BullMarketRun.com

Gold is higher this morning after yesterday’s significant intra-day turnaround…as of 6:00 am Pacific, the yellow metal is up $12 an ounce at $1,574…Silver is 61 cents higher at $28.45…Copper, which hit a new 4-month low yesterday before staging a bull hammer reversal like precious metals, is up 3 pennies to $3.47…Crude Oil is $1.07 higher at $90.97 while the U.S. Dollar Index is off slightly at 82.04…

Today’s Markets

Asian markets were mixed overnight with China falling a dozen points to 2351…European shares have rebounded significantly this morning despite an EU meeting in Brussels that accomplished little other than creating a framework for a major meeting near the end of June…meanwhile, regional data has provided additional evidence of a deterioration in economic activity in the euro zone…stock index futures in New York as of 6:00 am Pacific are pointing toward a modestly higher open on Wall Street…

The prospect of a Greek exit from the euro zone, rising losses at Spanish banks, and a failure of labor reform in Italy will force the European central bank to inject more liquidity into the banking system through its  long-term refinancing operation (LTRO) program, according to the chief economist at German banking giant Commerzbank in a report from CNBC this morning…

Yesterday’s Bullish Market Action

If you were keeping a close eye on the markets yesterday, you would have noticed a sharp intra-day reversal in the TSX Gold Index (as well as the Venture Exchange) even while Gold was down $20 an ounce…Gold and Silver both then rallied by the end of the day but the stocks led the way…this type of action is additional strong evidence that a turnaround in the sector is at hand, that important lows have likely been put in…as well, the latest COT statistics show that commercial traders have reduced their Gold and Silver short positions to levels even lower than they were at market lows last September and December…the “smart money” is therefore saying that Gold and Silver are now ready to begin new uptrends…

Below is a chart from John on the TSX Gold Index which has broken out of the downtrend that started near the end of February…

Venture Exchange

The Venture Exchange fell as low as 1231 yesterday before rebounding to close at its high of the day, 1256.48…look for follow-through action today as well as an overall volume increase…John’s latest CDNX chart shows a new uptrend appears ready to kick in…

GoldQuest Mining (GQC, TSX-V)

Yesterday morning in this space, we wrote about how GoldQuest was looking attractive at 6 cents with results pending from its drilling in the Dominican Republic…sure enough, news came out following the market close which was even better than expected as GQC has made an important new discovery at its Las Tres Palmas Project (Escandalosa) – 300 metres northwest of Hondo Valle and 2.5 km north of Escandalosa (two other strongly mineralized areas with a 43-101 deposit at the latter)…

Hole LTP-90 intersected 241 m grading 2.4 g/t Au plus Cu in what is the most northerly hole drilled to date by GoldQuest in a 3-km-long mineralized corridor…geologically consistent alteration and mineralization was observed from 30 metres to 261 metres…what’s different about this hole, compared to ones drilled in the Hondo Valle and Escandalosa Sur areas to the south, is the thickness of mineralization, more sulphides as well as high Gold values associated with high copper values at depth…a 12-metre section, for example, between 216 m and 228 m graded 16.95 g/t Au and 2.14% Cu…

The hole was terminated in mineralization, due to technical problems…the Romero discovery is open in all directions…it does not appear to be connected with Hondo Valle or Escandalosa Sur, but this is a rich geological area that GoldQuest is still trying to understand and at some point there’s a very good chance they will hit it big – perhaps Romero is it…more drilling, expected to begin shortly, will determine if that is the case or not…

GoldQuest also reported a solid hole from the northern flank of Escandalosa Sur (22 m grading 6 g/t Au), which should help increase resources at that deposit, though no significant mineralization was found south of Escandalosa Sur or between this area and Hondo Valle to the north…

GQC – What’s Coming

GoldQuest reported results from all 15 holes in this program (the other 14 were from Escandalosa Sur, Hondo Valle and other targets along the trend) so the market won’t be speculating on any additional holes to be reported in the near future from the Romero discovery or elsewhere…however, the fact that the Romero hole gets nicely richer at depth and ended in mineralization, plus the fact the discovery is open in all directions, will give speculators plenty to get charged up about…

Technically, GoldQuest will get an added boost if there are reversals to the upside (which seems quite likely) in the stock’s 100 and 200-day moving averages – giving it additional momentum…the declining 100-day SMA, currently at 10 cents, and the 200-day SMA, currently near 14 cents, have provided resistance for a year now…

GQC closed up a penny yesterday at 7.5 cents for a market cap of only $8.25 million, with the news coming out after the close…it will gap-up nicely this morning…generally speaking, in a situation like this, if a stock is able to hold its opening price through the first hour of trading, then that’s a very bullish sign…

Below is an updated chart from John for GQC, showing various resistance levels…

Prodigy Gold (PDG, TSX-V and OK Silver (OK, TSX-V)

John has chart updates on two these additional companies we’ve been tracking…

Prodigy Gold (PDG, TSX-V)

OK Silver (OK, TSX-V)

Note:  John holds a share position in OK (Jon and Terry do not).  John, Jon and Terry do not hold share positions in GQC or PDG.