Gold reversed nicely in the last few hours…after falling as low as $1,700 overnight, where there is clearly strong support, buyers stepped in and bullion is now up $5 an ounce to $1,715 as of 8:15 am Pacific…the inability of bears to push Gold below $1,700 an ounce, up to this point at least, has likely caused some shorts to begin to cover…Silver has also rebounded after almost touching $31.50…it’s currently up 12 cents at $32.23…Copper is off a penny at $3.54…Crude Oil is down 25 cents at $85.80 while the U.S. Dollar Index briefly shot past 80.20 but bears have pushed it back to 80.05…
Reports coming out of India are seeing better demand for physical Gold amid the festival season in that country…
TSX Gold Index Chart
We’ve seen an interesting divergence recently between the price of Gold and Gold stocks…the TSX Gold Index has managed to hold support around 330 despite the fact bullion recently fell through the $1,730 support area…this has to be considered a vote of confidence by investors in Gold’s primary trend (similarly, the Venture Exchange has hung in nicely as well)…below is an updated 2.5-year weekly chart from John for the Gold Index, and you can see how the weekly EMA(20) – currently at 328 – is providing rock-solid support…
Today’s Markets
Asian markets were sharply lower overnight, thanks in part to weak U.S. futures that reversed just prior to the opening of North American markets…European shares have finished strongly higher today, after being in negative territory, while the Dow is down 23 points as of 8:15 am Pacific…the Venture Exchange, which roared ahead 17 points yesterday, is off 4 points at 1301…the Venture has held up well in October, however, despite a $100 drop in the price of Gold…November should be better…
U.S. Economy Expands Slightly Better Than Expected
The U.S. economy expanded at a slightly faster 2% annual rate from July through September, buoyed by an uptick in consumer spending and a burst of (oh, just what we need) government spending…the Commerce Department said growth improved from the 1.3% rate in the April-June quarter…still, growth remains too weak to rapidly boost hiring and was held back by the first drop in exports in more than three years and flat business investment in equipment and software…but the public sector helped pick up the slack…
Despite the slow recovery and uncertain prospects, Americans also opened up their wallets in the third quarter…consumer spending accounted for most of the increase in GDP – real personal consumption expenditures climbed 2% compared with 1.5% in the second quarter…purchases of long-lasting goods posted an especially strong gain of 8.5%…
Government spending contributed to economic growth for the first time in more than two years, led by federal outlays on national defense…overall federal government spending jumped 9.6%, versus a 0.2% fall in the second quarter…state and local government spending was down slightly…and an improving housing market helped boost residential fixed investment by 14.4%, continuing a string of solid gains for the category…
U.S. Consumer Sentiment At 5-Year High
U.S. consumer sentiment rose to its highest level in five years in October as Americans were more upbeat about prospects for the economy and their own finances, a survey released this morning showed…the Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 82.6 from 78.3 in September, roughly in line with expectations…that’s the highest level since September, 2007, on a final reading basis…
Japan Approves Stimulus Package
Japan’s Cabinet approved a ¥423-billion ($5.3-billion U.S.) economic stimulus package today, moving to fend off recession as the recovery in the world’s third biggest economy falters…the emergency spending package, which is double the size originally expected, is also meant to help make up for lost momentum from reconstruction in the region devastated by the March 2011 earthquake and tsunami…the new stimulus will be paid for from government reserves. Prime Minister Yoshihiko Noda’s leeway to boost spending is limited by a legislative standoff preventing issuance of deficit-covering bonds as the country faces a “fiscal cliff” of some ¥38.3-trillion…the Prime Minister ordered the government to draft further measures to boost growth by next month, and the legislature is due to convene an extraordinary session on Monday…Chief Cabinet Secretary Osamu Fujimura said Noda told the Cabinet the package was meant to speed up Japan’s revitalization and help end a long and debilitating spell of deflation…
Orko Silver Corp. (OK, TSX-V)
Orko Silver (OK, TSX-V) has been showing strong chart patterns in recent months with a very obvious “cup and handle” and a rising 100-day SMA at $1.40 that’s currently underpinning the stock…OK jumped 13 cents yesterday to $1.62, and is off slightly in early trading this morning…we’ll have more on Orko’s fundamentals next week, but below is an updated chart from John…patient investors should do well with this one, especially if Silver takes off again to the upside as we expect it will…
Nevada Sunrise Gold Corp. (NEV, TSX-V)
As BMR readers know, we are extremely bullish regarding Nevada and another company we’re keeping an eye on there is Nevada Sunrise Gold (NEV, TSX-V) which recently broke above its weekly EMA-20 earlier this month after trading below it since May…the chart is telling us that NEV’s prospects look very positive for the next several months at least…as of 8:15 am Pacific, NEV is unchanged at 13 cents…
Note: John, Jon and Terry do not hold positions in OK or NEV.
any thoughts on new strike capital?
Comment by jeff — October 26, 2012 @ 7:31 am
My sixth sense report card for this week:
=================Forecast ==================================Actual =================================
RBW.. Low 17 cents High 21 cents, Close at 19 cents **Low 19.5 cents High 21.5 cents Close 21 cents
GQC.. Low $0.77, High $0.90, Close at $0.80———–Low $0.77 High $0.95 Close $0.87
GBB.. Low 11 cents, High 12.5 cents, Close at 12 cents **Low 10 cents High 11.5 cents Close 10.5 cents
EVR.. Low 7.5 cents, High 8 cents, Close at 8 cents—Low 7.5 cents, High 8.5 cents, Close 7.5 cents
SFF.. Low 14 cents, High 16.5 cents, Close at 16 cents ** Low 14 cents, High 15.5 cents, Close 14 cents
SF .. Low 2 cents, High 2.5 cents, Close at 2.5 cents ** Low 1.5 cents, High 2 cents, Close 1.5 cents
TYP.. Low 15 cents, High 19 cents, Close at 19 cents** Low 14 cents, High 16 cents, Close 14 cents
NAR.. Low 3.5 cents, High 4.5 cents, Close at 4 cents **Low 3.5 cents, High 4 cents, Close 3.5 cents
** hold a portfolio
Result: Not really accurate!
Comment by Theodore — October 26, 2012 @ 5:35 pm
Any chance you could do some more CEO interviews? RJK Exploration, Richmont Mines, Unigold, and Votla Resources would be four suggestions for you to consider. Thanks.
Comment by Michael — October 27, 2012 @ 9:08 am
Yes, we’re looking at doing more interviews before year-end. In fact, there’s a plan to visit the Blackwater district for 2 days by about mid-November. Other interviews can be done of course in different ways, without a visit, so we’re looking at that.
Comment by Terry - BMR — October 27, 2012 @ 10:35 am
A great long term play with huge growth potential is SPP.V. just announced a 5yr plan to open another 100+ cafes. Each cafe right now grosses on average 1.1million annually. huge insider holdings. do some dd on this one…
Comment by db — October 27, 2012 @ 3:11 pm
are you gentlemen still following cui? if so what are your comments.
Comment by walter emond — October 28, 2012 @ 12:33 am
Keeping an eye on it. Still waiting for CUI to pull the trigger on a new deal, but they’re still carrying an interest (now being diluted) in the Jubilee Reef Project in Tanzania with Liontown which has been getting some interesting results. CUI keeps monthly overhead very low, so they’re certainly in no danger of running out of cash. I suspect CUI will start to make some things happen within the next 6 months. I see it as a good entry point at these levels with a $2 million market cap. This company has been around for over 40 years with just one rollback.
Comment by Jon - BMR — October 28, 2012 @ 7:11 am
Jon u just said it all. Around 40 years!!!!!!!! And what have they created for sh value. Nothing!!
Comment by Heath stockford — October 28, 2012 @ 2:56 pm
You’re missing the point, Heath. This company has been around for a long time, they have survived every bear market and have kept share dilution to a minimum. They run a tight ship. From time to time the stock has has some great runs when they’ve ramped up exploration, and that’s where the opportunities have been for traders/investors. If you’re looking to make money in the market, CUI is worth looking at when it’s at depressed levels, when there’s not much interest in it. The risk factor is low (they’ve been around a long time) and you simply wait for when they get things going again. That’s the speculative junior resource market. If you’re looking for something different, invest in Apple.
Comment by Jon - BMR — October 28, 2012 @ 3:08 pm