Gold is off its lows of the day…as of 9:05 am Pacific, the yellow metal is down $18 an ounce at $1,725…it dipped as low as $1,704 overnight…Silver is down 90 cents at $34.39, Copper is down a dime to $3.57, Crude Oil is off 93 cents a barrel to $92.39 while the U.S. Dollar Index has rallied a full point to 76.13 as the Japanese intervened to lower the value of the Yen…
The CDNX, which closed at its declining 50-day moving average (SMA) Friday, is down 10 points to 1,620…an area where some solid support could initially occur is around 1575 which is also the current 10-day SMA…something else to keep an eye on is any continued correlation involving the CDNX, Gold and the TSX Gold Index…over the last two-and-a-half months they have been moving pretty much in concert as you can see in the chart below from John…it’s too early to say what this might mean, but it’s a trend that certainly bears watching…
Richmont Mines (RIC, TSX), already in a strong cash position, has completed a private placement at $10.50 a share to raise just over $10 million to finance additional exploration work at Wasamac…RIC is currently off 28 cents at $12.12…RIC’ is expected to report strong third quarter earnings in the near future, perhaps within the next couple of weeks, so any near-term pullback in RIC as a result of any overall market weakness could present an attractive opportunity…
There’s an interesting article this morning from CNBC’s Patrick Allen concerning the euro zone debt crisis and the agreement that was announced last Thursday…Allen quoted the respected Dr. Carl Weinberg, chief economist at High Frequency Economics (http://www.hifreqecon.com/home.html)…with the head of the European Financial Stability Fund (EFSF) touring the world in an attempt to sell the deal to major sovereign wealth funds, Weinberg questioned why anyone would want to buy into what he believes is a “crazy” scheme…“Now they (EU Leaders) are keen to tap into resources that are not their own to fund this crazy scheme of guarantees, leveraged off guarantees to sell bonds and bank shares that no one may want to buy, (in order) to restore value in the banking system destroyed by other bonds that no one wants to own right now…this is a construct of Madoffian proportions,” said Weinberg…China, Japan and the International Monetary Fund have all been discussed as possible sources of funding for the EU scheme, but Weinberg believes emerging nations do not want to start paying for rich countries trying to avert economic decline…“Our view is that unfunded guarantees are worthless…raising resources to fund the EFSF and the associated SIV will require diverting savings – domestic European savings, for the most part, not Chinese savings, and not those kept on reserve at the IMF – from either domestic consumption or investment,” he said…raising that money within the next year from European savers will have a major effect on jobs and incomes as output and demand drop sharply, according to Weinberg, who believes that Europe will be back in crisis sooner rather than later…“We predict a catastrophic contraction of GDP in Euroland in a combined monetary and real-economy event,” he said…”The event we envision is much more akin to the Great Depression of the 1930’s than to any business cycle we have experienced in our lifetimes”…just one economist’s view, and nine others may all give different opinions, but interesting nonetheless…what is certain, however, is that the euro zone debt crisis has not gone away and it will continue to rock the markets around like a boat in stormy seas…
According to some nuts out there, who actually predicted the world
was supposed to have ended sometime ago. I just pinched myself, i felt
pain, am i still alive ? This site has gone from happy days to, you’re
frightening the poop out of us boys. R !
Comment by Bert — October 31, 2011 @ 8:28 am
As someone pointed out its turned into bear market run.
Seems a strange way to trade, waiting for confirmation of a bull market to end…isnt the trick to try and forecast it happening not wait until it drops 40% first. That was the time to short, now is the time in my opinion to buy selectively on panic selling. Certainly wouldnt be chasing the market but its not all doom and gloom.
Why buy when a company is trading at a market cap of $100 million with $10 million cash 4 months ago, when you can buy now at a market cap of $15 million and cash $10million just because a chart says so.
The Eurozone crisis certainly hasnt gone away, Italy is a disaster waiting to happen.
On the point of who would want to buy into the EFSF…CHINA will! With Europe as the worlds largest consumer of Chinese goods do people really think they will stand by and watch Europe sink into depression, derailing there growth and bringing the world to a standstill…they just want something in return such as not mentioning there human rights abuses or manipulation of currency….they will play it out for a while until they get what they want.
They have heaps of US debt and its a bigger basketcase long term than Europe.
Comment by Mark — October 31, 2011 @ 8:46 am
This is a much more realistic analysis of the EFSF farce. There is no solution unless the Germans allow themselves to be dragged down to the same reckless level as the rest of Europe. And judging them by their clear knowledge of the outcome of excessive monetary expansion (money printing) they seem pretty determined not to be dragged down to the same insolvent level as the rest of Europe. This plan is similar to opening another credit card to pay the interest on an existing one. Not that clever but typical of the mentality of the modern economist. The bigger problem is that the debt to GDP ratio of the USA is quite similar to that of Greece. Unfortunately this fact is being ignored for the present but all the chickens will come home to roost as these unbacked paper money systems take their turn in their return to their intrinsic value.
Comment by Patrick — October 31, 2011 @ 8:46 am
Cadillac Mining Corporation Announces Private Placement
Cadillac Mining Corporation Announces Private Placement
Vancouver, British Columbia CANADA, October 31, 2011 /FSC/ – Cadillac Mining Corporation (CQX – TSX Venture)(the Company), is pleased to announce that it has negotiated, subject to approval by the TSX Venture Exchange, a non-brokered private placement (the Placement) of 2,500,000 Units of the Company at a price of $0.10 per Unit for gross proceeds of $250,000. Each Unit comprises one common share and one-half of a warrant, each whole warrant exercisable at $0.15 for 12 months from closing of the Placement, subject to the accelerator provision described below.
A finder’s fee will be paid on a portion of the placement as to 8% in cash, and 10% in brokers’ warrants exercisable at $0.15 for 18 months from closing of the Placement.
If at any time after closing of the Placement, the last trading price of Cadillac’s shares on the TSX Venture Exchange is equal to or greater than $0.25 for fifteen consecutive trading days, the warrants must be exercised within the ensuing 30 days. All securities issued pursuant to the Placement will be subject to a four-month hold period.
The net proceeds of the Placement will be utilized in the Company’s forthcoming Phase One drilling program on its Goldstrike project in southwestern Utah, and for general working capital purposes.
Comment by Andrew — October 31, 2011 @ 10:56 am
That’s a really weak private placement for Cadillac Mining. What kind of program can you put together for 250k? I’m sure they have maybe another 100-200k on the book but even that isn’t enough. I would think they may get 2 or 3 holes (1000m) for a drilling program? Comments/thoughts?
Comment by Andrew M — October 31, 2011 @ 11:33 am
Hi John. Based on the chart, would you say that the CDNX has some catching up to do compared to the gold? (It’s hard to see that happening in this market environment though).
Also, the fall of the CDNX from the height of the early 2011 was obvious as CDNX rised faster than the gold from the 2011 summer?
Thanks.
Comment by Bruce — October 31, 2011 @ 5:24 pm
Hi Bruce
I expect the Gold Price to continue to increase at the same sustainable gradient and the CDNX to climb at a faster rate similar to that between July/10 and March/11 which is not sustainable for a long period without a correction.
Comment by John - BMR — November 1, 2011 @ 1:24 am