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Gold continues to be volatile, trading between $1,390 and $1,415 so far today…as of 7:00 am Pacific, bullion is down $19 an ounce at $1,393…Gold stocks are holding up reasonably well, however, which is an encouraging sign…Silver has slipped 79 cents to $23.50 (strong support at $23)…Copper is off 6 cents to $3.22…Crude Oil is down $1.26 a barrel to $107.28 while the U.S. Dollar Index is off slightly at 82.29…

A heavy monsoon season in India this year is bullish for Gold demand in that country…it should bring a bounty to India’s rural population and a much needed boost to a struggling economy…a swelling of agricultural income and more cash in the hands of farmers also brings an unwelcome consequence for the government – more demand for Gold…about 60% of Gold demand comes from rural areas…the “Love Trade” and the “Fear Trade” are both at work in India, and rural buyers in particular use bullion to store wealth as they lack regular access to banking networks…

HSBC has noted that last week was the 7th straight week that funds have covered short positions in Gold, a major factor in bullion climbing back above $1,400…longs will be needed going forward…a couple of consecutive closes above $1,400 would be bullish from a technical perspective…

Reuters reports that a strike in at least some of South Africa’s Gold mines began yesterday…the stoppage was called by the National Union of Mineworkers, which represents two-thirds of the workers in South Africa’s Gold mines, after weeks of talks between unions and companies broke down last week…the union and management are miles apart on wages, with the dominant NUM seeking 60% pay hikes for entry-level miners and the more hardline Association of Mineworkers and Construction Union (AMCU) pushing for 150%…work stoppages in the auto and banking sectors have already hurt the South African economy, and the Gold industry – already in decline there, due in part to falling grades – could be crippled by a potentially prolonged and widespread strike…the industry has offered pay increases of up to 6.5%…

Today’s Markets

Japan’s Nikkei average hit a 1-month high overnight, climbing 74 points to close at 14054…the Bank of Japan (BOJ) kicks off a 2-day monetary policy meeting tomorrow…while no action is expected, the Asahi newspaper reported that the central bank may consider further easing if Prime Minister Shinzo Abe decides to raise the sales tax as planned next April…China’s Shanghai Composite gained 5 points to finish at 2128, its highest level since August 16…more positive economic data out of China this morning as growth in the country’s services sector hit a 5-month high in August, according to HSBC’s services purchasing manager’s index (PMI)…

The Dow is up 16 points through the 1st 30 minutes of trading…investors are looking ahead to the G-20 meeting beginning tomorrow in Russia, which could be overshadowed by debates over Syria…the Federal Reserve, meanwhile, will publish the latest edition of the Beige Book, its region-by-region assessment of the economy at 11:00 am Pacific today…

The TSX is down 21 points at 12710 while the Venture, despite Gold’s drop today, is up 6 points at 948…

TSX Gold Index Updated Chart

The TSX Gold Index experienced a healthy pullback recently, falling over a 3-day period last week from an intra-day high of 219 to an intra-day low of 195…it closed yesterday at 201, holding support at its rising 20-day moving average (SMA)…the Index appears to be in the process of climbing back to higher levels, though it’s down modestly in early trading today…an overbought condition in the RSI(14) has been unwinding…the measured target breakout from the ascending triangle is 226…the Gold Index through yesterday was up 30.5% from it late June low…few investors were brave enough to buy back then despite the strong support from the 2008 Crash low – what a shame…

Prosper Gold Corp. (PGX, TSX-V) Update – BMR Interviews Bernier

Prosper Gold Corp. (PGX, TSX-V) hit a new all-time high of 60 cents yesterday and closed up 7.5 cents at 49.5 cents after trading resumed following a 4-month trading halt as the company went through the Venture approval process for its Sheslay Copper-Gold Porphyry Project qualifying transaction…trading was light in this tightly-held play yesterday, but it’s reasonable to expect interest to ramp up steadily as this top quality exploration story gains traction with a wider audience in the days and weeks ahead…not surprisingly, President and CEO Pete Bernier and his team are moving at high speed on the ground with drilling, airborne and ground geophysics well underway…in fact, the company expects to be able to release the first batch of drill results by early next month, so look for the speculation factor to kick in…there are few companies who have the ability of performing at the level of Bernier’s team which is armed with a $3.6 million financing, mostly “hard” dollars…there’s also an accelerator clause on the 60-cent warrants (if the stock closes above 80 cents for 20 consecutive trading sessions) that potentially could bring in another $2.5 million…

Phase 1 drilling is focusing on the most advanced of 5 porphyry targets on the 68 sq. km property – the “Star“, and Bernier told BMR in an exclusive interview yesterday that they may drill as deep as 800 metres in this area…historically, Firesteel Resources‘ (FTR, TSX-V) 2 dozen holes averaged less than 200 metres in length and the deepest was about 300 metres…80% of the holes ended in strong Copper-Gold mineralization…the system is open at depth and laterally in all directions…

“We probably looked at well over 150 to 200 projects from grassroots all the way up,” Bernier told us yesterday in explaining his decision to acquire the Sheslay in an under-exploited region of northwest British Columbia, right on trend with major systems to the southeast…“As you know, a lot of companies can’t afford to do any work in the market right now.  Dirk (Tempelman-Kluit, PGX’s VP, Exploration), is a very smart geologist, very talented.  He took his time and we visited quite a few projects that he saw fit to visit.  And this one just stuck in the back of his mind all the way along.  We just think with the win we had before with Richfield and the Blackwater deposit that we needed to find something that may be or could be as big, albeit this is a Copper-Gold property.  We just think this thing has a lot of room and a lot of legs to get bigger.

“It’s looking very good.  It’s a big area.  It looks like it could extend outward quite a bit.  The gossans in the area are phenomenal from the air, all over the place up there.  So we just think this has got a lot of room to grow.  And they never drilled it to depth.”

Like Blackwater, exploration at the Sheslay started in the 1950’s but the right group obviously didn’t come along until Bernier, Tempelman-Kluit and the Richfield team in 2009…Bernier has many of the same Richfield personnel at his side with Prosper Gold, and has also added a couple of other key individuals…despite the big success at Blackwater, he told BMR yesterday that he’s just as motivated now to make another major discovery in British Columbia…

Below is another short audio excerpt (1:40) from our discussion with him yesterday…click on the forward arrow below to listen to this 2nd excerpt between Jon and Bernier (requires Adobe Flash Player, version 9 or above).   More later in the week.

[audio:https://bullmarketrun.com/wp-content/uploads/2013/09/BernierPGXclip2.mp3|titles=BernierPGXclip2]

Banks Island Gold Ltd.(BOZ, TSX-V)

Another company making progress in B.C. that’s worthy of our readers’ due diligence is Banks Gold Ltd. (BOZ, TSX-V)…BOZ recently broke out above an ascending triangle, but is currently up against technical resistance and may need to consolidate for a brief period and unwind temporarily overbought conditions…look for areas of strong support (mid-60’s) on John’s 2.5-year weekly chart…

Banks released more news last week, announcing assay results from their Red Mountain Gold project located near Stewart (they intersected 6.3 g/t Au over 52.5 m) as well as developmental progress at its Yellow Giant Gold Project near Prince Rupert…Banks has a very capable management team…CEO Ben Mossman, Chief Engineer at Alexco Resource Corp.’s (AXR, TSX) high-grade Bellekeno Mine during the successful construction and commissioning of that operation in 2010, has not missed a beat this summer, which is why BOZ has been a strong performer in the market since bottoming out around 50 cents in late May…as always, perform your own due diligence, but this is an interesting situation in our view – particularly on any near-term pullback in the stock…

Canada Carbon Inc. (CCB, TSX) Chart Update

Canada Carbon Inc. (CCB, TSX-V) continues to perform well and broke above important resistance yesterday, jumping 6 cents to close at 21.5 cents on total volume (all exchanges) of 2.6 million shares…the company last reported results from its 100% owned Miller hydrothermal lump/vein graphite property August 20…note the 25-cent Fib. resistance on John’s 3-year weekly chart, and that’s where CCB reacted in early trading today…as of 7:00 am Pacific it’s up a penny at 22.5 cents…

Continental Gold Ltd. (CNL, TSX) Chart Update

Interesting chart this morning – keep an eye on Continental Gold (CNL, TSX) which has pulled back to the “neckline” after releasing positive results a week ago from its Buritica project in Antioquia, Colombia, where 8 drill rigs are currently in action…this chart is just one more reason we’re bullish on Gold stocks at the moment – look at the classic head-and-shoulders bottom that formed in CNL between May and July…

North American Nickel Inc. (NAN, TSX-V) Chart Update

Assay results are pending from North American Nickel Inc. (NAN, TSX-V) which reported strong sulphide mineralization August 23 in 3 drill holes from the Imiak Hill Nickel-Copper-Cobalt zone at its Maniitsoq Project in Greenland…the stock has traded in a range between 21 and 38 cents since that time, and closed yesterday at 26 cents, a penny below its rising 10-day moving average (SMA) and 4 cents above its rising 20-day SMA…a temporarily overbought condition has been unwinding which is positive…of course, the ultimate direction of NAN will depend entirely on the assay results from these holes and others…the sulphide content in MQ-13-026, in particular, suggests the potential for high grades…it’ll be interesting to see how this one plays out as NAN attempts to follow high-grade mineralization down toward the base of the Imiak Hill mafic norite intrusion with additional drilling and borehole geophysics…

Below is an updated chart from John…key resistance, on a closing basis, as we mentioned earlier is 30 cents…as of 7:00 am Pacific, NAN is off 3 cents at 23 cents…

Note: Both John and Jon hold share positions in GGI.  Jon also holds a share position in PGX and NAN.