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Gold has traded between $1,226 and $1,240 so far today…as of 5:15 am Pacific, bullion is off $14 an ounce at $1,229 after enduring its biggest weekly fall in two months last week…Silver is down 16 cents at $19.67 (updated charts at bottom of today’s Musings, strong support for Silver at $19.50)…Copper is off a penny at $3.19…Crude Oil is $1.32 lower at $93.52, thank to the “historic” 6-nation deal with Iran that we’ll comment about tomorrow, while the U.S. Dollar Index is up one-fifth of a point at 80.92…

Frank Holmes, in his weekly Investor Alert at www.usfunds.com, commented:  “Citi Research, in its annual commodities forecast for 2014, suggests that we will have strong physical buying (much from Asia) over the next year, limiting the downside for Gold prices. However, the western buyers who are getting out of the market will likely continue to do so. Citi Research specifically pointed to two reasons why these buyers are getting out of the Gold market: 1) Inflation concerns and expectations have all but evaporated, and 2) The opportunity cost of holding Gold as opposed to other assets is high. As a result, we are seeing funds moving out of Gold and into other asset classes”…

Barclays is expressing a tone of optimism regarding base metal prices…“With LME inventories for most base metals either flat or falling, Chinese demand surprising to the upside, and market balances tightening, the recent move in base metals prices has little to do with fundamental signals, in our view,” the bank says. “As such, we caution against getting too bearish on the sector at these levels. Nickel and aluminum prices have sunk to close to the year’s lows and we see limited downside from here. Prices for these metals are already eating so far into industry cost curves that production cuts are beginning to address surpluses, and in the case of aluminum, are close to moving the market into a deficit.”

Updated CDNX 3-Year Weekly Chart

The Venture weathered the storm of a $46 drop in the price of Gold last week, and its three-year weekly chart continues to have a bullish overall tone to it with RSI(14) still slowly climbing an uptrend line…the Index’s long-term downtrend line, which was finally overcome last month, continues to provide support which is also very encouraging…the Venture’s rising 100-day moving average (SMA) is giving the Index additional much-needed support, especially given the time of the year…the type of pattern that we see here suggests the Venture is on its way to pushing through critical resistance in the 970’s within the next several weeks in what could be an impressive year-end finish if there’s indeed a breakout at that time…it’s interesting to note that since late June, the Venture has actually outperformed both Gold and the TSX Gold Index…this sends a message that Gold’s slide is nearing an end though a new low in bullion is possible first…the Venture is a reliable leading indicator – keep in mind, it topped out in 2011 six months ahead of bullion…likewise, it may have found a bottom in late June at 859 – six months or more ahead of a final low in Gold…we’ll see what happens but there are good reasons for optimism right now…

U.S. Dollar Index 2.5-Year Weekly Chart

How the greenback performs over the coming weeks will provide strong clues as to what’s in store for the Venture…the Dollar Index recently has been trading between strong support at 79 and resistance around 81…however, the drop below a long-term uptrend line in September as shown below, combined with a 200-day SMA that has flattened out and is threatening to reverse to the downside, leads us to believe that the Dollar Index could be headed toward rough waters – but it’s still premature to draw that conclusion…the next few weeks, especially following the mid-December Fed meeting, should be very telling, so it’ll be important to follow the Dollar Index closely…

Today’s Markets

Japan’s Nikkei average surged another 237 points or 1.5% overnight to close at 15619, a new 6-month high and just 323 points shy of last May’s 5.5-year peak of 15942…China’s Shanghai Composite slid 10 points to finish at 2186 after surging 3% higher last week…

European shares are up moderately in late trading overseas…

Stock index futures in New York as of 5:15 am Pacific are pointing toward a positive open on Wall Street…the S&P 500 closed above 1800 for the first time ever last week, while the Dow has strung together its best weekly winning streak (seven) in nearly three years…

The TSX begins the new week at 13478 while the Venture, despite some weakness in Gold and Oil this morning, will try to build on last week’s mid-week reversal to the upside…some tech deals of course are doing very well at the moment and John has an updated chart this morning on social media darling LX Ventures Inc. (LXV, TSX-V)…we also update Magor Corp. (MCC, TSX-V) which has been flying mostly under the radar but posted a nearly 30% gain last week…the strategy in the resource area is to focus on those companies that are financially strong, active, and have the potential to seriously take off over the next month or two on news and a rebound in that sector…Garibaldi Resources Corp. (GGI, TSX-V) is one of those…

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

The GGI rig keeps turning in Mexico, and that’s not only great news but one more reason we’re so excited about this company…there were a multitude of reasons why we brought GGI to our readers’ attention last June beyond just the potential of the company’s Grizzly Property in the Sheslay Valley, an area that has indeed emerged in our view as the #1 exploration hotspot in B.C.’s “Golden Triangle”…the Sheslay Valley will heat up immensely and leave the North ROK discovery to the east in the dust…at the moment, what we see unfolding imminently in Mexico for GGI is a bountiful harvest from the seeds that have planted recently (La Patilla) and over the last few years at the Tonichi, Iris and Rodadero projects…you like high-grade? – GGI has it…you like constant drilling and exploration excitement? – GGI has it…you like a company with cash and working capital? – GGI has it…you like an exploration company generating some cash flow? – GGI has it…you like a company with no warrants and virtually no share dilution since 2009? – GGI is one of the few that can claim that…

The GGI chart speaks volumes…John has gone back 10 years in this monthly chart, and the pattern is astonishingly similar to early 2009 when the stock was in the beginning stages of a dramatic move…currently supported by a rising 200-day SMA at 9 cents, GGI has also formed a bullish horizontal flag since July between 9 cents and 15 cents…the 9 to 10 cent area is the “sweet spot” for accumulation, and we anticipate a strong finish to the 2013 calendar year given this technical picture and the fact that GGI will be drilling not one but two properties before the end of December as noted in the company’s last news release…

There aren’t many Venture companies with rising 100, 200 and 300-day moving averages – GGI is part of that select group…

Garibaldi’s La Patilla Gold Property was acquired earlier this year for one specific purpose – to give the company potential near-term additional cash flow (GGI is already generating royalty income from the exploitation of near-surface coal seams by a private Mexican company at Tonichi)…La Patilla is a relatively small property but highly strategic as the extent of artisanal mining going back decades demonstrates the opportunity to quickly confirm enough shallow mineralization (within 25-50 metres) to literally bring in an excavator and haul material out…Dr. Craig Gibson, who’s got 20+ years’ experience in Mexico with a distinguished track record there, didn’t bring this property to Garibaldi without good reason…GGI hasn’t had to do a significant financing since 2009 because of previous success in Mexico (Temoris) – La Patilla may make it possible to go another several years without a major financing, and provide the funds to attack the Grizzly in a major way…a reader pointed out to us that GGI has posted about a dozen pictures of La Patilla on its web site, and indeed the mineralization is clear to see…this could get interesting…the attention artisanal miners have given to La Patilla tells us the grade potential is strong…

Meanwhile, at Tonichi, GGI recently reported the discovery of a supergene zone in the last hole completed at the Locust target, and diamond drilling quickly resumed to follow up on that…in the context of Au-Cu porphyry systems, especially in this area, an intercept of 104.6 metres grading 0.24 g/t Au and 0.16% is highly significant…if you want to know what can happen when you drill a little deeper into something like this, just check out what occurred with Barisan Gold Corp. (BG, TSX-V) recently…it hit almost identical length and grades at virtually the same depth at its property in Indonesia, then drilled deeper and hit a whopper of an intercept that quadrupled the value of the stock…where’s there’s smoke, there’s often fire, and GGI has found some serious smoke at Locust…previous drilling at Locust (widely spaced shallow holes) has already outlined a broad envelope of Au-Cu mineralization over a 5 km strike length that appears to be the near-surface expression of an underlying porphyry system…the last hole, MAR-13-02, has put GGI on the edge of that potential system…using its own drill rig, GGI’s exploration costs in Mexico are dirt-cheap…

The bottom line is that GGI is much better positioned than most other junior exploration companies at the moment given activity on the ground, the quality of its properties, its strong working capital position, a stream of income, and a highly favorable share structure with virtually no dilution in nearly five years…the management team is extremely capable, trustworthy, and determined to build shareholder value…

LX Ventures Inc. (LXV, TSX-V)

Newton’s first law – what’s in motion stays in motion until a force stops it…this law of physics can also apply to stocks…LX Ventures (LXV, TSX-V) had a big week last week – it will continue to be volatile but the overall trend remains bullish according to John’s updated three-month daily chart…Fib. retracement levels range from 53 cents to 63 cents (new technical support in that range), and note the new Fib. target level…as always, perform your own due diligence…LX closed Friday at 67 cents, nearly a double for the week…

Magor Corp. (MCC, TSX-V) Update

Tech plays are drawing a lot of investor interest these days, and one that we continue to be very excited about at BMR is Magor Corp. (MCC, TSX-V) which has a formidable team behind it and a product that has the potential to really catch fire…MCC jumped 28% last week, closing Friday above resistance at 40 cents…this breakout requires confirmation today as shown in John’s 6-month daily chart…

While MCC faces immediate resistance at the 50-cent Fib. level, the potential of share price appreciation over the coming months is truly phenomenal if the company’s launch of its Aerus cloud-based services is successful…they also now have a joint venture to sell and market their products in China…Magor has raised more than $7.5 million since going public in March of this year (including its IPO), and that’s because of the strength of the people behind this deal and the quality of their software solutions…

MCC President and CEO Mike Pascoe is well known for his ability to build shareholder value in the telecommunications industry…he has led several very successful deals, recently and in the past, including of course Newbridge Networks which was bought out by Alcatel for $10 billion in 2000…Sir Terry Matthews is the Chairman of Magor and his record is impeccable – he founded Newbridge and co-founded Mitel…he’s also the founder and current Chairman of Wesley Clover, an investment vehicle and holding company that has interests in a broad range of next-generation technology companies, real estate, hotels and resorts…Wesley Clover also holds a sizable chunk (approximately 30%) of Magor…

Magor – Taking Video Conferencing To The Next Level

Magor could be well on its way to changing the landscape of video conferencing and collaboration…they are a serious potential “disrupter” in this industry as they’ve eliminated the expensive infrastructure currently used by many of their competitors…quite simply, traditional video conferencing cannot provide Magor’s level of interaction combined with its clear, high-definition video on the Internet…they’ve managed to create an environment for their users so that they feel they’re communicating and working as if they were sitting beside each other in the same room – even though they’re in different cities or countries…it’s an amazing system and we’ve seen it in action…

Magor’s first seven months as a publicly traded company haven’t been easy, at least for investors – the stock slipped from a high of 69 cents, shortly after it started trading, to an October low of 23.5 cents before starting its rebound…in its fiscal year ending April 30, Magor reported a net loss of $8.5 million but Q4 revenues grew substantially to $847,000 – nearly half of the total for the entire fiscal year ($1,964,000)…the loss was due to increased operating expenses in the areas of sales, marketing, and research and development as the company continued to prepare for the launch of its Aerus cloud-based services this quarter…it takes money to roll these things out, and we believe Magor has made wise use of shareholder funds so far…there are challenges and risks, of course, but MCC’s strategy has a great chance of paying off big-time…

Aerus – Magor’s Catalyst?

The next few quarters are going to be key for Magor…Aerus enables people to engage collaboratively in high-quality visual conversations by simultaneously sharing, viewing, and editing relevant material on desktops, laptops, tablets, smartphones, whiteboards and other devices…Magor has been successful at securing requests for service trials with more than 20 carriers and solutions integrators around the globe, and the list continues to grow…how these “service trials” work out is obviously going to be key…

“Aerus is looking very strong as the traction with carriers and service providers at this stage is significantly exceeding our expectations,” stated Pascoe in a news release September 26…in order to accelerate the growth opportunity associated with Aerus, Magor recently completed a $1.5 million financing at 25 cents which also attracted some new institutional investors to the story…

Interestingly, Magor also appears to be making some inroads into China – the company announced Sept. 27, without going into details, that it has entered into a “joint venture agreement” with 3 Chinese parties – Harbin Venture Capital Management Co. Ltd., Harbin Aobo Venture Capital Management Co. Ltd., and Harbin Kaifu Investment Consulting Co. Ltd…

Effective software solutions often have high profit margins…if the Aerus launch is relatively flawless and Magor can gain the kind of market penetration and traction it expects with this technology, then MCC has huge upside potential from current levels over the next several quarters given Friday’s 43.5-cent close and total market cap of $22.5 million…MCC now has approximately 52 million shares outstanding…if Aerus succeeds the way Pascoe and others believe it can, MCC could easily command a much higher market cap…

Silver Short-Term Chart

Silver has slipped into oversold territory with RSI(14) now at just 27% on the six-month daily chart…expect support at $19.50 to be tested this week…

Silver Long-Term Chart

Sell pressure has been dominant in Silver most of this year, and RSI(2) is now once again below 20% which is typically a time when it’s best to be a buyer…Silver has powerful support in the immediate vicinity of $20 as shown in this 11-year monthly chart…

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