BullMarketRun.ca

Gold has weakened with this morning’s U.S. jobs report…as of 7:30 am Pacific, bullion is down $28 an ounce at $1,386…Silver is off 52 cents at $22.07…Copper is off 3 pennies at $3.29…Crude Oil is up 81 cents at $95.57 while the U.S. Dollar Index has reversed and is now up one-tenth of a point to 81.69…

Holdings in SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, fell 0.3%  to 1,007.74 tonnes yesterday, as outflows resumed after holding steady for nearly a week…holdings are at 4-year lows…weekly sales of Gold held through ETP’s, however, are poised for the second-lowest level since March after the value of holdings slumped by about $45 billion this year…

19 analysts surveyed by Bloomberg expect Gold prices to rise next week, with eight bearish and six neutral, the largest proportion of bulls since March 22…global stocks that rose to the highest since June, 2008, on May 22 reached a 6-week low yesterday amid mounting speculation about whether the Federal Reserve will taper stimulus…the U.S. Dollar Index, a measure against 6 currencies, slipped to its lowest level in 3 months…

The Reserve Bank of India, in its continuing effort to curb Gold imports to address the country’s current account deficit, has banned the import of Gold by domestic consumers through bank credit and has made overseas purchase of the precious metal a cash and carry business…the move is aimed at sharply curtailing the retail jewellery trade in the country…the central bank has also barred Gold importers from using letters of credit from banks for Gold import…how much of an affect these measures will ultimately have on Gold demand from India, after a couple of very robust months, remains to be seen…

U.S. Jobs Report Meets Expectations

The U.S. economy continued to create jobs at a relatively strong pace in May, adding 175,000 positions – though the unemployment rate ticked higher to 7.6%…economists surveyed by Reuters expected 170,000 new non-farm jobs in May, down slightly from the initially reported 165,000 in April, while the unemployment was forecast to hold steady at 7.5%…it’s going to take many months of 200,000+ job growth in order to put a serious dent into the unemployment rate, so it’s hard to imagine the Fed scaling back on its stimulus anytime soon as many are predicting…

Canadian Job Growth Surprises To Upside

The Canadian economy churned out 95,000 jobs last month, much more than expected and mostly in full-time positions in the private sector…the country’s jobless rate also fell to 7.1% in May from 7.2% a month earlier, Statistics Canada said this morning…economists had been expecting about 10,000 new jobs last month…

U.S. Wealth Lost In Recession Returns

The net worth of U.S. households and non-profit organizations – the value of homes, stocks and other assets minus debts and other liabilities – jumped 4.5%, or about $3 trillion, in the first three months of 2013 to $70.349 trillion…that is the highest in nominal terms (tempered of course by inflation) since records began in 1945, according to a Federal Reserve report released yesterday…for the past 5 years, U.S. consumers have struggled to fix their balance sheets from the damage inflicted by the housing crash and recession, which ran from December 2007 through June 2009…now the data suggest that recent stock market gains and a revival in the U.S. housing sector are boosting Americans’ wealth – a trend that over time could make them more inclined to borrow and spend, providing a lift for the overall economy…

Today’s Markets

The Dow is racing higher this morning on the jobs report…through the first hour of trading, the Dow is up 163 points at 15203…the TSX is down 37 points while the Venture Exchange has backed off 2 points to 950…Japan’s Nikkei average closed below the 13000 level for the first time since April, falling 26 points to finish at 12888…the Index hit an intra-day low of 12548 and rallied very late in the session after Japan’s Government Pension Investment Fund (GPIF) announced that it would raise its weighting of domestic stocks to 12% from the current 11% and lower its weighting of Japanese government bonds to 60% form 67%…for the week, the Nikkei was off 6.5%…China’s Shanghai Composite slipped for the 6th consecutive session, falling 31 points to close at 2211…it was off 4% for the week…China will be issuing a slew of economic data over the weekend including inflation, producer prices, fixed-asset investment and industrial output for the month of May…financial markets will be closed, however, from Monday to Wednesday as China celebrates the “Dragon Boat” holiday…European markets are up about 1% in late trading overseas…

U.S. Dollar Index Chart

Currency volatility has been significant this week with the Dollar Index now at a four-week low…resistance is obviously around 84 while strong support exists between 79 and 81 (it reversed just above 81 this morning)…the Index closed sharply lower yesterday at 81.52…it’s important to note that there was a critical trend reversal in the U.S. dollar relative to Gold in October of 2011 (see the bottom of John’s chart) and that trend does remain intact though it has weakened slightly recently…

Colorado Resources (CXO, TSX-V) Update

Yesterday’s plunge in Colorado Resources (CXO, TSX-V) was an over-reaction in our view to drill results that were not spectacular but still very good, and other information included in yesterday’s release points to the clear potential for a very large mineralized system at North ROK…we’ll have more on that Monday…in the meantime, for some quick perspective regarding CXO’s drill results, we thought it would be useful to highlight the best holes for the Red Chris deposit delivered by Imperial Metals (III, TSX) during 2011 and 2012…keep in mind that the Red Chris, which is going into production next year, has very robust economics and reserves of more than 300 million tonnes grading 0.359% Cu and 0.274 g/t Au…III reported a total of 19 holes during 2011 and 2012 with 5 of them or 26% not returning any significant mineralization (same percentage for CXO so far)…below is a chart showing the BEST 7 Red Chris holes out of 19…

Colorado has hit on 3 of its first 4 holes with results as follows (they haven’t gone as deep yet as III):

NR13-001 333 metres at  0.51% Cu and 0.67 g/t Au

NR13-003 152 metres at 0.21% Cu and 0.55 g/t Au

NR13-004 205 metres at 0.40% Cu and 0.50 g/t Au – 100 metre step-out to the southeast of discovery hole NR13-001.

In addition, recently completed surface geological mapping indicates that the monzonite intrusion at North ROK is 2000 metres x 2500 metres in size and similar to the Red Stock which hosts the Red Chris Mine…over much of this strike length, the North ROK intrusion has also been extensively altered by magnetite-potassium feldspar and quartz sericite pyrite mineral assemblages and appears similar to hydrothermal alteration assemblages spatially associated with Copper and Gold mineralization at the Red Chris mine…geophysical work has also outlined a 1200 m x 1200 m chargeability feature open to the south which has only been tested on its northernmost end by the 3-hole drill program over a 100-metre area…a second 500 x 1000 metre chargeability feature has also been discovered 1 km to the north of the drill area…less than 5% of the area of these geophysical anomalies has been tested by drilling…

What’s emerging at North ROK, therefore, is hugely significant and after yesterday’s 80-cent close, CXO’s market cap is a very modest $39.6 million…the company has no need to do a financing for the rest of this year, and if they do we suspect it could be a strategic financing with another company – possibly a major – and at a premium to the current share price…it’s going to be an interesting summer at Iskut River…

Updated CXO Chart

Let’s now take a look at the Colorado chart…clearly, there is exceptionally strong technical support in the mid-to-upper 60’s which is why the drop below 70 cents intra-day yesterday was such a smart buying opportunity…the 50-day moving average (SMA) at 80 cents also provides good support, and that’s where the stock closed at yesterday…CXO gapped up slightly this morning and is 7 cents higher at 87 cents as of 7:30 am Pacific…

Victory Ventures (VVN, TSX-V) Bucks The Trend

Victory Ventures (VVN, TSX-V) was the only Iskut River play that didn’t drop yesterday, and there’s a reason why – it’s the only company in the area other than Colorado with an active drill program at the moment…Victory is also drilling into a large anomaly of its own at Copau, a property that interestingly lies at the intersection of 2 major regional faults…Victory should be completing its first hole any day now, so the potential exists for some sort of news next week…with a tight share structure and a market cap of only $2.75 million, Victory could run in a hurry if there’s any indication they’ve hit something…VVN spent more than a year defining its drill targets, so they do have a strong degree of confidence they’re on track to find mineralization in the first few holes…

VVN continues to trade in a bullish upsloping channel as shown in John’s 2-month daily chart below…

GoldQuest Mining (GQC, TSX-V)

As we’ve been mentioning, one of the best exploration stories in the entire world right now is in the Dominican Republic where GoldQuest Mining (GQC, TSX-V) is hunting for a third significant discovery at its Las Tres Palmas Project…drilling continues along the newly-identified and very promising Guama Trend immediately to the west of Romero, and yesterday GoldQuest came to life as it jumped 11.5 cents to close at 50 cents…this puts GoldQuest above its 100-day moving average (SMA) for the first time since last October…GQC has had considerable difficulty pushing through a major resistance band between 40 and 48 cents, so yesterday’s move was certainly an eye-opener from a technical perspective…what John would like to see today is confirmation of this move, so another close above that resistance band is what traders/investors need to look for today…below is an updated chart…as of 7:30 am Pacific, GQC is looking strong with the gain of another nickel to 55 cents…

Note: John and Jon both hold share positions in VVN.  Jon holds share positions in CXO and GQC.

Gold continues to stick around the $1,400 level like a magnet…as of 7:30 am Pacific, bullion is down $1 an ounce at $1,402…tomorrow’s U.S. is up 4 cents to $22.59…non-farm payrolls report will be critical in determining if Gold can begin to gain some traction above $1,400 and post a strong weekly close…Silver is off 7 cents at $22.48…Copper has fallen from a 2-week high, down a nickel to $3.31…Crude Oil is up $1.28 to $95.02 while the U.S. Dollar Index has slid one-third of a point to 82.25…

According to a report from Reuters, the Reserve Bank of India has advised banks against selling Gold coins to retail customers, Finance Minister P. Chidambaram said this morning, a day after he raised the Gold import duty to try to ease pressure on India’s bloated current account deficit…”I think the Reserve Bank has advised banks that they should not sell Gold coins,” said Chidambaram, while speaking at an event in Mumbai…he also urged banks to advise their customers not to invest in Gold…Gold imports by India, the world’s biggest buyer of bullion, surged to 162 tonnes in May — more than twice the monthly average in the record year of 2011…when the state actually starts telling its citizens NOT to invest in Gold, chances are they might even be more inclined to do so…

The appetite for U.S. American Eagle Gold and Silver bullion coins is still at unprecedentedly high levels almost two months after a historic sell-off in Gold unleashed years of pent-up demand from retail investors, the head of the U.S. Mint said yesterday…his comments are likely to allay concerns among some traders that frenzied buying by mom-and-pop investors since mid-April – after prices plunged to two-year lows – had started to fade…”Demand right now is unprecedented..we are buying all the coin (blanks) they can make,” Richard Peterson, U.S. Mint’s acting director, said in an interview inside the Mint’s production facility in West Point, New York, referring to the Mint’s suppliers..sales of Gold and Silver bullion coins, including the popular 22-karat American Eagle and the 24-karat American Buffalo, are on pace to hit a record 45 million coins this year, said Peterson, head of the Treasury Department agency since 2011…the Mint sold about 35 million bullion coins in 2012 (source: Reuters, www.Mineweb.com)…

U.S. Jobless Claims Drop Slightly

The number of Americans filing new claims for unemployment benefits declined 11,000 last week to a seasonally adjusted 346,000, the Labor Department reported this morning, and this was generally in line with expectations…the drop is a positive sign that the labor market continues to steadily heal…however, claims data can fluctuate, and a broader measure of layoffs increased last week…the 4-week moving average, which smoothes out weekly volatility in the data, rose by 4,500 to 352,500…this morning’s figures offer a preview of tomorrow’s much broader look at the labor market, the Labor Department’s monthly employment report…economists forecast that payrolls grew by 169,000 in May with the unemployment rate holding steady at 7.5%…

China Has Growing Appetite For Food Imports

China is set to become more dependent on imported grains, oilseeds and meat during the next 10 years, a development that is likely to support prices and fuel further deal making in the global agribusiness industry…the Food and Agriculture Organization and the OECD today painted a bullish view for Chinese food demand in their closely watched annual agricultural outlook…the report for the first time devotes a full chapter to China…the country’s imports of coarse grains, used mostly for fattening herds, are expected to double by 202…imports of soyabeans will grow 40% while meat imports are set to soar – beef imports nearly doubling…

Today’s Markets – ECB & BOE Leaves Rates Unchanged

Asian markets were lower overnight with Japan’s Nikkei average falling another 111 points to 12904…the Index has now fallen 19% since hitting a 5.5-year peak of 15942 just over 2 weeks ago on May 22…China’s Shanghai Composite lost 29 points overnight to close at 2242…European shares are down slightly in late trading overseas…in a news conference this morning, ECB President Mario Draghi said the ECB is “technically ready” to lower the bank’s deposit rate into negative territory for the first time, which would mean the central bank would charge commercial banks for holding their money overnight, but ruled it out for the time being…the ECB left its main interest rate unchanged at a record low 0.50% and said the euro zone is on track for a “very gradual recovery” later this year driven by the central bank’s loose monetary policy and demand from abroad…”The Governing Council continues to see downside risks surrounding the economic outlook for the euro area,” Draghi added…”They include the possibility of weaker-than-expected domestic and global demand and slow or insufficient implementation of structural reforms in euro area countries“…
No surprises this morning from the Bank of England as it voted to keep benchmark interest rates unchanged at 0.5% at Mervyn King’s final monetary policy meeting as Governor…the BOE also opted to keep the size of its asset purchase program unchanged at 375 billion pounds ($574 billion)…Ex-Bank of Canada Governor Mark Carney will replace King on July 1 2013, and has agreed to serve for 5 years…

in North America, the Dow is up 4 points as of 7:30 am Pacific while the S&P 500 has gained a point to 1610…a measure of market movement known as the advance/decline line, which measures stocks rising and falling compared to previous values, shows that over a 10-day timeframe the S&P 500 is at “extreme oversold levels,” according to research from Bespoke Investment Group…while the near-term implications vary, the S&P 500 averages gains of 2.18% and 6.21% over the next 3 and 6 months respectively when it hits this level…one sign that investors are expecting more gyrations in stock markets is that the Volatility Index (VIX) has risen to the highest in more than 6 weeks, though it is still below the yearly high hit in February…meanwhile, a snap survey by CNBC yesterday of about 2 dozen economists, money managers and strategists showed that about 35% of them expect the Fed to start tapering its bond purchases in September…the next largest group, 23%, expect the Fed to taper in January…just a fraction, 3.8%, see tapering in July, while the same amount expects tapering in 2015 or later…

Updated Dow Chart

Don’t expect the Dow to collapse like the Nikkei…John’s 1.5-year weekly chart shows a very strong support band between 14500 and 14700…

As of 7:30 am Pacific, the TSX is down 5 points while the Venture is up 2 points at 949…the 970 area continues to provide strong resistance for the Venture, as we saw again Monday…the Index is now slightly below its 10 and 20-day moving averages…

Colorado Resources (CXO, TSX-V) Releases Results From Holes 2, 3 & 4

A typical “sell on news” mentality hit investors this morning as Colorado Resources (CXO, TSX-V) provided fresh drill results from its North ROK discovery at Iskut River…hole 2 was a dud, as expected (it may not have been drilled deep enough), but CXO delivered encouraging results from holes 3 and 4 which certainly compare favorably to Red Chris…NR-13-004, collared 100 metres southeast of the discovery hole, intersected 205.2 metres grading 0.40% Cu and 0.50 g/t Au, including 131 metres grading 0.56% Cu and 0.68 g/t Au…NR-13-003, meanwhile, which was drilled at the same location as the discovery hole but at a different angle and deeper, returned 152.4 metres grading 0.21% Cu and 0.55 g/t Au…as analysts pour over these results, and other details included in Colorado’s release this morning, we expect the consensus will be more favorable than the initial reaction from traders this morning…porphyry deposits are never easy to figure out but the big picture of what Colorado is putting together continues to be very promising…

North ROK clearly has the potential to be a large mineralized system…geophysical work has outlined a 1200 m x 1200 m chargeability feature open to the south which has only been tested on its northernmost end by the 3-hole drill program over a 100-metre area…a second 500 x 1000 metre chargeability feature has also been discovered 1 km to the north of the drill area…less than 5% of the area of these geophysical anomalies has been tested by drilling…

As stated in CXO’s release this morning, recently completed surface geological mapping indicates that the monzonite intrusion is 2000 metres x 2500 metres in size and is similar to the Red Stock which hosts the Red Chris Mine (mineable reserve of 301.5 mt of 0.359% copper and 0.274 g/t Au)…over much of this strike length, the North ROK intrusion has also been extensively altered by magnetite-potassium feldspar and quartz sericite pyrite mineral assemblages and appears similar to hydrothermal alteration assemblages spatially associated with Copper and Gold mineralization at the Red Chris mine…

Strong chart support exists in the upper ’60’s for CXO and John will be providing a chart update tomorrow morning…through the first hour of trading, CXO is off 53 cents at 70 cents…expect bargain hunters to step up to the plate because this story is still very much alive and well…

Global Met Coal Corp. Chart (GMZ, TSX-V)

Finally, at long last and at the urging of some of our readers, www.StockCharts.com has added Global Met Coal (GMZ, TSX-V) to its data base, so we’re able to provide a chart on this company for the first time…GMZ is in the final stages of the permitting process with the state of Alabama regarding its Black Creek metallurgical coal project which would be a turnkey operation that could generate significant cash flow for the company…management has previous successful experience with met coal operations…the second and final tranche of the company’s proposed $600,000 financing is expected to close in the coming days…a 20-month daily chart shows steady accumulation in the stock since March and the potential for a near-term breakout with strong support at a nickel the last several sessions…

Note: John and Jon both hold share positions in GMZ.  Jon holds a share position in CXO.

Gold hit a low of $1,395 overnight but is now back above $1,400…as of 7:00 am Pacific, bullion is up $3 an ounce at $1,405…Silver is 8 cents higher at $22.63…Copper is up 2 pennies at $3.37…Crude Oil is 52 cents higher at $93.83 while the U.S. Dollar Index has fallen one-tenthof a point to 82.75…

Key for Gold bulls over the near-term is to keep prices above the $1,400 level and push through last week’s high of $1,422…technically, Gold is looking healthier these days as John’s charts have shown but the bulls still have some heavy lifting to do…Bank of America Merrill Lynch recently just switched its bearish outlook and is now more neutral on Gold prices…in April, after the major correction, the firm expected prices to hit $1,200 in the second half of the year…however, because of Gold’s recent consolidation period, the analysts have updated their forecast and they now expect prices to average the year around $1,478…”Despite the rather gloomy picture, it is worth nothing that some demand strength persists, which may ultimately prevent a complete meltdown in Gold and Silver prices,” they stated in a research note published May 28…

China’s Gold imports from Hong Kong slumped in April from a record as banks failed to get quotas fast enough to meet surging demand from mainland buyers keen to purchase bullion at reduced levels…mainland buyers purchased 126,135 kilograms, including scrap, compared with 223,519 kilograms in March, according to Hong Kong government data today…net imports, after deducting flows from China into Hong Kong, were 75,891 kilograms, from 130,038 kilograms a month earlier, according to Bloomberg calculations…“Some qualified banks used up their Gold import quota in the first 3 months and weren’t able to get the paperwork done fast enough to bring in bullion in April,” said Tian Rui, vice president of the precious metals division at INTL FCStone Trading Co…“We might see higher imports in May because demand surged after the rout”…

ADP/Moody’s:  U.S. Private Sector Job Creation Weaker Than Expected In May

Private-sector job creation was weaker than expected in May, as the economy struggles to break free of what appears to be a summer slowdown on the horizon…ADP and Moody’s Analytics reported just 135,000 new positions for the month, below expectations of 165,000…the poor showing sets the stage for a possibly weak non-farm payrolls report on Friday, when the Labor Department had been expected to show 169,000 new jobs…economists sometimes will use the ADP numbers to adjust their estimates for the government account, even though the private sector count has been a historically unreliable gauge…

CRB Index-U.S. Dollar Comparative Chart

The Venture Exchange performs best when the CRB Index is in an uptrend, and right now the CRB Index is looking quite positive…below is an encouraging 5-year weekly chart from John…note the “W” formation in the RSI(14) and a possible double bottom reversal pattern…significant room for an upside move over the summer which would support the Venture immensely…

Today’s Markets

Japan’s Nikkei average tumbled another 3.8% overnight, losing over 500 points to close at 13014…Prime Minister Shinzo Abe’s third “Abenomics” arrow failed to impress investors…he outlined measures such as setting up special economic zones to attract investment and raising incomes by 3% annually but failed to address reforms surrounding the labor market and corporate taxes, which resulted in a late-afternoon sell-off.…China’s Shanghai Composite closed relatively unchanged…European shares are weak in late trading overseas, while in New York the Dow is down 50 points as of 7:00 am Pacific…the TSX has slipped 88 points while the Venture is up half a point at 959.48…

Bellhaven Copper (BHV, TSX-V) Hits At La Garrucha

About 3 weeks ago (May 17), we alerted readers to Bellhaven Copper (BHV, TSX) which was trading at 6 cents as drilling started at the company’s highly prospective La Garrucha Gold-Copper target at its La Mina concession in Colombia…La Garrucha is near the eastern edge of the property with the La Mina concession already featuring an inferred resource of 1.6 million ounces of Gold and 419 million pounds of Copper…the company was drilling right into the heart of a large magnetic anomaly and this morning reported a significant discovery with an intercept of 217 metres grading 1.31 g/t Au, 0.15% Cu and 5.6 g/t Ag in the first hole (previous drilling at La Garrucha was restricted to the western fringe of the anomaly because of ownership issues)…as stated by the company in this morning’s news, given these results together with the large size of the core of the magnetic anomaly (350 m by 250 m), Bellhaven believes it now has made an important discovery less than 1 km away from its La Cantera and Middle Zone prospects…BHV also believes that the discovery at La Garrucha confirms that clusters of high-grade Gold-Copper porphyry deposits occur at La Mina and as such, the concession holds the potential to form a new and significant Gold-porphyry district in the Middle Cauca Belt of Colombia…

Below is an updated BHV chart after the stock closed yesterday at 7.5 cents…the stock has taken a beating since last September when it climbed as high as 30 cents…for some serious new bullishness to kick in, BHV needs to bust out (on a closing basis) above the downsloping channel (10 cents) which it has been in place for nearly a year…it gapped up to 11 cents this morning, traded as high as 12 cents and then tested what could be new support at 10 cents…through the first 30 minutes of trading, BHV is up 4 cents at 11.5 cents on strong volume…it’ll be interesting to see how this finishes today…so far this morning, it’s looking very good and the market will have plenty to speculate on going forward with more results to come…

Fission Uranium Corp. (FCU, TSX-V), Alpha Minerals Inc. (AMW, TSX-V) Report Remaining Results From Winter Drilling Program

Fission Uranium and 50% joint venture partner Alpha Minerals (AMW, TSX-V) released assay results this morning from the remaining 17 drill holes from their winter program at Patterson Lake South (PLS)…nothing earth-shattering in the new results, but they do show continuous areas of broad uranium mineralization at shallow depth in all three PLS zones…of particular note is hole PLS13-066 which returned an interval of 63.5 metes at 1.15% U3O8, including 2 metres at 9.51%…the summer exploration program continues…

Huldra Silver (HDA, TSX-V)

Capitulation moment?…Huldra Silver (HDA, TSX-V) set an all-time single-day volume record yesterday as it traded 711,000 shares and hit a fresh 3-year closing low of 29 cents…we suspect this was more of the institutional selling that has plagued HDA in recent months due mostly to overall market conditions, and it should be winding down…keep in mind that at 29 cents, HDA’s market cap is only $15 million for a company that expects to produce 1.4 million ounces of Silver, 5 million pounds of lead and 4 million pounds of zinc on an annualized basis by July 1…commercial production at the company’s high-grade Treasure Mountain mine started at the end of March and continues to ramp up…Huldra has some debt issues but nothing in our view that is not manageable…the company also has significant assets on its books – $30 million in property, plant and equipment, exclusive of the mineral rights and permitted mines, as of Dec. 31, 2012…

Technically, HDA is currently trading within a strong support band between 28 and 31 cents…note the very extreme RSI(2) oversold conditions on John’s 3.5-year weekly chart…the company announced last Friday that it has arranged a non-brokered financing consisting of up to 3.3 million non-flow-through units at 30 cents per unit and 7.5 million flow-through units at 40 cents per unit to raise about $4 million in total…it’s unfortunate they have to do a financing at these levels, especially the flow-through as that stock will likely be thrown back into the market later this year…

Nevada Sunrise Gold Corp. (NEV, TSX-V)

A situation to keep an eye on is Nevada Sunrise (NEV, TSX-V) which is a partner with Pilot Gold (PLG, TSX) on the Kinsley Mountain Project in northeast Nevada…PLG has proposed a $5.2 million exploration budget for 2013 which would include 22,000 metres of drilling…NEV holds a 35% participating interest in the project, and subject to finalization of the joint venture agreement expects that it will provide its proportional share of projected exploration expenditures at quarterly intervals through the rest of the year…NEV, which had working capital of nearly $750,000 at the end of March, has been hovering around a nickel over the past couple of months…it has 97 million shares outstanding…

Note: John, Jon and Terry do not hold share positions in BHV, HDA or NEV.

Gold has traded between $1,392 and $1,413 so far today…as of 6:50 am Pacific, the yellow metal is down $13 an ounce at $1,398 after climbing more than $20 yesterday…Silver is off 29 cents at $22.45…Copper is up 3 pennies at $3.35…Crude Oil is 51 cents lower at $92.94 while the U.S. Dollar Index is up one-tenth of a point at 82.83…

Societe Generale says it’s maintaining its bearish view on Gold, saying it expects the Federal Reserve to begin tapering its purchases of bonds to stimulate the U.S. economy…the bank notes that while ETF redemptions have slowed, the market is dealing with the impact of the sales…”Net redemptions over the month of May were 125 (metric tons), taking the sales for the year-to-date to 481 (tons)…in the first five months of 2012, the funds absorbed just 13 (tons),” they stated…the bank plans on issuing a new outlook for Gold soon…

UBS says this Friday’s U.S. monthly jobs data could be critical in terms of determining Gold’s short-term direction…”While a strong print is likely to embolden shorts and potentially threaten the resolve of longs, a negative surprise is likely to trigger a stronger positive response considering the amount of (short) Gold trades around at the moment,” UBS stated…the bank added that a “strong fundamental catalyst would be required to unnerve the vast majority of (short traders) in the near-term”…

Updated Copper Chart

Gold is important but the direction of Copper is also a critical guide when analyzing the Venture Exchange which plummeted with the metal beginning in February and hit a multi-year low of 918 in mid-April as Copper slid to its lowest price ($3.04) since late 2011…Copper has been showing resilience recently, however, in the face of a 10-year high in warehouse inventories – though it’s important to point out that most of that supply is controlled by just two firms, restricting Copper supply available to the market…the Copper chart gives us confidence that the Venture can continue its recovery…RSI(14) is showing up momentum in the 2.5-year weekly chart below, and the overall bearish trend is weakening…for 5 weeks Copper has traded and tested the $3.30 support area which has held…

Updated Venture Chart

A 3-month daily chart shows how the Venture is positioned for a possible breakout in the near future above critical resistance at 970…selling pressure turned into buying pressure immediately after Colorado Resources‘ (CXO, TSX-V) Iskut River discovery in late April, RSI(14) is showing strong up momentum, and the ADX trend indicator is almost at the point of a bullish crossover…like with Gold, what appears to be a double bottom pattern formed in the Venture between mid-April and mid-May…the rest of this week will be interesting as the Venture attempts to push through 970…it could stall for now and try again next week or later this month – we’ll have to wait and see, but the critical point is that the trend is more encouraging than it has been in quite a while…the rising 10-day moving average (SMA) at 955 should provide support…

Canadian Dollar Update

Interestingly, significant rallies in the Venture have followed low points in the Canadian dollar over the past 3 years…we’ll see if that trend continues…the dollar hit 96 cents last week for the first time since the May/June period last year, and appears poised to start a recovery phase that could take it back to resistance at 99 cents…

Today’s Markets

Asian markets were mixed overnight with Japan’s Nikkei average falling 272 points to 13534…China’s Shanghai Composite fell 27 points to 2272…European shares are modestly higher in late trading overseas…producer prices for the euro zone showed a 0.6 percent month-on-month drop in April, the biggest monthly decline since July, 2009, according to the EU’s statistics office…amazingly, the Dow has closed higher for 20 consecutive Tuesdays, smashing the previous record of 15 consecutive positive Tuesdays set in 1927…through the first 20 minutes of trading, the Dow is up 40 points at 15294…the TSX is off 7 points while the Venture is down 1 point at 968…

Azincourt Resources Inc. (AAZ, TSX-V)

A company we suggest our readers put on their radar screens is Azincourt Resources (AAZ, TSX-V) which cut a deal with Fission Uranium (FCU, TSX-V) recently to earn up to a 50% interest in Fission’s Patterson Lake North Project (PLN)…the 10 contiguous claims total 27,400 hectares in the southwest area of the Athabasca basin, immediately north and adjacent to the Fission-Alpha Minerals (AMW, TSX-V) PLS discovery…Fission spent nearly $5 million on exploration at PLN ranging from airborne to ground geophysics to first-pass drilling of a few select targets…a portion of the property is currently drill-ready but other areas require further ground geophysics and interpretation in order to bring them up to the drill-ready stage…Azincourt had about $500,000 in working capital at the end of March and will obviously need to raise more dollars, but a tight share structure (only 14 million O/S), strong management team and a property of strong merit are important factors all in their favor…AAZ closed at 32 cents yesterday…

Zenyatta Ventures (ZEN, TSX-V)

Zenyatta has been red-hot lately, posting gains in 10 out of the past 11 sessions…it’s up again slightly in early trading this morning…the recent move above resistance at $2.28 was technically very significant…below is an updated chart from John…

Note: John, Jon and Terry do not hold share positions in AAZ or ZEN…

Gold has traded between $1,391 and $1,403 so far today…as of 7:00 am Pacific, bullion is up $7 an ounce at $1,395…Silver is 14 cents higher at $22.40…Copper is up a penny to $3.29…Crude Oil has added 38 cents to $92.43 while the U.S. Dollar Index has reversed and is now up one-tenth of a point at 83.35…

The latest COT report (May 28) shows the lowest collective net short position for the smart-money commercial traders since May, 2005…that means that over the last 8 years they have never been less fearful of a near-term fall in the price of Gold…meanwhile, massive amounts of short covering firepower remain in this market thanks to other participants such as large speculators…the bottom line is that the largest, best funded and best informed traders of Gold futures (commercial traders) have positioned for higher, not lower Gold prices. over the immediate to short-term at least…

Sovereign buyers like Russia are not the only ones benefiting from the price action created by Gold’s excessive sell-off in April…in Singapore, home to large communities of Chinese and Indian immigrants, unprecedented physical demand for the metal has drawn down inventories and made supply scarce…premiums for immediate delivery last week rose to $7 per ounce, setting new highs…premiums in other Asian countries have eased after Gold prices bounced off the two-year lows but remain well above their averages…

India, the world’s largest bullion consumer, plans to review import policy after shipments surged in the past two months, threatening to widen a record current-account deficit…the country can’t afford high levels of imports and policies will be reassessed if needed to curb purchases, Finance Minister Palaniappan Chidambaram told reporters in New Delhi today…he didn’t specify what changes could be made…imports may have been as high as 262 metric tons in May, he said…India tripled tax on imports since January last year to 6% and placed curbs on purchases by banks after bullion slumped the most in three decades in April, sparking a buying frenzy for jewelry, coins and bars…the Reserve Bank of India may ban all importers from shipping the metal on a consignment basis, a finance ministry official told reporters in New Delhi today, asking not to be identified (citing government rules)…the World Gold Council stated last week that India is poised for a quarterly demand record as imports reach 300 to 400 metric tons…that’s equal to almost half of last year’s total purchases…

China PMI At Lowest Level Since October

China’s factory activity shrank for the first time in 7 months in May as both domestic and external demand softened, a private survey showed, adding to concerns that the world’s second largest economy is losing momentum…the HSBC/Markit Purchasing Managers’ Index (PMI) for May slipped to 49.2, the lowest level since October, 2012, and down from April’s final reading of 50.4…the figure also was slightly lower than a preliminary reading of 49.6 released May 23…the reading adds to evidence in recent weeks that China’s economy is losing growth momentum, although the Chinese government’s official PMI, released on Saturday, ticked up to 50.8 in May from April’s 50.6…the official survey, however, focuses on bigger and state-owned firms…the IMF and OECD last week cut their forecasts for China’s 2013 economic growth to 7.75% and 7.8%, respectively…

Euro Zone Contraction Slows

The pace at which eurozone economies are contracting slowed in May, according to a leading manufacturing business survey, although the bloc is likely to remain in recession in the second quarter…the final Markit manufacturing PMI for the euro zone rose to 48.3 in May, up from 46.7 in April and an improvement on Markit’s initial estimate…any reading below 50 indicates a contraction in activity but the index suggested the contraction had hit its slowest pace since February, 2012…the data are watched as early indicators for gross domestic product readings…the firmer economic readings increased expectations that the ECB would likely refrain from acting at its rate-setting meeting later in the week…

S&P 500 P/E Ratios

Through the first 5 months of the year, the S&P 500 has climbed 14.3%…stock prices are not wildly out of line against earnings, however…P/E ratios are at 3-year highs but generally in line with historical averages…the S&P 500 currently trades at 14.4 x its earnings over the next year, and 15.8 x profits of the past year…below is a chart from this morning’s Wall Street Journal showing P/E ratios vs. trailing earnings since 2008…

The average P/E ratio since the 1870’s has been about 15…the S&P 500 currently sports a dividend yield of about 2.1%, below the 2.16% yield on 10-year Treasurys…until recently, stocks carried a higher dividend, encouraging investors to shift to stocks…

Today’s Markets

Japan’s Nikkei average extended its correction to hit a new 6-week low today as worries of a slowdown in China returned to the spotlight…the Nikkei slipped another 3.7% (513 points) to 13262…Japanese companies are still not heeding the political plea to raise their capital spendingg as a new reading today showed a spending drop of 3.9% in the first quarter…China’s Shanghai Composite, meanwhile, was relatively flat at 2299…European shares are modestly higher, thanks to the better-than-expected manufacturing data…the Dow is up 46 points at 15162 through the first 30 minutes of trading after Friday’s 200-point sell-off…the TSX is off 5 points while the Venture has gained 3 points to 965, putting it within shouting distance of the important 970 resistance level…Victory Ventures (VVN, TSX-V) has hit a new 52-week high of 14.5 cents this morning as drilling gets set to begin at the company’s Copau Property in the Iskut River area…

Colorado Resources (CXO, TSX-V) Updated Chart

John’s latest chart for Colorado Resources (CXO, TSX-V) shows a gradual unwinding of the stock’s recently overbought technical condition…the market is in a “waiting for news” mode with assay results for 3 of 4 holes still pending…since the announcement of the discovery at North ROK in late April, CXO has not traded below its 20-day moving average (SMA) which currently sits at $1.30…volume has tapered off recently but the bullish trend remains strong…CXO is up 6 cents at $1.43 in early trading…

Alpha Minerals (AMW, TSX-V)

Alpha Minerals (AMW, TSX-V) and 50% partner Fission Uranium Corp. (FCU, TSX-V) are both looking very strong as a major drill program continues at their Patterson Lake South Property…below is a chart for Alpha which shows a breakout Friday that needs to be confirmed, ideally today…the stock gained 19 cents Friday to close at $4.34 after a 27-cent jump the day before…

Aldrin Resource Corp. (ALN, TSX-V) Update

As we’ve mentioned, a stock to put on your radar screen is Aldrin Resource Corp. (ALN, TSX-V) which has just commenced an airborne magnetic and electromagnetic geophysical survey covering its Triple M Property 9 km south and 11 km west of the Alpha/Fission PLS discovery… ALN is currently sitting at strong resistance (note the down trendline in John’s 3-year weekly chart) but it’s reasonable to expect a breakout over the summer…

Updated Silver Charts – Short-Term & Long-Term

Little has changed technically in Silver over the last week as it continues to establish a base around $22…RSI(2) on both charts is certainly overdue to move out of oversold territory and perhaps that’s what we’ll see happen over the summer…the recently rising Gold to Silver ratio has been somewhat puzzling…it’s at odds with growth as it normally rises when U.S. business confidence is below 50 and indicating a contraction in the U.S. manufacturing sector…as Deutsche Bank has stated, a continued rise in the ratio “would be incompatible for an acceleration in U.S. growth during the second half of the year”…

Silver 3-Year Weekly Chart

Silver 11-Year Monthly Chart

There was a significant development Friday as Victory Ventures (VVN, TSX-V) “decoupled” from Iskut River area leader Colorado Resources (CXO, TSX-V) and surged 25% on strong volume to close right at its 52-week high of 13 cents.  What that demonstrated is how the Iskut River play, still in its very early stages, is beginning to mature – as Colorado continues to work on an important discovery, astute investors realize this prolific area offers potential for other discoveries as well.  It’s going to be a very busy summer.  Right now, the one company other than Colorado with the best shot at immediate success is Victory.  Which is why it’s now coming into investor focus.

Technically, VVN finally appears ready to break out (see John’s fresh chart below) which coincides with the closing of 2 financings and the start of a drill program at the company’s Copau Property immediately east of Colorado’s North ROK discovery and north of Imperial Metals‘ (III, TSX) massive Red Chris deposit.

With a temporary pause in Colorado’s drilling at North ROK, and other companies not yet ready to commence drill programs around Iskut River, Victory will take centre stage, so to speak, in the coming days as a highly anticipated drill program begins at its 100% owned Copau Property after nearly 2 years of preparation.  Victory is blessed with a tight share structure (just 17 million outstanding prior to May’s financings at a nickel and 6 cents) and its management team has skillfully advanced the Copau project while wisely maintaining one of the lowest overhead costs in the industry since first listing on the Venture in August, 2011, through a 15-cent IPO.   A driving force behind Victory is director and entrepreneur Howard Milne whose most recent success was International Wex Technologies, a biotech deal he helped raise $100 million for.  In this kind of a market, you look for companies with individuals like that who are smart business people with a proven track record at raising money and making money for investors.  That’s what allowed Victory to get launched during a volatile market nearly 2 years ago.

The geological case for the Copau Property is compelling as we’ve been pointing out.  Below are some highlights:

• An IP chargeability anomaly increases in strength with depth, suggesting the presence of sulphides within a southwest dipping syenite body that underlies the central part of the property;
• The IP anomaly is open to the south and west and currently covers an area at least 600 metres north-south and up to 400 metres east-west;
• Several occurrences of sulphide mineralization have been noted at surface including pyrite, chalcopyrite, and magnetite hosted in a syente host rock;
• Property lies at the intersection of 2 major regional faults – this represents a zone of weakness which mineralization often likes;
• Fault setting is similar to that at North ROK

Major Regional Fault Zones (thick lines) Around Iskut River

There are never any guarantees, of course, in the risky exploration business but Victory appears to have much going for it at this early stage.  With a market cap that is still very modest, and investors showing an appetite for the Iskut River story based on Colorado’s success to date, the upside potential for VVN at 13 cents seems to significantly outweigh the short-term downside risk with drilling set to start at Copau.  As always, perform your own due diligence.  Victory will have a terrific summer if the first holes at Copau put the company’s geologists onto a trail of mineralization that can then be followed up with even more drilling and exploration.  Based on current geological evidence, we like the company’s chances.  Speculation should intensify, and in this business that’s a critical driver of share prices.

Updated VVN Chart- Major Breakout Appears Imminent

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

TSX Venture Exchange and Gold

As we indicated yesterday morning prior to the start of trading, the Venture is looking a lot healthier these days from a technical standpoint.  That fact was very much in evidence during trading yesterday as the Index held up so well despite weakness in the broad markets and a $25 retreat in the price of Gold.  The Venture found support intra-day above its rising 30-day moving average (SMA) and rebounded at the end of the session to close up 1.67 points at 962.41.  The Dow, meanwhile., tumbled 209 points while the TSX was off 96 points.

The Venture posted its second straight weekly gain, climbing 14 points.  Key resistance, as we’ve pointed out, is 970.  Buy pressure is increasing and the bearish trend is weakening as you can see in John’s 1-year daily chart.  All things considered, the opportunity for a significant Venture rally commencing in the month of June clearly exists.  All the ingredients are in place including some positive developments on the exploration front.  What the Venture seems to be telling us is that Gold and Gold stocks have bottomed, for now at least. Newmont Mining (NMC, TSX) was actually the best performer in the S&P 500 last week, gaining more than 7%.

Keep in mind that a Venture rally will likely be focused on a relatively small universe of stocks – companies with money to spend and drill programs to carry out.  Follow the money – look for the leaders and run with them.  A rising tide is not going to lift all boats as we saw in 2009 and 2010.

F

Gold

Gold has formed a strong support band between $1,320 and $1,350 and is now starting to flex its muscles a little bit as we saw Thursday when it powered through the $1,400 level.  It gave up those gains yesterday but John’s 2-year weekly chart below confirms that the outlook over the short-term, at least, remains positive.  Sell pressure and the bearish trend are both weakening, while a bullish low “W” has formed in the RSI(14) indicator.

The latest COT report (May 21) showed that commercial traders have reduced their net short positions to the lowest levels since late 2008 when bullion bottomed during the Crash around $700 an 0unce.  Others, like the large speculators who would rather be chasing stocks at the moment, have built up very high short positions, but we’re siding with the commercials who are seldom wrong.  Small traders, not surprisingly, are the most bearish since February, 2001, just before Gold started its record decade-long run.

Gold closed at $1,388 Friday for a modest $2 weekly gain.

Silver lost 12 cents, finishing at $22.27.  Copper fell a penny to $3.28.  Crude Oil slipped $2.18 a barrel to $91.97 while the U.S. Dollar Index fell one-third of a point to 83.27.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion.  Despite its current weakness, the fundamental long-term 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, a Fed balance sheet now in excess of $3 trillion and expanding at $85 billion a month, money supply growth around the globe, massive government debt from the United States to Europe, central bank buying, flat mine supply, physical demand, emerging market growth, geopolitical unrest and conflicts…the list goes on.  However, deflation is prevailing over inflation in the world economy and this had a lot to do with Gold’s recent plunge below the technically and psychologically important $1,500 level, along with the strong performance of equities which are drawing money away from bullion.  Where and when Gold bottoms out in this cyclical correction is anyone’s guess, but we do expect new all-time highs later in the decade.  There are many reasons to believe that Gold’s long-term bull market is still intact despite a major correction from the 2011 all-time high of just above $1,900 an ounce.

Welcome to our site, or at least the initial version of it!  BMR has been online for more than 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.  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 perspective (His money that we have been given stewardship of), He will bless you.  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.