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Metals markets are quiet so far today…Gold has hovered between $1,673 and $1,683…as of 6:05 am Pacific, the yellow metal is flat at at $1,677…Silver is off a penny at $31.84…Copper is steady at $3.72…Crude Oil is relatively unchanged at $96.56 while the U.S. Dollar Index is up over one-tenth of a point at 79.94…

Platinum prices surged to their highest level in nearly 17 months yesterday as South African supply worries continue to underpin prices…the rise appears to be the result of traders continuing to factor in ongoing supply concerns rather than any fresh breaking news, according to Jim Steel, precious-metals analyst with HSBC…traders said the market is still reacting to news earlier this week out of Anglo American Platinum, the world’s largest producer…in particular, a U.S. trader cited comments from outgoing Amplats chief executive Cynthia Carroll describing the industry in South African as in crisis…the country provides around three-quarters of the global mine supply…

Today’s Markets

Asian markets were generally lower last night with China’s Shanghai Composite falling 16 points to 2419…European shares are mixed..the European Central Bank (ECB) held its main interest rate at a record low of 0.75% today, maintaining its policy in order to see whether an economic recovery sets in later this year or is derailed by the euro’s rise…the appreciation of the euro to a 14-month peak against the dollar and a 30-month high versus the yen prompted French President Francois Hollande to call yesterday for an exchange rate policy to protect the currency from “irrational movements”…stock index futures in New York are pointing toward a flat opening on Wall Street…U.S. non-farm productivity fell in the fourth quarter by the most in nearly two years as output increased marginally despite steady gains in employment, the Labor Department just reported…a separate report showed that weekly unemployment aid applications fall to 366,000, indicating steady but modest hiring…

Carney Questioned By British Lawmakers

Bank of Canada governor Mark Carney, the next governor of the Bank of England, said today he would move carefully with any changes to the way the BOE runs monetary policy but suggested he might favor committing to stimulus for an economy over a period of time…”In my view, flexible inflation targeting – as practiced in both Canada and the UK – has proven itself to be the most effective monetary policy framework implemented thus far,” Carney told British lawmakers…”As a result, the bar for alteration is very high,” he said in written answers to questions from a parliamentary committee…Carney, who will soon become the first foreigner to run Bank of England in its 318-year history, faced a three-hour question-and-answer session with the committee after submitting his testimony…in it, he said that while moving cautiously, reviewing monetary policies would be important…Carney said central banks “may need to commit credibly to maintaining highly accommodative policy even after the economy and, potentially, inflation picks up”…he also did admit, however, in a global context, that the “returns of quantitative easing have declined as the scale of the programs has increased”…

Venture Exchange Updated Charts

John has a couple of interesting charts this morning on the Venture Exchange which show a convergence of important support around current levels…the Index closed down a few points yesterday to 1212, exactly at its 50-day moving average (SMA) which has flattened out and has been providing support since early January…there is also Fibonacci retracement support at 1209 and downsloping wedge support around 2004…so the 1200 area appears likely to hold, especially if the 50-day SMA can reverse to the upside in the coming days…such a reversal helped usher in major rallies in early 2012 and again last summer…

Venture Exchange Chart #2

Below is another Venture (2.5-year weekly) chart that shows how the Index has finally broken above a down trendline in place since 2011, but has yet to gain any traction as a result…the Index has stayed above the down trendline, however, and this former resistance should now become new support…patience, as always, is critical…many conditions are in place for a stronger market to emerge this quarter…

Gold Canyon Resources (GCU, TSX-V)

Interesting news release from Gold Canyon Resources (GCU, TSX-V) yesterday as the company commented on the sharp decline in is share price over the last five months, from just over $2 in September to the current 66 cents…a major part of the problem, GCU admitted yesterday, was the company’s historical practice of issuing a large number of flow-through shares…“Gold Canyon had historically issued a large number of flow-through common shares, which, because of the associated tax treatment in Canada for qualified flow-through mining expenditures undertaken by the company, carry a much lower cost base than regular shares…the lower cost base allows resource money managers to sell these shares at prices that, despite declining market prices generally, are still profitable, providing more attractive optics than selling at a loss”…the company also commented: “Market participants have indicated that, due to investor fatigue with the mining sector, both retail and institutional, and prolonged mining sector weakness, resource money managers are experiencing higher than normal redemption challenges in their funds and managed accounts, causing them to sell shares to raise the cash needed to make redemption payments…with respect to Gold Canyon’s shares in particular, the continued recent demand has resulted in bids to buy at reasonable valuation levels, providing the sellers with better liquidity than is the case with many other mining issuers, and indeed than had historically been the case with Gold Canyon until very recently”…

GCU currently has over 130 million shares outstanding, giving it a market cap of $90 million…its Springpole Project in northern Ontario has an indicated resource of 4.41 million ounces of Gold and 23.8 million ounces of Silver (128.2 million metric tonnes grading 1.07 g/t Au and 5.7 g/t Ag) and an inferred resource of 690.000 ounces of Gold and 2.7 million ounces of Silver (25.7 metric tonnes grading 0.83 g/t Au and 3.2 g/t Ag)…the company is holding about $10 million in cash…the bleeding in GCU’s share price could continue for a while longer if the markets don’t rebound soon as GCU has fallen through important technical support…as John shows in the 4-year weekly chart below, the next major support band begins at 43 cents…this doesn’t mean it’ll necessarily fall that low, but the risk certainly exists…43 cents would put a value of approximately $12 on each ounce in the ground (inferred and indicated) at Springpole…GCU hit an all-time high of over $4 a share in the spring of 2011…this is a good lesson in how share structure is so important…many companies are suffering because of the issuance of too many flow-through shares (for our GBB followers, that is an issue) and/or too many shares in the hands of institutions who in some cases have been forced to sell at various times over the last year…

Probe Mines (PRB, TSX-V)

Probe Mines, with only 66 million shares outstanding, has fared much better in the market with its Borden Lake deposit which has just over 4 million ounces in the indicated and inferred categories (see January 15 news release for breakdown)…buying pressure, as indicated by the Chaiken Money Flow (CMF), has been strong in recent months with solid technical support at the $1.80 level (just above the 100-day moving average) which it has not closed below since the middle of November…

Note: John, Jon and Terry do not hold positions in GCU or PRB.