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Gold has traded between $1,243 and $1,253 so far today to begin the new week…as of 7:30 am Pacific, bullion is down $2 an ounce at $1,247…Silver is off a nickel at $20.12…Copper is down a penny at $3.31…Crude Oil is 62 cents lower at $92.10 while the U.S. Dollar Index is up slightly at 80.68…

BlackRock Inc.’s Evy Hambro, manager of its $8 billion World Mining Fund, said Gold supply may fall “quite rapidly” as producers curb output at expensive mines…“Very few Gold companies are actually making significant profit,” Hambro said in an interview on Bloomberg TV’s “On the Move”…“If this trend of better management of these assets continues, supply will start to decline quite rapidly.”

John’s 9-month daily Gold chart paints a clear picture of what bullion must do in order to gain momentum in this first month of 2014 following its worst annual performance in nearly 30 years…Gold must overcome resistance around $1,275 and then pierce through the downsloping wedge just below $1,300…Gold has been trading mostly within this downsloping wedge since last summer…a bullish factor in the yellow metal’s favor is the potential for substantial short-covering…

Gold 9-Month Daily Chart

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite fell 4 points to close at 2010, a fresh 5-month low…the Index lost 3% last week in part on the fears of a glut of new listings…Japan’s Nikkei was closed today for a public holiday…Indonesia’s Jakarta Composite rallied 3.2% to a 2-month high as investors cheered President Yudhoyono’s last-minute decision to allow the export of Copper, Iron Ore, Lead and Zinc concentrates to continue, while banning other mineral ore exports in an attempt to force domestic miners to grow higher-value processing businesses instead of simply shipping raw materials to foreign buyers…

European shares are up modestly in late trading overseas…

In North America, the Dow is up 15 points as of 7:30 am Pacific…after last Friday’s much weaker than expected U.S. jobs report, attention now turns to U.S. corporate profits as earnings season gathers steam this week, with the likes of JP Morgan, Goldman Sachs, Intel and General Electric due to report…

The TSX is up 4 points through the first hour of trading while the Venture is off a point at 966…big news in the mining sector this morning as Goldcorp Inc. (G, TSX) has made a $2.6 billion offer in cash and shares for Osisko Mining Corp. (OSK, TSX) which is up more than $1 per share as of 7:30 am Pacific…Chuck Jeannes, Goldcorp President and CEO, stated, “With our world-class Eleonore project in Northern Quebec due to commence production later this year, Goldcorp will be the largest gold producer in the province, with the resources to continue building collaborative, long-term relationships while leveraging corporate and regional synergies.”

CDNX 3-Year Weekly Chart Update

The CDNX is aiming for its 14th consecutive daily advance today…the Index, though on less volume of course, has already topped its longest winning streaks recorded during the 2009-2011 bull market (11 straight advances in late 2009/early 2010 and 10 in late 2010/early 2011)…

We’ve been tracking the 3-year weekly CDNX chart consistently in recent months for the benefit of our readers as it has been an extremely useful guide in gauging the direction of the market…significantly, in October, the Index broke above a long-term downtrend line which then became support (tested repeatedly) for the next couple of months…just before Christmas, the Venture took the path of least resistance and boldly moved north of the downtrend line to once again test the critical 970’s…

Strikingly, RSI(14) – now at 55% – has broken decisively above 50 for the first time since the bear market began in early 2011…as we also pointed out over the weekend, a multi-year monthly chart shows how the MACD has finally turned upward after a decline that started during the first half of 2011…there are several other technical indicators as well that suggest the Index has finally turned the corner with last June’s low of 859 marking an important bottom (this doesn’t necessarily mean Gold has found its low yet, as the Venture historically has led bullion to the upside or the downside by many months with early 2011 being an excellent example)…

The big question now is, how soon will the Venture stage a confirmed breakout above critical resistance in the 970’s, a level it has failed to breach on several attempts since late April of last year?…there is overwhelming technical evidence to suggest that a breakout is going to occur, and possibly even this week, but exact timing is uncertain and no one – not even our chart wizard – has a crystal ball…the important point is that this market is healing and recovering, and 2014 is shaping up to be a positive year when astute investors will likely have a chance to recoup losses incurred since the bear market started 3 years ago…a rising tide will not lift all boats, some of which are still ready to sink due to several factors including weak management teams, decimated share structures and the inability to raise money…rollbacks will be occurring with increasing frequency…focus on companies with superior management, healthy balance sheets, active exploration programs, high quality properties and attractive share structures…

Below is the updated 3-year weekly chart with RSi(14) crossing the important 50 level where it met resistance in October, the summer of 2012 and early 2012…

Mason Graphite Inc. (LLG, TSX-V)

Interesting news from Mason Graphite Inc. (LLG, TSX-V) this morning…the company has reported that it has entered into an agreement whereby it would purchase up to 40% of the issued and outstanding shares of NanoExplore, a privately held research and development company focused on developing low cost, large-scale production of Graphene from natural flake Graphite, and integrating it into several industries including energy and textiles…in connection with the proposed transaction, LLG is completing a private placement at 80 cents, fully subscribed for by members of the management teams of Forbes and Manhattan and Mason Graphite…as of 7:30 am Pacific, LLG is up 8 cents at 79 cents…

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

As we mentioned above, to take full advantage of a recovery in the Venture this year, investors must focus on companies with superior management, healthy balance sheets, active exploration programs, high quality properties and attractive share structures…Garibaldi Resources Corp. (GGI, TSX-V), which has more than doubled since we first uncovered this gem for our readers early last summer, is one of our favorites and certainly falls into that category…in fact, GGI has an explosive mix of high-grade Gold, Silver, Zinc and Graphite opportunities, in addition of course to the important Grizzly play in B.C.’s Sheslay Valley…drilling continues at the La Patilla Gold Property as a follow-up to high-grade channel sample results over significant widths, while of course the company is even earning royalty income from the extraction of near-surface Coal seams on concessions at Tonichi…

The 3.5-year weekly GGI chart shows a bullish flag formation while RSI(14) has broken above a trendline…with rising moving averages (SMA’s) and increasing buy pressure, GGI is well-positioned for a breakout above resistance at 15 cents…GGI is up half a penny at 13.5 cents as of 7:30 am Pacific…

Red Pine Exploration Inc. (RPX, TSX-V)

Below is an “awareness” chart from John on Red Pine Exploration Inc. (RPX, TSX-V) – we’ll have more on this one in the next couple of days…the company is drilling its Ceyenne-Chili Property near Timmins, prospective for the discovery of a VMS system…RPX has climbed systematically within an upsloping channel since mid-November, but will need very good drill results given the number of shares outstanding (about 200 million) and the current market cap…as of 7:30 am Pacific, RPX is up a penny at 11 cents…

Eagle Star Minerals Corp. (EGE, TSX-V)

On Friday, we suggested that investors keep a close eye on Encanto Potash Corp. (EPO, TSX-V) which appears to have put in a double bottom and has also broken above a downtrend line going back to last summer on its 2.5 year-weekly chart…this morning, we have a new potash play for our readers’ due diligence – Eagle Star Minerals Corp. (EGE, TSX-V) that is also exhibiting bullish technical tendencies at the moment…significantly, the company has also continued to report multiple thick intersections of high-grade Phosphate from drilling at its Santiago target in Brazil which borders MBAC Fertilizer Corp.’s (MBC, TSX) Canabrava discovery at its Itafos Property and appears to be an extension of that deposit…

Eagle Star has released results from all 23 RC holes completed at Santiago last year and plans on drilling up to 160…the company raised $1.7 million last summer from the exercise of 20-cent warrants but will certainly have to replenish its treasury in 2014…

What’s interesting about the EGE chart is that it shows the stock on the edge of breaking out above a downsloping channel…RSI(14) has pushed above 50 and the the trend is certainly positive…the stock has strong support at 18 cents with Fib. resistance levels between 21 and 27 cents…EGE is up 2 pennies at 23.5 cents as of 7:30 am Pacific…

Magor Corp. (MCC, TSX-V) Update

Magor Corp. (MCC, TSX-V) has been more active lately, climbing from a December low of 26 cents to a nearly 10-month high of 55 cents last week…it’s a tech play we like for the long-term, and 2014 could certainly be Magor’s breakout year after the company first started trading on the Venture last March…Magor is a “visual collaboration” company led by an all-star management team that includes some of the same senior personnel that guided Newbridge Networks…recently, Magor reported solid growth in its existing software transaction business, and the company is also in the process of rolling out its key Aerus cloud-based services…we expect Magor’s business model to really start to kick into gear during the second half of this year…the market is a forward-looking machine, so continued share price strength in Q1 is very possible if investors conclude that MCC is indeed on the right track and headed toward near-term profitability…MCC closed at 49 cents Friday…below is a 6-month daily chart from John…

Silver Short-Term Chart Update

Silver Long-Term Chart Update

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