BullMarketRun.com

Not surprisingly, Gold is pulling back modestly today after last week’s $50+ jump and some follow-through buying yesterday on President’s Day in the U.S. and Family Day in much of Canada…as of 7:45 am Pacific, bullion is down $6 an ounce at $1,323 after dipping as low as $1,312…Silver is off just 3 cents at $21.81 (see updated Silver charts at bottom of today’s Morning Musings)…Copper is up a penny at $3.28…Crude Oil has surged by more than $1 a barrel to $101.38 while the struggling U.S. Dollar Index is down nearly one-fifth of a point to 79.98…

Total global demand for Gold fell in 2013 as outflows from exchange-traded funds more than offset robust consumer buying, the World Gold Council reported today…otherwise, the WGC said, jewelry demand for Gold climbed back to pre-financial-crisis levels and investments in small bars and coins hit a record high…

After smashing through important resistance around $1,275 and climbing more than $50 an ounce last week, Gold’s next major hurdle is the $1,350 area where it got pushed back from in late October…bullion has shot above its 200-day moving average (SMA) for the first time in more than a year…reports show that the Federal Reserve began 2014 with a sharp increase in M2 money supply…in addition, Gold ETF holdings are showing a net increase of 22,000 ounces so far this month, reversing the large redemptions from last year…with a stabilization in the ETF market, robust physical demand from China, a weak U.S. Dollar Index, more potential short-covering, and improved technicals, any pullback in Gold is likely to be modest with strong new support in the $1,270’s…

China’s Growing Appetite For Gold

As you can see in this chart from www.usfunds.com, January marked a record level of Gold deliveries on the Shanghai Gold Exchange (246 tons which exceeded world mining production for the month) as bullion continues to move from west to east…the Chinese were saying “thank you very much” when the west was dumping its Gold last year – won’t be easy for the west to get it back…

China has officially taken over the throne as the world’s top Gold-consuming nation, the WGC reported today…“We’ve had quarters where China has been the No. 1 market overall,” stated Marucs Grubb, managing director for investment strategy at the WGC. “But 2013 is the first calendar year where China has been No. 1, in recent decades anyway.” Collectively, China and India accounted for more than half of global Gold demand last year, according to the WGC’s data…officially, China purchased a record 1,065.8 metric tons during 2013, a year-on-year surge of 32%…the WGC stated that Indian demand was “resilient” despite import restrictions…

Today’s Markets

Asia

Japan’s Nikkei average surged 3.1% overnight, climbing 450 points to close at 14834…the Bank of Japan left monetary policy steady at the conclusion of its two-day meeting and said it will extend a special lending program by one year to support the economy…China’s Shanghai Composite slipped 16 points to finish at 2119…foreign direct investment in China rose an annual 16.1% in January…HSBC flash purchasing managers’ index (PMI) for February will be released Thursday…

Europe

European markets are mixed in late trading overseas…U.K. inflation fell below the Bank of England’s target in January to its lowest annual level (1.9%) since November 2009…

North America

The Dow is down 11 points as of 7:45 am Pacific…the TSX is 32 points higher while the Venture has crossed the 1000 level, up 5 points at 1002…

Venture 3-Year Weekly Chart

Below is John’s updated 3-year weekly chart for the Venture…a very significant confirmed breakout through the 970’s occurred last week…numerous attempts over the last 10 months to overcome that wall of resistance failed…the next major chart resistance is around 1150 as shown on the Venture 5-year weekly we posted Saturday as part of the Week In Review And A Look Ahead…

As you can see on this 3-year chart, which also includes Gold, the Venture’s turnaround really started in October when it broke above a long-term downtrend line which then became new support over the next couple of months…that support was tested repeatedly until just before Christmas when the Index took the path of least resistance and headed north…encouragingly, RSI(14) now has support at 50% (previous resistance since the bear market began in early 2011) and certainly has room to move higher…

Eskay Mining Corp. (ESK, TSX-V)

It’s a certainty that northwest British Columbia is going to be a hot exploration area this year, all the way up to the Sheslay Valley and beyond…on that note, another company we suggest our readers perform their due diligence on is Eskay Mining Corp. (ESK, TSX-V)…ESK controls 40 sq. km surrounding the prolific past producing Eskay Creek mine, and they have some giant neighbors – Pretium Resources Inc. (PVG, TSX) and Seabridge Gold Inc. (SEA, TSX)….while it was in operation, Eskay Creek was the second richest deposit in North America and the fifth largest Silver producer in the world…a technical adviser for ESK is the highly respected James Rogers, P.Geo., who was Chief Geologist at the Eskay Creek mine between 1994 and 2003…Rogers prepared an ESK corporate presentation which is available on their web site – we suggest our readers check it out…

Technically, what’s interesting about ESK is that it’s threatening to push above a long-term downtrend line after finding rock-solid support at 3 cents…recently, there has been a volume surge in the stock which caught our attention, and the company also granted three million stock options at a nickel…below is a 5-year weekly chart from John…

Doubleview Capital Corp. (DBV, TSX-V) Continues To Fill Its Treasury

More encouraging news from Doubleview Capital Corp. (DBV, TSX-V) this morning as the company has now crossed the $500,000 mark in proceeds raised from the exercise of warrants…in total so far, 2,616,666 warrants have been exercised at 15 cents while 1.38 million warrants have been exercised at 10 cents for gross proceeds of $530,500…just over 16 million share purchase warrants are still outstanding, so DBV has an excellent chance of enlarging its bank account even more in the days ahead…this is an important development as it gives the company the opportunity to proceed quickly with the next phase of drilling at the Hat Property in order to follow up on the discovery holes reported last month…a warming trend is developing in the Sheslay Valley which may create suitable drilling conditions for DBV next month…

Technically, DBV has been consolidating in a 2-week pennant which constitutes a bullish flag…strong Fib. support exists at 23 cents…

We continue to work on “Part 2” of our special report series on DBV, and we’ll be posting that in the near future…

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

While much attention is being given, and deservedly so, to Garibaldi Resources’ (GGI, TSX-V) Grizzly Property in the Sheslay Valley, along comes “Mexico Mike” to remind everyone of the value of GGI’s assets in Mexico…interviewed by The Gold Report (www.theaureport.com), Kachanovsky (consultant to hedge funds and mining companies and contributor to SmartInvestment.ca) stated, “Garibaldi has a core group of holdings in Mexico that the company is currently drilling in proximity to large-scale mines in Mexico. Any drill-bit success that it accomplishes could become a very attractive takeover target. Garibaldi is unique in that earlier in the cycle it did just that. It found a large Gold and Silver deposit, which it successfully vended to another company, making a lot of money for its shareholders. The company has done a very good job of managing its cash position.”

Below is an updated 3.5-year weekly GGI chart from John…a bullish flag has formed in GGI…

Abcourt Mines Inc. (ABI, TSX-V)

A small junior producer in Quebec that will clearly benefit from a weak Canadian dollar and firmer Gold and Silver prices is Abcourt Mines (ABI, TSX-V) which is close to pushing its Elder Mine near Rouyn-Noranda into the commercial production phase…the company also has a significant Silver resource at another nearby property…

We have two charts this morning on Abcourt that our readers should find quite helpful as part of their due diligence…immediately below is a 10-year monthly chart…note how support has held at 5.5 cents, and how close ABI is to breaking out above a long-term downtrend line…

ABI 2-Year Weekly Chart

What’s revealing about this 2-year weekly chart is the very strong accumulation in ABI since the fourth quarter of last year...immediate resistance is at 8 cents…

Barisan Gold Corp. (BG, TSX-V) Chart Update

Readers should continue to keep a close eye on Barisan Gold Corp. (BG, TSX-V) which re-started drilling a few weeks ago at its Upper Tengkering Porphyry Prospect in Indonesia…as the company reported January 29, it’s anticipated that hole UTD-005 will intersect the high-grade zone identified at the bottom of UTD-002…the final 59 m of that hole returned 1.2 g/t Au and 0.5% Cu, the highest-grade intercept longer than 50 m drilled at Upper Tengkering so far…this is an interesting discovery and it could heat up again on more drill results, or through fresh speculation in anticipation of results from UTD-005…

Technically, BG has unwound an overbought RSI(14) condition and the Fib. 50% retracement level has held…

Updated Silver Charts

Short-Term Outlook

The $20.50 area was stiff resistance for Silver throughout December and January, and that was finally overcome last week…$20.50 now becomes new support…the next really key area is $21.50 and it’ll be interesting to see if Silver can bust through that resistance this week…importantly, Silver relative to Gold has broken out above a downsloping channel as you can see in this 8-month daily chart – this is bullish for Silver and has positive implications for Gold as we’ve seen in the past…

Long-Term Outlook

If at some point this year Silver can overcome stiff resistance and a downtrend line around $26, watch out – it will likely soar…

Note: John and Jon both hold share positions in GGI, DBV and BG.