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Gold is getting hammered again today as it marches toward its biggest quarterly loss since at least 1920…as of 7:25 am Pacific, bullion is off its worst levels of the day but still down $37 an ounce at $1,241…it hit a new 34-month low of $1,223 this morning after yesterday’s encouraging U.S. economic data (increases in home prices and durable goods orders), but a weaker-than-expected revised U.S. first quarter GDP figure (1.8%) this morning has given Gold some support…with 2 more full trading days left in Q2, bullion’s quarterly loss is currently 23%…Silver is down 70 cents at $18.94, within a support band between $17.50 and $19.50…the Gold-Silver ratio (65.5) is the highest in nearly 3 years…Silver is 34% lower this quarter, set for the biggest such drop since the start of 1980…it’s also the worst performer this year on the S&P GSCI gauge of 24 commodities…Copper is up slightly at $3.05…Crude Oil is 17 cents lower at $95.15 while the U.S. Dollar Index is now relatively flat at 82.73 after almost touching 83 this morning…

Assets in the SPDR Gold Trust fell 16.2 metric tons to 969.5 tons yesterday, the lowest since February 2009, according to its website…Bloomberg data show that global holdings are at their lowest since June 2010…

So where to from here for Gold?…chart support at $1,250 is certainly in danger of being breached today on a closing basis…no one has a crystal ball, and there could be some wild gyrations in the coming days and through the balance of this year, but one can make a very strong case from technical and fundamental perspectives that the floor for Gold is likely around $1,000 an ounce…John has an interesting chart this morning that shows the next 2 long-term Fibonacci support levels at $1,088 and $891…

Keep in mind that the average “all-in sustaining costs” for most major producers for 2013 are around $1,100 an ounce (Yamana is believed to be on the low end around $800 while Newmont and Kinross could be as high as $1,200)…Brian Christie, VP Investor Relations at Agnico Eagle, gave a talk at the Denver Gold Group Luncheon in Toronto May 6 where he defined all-in sustaining costs (AISC) as:  Total Costs (net of by-product credits) + Sustaining Capital + Corporate, General and Administrative expense (net of stock option expenses) + Exploration expense…for 2013, he stated Agnico-Eagle’s AISC would be $1,110 an ounce, slowly declining to just over $1,000 an ounce by 2015…

Long-Term Gold Chart

This 20-year monthly chart puts the “Big Picture” for Gold into clear perspective…a very normal Fibonacci 50% retracement of the move between the low of $253 in 1999 and the high of $1,924 in 2011 would take bullion down to $1,088…with Gold breaking below the first long-term Fib. level of $1,286, $1,088 seems highly probable – as we speculated in April – but precise timing of course is uncertain…even a drop to $1,088 would keep the long-term bull market intact…

TSX Gold Index Chart Update

The TSX Gold Index has almost reached its 2008 Crash low (152) which turned out to be the buying opportunity of a lifetime…the question is, will that support hold this time around?…the Index, which has fallen almost in half already this year, closed at 164 yesterday…below is a 5-year weekly chart from John that shows a support band between 150 and 160…after that, the next support (not shown on the chart) is 137…it’s reasonable to believe to conclude that we’ll see an immediate test of the 150-160 support, perhaps followed by a rally and then a re-test of the support…as of 7:25 am Pacific, the Index is off 7 points at 157…

U.S. Q1 GDP More Tepid Than Previously Estimated

U.S. economic growth was slower than previously estimated in the first quarter, held back by a moderate pace of consumer spending, weak business investment and declining exports…gross domestic product expanded at a 1.8% annual rate, the Commerce Department said in its final estimate this morning…output was previously reported to have risen at a 2.4% pace after a 0.4% stall speed in the fourth quarter…

Today’s Markets

Asian markets were mixed overnight with Japan’s Nikkei average down 135 points, closing at 12834…China’s Shanghai Composite recovered from a 2% intra-day decline to finish down just 8 points at 1951…the People’s Bank of China (PBOC) released a statement, saying that it would provide cash to institutions that needed it…but analysts said that the move was not enough to quell market fears and that there was still plenty of uncertainty in the banking system…European markets are rallying strongly in late trading overseas…in Germany, research firm GfK released its forward-looking consumer sentiment indicator which showed morale was at its highest level in nearly 6 years…July’s figure came in at 6.8, above expectations of 6.5 and better than the 6.5 figure for June…the Dow is racing higher this morning, up 122 points to 14882…the TSX has retreated 27 points while the Venture is 7 points lower at 876…an important support level on the Venture, as we’ve pointed out, is 860…

In its most recent Junior Mining Weekly report, Canaccord Genuity stated:  “The drop in the TSX Venture harkens back to the 1995-2000 period where it fell (70-75%) from peak to trough over a plus 40-month time frame”…so far, Canaccord noted, the Venture has dropped about 65% in 29 months since the current downturn started in March 2011…a similar percentage drop would take the Venture down to between 615 and 740, in the immediate vicinity of the 2008 Crash low which was about an 80% haircut from the 2007 all-time high…

Zenyatta Ventures Ltd. (ZEN, TSX-V)

Zenyatta (ZEN, TSX-V) continues to climb, aided by a strong chart (breakout yesterday) and the news yesterday that the company had raised nearly $13 million through the exercise of warrants…President and CEO Aubrey Eveleigh stated, “Some of the proceeds will be used to fund continuing drilling, resource estimate, metallurgical studies, graphite characterization and a preliminary economic assessment…the budget for this program is approximately $7.5-million…the company is now in a great position to carry out the exploration and development program on our graphite deposit for the foreseeable future without a need for a capital raise”…as of 7:25 am Pacific, ZEN is 13 cents higher at $2.83…

Huldra Silver Puts Treasure Mountain Mine & Merritt Mill On Care & Maintenance

Another casualty of low Silver prices…the news yesterday from Huldra Silver (HDA, TSX-V) was rather ominous, and this morning the company confirmed that it has put its mine and mill on care and maintenance to minimize cash obligations…Huldra says it will continue to pursue financing options in order to recommence operations, but the fact of the matter is that at current Silver prices Treasure Mountain is simply unprofitable despite the high-grade ore…there is value in Huldra’s assets – they exceed the company’s liabilities – so it’ll be interesting to see if some group or another company decides to swoop in…HDA is down another 3.5 cents in early trading to 10.5 cents, putting the company’s market cap at approximately $6 million…HDA raised millions during the last year over $1 per share, so unfortunately a lot of wealth has evaporated in this deal…

U.S. Overtakes China, Canada Shoots Up In Survey Rating Favorable Places For Foreign Direct Investment

For the first time since 2001, the U.S. knocked China out of first place in the annual Kearney survey of executives rating favorable places for foreign direct investment…and Canada has shot up from 20th to 4th on the list…the U.S. narrowly outscored China in the survey by consulting firm A.T. Kearney of executives from 302 companies world-wide, as reported by the Wall Street Journal yesterday…China slipped to second place and Brazil came in third, followed by Canada…India dropped to No. 5 from No. 2 last year…the release of the survey comes amid several indications of foreign interest in U.S. manufacturing…confidence in the U.S. has grown with the surge in U.S. oil and gas production, which promises lower energy costs and export opportunities in petrochemicals and other products…though foreign companies are wary of the U.S. federal budget deficit and gridlock in Washington, the U.S. is benefiting as some companies bring back production previously outsourced to Asia…China’s allure has been dimmed slightly by rising wages and a rapidly aging population, but the country is likely to remain a huge magnet for foreign investors…Brazil is benefiting from investments related to the country hosting next year’s World Cup and the 2016 Olympics…the survey was taken last October and November…executives were questioned about the likelihood of investing in various countries over the next three years…Kearney uses the responses to create an index ranking 25 countries on a scale of 0 to 3 in terms of attraction…rhe U.S. scored 2.09 in the latest survey and China, 2.02…about two-thirds of the companies surveyed had annual sales of more than $1 billion and the sales for all were above $500 million…

Note: John, Jon and Terry do not hold share positions in ZEN.