There appears to be a lot of pessimism in the Gold market at the moment which is a bullish contrarian sign…the yellow metal has had a rough couple of days and so have the TSX Gold Index and the CDNX – each, interestingly, down exactly 5.8% vs. the metal’s drop of 4.7%…we’re not panicking given the fact Gold has simply moved down to a strong support area – the technical pattern is familiar with Gold touching its 200-day moving average (SMA) as John’s chart last night pointed out…some firming up in Gold by the end of the week will keep its long-term weekly trendline completely intact, though it may have to test $1,600 first…throughout this bull market in Gold, physical buying has always entered the picture during times of technical weakness and we expect that’s happening now – central banks could be backing up the trucks and loading up, among others…the sky is not about to fall, as threatening as it looks this morning…
Examining some individual Gold stock charts can provide some interesting insight…take, for example, the chart for the Kinross “D” warrants (K.WT.D, TSX)…based on RSI (14), Slow Stochastics (14) and the Chaikin Money Flow (14), these warrants are in a deeply oversold condition, the likes of which one typically sees at or near a market bottom…
Gold producers will continue to outperform the juniors until the “risk on” switch is turned on again permanently, and that could take a while given the problems in the euro zone which is dominating market sentiment…the under-performance of the CDNX this year vs. other markets is not a good sign for the global economy and that could mean there are some rough waters ahead for at least the first half of 2012…the Venture has been in a bear market since March, interrupted on occasion by a decent rally…that trend is likely to continue…timing these rallies and trading them is not easy…those with a longer-term outlook can certainly find value in the market at the moment as many issues have had their valuations beaten down to very attractive levels…
As of 6:00 am Pacific, Dow futures are pointing to lower open… Gold is off $10 an ounce at $1,621…Silver is $1.07 lower at $29.77…Copper is down a dime at $3.33…Crude Oil is off $1.80 a barrel to $98.34 while the surging U.S. Dollar Index is up more than one-fifth of a point to 80.54…the Dollar Index is looking bullish overall but it is approaching resistance – 81 is a key level to watch…we could see a reaction soon in the Dollar which would help to stabilize Gold and the CDNX…
The Financial Times reports that Franco-German hopes for a sweeping new treaty to bind the EU’s economies more closely came under strain yesterday as several European Union leaders warned of difficulties pushing a far-reaching pact through their national parliaments…this euro zone nightmare isn’t going to end anytime soon – there is no quick solution, just a step forward followed by a step back…on and on and on like slow torture…
OPEC has agreed to keep oil output broadly steady at its current level for 2012, in a show of unity by the cartel after its previous meeting in June ended in disarray…the deal will comfort oil consumers, who have urged the oil cartel to maintain supplies rather than cut them in the face of slower economic activity…however, the supply-demand balance remains tight and prices are likely to remain at elevated levels…Iran is the “wild card” that could cause prices to spike at some point next year which would have negative consequences for the global economy..
Canadians have set a new record for household debt, a sign that many families are leaving themselves vulnerable to an economic shock…new Statistics Canada show that the debt burden of Canadian households has surpassed levels of both the United States and the United Kingdom and, by at least one measure, they are hurtling toward those countries’ peak levels of 2007…the ratio of debt to personal disposable income hit a high of 152.98% in the third quarter from 150.57% in the prior three months, Statscan said yesterday…the report comes as Bank of Canada Governor Mark Carney is again sounding the alarm over swelling household debt…“Our greatest domestic risk relates to household finances,” the central banker said in a CBC radio interview…roughly one in 10 Canadians is in a vulnerable financial position, Mr. Carney said – meaning that the cost of servicing their debt consumes more than 40% of their income – “and that, historically, is where people start to have issues in making their debt service payments”…
zerohedge.com/news/commodity-unwind-continues-global-liquidity-scramble-accelerates
Comment by Hugh — December 14, 2011 @ 6:55 am
Come on people, I have a MASSIVE bid in for GBB at .10, sell to me!!!!!!!! LOL GBB, GDX, SD, ABI, SFF HAHAHHA way to go BMR!! How much is BMR UP sine you 1st introduced these companies to your readers???? LOL What a JOKE!!
Comment by John — December 14, 2011 @ 9:18 am
Hey John,you forgot to mention EPO,VGN,just wondering how much your up and what price they are going to,just wondering.
Comment by John — December 14, 2011 @ 9:51 am
My average on EPO is .115, and on VGN it is .12. By Feb. EPO WILL be at .65 and VGN at .40. Just watch. As for the LOSERS that BMR picks, well they speak for themselves. ALL are at or very near the LOWS!!!! GBB HAD to raise more money, meaning MORE DILUTION, atleast VGN ACTUALLY EARNS money!!!
Comment by John — December 14, 2011 @ 10:28 am
Notice posts number 2, 3 & 4, is that John talking to himself ?
Comment by Bert — December 14, 2011 @ 11:01 am
Salut Martin: Are you still long HJD? I’m thinking about it now for my VGD position. I halved it but what’s left is rapidly losing value. The Venture looks like it will fall into the 1300s imminently and gold is heading for 1400? Are you looking at any other ETFs (HSD?) Bonne chance.
Comment by Andrew — December 14, 2011 @ 11:07 am
zerohedge.com/news/citi-predicts-gold-3400-next-two-years
Weird I agree with something CITI says? I need a drink.
Comment by Hugh — December 14, 2011 @ 12:35 pm
Hugh – Thanks for those two links today. Not sure where we go from here with Merkell and Bernanke refusing to help and the Euro at a year low? US problems were masked by the Eurozone’s for a while but now they’re both out in the open.
Comment by Andrew — December 14, 2011 @ 1:23 pm
Salut Andrew,
I am cash and have about 70K shares of RBW in the CELI at the moment, market are hard to size!!
Have to go now!
On se reparle,
Martin
Comment by Martin — December 14, 2011 @ 2:23 pm
From David Pescod’s Stocktalk
Interestingly, when we ask him (Brad Cooke of Endeavour Silver)
for a stock pick, he goes with Cap-Ex Ventures (CEV). What? Yes
folks, that’s an exploration company (at at time like this, Cooke
favors production or near-production companies in the precious metals
sector versus explorers) and it’s in the iron ore sector. Yes
Cooke says—”the world economy will be a tad weak now” but
he believes China is just taking pause and sooner or later iron
ore again, will be needed.
Comment by Bert — December 14, 2011 @ 2:25 pm
Peter Grandich is betting $1,000,000.00 that Gold reaches $2,000.00 before it reaches $1,000.00.
Comment by Bert — December 14, 2011 @ 2:27 pm
Thanks for the optimism, Bert. I’m really disappointed in M. Dallaire after promoting VGD in August and making it sound as if the other assays would be available. I think he would do quite well in the East End (of London)! If gold takes a hike northwards overnight I think I may dump my VGD and buy CEV – probably a better chance of reducing losses than holding VGD now that Mineralfields are in so deep. At least CEV has liquidity and I’ll be able to trade it. 🙂
Comment by Andrew — December 14, 2011 @ 5:13 pm
Andrew
We have to try to be optimistic, as there’s not much we can do about anything
anyway. The sad part is, most, if not all of us, have invested all or most of our
cash at higher prices & are now forced to sit & watch. It is for this reason that
i do understand where Johnny is coming from.
VGD. M. Dullaire, when the time is right, will find a way to get his stock moving
up again, because this is how they play the game. No one out there my buddy cares about
you & me.
CEV. Although the financing is for 0.85, i was disappointed to see it drop below
0.90 . It may have bottomed at 0.90, but the market conditions during the last few
days, leaves much to be desired. I am still picking up a few in the low 80’s.. For
what it’s worth, this is my favorite stock. We need the financing to be closed & no
doubt, with approximately 44 million shares issued & outstanding, we will see
someone from Forbes & Manhatten on the CEV board. With a 12 million share
financing, they now own a major part of the company. All good news & if one
can buy & hang in there, an excellent chance for a buyout. They have a flow of news
coming, but i must remind you, it’s winter down there now & that means no drilling
for awhile. R !
Comment by Bert — December 14, 2011 @ 5:55 pm
@Andrew – You’re welcome
Here is another, dollar short sqeeze gathering pace!
rickackerman.com/2011/12/a-devastating-dollar-short-squeeze-is-gathering-steam/
Comment by Hugh — December 15, 2011 @ 5:08 am
Hello Bert, thanks for your comments! Gold bounced off a low so hopefully VGD will gain a penny or two and I’m out and into CEV. RIC have their resource estimate this morning – good for buyers yesterday! However, I don’t think it will help VGD’s Wasa Creek. News should be coming from VGD any day now and perhaps tomorrow shortly before the close with unimpressive results? 🙂 Enjoy the day, it looks like it will be better than yesterday.
Comment by Andrew — December 15, 2011 @ 5:11 am
Fantastic new resource estimate for Wasamac….now at 2.7 million ounces, and growing….this even exceeds our bullish expectations…ultimately, this could be 5 million+…good news for VGD and CQX if they play their cards right…
Comment by Jon - BMR — December 15, 2011 @ 5:42 am
The U.S. is coming alive & leading the way. Look for a good day in the market today, in particular in the U.S.
and Europe.
Comment by Bert — December 15, 2011 @ 5:48 am
Jon – VGD and CQX haven’t played their cards right. I don’t see that changing based on RIC’s results but I hope I’m wrong. VGD in any event is now limited due to Mineralfields – very few juniors make any progress in sp regardless of results when so many shares are controlled by Mineralfields. If there was evidence that VGD had good potential why would they have done a brokered PP flow-through financing with Mineralfields? More financing will be required and Sh OS will currently be over over 80m when fully diluted.
Comment by Andrew — December 15, 2011 @ 6:01 am
CQX for sure hasn’t played its cards right…you’ll notice in RIC’s news this morning, the upcoming drill program is going to go deeper into the Main Zone…in the direction of CQX’s claims…yet they continue to believe Goldstrike is going to drive shareholder value…they have completely missed the picture with Wasamac for the last year-and-a-half – this is a huge story – and that’s why the stock has tanked…I am absolutely astounded and gravely disappointed that VGD and CQX have not come together at Wasamac…that only makes sense and they have both missed out on opportunities as a result…
Comment by Jon - BMR — December 15, 2011 @ 6:08 am