TSX Venture Exchange and Gold
After a horrible September so far, the Venture stabilized Friday after testing important support and closed up 8 points for the day to finish the week at 919. The Index has given up ground in 16 out of 19 trading sessions this month (a loss of 10.3%) and last week’s drop totaled 36 points. By comparison, the TSX Gold Index has plunged 15% this month while Gold itself is down only 5.4%. The TSX Composite is off 3.8% while the Dow is virtually unchanged.
So what’s happening? The surging U.S. Dollar Index, which is on a record run, has clearly been the main factor in putting a damper on Gold and commodities in general this month, and this has certainly inflicted pain on the Venture which tends to move in the opposite direction of the greenback. Technically, the Venture found support at an uptrend line this past week going back to last year on its 1.5-year weekly chart. It’ll be very important for the Index to hold that support. Given some of the extreme oversold conditions that emerged last week, relief should be on the way as September ends and October begins. On a short-term basis, the Dollar Index – having posted 11 straight weekly gains – is due for a correction, though that doesn’t rule out a “momentum” move a little higher first.
The Venture’s RSI(14) on this 1.5-year weekly chart is near previous support and the formation of a bullish “W” in the coming week would be encouraging. You can see the symmetrical triangle that is now in place, providing a likely range for the Venture over the near to short-term before a move either above or below the triangle occurs.
Venture 5-Year Weekly Chart
The Venture’s recent breakdown below an RSI(14) uptrend in place for more than a year was a warning of increased downside risk. In situations like this, with sentiment very negative and the Index still maintaining a rising 200-day moving average (SMA), the possibility for a very sudden and powerful reversal definitely exists. This will depend on how Gold and commodities behave, and there are reasons for optimism with regard to Gold as we examine further below.
Gold
Gold held important support last week, and actually posted a $3 gain for the week with a close of $1,219, despite a jump of nearly a full point in the Dollar Index (in the previous 3 weeks, Gold tumbled a total of $72).
The COT structure is more favorable for Gold than it has been in quite some time with commercial traders significantly reducing their net short positions. It’s almost always a losing strategy to bet against the commercials. Whey they ramp up shorts, it’s time to be concerned. When they do the opposite, you can be confident that Gold is likely headed higher.
This 6-month daily chart for Gold shows how short-term oversold conditions likely peaked at the beginning of last week – RSI(14) and the ADX indicator demonstrate this – just above strong support for bullion around $1,200. There’s every indication that this market is overdone on the downside with a reversal in the works.
Silver fell 13 more cents last week to close at $17.66 (updated Silver charts tomorrow morning). Copper fell 6 pennies to $3.07. Crude Oil gained $1.13 a barrel to $93.54 while the U.S. Dollar Index broke above resistance at 85 to finish at 85.62.
The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks
There’s no better cure for low prices than low prices. The great benefit of the collapse in Gold prices in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their their overall operations. Exploration budgets among both producers and juniors have also been cut sharply. In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to carry out exploration or put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe). Ultimately, all of these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, grades have fallen significantly just over the past decade.
The “Big Picture” View Of Gold
As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade. The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion and will continue to support prices. Despite Gold’s largest annual drop in three decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors:
- Growing geopolitical tensions, fueled in part by the ISIS terrorist group and a highly dangerous and expansionist Russia under Vladimir Putin, have put world security in the most precarious state since World War II;
- Weak leadership in the United States and Europe is emboldening enemies of the West;
- Currency instability and an overall lack of confidence in fiat currencies;
- Historically low interest rates
- Continued strong accumulation of Gold by China which intends to back up its currency with bullion;
- Massive government debt from the United States to Europe;
- Continued net buying of Gold by central banks around the world;
- Flat mine supply and a sharp reduction in exploration and the number of major new discoveries.
Deflationary concerns around the globe and the prospect of Fed tapering had a lot to do with Gold’s plunge during the spring of 2013 below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew momentum traders away from bullion. The June 2013 low of $1,179 was the bottom for Gold in our view. Extreme levels of bearishness emerged in the metal last year. With the long-term bull market remaining intact, we expect new all-time highs in Gold as the decade progresses. Inflationary pressures should eventually kick in around the globe after years of ultra-loose monetary policy and the reluctance of central banks to increase interest rates.
Doubleview Capital Corp. (TSX-V: DBV) Completes 7 Additional Holes at Hat Project
(via Thenewswire.ca)
Date: 29/Sep/2014
Doubleview Capital Corp. (“Doubleview”) (TSX-V: DBV) is pleased to report that as its 2014 exploration program continues at its Hat Property in the Sheslay district, northwest British Columbia, seven additional drill holes have successfully extended the Lisle Zone discovery. Assay results are expected in the very near future.
Doubleview has now completed 22 holes totaling more than 7,000 meters since first-ever drilling at the Hat Project began last year. This latest round of drilling, and pending assay results, are expected to significantly refine the geological model for the property which shows increasing potential as an important new copper-gold alkalic porphyry-type deposit in this robust, under-explored district.
The extensive Hat database is currently being analyzed by Mr. Pat McAndless, P.Geo., the Company’s senior technical adviser, and his team of independent geological consultants who specialize in advancing this type of project. All members of the McAndless team have histories of success in the identification and measurement of copper-gold alkalic porphyry deposits in central British Columbia. The Lisle discovery is one of numerous large untested coincident geophysical and geochemical targets over a broad area at the Hat.
“The fresh insight and energy of Pat and his team will be invaluable as we continue to advance the Hat Project in the coming weeks and months,” stated Mr. Farshad Shirvani, Doubleview President and CEO.
Mr. Erik A. Ostensoe, P. Geo., a consulting geologist, is Doubleview’s Qualified Person with respect to the Hat Project as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects. Mr. Ostensoe has reviewed and approved the technical contents of this news release. He is not independent of Doubleview as he is both a shareholder and a co-optionor of the Hat Project.
About Doubleview Capital Corp.
Doubleview Capital Corp., a mineral resource exploration and development company, is based in Vancouver, British Columbia, Canada, and is publicly traded on the TSX Venture Exchange [TSX-V:DBV]. Doubleview identifies, acquires and finances precious and base metal exploration projects in North America, particularly in British Columbia. Doubleview increases shareholder value through acquisition and exploration of quality gold, copper and silver properties and the application of advanced state-of-the-art exploration methods. Doubleview’s portfolio of strategic properties provides diversification and mitigates investment risk.
On behalf of the Board of Directors,
Farshad Shirvani, President & Chief Executive Officer
For further information please contact:
Doubleview Capital Corp.
Suite 310, 675 West Hastings Street
Vancouver, BC V6B 1N2
Farshad Shirvani
President & CEO
T: (604) 678-9587
E: corporate@doubleview.ca
Forward-Looking Statements
Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. Doubleview cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Doubleview’s control. Such factors include, among other things: risks and uncertainties relating to Doubleview’s limited operating history and the need to comply with environmental and governmental regulations. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward looking information. Except as required under applicable securities legislation, Doubleview undertakes no obligation to publicly update or revise forward-looking information.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Copyright (c) 2014 TheNewswire – All rights reserved.
Comment by Bert — September 29, 2014 @ 4:52 am
Thanks for the update Bert. Sounds good.
Comment by STEVEN1 — September 29, 2014 @ 5:26 am
I believe Farshad is making some serious progress here. He’s a bulldog and I really don’t think McAndless would be stepping into this if he didn’t think the Hat had the goods…evidence of higher grades is going to be key, and there are 7 new chances for that with these holes and more to come…encouraging.
Comment by Jon - BMR — September 29, 2014 @ 6:11 am
This was a good news release. It brings everybody up to speed on what is happening. Now all eyes are back on us.
Comment by Chris — September 29, 2014 @ 6:15 am
HA! I just took a look at stockhouse and a person going by the handle “Lifegoeson” has accused me of having inside information. Just to make it clear I am not an insider. I don’t know the results and I haven’t taken part in any PP. I asked Farshad two simple questions (the ones that were on everybody’s mind): Where we are in the current drilling campaign and if the PP is still open or closed. That’s it. And those were his answers. Some people have too much time on their hands and concoct wild theories.
Comment by Chris — September 29, 2014 @ 6:41 am
I don’t expect much of anything during the next couple
of days. It will not only be the end of the month, but
the end of the quarter, remember window dressing & all
the necessary things the money pockets usually do to
cover up, whoops ! did i state cover up, sorry ! that
should have been up cover. Anyway, hopefully better days
ahead & our aim is to make a dollar out of 50 cents.
Comment by Bert — September 29, 2014 @ 6:51 am
Does anyone have any thoughts as to what grades will be required to get DBV moving upwards? They have a couple of holes that have around 0.3% CuEq that include sections of 0.6% CuEq. Would more of these be ok or do we need higher % CuEQ?
Comment by Tom UK — September 29, 2014 @ 10:16 am
Tom, are you saying you have these numbers from this drill program? The one that hasn’t been released yet?
Comment by KevinMc — September 30, 2014 @ 5:52 am
Sorry for confusion, I was referring to the previous holes drilled. If they get the same numbers from the awaited 7 holes, will it be enough to shift the SP up, or do we need better grades. Would large tonnage of 0.3% CuEq be sufficient at this stage?
Comment by Tom UK — September 30, 2014 @ 12:12 pm