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The TSX Gold Index surged to a new all-time high today, confirming Gold’s record new high, and now the real fun begins.  With the Fed actively promoting a lower U.S. Dollar and a more inflationary environment (Helicopter Ben is all doped up on “quantitative easing”), coupled with continued strong growth in emerging markets such as China, India, Brazil and Russia, the prices of many commodities from Gold to foodstuffs are going to keep charging higher with some parabolic moves possible.  We are living in historic times as the Great Commodities Super Cycle heats up.

The “inflationary scenario” is just one of many factors driving Gold, not the least of which is the fact the yellow metal is being increasingly viewed as an alternative currency.  Other contributing factors to Gold’s rise are flat mine supply and strong investment demand.   Gold is also not even close to being in the “bubble” stage  yet – Gold’s run over the last decade has been slow and steady.  And one of the key differences today is that we’re seeing greater affluence in the developing world where people have traditionally turned to Gold to store their wealth.

BMR’s Technical Analyst made a great call October 19 when he predicted that 380 would be the bottom in the TSX Gold Index (“before continuing its climb past 400”) on any pullback in sympathy with some short-term weakness in the metal.  Indeed, the TSX Gold Index hit a low of 383 October 22.  Today it moved convincingly past 400 into record high territory.  John’s next target should not startle you if you have been following this site closely in recent months:  474.  He explains below as he reviews today’s closing chart for the TSX Gold Index:

John: Today the TSX Gold Index gapped up at the open to 410, fell to a low of 398 and then rose to a high of 415 before closing at 414, up 15 points (3.7%) on volume of 90 million shares. This was the reaction after the latest round of “Quantitative Easing” and the turmoil in the U.S. over the mid-term elections.

Our last update on this Index was October 19 when we used the 1-year weekly chart. On that chart we identified two support levels  – 380 and 390 – and stated an expectation for near-term weakness.  “I expect we’ll see some additional weakness in the immediate future but support should hold at the 380 level. I will be surprised if it falls further before continuing its climb past the 400 level.”

Today for our update we use the same 1-year weekly chart to see where the Index has been and where it’s going in the near to intermediate future. On the chart the October 19 situation is identified by the vertical thin blue line. The two identified support levels are shown by horizontal green lines and are noted on the chart. The 390 support was broken only on a daily basis and the 380 level was not reached at all (383 was the low).   Thus, support held.

There are two sets of Fibonacci levels shown. The first one is the blue one on the left showing 0% at 300 and 100% at 367. This is the seed wave. The target extension from this is at 408 which is at the approximate level of the 4 spinning top candles which recognized this area as resistance.

After bottoming out at the 390 level we see that for last week and this week the 2 bullish white candles show a reversal to the upside. In fact, this week’s candle has broken out above the Fibonacci level of 408. This is a very bullish sign. The second set of Fibonacci levels (green) shows the next target is at the 474 level.

Looking at the Indicators:

The RSI is at 65% and climbing – very bullish.

The Chaikin Money Flow Indicator (CMF) is bullish (green) and the average weekly value is increasing, indicating buying pressure is accelerating – very bullish.

The ADX trend indicator shows the +DI (green line) has now reversed to the upside and is above the -DI (red line), thus in bullish trend orientation. The ADX (black line) is flat, showing the bullish trend strength is constant but with the +DI reversal the trend strength is expected to increase.

Outlook: With the breakout above the Fibonacci target of 408 and the bullish positions of the indicators, I expect the Index to methodically climb toward the next Fibonacci target of 474.

Gold has surged higher today, following yesterday’s intra-day reversal when the Fed modestly exceeded market expectations regarding its fresh quantitative easing program…if there was any doubt concerning Helicopter Ben’s strategy, he has made it abundantly clear in a Washington Post opinion piece…the Fed Chairman defended the central bank’s decision to buy $600 billion in government bonds and noted that this strategy “eased financial conditions in the past and, so far, looks to be effective again”…the Central Bank Chairman noted that stock prices rose and long-term interest rates fell in anticipation of Wednesday’s decision…”Lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending,” he said…those are stunning words from a Fed Chairman who seems determined to put the pedal to the metal and drive the U.S. Dollar even lower to help prevent a Japanese-style deflationary scenario…meanwhile, the new dynamics in Congress after Tuesday’s elections are likely to make economic growth through stimulative tax measures the #1 priority…the anti-business, tax “the rich” agenda of the Obama administration is out the window and this is very market bullish, but there will be enough gridlock in Washington to prevent any substantive progress in terms of reducing American government debt…that’s a very positive recipe for Gold which is $31 higher as of 8:00 am Pacific at $1,380…Silver is up 76 cents to $25.60 while the U.S. Dollar Index has plummeted to 75.74, a drop of two-thirds of a point…the CDNX has climbed 39 points to 1987 and appears certain to blast through 2000…we’re preparing a major report on Currie Rose Resources (CUI, TSX-V) which we’re convinced has enormous blue sky potential with its large land package in northwest Tanzania where the company is very active and will be ramping up its exploration efforts…CUI is up a penny at 20 cents and a breakout through this resistance area appears imminent…BMR will be interviewing CUI President and CEO Harold Smith again tomorrow…GoldQuest Mining (GQC, TSX-V) is looking very strong technically at the moment as John pointed out in a recent GQC chart update…the fundamentals with this company are far better than they were in 2007 when GQC rocketed to $1.80 a share at a time when the CDNX was also on fire…GoldQuest is currently up another 2 cents to 27 cents…Greencastle Resources (VGN, TSX-V) is becoming much more aggressive in the Gold exploration space and its 200-day moving average is just starting to reverse to the upside…given VGN’s history of sudden and dramatic spikes to the upside, this is a highly attractive opportunity at 20 cents as Greencastle’s market cap of $9 million is only $3 million above the company’s cash value…Gold Bullion Development (GBB, TSX-V) is quiet at 60 cents, up 2 pennies, but our gut feeling is that we’re witnessing the lull before the storm…the Granada Gold Property has consistently delivered good news all year long…our boots have been on the ground in the LONG Bars Zone and we’re as comfortable as we’ve ever been with GBB…in the type of environment we’re in for Gold and junior mining stocks, an advanced project with multi-million ounce potential such as Granada is going to garner an immense amount of investor interest…

The Perfect Storm for junior mining stocks continues to intensify with the Fed putting the nail in the coffin of the Dollar which has dropped below important support at 76 on the Index this morning…Gold has reversed course from yesterday and as of 6:45 am Pacific the yellow metal is up $29 an ounce to $1,378…the probability of the CDNX pushing convincingly past 2000 in the immediate future has increased substantially…more in our Morning Musings at approximately 8:45 am Pacific…

Gold has been bouncing back and forth today as the Fed’s FMOC meeting nears conclusion…market participants are virtually certain that the Fed will announce a substantial amount of asset purchases today (new “quantitative easing” measures) when its November meeting ends…according to a CNBC Fed survey, market participants look for the Fed to announce $457 billion in asset purchases, down from the $490 billion estimated in mid-October…the Fed’s “language” will be important as well…as of 7:25 am Pacific, Gold is off $3 an ounce at $1,355…Silver is down 13 cents to $24.81 while the U.S. Dollar Index is up slightly to 76.80…in the biggest repudiation of a White House in over half a century, Republicans gained over 60 seats in last night’s Congressional elections to win control of the House of Representatives…Democrats, however, managed to maintain control of the Senate though their majority was reduced…the end result should be very bullish for the markets going into 2011 as we’ll explore in more detail in a separate article…markets are generally quiet and directionless this morning in anticipation of the Fed announcment…the CDNX is up a point at 1943 while the Dow is ahead 17 points and the TSX is off 19 points…at BMR, we welcome and regularly receive comments from our readers as we value everyone’s input…this morning for the first time we received a comment from a President and CEO of a company, John Carter from Trueclaim Exploration (TRM, TSX-V), which we thought we also include in our Morning Musings…”We are the optionee of the Scadding property from Currie Rose Resources. I would like to say that we have been involved with Harold Smith for over three years, in that time we have developed a great relationship and have worked closely together to make the Scadding property a success. His help and guidance has been instrumental in helping us develop what we both feel is an excellent opportunity. I would highly recommend Currie Rose and Mr. Smith to any potential investors, his honesty, integrity and hard work will insure in my opinion the ultimate success of Currie Rose“…we thank John for his comment and we suggest investors keep a close eye on Trueclaim as well which has been working diligently at Scadding and getting encouraging results…Currie Rose is currently unchanged at 19 cents…massive accumulation has been taking place in this stock for almost 3 months now with over 6 million CUI shares trading the last 2 days alone on the CDNX…we believe CUI is on the verge of a major breakthrough in the development of its large land package in the Lake Victoria Greenstone Belt in northwest Tanzania…Gold Bullion Development (GBB, TSX-V) is trading between 59 and 60 cents this morning…we haven’t interviewed Frank Basa for quite some time but Basa has agreed to speak with us in the very near future which leads us to believe something is “in the works” with GBB...Seafield Resources (SFF, TSX-V) has shown a little weakness the last couple of days, falling as low as 19 cents, but our interview late last week with President and CEO Tony Roodenburg actually gave us some encouragement regarding Seafield…he expressed some frustration with the pace of exploration at Quinchia but stressed, as we have been stressing, the inherent value of the property package and the blue sky potential of Dos Quebradas in particular…Roodenburg stated that drilling has concluded at Miraflores (12 holes) and will start very soon at Dos Quebradas…Seafield is unchanged at 20.5 cents…

Gold is trading in a tight range so far today ($1,350 to $1,361) as the Fed’s FMOC meeting begins…it will conclude tomorrow with an announcement regarding fresh quantitative easing measures from the Fed with the expectation the package will start at around $400 or $500 billion…with U.S. inflation well below the Fed’s unofficial target of 2 percent, unemployment stuck at nearly 10 percent, and gross domestic product growing at a lethargic rate, Fed Chairman Bernanke has evidently concluded that doing nothing is not an option…the actions of the Fed over the next 2 years could take on an even more prominent role if Washington is mired in gridlock as a result of today’s Congressional elections…President Obama’s willingness to abandon his far left positions and work with Republicans, and whether or not Democrats will still control the Senate (they’ve most certainly lost the House), will determine how much gridlock there will be in Washington…Democrats will also be battling Democrats and there is also division within the Republican ranks, so it’ll be very interesting to see how politics play out in Washington and how this may impact the markets…overall, we view the Republican resurgence as a major positive for the markets with a renewed emphasis on lower taxes across the board and a push toward smaller government…as of 8:50 am Pacific, Gold is up slightly at $1,353, Silver is ahead 8 pennies to $24.71, while the U.S. Dollar Index is off one-third of a cent to 77.82…the CDNX, after stumbling out of the gate for November yesterday, is currently up 5 points to 1939…Gold Bullion Development (GBB, TSX-V)  is unchanged at 60 cents after jumping as high as 63 cents in early trading…Richfield Ventures (RVC, TSX-V) has come out with new drill results from its Blackwater Project this morning including 115 metres grading 2.59 g/t Au in BW-87…the other 3 holes reported by Richfield weren’t nearly as impressive and all 4 holes were drilled vertically…the stock is off a nickel at $2.80 after climbing as high as $2.94…Blackwater is shaping up nicely and at some point before year-end it’s reasonable to expect that Richfield will get through resistance at $3…in an interesting development, Greencastle Resources (VGN, TSX-V) has hired the same IR company that Richfield uses…Greencastle just recently picked up property near Blackwater and for Greencastle to invest significantly in IR is just one more clue that Tony Roodenburg has some major plans in store for VGN which is currently up half a penny to 19.5 cents…Currie Rose Resources (CUI, TSX-V), which traded nearly 4 million shares on the CDNX yesterday, is very active again today and up a penny at 20 cents…this stock has been under major accumulation since August and its Gold assets in northwestern Tanzania make the risk-reward ratio on CUI extremely attractive…we’ll soon be outlining in detailed geological language why we believe this company’s properties offer so much potential…a 3,000 metre RC drill program is currently underway at CUI’s Sisu River Property which is part of its very promising Mabale Hills Project that also includes Mwamazengo (just a few kilometres southwest of Sisu River) where a significant discovery was made several years ago…what has really been overlooked by the market with regard to Currie Rose is the company’s Sekenke Project, a large land package that surrounds and even runs in between 2 former producing mines from the first half of the last century…in addition to other targets, CUI will be following up on a 12 km x 800 metre NW-SE trending structure (strongly sheared basic volcanic rocks that host numerous vertical quartz reefs) approximately 10 km east of the former high grade Sekenke Mine which was one of Tanzania’s original Gold producers…with the addition of CUI, the BMR Portfolio now has 2 companies exploring in mining-friendly Tanzania – we also expect big things in the coming months from Sidon International Resources (SD, TSX-V)…Sidon is up a penny this morning to 11 cents…

At BMR, we focus on quality, not quantity.  We only put forward a limited number of situations to our readers as it takes a lot to get us really excited about a company – all the right ingredients have to be in place, and that’s not easy to find.

Last December, we sounded the alarm regarding Gold Bullion Development (GBB, TSX-V) as we came to the conclusion the company was likely on the verge of a significant discovery at the Granada Gold Property.  We were soon proven correct and within six months the stock was up 1,000 per cent from when we first introduced it to BMR readers.  Some investors have made a fortune, and Gold Bullion continues to make excellent progress toward its goal of defining a multi-million ounce deposit at Granada.

Today we’re sounding the alarm regarding Currie Rose Resources (CUI, TSX-V). Not since Gold Bullion late last year have we seen a situation quite like this.

We have been investigating Currie Rose extensively recently and of course last week we added it to the BMR Portfolio at 16 cents.  It is truly an undiscovered home run opportunity.  You may have heard our interview late last week with Currie Rose President and CEO Harold Smith.  If not, we suggest you check out the important posting from last Friday and listen to our 20-minute discussion with Smith who we believe could be on the verge of taking Currie Rose from near obscurity to one of the market’s most exciting exploration stories.

Currie Rose has not 1, not 2, but a minimum of 3 superb Gold properties in northwest Tanzania where the company has been exploring since 2005:

• Sisu River (Mabale Hills Project) is being drilled right now following a discovery by artisanal miners.  Initial results could come very soon.  A total of approximately 25 RC holes are being drilled into the Sisu River quartz porphyry anomaly, each to a depth of about 100 to 125 metres.  There are never any guarantees in the exploration business but we do like the odds of a “hit” in this first round of drilling at Sisu River.  “Significant in-situ Gold mineralization” exists at this property according to a 2005 technical report – the current drilling will help determine the extent of that mineralization.  Another Mwamezengo-style hole would send CUI through the roof;

• Mwamazengo (Mabale Hills Project, significant discovery in 2005 just a few kilometres from Sisu River that warrants additional exploration);

• Sekenke Project – 12 km by 800 metre structure (strongly sheared basic volcanic rocks that host numerous vertical quartz reefs) has been identified in close proximity to 2 former producing mines from the first half of the 20th century.

Mabale Hills is in the centre of the prolific Lake Victoria Greenstone Belt which includes AngloGold’s Geita Mine, a massive multi-million ounce open-pit operation just 80 kilometres to the west.  The Geita deposit model is applicable to Mabale Hills – very similar geological environment.

The possibilities regarding the Sekenke Project are intriguing to the least.  We are fascinated by this large land package which surrounds and is also in between two former producing mines including the high grade Sekenke Mine, discovered in 1907 and one of the very first producers in Tanzania (1909-1959).   As Gold Bullion discovered, along with a lot of other junior exploration companies, the best place to find a new mine is near an old mine.  The Sekenke Project has HUGE potential and in the Iramba Plateau the company already has a highly prospective exploration target.  Sekenke could turn out to be a “company maker” for Currie Rose – and wouldn’t it be something if they could also secure the land package hosting the former mine?

We expect Currie Rose to get VERY aggressive in developing its Tanzanian assets which also include the Jubilee Reef Project, a former joint venture with Barrick.   The company has already proven its ability to find Gold – Mwamazengo near-surface drill results from 2005 included 63 metres grading 2.59 g/t Au, 34 metres grading 3.60 g/t Au, and 31 metres grading 5.97 g/t Au.

Currie Rose also holds a promising Gold property in Ontario near Sudbury (Scadding) which it has optioned to Trueclaim Exploration (TRM, TSX-V).  Trueclaim is working hard and getting encouraging results from Scadding where exploration is very active at the moment.

Currie Rose has been under massive accumulation since mid-August – the volume surge is of historic proportions for this stock which has been around for a long time.

Given the new-found aggressiveness of this company, its outstanding portfolio of properties, investor appetite for Gold plays in mining-friendly Tanzania, and a very bullish outlook for the CDNX going into next year, Currie Rose Resources is extremely well positioned for success.

We’ll be going into more detail on Currie Rose in the week ahead at www.BullMarketRun.com including Part 2 of our interview with Smith.

Currie Rose closed at 19 cents Monday for a market capitalization of $15 million.  CDNX volume was 3.7 million yesterday as stock moved from weak hands into strong hands.

As always, perform your own due diligence.  As a matter of disclosure, the writer of this article has increased his position in CUI since last week to 120,000 shares.

Gold has softened this morning ahead of this week’s Fed meeting and tomorrow’s Congressional elections which are expected to deal a severe blow to President Obama’s radical agenda…Gold has traded between $1,348 and $1,366 so far today…as of 8:35 am Pacific the yellow metal is off $10 an ounce to $1,350…Silver is 22 cents lower at $23.53 while the U.S. Dollar Index is nearly half a point higher at 77.39…the CDNX is down 5 points at 1945…we have a couple of theories with regard to tomorrow’s elections in terms of their potential impact on the markets…first, the expected Republican takeover of the House of Representatives and possibly even the Senate should be welcomed by investors (in both the United States and Canada)…the far left, anti-business, tax-the-”rich” agenda of the self-described “community organizer” in the White House who hasn’t worked a day in his life in the private sector is about to be stopped in its tracks…the Bush tax cuts will likely be extended for everyone, and it would be nice to see the Republicans move to reduce job-killing high U.S. corporate taxes…a reduction in capital gains taxes would also be welcomed by the market…with Obama in the White House, however, there will be plenty of gridlock in Washington which may elevate the importance and influence of the Fed…given Bernanke’s appetite for quantitative easing, a lower U.S. Dollar and a generally more inflationary environment, this could be very bullish for Gold and commodities in general…more Republicans in Congress is also bullish for Canada’s oil industry and will reduce protectionist trade sentiment in Washington…we expect little progress in reducing the huge U.S. government debt as Americans haven’t yet really come to grips with the seriousness of that issue (like an alcoholic who refuses to believe he has a problem), and there’s no leader in the White House who can rally Americans to that cause…China’s economy continues to motor along with manufacturing data coming in much stronger than expected…the Shanghai Composite Index recorded its biggest monthly gain in October since July, 2009…Gold Bullion Development (GBB, TSX-V) has traded between 60 and 65 cents this morning…GBB’s new bullishness was clearly on display in early trading as the stock fell to a low of 60 cents and then roared back up…as of 8:35 am Pacific, GBB is off 2 pennies at 61 cents…Adventure Gold (AGE, TSX-V), which will benefit from any positive developments reported by Gold Bullion at Granada (and vice-versa for that matter), is down half a penny at 39 cents after climbing as high as 42 cents…AGE has much more going for it than its newly-acquired 200 hectare land package at Granada…Currie Rose Resources (CUI, TSX-V) has broken through resistance at 20 cents on high volume…what’s moving CUI is the growing realization of the quality and potential of this company’s Gold properties (hundreds of square kilometres) in northwest Tanzania…drilling is well underway at Sisu River, just a few kilometres northeast of the discovery CUI made several years ago at Mwamazengo…both properties are part of CUI’s highly prospective Mabale Hills Project which is in the centre of the Gold-rich Lake Victoria Greenstone Belt…another Currie Rose project we are extremely excited about is Sekenke which surrounds the former Sekenke Mine, one of Tanzania’s original Gold producers from the first half of the 20th century…as we learn more about Sekenke, we see this property as being a potential “company maker” for Currie Rose and we’ll be reporting more on that this week…CUI is currently at 23 cents, up 3.5 pennies after hitting a new 52-week high of 23.5 cents…CUI volume is over 2 million shares…Greencastle Resources (VGN, TSX-V) appears to be in the early stages of one of its infamous major moves…VGN spiked in late 2003, early 2006 and mid-2008 with higher highs in ’06 and ’08…Greencastle’s focus is shifting to Gold and the company’s current market cap of only $8.5 million is dirt cheap when you consider its Gold assets and potential new acquisitions along with its current cash position of $6 million…it also has monthly oil royalty revenue…Greencastle is currently up half a penny to 19 cents…GoldQuest Mining (GQC, TSX-V) is another one of our favorites with an outstanding portfolio of Gold properties in the Dominican Republic…we suggest investors check out John’s chart on GQC this morning as well as our Weekend in Review piece on GQC yesterday…GoldQuest is up 2 cents this morning to 26 cents…

GoldQuest Mining (GQC, TSX-V) is one of our favorites with an exceptional portfolio of Gold properties in the Dominican Republic where it has been active for a decade.  GQC also holds the Toral Project (zinc, lead, silver) in northwest Spain with a 43-101 resource estimate due on that deposit in the near future (the historical estimate is in excess of 5 million tonnes grading 9% zinc, 6% lead and 45 g/t Ag).  For more information regarding the fundamentals with this company, we suggest you read Part 2 of yesterday’s Week In Review which goes into some detail.  This morning, John examines the technical health of the stock after a recent pullback and loves what he sees:

John: On Friday, Goldquest Mining (GQC, TSX-V) opened at 22 cents, its low, then rose and closed at its high of 24 cents, up 2 pennies on CDNX volume of 343,000 shares.

Looking at the 6-month daily chart, we see that the bullish uptrend started at the beginning of September as the stock rose from a low of 11 cents to a high closing of 31 cents on Oct 8.  Then for a couple of weeks it retraced to 50% within a downsloping channel to bottom at 21 cents (the Fibonacci scale shown in blue horizontal lines cannot indicate 3 significant figures, so half- cent values cannot be shown).  This retracement to 50% is perfectly normal and has completely unwound the previous overbought condition forming a very solid foundation for another bullish move (green dotted line). Friday’s trading created a breakout above the downsloping channel and pushed the price up 24 cents which is resistance at the Fibonacci 61.8% level.  The next Fibonacci target is 40 cents as shown on the chart. The EMA(20) provides very close bullish support and the SMA(50) provides long-term support. The EMA(20) is flat and Friday’s move broke above this moving average so GQC is now trading above both moving averages with the SMA(50) pointing up – a very bullish scenario.

The volume over the last 2 days has doubled from that of the previous 2 days which is bullish. An increase in volume often precedes an increase in price. I fully expect to see a far greater increase in volume in the near future.

Looking at the indicators:

The RSI has completely unwound the recent overbought conditions and is pointing up at the 55% level with plenty of room to move higher before becoming overbought again – very bullish signal here.

The Slow Stochastics shows the %K (black line) at 18% has just crossed above the %D (red line) at 15% with both lines pointing up – very bullish.   The ADX trend indicator shows that during the retracement the +DI (green line) declined but did not cross down over the -DI (red line) which kept the uptrend in force.  Now the +DI is pointing up and the -DI is pointing down, showing a reversal has taken place. The ADX (black line) trend strength indicator is still pointing down at the 36 level but this is of no concern because the ADX line always lags the action of the +DI indicator. These indicators are in bullish orientation.

Outlook: Seldom does one see a situation as bullish as this one. The overbought is completely unwound and a reversal is in place.  All indicators and chart patterns are in bullish mode with an expected increase in volume. Everything points to a serious move up toward the Fibonacci target in the near future.