BullMarketRun.com

Gold is off sharply this morning after Friday’s big run…we cautioned investors over the weekend not to get too excited by Gold’s jump Friday as the yellow metal does appear to be in a short-term consolidation phase…as of 7:55 am Pacific, Gold is down $36 an ounce at $1,793…Silver is off 80 cents to $40.70, Copper is off 12 cents to $3.97 on concerns that moves to curb credit growth and curb inflation in China may reduce demand for raw materials, Crude Oil is up $1.73 to $87.10, while the U.S. Dollar Index has declined one-fifth of a point to 73.60…Morgan Stanley views Gold’s correction as a “buying opportunity” and states that Gold is “an insurance policy against a rising probability of worsening global systemic risks”…Gold jumped $58 an ounce Friday and while readers know we’re extremely bullish on the yellow metal’s overall prospects, we believe Gold is in a consolidation phase for the short-term before likely shooting higher later in the year…John’s updated chart, which we first posted yesterday morning in Part 1 of our Week In Review And A Look Ahead, explains why Gold will likely consolidate for possibly a couple of months…

During previous periods of some short-term technical weakness in Gold, it has benefited from strong physical buying which has limited the potential downside…we’ll have to closely track the physical side of the market in the coming days and weeks…August is traditionally a slow month for Chinese jewelers, but Reuters reported this morning that Gold sales in China over the last few weeks have been surprisingly strong with shoppers seemingly unfazed by Gold’s recent stellar performance…the attitude of Chinese consumers, expected to soon overtake Indians as the world’s top buyers of Gold, will certainly be an important influence on longer-term trends…expect central banks to continue buying Gold as well…the World Gold Council recently highlighted that central banks were very active buyers of Gold during the first six months of the year…in February and March, the Bank of Mexico accumulated almost 94 tonnes of Gold, representing the largest accumulation of Gold by a central bank in over a decade…the second-largest growth in the precious metal’s accumulation was made by South Korea in June…with the exception of the Philippines, every central bank has reported increased reserve holdings through the first half of the year…Kazakhstan’s central bank has plans to add to its Gold reserves by exercising its right to buy the Central Asian state’s entire bullion output, according to Mineweb…

Amid all the recent doom and gloom, some encouraging economic news this morning…U.S. consumer spending rebounded strongly in July to post the largest increase in five months on strong demand for motor vehicles, a Commerce Department report shows, supporting views the U.S. economy is not falling back into recession…the Commerce Department said consumer spending increased 0.8%, the largest gain since a matching increase in February, after slipping 0.1% in June…economists polled by Reuters had expected spending, which accounts for about 70% of U.S. economic activity, to rise 0.5%…when adjusted for inflation, spending rose 0.5% last month, the largest gain since a matching increase in December, 2009, after being flat in June…the data was the latest to suggest the economy started the third quarter with some strength after growth almost stalled in the first half of the year…

Though volumes are still low, the CDNX is showing some renewed technical strength as John outlined in a chart yesterday…trading activity should pick up very soon as the calendar flips from August to September…as of 7:55 am Pacific, the CDNX is up 14 points at 1766…

Visible Gold Mines (VGD, TSX-V) is currently off half a penny at 34 cents but we see a strong likelihood of a near-term breakout in this play given the bullish chart patterns and activity on the ground as VGD continues to drill its Wasa Creek Property, adjacent to Wasamac, with more results pending…drilling also begins soon at Joutel which could be a stellar project for this company…VGD was up 49% in July and is up again slightly in August, quite a remarkable achievement given the fact the CDNX was down 11.5% this month through Friday…that shows confidence in VGD and a better overall market going into September should allow it gain additional momentum…there’s a good chance Richmont Mines (RIC, TSX) will be releasing a major exploration update on its Wasamac Property this week, so we’ll be watching for that…RIC is off 17 cents at $9.39 in early trading after climbing as high as $9.75…

BMR has interviewed Currie Rose Resources‘ (CUI, TSX-V) consulting geologist Mike Griffiths, and we’ll be posting Part 1 of that discussion by approximately 8:30 am Pacific…Currie Rose reported last Wednesday that it has completed 20 holes at its Mabale Hills Project in Tanzania (16 at Sisu River and 4 at Dhahabu) with each and every hole intersecting disseminated sulphide mineralization…it seems what was observed in the core for the holes drilled in this phase at Sisu River was more encouraging than the visuals from Phase 1 drilling last winter…assays, of course, will tell the real story and they are pending…meanwhile, what has us quite excited is that drilling has finally started at the Sekenke Project (200 kilometres southeast of Mabale Hills) which has significant potential in our view given its proximity to two former high-grade Gold mines…Griffiths is quite optimistic about Sekenke, as well, as you’ll hear in the interview…Currie Rose will be drilling numerous quartz reefs at Sekenke, some of which are even larger than those that developed at the nearby historic mines as the map below shows…

What’s also interesting is that Sekenke offers potential for more than just Gold as Griffiths confirmed in the interview…it’s a rich geological area that has been under-explored…the mining industry in Tanzania has exploded only over the last dozen or so years – it’s likely that many deposits have yet to be discovered…CUI is currently half a penny higher at 18.5 cents…

We don’t often mention non-resource companies but one situation we have been following in recent months is iSign Media Solutions (ISD, TSX-V) which is up 3 pennies at the moment to 30.5 cents…John updates the ISD chart below for those, like us at BMR, who are following developments with this interesting company…