Gold has traded between $1,608 and $1,616 so far today…as of 6:00 am Pacific, the yellow metal is up $1 an ounce at $1,611…Silver is off 4 cents at $29.94…Copper is down a penny at $3.65…Crude Oil is up 14 cents to $96.00 while the U.S. Dollar Index is flat at 80.61…
There’s a very interesting set-up in Gold at the moment as managed money (large funds) has a record high short position compared to a very low net short position by commercial traders…this suggests we’re about to see some high to extreme volatility in Gold…it’s never a wise bet to go against the commercial traders, so we have to side with their bullish stance at the moment…Gold could drop a little more but the COT structure is at least as favorable now as it was before last summer’s big rally…
Below is a chart from www.usfunds.com (updated through last Friday) that gives a very clear buy signal for Gold…bullion, as Frank Holmes has pointed out, has dropped nearly 2 standard deviations on a year-over-year basis…an event like this has happened only about 2% of the time over the last 10 years…following these extreme lows, Gold has historically increased as much as 15% over the next year…
Silver Short-Term Chart
Below is John’s updated short-term Silver chart (9-month daily) to begin the new week…a strong support band exists between 29 and $29.60…RSI(14) is approaching a support area as well…while some additional weakness is certainly possible, the downside risk at this point appears minimal…
Silver Long-Term Chart
The long-term chart (15-year monthly) provides further evidence that Silver is near an important low at the moment given the oversold RSI(2) condition (below 30)…Silver has been a proven buy on this chart anytime RSI(2) has fallen to 25 or lower…what has been developing since last summer is a powerful “Wave 5” move that could drive Silver much higher…
Today’s Markets
Asian markets were mostly lower overnight with China’s Shanghai Composite falling 39 points to 2383…European markets are sharply higher as data released in Germany showed analyst and investor confidence in the country beat all expectations in February and was at its highest level since April, 2010…stock index futures in New York are pointing toward a slightly higher open on Wall Street after yesterday’s holiday…
Venture Exchange-Gold-CRB Comparative Chart
The drop in the CDNX over the past two weeks (43 points to 1186) has spooked some investors BUT there are a couple of important technical points to keep in mind…first, the Index is now trading within a very strong support band between 1166 and 1200…this has held for more than 7 months (the Index hit a low of 1154 late last June)…second, as you can see in the chart below, the Venture broke through a two-year downtrend line in late December in what definitely had to be considered a bullish development…previous resistance typically becomes new support, and that’s what we’re hoping to see now as a “throwback” to the downtrend line has occurred…
Seafield Resources (SFF, TSX-V)
Seafield Resources (SFF, TSX-V) was the very first company BMR began tracking in 2009 when it was trading at just a nickel and a market cap of less than $2 million…its market cap soared to well over $100 million in late 2010 on drill results from its Miraflores Property in Colombia before the bear market set in and took Seafield down along with just about every other company…Seafield has made impressive progress on the ground, however, with the latest NI-43-101 resource calculation for Miraflores showing 1,925,542 ounces in the measured and indicated categories (77,841,ooo tonnes at 0.8 g/t Au at a cut-off of 0.3 g/t)…other areas of the company’s Quinchia Project land package hold excellent potential as well…on Friday, Seafield was halted late in the trading session as the company reported fresh drill results from Miraflores including an outstanding 238.15 metres grading 2.06 g/t Au in QM -DH-50…importantly, this hole – along with QM-DH-51 (90.1 metres grading 0.85 g/t Au) – were collared to the east outside the Miraflores breccia pipe…the latest results will help to add tonnage and grade to Miraflores but we don’t expect a massive move in the stock price given the state of the current junior resource market and the fact Seafield will likely use these results as a springboard to a financing…
Below is an updated Seafield chart from John…the technical challenge for this stock is to break above both downtrend lines on a closing basis…we’ll see what happens…
Dynasty Gold (DYG, TSX-V) Updated Chart
A 5-year weekly chart for Dynasty Gold (DYG, TSX-V) shows strong accumulation in this stock since the beginning of Q4 2012…RSI(14) remains in a nice uptrend…
Note: John and Jon both hold share positions in DYG.
Ok seriously, wtf is going on with the venture? All indices are up and this POS is down another 15pts today. Jon, you keep saying investors need to be patient, but this is getting a little silly. This market is DEAD!!
Comment by Tony T — February 19, 2013 @ 9:44 am
a history lesson????? from an analyst ….
Our March GDX calls should have given us plenty of time, but then again how where we to know the right translated IC this summer would be followed by a left translated one this winter (something that has never happened before).
I decided to cure that problem by sticking to LEAPS, as I doubt anyone can manipulate the precious metals that long.
Comment by Jeremy — February 19, 2013 @ 11:47 am
Jon, is there still any intent to post the Everton Resources interview?
Comment by George — February 19, 2013 @ 2:10 pm
I spoke with Andre just last week and we’ll be doing an interview in the near future. Originally, we were going to do this at the Cambridge Show but there were scheduling conflicts in the midst of the Show.
Comment by Jon - BMR — February 20, 2013 @ 7:24 am