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Gold continues to trade in a narrow range…as of 5:15 am Pacific, the yellow metal is off $2 an ounce at $1,611…Silver has dropped 16 cents to $27.88…Copper is down a penny at $3.40…Crude Oil is up 20 cents at $93.55 while the U.S. Dollar Index has climbed one-third of a point to 82.63…

Gartman Predicts Gold Will Break Out To The Upside

“The range in which Gold is trading is growing ever tighter – the lows are higher and the highs are lower”, commodities trader Dennis Gartman told CNBC yesterday…in other words, the bulls and the bears are closing in on one another and an important final battle is imminent…“Ultimately I think bulls win,” said Gartman…“I think Gold will break out to the upside”…

Kinross Reports Earnings, Takes Aim At Cutting Costs

On the heels of major cost escalation in the Gold sector, Canada’s third-largest Gold miner (Kinross Gold, K-TSX) said last night it’s launching a sweeping cost-cutting campaign to improve its cash flow…the announcement comes after a warning last week by Barrick Gold Corp (ABX, TSX) that a key mine it’s building in Chile will cost billions of dollars more than originally projected…new Kinross CEO J. Paul Rollinson stated, “Given rising costs, I believe we need to get back to the fundamentals of our business…to that end, I am launching a company-wide cost reduction initiative aimed at improving capital efficiency, reducing costs and increasing margins…this may require tough decisions in a number of areas to ensure that we maximize free cash flow and shareholder returns”…Kinross has reported adjusted net earnings of $156 million of 14 cents per share for the second quarter of 2012 vs. $222.6 million or 20 cents per share for the same period last year…as a result of the company’s disposition of its 50% interest in Crixas, it now expects to produce approximately 2.5 million to 2.6 million Gold equivalent ounces in 2012 from its continuing operations, compared with its previous forecast of 2.6 million to 2.8 million Gold equivalent ounces…cost of sales for 2012 is now forecast to be $690 to $725 per ounce, compared with the previous forecast of $670 to $715, due to higher forecast production cost of sales per ounce in west Africa and South America…

China Data Fuels More Stimulus Hopes

Data released today by the world’s second-largest economy showed the slowdown that’s been underway since late last year hasn’t reversed just yet…China’s Shanghai Composite finished up 0.6% overnight after data showed inflation fell to a 30-month low while industrial output and retail sales both slowed in July…markets are cheering the fact that a decline in inflation to 1.8% gives Beijing more room to use both fiscal and monetary tools to prop up growth…since the start of June, the central bank has cut interest rates twice, state planning officials have accelerated approvals for investment projects, and a series of local governments have announced large spending plans…most analysts anticipate these measures will spur a recovery, and are expecting stabilization by next month and a more pronounced upturn in the fourth quarter…but the strength of this recovery is expected to be much milder than the rebound China experienced in 2009 when the government pushed through a nearly $600 billion stimulus program…that spending binge ultimately created stubbornly high inflation and a surge in local government debts, so Beijing has been much more reluctant to launch a similarly big stimulus this time…

Potential For Food Crisis Grows

The world could face a new food crisis of the kind seen in 2007-08 if countries resort to export bans, the UN’s food agency warned today, after reporting a surge in global food prices due to a drought-fueled grain price rally…a mix of high oil prices, growing use of biofuels, bad weather, restrictive export policies and soaring grain futures markets pushed up prices of food in 2007-08, sparking violent protests in countries including Egypt, Cameroon and Haiti…concern about extreme hot and dry weather in the U.S. Midwest sent corn and soybean prices to record highs last month, driving overall food prices higher again and reversing the Food and Agriculture Organization’s expectations for steady declines this year…

Today’s Markets

Asian markets were strong overnight with China’s Shanghai Composite gaining 13 points to 2171…European shares are off slightly this morning while stock index futures in New York as of 5:15 am Pacific are pointing toward a flat to slightly negative open on Wall Street…the Venture Exchange closed at 1186 yesterday, right at its 10 and 20-day moving averages…

Osisko Mining (OSK, TSX)

Osisko Mining (OSK, TSX-V) has rebounded strongly over the last couple of months, and yesterday the company reported record monthly Gold production of 37,780 ounces from its Canadian Malartic Mine in northwest Quebec…the average grade milled was 1.02 g/t Au while average recovery was 88.6%…Sean Roosen, president and chief executive officer of Osisko, commented, “We are now beginning to see significant improvement in daily throughput and Gold production from the Canadian Malartic mill…in the month of July, Canadian Malartic achieved another Gold production record of 37,780 ounces…with the now-completed precrushing circuit and the coming installation of the second pebble crusher in early fourth quarter, we will be focused on plant optimization and cost reduction…since we started production last year, Canadian Malartic has now produced well over 400,000 ounces of Gold during this ramp-up phase”…after falling briefly below $6.50 per share in May, OSK is approaching the $10 level again after gaining exactly $1 per share to $9.69 over the last three trading sessions…below is a 4-year monthly OSK chart from John…

Rainbow Resources (RBW, TSX-V) Chart Update

Rainbow Resources (RBW, TSX-V) continues to look very strong, with the half penny drop yesterday healthy from a technical point of view…selling into a normal minor pullback (on lower volume) like yesterday, when the primary trend is up, is a mistake many traders make with a stock in general…RBW is expected to start drilling at its International Silver Property within the next few days, and anything can happen once that drill starts turning – especially in this case when Rainbow is taking direct aim at a very promising high-grade, near-surface structure…below is a 6-month daily chart from John that shows continued strong “up” momentum and a pronounced trend…the 50, 200 and 300-day moving averages (not shown in this chart) are all in bullish alignment…

Canamex Resources (CSQ, TSX-V)

Canamex Resources (CSQ, TSX-V) reported a terrific drill result from its Bruner Property in Nevada July 18 (4.08 g/t Au over 118.1 metres) with the stock climbing as high as 44 cents from the 10-cent level on huge volume…it pulled back, as we had anticipated, into the mid-20’s to cleanse an overbought condition…it has regained strength over the last week or so, and the company has also announced a fully subscribed private placement for $2.7 million at 27 cents…below is an updated CSQ chart from John that shows a bullish consolidation pennant – this one definitely needs to be watched closely in the weeks ahead…

Note: John and Jon both hold share positions in RBW.  John, Jon and Terry do not hold positions in OSK or CSQ.

Gold has traded in a tight range between $1,603 and $1,612 so far today…as of 5:40 am Pacific, the yellow metal is down $5 an ounce at $1,607…Silver is 24 cents lower at $27.86…Copper is off 2 pennies at $3.41…Crude Oil has retreated 29 cents at $93.38 while the U.S. Dollar Index is up over one-tenth of a point at 82.50…

Since late 2010, Gold stocks have been significantly under-performing Gold though stocks have recently started to play “catch-up” – it’ll be interesting to see if this trend accelerates through the remainder of this quarter…

Today’s Markets

Asian markets were mostly higher overnight with China’s Shanghai Composite inching up 3 more points to 2160…European shares are modestly lower this morning while stock index futures in New York as of 5:45 am Pacific are pointing toward a slightly lower open on Wall Street after a three-day rally that has pushed the Dow up 300 points…the Venture Exchange closed yesterday at 1191, a 4-point gain, on increased volume…a move through the 1200 level would confirm the start of a new uptrend…

Strength In Commodities

Two currencies that are showing underlying strength in commodities are the Canadian and Australian Dollars, which ultimately is a bullish sign for the Venture Exchange…the Leaping Loonie has surged more than 4 pennies since bottoming out just below 96 cents at the end of May…it’s trading this morning just slightly above par at 1.0028…the overall uptrend in both these currencies has been very pronounced over the last couple of months and should continue…below is a chart from John that compares the relationship between the Canadian and U.S. Dollars (blue line) and the Australian Dollar and the Japanese Yen (black line)…

Euro

Another important currency to watch these days, of course, is the euro…a trend reversal appears to have occurred in the euro which should be bullish for Gold and the equity markets in general…below is a 2.5-year weekly chart update for the euro which has plenty of upside potential from current levels, part of which could be fueled by a short squeeze (the shorts could get burned in a hurry, given this chart, if they’re not careful)…

Slew Of Chinese Economic Data Tomorrow

Markets will be combing through a slew of data that China is releasing tomorrow including the consumer price inde x, fixed asset investment, retail and industrial production…meanwhile, the Wall Street Journal reported recently that China has quietly increased its budget for railway investment this year by 16%, according to data from the Ministry of Railways…in its latest bond prospectus published on Chinabond, an official website for debt issues, the railway ministry said it plans to spend 470 billion yuan ($73 billion) on infrastructure investment this year, up from the 406 billion yuan stated in the previous prospectus…spending on railway infrastructure in the second quarter slipped to 7.6% year-on-year, down from 8.1% in the first quarter, for its slowest pace in more than three years…data from the railway ministry showed that it spent 148.7 billion yuan on infrastructure investment in the first half of 2012, down 39% from a year earlier…

Bank of England Cuts Growth, Inflation Forecasts

The Bank of England this morning cut its forecasts for growth and inflation in the U.K. economy, giving investors a signal it could inject further stimulus in the coming months…the U.K.’s central bank said in its quarterly inflation report that the damaging economic effects from the financial crisis could persist longer than previously thought, while inflation is likely to fall below target from mid-2013 and remain there for two years…the central bank said the biggest risk to any recovery comes from the euro zone, and specifically the danger that leaders will delay in resolving their long-running fiscal crisis…the new forecasts come after BOE rate setters voted in July to pump an additional 50 billion pounds ($78.1 billion) into the economy through asset purchases with newly created funds, raising the ceiling of its quantitative easing program to nearly $600 billion…

Everton Resources (EVR, TSX-V) Chart Update

Not surprisingly, Everton Resources (EVR, TSX-V) finally broke through resistance at 10 cents yesterday and closed the day up 2.5 cents at 12.5 cents on total volume (all exchanges) of 1.7 million…the case for Everton is strong given the big jump in interest in the Dominican Republic due to GoldQuest Mining’s (GQC, TSX-V) Romero discovery…the Law of Supply and Demand is at work here as most of the prime exploration land in the DR is held by just three juniors – GoldQuest, Unigold (UGD, TSX-V) and Everton…GoldQuest and Unigold are much further along, of course, but Everton at a dime is simply too good to pass up…part 2 of our interview with EVR President and CEO Andre Audet will be posted later this week…in the meantime, below is an updated EVR chart from John after yesterday’s jump…

Note: Both John and Jon hold share positions in EVR.

Both Gold and Silver continue to look solid…as of 4:55 am Pacific, Gold is up $2 an ounce at $1,614…Silver has added 4 cents to $27.92…Copper is up 4 pennies to $3.43…Crude Oil, after a powerful move Friday, had added another 40 cents and is now at $92.60 while the U.S. Dollar Index is off one-fifth of a point at 82.13…the greenback bulls are fading as the Dollar Index hit a fresh four-week low this morning…

Gold is entering a period of seasonal strength, and the anticipation of action by the Federal Reserve and the ECB by September should underpin prices and allow for a breakout in the coming weeks through resistance between $1,620 and $1,640 an ounce…central banks continue to accumulate…last Wednesday, the South Korean central bank announced it had purchased 16 metric tonnes of Gold in July, the third in an an acquisition program for the country’s still small foreign exchange reserves…on Friday, Turkey reported July Gold imports of 35 tonnes, the third highest on record and 46% above June (much of this Gold is thought to be headed for Iran, whatever that means)…and over the weekend, Hong Kong reported June was another month of heavy net shipments of Gold to China…while shipments in June fell 10% from May, it was well above the year-ago level…in a note, Commerzbank said:  “In the first half year, China thus imported 382.79 tons of Gold from Hong Kong, following a figure of 64.95 tons in the same period last year”…

Today’s Markets

Canadian markets re-open after yesterday’s holiday with the Venture Exchange poised, in our view, for an important breakout this week as explained in our Saturday report (Week In Review And A Look Ahead)…overseas, Asian markets were higher overnight with China’s Shanghai Composite gaining another 3 points to finish at 2158, its highest close since July 20…the SSEC has bounced up from rock-solid support and has the potential of rallying strongly in the coming weeks (positive for the Venture as these two markets, for whatever reason, have similar trading patterns)…below is an updated 4-year weekly Shanghai Stock Exchange chart from John…

European shares are mostly slightly in the green this morning while stock index futures in New York are pointing toward a positive open on Wall Street after the Dow finished at a three-month high of 13,118 yesterday…

Rainbow Resources (RBW, TSX-V)

It’s shaping up to be a big week for Rainbow Resources (RBW, TSX-V) with drilling expected to commence at the company’s International Property near the historical silver mining community of Kaslo in southeast British Columbia…last night, we spoke briefly with President David W. Johnston who has arrived in Vancouver for a major interview after spending the weekend at the property where pre-drilling activity is apparently proceeding at a feverish pace…BMR will be attempting to corner him for a short interview later today…

Everton Resources (EVR, TSX-V)

Part 1 our interview with Everton Resources‘ (EVR, TSX-V) President and CEO Andre Audet was posted earlier this morning…the simple law of supply and demand tells us Everton should perform well over the second half of the year…many new eyes are now focused on the mineralization-rich Dominican Republic, and dominant land positions are held by only three juniors – GoldQuest Mining (GQC, TSX-V), Unigold Inc. (UGD, TSX-V) and Everton (EVR, TSX-V)…market caps for GoldQuest and Unigold have soared beyond $100 million each (GQC’s Romero discovery could ultimately send its market cap significantly higher) while EVR’s market cap is still a modest $10.6 million…we suspect Everton will cut a deal, potentially with a major, for further exploration of its APV Property contiguous to the Barrick-Goldcorp Pueblo-Viejo Project…EVR holds the maximum allowable land position in the DR of 30,000 hectares, all of it in the immediate vicinity of Pueblo-Viejo which is one of the world’s largest Gold deposits…below is 2.5-year weekly EVR chart from John that shows the stock likely recently bottomed out a nickel after a long decline that started in the spring of last year…volume picked up considerably last week…chart resistance at 10 cents should be relatively minor, after last week’s activity, with the next major resistance at the declining 300-day moving average (SMA) around 15 cents…

John has charts this morning on three other interesting situations…

Corvus Gold (KOR, TSX)

Corvus Gold (KOR, TSX) has been a solid play this year as it continues to make progress at its North Bullfrog Gold Property in Nevada…the stock broke through the $1 level last Friday for the second time this year, closing at $1.09 which is just 14 cents below the 52-week high…as John’s chart shows, KOR – while very promising – is now up against a resistance band and requires higher volume to break out…we’ll see what happens this week…we’ve been tracking KOR since February when it was trading in the 75 to 85 cent range…

Comstock Metals (CSL, TSX-V)

Comstock Metals (CSL, TSX-V) enjoyed a banner week last week as it gained 76% on strong volume following release of impressive trenching results from its QV Project in the heart of the White Gold District in the Yukon…the company has also just closed the second tranche of a financing (20 cents per flow-through share, 15 cents per NFT share)…some consolidation is now likely as RSI(2) appears to have peaked at 96%…waiting for a pullback, rather than chasing this around 30 cents, seems to make sense…

Strategic Metals Ltd. (SMD, TSX-V)…

If Spain is looking for a bailout, all it needs to do is call up Strategic Metals (SMD, TSX-V)…the company came out with news Friday regarding the sale of royalty interests that will add (assuming everything goes through) another $36 million to its already strong treasury that showed $75 million in cash and marketable securities as of March 31…the stock closed Friday at 81 cents for a total market cap of $73 million…SMD has a strong presence in the Yukon and the risk-reward ratio at current levels, for patient investors, appears to be quite attractive given the company’s cash position and exploration opportunities…the stock price has taken a bit of beating this year but as the saying goes, buy low and sell high…

Note: John, Jon and Terry do not hold positions in Corvus Gold, Comstock Metals or Strategic Metals.  John and Jon both hold share positions in Rainbow Resources and Everton Resources.

Everton Resources (EVR, TSX-V) is on the rebound after a long decline from a high of 45 cents in April, 2011, thanks to the major Gold-copper discovery in the Dominican Republic recently by GoldQuest Mining (GQC, TSX-V).  The DR is suddenly a very hot address again, and Everton’s nearly-completed compilation work from a decade of exploration there should pay big dividends as the company looks at ways to re-launch drilling on it promising land package next to the Barrick-Goldcorp Pueblo-Viejo Project.

Everton inched up slightly last week on increased volume to close Friday at 9.5 cents (John will have an updated chart as part of today’s Morning Musings).  Click on the link below to listen to Part 1 of Jon’s recent discussion (10 minute interview) with Everton’s President and CEO, Andre Audet.

BMR Interview with Andre Audet (EVR) – Aug. 7, Part 1 of 2

Note: No compensation was paid by EVR for this interview in accordance with BMR policy.  Please read our disclaimer.  As always, perform your own due diligence.  Our stock coverage is for informational and entertainment purposes only and must NOT be viewed or interpreted as “buy”, “sell” or “hold” recommendations.  Both John and Jon hold positions in EVR (Terry does not).

Welcome to our site, or at least the initial version of it!  BMR has been online for nearly three 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 a great deal 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. We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. 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.

At BullMarketRun (BMR) we approach the handling of money from a biblical perspective and this is an important topic we will be sharing with our readers (and listeners) as the site continues to develop. The Bible teaches so much about money and how to handle it and invest it –  there are literally thousands of verses on how we should handle the money and possessions that God entrusts us with.  By examining the life of Jesus and reading the Word of God, we can all become fully equipped to be successful investors and handle money wisely.  If it’s the other way around –  if you’re a slave to money by being in debt for instance, or if you don’t respect the value of money and spend it foolishly –  you’re in trouble and you’ll never be blessed financially.  We have a God who thinks big – He created the universe – and He wants us to think big  in every area of our lives.  When we handle money from a Biblical perpective (His money that we have been given stewardship of) He will bless our financial decisions and an increase of tenfold or a hundredfold is always possible.  This all begins, of course, with a personal relationship with Jesus Christ by accepting Him as your Lord and Savior and putting Him at the throne of your life.  It is the most important decision you’ll ever make.

God Bless,

Terry Dyer

Owner/Publisher, www.BullMarketRun.com

Disclaimer:

BullMarketRun.com (BMR) is completely independent from any companies it covers.  BMR accepts no compensation of any kind from any groups, individuals or corporations for coverage of any company mentioned on this site.  We accept no advertising either.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. No investment opinion or other advice is being rendered on any stock or company. We strongly recommend that you consult with a qualified investment adviser, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research before making any investment decisions. The stocks we cover, by definition, are highly speculative and potentially very volatile. Investors are cautioned that they may lose all or a portion of their investment if they make a purchase or short sale in these speculative stocks.  We are not Registered Securities Advisers. Our opinions can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Adviser operating in accordance with the appropriate regulations in your area of jurisdiction. It should be assumed that BMR personnel, writers and their associates may hold or dispose of or trade in positions in any securities mentioned herein at any time.  Owner/Publisher of BullMarketRun.com is Terry Dyer of Langley, British Columbia.

Forward Looking Statements:

All statements in BMR’s reports, other than statements of historical fact, may be forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.

TSX Venture Exchange and Gold & Silver

Over the last 30 sessions, going back to June 22, the Venture Exchange has traded in a narrow range between a low of 1154 and a high of 1242.  The EMA-20, currently at 1189, has provided stiff resistance for several months since the downtrend started in March.  All things considered, including the anticipation of major moves by both the ECB and the Federal Reserve by September, the Venture appears ready to finally bust out of this downtrend as early as next week.

Below is an updated CDNX chart from John that makes the technical case for a near-term turnaround as the Index continues to gather internal strength.  There are several indicators of importance – the Bollinger Band squeeze, RSI(14), increased buying pressure since late July, and a general weakening of the bearish trend.  The Venture has been “crawling along a bottom” for well over a month which has been an ideal time to accumulate positions in quality situations for what could turn into a very strong move in the coming weeks.  Several companies have also been reporting excellent exploration results, and more should be expected which will add fresh fuel to the market.  Historically, the CDNX has shown the tendency to suddenly reverse violently in one direction or the other.  With sentiment having been so negative since the spring, the conditions are ideal for such an event to the upside very soon that could surprise many investors.

The CDNX gained 13 points Friday on increased volume – impressive going into a holiday long weekend – and finished the week down 4 points at 1187, just two points below the EMA-20 resistance.

While Friday’s U.S. jobs data was better than expected in terms of the number of new jobs created (163,000 in July vs. an expected 100,000), the report wasn’t strong enough to dramatically alter the Federal Reserve’s view that the economy is growing too slowly to register meaningful improvement in the unemployment rate (in fact, the unemployment rate actually rose one-tenth of a point in July to 8.3%).   That rate hasn’t come down since the beginning of the year, keeping it well above almost any definition of maximum sustainable employment, which is half the mandate Congress has given the central bank. That leaves the door open to new moves by the Fed to help the economy.

Meanwhile, the European Central Bank seems determined to step in aggressively to ease the euro zone debt crisis.  The market didn’t get all the immediate action it was hoping for Thursday from ECB President Mario Draghi, but the direction the central bank is going seems quite clear.  That’s bullish for stocks and commodities and should help foster a “risk-on” environment, at least going into the end of this third quarter.

Gold

As you can see in John’s chart below, Gold’s drop Wednesday and Thursday was very normal from a technical perspective as bullion simply tested support at the neckline.  Resistance is currently between $1,620 and $1,640 an ounce which we expect Gold will overcome within the next few weeks.  The yellow metal was off $20 for the week, closing Friday at $1,604.

Central bank buying of Gold continues to be a strong theme.  This past week, the Bank of Korea, which has the world’s seventh biggest foreign exchange reserves, announced it had purchased 16 metric tons of Gold last month, increasing reserves to 70.4 tons. Central banks and the International Monetary Fund (IMF) are the largest bullion owners with 29,500 tons at the end of last year, or 17% of all mined metal, World Gold Council data shows.  Central banks have been net buyers for two straight years, the Council said.  Purchases this year will probably exceed the 456 tons added in 2011, the Council estimates.

Silver bounced around but finished the week essentially unchanged at $27.79.  Copper fell 6 cents to $3.37.  Crude Oil, after a big jump Friday, closed the week up 27 cents at $91.40 while the U.S. Dollar Index full a full point Friday and closed the week down one-third of a point at 82.31. The Dollar Index appears to have put in at least a temporary high around 84 which is bullish for commodities and the Venture Exchange.

Looking ahead to the coming week, performance bonds needed to trade Silver and the platinum group metals will be lowered, the CME Group said late Thursday.  That may help to attract more activity to those markets as the lower performance bonds, also known as margins, means traders need to put up less money for collateral in order to trade those markets.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, Gold is being 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, is having a huge impact on Gold.

The fundamental case for Gold remains incredibly strong – currency instability and an overall lack of confidence in fiat currencies, governments and world leaders in general, an environment of historically low interest rates and negative real interest rates that won’t end anytime soon (inflation is greater than the nominal interest rate even in parts of the world where rates are increasing), money supply growth, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, investment demand, emerging market growth, geopolitical unrest and conflicts, and inflation concerns…the list goes on.  Massive central bank intervention appears increasingly likely to prevent a breakup of the euro zone and to kick-start the global economy.  It’s hard to imagine Gold not performing well in this environment.

As John’s chart showed yesterday, the Venture Exchange is showing clear signs of a pending turnaround – we’re convinced now that next week the CDNX will finally push through its EMA-20 which has provided key resistance during the downtrend that started in March.  Gold and Silver are looking technically strong as well.

At BMR, we’ve been following several “hot” situations recently including of course GoldQuest Mining (GQC, TSX-V) which is looking better than ever (we’ve been covering this story aggressively since Day 1) after a “monster” hole (LTP-93) was reported Monday (258 metres grading 4.5 g/t Au and 1.3% Cu).  GQC’s Romero discovery in the Dominican Republic is still in the very early stages, but this stock is a “keeper” in our view given the early indications of a potential world class deposit.  The fact Dundee Securities jumped all over a financing immediately after the release of last Monday’s results is a very bullish sign.  Dundee has some excellent mining analysts and they’re seldom wrong in these situations.

The mineralization-rich DR is getting more attention than ever now, so, as we’ve been mentioning, it’s also an excellent time to be looking at the only other juniors in this mining-friendly jurisdiction – Unigold Inc. (UGD) and Everton Resources (EVR, TSX-V).    UGD gained 29% last week, closing Friday at 49 cents, while Everton inched up to close the week at 9.5 cents.  Recently, we interviewed EVR President and CEO Andre Audet and we’ll be posting that interview as soon as possible.  UGD is getting very encouraging drill results from its Candelones Project approximately 40 kilometres north of GQC’s Romero discovery, while Everton is looking to joint-venture its promising land package contiguous to the massive Barrick-Goldcorp Pueblo-Viejo deposit where mining operations are expected to commence this month.

In British Columbia, Rainbow Resources (RBW, TSX-V) has mobilized a drill rig to its International Silver Property in the West Kootenays.  Drilling is expected to start by the end of next week, and initial shallow holes will be testing for high-grade mineralization along an exposed structure.  Rainbow has some fabulous targets to drill, and several years of work has gone into pinpointing the best locations for the first-ever holes drilled at this promising property.  Yes, there are never any guarantees in this business and this is a speculative play just like GoldQuest was (and still is).    But based on all the historical information known about this property, several geological reports over the last few years, Braveheart’s work starting in 2007 which was followed up by Rainbow beginning last year when it took over the private company, and our own site visit which included conversations with geologists and prospectors, we believe the odds of a discovery at the International are unusually high.  It seems investors are starting to catch on to that with RBW closing above important resistance at 20 cents this past week.  There aren’t many companies on the Venture with a chart so favorable as Rainbow’s, and we believe those bullish technicals are reflecting underlying confidence in the prospects for this very active young company.

The last company we aggressively followed with properties in British Columbia was Richfield Ventures which became a 10-bagger for some of our readers after a major Gold-silver discovery in the Blackwater district in the central part of the province.  Richfield was taken out by New Gold Inc. last year at around $10 a share.

Below are chart updates for GoldQuest, Unigold and Rainbow.  There are of course other opportunities we’re looking at (Comstock Metals – CSL, TSX-V – had a very good week), and we’ll be reviewing them in the coming days.

GoldQuest Mining (GQC, TSX-V)

Unigold Inc. (UGD, TSX-V)

Rainbow Resources (RBW, TSX-V)

Note: Both John and Jon hold share positions in RBW with Jon increasing his position yesterday.  Jon also holds a share position in GQC.

Gold is slightly firmer today, though it’s off from its high of the day ($1,602) thanks to a stronger-than-expected U.S. jobs report..as of 6:10 am Pacific, the yellow metal is up $3 an ounce at $1,591..Silver has gained 13 cents to $27.26…Copper is up slightly at $3.33…Crude Oil has gained just over $1 a barrel to $88.31 while the U.S. Dollar Index is down one-third of a point at 82.97…

HSBC Predicts $1.900+ Gold By Year-End

Gold could be one of the few assets to profit from the political and economic turbulence in the U.S. as the “fiscal cliff” approaches, potentially creating a rally in the precious metal later in 2012 for it to reach $1,900 per ounce by the end of the year, analysts at HSBC are saying…“Economic uncertainty, geopolitical tensions and the uncertainty of the U.S. November elections are theoretically Gold-bullish,” and Gold should perform better later in the year “when U.S. growth is poor and the dollar is weak,” a new HSBC report said…“We expect prices to rally to above $1,900/oz by the end of the year…patience is the most important commodity.”

Today’s Markets

Asian shares were mixed overnight while European markets are up strongly this morning, as much as 2.7%…stock index futures in New York as of 6:10 am Pacific are pointing to a very positive open on Wall Street – thanks in part to the just-released jobs report for July…the U.S. economy closed out an otherwise weak second quarter by creating more jobs than expected, with 163,000 new positions added, but the unemployment rate rose to 8.3%…June saw 80,000 new jobs while the expectation for July was about 90,000…as the country struggles to gain growth traction, the unemployment rate held above 8% for the 41st consecutive month…

Also due out this morning, at 7:00 am Pacific, is the Institute for Supply Management’s non-manufacturing index which tracks monthly changes in the services sector…economists polled by Briefing.com predict the index rose in July to 52.3, up from 52.1 in June…reading above 50 indicates expansion for the sector…in addition, JP Morgan will release its latest global services and global composite purchasing manufacturers’ indexes (PMI) at 8 am Pacific…

Canadian Markets Closed Monday

Don’t forget, Monday is a civic holiday in Canada and Canadian markets are closed…

Canadian Dollar Update

What we find particularly encouraging about commodities is how well the Canadian Dollar is holding up despite all the gloom-and-doom of pending economic armageddon…the Dollar is trading in an upsloping channel with very strong support at 99 cents (the EMA-20 and the 200-day SMA)…the loonie is showing the potential of gaining momentum during this third quarter…

Venture Exchange Chart Update

Despite yesterday’s 16-point decline to 1174, the outlook for the Venture Exchange continues to be more upbeat these days with the general belief that the Index is “crawling along a bottom” and just needs a catalyst or two to break out above 1200…we are seeing some technical progress…below is an updated chart from John that shows, among other things, a squeeze in the bollinger bands which typically precedes volatility..buying pressure is increasing and RSI is in sync with price support…patience is the key…

Northern Gold Mining (NGM, TSX-V)

A situation worth keeping an eye on, over both the short and longer-term, is Northern Gold Mining (NGD, TSX-V) which continues to show promise with its Garrison Gold Property (two deposits) 100 kilometres east of Timmins…below is a 2.5-year weekly chart from John…

Rainbow Resources (RBW, TSX-V) – The Waiting Game Is Over

The wait is over, and the sparks are ready to fly…Rainbow Resources (RBW, TSX-V) has received the much-anticipated drill permit for its highly prospective International Silver Property, the flagship of its Big Strike Project in the heart of the mineralization-rich West Kootenay region of southeast British Columbia…not only does it now have its drill permit, but Rainbow is wasting no time in launching a first-ever drill program at the International as the rig is being mobilized immediately as reported yesterday…drilling is expected to commence by the end of next week…

Drilling Into The “Honey Zone”

Rainbow will be starting with a shallow series of holes that will be taking direct aim at an impressive quartz-dominated structure that we’ve seen for our own eyes – an exposed wall of mineralization (disseminated to massive galena, pyrite and sphalerite) the length of nearly two hockey rinks and up to 8 feet high…historical reports suggest this high-grade mineralization could run…well, we’re about to find out…the drill rig is the “truth machine” but we’re confident Rainbow has an excellent chance of making a discovery given the quality of the property and the amount of work that has gone into selecting these drill targets…we don’t need to remind our readers that the last company we closely followed with property in British Columbia became a 10-bagger after we first introduced it and was taken out by New Gold Inc. (NGD, TSX) last year – Richfield Ventures made a major Gold-Silver discovery in the Blackwater District…GoldQuest Mining (GQC, TSX-V), meanwhile, another one of our favorites, has skyrocketed more than 20-fold since late May on a major discovery in the Dominican Republic…all an investor needs to make money is one BIG winner to more than make up for a few losers along the way in the volatile junior resource market… as we’ve been detailing over the past 8 months or so, Rainbow is a very legitimate “discovery play” and it has at least three kicks at the can this summer with its International, Gold Viking and Jewel Ridge properties…

There are many things to like about Rainbow including how well it has held up over the last several months during some of the worst market conditions investors have ever seen.  RBW has significantly outperformed the CDNX and its chart looks explosive, plain and simple, as John outlined in this space yesterday…major moving averages are in bullish alignment with the 50-day SMA just now reversing to the upside – an indication that the recent trend to the upside could accelerate quickly…The company’s news yesterday was short, sweet and to the point…we suspect there’s much more to come by the end of next week, and of course we’ll be following events very closely…

Note: Both Jon and John hold share positions in RBW.