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Gold climbed as high as $1,246 overnight but has given back most of those gains…as of 7:35 am Pacific, the yellow metal is up $7 an ounce at $1,232…Silver is 34 cents higher at $18.86…Copper is up a penny at $3.04…Crude Oil is 52 cents higher at $96.02 while the U.S. Dollar Index has climbed one-fifth of a point to 83.06…

Reuters reported this morning that Gold premiums doubled in India on Wednesday as suppliers struggled to meet surging demand after a ban on consignment imports…India, the world’s biggest buyer of gold, now requires importers to pay upfront for inventory, making it difficult for smaller jewellers with lower working capital to source supplies…the government also raised the import duty to 8% n May to keep a lid on the surging current account deficit…most of the supplies are being met by privately held trading houses and state-run agencies such as Metals and Minerals Trading Corp of India Ltd., State Trading Corp. and PEC Ltd. through their imports in April and early May as banks await guidelines from the central bank on outright cash purchases…Indian Gold imports fell to $36 million in the second half of May from an average of $135 million per day in the first half, Finance Minister P. Chidambaram said earlier in June…India has ruled out a blanket ban on Gold imports or any increase in customs duty from the current 8%…

Huldra Silver Inc. (HDA, TSX-V), despite a high-grade Silver resource at Treasure Mountain, is an example of a trend – mines being put on “care and maintenance” – that’s going to accelerate if Gold and Silver prices do not recover soon…a vast portion of the Gold industry is struggling to make any money at the current price, according to analysts…while precious metal prices are plunging, costs are not falling nearly as fast…as Peter Koven reported in the Financial Post this morning, that leaves many companies vulnerable to mine closures…the ones in the toughest positions are small miners with high costs, high debt and limited liquidity – San Gold Corp. (SGR, TSX), Claude Resources Inc. (CRJ, TSX), and Wesdome Gold Mines Ltd. (WDO, TSX) all fit that description…the average cash per ounce of Gold sold at Richmont Mines‘ (RIC, TSX) Beaufor and Island Gold Mines increased to $1,305 CDN in the first quarter of 2013 from $964 in the year-ago period, primarily as a result of lower head grades at both mines and a higher cost per tonne at the Island Gold mine…so Richmont faces issues as well, though they have discovered a promising new higher-grade resource at depth at the Island Mine…

Dynasty Gold Corp. (DYG, TSX-V)

That’s why really solid exploration plays and potential new “discovery” situations continue to be our focus at BMR, with northern British Columbia being a very keen area of interest…we’ll be reporting a lot more on the Iskut-Telegraph Creek areas in the days and weeks ahead…south of that region, in the prolific Stewart area, is a company that will be drilling some exceptionally promising targets this summer – Dynasty Gold (DYG, TSX-V) which is trading at just a penny-and-a-half…Dynasty has $1.2 million in cash and a very strong board that includes New Gold Inc. (NGD, TSX-V) President and CEO Bob Gallagher…Dynasty held its AGM Tuesday, which we attended, and the company’s preparation for its drill program at the Strike Property has been impressive to say the least…they are targeting Eskay Creek, VHMS-style mineralization in favorable felsic stratigraphy in an under-explored area in close proximity to some major past producers (see the company’s June 12 news release)…Dynasty should firm up as the drill program, expected to commence in August, draws closer…though there are never any guarantees in this risky exploration business, they do have some exceptional targets that could very conceivably result in a discovery…so the potential leverage in this stock at current levels is phenomenal…British Columbia is hot right now and we’re convinced more discoveries will be made in the coming months…

The northern part of Dynasty’s property, where drilling this summer will be focused, is particularly intriguing…geophysical anomalies extend through much of the northern part…of those anomalies, a 700-metre-long northwest-trending deep EM conductor, identified in 1990, is the most persistent…a reinterpretation of historical data suggests the potential for an Eskay Creek-style system at depth…rock and soil sampling last fall returned encouraging results including rock sample S-12-AR-01, taken from the north portion of the deep EM conductor axis, which returned 7.2 g/t Au and 4,395 g/t in Silver as well as significant Zinc…

Below is a 4-year monthly chart from John, showing all DYG needs at this point is a catalyst…

Probe Mines Ltd. (PRB, TSX-V)

Probe Mines (PRB, TSX-V), which Agnico Eagle recently acquired a 9.9% position in, is unquestionably one of the best exploration stories in the country at the moment as the company continues to work on a high-grade zone Gold discovery trending to the southeast at the rapidly evolving Borden Lake deposit in northeastern Ontario…the most recent results were successful in identifying high-grade mineralization up to 700 metres along strike from the initial discovery on Section 1200m SE…four drill rigs were mobilized to that area for expansion and infill drilling…the footprint of near-surface mineralization to the northwest is also being expanded…the company is now reclassifying the deposit as a more traditional high-grade, Archean lode Gold system, amenable to underground recovery, which is also bounded by significant ancillary lower-grade mineralization, the latter ideally suited to potential open-pit mining techniques…expect significant changes to the last resource estimate which was in January (3,686,000 indicated ounces of Gold averaging 1.02 g/t Au and an additional inferred resource of 625,000 ounces averaging 1.08 g/t Au, at a 0.5-g/t cut-off)…below is a 2.5-year weekly PRB chart, showing strong near-term support at $1.55…PRB is up 8 cents to $1.63 through the first hour of trading this morning…

Today’s Markets

Japan’s Nikkei average roared closed nearly 3% higher overnight while the Shanghai Composite stabilized on signs of improvement in China’ strained money markets, and as fears of a U.S. stimulus withdrawal eased…the Nikkei finished 380 points higher at 13214 while the Shanghai closed essentially unchanged…European markets are up significantly in late trading overseas, while the Dow has posted 162-point gain as of 7:35 am Pacific…the number of Americans filing new claims for unemployment benefits fell slightly last week, in line with the recent moderate pace of jobs growth…meanwhile, the Commerce Department said consumer spending increased 0.3% last month, after a revised 0.3 percent drop in April…consumer spending in April was previously reported to have declined 0.2%…the TSX is 67 points higher at 12019 while the Venture found support at 860 yesterday and is up 4 points as of 7:35 am Pacific at 865…

Shanghai Chart Update

China’s Shanghai Composite has struggled recently, but there are signs there is more trouble on the way when one examines the 11-year monthly chart…RSI(14), currently at 39%, is moving down from a bearish “M formation…there is critical support around current levels (1950), and if that fails then a 10% drop to the next major support (1700) is a distinct possibility before a recovery sets in…interestingly, trading patterns between the Shanghai and the Venture have been strikingly similar in recent years…the Shanghai is down nearly 70% from its 2007 peak while the Venture is off almost 75% since then…