Gold is attempting to get back on track after yesterday’s sell-off but the bulls are on the defensive…as of 6:25 am Pacific, bullion is up $2 an ounce at $1,567…Silver is 4 cents lower at $26.84, just above its May low…Copper is up a penny at $3.32…Crude Oil has gained 47 cents to $78.67 while the U.S. Dollar Index is off slightly at 82.22…
For some encouragement regarding Gold, in 8 out of the last 9 years the July to December period has been bullish for the yellow metal as John points out in the chart below…
Crude Oil
Markets across the board threw a temper tantrum yesterday over a range of issues…U.S. crude oil prices tumbled below $80 to their lowest level since last October…weak manufacturing data from China and the U.S. reminded market watchers that the global economy remains sluggish and ratcheted up fears it may slow further…continued weak oil prices, however, will ultimately help consumers and businesses and have a “stimulus” effect on the global economy…
Crude prices have fallen 30% from their March highs but it’s not just a demand issue…oil production globally rose to a record level in May, according to the International Energy Agency…the world is now pumping 91.1 million barrels per day, the most ever, with OPEC production, at more than 31.5 million barrels in May, also higher than normal…growth in oil production from Iraq and even the United States has been significant…the total supply increase may also have a lot to do with Iran which was threatening to close the Strait of Hormuz just a few months ago…Iran is getting hit hard by lower oil prices, a fact that may soften them up at the negotiating table with regard to their nuclear ambitions…
Banks Downgraded by Moody’s – Reaction Overdone?
Contributing to yesterday’s market sell-off was word of an imminent downgrade to the credit ratings of 15 of the world’s biggest banks (Moody’s came out with its downgrades after the closing bell) which caused panic among some investors and pundits, but why?…this was certainly not an unexpected development…Moody’s had flagged in February that it was considering a mass downgrade of the banks, and how much credibility does this ratings agency have in the first place?…as one market observer pointed out yesterday, “If Moody’s designed a car, you’d have the driver’s seat facing backwards”…five U.S. banks were downgraded, one Canadian (Royal Bank) and nine European banks…does anyone believe the Royal Bank of Canada is not as solid as a rock?…RBC has long taken issue with being called out for its capital markets exposure…it argued in early June that its trading inventory has been cut to $118-billion from $151-billion in the third quarter of 2011, and noted that its fixed-income balance has shrunk by 15% since last year…RBC also said profits from its retail operations vastly outweigh those from capital markets…
Stress tests conducted by the Federal Reserve at the beginning of this year year showed that the majority of the largest U.S. banks will continue to have enough capital to satisfy the regulators, even if they suffer a financial shock that includes unemployment hitting 13% and a 21% drop in housing prices…
“This is one of the most absurd things that Moody’s has ever done perhaps in the history of the company,” said Dick Bove, Vice President of Equity Research in the Financial Sector at Connecticut-based Rochdale Securities…the fundamentals of the American banking industry point to balance sheets that have improved “dramatically” over the last 4 years, Bove told CNBC…the equity-to-assets ratio is as high as it was in 1938, liquidity as a percentage of assets is at a 30-year high, and reserves against bad loans are up while bad loans are down, Bove said…
“In any metric that you look at…the banks have shown improvement in earnings in every one of the past 11 quarters year-over-year…if you go into the bond market, where Moody’s did the downgrade, prices of bank bonds are going up…not only are they going up, they are going up faster than the prices of Treasurys, so what in heavens’ name is Moody’s doing?,” Bove said…
Today’s Markets
Stock index futures as of 6:25 am Pacific are pointing toward a higher open on Wall Street as markets try to finish the week on a positive note and make up for lost ground yesterday…(the ECB is taking some measures this morning in reports just hitting the wire)…the Venture Exchange hit a new 52-week low of 1211 but rebounded slightly near the end of the trading session to finish at 1217, 2 points above its May 16 intra-day low…there’s a strong support zone between approximately 1150 and current levels…is the Venture putting in a double bottom?….we’ll see what happens today…John will have an updated Venture chart as part of our Week In Review and A Look Ahead which will be posted Sunday following our site visit tomorrow to Rainbow Resources‘ (RBW, TSX-V) International Silver Property…
Eagle Hill Exploration (EAG, TSX-V)
One of the bright spots in the market yesterday was Eagle Hill Exploration (EAG, TSX-V) which intersected 11.8 g/t Au over 47.2 metres near-surface at its Windfall Lake Gold Deposit in northwestern Quebec – a 25-metre step-out to the east of a hole drilled earlier this year which returned 22.85 g/t Au over 25 metres… below is an updated chart on EAG after it climbed 3 cents to close at 16 cents on total volume (all exchanges) of 3.6 million shares…
Note: John, Jon and Terry do not hold positions in EAG.
MAO – don’t really know this Quebec junior but I see it’s had interesting chart action this month. If it becomes o/s it could be worthwhile looking into to.
Comment by Andrew — June 22, 2012 @ 6:06 am
Bullish signs?
Comment by Don — June 22, 2012 @ 7:15 am
To the good folks of BMR, just a note of thanks for maintaining this sight and improving it all the time. Really like the fact the you are interviewing CEO’s such as your recent chat with Bill Fisher of GQC. Shout out to BMR for having GQC on their radar many moons ago when the general public had no clue of their potential.
I am very intruiged with CQX Cadillac Mining, a sleeper company I have been following thanks to BMR. Like the fact their share structure is so tight and the fact that they border some really big discoveries and their past drill results have been very impressive.I feel it is just a matter of time before they could turn into a GQC and rocket overnight, if they hit the big one. I believe that drill results are due anytime now and if they are released on a day when GOLD is is favor that could really help the cause. Just wondering if it would be possible to interview their CEO as i find your interviews very helpful in determening if I will hold onto plays long term or if they are just flashes in the pan. Once again thanks for all you do. KD
Comment by KD — June 22, 2012 @ 10:48 am
Hopefully, GBB will not close at 9 cents today…. the 9 cents lot is in danger! RBW is fine and my AOX lot has been filled.
Comment by Theodore — June 22, 2012 @ 11:33 am
@theodore. Please explain why it is that you post everyday on gbb???? A stock you don’t own or have any interest in???
Comment by Heath — June 22, 2012 @ 2:29 pm
@Heath ..I am a loser in this stock… and I am hoping that people who are interested in GBB should not jump in a hurry … the sliding of this stock in my opinion will continue to about 8 cents… The worst performance stock … even SFF is much better than GBB… Believe it or not. Anyway, I will stop posting GBB from now… no more negative views.
Comment by Theodore — June 22, 2012 @ 3:58 pm
Jon, Have you had any further contact with Bill Fisher? What seemed like a clear desire to communicate with the markets and shareholders appears to have come to naught.
apparently management now has cold feeet about releasing any core pictures, supposedly due to regulatory concerns. So here we have an interesting potential situation remaining in limbo. do you know when the status of the four step out holes will be released?
Comment by George Wohanka — June 22, 2012 @ 4:50 pm
Hi George, everyone: No contact with Bill Fisher since the Resource Show interview. We’ll try to do a GQC update in the coming days. I’m currently in the Kootenays and had a fascinating site visit yesterday at RBW’s International Property. Will be reporting on this by tomorrow morning as the trip continues this morning to Gold Viking/Ottawa. Week In Review may be delayed until tonight – severe time constraints and Internet access issues due to property visits. International is everything – and then some – that RBW has been reporting. We have some new insight to share as well as pictures.
Comment by Jon - BMR — June 24, 2012 @ 6:56 am
Thanks for that update, Jon – looking forward to comments on your site visit. 🙂
Comment by Andrew — June 24, 2012 @ 10:11 am
Hopefully Jon you didn`t get flooded out on your site vist to Rainbows prop.finally quit raining today lived here 20 years and have never seen it rain like yesterday 35mm non stop
Comment by brian — June 24, 2012 @ 1:35 pm
Brian, the weather we encountered was actually incredible – during virtually the entire time at the International yesterday, there was no rain and even some rays of sunshine……while down in Kaslo (40 miles away) it was pouring. So we were very lucky. Shortly after we left around 5:30 pm, the rain started at the International and turned into a downpour. Got some fabulous pictures and will be posting some by tomorrow. Folks, imagine this: a wall of mineralization (galena, pyrite and sphalerite) up to 7.5 feet high and 300 feet long, exposed along a road…..this is what RBW will be drilling into initially…….and that’s only a fraction of the entire structure……it’s one thing to read about a property like this in technical reports and hear people talk about it, but when you actually see it – you have that light bulb moment……a lot to write about over the next several days……the International actually exceeded my expectations – this is a very special property that has a terrific chance of becoming British Columbia’s next silver discovery, and that was confirmed to me as well by a long-time prospector in the area who’s not even with RBW….
Comment by Jon - BMR — June 24, 2012 @ 6:10 pm
was there a big turnout for the visit?
Comment by db — June 24, 2012 @ 7:14 pm
It was a manageable group of several investors/writers and RBW wanted it that way as a logistical “test run” for larger visits over the summer – smart idea……it was exceptionally well done but RBW learned a lot to pull off larger visits over the summer with drilling in full swing…..I believe their plan is to fly in brokers/analysts/investors/writers from out of Calgary by helicopter to Kaslo for a 2-day trip, that will also taken them by helicopter to other areas…..while also using the helicopter for geological purposes…….they have a very sophisticated strategy to pull a bunch of things together at the same time……a helicopter was not used in this visit….believe me, they have one heck of a “show and tell”….the high-grade showings and the overall structure are stunning at the International – Kaslo is a terrific stay-over, then it’s south to other properties and I’m told they’ve worked out an arrangement with Eagle Graphite for a tour of their graphite processing facility in addition to RBW’s fly-over of the whole flake graphite area….throw in a fly-over of the Rocky Mountains, and I don’t think any company can match what RBW is going to be able to offer up……the best thing of all IMHO, they have the goods at the International……
Comment by Jon - BMR — June 24, 2012 @ 8:07 pm