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Gold is under pressure following release of a stronger-than-expected U.S. jobs report for October…as of 7:30 am Pacific, bullion is down $24 an ounce at $1,284…Silver is off 34 cents at at $21.34…Copper is down a penny at $3.23…Crude Oil is up slightly at $94.38 while the U.S. Dollar Index has surged more than half a point to 81.42…

Excellent article this morning on China’s Gold appetite by Mineweb’s Lawrence Williams – www.mineweb.com…

U.S. Jobs Number Beats Expectations

U.S. job creation unexpectedly surged in October despite dimmed expectations from the impasse in Washington…there were a net 204,000 new jobs created for the month, though the unemployment rate rose to 7.3%…analysts were expecting a jobs number between 100,000 and 120,000…private sector employment expanded by 212,000, the best gain since February, driven by a service-sector gain of 169,000…the government sector only shed 8,000 positions…employment gains for September and August were revised up by a total of 60,000…September now shows a gain of 163,000 jobs, up from 148,000,while August is at 238,000, up from 193,000…will this be enough for the Fed to start “tapering” as early as next month, as some pundits are speculating?…unlikely…any tapering is still likely at least several months away as incoming Fed Chairman Janet Yellen, believed to be even more dovish than Ben Bernanke, will want to see the kind of consistent monthly job growth (200,000+) that will be required in order to significantly further reduce the unemployment rate…more political wrangling in Washington is coming up, as well, which isn’t conducive to Fed tapering…

Today’s Markets

The Dow is up 75 points through the first hour of trading…the TSX has added 54 points while the Venture, trying to snap a 9-session losing skid, is up a point at 932 (despite the drop in Gold, a good sign) and resting at support…

Asian markets were weaker overnight with China’s Shanghai Composite, despite some encouraging economic data, falling 23 points to close the week at 2106…mainland exports rose by a better-than-expected 5.6% in October from a year earlier, well above economists’ forecast for a rise of 3.2%…China is expected to unveil some major economic reforms following this weekend’s meeting of its ruling Communist Party…some analysts have speculated, for various reasons, that the price of Gold could benefit from this weekend’s summit – we’ll what happens…

European shares are down modestly in late trading overseas…Standard and Poor’s (S&P) has cut France’s credit rating to AA from AA+…the move comes almost two years after the country lost its top-rated AAA status…S&P said it downgraded France because high unemployment in the country was making it hard for the government to make important reforms which would boost growth…“The downgrade reflects our view that the French government’s current approach to budgetary and structural reforms to taxation, as well as to product, services, and labour markets, is unlikely to substantially raise France’s medium-term growth prospects,” S&P said in a statement today…the French government responded by saying that its debt rating was one of the safest in the euro zone…S&P said it expected government debt to hit 86% of GDP in 2015 and unemployment to remain above 10% until 2016…the country’s Finance Minister, Pierre Moscovici, said S&P had made “critical and inexact judgements”…

U.S. Dollar Index Chart Update

The strong October jobs number is giving the U.S. Dollar Index a boost today…after falling below a 2.5-year up trendline on the weekly chart in September, we caution that the Dollar Index has some heavy lifting to do, however, even if there is a confirmed breakout above resistance at 81 cents…below is an updated chart from John…it’ll be interesting to see how the Index performs over the next couple of trading sessions, and then we’ll examine a fresh chart next week…

TSX Gold Index Chart Update

The TSX Gold Index appears to have formed a double bottom pattern, and this is encouraging in terms of the outlook for the Gold price…interestingly, like the Venture, the Gold Index RSI(14) has also been climbing an up trendline since the early summer…the overall bearish trend is clearly weakening as evidenced by the ADX indicator…below is a 2.5-year weekly chart…the Gold Index is off 2 points at 171 as of 7:30 am Pacific…

Garibaldi Resources Corp. (GGI, TSX-V) Update

Garibaldi Resources (GGI, TSX-V) has to be one of the few companies on the Venture that’s on track to drill at least two properties between now and the end of the year, and that’s just one more reason why we like this company so much – management is delivering on its promise to stay active in an effort to unlock project value, no matter what the overall market conditions are…GGI is drilling once again in Mexico, in a cost-effective manner with its own rig, and of course the company continues to generate regular royalty income as well from a pilot coal program…in B.C., GGI has been very busy putting the pieces of the Grizzly puzzle together and prioritizing drill targets for 2014…news on developments at the Grizzly is expected soon…

After yesterday’s market close, GGI announced it has resumed drilling at the Locust target – part of the company’s large Tonichi Project in Sonora State…drilling to date at Locust has outlined a broad envelope of shallow mineralization along a 5 km trend, quite possibly the near-surface expression of an underlying Au-Cu porphyry system…yesterday, the company reported very interesting results from the westernmost hole drilled so far – a large step-out that was drilled from a topographically high area and hit a supergene zone above the water table and a hypogene Gold-Copper zone deeper in the hole…mineralization generally improved with depth (the hole was drilled to only 191 metres) and a 37-metre interval graded 0.42 g/t Au and 0.21% Cu (significant Au-Cu porphyry mineralization was returned over a 104.6 metre core length)…they’ve gone to the valley floor to immediately follow up on that intercept with a hole (MAR-13-03) designed to intersect sulphide mineralization and a second potential supergene zone at increased depth…there are large porphyry deposits surrounding Tonichi, so GGI has a chance to drill into something quite significant – they’re in a rich geological district…

Dr. Craig Gibson, one of the world’s leading geological authorities on Mexico, is overseeing GGI’s exploration programs at Tonichi and elsewhere…he’s also the one who recently came up with the La Patilla Gold Property for GGI, a higher-grade near-surface Gold system that has potential for near-term production (small open-pit) in the Rosario district to the south…this could be the property that GGI drills next as per yesterday’s news…

With financial strength, activity on the ground throughout the winter, a proven inventory of high quality properties, and a strong management and geological team, GGI clearly fits into the top 10% of Venture companies that should thrive as the market rebounds…the share structure is clean with no warrants as the company hasn’t had to do a financing in nearly 5 years…accumulating these type of situations on any weakness – especially when they’re trading right near their working capital positions as GGI is now – is a recipe for making money in the market, short-term and long-term…

Below is an updated GGI chart from John showing strong support at current levels…the stock landed yesterday on its rising 200-day moving average (SMA) at 8 cents…as of 7:30 am Pacific, GGI is up a penny at 9 cents…

Azincourt Uranium Inc. (AAZ, TSX-V) Chart Update

As in GGI, any weakness is an opportunity in our view with Azincourt Uranium (AAZ, TSX-V) which will be active this winter with its PLS North Property (JV with Fission) in the Athabasca basin…AAZ has been trading in a horizontal channel between 20 cents and 33 cents since April, and it’s just a matter of time we believe before a confirmed breakout occurs above that channel…AAZ is unchanged at 30.5 cents as of 7:30 am Pacific…

Note: John sold his 100,000 Twitter shares intra-day yesterday.  John and Jon both hold share positions in GGI.