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Gold is up slightly this morning after another sharp fall yesterday that brought it down to a six-week low and a strong support area….as of 5:55 am Pacific, the yellow metal is ahead $3 an ounce to $1,678…Silver is 24 cents higher at $33.19…Crude Oil is up 41 cents at $105.1…Copper is unchanged at $3.73 while the U.S. Dollar Index is flat at 79.77…

We’re not concerned by the drop in Gold as this pullback has all the signatures of previous mild corrections, and there are powerful fundamental forces supporting this market…so this is a buying opportunity in Gold like many we’ve seen over the last several years… very strong support exists around the $1,670 area as John`s 6-month daily chart below indicates…

Equity markets got hammered yesterday as the Dow`s longest streak without a triple digit loss since 2006 came to an end…the Venture Exchange, meanwhile, plunged 51 points to 1605 but not on huge volume…the 100-point correction since February 29 works out to 6%, precisely within the range of the type of pullback (5-7%) that has to be expected on occasion as this bull market moves forward…this is the “pause that refreshes” and we expect March to finish on a much different note…the CDNX has fallen through a support band between 1625 and 1675, but with yesterday’s close of 1604 the Index is resting above other strong support…the 50 and 100-day moving averages are also advancing with the 100-day right around the Fibonacci support level of 1582…so the downside, in our view, is only another 20 or 30 points which would turn this into a 7% correction…have faith and embrace this dip for what it is – a mild and healthy correction within the context of a powerful bull market…

Below is a 2012 performance chart through yesterday which is highly encouraging as the Venture Exchange continues to out-perform both Gold and the TSX Gold Index…that’s always a bullish sign, and Copper’s strength is also important as it’s a barometer of course of the global economy…Silver is up nearly 15% for the year so far, a fantastic performance and a sign of things to come…

PDAC is wrapping up this afternoon, so this is an abbreviated version of Morning Musings as a result…a couple of quick notes…we’ve checked into a number of companies while we’ve been here, and we look forward to sharing some interesting information in the week ahead…over the next few days we’ll also be looking at the best immediate opportunities among the stocks on our “Strong Play”, “Watch” and “Sleeper” lists thanks to the gift of this mini-correction…

Gold continues to be under pressure…as of 6:05 am Pacific, the yellow metal is down $28 an ounce at $1,678…Silver is $1.08 lower at $32.92…Copper is off 6 pennies to $3.78…Crude Oil has slipped $1.12 to $105.60 while the U.S. Dollar Index is up nearly half a point at 79.77…

John’s updated Gold chart this morning shows solid support at $1,672…the recently overbought RSI(14) condition has unwound and potentially could drop further though a bullish “W” formation could also be in the works right now…the overall “big picture” is still very bullish for Gold and this drop needs to be viewed simply in the context of a normal and healthy retracement…

China Fears Overblown

Fears of a slowdown in China appear, after comments yesterday by Chinese premier Wen Jiabao, appear to have been overblown by the mainstream media in our view…investors focused on Jiabao’s “7.5%” GDP growth target for 2012 but government targets in China typically are very conservative so they can comfortably exceed them…Jiabao also stated, “Expanding domestic demand, particularly consumer demand, which is essential to ensuring China’s long-term, steady and robust economic development, is the focus of our economic work this year“…those are very bullish comments…here at PDAC, Patricia Mohr – vice-president and commodity market specialist at Scotiabank – believes China will have no problem engineering a “soft landing” and expects GDP to come in at a very robust 8.6% for 2012 and rise to 8.9% in 2013…stimulative measures should be helpful with inflation no longer the government’s major concern…expansion of China’s social housing program,  a roll-over of municipal debts and government-led infrastructure projects will all aid the Chinese economy in 2012…

Today’s Markets

North American markets will open lower this morning following weakness overnight in Asia and lower European markets today…the so-called “PDAC Curse” (the Venture Exchange traditionally drops around PDAC) is really a blessing as far as we’re concerned….March 2012 is not going to be a repeat of March 2011…the Venture Exchange is on a stronger technical footing and the primary trend is now up, not down…so this is an excellent time in our view to take advantage of some bargains that are popping up….John’s latest CDNX chart shows strong support at 1625…for now the Index is trading between its 50 and 200-day moving averages (not shown in the chart) which provides support just above 1600 (rising 50-day) and resistance at 1700 (declining 200-day)…

Miocene Metals (MII, TSX-V)

A company we’ve come across at PDAC that has caught our attention, as it’s drawing little interest at the moment, is Miocene Metals (MII, TSX-V) which has assembled an attractive 1,400 sq. kilometre land package (Cu, Au, Mo along the Cascade Magmatic Arc) in southwest British Columbia approximately 80 kilometres northwest of Pemberton…this belt of rocks has produced some giant deposits in Alaska and Washington State but no major discoveries have yet been made in the Canadian segment of the Cascade Arc even though the geology and subduction processes are the same on both sides of the border…Miocene was a spin-out of Wallbridge Mining (WM, TSX) last year and began trading on the Venture in August after raising $5 million in an IPO during a tough market at the time…that money was raised at 36 and 40 cents and yesterday the stock closed at 11 cents…(67 million shares outstanding)…it’s a sure candidate, we believe, to bounce back strongly by late spring or early summer…company geologists have made a strong case that the Copper-Gold mineralization discovered at the flagship Mackenzie Property (higher grade surface exposures) is possibly related to a buried porphyry system…MII has six additional properties along this belt (Rogers Creek and Salal are the other more advanced ones with significant surface exposures)…this is not a stock to chase at the moment but it’s worth keeping a close eye on with a view of perhaps building a position gradually prior to the start of drilling…as always, perform your own due diligence…

Gold is slightly weaker this morning but important support levels are still holding…as of 5:30 am Pacific, the yellow metal is off its low ($1,694) but down $7 an ounce at $1,704…physical buying typically becomes a factor during any periods of short-term technical weakness in Gold, and that trend is likely to come into play again as Chinese and Indian buyers in particular step up to the plate…investors purchased some 350,000 ounces of ETF held Gold (now 78 million+ ounces total holdings) on the worst trading day of the year last Wednesday which bodes well for the “big picture” outlook…Silver is down 30 cents to $34.43…Copper is 3 cents lower at $3.85…Crude Oil is relatively unchanged at $106.63 while the U.S. Dollar Index is down just over one-tenth of a point at 79.31…

Stock index futures as of 5:30 am Pacific are pointing toward a rather boring start to the week, at least at the open…

China To Stimulate Domestic Demand

China’s premier has warned that growth will slow this year in the world’s second-largest economy as the government seeks to overhaul the country’s “unbalanced, uncoordinated and unsustainable” development model…Wen Jiabao, who is scheduled to step down as premier during this year’s Chinese leadership transition, said the government had set a target for GDP growth this year of 7.5%, the first time since 2004 that the annual target has dropped below 8%…however, targets set by the government each year are usually very conservative, allowing them to be exceeded comfortably, but they are regarded as a useful indicator of Beijing’s economic intentions…as China gears up for a once-in-a-decade leadership transition later this year, when most of the ruling Communist party’s top officials will be replaced, the government has made structural reforms its #1 priority…“Expanding domestic demand, particularly consumer demand, which is essential to ensuring China’s long-term, steady and robust economic development, is the focus of our economic work this year,” Wen stated…that marked a distinct shift in emphasis from last year when the Chinese premier said curbing persistently high inflation was the key economic policy for 2011…this is market-bullish in our view and should help Gold as well…

PDAC In Toronto

It’s Day 2 at a busy and successful PDAC in Toronto…as an investor in the junior resource sector, if you’ve never attended the PDAC show we would highly recommend that you do as it is very educational…the gentleman below is one who would benefit greatly from time spent inside the Convention Centre as opposed to on the sidewalk across the street…

What can we say...it's a free country and no matter how wrong a person's opinion may be, this protestor outside PDAC Saturday was exercising his right of free speech.

Inside the Convention Centre, there are a multitude of seminars and workshops in addition of course to company booths and special gatherings where investors can hook up with management…it is indeed the world’s premier event for people, companies and organizations connected with mineral exploration…nearly 30,000 attendees from over 100 countries are expected during the four days…

There is no shortage of publicly-traded companies and industry-related companies and organizations to check out at PDAC 2012 with a total of about 1,000 exhibitors.

The “Core Shack” is always an interesting place to hang out and below is a picture of the very high-grade Gold that Manitou Gold (MTU, TSX-V) intersected at its Kenwest Property early last year, which reminded us that MTU in the low 40’s is looking quite attractive as it continues to develop Kenwest and the Gaffney Extension…

This core sample is from hole KW-11-26 that Manitou reported almost exactly a year ago (1,566 ounces per tonne over 0.55 metres near-surface) at the company's Kenwest Property near Kenora in northwestern Ontario.

Newsletter Writers Speak Out

Below are comments from various newsletter writers/analysts yesterday at PDAC on the state of the markets:

John Kaiser (www.Kaiserbottomfish.com)

“Silver is becoming revived again as an asset class…it had become an industrial metal but at current prices it’s going to shift out of its industrial uses and be accumulated…so I see something like a $40 to $60 range as the new norm for Silver.”

Jeb Handwerger (www.goldstocktrades.com)

“The risk-on rally began in early October due to record breaking stimulative measures, measures from the ECB, China, the U.S. and Japan…it’s very hard to fight the Federal Reserve which is constantly pushing money into the system…this run into cash and treasuries, this irrational run in 2011, was really a very dangerous move and there are a lot of investors still on the sidelines, a lot of capital that’s going to come back into the market…we’re seeing that in one sector that I’m really excited about, the uranium sector.”

Lawrence Roulston (www.resourceopportunities.com)

“The key point right now is that we haven’t had a big run-up in the markets…when the market pulls back in May, it’s after there has been a run-up…if it does run between now and May, lock in some profits in May…but if it just kind of goes sideways like this, focus on building positions in high quality select companies…and then look for news to keep driving the markets.”

Greg McCoach (www.miningspeculator.com)

“Have confidence in your investments…get ready because the precious metals mining stocks, because of QE3, are about ready to run to their next new highs…we’re going to have a big, big run here…take your positions now…as we have a good profitable run, make sure you take some profits”…

“In my opinion, governments and their central banks can’t prevent what’s coming…they cannot stop what’s coming…all they can do at this point, all they have in their political and financial tool bag, is their QE to infinity, like Jim Sinclair talks about, lying, deceiving and criminal behavior…so that’s basically what you’re going to see…that’s all they can use as tools…

“Let’s just take this past Wednesday…we had a criminal event that just took place…the media makes Mr. Bernanke look like he’s some God…I call him Ben ‘The Deceiver’ Bernanke…he used this testimony before Congress as a platform…it was an orchestrated event in my opinion to knock Gold and Silver down which has very little effect…this to me shows you that Gold and Silver prices are getting ready to really rock ‘n roll…and our junior mining stocks, when you see QE3 unfolding as it has already started to, this is making QE1 and QE2 look like child’s play…we are going to see a big bull run I think in our junior mining shares again as precious metals prices reach new highs”…

Rainbow Resources (RBW, TSX-V)

As we mentioned Friday, Rainbow Resources’ (RBW, TSX-V) chart is looking phenomenal and we believe that speaks to the potential of this situation which should become much more apparent in the coming days and weeks as President David Johnston has promised steady news flow…Rainbow, like quite a few other companies during PDAC, will be holding an “event” tomorrow night at a popular Bay Street restaurant…below is John’s latest RBW chart which shows a potential near-term Fibonacci level of 37 cents…that’s not a price target, just a theoretical level based on technical analysis that RBW could attain over the near-term…RSI has unwound somewhat, and a bullish ascending triangle has formed…

Note: John and Jon both hold positions in RBW (Terry does not).

RJK Explorations (RJX.A, TSX-V)

A company on one of our “Watch” lists that we’re keeping a close eye on is RJK Explorations (RJX.A, TSX-V) which has started a 2000-metre Phase 1 drill program at its Blackwater East Gold Property in central British Columbia…this property is contiguous to New Gold Inc.’s (NGD, TSX) Blackwater-Davidson multi-million ounce Gold deposit…RJK has been strong recently and closed Friday at 21 cents, just a penny below resistance as John outlines in the chart below…waiting for a pullback of a few pennies probably makes sense as RJK is likely not ready just yet for a major breakout, though that scenario could unfold after an unwinding of the current overbought condition…

Note: John, Jon and Terry do not hold positions in RJX.A.

Golden Predator (GPD, TSX)

Golden Predator (GPD, TSX), with a strong presence in the Yukon, is a company we expect to perform very well in 2012…GPD announced a $17 million financing last week though we are disappointed most of the those dollars being raised are from flow-through shares…nonetheless, GPD will be well-positioned financially to advance its flagship Brewery Creek Project…below is John’s chart update on GPD…

Note: John, Jon and Terry do not hold positions in GPD.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than two years and strictly through word-of-mouth we have built a loyal following. 

We’re continuing with our plans to ultimately build a very unique investment and money-management resource site that goes considerably beyond what we have now.  While we focus very much on the Gold and Silver markets and trends in the global economy, and of course the technical health of the TSX Venture Exchange (CDNX), an important component of this site will always be original research on undiscovered junior exploration companies or small producers, mostly in the Gold and Silver exploration space, that offer very real and significant upside potential. We are extremely selective in the companies we feature and put forward to investors – we prefer quality over quantity.  However, investors must understand that these are still highly speculative situations and entail considerable risk, volatility and unpredictability.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. Always perform your own due diligence and please read our disclaimer at the bottom.

We use a combination of fundamental and technical factors in determining the value and potential of a stock.  In terms of fundamentals we look for a company with a superb project supported by strong management.  Management must possess integrity, solid ethics and a determination to succeed and build shareholder value.

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Gold has traded between $1,704 and $1,723 overnight…as of 6:00 am Pacific, the yellow metal is off $5 an ounce at $1,713…silver is 61 cents lower at $34.90…Copper is off a penny at $3.89…Crude Oil is down 77 cents at $108.77 a barrel while the U.S. Dollar Index is up more than half a point at 79.32…

We`re off to Toronto and PDAC this morning, so hence an abbreviated edition of Morning Musings but we have plenty in store for Monday on several fronts…

Stock index futures are pointing toward a slightly negative open on Wall Street…Asian markets did well today with China`s Shanghai Index gaining 35 points or 1.43% to close at 2461…

John has technical updates on three situations this morning – Cap-Ev Ventures (CEV, TSX-V), Wildcat Silver (WS, TSX) and Corvus Gold (KOR, TSX)…

Cap-Ex Ventures (CEV, TSX-V)

CEV has good strength at the moment and closed up 3 pennies yesterday at $1.15.  Below is John`s chart update on this exciting iron ore play.

Wildcat Silver (WS, TSX)

It has been a solid week so far for Wildcat Silver – up 25 cents to $2.16…the stock has now broken above a pennant as John shows in the chart below.

Corvus Gold (KOR, TSX)

Corvus came out with more encouraging news this week on its North Bullfrog Project in Nevada, and the stock is up about 15% for the week after closing yesterday at 95 cents.  KOR has broken through a resistance band, and the next major resistance is around the $1.20 level as John shows below in this 2.5-year weekly chart update.  Note the change in buying pressure that started in late January.

Note: John, Jon and Terry do not hold positions in CEV, WS or KOR.

Gold is trying to get back to business as usual after yesterday’s sharp fall…as of 6:10 am Pacific, the yellow metal is up $12 an ounce at $1,709…throughout this decade-long bull market in Gold, sudden and dramatic moves to the downside like yesterday have always been buying opportunities and we have a chart to prove it…this time should be no different…the action in the Venture Exchange yesterday was particularly encouraging as the CDNX largely shrugged off the $90 drop in Gold by falling only 21 points to 1672…the CDNX, a reliable leading indicator, has been out-performing Gold this year (and generally in recent months) and that’s a very positive sign (when it’s the other way around, like we saw beginning in March of last year, that’s when we need to be concerned)…below is a chart showing how the CDNX, the TSX Gold Index, Gold, Silver, Copper, and the U.S. Dollar Index all performed during the first two months of this year…Silver, Copper and the CDNX led the way…

Now as far as Gold is concerned, we asked John to update the chart after yesterday’s plunge and what you’ll notice is that Gold has been strongly supported by the weekly SMA(40)…there is no reason to believe this won’t continue…

Comments by Federal Reserve Chairman Ben Bernanke yesterday on the opening day of his Congressional testimony (he speaks again this morning before the Senate Banking Committee) were the main factor in driving Gold down yesterday as the market interpreted that he was questioning the appropriateness of more aggressive easing through “QE3″…the fact, remains, however, that the Fed intends to keep rates low for a long time and that’s a very bullish scenario for Gold which always perform well in that kind of monetary environment…on top of that, the world as a whole has been flooded with liquidity from central banks in recent months…the bullish case for Gold doesn’t cease just because of a one-day plunge or even if it were to fall some more…this market has very strong overall technical and fundamental underpinnings…

The Venture Exchange found support at its 20-day moving average (SMA) yesterday…we’re expecting a strong month of March which means a breakout through the 1700 resistance area…support is solid from 1600 and higher with the rising 50 and 100-day moving averages just below 1600 at the moment…

Stock index futures as of 6:10 am Pacific are pointing toward a positive open on Wall Street…Silver is up 20 cents an ounce at $34.84…Copper has gained a nickel to $3.89…Crude Oil is 30 cents higher at $107.37 while the U.S. Dollar Index is flat at 78.84…

This is a slightly abbreviated edition of Morning Musings today as we prepare for PDAC in Toronto which means leaving tomorrow from Vancouver…this show should be busier than ever and we look forward to updating our readers on several important and exciting stories…we’re expecting major fireworks this month out of Rainbow Resources (RBW, TSX-V) as the company has signaled to the market that a period of strong news flow is imminent…we suspect that includes release of the 43-101 compliant report on the company’s Big Strike Project in the Kootenays…if the assessment report on the International Property that one of our readers discovered on the B.C. Energy and Mines web site is any indication, Rainbow is going to have a terrific story to tell…RBW’s market cap is still only a very modest $9 million…

In response to an inquiry from one of our readers, below is a chart from John on Triausmin (TOR, TSX)…the stock has broken out from an ascending triangle…it closed yesterday at 16 cents and from a technical perspective has a good chance this month of testing resistance at 22 cents…

Note: John, Jon and Terry do not positions in TOR.