch of drilling on the way…

2. Understanding what’s in store for DBV – as simple as A-B-C-D-E-F…

3. HIT takes a hit on old news but the chart and upcoming quarters give a bullish outlook…

4. If Uranium is about to turn, the NXE 50% off sale was a steal…

5. Has the Silver recovery started?…

6. Daniel’s Den – how about these Zinc picks?…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…