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Gold has traded between $1,368 and $1,380 so far today…as of 7:00 am Pacific, bullion is unchanged at $1,376…Silver is off a penny at $23.18…Silver jewelery from India continues to be a major draw with consumers in Europe, Middle East and Hong Kong…Mineweb reports that according to the Gems and Jewelery Export Promotion Council, Silver jewellery exports from India surged 184% to $109.69 million in July…Copper is up 2 pennies to $3.31…premiums for imported Copper remain near an all-time high in China as the domestic output has slumped on tight supplies of scrap metal, according to a Bloomberg report…Copper imports by China rose for a 3rd straight month in July, touching a 10-month high…according to Europe’s biggest Copper producer Aurbuis, imports by China are expected to be robust in the coming months…Platinum is set for a 7th straight weekly gain, the best run since May 2006…demand for the metal will outpace supply for a 2nd year in 2013, partly as labor strikes and rising mining costs in top producer South Africa curb output, according to Barclays Plc…Crude Oil is off slightly at $104.75 while the U.S. Dollar Index is up one-tenth of a point to 81.61…

Gold exchange-traded product holdings fell 1 metric ton to 1,947.3 tons yesterday, data compiled by Bloomberg show…Gold, which has likely already taken into account any imminent slow scaling back of the Fed’s $85 billion a month bond buying program, is currently benefiting from a variety of factors including a drying up of ETP selling, short-covering, impressive Asian demand, and strong Oil prices…historically, September has also been Gold’s best month of the year…2 other factors could also positively impact Gold prices in the weeks ahead – the upcoming showdown in Washington over the debt ceiling, and a possible escalation of violence and political upheaval in parts of the Middle East…how the United States and the West may respond to the situation in Syria will be interesting indeed given the seemingly strong evidence that the Syrian government this week carried out what some experts are calling the world’s worst chemical weapons massacre in 2 decades…the Assad regime, of course, has denied allegations it gassed its own people, amid an ongoing government assault on rebel-held areas around Damascus, and allies Iran and Russia are accusing Assad’s international foes of conspiring against him…the world remains a very dangerous place, especially with a resurgent al Qaeda, and Gold could benefit from these geopolitical dynamics through the remainder of the year…

Today’s Markets

The Dow is up 6 points through the first 30 minutes of trading after snapping a 6-session losing streak yesterday…new homes sales in the U.S. plunged 13.4% in July, far below expectations, in data just released, which should be bullish for Gold…the world’s top central bankers are meeting in Jackson Hole…the annual event discusses important economic issues facing the U.S. and world economies, though Fed Chairman Ben Bernanke and ECB Chairman Mario Draghi are not in attendance this year…the TSX has gained 43 points as of 7:00 am Pacific to 12713 while the Venture is unchanged at 935, its 100-day moving average (SMA) where there has been resistance…however, the Venture’s 50-day SMA is just now beginning to reverse to the upside after a long decline…that’s a very bullish development which should bring fresh technical strength into the market…we’re anticipating a strong close today and then strong momentum going into the final week of the month…

Japan’s Nikkei Average surged 295 points or 2.2% overnight to finish the week at 13660…China’s Shanghai Composite fell points to 2057…more encouraging economic data out of China showed foreign direct investment for the first 7 months of 2013 increased at an annual rate of 7%…European markets are up modestly in late trading overseas…

TSX Gold Index Chart Update

The TSX Gold Index appears poised for a breakout through important resistance at 210 in the very near future, according to John’s latest chart, which suggests to us that Gold is gearing up for a move through $1,400…the Gold Index, though still down over 30% for the year, has gained 33% over the last 2 months (39 trading sessions) since touching an intra-day low of 154 June 27…during that same period, Gold itself is up nearly 17% while the Venture Exchange has climbed 8.8%…it’s not only Gold producers and the top junior explorers who have experienced significant gains, but some owners of large undeveloped Gold deposits have performed extremely well…interest in northwest British Columbia is intense, and Seabridge Gold Inc. (KSM Project, SEA, TSX) has surged 88% to $16.39 since its June 27 low while Pretium Resources (Brucejack Project, PVG, TSX) has climbed 54% during the same period…another reason we expect Pete Bernier’s Prosper Gold (PGX.H, TSX-V) to immediately emerge as a market leader on the Venture with its Sheslay Cu-Au Porphyry Property, an advanced-stage exploration project with major upside potential as we’ve been reporting…Prosper Gold is expected to start trading during the 1st week of September…

Below is 6-month daily TSX Gold Index chart…among other positive indicators, the 50-day SMA has swung positive after being in continuous decline since November of last year…

Garibaldi Resources (GGI, TSX-V) Chart Update – An Eye-Opener

A picture tells a thousand words…on Tuesday, we posted an exclusive map showing Prosper Gold’s Sheslay Project and Garibaldi Resources’ (GGI, TSX-V) adjoining Grizzly Property, along with important features including mineralized zones and targets on the combined 240 sq. km area…this morning, John has a 10-year monthly GGI chart that is a huge eye-opener…there are few stocks on the Venture with a chart as strong as this one…GGI’s bullish technicals include a critical +DI/-DI crossover (the 1st time this has occurred in GGI since late 2009 prior to a major upside move in the stock) and 200 and 300-day moving averages that have just reversed to the upside…RSI(14) has broken above 50, shows strong up momentum and has plenty of room to move higher…GGI has also staged a key breakout above 12 cents which has been resistance for about 14 months…the company has no warrant overhang (zero warrants outstanding) as it hasn’t done a financing in more than 4 years…the GGI runway, so to speak, is clear for take-off, given all these factors including a very healthy working capital position (nearly $5 million as per the latest financials ending April 30)…we’ll have more on the Grizzly and the Sheslay Monday, plus an overview of Garibaldi’s attractive Mexican assets that provide a rock-sold foundation for this company’s short-term and long-term growth…GGI’s management team, a critical component in any assessment of a Venture company, is talented and driven…as of 7:00 am Pacific, GGI is unchanged at 13.5 cents…

True Gold Mining Inc. (TGM, TSX-V)

Mark O’Dea’s True Gold Mining (TGM, TSX-V) has certainly bucked the trend of companies in this sector struggling to raise money…in May, TGM closed a $10 million financing with Teck Resources (TCK, TSX) at 33 cents and then just recently completed a $17.4 million private placement with Liberty Metals and Mining Holdings, a subsidiary of Boston-based Mutual Insurance, as part of a broader strategic investment by Liberty into TGM…

True Gold is developing 2 key projects in Burkina Faso, West Africa, where mining contributes 12% of GDP…8 Gold mines have been permitted there over the last 7 years…TGM’s 856 sq. km Karma Project includes 5 closely spaced deposits – Rambo, Nami, Kao, Goulagou I and Goulagou II – with a proposed central processing facility…the Karma project is currently undergoing a feasibility study, which entails the development of a fully engineered construction and operating plan for a proposed low-cap-ex, open-pit, heap leach mine…

We initially brought True Gold to our readers’ attention after the announcement of its financing with Teck…below is an updated 2.5-year weekly chart from John…this chart isn’t as explosive at the moment as Garibaldi’s, but it’s very promising nonetheless…notice how TGM has broken above resistance at 35 cents and is now is up against a down trendline in place since late last year…the stock closed yesterday at 38.5 cents, just half a penny below its still-declining 200-day SMA…the 100-day SMA has flattened out at 30 cents and should reverse to the upside soon…this is definitely a situation to continue watching closely given both the improving technicals and the solid fundamentals…as always, perform your own due diligence…as of 7:00 am Pacific, TGM is up a penny at 39 cents…

Macro Enterprises Inc. (MCR, TSX-V)

At BMR, we focus primarily on Gold, Copper and Silver and promising juniors, plus general economic and market trends, but occasionally a company comes along that really grabs our attention if it’s serving a niche market and performing very efficiently…Macro Enterprises (MCR, TSX-V) is a great example as the company specializes in construction and maintenance of pipelines in Alberta and British Columbia…we 1st introduced MCR to our readers in May given its earnings growth and momentum, and the stock has climbed more than 75% since that time…it closed yesterday at $5.29, up 16 cents on volume of nearly 1 million shares…this is a situation we will continue to monitor closely, but keep in mind that MCR has risen in Zenyatta-like fashion and came within 7 cents yesterday of John’s $5.61 Fib. level…of course it could eclipse that Fib. level in the coming days but John has proven to be very accurate with his use of this particular technical indicator…the probability of some consolidation in MCR in the immediate future has risen considerably, so please be aware of that as John points out in this 1-year weekly chart…as always, perform your own due diligence…after 30 minutes of trading, MCR has gained 16 cents to $5.45…

Have a great weekend, everyone…we’ll return with our popular Week In Review And A Look Ahead by approximately mid-afternoon tomorrow Pacific time…

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

Gold has firmed up after touching an overnight low of $1,359…as of 7:30 am Pacific, bullion is up $11 an ounce at $1,378, $4 above its 100-day moving average (SMA)…it climbed as high as $1,383 over the last hour…Silver has added 37 cents to $23.26…Copper has advanced 3 pennies to $3.31 on positive economic data out of China…Crude Oil has gained 34 cents to $104.19 while the U.S. Dollar Index has is up one-fifth of a point to 81.59…

JPMorgan and Bank of America (BOA) have turned quite bullish on Gold….BOA is predicting a 4th quarter average of $1,495, while JPMorgan anticipates rising averages in every quarter through the end of next year, according to analyst estimates compiled by Bloomberg…

Sales of jewelry, coins and bars will reach as much as 1,000 metric tons in India and China in 2013, valued at a combined $87.6 billion, according to the World Gold Council…“Specifically the demand for jewelry was the highest 2nd quarter since 2007,” said David Lamb, Managing Director, Jewelery at the World Gold Council. “This was driven by the powerhouse markets of India and China, jointly representing 50% of world demand.”

Commenting on the Chinese numbers, Lamb added,  “Despite recent price adjustments, this Gold demand trend data reinforces just how the Chinese belief that holding Gold as a store of value has become even more entrenched.”

Investors have sold 23.2 tons from Gold-backed ETPs since the start of August, set for the smallest outflow since January, according to data compiled by Bloomberg…that takes this year’s drop to 683.6 tons, close to the 700 tons that Barclays Plc expects to be sold in 2013…the bank predicts no change in ETP holdings in 2014…

Demand for jewelry, coins and ingots contrasts with record sales from ETPs, which at the peak in December held 2,632.5 tons, more than the official reserves held by all but 3 central banks…the funds now own 1,948.3 tons valued at $85.8 billion, $55.9 billion less than at the end of December…there has obviously been a big and important shift in Gold holdings from West to East this year…

Factory Output Improves in China & Euro Zone

The global economy showed signs of improvement today with factory output improving in 2 of the world’s largest economies…In China, HSBC’s preliminary reading of PMI data crossed the key 50-level, which signals expansion, for the first time in 4 months…meanwhile, business activity in the euro zone rose at the fastest pace in August for more than 2 years, a survey showed this morning, a sign that economic recovery in the 17 nations that use the common currency is picking up steam…data firm Markit said a preliminary gauge of activity based on a survey of purchasing managers in the currency union rose to 51.7 in August from 50.5 in July – its highest reading for 26 months…a reading of more than 50 indicates activity is expanding…

Today’s Markets

Dow Aims To End 6-Session Skid

After 6 straight losing sessions, the Dow is in positive territory (up 44 points) through the first hour of trading today…RSI(2) on the daily chart, after yesterday’s close, hit a low extreme not seen since last December…minutes of the Fed’s July 30-31 policy meeting, released late during yesterday’s trading session, suggested officials were on track to start winding down the $85 billion-a-month bond-buying program, possibly as early as next month, if the economy strengthens…they were, however, a bit more uncertain than in June about whether economic growth would pick up as they had forecast and about the gains they were seeing in the job market…

The latest jobless claims report, issued this morning, showed a rise in initial claims to 336,000, a bit higher than the 330,000 economists were looking for…July leading indicators rose 0.6%, slightly higher than the 0.5% increase expected…meanwhile, financial data firm Markit said its “flash” U.S. manufacturing PMI rose to 53.9, its best showing since March…

The average American household is earning less than when the Great Recession ended four years ago, according to a report released this morning…U.S. median household income, once adjusted for inflation, has fallen 4.4% in that time, according to the report from Sentier Research…the report is based on an analysis of Census Bureau data…

TSX, Venture

The TSX has jumped 116 points as of 7:30 am Pacific while the Venture is 5 points higher at 930…the Venture is underpinned by strong technical support between 918 and 924…the rising 30-day SMA provided rock-solid support at this month’s low of 906, and that SMA is currently at 921…the biggest immediate technical challenge for the Index is to climb above its still-declining 100-day SMA in the mid-930’s…despite 3 straight losing sessions to begin the week, the outlook going into September still has to be considered very bullish in our view – and a number of individual stocks are reflecting this…we expect a reversal to the upside by next week in the 50-day SMA which has flattened out after being in decline since November of last year…

Pershimco Resources Inc. (PRO, TSX-V) is among the strong performers on the Venture this morning, up 3 cents to 40 cents after reporting impressive drill results (including 77 metres grading 1.77% Cu and 2.03 g/t Au) from its Idaida target in Panama (in the immediate vicinity of its La Pava and Quema deposits) where it has confirmed a new Copper-Gold system…

Asian markets were relatively quiet overnight…Japan’s Nikkei average fell 59 points while the Shanghai Composite slipped 6 points to 2067…European shares were up significantly today…

Fission Uranium (FCU, TSX-V) and Alpha Minerals (AMW, TSX-V) Report More Results From PLS

Fission Uranium (FCU, TSX-V) and Alpha Minerals (AMW, TSX-V) reported drill results from 5 more holes this morning from the Patterson Lake South (PLS) discovery in Saskatchewan…PLS13-078, PLS13-081, PLS13-083, PLS13-085 and PLS13-086 all intersected relatively wide zones of mineralization of varying degrees of radioactivity in the R390E Zone, the strike length of which has doubled to 120 metres since the winter 2013 program…PLS13-086 returned a 47-metre wide mineralized zone including a total of 5.27 metres composite “off scale”…a $7 million, 44-hole, 11,000 metre drill program and ground geophysics surveys continues at PLS…

Technically, Fission tested important “gap” support yesterday – John suggested this would likely occur and indeed it did, as FCU reached an intra-day low of $1.23 yesterday before closing at $1.30…below is an updated 4-month daily chart…note the next Fib. level ($1.84)…this is not a price target but a theoretical level based on Fibonacci analysis…FCU is up 6 cents at $1.36 through the first hour of trading…

Macro Enterprises Inc. (MCR, TSX-V) Updated Chart

Macro Enterprises Inc. (MCR, TSX-V) has climbed more than 75% since we first called our readers attention to this situation 3 months ago…it’s certainly unusual for a Venture company to report strong revenue and earnings growth, but that’s exactly what Macro has been doing for the past year…the company specializes in construction and maintenance of small to mid-inch pipelines, facilities and gathering systems…operations are centered in Fort St. John, B.C., with a satellite office located in Hinton, Alberta…Macro maintains one of the most modern fleets of heavy equipment in the industry…yesterday, the stock jumped 63 cents to close at $5.13 (it hit a new all-time high of $5.35) after the company reported Q2 net income of $5.71 million (21 cents per share) vs. $2.6 million or 11 cents per share during the same period last year…for the first 6 months of fiscal 2013, MCR has earned 61 cents per share…the company says it expects revenues in the 3rd quarter to be above that recorded in the 3rd quarter last year ($35 million) after taking into account the expected additional revenues resulting from a November 2012 acquisition…Macro continues to actively bid new jobs and look for new opportunities, and says it’s encouraged by the prospect of significant pipeline infrastructure projects in British Columbia and Alberta over the short and medium-term…

Below is an updated MCR chart…keep in mind that technically “overbought” conditions don’t last forever – corrections at some point always occur, and it’s never a mistake to take some profits off the table…note John’s $5.61 Fib. level…MCR is 29 cents higher at $5.42 as of 7:30 am Pacific…

Mirasol Resources Ltd. (MRZ, TSX-V)

A company worthy of our readers’ due diligence is Mirasol Resources Ltd. (MRZ, TSX-V) which smartly sold its 49% interest in the Joaquin Silver-Gold Project in Argentina late last year for $60 million ($30 million in cash and the balance in stock in Coeur d’Alene Mines Corp. (CDE, NYSE)…with a strong treasury, MRZ is now focused on Chile…what we also like about this company is the transparency of its financial statements…Mirasol is a great example for the rest of the industry in terms of how it reports its expenses…

Technically, there has been a strong correlation between MRZ and the Venture Index…the stock was as high as $8 in early 2011 before falling to a multi-year low of $1.04 on June 27-28, a time that may later be viewed as the bottom of the Venture’s 2+ year bear cycle…below is a 2.5-year weekly MRZ chart that shows a double bottom and a strong reversal pattern…seeing this kind of increasing bullishness in MRZ adds credence to the view that a significant Venture move to the upside is on the way…MRZ closed yesterday at $1.41…it has 44 million shares outstanding…

GoldQuest Mining Inc. (GQC, TSX-V) Updated Chart

Investors were disappointed with results from GoldQuest Mining (GQC, TSX-V) yesterday as the company missed on its 1st 5 holes drilled along the promising Guama trend, immediately west of the Romero discovery…the targets tested at Guama, however, were not the core targets for that area – the holes were drilled into the peripheral parts of the trend, albeit into some strong anomalies…the targets of the highest interest at Guama are located within the Los Comios concession, which is currently under reapplication…the trend is defined by strong chargeability anomalies coincident with outcropping Copper veins (up to 34% Cu)…GoldQuest expects the Los Comios concession to be granted shortly, at which point those targets will be tested…momentum traders are exiting GQC and moving into other situations, and that always creates opportunities…

Technnically, GQC has 2 important support levels – 35 cents, which it closed at yesterday (this is also the 1,000 day moving average), and 25 cents as shown in John’s 1.5-year weekly chart below…we see a good chance of a much stronger 4th quarter for GQC as an initial Romero resource estimate will be announced along with an updated resource for La Escandalosa…it’s possible those systems could be linked…in addition, the company should be in a position to drill the best targets at Guama, so we view any additional weakness as an opportunity – especially if oversold conditions emerge, and they likely will…the company has a strong treasury and can easily survive without a financing until at least 2015…GQC is unchanged at 35 cents after 60 minutes of trading today…

Note: John, Jon and Terry do not hold positions in FCU, MCR, MRZ or GQC…

Gold has traded between $1,359 and $1,373 so far today…as of 7:15 am Pacific, bullion is down $8 an ounce at $1,363…Silver is off 9 cents at $22.94…Copper has retreated 2 cents to $3.28…Crude Oil is off 20 cents at $104.91 while the U.S. Dollar Index is up one-fifth of a point at 81.14…

Gold appears to be making its way from London vaults to Switzerland for a pit stop for refining/re-melting, then continuing on to the Far East to meet strong physical demand there so far in 2013, according to UBS…data show that there has been a tendency for U.K. Gold shipments to Switzerland to rise during periods of strong physical demand…the flow in the 1st half of the year was the highest in the UBS database that goes back to 1988, the bank stated…

Acquisitions by China’s Gold mining companies reached a record this year as the metal’s steepest quarterly drop in more than nine decades slashes mine values and sidelines Western rivals laden with debt…takeovers and asset purchases by producers based in China and Hong Kong rose to a record $2.24 billion this year, beating last year’s record $1.96 billion, according to data compiled by Bloomberg…Zijin Mining Group Co., the world’s 7th-largest Gold company by market value, and Zhaojin Mining Industry Co. are among companies looking to strike after the share price of targets fell an average 53% since bullion peaked in 2011…

Gold-Silver Ratio Short-Term Chart

Yesterday, we posted a long-term chart on the Gold-Silver Ratio (GSR)…this morning, John has a short-term chart…recently, the GSR has been narrowing with Silver out-performing bullion (the ratio reflects how many ounces of Silver it take to buy an ounce of Gold)…historically, a declining GSR ratio has proven to be bullish for precious metals (shows positive money flow) as it was between late 2008 and 2011 when it fell from a high of 96.23 to a low of 29.08…this year, the GSR hit a high of 72.77 and yesterday closed at 59.57…the GSR’s 50-day moving average (SMA) recently reversed to the downside, indicating a change in trend over the short to medium term…there is strong chart support between 52 and 56…bottom line – the GSR could bounce higher and take a run at the declining 50-day SMA, but the current trend favors an even lower GSR ratio which supports the idea that we are going to see higher Silver and Gold prices this quarter…

Prosper Gold Gets Conditional Approval For Sheslay Project Qualifying Transaction

Pete Bernier’s Prosper Gold (PGX.H, TSX-V) has received conditional approval from the Venture Exchange for its much-anticipated qualifying transaction with Firesteel Resources (FTR, TSX-V), and closing of the QT is expected next week with trading slated to begin the first week of September…our sources confirm that Bernier has all of his ducks in a row, including his financing and drill program, so Prosper Gold will be ready to hit the road running at the Sheslay Cu-Au Porphyry Project immediately upon trading…this is the way he and his team operate, with precision and a high level of skill…this puts the wheels in motion, of course, for Garibaldi Resources (GGI, TSX-V) in terms of its Grizzly Property, surrounding the western and southern borders of the Sheslay, and if you haven’t studied the map we posted yesterday on the entire area, we strongly suggest you do because this in our view is going to quickly develop into one of the hottest Cu-Au porphyry plays in the country…GGI President and CEO Steve Regoci agreed to an interview with BMR, immediately after Prosper Gold begins trading, and that’s when we expect GGI will come out with all guns blazing regarding the Grizzly…of course they are also busy with their Mexican projects, so it’s reasonable to expect GGI to come alive with news in the very near future…we suspect many investors, asleep at the switch this summer, still aren’t even aware of Garibaldi’s Grizzly Property or the significance of it, but that will no doubt change very shortly…

Below is a chart for Prosper Gold up until the point it was halted in early May…it was launched in February, 2012, and it’s important to point out that Bernier and his group looked at hundreds of potential properties before settling on the Sheslay River Valley, at the top end of British Columbia’s prolific Golden Triangle and about 60 miles west-northwest of Colorado Resources’ (CXO, TSX-V) North ROK discovery…trading in PGX.H was primarily in a horizontal channel between 30 cents and 50 cents…what could happen very quickly is a breakout above the horizontal channel, and then the race is on…

The Sheslay is a potential world-class Cu-Au porphyry system, given historical results, and there is no one better to prove it up than Dirk Tempelman-Kluit who was the genius behind the multi-million ounce discovery at Blackwater…an intimate connection between the Sheslay and the Grizzly clearly exists, in part due to the Kaketsa Pluton which originates on the Grizzly in the northwest corner of that 17,000+ hectare property…the Grizzly is about 2.5x the size of the Sheslay but at a much earlier stage of exploration…nonetheless, the Grizzly offers significant blue-sky potential and Garibaldi has its own outstanding geological team, and the financial power, to unlock the value of this property – especially with Bernier completely changing the dynamics of the situation in this under-explored area…as stated in Prosper Gold’s own technical report on the Sheslay, “The Grizzly covers the west and south contacts of the Kaketsa intrusion with the surrounding Stuhini contacts, in a similar geological setting to the Sheslay Project…known mineralization has characteristics of alkalic porphyry Copper-Gold mineralization”…

Euro Chart Update

It’s very important to keep a close eye on the euro at the moment as it continues to sit on the edge of a potential important breakout above a down trendline as John shows in this 3-year weekly chart…the euro and Gold have a strong correlation, so a breakout by the euro should be positive for bullion…the euro is off slightly today…

Today’s Markets

Asian markets were quiet overnight with Japan’s Nikkei average and China’s Shanghai Composite both posting slight gains…European shares were down slightly today as well…

The Dow faces the possibility of its 1st 6-day losing skid since July 2012, but the current oversold conditions suggest a turnaround isn’t far off…as of 7:15 am Pacific, the Dow is down another 54 points…Fed minutes will be released at 11:00 am Pacific and could provide fresh insight into when the Central Bank plans to start scaling back its $85 billion per month in asset purchases…our hunch is that this won’t happen until at least later in the year…the TSX has slipped 59 points while the Venture is off 2 points at 931…

Macro Enterprises Inc. (MCR, TSX-V)

Macro Enterprises (MCR, TSX-V) continues to be an earnings machine and hit a new all-time high this morning of $5.35 (31 cents below John’s Fib. level)…it reported Q2 earnings yesterday of $5.71 million or 21 cents vs. $2.6 million or 11 cents per share during the same period last year…for the 1st 6 months of 2013, MCR has earned just over $15 million or 61 cents per share…Macro Enterprises is a simple story and it’s making money, 2 reasons why MCR has been an island of safety for a Venture stock (and a market leader) since late last year…MCR has it has risen in Zenyatta-like fashion from below $1 a share…Macro specializes in construction and maintenance of small-to mid-inch pipelines, facilities and gathering systems…operations are centered in Fort St. John, B.C., with a satellite office located in Hinton, Alberta…Macro maintains one of the most modern fleets of heavy equipment in the industry…as always, perform your own due diligence…as of 7:30 am Pacific, MCR is up 51 cents at $5.01…

Probe Mines (PRB, TSX-V) Drills More High-Grade Intersections At Borden Lake

Probe Mines’ (PRB, TSX-V) Borden Lake Project in northern Ontario continues to evolve in very impressive fashion…results released this morning from 10 infill drill holes from the high-grade Gold zone at Borden Lake have returned significant intersections of thick mineralization, confirming the continuity of the high-grade system currently delineated over a potential strike length of 950 metres…BL13-455 on Section 1500m SE returned an interval of 44 metres averaging 4.0 g/t Au, which included 14.3 metres of 11.1 g/t Au, while 100 metres to the southeast, hole BL13-458 intersected 41 metres grading 5.1 g/t Au, including 11.6 metres averaging 15.1 g/t Au (all intervals approximate true width)…the high-grade mineralized zones in the southeast are between vertical depths of 283 and 444 metres…Probe will be issuing an updated resource estimate later this year…the deposit remains open to the southeast (high-grade area, potential underground operation) and the northwest (lower grade area, open-pit) where more infill results released this morning included 50 metres averaging 1.4 g/t Au in BL13-444 and 19 metres of 2.2 g/t Au in BL13-451 on Section 150m NW…as of 7:30 am Pacific, PRB is up 3 cents at $1.98…Agnico Eagle Mines (AEM, TSX) took a nearly 10% position in PRB a few months ago, and for good reason…great play…

GoldQuest Mining (GQC, TSX-V) Drills 47 Metres Grading 6.9 G/T Au and 0.94% Cu At Romero

GoldQuest Mining (GQC, TSX-V) released results from 2 infill holes at Romero this morning, the last holes to be incorporated into a maiden resource estimate for the discovery made last year…LTP-145 returned 227 metres grading 1.78 g/t Au and 0.44% Cu (including 47 metres averaging 6.9 g/t Au and 0.94% Cu) while LTP-144a intersected 172 metres grading 0.99 g/t Au and 0.33% Cu…both holes were located about 150 metres east of the original discovery…the disappointing news, however, is that the first 5 holes drilled at Guama did not return significant results…these particular holes were drilled into the peripheral parts of the trend but still featured anomalies that cannot be explained…the targets of the highest interest at Guama are located within the Los Comios concession, which is currently under reapplication with the concession expected to be granted shortly…not a great start for GoldQuest at Guama but it should get better for them there…these kind of systems can take time to figure out…GQC is under a little pressure in early trading, down 3.5 pennies at 38.5 cents…as we suggested a while back, GQC was nearing a point of “decision” technically and it was wise to wait for fresh drill results to determine the near-term direction of this sometimes very volatile stock…attractive buying opportunities in GQC should open up for patient investors…this still has major upside potential as the year progresses with more drilling to come at Guama, an initial resource estimate for Romero and an updated one for Escandalosa…it’s also possible there could be an important link between Romero and Escandalosa…

Teuton Resources Corp. (TUO, TSX-V) Chart Update

Teuton Resources (TUO, TSX-V), with a large package of properties in British Columbia, has been firming up since we first mentioned it recently to our readers when it was trading in the 8 to 9 cent area…it closed yesterday at 11.5 cents and is pushing higher this morning after announcing a major drilling program has started on its Tennyson property, situated 40 km north of Stewart…operator of the program is Brigade Resources, a Hunter Dickinson company, which is in the 2nd year of a 4-year option to earn a 50% interest in the property by spending $6 million and making cash payments totaling $300,000…below is an updated TUO chart (15-month weekly) from John…next major resistance is at 15 cents…we’ll have more on Teuton in the near future…

New Gold Inc. (NGD, TSX) Chart Update

Producers have been performing well recently, and New Gold Inc. (NGD, TSX) is no exception…this 8-year monthly chart supports the view that New Gold Inc. (NGD, TSX) and other well-run producers have turned the corner – in the case of NGD, a confirmed reversal around the $6 level…of course there’s some weakness this morning with some normal consolidation in the TSX Gold Index…NGD is off 42 cents at $7.78 through the first 45 minutes of trading…strong technical support around $7.40…

Note: John and Jon both hold share positions in GGI.  Jon also holds a share position in TUO.

Gold retreated and tested new support near $1,350 overnight before recovering and pushing higher…as of 6:45 am Pacific, bullion is up $5 an ounce at $1,371…Silver is off its lows, now basically unchanged for the day at $23.13…Copper is flat at $3.30…Crude Oil is down $1.80 a barrel to $105.26 while the U.S. Dollar Index is off half a point to 80.77…

With less than 2 weeks left in August, total sales of U.S. Mint American Eagle Gold bullion coins for investors stood at just 3,000 ounces as of yesterday…that’s a far cry from 39,000 ounces for the entire month of August 2012 and the monthly average of almost 100,000 ounces for the first 7 months of this year, according to data on the U.S. Mint web site…projected sales for this month will be one of the lowest tallies for August since the U.S. Mint launched the American Eagle coins program for investors in 1986…unlike previous years when sales were limited by a lack of Gold coin blanks, the U.S. Mint has not experienced any supply issues this time around…demand for Gold in Asia has reportedly been strong so far this quarter, and one of the factors behind bullion’s jump to a 2-month high…it’ll be important for that demand to continue to be robust at these higher levels to sustain this move…Barclays’ analysts say Gold is in a balancing act…“While short positioning remains elevated, therefore leaving scope for further short covering activity, a change in market perception toward Fed tapering or weaker-than-expected data could trigger the re-establishment of short positioning, possibly exacerbating the downside for Gold,” they stated…

In India, Gold has advanced to a level not seen since mid-December of last year due to a tumbling rupee which has a new record low against the U.S. dollar…the Indian rupee has overtaken the Australian dollar and the Japanese yen to become Asia’s worst-performing currency this year amid fears over the Indian government’s management of the economy…The Financial Times reported this morning that New Delhi’s seeming inability to protect its currency has raised concerns about a potential pull-out among foreign investors, who own roughly half of freely traded Indian shares but are yet to withdraw large quantities of capital…“Market confidence has fallen sharply in the past week following policy measures aimed at reducing pressure on the currency, such as restrictive capital controls, and increases to the import duty on Gold, which have had the perverse effect of signalling desperation rather than fostering stability,” The Financial Times reported this morning…the head of global markets research at Australia’s ANZ bank, Richard Yatsenga, has a different take on the situation…he told CNBC that India’s troubles represent a “great microcosm” for what is happening in many emerging markets right now…“India is a microcosm in the sense that nothing domestic occurred to trigger this latest move,” he said. “India’s current account deficit and budget deficit have been very wide for at least 2 years.  It’s only when U.S. bond yields really started going up and the free money tap turned off that it started to be manifested in the currency.”

Gold-Silver Ratio

John has an interesting chart this morning regarding the Gold-Silver ratio (GSR) which has been narrowing recently with Silver out-performing bullion (the ratio reflects how many ounces of Silver it take to buy an ounce of Gold)…historically, a declining GSR ratio has proven to be bullish for precious metals (shows positive money flow) as it was between late 2008 and 2011 when it fell from a high of 96.23 to a low of 29.08…this year, the GSR hit a high of 72.77 and yesterday closed at 59.99…this 15-year monthly chart shows near-term support at the rising 200-day moving average (SMA) of 58 which also coincides with the Fib. 38.2% retracement level…there is also a long-term support band between 45 and 50 which clearly could be tested…RSI(14), currently at 53%, is showing downward momentum with support between 40% and 50%…bottom line – expect some more weakness in the GSR over the short-term (the 50-day SMA is also in decline) which suggests that the current uptrend in both Silver and Gold should continue as this quarter progresses…we’ll show a short-term chart tomorrow…

The Sheslay-Grizzly Copper-Gold Play – Updated Map

A picture tells a thousand words, so we thought our readers would appreciate this exclusive, updated map of Prosper Gold’s (PGX.H, TSX-V) Sheslay Cu-Au Porphyry Project (6,800 hectares) and Garibaldi Resources’ (GGI, TSX-V) 100%-owned adjoining Grizzly Property (17,500 hectares)…BMR prepared this map based on publicly available information from both companies including other maps and technical reports…the property boundaries and mineralized zones/target areas are approximate but believed to be very reliable…we’ll make adjustments as necessary and as developments unfold, but this is the initial version and should be helpful…the goal of the map is to put the “Big Picture” into perspective…

We firmly believe the Sheslay and the Grizzly will become one of the hottest Cu-Au exploration plays in the country beginning imminently as soon as Pete Bernier’s Prosper Gold receives final Exchange approval for his company’s qualifying transaction with Firesteel Resources (FTR, TSX-V)…given Bernier’s credibility and the geological expertise of his team, led by award-winning geologist Dirk Tempelman-Kluit who discovered the multi-million ounce Blackwater deposit that was bought out by New Gold Inc. (NGD, TSX), combined with the advanced exploration status of the Sheslay and the incredible targets that exist (5 known mineralized zones with drilling starting at the Star porphyry body – mineralization is open in all directions everywhere at Sheslay), this project should rapidly develop into a market “darling”…Bernier is aiming for one thing, and that’s a major new deposit in this part of northwest British Columbia, and of course the property is on trend with some huge deposits and mines to the south…no less than 85% of Firesteel’s 23 holes drilled at the Star target bottomed in strong Cu-Au mineralization and the average length of those holes was only 174 metres…quite simply, this project is incredible and that’s why Bernier scooped it up, and with perfect market timing…

Meanwhile, as far as Garibaldi is concerned, they are in an extremely enviable position and it makes absolute sense to us that they’re gearing up for a major push at the Grizzly given the positive exploration results they have slowly but gradually built up since 2006, and the new dynamic at play which is Bernier and the aggressive drilling program already in place for the Sheslay…Bernier’s Prosper Gold should have a very large following given what his team did with Richfield Ventures…the Grizzly is a more “early stage” project than the Sheslay but offers major blue-sky potential as the map itself makes perfectly clear…mineralization is trending north-south…what does that mean, folks?…

There are 2 important large blocks of interest on the Grizzly – the “Western Block“, which hosts the important Mount Kaketsa Pluton believed to be a critical “heat engine” driving mineralizing fluids at both the Grizzly and the Sheslay (note the known Cu-Au occurrences), and the “Southern Block” which we’ve pointed out with a large star…interestingly, for comparative purposes, Garibaldi carried out an airborne magnetic survey in 2006 that covered the southern half of what’s now called the Sheslay as well as portions of the Grizzly (mainly to the south)…according to a technical report, “Results of the survey showed that the rock units and structures which underlie the Copper Creek Property (Sheslay) continue into the large area of low relief within the Garibaldi claims and identified several magnetic anomalies which are similar to the magnetic anomalies that are associated with the mineralized zones which comprise the Copper Creek Property (Sheslay).  The area of interest defined by the airborne magnetic survey appears to cover a north trending zone approximately 6 kilometres long and 4 kilometres in width.”

We’ll comment more on this map in the days ahead…combined, the Sheslay and the Grizzly total 240 sq. km – about 5 times the size of Colorado Resources’ (CXO, TSX-V) North ROK Property…after 2 years of searching the globe for his next project, it’s no wonder that Pete Bernier landed here in the Sheslay River Valley…given the significance of this story, and the ultimate potential of a new mine in this under-explored area, BMR is working on a September site visit…

Today’s Markets

Asian markets fell sharply overnight with Japan’s Nikkei average losing 362 points or 2.6% to close at 13396…the losses on China’s Shanghai Composite weren’t as severe as that Index fell just 13 points to 2073…European shares are down moderately in late trading overseas…the Dow, which has closed lower for 4 straight sessions for the first time this year, is down 13 points through the first 15 minutes of trading…the TSX is up 10 points while the Venture is down 4 points at 930 as of 6:45 am Pacific…the Venture’s declining 100-day SMA in the mid-930’s is providing resistance at the moment, as it has since late last year, so investor patience is required…all signs point to this hurdle being overcome very soon…

Fission Uranium (FCU, TSX-V) Updated Chart

John has been extremely accurate recently with his use of Fibonacci analysis, another reason we’re so bullish on Garibaldi which still has a long ways to go reach its potential Fib. levels…below is an updated chart for Fission…we warned of a temporarily overbought condition as FCU hit an all-time high of $1.47 last week…it closed yesterday at $1.34…this is a very fluid situation, of course, with Fission and JV partner Alpha Minerals (AMW, TSX-V) in the middle of a major drill program, and drill results can bring major volatility to a stock…the PLS discovery in Saskatchewan appears to be world-class and more great results should be forthcoming…anyway, John’s chart does provide some valuable guidance for our readers as part of their continuing due diligence…note the “gap” band between $1.22 and $1.28 – that’s certainly where FCU should find strong support, if it moves lower…previous resistance at $1.10 is also excellent support…this is a very bullish chart which bodes well for this exciting discovery play…as of 6:45 am Pacific, FCU is unchanged at $1.34…

Aldrin Resource Corp.(ALN, TSX-V)

We initially brought Aldrin Resource Corp. (ALN, TSX-V) to our readers’ attention when it was trading in the 8 to 10-cent range in May and we’ve been following it closely ever since…Aldrin, of course, is working on its 12,000-hectare Triple M Property in the Patterson Lake area (9 kilometres south to 11 km west of the Fission-Alpha Minerals discovery) and should continue to stir up interest as the year progresses, with drilling currently planned for January…this morning, the company announced the start of its summer field exploration program…the conductive trends at Triple M property parallel the mineralized Patterson Lake conductors and fault…again, John’s TA on Aldrin has proven remarkably accurate…ALN strengthened, as expected, after a breakout above the down trendline on this multi-year weekly chart…ALN hit a high of 15.5 cents yesterday…while some near-term consolidation is certainly possible based on the current RSI(14) level, look for rock-solid support at the top of both the down trendline and the cup…this is going to continue to be a very interesting play to follow for many months…as of 6:45 am Pacific, ALN is unchanged at 15 cents…

Note: John and Jon both hold share positions in GGI.

Updated at 7:50 am Pacific

Gold is taking a breather today after climbing $62 an ounce last week and blasting through critical resistance around $1,350…as of 7:50 am Pacific, bullion is down $9 an ounce at $1,368 after touching an overnight high of $1,383…Silver is down a dime at $23.16…(see updated Silver charts below)…Copper is off 3 pennies at $3.30…Crude Oil is flat at $107.40 and should continue to be underpinned by strong demand and unrest in Egypt…the U.S. Dollar Index, meanwhile, is off slightly at 81.26…

SPDR Gold Trust, the world’s largest Gold-backed ETF, says its holdings rose 0.26% to 915.32 tonnes on Friday…the fund posted a 0.4% climb in holdings last week – the first increase in nearly a year…while western Gold investors have been moving out of ETF’s, with holdings falling by a dramatic 402.2 tons in the 2nd quarter, that selling has been “absorbed” by a 71% rise in demand from India and an 85% jump in demand from China during the same quarter, according to the World Gold Council…the effort by India’s rather incompetent government to convince its citizens not to buy Gold is simply not working, and may even be having the opposite effect…whether legally or illegally, Indians want their Gold and may even desire it more – not just because of a cultural affinity for bullion, but for safe haven purposes as well…

Even though central banks are expected to buy fewer Gold bars than previously expected in 2013 (they are now expected to be net buyers of 300 to 350 tonnes of Gold in 2013, down from an earlier forecast of 400 to 450 tonnes, according to the WGC), demand from China and India should pick up the slack…they were the runaway leaders and indications are that Q3 demand from “Chindia” will also be very impressive…

Venture Exchange Long-Term Chart

Was the Venture’s June 27 intra-day low of 859 the bottom in the 2+ year bear market cycle for junior resource stocks, as Eric Sprott suggested last week?…Gold hit a low of $1,180 June 28 before reversing higher, and since those late June lows the Venture is up 9.4% while bullion has climbed 17%…when the Venture is really flying, when it’s in a bull phase, it typically out-performs Gold…that pattern hasn’t emerged yet but that’s something to watch for as a possibility in the coming weeks…

Below is a 13-year Venture monthly chart that offers some encouragement…there’s a long-term support band between 844 and 887…notice, as well, how the RSI(14) is now moving higher after being in decline since late last year…this indicator may have bottomed out just slightly above its 2008 low when the Venture sank to 679…at the very least, a significant rally appears to be in the works with this important turnaround in the RSI(14)…

The Venture posted a 19-point gain last week, thanks to the breakout in Gold prices and continued firmness in Crude Oil and Copper…the Index closed Friday at 940, its 100-day SMA (which is still in decline, may provide some minor resistance), and seems destined in the near future to test strong resistance at 970…a key technical event that certainly could occur before the end of the month – even potentially this week –  is a reversal to the upside in the 50-day SMA…this would add some much-needed fuel…the long-term chart also shows that the -DI indicator may have recently peaked as it did during the 2008 Crash…

Venture-TSX Gold Index-Gold Comparative Chart

Below is a monthly comparative chart that goes back to April, 2011, shortly after the Venture bear market began…the Index went from being an “out-performer” to an “under-performer” even though Gold prices took off in the summer of 2011 to an all-time high…at the very least, what this chart tells us is that we’re currently in the midst of a strong rally for Gold and Gold stocks that could have some legs to it…it’s too early to tell, though, whether this is the beginning of a new bull phase…for confirmation of that, we’d like to see the Venture out-performing Gold and even the broader markets…

Today’s Markets

The Venture is off 1 point at 939 as of 7:50 am Pacific…Intertainment Media Inc. (INT, TSX-V) is the runaway volume leader so far this morning, climbing 4 cents to 9.5 cents on news that its Ortsbo Inc. subsidiary has formed a partnership with Telus International to support global customer care…Zenyatta Ventures (ZEN, TSX-V) is strong this morning, back above the $4 level…

Zara Resources (ZRI, CNSX) is trying to throw its weight around again, what little it has…Zara announced 3 simultaneous takeover bids this morning (all for shares in ZRI) of Greencastle Resources (VGN, TSX-V), Altai Resources (ATI, TSX-V) and Visible Gold Mines Inc. (VGD, TSX-V)…previously, ZRI made an offer to accredited investors of VGD for up to 19.9% of Visible which expired July 25…it’s now making an offer for all VGD shares in addition to 100% of VGN and 100% of ATI…this is Danny Wettreich on steroids this morning…is he a schemer, as one of our readers suggested this morning, an opportunist, an entrepreneurial genius, a dreamer, an lunatic, or what, exactly?…one thing’s for sure – he’s no Pete Bernier…at least Wettreich is providing some entertainment and giving a few companies a push…

“The enlarged Zara group of companies will have approximately $13,738,000 in net cash and securities after payment of all current liabilities and a resource development portfolio of Gold, nickel-copper, and oil and gas, located in Canada in Quebec, Ontario, British Columbia, Alberta and Saskatchewan, and also in Nevada, USA,” stated Zara CEO Wettreich. “This is a dramatic and innovative simultaneous offer for three public companies, and is designed to offer the shareholders of these companies the opportunity of participating in the creation of a viable natural resource company led by the dynamic, experienced and innovative management team of Zara.

“I expect annual savings of approximately $1,200,000 by putting these companies together. Substantial savings will result from the elimination of excessive management fees, duplicated public listing costs, duplicated office and administration costs and other wasteful practices. The enlarged Zara will be lean, efficient, cash rich, asset strong and managed by directors who are sensitive to shareholders best interests.

“Over the last three years, these companies have seen share price declines ranging from 79 per cent to 96 per cent, while the directors of these companies have paid themselves a total of $2,505,640.  Shareholders of these three companies, which comprise about 3,000 investors, can transform their investment by becoming shareholders of a significant new company with a bright future. Further, by accepting the Zara Offer shareholders can establish a tax loss on their investment.”

The TSX is off 61 points as of 7:50 am Pacific while the Dow, coming off its worst week of the year, is up slightly through the first 85 minutes of trading…Fed watchers will be dissecting Wednesday’s release of minutes from the August Federal Open Market Committee meeting for clues on how and when a scaling back of the $85 billion in monthly bond purchases could occur…the annual Kansas City Fed gathering in Jackson Hole starts Thursday, and while Fed Chairman Ben Bernanke will not be there, other officials will be, and they are bound to continue to express their views on Fed policy…

China’s Shanghai Composite led Asian markets higher overnight with a gain of 17 points to close at 2086…Japan’s Nikkei average finished 108 points higher at 13758…European shares were down modestly today…

Amarc Resources Ltd. (AHR, TSX-V)

The junior resource market since early 2011 has taken its toll on just about every junior, and Amarc Resources (AHR, TSX-V) is certainly no exception as it’s trading at all-time lows…we’ve mentioned AHR occasionally in recent months and we’ll have more later this week…with a decent cash position ($6 million as of its March 31 year-end) and a portfolio of high quality properties in B.C., however, the opportunity for a significant turnaround in AHR clearly exists…it seems traders/investors love to buy when they see everyone else piling in, even at the top of a market, but few individuals have the nerve to jump in at or near the bottom after a stock has taken a beating…the chart tells us that AHR has been forming a strong base between a nickel and 6.5 cents, a foundation it has a good chance of building on over the next couple of months – especially, of course, if the company can create some excitement on the exploration front which it clearly has the ability to do…patience is a virtue…as always, perform your own due diligence…as of 7:50 am Pacific, AHR is up half a penny at 6 cents…

Radius Gold Inc. (RDU, TSX-V)

Simon Ridgway’s Radius Gold (RDU, TSX-V) is beginning to come to life…it gained 2.5 cents last week on increased volume to close at 12 cents…keep in mind, the company holds approximately 4 million shares of B2Gold (BTO, TSX) which reported excellent Q2 results recently with the stock climbing as high as $3.69 last week after trading as low as $2.17 in July…BTO has weakened this morning, however, on news that it has launched a private offering of $225 million U.S. of convertible senior subordinated notes due 2018…Radius has JV’s with B2Gold in Nicaragua and Fortuna Silver Mines (FVI, TSX) in Mexico…

For the quarter ending March 31, Radius reported working capital of $15 million or 17 cents per share with BTO trading at about the same price as it is now…so RDU is currently trading significantly below its working capital position, and the outlook for BTO appears to be very bright as we mentioned last week…what’s going to be particularly interesting in the coming weeks is whether or not Radius “seizes the moment” and pulls the trigger on a property deal of some sort…the company’s stated objective is to use its treasury “to acquire distressed projects or companies and unlock their potential…the drying up of equity funding for junior explorers is creating a unique window of opportunity”…

In late February, Radius stated the following in a news release:

“Management is conducting an extensive review of precious metal exploration projects that may be available for acquisition or joint venture. A number of projects have been identified internally or submitted to Radius’s management team for review. Radius has signed confidentiality agreements with a number of companies to allow detailed technical and legal/fiscal reviews to be carried out, and its geologists have recently completed site visits to some of the projects.

“Management is optimistic that the company will be able to acquire significant stakes in one or more projects within the next six months. Further news on the acquisition effort will be reported as and when the terms of any deals are negotiated”.

That 6-month window is closing rapidly, and given improving market conditions Radius would probably be wise to pull the trigger sooner rather than later…we’ll see what happens…

Below is a 2.5-year weekly RDU chart that shows 3 critical developments: 1) Strong up momentum in RSI(14); 2) A bullish +DI/-DI crossover; and 3) A prolonged period of sell pressure has been replaced with buy pressure which is increasing…RDU has 87 million shares O/S (no warrants outstanding which is positive)…as always, perform your own due diligence…

Castle Resources Inc. (CRI, TSX-V)

As the junior resource market continues to heal, a situation to watch closely in northwest British Columbia is how the high-grade Granduc Copper Project near Stewart plays out…just over a month ago, Castle Resources (CRI, TSX-V) engaged KPMG Corporate Finance to identify, analyze and execute a transaction that will fast-track the development of Granduc…the company is considering a range of transaction structures, including a joint venture, off-take agreement, earn-in or some form of business amalgamation or merger…since that announcement, the stock has traded between a low of 2.5 cents and a high of 6 cents on total volume (all exchanges) of 54.1 million shares (27 trading sessions)…this huge spike in volume included a 22 million share day July 29…volume spikes typically precede big share price moves…

In February, Castle issued a Granduc PEA using a measured/indicated resource of 11.3 million tonnes grading 1.47% Cu, 0.17 g/t Au and 12.4 g/t Ag, and an inferred resource of 44.6 million tonnes grading 1.43% Cu, 0.19 g/t Au and 10.7 g/t Ag…the capex is estimated at $494 million…the payback period is 4 years with annual production averaging 70 million pounds of payable Copper equivalent over a 15-year mine life…resources are open for expansion, and excellent infrastructure is in place…the PEA envisions an underground mining operation similar in scope to the historic mining operations at Granduc in the 1970’s and 1980’s…

Below is an 8-month weekly CRI chart from John…a bullish reversal pattern has formed in the last 3 weeks, RSI(14) is beginning to show strong momentum and the overall bearish trend is clearly weakening…CRI collapsed from a high of nearly $1 in early 2011 to a multi-year low of 2.5 cents…as the saying goes, you sell high and buy low…there is significant value in Castle’s Granduc Project, especially considering the high-grade nature of it…with nearly 200 million shares outstanding, CRI’s market cap is just under $10 million based on Friday’s 5-cent close…it’s off half a penny at 4.5 cents in early trading today…

Contact Exploration Inc. (CEX, TSX-V)

A junior oil and gas company we’re watching closely, for technical and fundamental reasons, is Contact Exploration (CEX, TSX-V) which is currently producing at a rate of 450 Boe/d (vs. 66 Boe/d in Q1 2013)…CEX is positioned in the heart of the Montney trend and tripled its reserves in fiscal 2013 (ending March 31), thanks in large part to its East Kakwa discovery, a liquids-rich natural gas play, in the Deep basin in Alberta…on August 8, Contact announced the closing of an over-subscribed $6.5 million financing…the company has no debt and is poised to continue to grow its reserves and production (it has assets in Alberta and New Brunswick)…since late last year, CEX has traded in a horizontal channel between 18 and 28 cents…it closed Friday at 26 cents, and a breakout above that horizontal channel at some point in the near future appears quite possible given the progress this company is making…CEX has 250 million shares outstanding, following this latest financing, for a total market cap of $65 million…as always, perform your own due diligence…

Updated Silver Charts

Silver has been out-performing Gold recently with the Gold-Silver ratio (GSR) beginning to decline (we’ll have a couple of interesting charts on that tomorrow)…this typically indicates positive money flow into precious metals and a bullish trend for precious metals…Silver gained a whopping 13% last week to close at $23.26 while bullion jumped 4.7%…sales of American Eagle Silver coins by the U.S. Mint rose to 31 million ounces year to date, closing in on the 33.7 million ounces sold in all 2012…

Silver Long-Term Chart – 11-Year Monthly

The long-term chart, which we’ll start with this morning, shows very stiff and critical resistance at $26 which will take time to overcome…notice that the RSI(2), which is coming off historical lows, is now at 73.98%…it will likely push higher and remain in the overbought zone for a modest period of time before correcting – similar to previous patterns in 2008-2009 and 2012…

Short-Term Silver Chart -6-Month Daily

The Silver-Gold ratio has broken decisively above its downtrend line, an interesting development…RSI(14) is showing strong momentum and is now at 77%…it’s in the overbought zone but still has room to move higher…looking for conifrmation of a breakout above the $22-$23 resistance band…next significant resistance would be at $24…

Note: John holds a share position in AHR.  Jon holds share positions in CRI and VGN.

4:00 am Pacific – Updated Version at 8:00 am Pacific

Gold is taking a slight breather in early trading today after climbing $62 an ounce last week and blasting through critical resistance around $1,350…as of 4:00 am Pacific, bullion is down $4 an ounce at $1,373 after touching an overnight high of $1,383…Silver is down 8 cents at $23.18…(see updated Silver charts below)…Copper is off a penny at $3.32…Crude Oil has declined 35 cents to $107.11 but should continue to be underpinned by strong demand and unrest in Egypt…the U.S. Dollar Index, meanwhile, is off slightly at 81.25…

SPDR Gold Trust, the world’s largest Gold-backed ETF, says its holdings rose 0.26% to 915.32 tonnes on Friday…the fund posted a 0.4% climb in holdings last week – the first increase in nearly a year…while western Gold investors have been moving out of ETF’s, with holdings falling by a dramatic 402.2 tons in the 2nd quarter, that selling has been “absorbed” by a 71% rise in demand from India and an 85% jump in demand from China during the same quarter, according to the World Gold Council…the effort by India’s rather incompetent government to convince its citizens not to buy Gold is simply not working, and may even be having the opposite effect…whether legally or illegally, Indians want their Gold and may even desire it more – not just because of a cultural affinity for bullion, but for safe haven purposes as well…

Even though central banks are expected to buy fewer Gold bars than previously expected in 2013 (they are now expected to be net buyers of 300 to 350 tonnes of Gold in 2013, down from an earlier forecast of 400 to 450 tonnes, according to the WGC), demand from China and India should pick up the slack…they were the runaway leaders in Q2, as this chart from www.usfunds.com shows, and indications are that Q3 demand from “Chindia” will also be very impressive…

Today’s Markets

China’s Shanghai Composite led Asian markets higher overnight with a gain of 17 points to close at 2086…Japan’s Nikkei average finished 108 points higher at 13758…

European markets are off slightly, looking for direction from New York where the Dow is coming off its worst week of the year amid uncertainty regarding the Federal Reserve’s policy outlook…futures in New York as of 4:00 am Pacific are pointing toward a flat opening on Wall Street…Fed watchers will be dissecting Wednesday’s release of minutes from the August Federal Open Market Committee meeting for clues on how and when a scaling back of the $85 billion in monthly bond purchases could occur…the annual Kansas City Fed gathering in Jackson Hole starts Thursday, and while Fed Chairman Ben Bernanke will not be there, other officials will be, and they are bound to continue to express their views on Fed policy…

The Venture Exchange posted a 19-point gain last week, thanks to the breakout in Gold prices and continued firmness in Crude Oil and Copper…the CDNX closed Friday at 940, and seems destined to test stiff resistance at 970 – possibly this week…a key technical event that could occur this week is a reversal to the upside in the 50-day moving average (SMA)…investors will be keeping a close eye on possible drill results from several fronts including Colorado Resources (CXO, TSX-V) and GoldQuest Mining (GQC, TSX-V)…

John will have an interesting long-term Venture chart as part of our 8:00 am update…the trend is your friend, and right now the trend is very favorable…

Radius Gold Inc. (RDU, TSX-V)

Simon Ridgway’s Radius Gold (RDU, TSX-V) is beginning to come to life…it gained 2.5 cents last week on increased volume to close at 12 cents…keep in mind, the company holds approximately 4 million shares of B2Gold (BTO, TSX) which reported excellent Q2 results recently with the stock climbing as high as $3.69 last week after trading as low as $2.17 in July…BTO could back off a little, however, after announcing this morning a private offering of $225 million of convertible senior subordinated notes due 2018…Radius has JV’s with B2Gold in Nicaragua and Fortuna Silver Mines (FVI, TSX) in Mexico…

For the quarter ending March 31, Radius reported working capital of $15 million or 17 cents per share, and that was with BTO trading at a lower price than it is now…so RDU is currently trading significantly below its working capital position, and the outlook for BTO appears to be very bright as we mentioned last week…what’s going to be particularly interesting in the coming weeks is whether or not Radius “seizes the moment” and pulls the trigger on a property deal of some sort…the company’s stated objective is to use its treasury “to acquire distressed projects or companies and unlock their potential…the drying up of equity funding for junior explorers is creating a unique window of opportunity”…

In late February, Radius stated the following in a news release:

“Management is conducting an extensive review of precious metal exploration projects that may be available for acquisition or joint venture. A number of projects have been identified internally or submitted to Radius’s management team for review. Radius has signed confidentiality agreements with a number of companies to allow detailed technical and legal/fiscal reviews to be carried out, and its geologists have recently completed site visits to some of the projects.

“Management is optimistic that the company will be able to acquire significant stakes in one or more projects within the next six months. Further news on the acquisition effort will be reported as and when the terms of any deals are negotiated”…

That 6-month window is closing rapidly, and given improving market conditions Radius would probably be wise to pull the trigger sooner rather than later…we’ll see what happens…

Below is a 2.5-year weekly RDU chart that shows 3 critical developments: 1) Strong up momentum in RSI(14); 2) A bullish +DI/-DI crossover; and 3) A prolonged period of sell pressure has been replaced with buy pressure which is increasing…RDU has 87 million shares O/S (no warrants outstanding which is positive)…as always, perform your own due diligence…

Castle Resources Inc. (CRI, TSX-V)

As the junior resource market continues to heal, a situation to watch closely in northwest British Columbia is how the high-grade Granduc Copper Project near Stewart plays out…just over a month ago, Castle Resources (CRI, TSX-V) engaged KPMG Corporate Finance to identify, analyze and execute a transaction that will fast-track the development of Granduc…the company is considering a range of transaction structures, including a joint venture, off-take agreement, earn-in or some form of business amalgamation or merger…since that announcement, the stock has traded between a low of 2.5 cents and a high of 6 cents on total volume (all exchanges) of 54.1 million shares (27 trading sessions)…this huge spike in volume included a 22 million share day July 29…volume spikes typically precede big share price moves…

In February, Castle issued a Granduc PEA using a measured/indicated resource of 11.3 million tonnes grading 1.47% Cu, 0.17 g/t Au and 12.4 g/t Ag, and an inferred resource of 44.6 million tonnes grading 1.43% Cu, 0.19 g/t Au and 10.7 g/t Ag…the capex is estimated at $494 million…the payback period is 4 years with annual production averaging 70 million pounds of payable Copper equivalent over a 15-year mine life…resources are open for expansion, and excellent infrastructure is in place…the PEA envisions an underground mining operation similar in scope to the historic mining operations at Granduc in the 1970’s and 1980’s…

Below is an 8-month weekly CRI chart from John…a bullish reversal pattern has formed in the last 3 weeks, RSI(14) is beginning to show strong momentum and the overall bearish trend is clearly weakening…CRI collapsed from a high of nearly $1 in early 2011 to a multi-year low of 2.5 cents…as the saying goes, you sell high and buy low…there is significant value in Castle’s Granduc Project, especially considering the high-grade nature of it…with nearly 200 million shares outstanding, CRI’s market cap is just under $10 million based on Friday’s 5-cent close…

Contact Exploration Inc. (CEX, TSX-V)

A junior oil and gas company we’re watching closely, for technical and fundamental reasons, is Contact Exploration (CEX, TSX-V) which is currently producing at a rate of 450 Boe/d (vs. 66 Boe/d in Q1 2013)…CEX is positioned in the heart of the Montney trend and tripled its reserves in fiscal 2013 (ending March 31), thanks in large part to its East Kakwa discovery, a liquids-rich natural gas play, in the Deep basin in Alberta…on August 8, Contact announced the closing of an over-subscribed $6.5 million financing…the company has no debt and is poised to continue to grow its reserves and production (it has assets in Alberta and New Brunswick)…since late last year, CEX has traded in a horizontal channel between 18 and 28 cents…it closed Friday at 26 cents, and a breakout above that horizontal channel at some point in the near future appears quite possible given the progress this company is making…CEX has 250 million shares outstanding, following this latest financing, for a total market cap of $65 million…as always, perform your own due diligence…

Updated Silver Charts

Silver has been out-performing Gold recently with the Gold-Silver ratio (GSR) beginning to decline…this typically indicates positive money flow into precious metals and a bullish trend…Silver gained a whopping 13% last week to close at $23.26 while bullion jumped 4.7%…sales of American Eagle Silver coins by the U.S. Mint rose to 31 million ounces year to date, closing in on the 33.7 million ounces sold in all 2012…

Silver Long-Term Chart – 11-Year Monthly

The long-term chart, which we’ll start with this morning, shows very stiff and critical resistance at $26 which will take time to overcome…notice that the RSI(2), which is coming off historical lows, is now at 73.98%…it will likely push higher and remain in the overbought zone for a modest period of time before correcting – similar to previous patterns in 2008-2009 and 2012…

Short-Term Silver Chart -6-Month Daily

The Silver-Gold ratio has broken decisively above its downtrend line, an interesting development…RSI(14) is showing strong momentum and is now at 77%…it’s in the overbought zone but still has room to move higher…looking for conifrmation of a breakout above the $22-$23 resistance band…next significant resistance would be at $24…

Note: John, Jon and Terry do not currently hold share positions in RDU or CEX.  Jon holds a share position in CRI.

TSX Venture Exchange and Gold

Editor’s Note:  Morning Musings Monday at 4:00 am Pacific followed by updated version at approximately 8:00 am Pacific.

The Venture continues to strengthen, as expected, and the conditions are in place for an acceleration in the weeks ahead of what could be a very powerful move.  That’s the nature of this highly speculative market – it can turn violently in one direction or the other very quickly.  Negative sentiment was at historical extremes, and that’s the ideal environment to scoop up beaten-down but quality situations that ultimately can turn into doubles, 5-baggers and even 10-baggers when the market reverses.  Scared, emotional investors often dismiss these opportunities when they should be embracing them.

Eric Sprott told the Globe and Mail a couple of days ago in a question and answer session with readers,  “I firmly believe that we reached the bottom on June 28th and that Gold should double from that bottom within the next 12 months.  So by next summer, I think that the price of Gold will have made new highs and stand around $2,400 per ounce.  Given my outlook on Gold prices, this sector (the junior space) will be explosive.  The continuation of the Gold bull market will lead the junior Gold mining stocks higher by many hundreds of per cents, just like it did during the 2008 recovery.  By the way, since hitting the bottom on June 28, Gold has rebounded by 12% while Gold miners have gone up by about 25%…I think the Fed will remain accommodative for a very long period of time.”

Has Sprott lost his mind?  $2,400 Gold by next summer, and some junior Gold mining stocks jumping by many hundreds of per cents?  No one, including Eric Sprott, for whom we have a great deal of respect, has a crystal ball.  While not being as bold as Sprott, and keeping in mind that skeptics will consider his comments rather self-serving, we are convinced an explosive move is underway in Gold and in select producers and juniors – as regular readers know, we’ve seen this brewing for several weeks now, especially after the Venture hit John’s 860 Fib. target which held as support.

First, however, a word of caution as we mentioned in Thursday’s Morning Musings, and then we’ll get to the current Venture and Gold charts.  This message from Thursday is worth repeating.  This is not wisdom unique to BMR – it’s just plain common sense:

It’s safe to assume that rising Gold prices and a higher TSX Gold Index, over the short-term at least, will translate into a strong rally by the Venture Exchange. Firm Oil and Copper prices will also help.  The Venture is looking much healthier from a technical standpoint these days and a move above critical resistance at 970 will indeed signal a serious breakout.  A rising tide, however, will not lift all boats on the Venture – many of those boats, in fact, remain in serious danger of sinking before the end of the year, even in an environment of stronger Gold prices.  The chickens are coming home to roost for many of these “lifestyle” companies that have fleeced the public over the years.  When looking at companies, as individual investors, each one of us should commit to performing even better due diligence to ensure the following conditions are met:

A company must have…

1. A superior management team with proven track records at building value and executing both on the ground and in the market;
2. A strong working capital position;
3. An attractive share structure (many companies have been forced to do cheap financings over the past 2 years);
4. An exploration program(s) in progress or about to begin at a property (or properties) with strong geological and upside potential with limited jurisdictional risk;
5. A healthy stock chart;
6. A simple but exciting and compelling story.

It’s one thing if a company with the above characteristics drills a property and the results just aren’t there – that’s the nature and the risk of the exploration business, and as an investor one has to be prepared for that.  Never invest money you can’t afford to lose.  But you can reduce the “other” risks that come from a company not possessing all of the above qualities and tripping over its own feet.  There is plenty of speculative money sitting on the sidelines, in our view, that can propel the Venture significantly higher as this quarter progresses (historic opportunities exist).  But this money will be more selective than ever in terms of the companies it’s flowing into.

Bottom line: The juniors who really have their act together (maybe 20%?) – we’ve focused on quite a few of them in recent weeks – are the ones who will attract money like a magnet into the open market (and private placements if needed) immediately and over the coming months.  They will seriously out-perform.

Updated Venture Chart

Okay, with that out of the way, let’s take a look at John’s latest Venture chart.  After being in decline since November of last year, the Venture’s 50-day moving average (SMA) is potentially within just a few trading days of reversing to the upside.  This is hugely bullish and, history shows, always indicative of a bullish new phase.  A test of 970 is quickly on the way in our view.  The fact this market held critical support the week before last, when Gold slipped to $1,280 an ounce, was a highly encouraging sign.  The Venture gained 19 points last week to finish at 940, its highest close in over 2 months (the Dow, by comparison, experienced its worst week of 2013).  It’s quite possible there could be a minor reaction around the 970 level but this time the rising 50-day SMA will provide the technical support, the encouragement and the fuel to ultimately allow the Venture to overcome this critical resistance and send the Index significantly higher.  Powerful bear market rally or the beginning of a major new bull market as Sprott suggests?  Time will tell.

Canadian Dollar Updated Chart

Keep a close eye on the Canadian dollar which is poised for a breakout – the Venture always tends to perform its best when the loonie is in an uptrend and the U.S. Dollar Index is struggling.  The Canadian dollar is very close to busting out above a downsloping channel in place since late last year (the euro has been gaining strength, too, and we believe that’s good news for Gold).

The Seeds Are Being Planted For The Next Big Run

There’s no better cure for low prices than low prices.  The great benefit of the collapse in Gold prices this year is that it forced producers to learn to become much more lean and mean in terms of their cost structures. Among many others, Barrick Gold (ABX, TSX), the world’s largest producer, said it may sell, close or curb output at 12 mines from Peru to Papua New Guinea where costs are higher.  Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their operating structures.  Exploration budgets among both producers and juniors have also been cut sharply.  In addition, government policies across much of the globe are making it more difficult (sometimes impossible) for mining companies to put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists.  Ultimately, all these factors are going to create a supply problem – think about it, where are the next major Gold deposits going to come from? On top of that, a recent Mineweb study shows grades have indeed fallen significantly just over the past decade.  For instance, grades in the South African Gold sector fell from an average of 4.3 grams per metric ton in 2002 to an average of 2.8 grams per metric ton in 2011.  It doesn’t take a rocket scientist to figure out that the next huge bull market in Gold stocks is just around the corner due to demand-supply dynamics, much leaner producers who will suddenly become earnings machines, and a junior market that will be healthier simply because a lot of the “lifestyle” companies sucking money out of investors will simply disappear or get taken over by individuals or groups who are actually competent and serious about building shareholder value.   A healthy “cleansing” in the market has been taking place.  As this continues, more and more seeds are being planted for an incredible future move in well-managed Gold producers and explorers that could make the dotcom bubble look like a tea party.

Gold

Gold has broken out powerfully above the $1,320 – $1,350 resistance band which makes $1,400 the next immediate target. A number of factors are supporting Gold at the moment, technically and fundamentally, which we’ve been mentioning recently and we’ll review again Monday in our pre-market 4:00 am Pacific Morning Musings update.

Below is a 3-year weekly chart from John.  Lots of room for bullion to move higher.  For the week it gained $62 to close at $1,377.

Silver rocked last week, climbing $2.80 an ounce or 13% to close at $23.26.  It cut through resistance at $22 like a knife through butter.  As usual, John will have updated Silver charts Monday morning.  Copper added to its recent gains, climbing 7 cents to finish at $3.34.  Crude Oil added $1.49 a barrel on unrest in Egypt to close at $105.97.  The U.S. Dollar Index, meanwhile, gained nearly one-fifth of a point to finish the week at 81.29.

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 this year’s drop, 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 (especially from China), 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 drew money away from bullion.  Where and when Gold bottoms out in this cyclical correction is anyone’s guess – the June low of $1,180 may have been the bottom – but we do expect new all-time highs as the decade progresses.  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 almost 4 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, Silver and Copper 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 intent is to provide you with information that you can use as part of your own due diligence.  Our stock coverage is for informational and entertainment purposes only and must not be viewed or interpreted as “buy”, “sell” or “hold” recommendations. 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.