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Gold fell as low as $1,308 overnight but has recovered to $1,324 as of 7:35 am Pacific, a gain of $2 an ounce from yesterday…Silver is unchanged at $20.16…Copper has pulled back a penny to $3.15 after 5 straight days of advances, its longest winning streak since December…the global surplus of Copper may rise to 500,000 tons in 2015 from 257,000 tons this year, Goldman Sachs stated in a report released yesterday…Crude Oil is off $1.02 a barrel to $104.37…Fibonacci support for WTIC exists between $100 and $104, and then expect another run-up in prices…the U.S. Dollar Index (see John’s important updated chart in this morning’s Musings) is off one-quarter of a point to 82.10…

In a move bound to confound the bears and comfort even the most shell-shocked Gold bugs, renowned economist and precious metals investor Peter Schiff has launched a new Gold mutual fund with exposure to the sector…Schiff, the author of 3 books including The Real Crash: America’s Coming Bankruptcy – How to Save Yourself and Your Country, announced last Friday the launch of the EuroPac Gold Fund (MUTF: EPGFX) through his company, Euro Pacific Asset Management…the fund will invest in both precious metals producers/explorers and precious metals, with at least 80% targeting Gold-related investments…it will be sub-advised by Adrian Day of Adrian Day Asset Management, also a high-profile investor and author whose titles include Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks…

“With precious metals stocks currently at their lowest levels in years, and with many investment firms declaring the end of the bull market in Gold, some may consider the launch of our fund to be poorly timed,” said Schiff.  “But for those who believe, as Adrian and I do, that Gold still has a long way to rise, then the timing may be attractive.  In our view, the fundamentals behind the metal become stronger every day.”

Day stated, “The underperformance of the miners versus the metal appears stretched. We believe the severely depressed levels of many mining stocks provide a good opportunity to seek and exploit value in the mining space.”

Metals Warehousing Industry Being Probed By U.S. Justice Department

The Department of Justice has opened an initial probe into the metals warehousing industry, a source familiar with the matter has told the Wall Street Journal in an article written by Devlin Barrett and Deborah Solomon…the probe comes amid growing concerns in Washington over banks’ ownership of metals warehouses and other commodity assets…the Commodity Futures Trading Commission has also sent letters to some firms telling them to preserve documents, in what is likely the beginning stages of an investigation, according to other people briefed on the matter…banks that trade physical commodities have come under attack by government officials, companies and consumer groups, who worry about the ability of the financial sector to exert influence over markets for raw materials…

China Provides Kick To Economy

China will scrap taxes for small firms, offer more help for ailing exporters and widen funding channels to speed railway investment, the cabinet said yesterday, in Beijing’s latest efforts to boost the slowing economy…the world’s second-largest economy has slowed in nine of the past 10 quarters and while the government has said it will tolerate slower growth to push reform, it has begun fine-tuning policy in recent weeks to stop the economy from slipping too far…State radio and TV quoted the State Council, or China’s cabinet, as saying Beijing would exempt more than 6 million small firms with monthly sales of less than 20,000 yuan ($3,300) from business and value-added taxes…such firms collectively employ several tens of millions of workers…the cabinet also said later on its website that banks should step up support for exporters, while the government would simplify customs clearance procedures, cut administrative fees and provide zero tariffs for exporters in the services sector…China will also increase interest rate discounts on loans to benefit importers, while “keeping the yuan basically stable at a reasonably balanced level,” the cabinet decided in a regular meeting chaired by Premier Li Keqiang…unlike 2008 when China deployed a massive stimulus package to fend off the global financial crisis, it is instead using a series of targeted reforms to reduce the power of the government and give companies more space to operate…the State Council, China’s cabinet, said late on Wednesday it hoped to “arouse the energy of the market”…

Obama’s Fixation On “Inequality” Instead Of Growth

President Obama could probably learn something from the Chinese…he made yet another one of his famous pivots on the economy in a speech yesterday when he used word “inequality” more than the word “growth”…corporate America is sitting on record amounts of cash, and one of the main reasons why is that it doesn’t have a lot of visibility or confidence in future growth thanks to a rapid acceleration of stifling government regulations under Obama that, among other things, have reduced incentives for companies to hire…that, in turn, has actually made inequality worse, but this “community organizer” President can’t seem to understand this…Wall Street Journal editorial board member Steve Moore describes it best:

“For four and a half years, Mr. Obama has focused his policies on reducing inequality rather than increasing growth. The predictable result has been more inequality and less growth. As even Mr. Obama conceded in his speech, the rich have done well in the last few years thanks to a rising stock market, but the middle class and poor have not. The President called his speech “A Better Bargain for the Middle Class,” but no President has done worse by the middle class in modern times.

“The core problem has been Mr. Obama’s focus on spreading the wealth rather than creating it. ObamaCare will soon hook more Americans on government subsidies, but its mandates and taxes have hurt job creation, especially at small businesses (our emphasis).  Mr. Obama’s record tax increases have grabbed a bigger chunk of affluent incomes, but they created uncertainty for business throughout 2012 and have dampened growth so far this year.

“The food stamp and disability rolls have exploded, which reduces inequality but also reduces the incentive to work and rise on the economic ladder. This has contributed to a plunge in the share of Americans who are working – the labor participation rate – to 63.5% in June from 65.7% in June 2009. And don’t forget the Fed’s extraordinary monetary policy, which has done well by the rich who have assets but left the thrifty middle class and retirees earning pennies on their savings.

“Mr. Obama would have done far better by the poor, the middle class and the wealthy if he had focused on growing the economy first. The difference between the Obama 2% recovery and the Reagan-Clinton 3%-4% growth rates is rising incomes for nearly everybody.”

Today’s Markets

Asian markets were lower overnight, though losses weren’t heavy…China’s Shanghai Composite fell 12 points to 2012 while Japan’s Nikkei average slipped 168 points to finish at 14563…European shares are moderately lower in late trading overseas, thanks to some earnings disappointments…in Germany, business morale improved in July for the 3rd month in a row, figures from the Ifo institute released today showed…the Business Climate Index rose to 106.2 in July, above expectations of 106.1…in New York, the Dow is down 51 points as of 7:35 am Pacific…a gauge of planned U.S. business spending rose more than expected in June and new orders for long-lasting manufactured goods surged, offering tentative signs of a pickup in economic activity…meanwhile, the number of Americans filing new claims for jobless benefits rose slightly last week…the TSX is down 17 points through the first 65 minutes of trading while the Venture is flat at 925…

U.S. Dollar Index Updated Chart

Keep a close eye on the U.S. Dollar Index as a drop below 82 on closing basis would be a bearish development and a shot-in-the-arm for Gold and Oil prices as well…below is a 6-month daily chart from John…

Four Interesting Venture Situations

We have updates on 3 companies we’ve been tracking recently, plus a new situation in the energy sector which is certainly worthy of our readers’ due diligence – Pine Cliff Energy Ltd. (PNE, TSX-V)…it’s not just that we like the symbol – the PNE is a great event every summer here in Vancouver – but Pine Cliff is showing impressive development as a company and its chart shows us that even better things could be on the way…PNE is actively engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids…the company also has a minerals division through its wholly-owned subsidiary Geomark Exploration Ltd. which is focused on exploring for precious and base metals by acquiring early stage properties…it has assets in Utah, Ontario, the Northwest Territories and Nunavut…

Pine Cliff now has production of approximately 6,000 barrels of oil equivalent per day (boepd), weighted approximately 96% toward natural gas…its current production levels do not include the previously announced acquisition of approximately 850 boepd production expected to close at the end of August…below is a 20-month weekly chart from John…note the important breakout yesterday which needs to be confirmed today…great-looking chart…as always, perform your own due diligence…

Pine Cliff Energy (PNE, TSX-V) 20-Month Weekly Chart

Macro Enterprises Inc. (MCR, TSX-V) Update

We first brought Macro Enterprises (MCR, TSX-V) to our readers’ attention when it was trading in the $3 range near the end of May because of the unusual fact it’s a Venture company not only making money, but showing tremendous earnings momentum…MCR announced superb Q1 earnings near the end of May…since late last year, it has risen in Zenyatta-like fashion…Macro specializes in construction and maintenance of small-to mid-inch pipelines, facilities and gathering systems…operations are centered in Fort St. John, B.C., with a satellite office located in Hinton, Alberta…Macro maintains one of the most modern fleets of heavy equipment in the industry…

Last week, John’s chart showed MCR was ready for another push to the upside…sure enough, the stock hit a new 52-week high yesterday of $4.27…what a bargain this was around $3…check out the Fibonacci target level of $5.66…

Sego Resources Inc. (SGZ, TSX-V)

A near-surface drill intersection of 100.39 metres grading 0.95% Cu, 0.55 g/t Au and 3.47 g/t Ag is impressive by any standards…that’s what DDH-21 returned for Sego Resources (SGZ, TSX-V) last year at its Miner Mountain Property near Princeton, and a follow-up drill program is scheduled to begin today…this property is in the prolific Nicola Arc where West Cirque Resources (WCQ, TSX-V) and others, including some majors, are also very active this summer…it’s an area that investors need to be paying attention to…we’ll have more on Sego in the days ahead, but Miner Mountain is approximately 15 km north of the Copper Mountain Mine and shows similar geological signatures to that current producer…several mineralized zones have already been identified at the 2,000-hectare Miner Mountain Property clustered in an area about 3 km north-south and 2.5-km east-west…mineralization appears to be open in all directions…what Sego is conducting now is a 2,000-metre percussion drill program, to depths of approximately 150 metres, to identify specific diamond drilling target areas (percussion drilling is about 1/3 the cost of diamond drilling)…the areas being drilled in this program are coincidental with magnetic, chargeability and soil geochemical anomalies…Sego has also signed a geoscience partnership with the BCGS that will contribute to continuing regional geological studies in the Princeton to Merritt area, a priority for the BCGS which should be a strong message to investors…

Below is a 2.5-year weekly SGZ chart from John…rest assured, this play has legs over the summer…it closed yesterday at 10 cents and has 58 million shares outstanding…the company just completed 2 financings totaling $630,000 at a dime…one important note – there are about 14 million warrants outstanding at an average weighted price of 11 cents per share with expiry dates ranging between April and December, 2014…

West Cirque Resources (WCQ, TSX-V)

West Cirque (WCQ, TSX-V) is currently drilling its promising Castle Property immediately west of Iskut, through its joint venture with Freeport-McMoRan of Canada Ltd., and the company is also very active in the Princeton-Merritt region, as mentioned above, with its 100%-owned Aspen Grove Project that covers an extensive belt of alkalic porphyry Copper-Gold-Silver mineralization hosted by Upper Triassic Nicola group volcanic rocks and late Triassic to early Jurassic intrusions…this is a well-run company that could suddenly grab the attention of the market this summer with good results…exploration is a risky business, so there are never any guarantees of course…but WCQ knows what it’s doing and has some outstanding targets to drill at both Castle and Aspen Grove…

John’s 3-year weekly chart for WCQ shows excellent potential for a breakout above resistance at 40 cents this summer…

Note: John, Terry and Jon do not hold share positions at the moment in PNE, MCR, SGZ or WCQ.