Gold has traded between $1,322 and $1,341 so far today…as of 7:05 am Pacific, bullion is down $17 an ounce at $1,326…Silver is off 71 cents at $22.02…Copper is unchanged at $3.29…Crude Oil has slid 26 cents to $96.56 while the U.S. Dollar Index has gained one-third of a point to 80.07 – rallying modestly as expected out of temporarily oversold conditions and after finding support around 79…the Dollar Index, however, is now trading within a stiff resistance band between 80 and 81, so any rally has limited upside potential and little chance of gaining serious traction in our view…this should be supportive of Gold prices…
There were no major surprises from the Fed yesterday, though it did not sound as negative on the economy as some had expected…it also removed some dovish language from its statement including comments highlighting its concern about tightening financial conditions – one reason cited for maintaining easing in September…Deutsche Bank analysts (Jim Reid and anthony Ip) probably stated it best in a research note this morning as reported by CNBC: “Our view continues to be that the market will swing between taper fear and complacency over the coming months but that at the end of the day, they (the Fed) will under-deliver on tapering relative to expectations.”
Technically, as John’s charts have shown, Gold is facing strong resistance in the $1,360’s…physical demand needs to pick up, but that’s not evident so far given a recent decline in Shanghai premiums while official Indian demand remains constrained due to stiff measures to curb imports which has also created a Gold supply problem in that country…many jewellers are reportedly focusing on platinum-based diamond jewellery over traditional Gold and Silver jewellery this festive season…
Barrick Suspends Construction at Pascua-Lama
Barrick Gold Corp. (ABX, TSX), the world’s largest producer of the metal by sales, stated this morning it will temporarily suspend construction at its Pascua-Lama mine project on the Argentina-Chile border to conserve cash…all work will cease except for that needed for environmental protection and regulatory compliance…a decision to restart work will depend on future costs and the outlook for Gold prices, it said…Barrick also reported that 3rd quarter net income fell to 17 cents a share from 65 cents a year earlier…
Yamana Expects “Robust” Production Increases In Q4
Yamana had a strong day yesterday, rising 49 cents to close at $10.71 after reporting lower costs and increased production during Q3 for net earnings of $43.5 million or 6 cents a share…all-in sustaining costs of $730 per Gold equivalent ounce on a byproduct basis was a a 20% reduction from the 2nd quarter of this year…on a conference call, President and CEO Peter Marrone said he expected “robust” production increases in Q4…he also restated the company’s stance and philosophy during this volatile year for commodities, and sounded upbeat regarding his outlook for Gold prices…
“Preservation of margins and the generation of cash flow and pre-cash flow is at our philosophical core; we’ve been consistent with that for some time and this is an important point. In an environment where Gold prices are rising, or there is a reasonable certainty that it will continue to rise, where there’s minimal risk of margin compression, marginal ounces should be produced, they will contribute to the generation of cash flow. The overall objective in a certain and rising Gold price environment is to maintain increased cash flows and maximize production.”
Yamana’s improving fundamentals are supported by a healthier-looking chart…below is a 6-month daily YRI chart from John…strong support at $10.25…YRI fell as low as $10.31 in early trading today…as of 7:05 am Pacific, it’s down 30 cents at $10.41…
The TSX Gold Index is gradually climbing out of a double bottom pattern, though investor patience is critical…below is a 2.5-year weekly chart from John…the overall bearish trend continues to weaken, and RSI(14) is supported by a rising trendline…the 100-day moving average (SMA) at 181 provided support during yesterday’s volatile session – we’ll see if that repeats itself today, on a closing basis at least…as of 7:05 am Pacific, the Gold Index is indeed sitting at 181 – off 7 points…
Today’s Markets
Asian markets were moderately lower overnight…China’s Shanghai Composite declined 19 points to 2142 while Japan’s Nikkei average slipped 174 points to 14328…
European shares are mixed in late trading overseas…inflation in the euro zone fell to its lowest in almost 4 years in October, raising pressure on the European Central Bank to ease the money supply and support the region’s fragile economy at its rate decision next week…the annual rate of consumer price rises fell to 0.7% in October, the lowest since November 2009, from 1.1% in September, according to preliminary figures from Eurostat, the European Union’s statistics agency…data from individual countries this week show price growth waning in Germany and Belgium as well as in Spain, where annual inflation was just 0.1%…
In New York, the Dow is down 45 points as of 7:05 am Pacific…the TSX has lost 54 points while the Venture is down 7 points at 956…
Updated Venture Chart
The Venture is lower this morning to finish off the month, but keep in mind it’s underpinned by strong chart support around current levels…below is a look at the 3-month daily from John showing RSI(7), which had become overbought, as opposed to RSI(14) which we normally show…the EMA(20) is at 956 and the 50-day SMA is at 950 and still rising, so there’s no need to panic regarding this morning’s drop…the 970 area continues to provide resistance of course…
Quebec Mining Bill Scrapped
The socialist/separatist attack on the Quebec mining industry has thankfully been stopped, at least for now…Quebec’s mining bill has been scrapped because of a lack of opposition support, amid deepening economic concerns…the minority government’s Bill 43 died on the order paper yesterday as opposition parties opposed the minority government’s bill…the PQ is expressing frustration over that turn of events, noting that the bill was already a watered-down version of the plan it campaigned on and that it had incorporated opposition ideas…“What a great way to help the Quebec economy – blocking a bill that needed to be adopted,” Premier Pauline Marois told the legislature…
What a great way to help the Quebec economy?…how ignorant and stupid can some of these politicians be?…among other things, mining companies would have been required to pay a minimum annual tax, based on extraction amounts, and a royalty on profits ranging between 16% and 23%, at a time when the industry is already suffering…“In the mining sector there’s a movement that exists, it’s called ‘Quebec, never again,’ it’s an anti-Quebec movement around the world in reaction to its mining bill,” stated Quebec MNA Jean-Marc Fournier…
Fission Uranium (FCU, TSX-V) Updated Chart
Bargain hunters should be keeping an eye on Fission Uranium (FCU, TSX-V) which has very strong support around current levels…a support band exists between $1.01 and $1.07, while directly beneath that area there’s strong Fib. support at 96 cents…the recent weakness in FCU has come on low volume…FCU is unchanged at $1.02 through the first 35 minutes of trading…
Aldrin Resource Corp. (ALN, TSX-V)
Aldrin (ALN, TSX-V), which yesterday appointed Edward Marlow (formerly a managing director at Credit Suisse) to its board, continues to look very promising, technically and fundamentally…the company has also increased its recently announced financing to $1.5 million…
“We are thrilled to have Mr. Marlow join our board of directors,” stated ALN President and CEO Jonathan More in a news release yesterday. “His past success with Hathor Exploration from its inception to its $654-million sale to Rio Tinto, as well as his early involvement with Alpha Minerals Inc.’s Patterson Lake project, greatly enhances the depth of our board of directors.”
Below is a 3-year weekly ALN chart from John…exceptional support exists at 11 cents…note how ALN broke above a long-term down trendline over the summer…ALN is off half a penny at 13 cents as of 7:05 am Pacific…
Note: John, Jon and Terry do not hold share positions in YRI, FCU or ALN.
The truth of the matter seems to be that there is no
support in the Venture, the troops are abandoning it
in droves. I have tried to regain some spark by
suggesting at the end of each month, that next month
will be different, but it was not to be. There are
many factors that led to it’s demise, but if there
is a positive, it’s that the big boys have also come
to the end of their rope. R !
Comment by Bert — October 31, 2013 @ 6:59 am
DBV
According to this musing, DBV looks good technically ;
Doubleview Capital Corp. (DBV, TSX-V)
Doubleview Capital (DBV, TSX-V) is looking stronger technically as it commences drilling at its Hat Property contiguous to the Sheslay and Grizzly properties…DBV’s rising 20-day SMA at 7 cents is providing strong support while the 50-day SMA has flattened out just beneath the 20-day and appears poised to reverse to the upside…
Comment by Bert — October 31, 2013 @ 7:42 am
Bert, my comment this morning was with regard to DBV’s fundamentals, not the technical posture of the stock. DBV’s technicals have shown some improvement recently as John’s chart pointed out and you have referred to. The 50-day has also flattened out, and support around current levels is strong.
Comment by Jon - BMR — October 31, 2013 @ 7:51 am
Trying to give Paul some confidence here, considering
what you posted on Oct. 22. Anyway, no one knows anything
with certainty anymore. In today’s market,Charts are nothing
more than pictures of past behavior. I hate to be so negative,
but i am only passing on my view of what i see out there & that
is nothing. R !
Comment by Bert — October 31, 2013 @ 8:11 am
Absolutely right,Bert.No one has a clue what will set a stock off these days.At least in mining.Could DBV set the market on its ears?Yes,looking at the IP survey,and Farshad’s comments.But,like NAN and PGX,if the results don’t stand out,look out below.It is just another dime-a-dozen play right now unless they hit long rich intercepts.
Some people naively think that 200 metres at .5% copper will be good enough.No,it won’t be.That will result in an instant selloff,and DBV will not recover.They will be taken over,or a j/v at poor terms will occur.That’s a certainty.That’s how tough the market is.People want a winner,and mediocrity will not suffice.
Farshad has to dream and think outside the box.He has to go very deep.Past the first dead spot he hits and see if he hits mineralization below a possible clay layer.His target has to be one 1000 metre hole at high grade,or,imo,this play will be in the hands of someone for the next program.
Comment by Jim Niles — October 31, 2013 @ 10:06 am
BRD reported some thick high grade intercepts tonight. Stock shook off the pullback in gold today.
Comment by Justin — October 31, 2013 @ 5:21 pm
Get a grip Jim, you’ve been talking about 1000 meters all over the stock boards, there has been no indication on any ip or the airborne survey that pgx did on dbv to suggest a 1000m hole, so if you’re counting on that best sell now. At the end of the day , hopefully dbv hits something decent that allows them to continue drilling and get a mine, but if you’re in this for the short term and are expecting 1000m i believe you will be dissapointed.
Comment by Paul — October 31, 2013 @ 6:01 pm
P/M Harper should consider himself fortunate, now
that Mayor Ford has replaced him in the news… I
do not condone any wrongdoings but, i want to see
that video first & i want to see more that a so
called crooked pipe, i want to see what is inside
that pipe. The police chief seen fit to come forward
and say there is a video, he should now put the video
out there, so that the citizens can see what’s in that
video, that makes the Chief so disappointed.
Back to the market, what market ???
Comment by Bert — November 1, 2013 @ 5:39 am
Bert, that has to be first played for the courts as no one has seen it yet but the one thing you have to look at it is Robert is hanging out with a Drug dealer who has other associates involved in the same trade and LISI by law is classified as part of an organized crime group (3 persons or more invovled in illegal activity that results in direct or indirect material benefit )
Comment by Paul — November 1, 2013 @ 5:46 am
Paul
I am looking at the legal aspect, hanging out with
shady individuals is not a crime, unless one becomes
shady himself & having a crooked pipe in one’s lips
is not illegal, until what is inside the pipe is
determined. Could it have been tobacco, or could it
be leaves, don’t laugh, i smoked leaves when i was
young. I realize there were envelopes exchanged, but
what was inside those envelopes. They found 2 vodka
bottles in a garbage container, but when did whomever
drink the liquid inside those bottles. The one thing
that appears factual is that he relieved himself on
the side of the road. Lots of things to come & makes
it more exciting than the market. Stay tuned !
Comment by Bert — November 1, 2013 @ 6:05 am
I see your point Bert, and thats probably the reason they didnt charge him with possession of a narcotic, but the point I was making is he is associating with a Criminal Organization, which in a public service position, especially his, thats not acceptable.
Comment by Paul — November 1, 2013 @ 7:15 am
You’re right,Paul.And for that reason,among others,I have sold.When I only have a 40% belief the stock can go up,it’s time to bail,especially at a slight profit.When an investor gets to the point where everything he posts is negative or overly cautious all the time,it’s time to exit.No sense playing questionable stocks when there are winners out there waiting for my money.I will keep an eye on DBV in case they hit.There’s always time to get in for the long haul.
Comment by Jim Niles — November 1, 2013 @ 10:15 am
If thats how you feel, then you made the right decision based on whats right for you. Good luck!
Comment by Paul — November 2, 2013 @ 6:40 am