BullMarketRun.com

Gold has traded at a 4-week high between $1,334 and $1,351 so far today…as of 7:45 am Pacific, bullion is up $11 an ounce at $1,345, $2 above its 50-day moving average (SMA)…good traction above $1,350 would likely attract fresh buying…Silver has gained 18 cents to $22.74…Copper is flat at $3.24…Crude Oil has stabilized, up 34 cents to $97.24 while the U.S. Dollar Index is down slightly at 79.20…

According to Business Insider, analysts at Bank of America Merrill Lynch and Morgan Stanley are telling clients that Gold could benefit from the Indian festival season now underway…“Indian festival season could provide a lift to Gold,” Morgan Stanley analyst Paretosh Misra wrote in a note to clients. ”Traditionally, the Diwali festival (specifically, Dhanteras, the 2 days before Diwali) is the biggest Gold buying period of the year in India. In the last 10 years, Gold has risen an average 2.5% in the one month around Diwali. While government’s new import restrictions and INR depreciation could adversely affect Gold imports, buying should be supported by ~20% YoY decline in Gold in Rupee terms.”

The Commodity Futures Trading Commission said yesterday it will catch up on its delayed reports (due to the partial U.S. government shutdown) during the week of November 4…the updated COT reports will give us some valuable insight into who has been doing what in the Gold market recently…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite slipped another 19 points to close at 2164, its lowest level since late September and 35 points below its 200-day moving average (SMA), after short-term money-market rates continued to be in focus…traders have been concerned about a drying up of lending in the interbank market in recent days with the People’s Bank of China (PBOC) remaining on the sidelines, not injecting cash into the system…Meanwhile, HSBC’s China flash Purchasing Managers’ Index (PMI) rose to a seven-month high in October at 50.9…the figure was higher than the previous month’s reading of 50.2 and is the latest piece of positive data to emerge from the world’s second-largest economy following last week’s upbeat Q3 GDP report…

Japan’s Nikkei average climbed 60 points overnight…meanwhile, European shares closed modestly higher today…Markit’s flash PMI revealed that the euro zone’s composite reading fell from 52.2 in September – a 2-year high – to 51.5 in October, worse than forecast in a Reuters poll…

In New York, the Dow is up 67 points as of 7:45 am Pacific…in Toronto, the TSX has jumped another 37 points while the Venture is 5 points higher at 972…a confirmed breakout by the Venture through critical 970 resistance appears to be imminent (within a few trading days)…confirmation could come as early as tomorrow – what that would require is a close above 970 today and a higher close to finish the week tomorrow…Unigold Inc. (UGD, TSX-V) is among the most active this morning, up 1.5 cents at 8 cents, after just reporting very good drill results from the Dominican Republic…

TSX Updated Chart

Since finally topping the 13000 level last week, the TSX has been looking very strong with the next major chart resistance at 13500…so a new range appears to be forming between 13000 (previous resistance) and 13500…yesterday, the Index confirmed a breakout above Fib. resistance at 13135…below is a 4-year weekly chart from John…the TSX is still quite a ways from its mid-2008 all-time high of 15073…

Agnico-Eagle Mines (AEM, TSX-V) Shows Improved Q3 Performance

Agnico-Eagle Mines (AEM, TSX) reported Q3 net income of 47.3 million or 27 cents per share following the close of trading yesterday, thanks in part to record quarterly production…this was a big improvement over AEM’s Q2 performance when it lost 17 cents per share…the company increased byproduct production in Q3 and also reduced capital and operations costs by $50 million and cut its exploration budget by $20 million…AEM has responded well to the news, up more than $4 a share in early trading today…

WTIC Updated Chart

Gold producers are getting a break from the drop in Crude prices which just recently were threatening to push through important resistance at $110 a barrel…below is a 10-year WTIC chart from John…Crude has been trading between triangle support and resistance for the last few years…decision-time (a major breakout either above or below the triangle) is approaching, but for now expect the strong support in the low $90’s to hold…

Prosper Gold Corp. (PGX, TSX-V) Updated Chart

As we glance at the calendar, we can’t help but think that Prosper Gold (PGX, TSX-V) is within just a few trading days of releasing assay results from its 4th, 5th and 6th holes at Sheslay (S027 through S029)…keep in mind, hole #4 intersected mineralization at the deepest levels ever (to 598 metres) at Sheslay in what potentially could turn out be Prosper’s version of Colorado Resources‘ (CXO, TSX-V) April “glory hole”…unfortunately for CXO, that was the 1st hole they drilled and they haven’t been able to repeat that success…

In the case of the Sheslay, drill results at the Star target going back to Firesteel Resources‘ (FTR, TSX-V) drilling between 2004 and 2007 have been remarkably consistent…historically, the Sheslay has never been tested below a depth of 350 metres…so Prosper’s 4th hole, which intersected mineralization from top to bottom, could be a serious game-changer – particularly if they hit some wide sections of higher grades at depth, perhaps a magnetite-enriched potassic core…

With any company, it’s always critical to examine share structure…in the case of PGX, it’s important to note that this stock is primed for a VERY explosive move if indeed results from holes 4, 5 and 6 are stellar, as we believe they could be…65% of all PGX stock is locked up at the moment due to escrow provisions and the 4-month hold on the August financing…according to our research, most of the other stock (about 75% or 7 million shares) that can be traded right now is believed to be in tight, friendly hands (long-term holders)…the 0ther 25% (about 2 million shares) has been “loose stock” from the original 6-cent financing but most of that has been cleaned up since PGX resumed trading at the beginning of September…so the conditions from a share structure standpoint are about as attractive as they can possibly get – buyers potentially could be scrambling to get their hands on PGX paper, depending of course on results…

Technically, the stock has unwound an overbought condition that emerged in early September, and the Slow Stochastics (SS) indicator is showing increased up momentum…the stock has been consolidating between 45 and 55 cents…volume has picked up this week and a couple of 100,000 share blocks have also gone through which again, we believe, is stock moving from weak hands into strong hands…

Sheslay Drill Core Photos

Sheslay drill core photos, published on the Prosper Gold web site, provide ample evidence of a robust hydrothermal system at this property…a strong porphyry system requires water and plenty of heat and pressure…when you see intensely fractured rock, and multi-directional veining as well as multi-generations of veins (common in drilling to date at the Sheslay) – those are very encouraging signs that Prosper is indeed drilling into a classic Stikine Arch Cu-Au porphyry system that has the potential to produce Red Chris style grades and intersections…

Prosper Gold President and CEO Pete Bernier has always demonstrated a great sense of timing…he appears to be doing so again with these important results expected in the coming days, just as the Venture is heating up and showing signs of an imminent major breakout…

Colorado Resources (CXO, TSX-V) Update

We prefer what we’re seeing unfold in the Sheslay Valley with Prosper Gold and Garibaldi Resources (GGI, TSX-V) leading the way there vs. North ROK to the east where Colorado has been struggling trying to repeat its early success…North ROK is still very prospective, and Colorado could yet come up with another stellar hole that will turn their market around, but both PGX and GGI have certain dynamics that CXO lacks – better share structures as well as business and market savvy at the top, to go along with geological expertise…those are important factors in favor of both PGX and GGI…in addition, we just see the Sheslay area as more attractive geologically…

Nonetheless, Colorado is showing signs of kicking up its heels and not going down without a fight…below is a 2-month daily chart from John…the overall technicals for both PGX and GGI are certainly superior, but CXO’s chart is starting to look better with the possibility of a near-term breakout above a downtrend channel that has restrained the stock since September… below is a 2-month daily CXO chart from John…watch for a possible breakout above 30 cents in the near future…selling pressure has been in decline recently…CXO had a good day yesterday and is up a penny at 29.5 cents as of 7:45 am Pacific…

Magor Corp (MCC, TSX-V) Update

Refer to Morning Musings October 15 for more details on Magor Corp. (MCC, TSX-V), a promising tech play we’re following closely…in mid-October, MCC was trading around a quarter after completing a $1.5 million private placement…yesterday, the stock closed at 37.5 cents with current strong support at 30 cents and resistance at 40 cents as shown in John’s 6-month daily chart…yesterday, MCC announced a brokered debenture offering for gross proceeds of up to $2 million as the company senses a true growth opportunity with the full launch of its Aerus cloud-based video collaboration solutions this fall…