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Gold has surged above $1,700 this morning…as of 6:15 am Pacific, the yellow metal is off its highs but still up $10 an ounce at $1,703…Silver is 42 cents higher at $32.69 after briefly touching $33…Copper is off 4 pennies at $3.47…Crude Oil has climbed 77 cents to $96.13 while the U.S. Dollar Index is up slightly at 81.27…

Investment demand for Gold continues to rise…Gold holdings in exchange-traded funds rose 2.1 million ounces during the month of August and added a further 253,000 ounces since Friday’s close to record new all-time high levels of holdings interest, according to TD Securities…ETF holdings reached a record of 2,467.822 metric tons which is supporting the yellow metal…

ECB Rolls Out “MOT”  Bond Buying Program

European Central Bank Chief Mario Draghi said the “euro is irreversible” as he announced a new bond-buying program at a still ongoing press conference in Frankfurt this morning after the central bank decided to keep its benchmark interest rate on hold…the program, called “Monetary Outright Transactions” or MOT, would focus on the secondary sovereign bond market and Draghi said it was necessary to deal with “severe distortions” in the bond markets…bond yields have risen in recent months for Spain and Italy, sparking worries the debt crisis was spreading…Draghi confirmed reports that the ECB would only buy bonds with maturities of up to three years and would not have seniority over private creditors…

U.S. Private Sector Job Creation Exceeds Expectations In August

Private businesses created 201,000 jobs in August, well above expectations, according to a closely watched report released within the last hour from ADP and Macroeconomic Advisors, a number that sets the stage for a pivotal non-farm employment report…the level of weekly jobless claims also dropped, falling 12,000 to 365,000 last week, though the previous week’s number was revised higher from 374,000 to 377,000…tomorrow’s jobs report is expected to be a critical factor in determining the precise timing and nature of more stimulus from the Federal Reserve which meets next week (Sept. 12-13)…the median forecast expects 125,000 new non-farm jobs created last month…

Today’s Markets

Asian markets were up slightly overnight with China’s Shanghai Composite Index showing the strongest gains, climbing 14 points to 2052…European shares are up significantly this morning while stock index futures in New York as of 6:15 am Pacific are pointing toward higher opening prices on Wall Street…the Venture Exchange, with a rising 50-day moving average (SMA) now at its back, is looking to bust through important resistance around 1250 today or tomorrow…the Index gained 4 more points yesterday to close at 1247…

OECD Growth Forecasts

A Paris-based think tank predicts economies of the Group of Seven countries will grow at an average annualized rate of just 0.3% in the third quarter…at the same time, the Organization for Economic Co-Operation and Development (OECD) expects Canada’s economy to grow by 1.3% and 1.9% in the third and fourth quarters, respectively, while projected numbers for the United States for the same period are 2% and 2.4%…the OECD says the world economy is slowing with key European countries entering a recession that’s having a global impact…the assessment warns that the euro zone crisis is dampening confidence, weakening trade and employment and slowing economic growth for both OECD and non-OECD countries…the OECD projects that the euro zone’s largest economies – Germany, France and Italy – will shrink 1% on average in the third quarter and 0.7% in the fourth…Japan’s economy is projected to contract by 2.3% during the third quarter and hover around a zero growth rate in the fourth…

China Approves 25 Subway Projects

China has recently approved 25 subway projects by local governments, data from the country’s top economic planning agency show, as part of the central government’s efforts to boost sluggish growth in the world’s second-largest economy…the National Development and Reform Commission has approved a total of 710.8 billion yuan ($112.1 billion) worth of investments by 18 local governments to build city subways, according to statements posted on its website yesterday…most of the approvals came between June and August, according to the NDRC…the projects are expected to have an average construction time of 4.6 years, with local governments providing 40% of the funding…Beijing has significantly accelerated approvals for new infrastructure projects by local governments as it seeks a range of avenues to jump-start growth, which slowed to a more-than-three-year-low of 7.6% in the second quarter…recently-released key economic data from the manufacturing, trade and industrial sectors added to the gloom…Nomura economist Zhang Zhiwei said the recent number of city subways approved was comparable with the 23 approved in early 2009, when the government unleashed a 4 trillion yuan stimulus package…

China’s Most Important Political Meeting In A Decade Slated For Mid-October

The Financial Times reported last night (confirming Beijing’s worst-kept secret) that Chinese government advisers say they have been told to expect the party’s 18th National Congress in mid-October…in contrast to other countries such as the U.S., where political conventions are transparent affairs announced months if not years in advance, China’s ruling party and government rarely say in advance when they will hold meetings…there is much intrigue surrounding the leadership that will emerge at the party congress, although the two most important personnel changes are clear…Xi Jinping and Li Keqiang are expected to succeed, respectively, Hu Jintao and Wen Jiabao as president and premier… 

Will Obama Release Oil From SPR?

It would be viewed by many as a purely political and desperate act, but President Obama may authorize the Department of Energy to release oil from the Strategic Petroleum Reserve in a preemptive move to head of $100 prices, according to a report from Citi Research that made the rounds on trading floors  yesterday…a confluence of forces including tensions in Syria and Iran, hurricanes and the possibility of additional stimulus from the Federal Reserve all point to higher oil prices, giving Obama the justification he thinks to release some crude from the SPR and coordinate with Saudi Arabia to draw down its stocks as well, stated the report….“In recent weeks, the probability of a coordinated release of strategic stocks has risen significantly,” wrote Eric Lee, commodities analyst at Citi, in the note…

47% Of Canadians Live Payday To Payday

The Globe and Mail reports this morning that a new survey suggests fewer Canadians are living from paycheque to paycheque, and more are putting money aside for a rainy day or retirement…however, there are still a large number that would face difficulties after one week of not receiving their cheques, and savings rates remain low, the results show…the survey by the Canadian Payroll Association found 47%  saying they would be in financial dire straits if their pay was delayed as little as a week…that is a worrying number, said the group, but significantly lower than the 57% that reported such a thin margin of financial security last year….also, 66% of the 3,500 employees from across Canada that participated in the survey said they are trying to save more, up from 40% in last year’s results…CPA chairman Caroline Bernard said this year’s results are encouraging, but Canadians still face considerable financial challenges…

Levon Resources (LVN, TSX) Chart Update

As John mentioned Tuesday, Levon Resources (LVN, TSX) has broken out of its basing channel with the next major resistance at 60 cents…LVN was unchanged yesterday at 48 cents after climbing 6.5 cents Tuesday…we’re seeing a lot of individual charts that are breaking out in similar fashion which reinforces our bullish view of the junior resource sector through the balance of the year…

Adventure Gold (AGE, TSX-V)

Adventure Gold (AGE, TSX-V), one of our old favorites, is another excellent example of how the market for junior exploration stocks has turned the corner…AGE exploded higher yesterday on its best volume since 2010, gaining 4.5 cents on 1.7 million shares (all exchanges)…AGE has strong support in the low 30’s, so any minor pullback should be viewed as an opportunity given this important breakout on heavy volume…

Critical Elements (CRE, TSX-V)

One of our astute readers pointed this one out this morning – Critical Elements (CRE, TSX-V) which is certainly worthy of our readers’ due diligence given a volume increase over the last couple of weeks as well as reversals in the 100 and 200-day SMA’s…with CRE, it must overcome a critical resistance band between 17.5 and 20 cents as shown in John’s chart below…CRE has some promise – we’ll keep an eye on it…

Note: John, Jon and Terry do not hold positions in LVN, AGE or CRE.

Gold has traded in a narrow range so far today between $1,687 and $1,695 an ounce…as of 6:00 am Pacific, the yellow metal is down $3 an ounce at $1,693…Silver is off 6 cents to $32.30…Copper is up slightly at $3.47…Crude Oil is up 25 cents at $95.55 while the U.S. Dollar Index has fallen one-third of a point to 81.17…

In a significant shift, Dennis Gartman has turned bullish on Gold in U.S. dollar terms, he told CNBC yesterday…“Gold’s going up in all currency terms at this point…Gold seems to be the dominant currency – it doesn’t really matter at this point,” the editor of The Gartman Letter said on “Fast Money”…Gold is gaining in euro, yen and dollar terms, he added…

GFMS Predicts $1,800+ Gold Before Year-End

Gold prices could rise above $1,800 an ounce before the end of 2012, as more quantitative easing and other monetary stimulus is expected by central banks, Thomas Reuters GFMS stated yesterday in its Gold Survey 2012 Update 1…“I think we’re on pretty safe ground saying that we’ve already seen the lows for the year and that firmer prices, particularly towards year-end, are (in) the cards, but we’re also expecting a bumpy ride looking ahead – any intensification of the eurozone crisis or dashing of hopes for further easing by the Fed and you could easily see the rally derailed for a while,” said Philip Klapwijk, global head of metals analytics at GFMS…the consultancy does not see Gold taking out the 2011 highs of just over $1,900, however…the firm also noted that world investment in Gold in the second half of 2012 is expected to reach a record in terms of tonnage, forecast at more than 970 metric tons, and value, at $53 billion…central banks are expected to continue to buy Gold in the second half of the year, following the 270 tons bought in the first six months…the consultancy said central banks could purchase 220 tons between now and year’s end…

Mining Costs Continue To Rise

While global Gold mine production was at best flat in the first half of 2012, average total cash costs jumped 19% to a new high of $727 per ounce according to the Thomson Reuters GFMS’s Gold Survey 2012 Update 1…some of the reasons behind the hiatus in production are declining grades across the industry, construction and commissioning delays and slower than expected ramp-ups of output at a number of properties…added to this, the group said, were exogenous factors like geotechnical problems, extreme weather and labour strikes…but, the consultancy says, “These are not the only headwinds producers have to face…the relative stagnation of the Gold price, coupled with further rises in production costs, has seen producers’ cash margins eroded by 16% over the past nine months, while upward revisions to capital expenditure forecasts will place additional pressure on free cash flow going forward”…continued cost inflation and falling prices also meant that average cash margins have fallen sharply from above $1,000/oz in Q3 2011 to just below $900/oz in the second quarter of 2012…if one adds to this the 6% jump in depreciation and amortization costs to $203/oz, then GFMS’s proprietary “all-in cost” metric which is designed to reflect the full marginal cost of mine production rose to $1,050/oz during the period…

Euro Zone Business Activity Slides At Accelerated Pace In August

The euro zone is likely to have slipped back into recession in the current quarter, according to a survey published on Wednesday that showed a seventh month of contraction for the bloc’s private sector as new orders dwindled…the Purchasing Managers’ Index (PMI), published by Markit, showed the economic rot that began in smaller periphery members of the 17-nation bloc is now taking hold even in Germany, the region’s largest and strongest economy…August’s composite PMI, which measures manufacturing and services together, fell to 46.3, revised down from a flash reading of 46.6 and below July’s 46.5…

U.S. Becoming Less Competitive

The United States has slipped further down a global ranking of the world’s most competitive economies, according to a World Economic Forum (WEF) survey released today…the world’s largest economy, which was placed 5th last year, fell two positions to the 7th spot – marking its fourth year of decline….a lack of macroeconomic stability, the business community’s continued mistrust of the government and concerns over its fiscal health were some of the reasons for the downgrade, according to the annual survey…

U.S. Manufacturing Sector Contracts For Third Straight Month

The U.S. manufacturing sector contracted for the third straight month in August, the longest slide since the recession ended, in line with recent data showing a pullback in business spending…the Institute for Supply Management said its manufacturing index declined to 49.6, the lowest level since July 2009…that followed readings of 49.8 in July and 49.7 in June and came in below expectations of 50…a reading below 50 indicates contraction…there have not been three straight readings below this contraction line since May-July 2009…ISM surveys more than 300 manufacturing companies on employment, production, new orders, supplier deliveries and inventories…“The data continue to show a significant loss of momentum in manufacturing in recent months, although the overall index is still well above the low 40s levels typically associated with recession,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics…the index averaged 55.2 in 2011 compared with 53.6 in the first five months of 2012…

Democratic Convention

With social issues topping the agenda, we’re not hearing much talk about economics, growth and the debt at the Democratic Convention which opened last night in North Carolina…President Obama makes his pitch tomorrow night for four more years and it’ll be very interesting to see how he tires to spin that…

PQ Held To Minority In Quebec

The fact the Parti Quebecois was held to a minority in last night’s Quebec’s election (only 54 of 125 seats) was a blessing as the separatist/socialist/bigoted party should be prevented from implementing many of its most destructive policies including increased social spending through tax hikes on high earners and mining companies…Quebecers are already the most burdened taxpayers in North America, and what do they have to show for a bloated government? – a wobbly economy and the highest debt ($200 billion or 55% of GDP) of any province in the country…Quebec has become the Greece of Canada and things are only going to get worse given the current political leadership…

Today’s Markets

Asian markets were weaker overnight with China’s Shanghai Composite Index falling another 5 points to 2038…European shares are mixed this morning with investors cautious ahead of tomorrow’s ECB meeting at which bank president Mario Draghi is expected to announce a bond-buying program to help countries such as Spain and Italy lower their borrowing costs…stock index futures in New York, meanwhile, as of 6:00 am Pacific, are pointing toward a flat to slightly negative open on Wall Street…

Venture Exchange

The Venture Exchange was down most of the day yesterday but recovered to finish up 2 points at 1243…this market will pick up fresh momentum once it’s able to plow through resistance at 1250…the 50-day moving average (SMA) has reversed to the upside which has always signaled higher prices…

A comparison between the CDNX and the CRB Index over the last few years shows an interesting pattern at the moment that bears some resemblance to that seen in the summer of 2010, just prior to the start of a powerful advance by the CDNX…you’ll notice in John’s chart below that there was a divergence beginning in June, 2010, as the CRB Index started moving higher while the CDNX was still struggling…within a couple of months the CDNX was in full flight…since June of this year we’ve seen another significant divergence, and the Venture definitely has some catching up to do which we expect will start shortly…what we’re looking for is a breakout in the CDNX relative to the CRB…

New Gold Inc. (NGD, TSX)

As we mentioned recently, keep a close eye on New Gold Inc. (NGD, TSX) which is getting very close to a significant technical breakout above a down trendline…the market has not fully taken into account, in our view, the success New Gold is enjoying in the Blackwater district of central British Columbia where it’s aggressively expanding its Gold-Silver resource with nearly 20 drill rigs in operation (two Venture-listed companies – Parlane Resource Corp. (PPP, TSX-V) and RJK Explorations (RJX.A, TSX-V) – are currently very active with strategic land packages in the area and could make a lot of noise in the coming weeks and months)…New Gold is a very well-run company that could have been picked up for just over $7 a share when the market bottomed in May…it closed yesterday at $11.14 but still has to be considered attractive just based on developments at Blackwater…

Corvus Gold (KOR, TSX)

Corvus Gold (KOR, TSX) has enjoyed a very strong 2012 thanks in large part to continued success at its North Bullfrog Project in Nevada…note that it’s currently trading near the lower end of an upsloping channel in place since the beginning of the year…

Orko Silver (OK, TSX-V)

We’ve mentioned Orko Silver (OK, TSX-V) on several occasions, and John also recently posted a chart warning of a possible breakout…a long period of selling pressure has abated, and the stock has formed a bullish “cup with handle” pattern…below is an updated chart that shows the next major resistance at the $2 level…

Note: John, Jon and Terry do not hold positions in NGD, KOR or OK.

Gold has been steady overnight, trading in a range between $1,689 and $1,698…as of 6:15 am Pacific, the yellow metal is down $2 an ounce at $1,691…Silver is up 8 cents at $32.18…Copper is unchanged at $3.47…Crude Oil is flat at $96.48 while the U.S. Dollar Index is up slightly at 81.29…the Dollar Index, as John has shown on some recent charts, is near critical support levels…there is plenty of fodder ahead this week that could trip up the greenback including Thursday’s ECB meeting and Friday’s U.S. jobs report…we’ll see what happens…

Priced in euros, Gold posted its highest close of 2012 last Friday after Fed Chairman Ben Bernanke left the door open for a further round of quantitative easing in a highly-anticipated speech at Jackson Hole…

Gold inventories held in ETFs have been on the rise with nearly 38 tons of accumulation in August just in the U.S.’s most widely traded product, marking the biggest inflow since November…Gold held in ETFs now exceeds Italy’s national reserves of Gold which are the third largest in the world…

A move by Gold this week through $1,700 seems highly probable with the next major resistance at $1,730 as John’s charts have been showing…given the right dynamics (aggressive global central bank action combined with an Obama victory in November), Gold certainly has a good chance of challenging its all-time high by year-end…

Silver, meanwhile, continues to look even better than Gold in terms of potential percentage gains…below is John’s updated long-term Silver chart that shows Silver is now at the beginning of a powerful Wave 5 move that should allow it to continue to rise even faster than the yellow metal…the RSI(2) indicator, which helped us to identify the recent bottom in Silver, can be expected to remain in overbought territory for a considerable period given historical patterns…for the near-term, expect Silver to meet resistance at $32.50 but the new support band (shown in John’s Saturday chart) is $30.50 to $31.00…

Silver has been rising much faster than Gold since the beginning of August which supports an old truism that when Gold is on the up, Silver outperforms (although the reverse seems to be true on a downturn)…respected Silver analyst Ted Butler describes Silver’s out-performance as a “multiplier effect” and is convinced that the current broad Gold:Silver price ratio of around 50:1 (52.8:1 as of this morning) which has now mostly been in place for a number of years, will not continue, with the ratio coming back down – in part because the amount of Silver available for investment is far smaller than the amount of Gold…add into that Silver’s big industrial usage element, where much is completely consumed and not recycled, and Butler feels there is a recipe for further considerable advances in Gold’s less costly sibling…“If you are considering the purchase of precious metals at this time, Silver is the one to buy…it is rarer than Gold in investment quantities yet priced as if it were more than 50 times as plentiful…considering the massive quantity of Silver that can be bought for the same dollar amount as compared to Gold, the biggest potential multiplier effect Silver can have may be on one’s financial health and wealth”…

Draghi In The Spotlight This Week

ECB chief Mario Draghi was reported to have told a closed hearing of the European Parliament that the central bank could buy government bonds with maturities of up to three-years from euro zone countries such as Spain that have been grappling with high borrowing costs…the ECB meets on Thursday against a backdrop of heightened expectations that it will now take decisive steps to get on top of a debt crisis in the region and restore confidence in the beleaguered euro…while the idea of the central bank stepping buying bonds from troubled euro member states is not new, details of the kind of bonds it will buy is and the suggestion that the ECB will buy debt with a short duration is a positive sign…

Troubles Continue in Spain

Interest rates paid by companies in the euro zone’s weaker economies have surged, highlighting the bloc’s fragmentation as the ECB loses control of borrowing costs…the Financial Times reports this morning that ECB data today showed Spanish small businesses face the highest bank borrowing costs in almost four years while interest rates paid by German rivals are at record lows…the sharply diverging interest rates have put southern European companies increasingly at a competitive disadvantage to their northern European rivals…meanwhile, the flight of capital from Spain is now worse than what Indonesia, one of the hardest hit countries during the Asian financial crisis, experienced in the late 1990’s, according to analysis by Nomura…on a three-month rolling basis, portfolio and investment outflows from Spain totaled 52.35 of the country’s gross domestic product (GDP), (that’s) more than double the outflows from Indonesia, which reached 235 of GDP at the time of the Asian crisis…

More Weak Manufacturing Data from Euro Zone & Asia

Manufacturing downturns gripped Asia and the euro zone in August, surveys of purchasing executives showed, in the latest sign of weakness in the global economy…new orders dwindled in the euro zone, suggesting the outlook for the 17-nation economy remains poor, while activity in China’s manufacturing sector – the engine for much of Asia’s economy – shrank at the fastest pace since the depth of the global financial crisis…the HSBC manufacturing Purchasing Managers’ Index (PMI) for China fell to 47.6 from July’s 49.3, the lowest since March 2009, figures released today show…in the 17-nation euro zone, the manufacturing PMI remained below 50 for a 13th month, though the contraction was less deep than in July, according to data company Markit…the August index was 45.1 compared with 44 in July…

China Weighs Timing Of More Stimulus

The Chinese Communist Party’s flagship newspaper, which provides a window into the thinking of Chinese leaders, urged officials today to save much of their pro-growth ammunition for the future, giving cover to Beijing as it faces growing pressure to do more to stimulate China’s slowing economy…in an editorial, the People’s Daily called for authorities to build up an inventory of policy measures that could be used to rekindle growth…but it said officials should use the downturn to first address long-standing ills such as economic imbalances and industrial overcapacity…it also said that while the world’s second-largest economy faces the risk of even slower growth because of the euro-zone crisis, China’s economic fundamentals remain healthy…”We not only have to make preparation for coping with short-term and sudden shocks, but also need to make long-term plans,” it said…the editorial suggests any major stimulus efforts may be delayed until China embarks on a once-a-decade leadership change later this year…

Today’s Markets

Asian markets eased overnight on concerns over weakening regional and global economic activity, but expectations of more stimulus from central banks and hopes for progress in tackling Europe’s debt crisis lent support…China’s Shanghai Index fell to its lowest close (2044) since March, 2009…European shares are modestly lower this morning while stock index futures in New York as of 6:15 am Pacific are pointing toward a flat opening on Wall Street…historically, September has been the worst month of the year for the Dow…over the last dozen years, the Dow has fallen an average of 2% in September…however, gains have been posted in five out of the last seven Septembers…

Venture Exchange

The Venture Exchange rallied strongly on Friday, along with Gold and Silver, and the key resistance level to watch right now is 1250…given the general technical posture of the Venture at the moment, including the fact its 50-day moving average (SMA) is about to reverse to the upside, the likelihood of an imminent breakout through the 1250 area has certainly increased…the Index closed Friday at 1241…

Below are a series of individual company charts from John, for our readers’ due diligence, that are looking bullish as the new trading week begins…

Rainbow Resources (RBW, TSX-V)

GoldQuest Mining (GQC, TSX-V)

Levon Resources (LVN, TSX)

Brixton Metals Corporation (BBB, TSX-V)

Golden Predator (GPD, TSX)

Panoro Minerals (PML, TSX-V)

Note: Both John and Jon hold share positions in RBW while Jon also holds a share position in GQC.

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

Friday was a critical day for the Venture as it held support at its rising 20-day moving average, as technical indicators suggested it would, and then powered higher to close the week and the month on a very strong note.  The Index climbed 23 points Friday, aided by a surge in both Gold and Silver, to finish at 1241.  While the Index was still 11 points down for the week, it is extremely well positioned from a technical standpoint to push higher this week and bust through resistance around 1250.  The recent overbought condition has been cleansed and the 50-day moving average (SMA) is ready to reverse to the upside, ending a five-month decline.  RSI(14) found support at 50 and is turning higher.  For the month of August, the Venture posted a gain of 58 points or 4.9%, significantly outperforming the Dow, S&P, the Nasdaq and the TSX.  More volume still needs to come into the Venture but we anticipate September will be a much more active month.  Below is an updated 4-month daily chart from John.

In a highly anticipated speech on monetary policy Friday, Federal Reserve Chairman Ben Bernanke argued that the Fed’s easy-money policies were helping the weak economy and laid the groundwork for more action.  The combination of near-term policy responses expected from both the Fed and the European Central Bank (the ECB meets Thursday) should be bullish for commodities and stocks in general, and bearish for the U.S. Dollar which closed at a 3.5-month low Friday.  Meanwhile, more stimulus measures are likely coming from China where the official factory PMI (purchasing managers’ index) fell to a lower-than-expected 49.2 in August from 50.1 in July in official data released yesterday.  The official PMI dipped below 50, which demarcates expansion from contraction, for the first time since November, 2011, in the latest sign that the world’s second-biggest economy is struggling against global headwinds.

Gold

Don’t be wrong – stay long.  That’s the message for Gold investors after the yellow metal initially fell Friday, at the beginning of Bernanke’s speech, and then staged a powerful reversal to close the session up $36 an ounce at $1,692 (for the week, Gold was up $21).   Given the right dynamics (aggressive global central bank action, an Obama victory in November), Gold could easily challenge or surpass its all-time high during the fourth quarter.  John’s first major target, as he has been stating for several weeks now, is $1,730 as shown in the 6-month chart below.  The recent significant rise in commercial short positions cannot be overlooked and suggests a pause around the $1,730 level to unwind overbought conditions.

Gold inventories held in ETFs have been on the rise with nearly 38 tons of accumulation in August just in the U.S.’s most widely traded product, marking the biggest inflow since November. Gold held in ETFs now exceeds Italy’s national reserves of Gold which are the third largest in the world.

Meanwhile, Gold smuggling in India may be up as much as 10-fold based on seizures of undeclared Gold coming into the country at airports. The rise in the import duty on Gold from 2% to 4% earlier this year has evidently not stymied the desire to acquire Gold in India. Weakness in the rupee has sent the local Gold price to new highs.  This would typically soften the demand for Gold in anticipation of a pullback, but demand still appears to be strong.

Silver is rising much faster than Gold and jumped 4% in value Friday, gaining $1.30 an ounce to $31.74.  That was a gain of 92 cents for the week.  Short-term, Silver is in overbought territory but what’s important now is that it has new support between $30.50 and $31.  As we’ve been mentioning recently, a powerful Wave 5 move now appears to be underway in Silver which should ultimately take it well beyond the $50 an ounce all-time high.

Copper was up 2 cents last week to $3.43.  Crude Oil gained 46 cents to $96.47 while the U.S. Dollar Index closed down one-third of a point at 81.25 (critical support is at 81).

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.

Rainbow Resources (RBW, TSX-V) gave investors plenty to cheer about over the the long holiday weekend with very positive news yesterday morning regarding its International Silver Property, plus the announcement the company has closed a $1.1 million financing – the timing of which speaks volumes, in our view, about how things are progressing on the ground at the International where Rainbow is drilling for a near-surface, high-grade deposit.  We’ll have more on Rainbow in an article Monday.

Technically, RBW is ideally positioned for a major breakout through the 25 cent resistance area – the PP is likely what was holding RBW back over the last week or so.  The Rainbow chart looks extremely bullish, so it’s no surprise this stock is drawing attention from the likes of Clive Maund, Jeb Handwerger and others.  Below is John’s updated technical interpretation of what could be in store for RBW as early as next week.

After climbing as high as $2 last Monday on more spectacular drill results from the Dominican Republic, GoldQuest Mining (GQC, TSX-V) pulled back in what was simply a very normal and healthy correction of about 30% (keep in mind, the stock also retreated 40% in June).  GQC regained strength Friday, jumping 14 cents to close at $1.56.  We expect another strong month for GoldQuest in September, and don’t forget that Big Daddy is on his way – the heavy rig that can handle much deeper drilling at Romero. Below is an updated 3-month daily chart from John that shows the recently overbought condition has been cleansed.

Note: John holds a share position in RBW while Jon holds share positions in both RBW and GQC.

Gold dipped slightly at the beginning of Ben Bernanke’s much-anticipated speech at Jackson Hole yesterday, then (along with Silver) powered higher in an impressive show of strength as Bernanke hit a hole-in-one for the markets with strong hints that the Federal Reserve will soon implement fresh, unconventional monetary policy stimulus.  Combined with encouraging rumblings out of Europe, prior to next Thursday’s critical ECB meeting, the “perfect storm” appears to have formed for both Gold and Silver as predicted.

Gold gained $36 yesterday to close at $1,692 while Silver jumped $1.30 an ounce to $31.74.  Both are five-month highs.  The next major target for Gold is $1,730 – a level John has highlighted on his charts for a number of weeks.  A challenge of last year’s all-time high of just over $1,900 an ounce has to be considered a strong possibility by year-end.  More on Gold and Silver in our Week In Review And A Look Ahead which will be posted at approximately 5 pm Pacific time Sunday.