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Gold has traded in a range between $1,304 and $1,315 so far today after yesterday’s sharp move to the upside thanks in part to short-covering, a weaker U.S. Dollar Index, and encouraging economic data of out China…a close today above this week’s high of $1,320 would certainly set a bullish tone entering next week…as of 6:55 am Pacific, bullion is off $3 an ounce at $1,309…Silver, which closed at a 2-week high yesterday, has gained another nickel to $20.30…Copper, which staged an important move yesterday through resistance above an ascending triangle at $3.20, is up another 3 cents at $3.27…we’ll see how Copper finishes today – confirmation of yesterday’s rally is required – and we’ll possibly have an updated chart over the weekend or Monday at the latest…Copper’s June high was $3.41 and could be ready to test that level in the near future…Crude Oil has gained $1.34 a barrel to $104.76 while the U.S. Dollar Index is up slightly at 81.12…

June figures for South Africa, released by the government yesterday, show that Gold production in that country continues to fall – it was down 14% year-on-year in June 2012, and is now only South Africa’s 4th most important mined metal by value, having been overtaken by iron ore…coal remains the most important metal or mineral by sales value, followed by platinum…

Tracking the Euro Chart For Insights Into Gold

The euro has been trading in a horizontal channel since February between 127.5 and 134…over the last 5 sessions it has moved from the bottom of the channel to the top, and is also facing resistance from a down trendline, as you can see in John’s 2-year weekly chart…the reason we’re presenting this chart is that the euro is at a decisive point, and it’s correlation with Gold has been increasing…a breakout about the horizontal channel and the down trendline would be very significant for the euro, and potentially for Gold as well if the correlation continues…the euro is off very slight at the moment at 1.3355…RSI(14) has bounced off support 3 times and is showing up momentum…next week should be interesting…

More Encouraging Economic Data Out of China:  Power Production Stages Biggest Jump In 2.5 Years

China’s economy appears to have stabilized amid fears that one of the world’s most important growth engines is close to stalling…a series of small targeted measures from Chinese policy makers in recent months seems to have at least temporarily reversed a growth slowdown, if we can trust the numbers, with factory production, investment and real estate construction all picking up in July, according to official data released today…this is after encouraging export/import statistics yesterday…most economists had expected the July figures to show stabilization in the world’s second-largest economy, which has decelerated in 9 of the past 10 quarters, but some numbers surprised on the upside, suggesting fears of an imminent collapse are unfounded…the composition of the mild rebound, however, appears to rely heavily on construction and investment and undermines Beijing’s stated goal of rebalancing the economy more towards consumption and services…

Industrial production at large enterprises, a closely watched measure that usually tracks China’s gross domestic product, increased 9.7% from a year earlier in July, sharply up from 8.9% growth in June and the fastest pace since February…the unexpectedly strong performance was driven mostly by rebounding production of steel, cement, power and nonferrous metals, underscoring the fact that China’s growth remains disproportionately reliant on credit-fuelled infrastructure and property construction…in contrast, growth in retail sales slipped slightly in July, increasing 13.2% from a year earlier compared with 13.3% growth in June…fixed asset investment, a key driver of China’s investment-led economy, stabilized in July with a 20.1% rise in the first 7 months from a year earlier, the same pace as in the 6 months to the end of June, following 4 consecutive months of deceleration…growth in real estate investment sped up in July, jumping 20.5% in the first 7 months, compared with 20.3 per cent growth in the first 6 months…power production, another closely watched indicator, increased 8.1% in July from a year earlier, up from 6% growth in June and the fastest increase since December 2011…On a less bright note, consumer prices were unchanged from the previous month and producer prices fell at an annual rate of 2.3%…

Today’s Markets

China’s Shanghai Composite gained 7 points overnight to close at 2052…Japan’s Nikkei average was virtually unchanged to finish the week at 13616…European shares are mixed in late trading overseas…

In New York, the Dow is down 16 points through the first 30 minutes after snapping a 3-day slide yesterday…the Dow and S&P 500 have not fallen 4 sessions in a row all year…a total of 28 companies have raised $5.2bn from U.S. initial public offerings since July, which marks the fastest rate of activity and amount raised in the same period since 2007, according to data from Dealogic…a further further 6 companies are looking to price deals and begin trading by the end of this week…IPO’s this year have gained an average of 13.2% on their first day of public trading and are up on average just over 30% from their listing price, Dealogic said…new listing activity has been most prolific around the biotechnology sector, which has seen companies raising money at the fastest rate since the dotcom boom amid a wave of growing investor interest…

In Toronto, the TSX is off 23 points as of 6:55 am Pacific…Canada’s labor market continued to exhibit signs of weakness last month as the economy shed a surprisingly high 39,400 net jobs nationally, with public sector workers and youth taking on the biggest share of the losses…not surprisingly, Quebec suffered the highest number of job losses (30,400) while Alberta posted the largest gain…overall, Canada’s unemployment rate edged up slightly to 7.2%…the Venture is off a point at 914 in early trading…

TSX Chart Update

Could a big move be coming in the TSX?…there are indications of that, based on John’s chart below…the TSX found support this week in the immediate vicinity of its rising 200 and 300-day moving averages, and at the Fibonacci 61.8% level before yesterday’s 140-point jump…Fib. analysis gives a target of 13319 which of course would mean an important breakout above significant resistance at 12900…

TMX Group released its July trading statistics yesterday…TSX trading volume rose 10% to 6.3 billion shares last month, up from 5.7 billion in July of last year…the dollar value of trading also rose, to $98.5 billion from $87.2-billion in July 2012…volume on the Venture rose as well to 2.8 billion shares, up from 2.5 billion the year earlier…the dollar value of trading, however, dropped significantly to $847-million, down from $1.2-billion in July 2012 which reflects the 25% drop in the Index since then…Alpha trading slipped hard, handling only 1.2 billion shares, a 46% drop from July 2012…when it comes to listings, the TSX welcomed 8 in July, bringing its 2013 total to 61, down from 77 at this time last year…the Venture welcomed 5 new listings, bringing its 2013 total to 44, down from 107 last year…around half the 1,800 or so juniors on the Venture have less than $200,000 in working capital, according to Kaiser Research…

Fission Uranium (FCU, TSX-V) Updated Chart

Looking very good, as simple as that…results of 4 more holes were released yesterday from Patterson Lake South, and Fission Uranium (FCU, TSX-V) climbed as high as $1.06 intra-day before closing at $1.01 on heavy volume of more than 6 million shares (all exchanges) while partner Alpha Minerals (AMW, TSX-V) added 4 pennies to $5.50…

If and when resistance on FCU is overcome at $1.10, the next Fib. level is $1.38…that’s not a price target, just a level for guidance and our readers’ due diligence based on Fib. theory and analysis…as of 6:55 am Pacific, FCU is up a penny at $1.02…

Copper Fox Minerals (CUU, TSX-V)

With exploration interest in parts of B.C. on the upswing, we’ve been keeping a close eye on Copper Fox Minerals (CUU, TSX-V) and watched with interest as it suddenly jumped from the 50’s into the 80’s on strong volume July 17 when the company announced a revamped JV with Teck Resources (TCK. B, TSX) on the massive Schaft Creek Project in the northwestern part of the province, 100 km southeast of Prosper Gold’s (PGX.H, TSX-V) Sheslay Project and Garibaldi Resources‘ (GGI, TSX-V) Grizzly Property…

We weren’t interested in chasing CUU in the 80’s but patiently waited for a potential re-test of support after that sudden spike higher, which is exactly what has occurred…CUU appears to be forming a base between 49 and 53 cents as John outlines in a 6-month daily chart below…a Phase 1, 10,000-metre drill program aimed at increasing the value of the Schaft Creek Project was slated to begin by the end of July…as of 6:55 am Pacific, CUU is down a penny at 49 cents…

Note: John, Terry and Jon do not hold share positions in FCU or CUU.

Gold has traded between $1,287 and $1,298 so far today…as of 7:00 am Pacific, bullion is up $8 an ounce at $1,295…Silver is 38 cents higher at $19.97…Copper is making an important move, up 7 cents to $3.24 (refer to John’s Copper chart yesterday) thanks to stronger-than-expected economic data out of China…a close above resistance and an ascending triangle at $3.20 (today and tomorrow to finish the week) would be a very bullish development in the Copper market from a technical perspective…Crude Oil is down 81 cents to $103.56 while the U.S. Dollar Index is off one-fifth of a point to 81.05…it hit a 7-week low this morning…

The world’s biggest Gold-backed exchange-traded fund, New York’s SPDR Gold Shares, said its holdings fell by another 4.5 tonnes yesterday,  bringing its total outflow for the week to 8.1 tonnes…

Gold demand has picked up again after prices fell back below $1,300 an ounce, according to Standard Bank…“Looking at China first, two days ago, when Gold was still above $1,300, the physical premium on the Shanghai Gold Exchange reached a high of $22.83; yesterday morning, when Gold dropped below $1,300, the high was $26.25,” the bank stated.  “By contrast, the premium was $14.87 last week when Gold was above $1,330.  The physical premium indicates strong Gold-bar demand out of China.  More broadly, the Standard Bank Gold Physical Flow Index, which captures the physical demand trend in Asia, also increased substantially since the start of the week with the Gold price below $1,300, not far from levels seen at the start of July when Gold had moved into backwardation”…

U.S. Dollar Index-Gold Comparative Chart

The U.S. Dollar Index continues to struggle and is likely headed lower as you can see in John’s 6-month chart below…that has to be considered supportive for Gold at the moment which hit a low of $1,180 in late June when the Dollar Index raced hard to resistance at 85…there is now strong chart resistance at 82, and just half a point above that is the declining 50-day moving average (SMA)…not always, but generally the Dollar Index and Gold tend to move in opposite directions…note the “exhaustion gap” when the Dollar Index pushed through 84 at the beginning of July…that was a clear sign of a near-term top, which John correctly pointed out at the time, and Gold is up significantly since then though it met its own resistance recently at $1,350…

China Reports Better-Than-Expected Export/Import Data

One has to be careful with any numbers reported out of China, but markets have responded positively today to data showing that exports and imports there grew strongly in July…traders are interpreting this as a sign that the Chinese economy may be stabilizing after a shaky first half of the year…exports rose 5.1% year-on-year, rebounding from a 3.1% drop in June…imports increased 10.9%, up from a 0.7% fall in June…both figures were considerably stronger than analysts had forecast, pointing to a possible steadying of the country’s growth outlook after a sharp slowdown in exports and imports over the previous few months…the big jump in imports was especially notable as it’s an indication that Chinese domestic demand is holding up well…the data followed a survey of manufacturing companies released last week that showed modest expansion in Chinese factory activity in July…a fuller picture will come tomorrow when Chinese officials release data on industrial output, retail sales and inflation…

U.S., U.K, Japan & Euro Area Showing Growth In Economic Momentum: OECD

Brazil, Russia, India and China (BRIC) are showing worrying signs of a decline in economic growth, while the U.S., U.K., Japan and even the euro area are in far better shape, according to a report by the Organization for Economic Co-Operation and Development (OECD)…using composite leading indicators (CLI’s), which anticipate turning points in economic activity, the OECD concluded that there is a continuing divergence in growth patterns across major economies…”The CLI’s for the United States, Japan and the United Kingdom point to economic growth firming, while in the euro area as a whole, the CLI continues to indicate a gain in growth momentum”, the OECD stated…Italy is currently showing a positive change in its growth momentum, while France’s economic picture is stabilizing…however, Brazil, Russia and China are showing slowing economic momentum, while India, whose CLI’s point to a vastly fluctuating economy, is showing signs of a tentative positive change in momentum, although its CLI figure is still down year-on-year…

Today’s Markets

Japan’s Nikkei average suffered another significant drop overnight as the yen continues to gain strength, falling 219 points or 1.6% to close at 13606…China’s Shanghai Composite finished relatively unchanged at 2045…European shares are up moderately in late trading overseas…in New York, the Dow is trying to reverse a 3-day slump and is up 39 points through the first 30 minutes of trading…the TSX is up 64 points as of 7:00 am Pacific while the Venture has gained 4 points…the Venture closed yesterday at 907, 1 point above its rising 30-day moving average (SMA) where it may have found support…

Tinka Resources Ltd. (TK, TSX-V) Chart

It has been a little while since we’ve taken a look at Tinka Resources (TK, TSX-V) which has significantly out-performed the overall market during the past year as it continues to have exploration success at its major projects in the richly mineralized Silver-Lead-Zinc belt of Central Peru…John’s chart says a lot here…Tinka, which closed yesterday at 75 cents, is trading at strong support as shown in this weekly chart going back to the spring of 2011…RSI(14) has also bounced up from previous support…what’s also interesting, though not shown on the chart, is that Tinka has consistently found support at its rising 500-day SMA since its move started in mid-2010…the 500-day is currently at 66 cents…as always, perform your own due diligence…but if you believe Silver has a good chance to rally at some point over the next couple of months, Tinka is at attractive entry point here based on the stock’s technical posture at the moment…as always, perform your own due diligence…

Northwest British Columbia Update – Colorado Resources Ltd. (CXO, TSX-V)

Monday, we’ll have a fresh and interesting piece on the Sheslay River Valley area where we believe Prosper Gold (PGX.H, TSX-V) and Garibaldi Resources (GGI, TSX-V) will generate  a lot of investor excitement in the near future given a variety of factors, not the least of which is Pete Bernier’s arrival on the scene up there…meanwhile, about 60 miles to the east, Colorado Resources (CXO, TSX-V) continues work at its North ROK Copper-Gold discovery with fresh drill results expected soon…below is a 7-month weekly CXO chart – nothing new to report as CXO continues to trade near technical support around 70 cents…the market is patiently waiting for news…the overbought condition that emerged during May-June has certainly been cleansed…the 50-day SMA is declining and now at 80 cents (resistance)…if and when there’s a reversal to the upside in the 50-day, that would be an important indication that a fresh uptrend has commenced…

Pacific Potash Corp. (PP, TSX-V) Chart Update

Potash plays took their lumps last week on the news from Russia’s Urakali and the apparent break-up of the global potash cartel…Pacific Potash (PP, TSX-V), which has been an impressive performer most of this year on the Venture, broke below important support at 15 cents and fell as low as 12 cents…investors may have over-reacted with these potash stocks, we’ll have to wait and see…keep in mind that Pacific Pacific is gearing up for a drill program at its project in northwestern Brazil – expected to commence next month…PP closed yesterday at 13.5 cents and appears to be forming a nice base near 2 Fibonacci retracement levels – 13 cents and 11 cents…RSI(14) on this 7-month weekly chart is at previous support…

Note: John, Terry and Jon do not hold positions in TK, CXO and PP…

Gold hit a 3-week low of $1,272 overnight but has started to recover…as of 7:30 am Pacific, bullion is up $2 an ounce at $1,285…Silver was lower this morning but is now unchanged at $19.49…Copper is off a penny at $3.15…Crude Oil is flat at $105.32 while the U.S. Dollar Index is down one-fifth of a point at 81.36…

Gold’s inability to push through $1,350 and its drop below 2 important support levels – $1,320 and $1,300 – as well as last Friday’s intra-day low, have combined to give bears fresh encouragement…a re-test of the $1,180 late June low can’t be ruled out given these recent developments, but there is support around $1,280 on a closing basis and below that at $1,250…bullishness in Crude Oil and a weak U.S. Dollar Index are helpful factors for Gold at the moment, so the outlook is far from totally negative…we’re also approaching a traditional period of strong physical buying out of Asia…September is typically Gold’s best month of the year…

What hurt Gold yesterday were comments from 2 Federal Reserve officials who said the U.S. central bank might start slowing asset purchases as early as next month, suggesting last week’s sluggish payrolls data were not sufficiently weak for them to take such a move off the table…Charles Evans, one of the more dovish officials at the Fed, said he would “clearly not” rule out the tapering of bond buying at the next meeting of monetary policy makers September 17-18…his remarks were significant as he’s known as a staunch defender of QE and is also a voting member of the FMOC…he said the Fed was “quite likely to reduce the flow purchase rate starting later this year”, though he added that “I couldn’t tell you exactly which month that will be”…separately, Dennis Lockhart, President of the Federal Reserve Bank of Atlanta who does not hold a vote on the FMOC this year, also suggested Fed tapering could begin next month, assuming some improvement in the data…

HSBC says it looks for the impact of potential Federal Reserve tapering of QE to be “negative but limited” for Gold…the introduction of unconventional monetary policies such as QE played a big role in Gold’s advance beginning in late 2008…“We find it logical therefore that any indication of a withdrawal of QE would act to undercut Gold prices,” the bank stated…“The underlying questions are when might QE tapering occur and how negative would any such tapering be for Gold prices?…It is safe to say that tapering, when it comes, will not be unexpected and therefore we do not anticipate a freefall in prices such as witnessed in April…Also the market has already dropped sharply this year and heavily from the peak of $1,921/oz in September 2011…We expect the fallout from tapering to be negative but limited, as traditional physical purchases such as jewelry, coin and bar purchases appear to be filling some of the slack left by institutional investors in the wake of the shift in monetary policy” (source: Kitco)…

Copper Chart Update

It has been a while since we’ve done a Copper chart update but there are some interesting developments as the trend is starting to show some bullish tendencies, despite this morning’s minor weakness…for the past 8 weeks, the metal has traded primarily between $3 and $3.20 a pound…it has attempted a breakout in each of the last 6 weeks, but the lows each week were higher…Copper appears to be forming an ascending triangle, so this is something to watch closely in the days and weeks ahead…RSI(14) is showing up momentum at 41% on John’s 2.5-year weekly chart below…the Venture should respond positively to any breakout by Copper…

The Copper market will be eyeing Chinese import and export data due tomorrow and a reading on Chinese industrial production in July scheduled for Friday…China accounts for around 40% of global Copper demand, making it the world’s largest consumer of the metal…

Today’s Markets

Asian markets were down significantly overnight with Japan’s Nikkei average leading the way with a drop of 516 points or 4% to 13825…the yen hit a 6-week high against the greenback…the Bank of Japan begins a 2-day policy meeting today with an outcome due Thursday…while analysts expect no action, the direction of the yen will hinge on the BOJ’s policy statement…China’s Shanghai Composite fared better overnight, losing just 14 points to close at 2047..

European shares are down moderately in late trading overseas…Bank of England governor Mark Carney announced that the central bank will not raise interest rates until U.K. unemployment hits 7%…it stood at 7.8% in July…this guidance, similar to that issued by the Federal Reserve in the U.S., marks one of Carney’s first departures from the reign of his predecessor, Mervyn King, who stepped down earlier this year…the former head of the Bank of Canada seemed cautiously optimistic on the U.K.’s economy…he told reporters, “A renewed recovery is now underway in the United Kingdom and it appears to be broadening” but cautioned that the recovery is “weak” by historical standards…

The Dow is off another 89 points through the first hour of trading today…the TSX has slipped 58 points while the Venture is off 3 points at 910…

Venture To Ease Rules On Consolidations

Good article by Mineweb’s ace reporter Kip Kean yesterday (www.MineWeb.com, Changes To Financing, Share Consolidation Rules On Horizon For Canadian Juniors)…TSX Venture President John McCoach told Mineweb, “We have decided to allow the temporary relief on certain policies, including pricing of private placements, lapse on August 31,” confirming earlier reports…however, McCoach added, the Venture is going to ease rules around share consolidation…the new policy the Exchange is coming out with this week, McCoach told Mineweb, is that juniors will be allowed to do consolidations without shareholder approval when the rollback is 10:1 and less…of course juniors will still have to comply with securities laws in their home provincial jurisdictions “but the majority of our companies will benefit from that change,” McCoach said…British Columbia, for example, which is home to a vast number of juniors, does not require shareholder approvals on such consolidations…so expect a considerable pick-up in consolidations during the 2nd half of this year…companies short on cash, of course, are the ones most vulnerable to consolidations, and there are plenty of those on the Venture at the moment…

West Cirque Resources Ltd. (WCQ, TSX-V)

West Cirque Resources (WCQ, TSX-V) continues to hold up extremely well as it continues work on 2 significant projects in British Columbia…a Phase 2 drill program, following up on promising results last year, commenced 3 weeks ago at the company’s Castle Property 15 km west of Colorado Resources’ (CXO, TSX-V) North ROK discovery…the work at Castle is being financed by Freeport McMoRan of Canada Ltd. as part of its JV with West Cirque, but the latter remains the operator of the project…in addition to the drill program, mapping and sampling will be carried out in order to better define geological controls and to outline additional targets within the 5.5-kilometre-long Castle porphyry system…meanwhile, keep an eye on WCQ’s 100%-owned Aspen Grove Project halfway between near Merritt and Princeton…this 8,000-hectare property, 85 km south of New Afton and 45 km north of Copper Mountain, covers part of an extensive belt of alkalic porphyry Copper-Gold-Silver mineralization hosted by Upper Triassic Nicola group volcanic rocks and late Triassic to early Jurassic intrusions…numerous Copper-Gold occurrences are being investigated, and 3 separate porphyry systems have been outlined…the company also announced last week that it has acquired a package of historical technical data concerning the property, information that we suspect could be quite significant…

Below is an updated chart from John (3-year weekly) on WCQ which closed yesterday at 40 cents where’s it’s trading as of 7:30 am Pacific…WCQ has the potential to be one of this summer’s market surprises given the strong potential of their Castle and Aspen Grove projects…

Fjordland Exploration Inc. (FEX, TSX-V) Begins Drilling Dillard Property

Other companies are currently active in the promising Princeton-Merritt area including Fjordland Exploration (FEX, TSX-V) which announced this morning that it has commenced a 2,500-metre Phase 1 drilling program at its Dillard Porphyry Copper-Gold Project as part of its joint venture with a subsidiary of Sumitomo Metal Mining Co. Ltd. of Japan…drilling is designed to test for additional Copper-Gold mineralization, including possible depth extensions in holes that bottomed in mineralization during Placer Dome’s 1991 program when drilling intersected 207 m grading 0.25% Copper…first-time drilling will also test recently discovered high-grade Copper and Gold mineralization at the Dillard East property, where surface rock sampling yielded assays up to 1.6% Cu and 28.9 g/t Au, respectively…geophysical surveys completed in June and July, combined with historical data, have outlined two large anomalies at Dillard…1 includes the historic “Dill” target drilled by Placer Dome in 1991 and measures approximately 1,400 m by 1,200 m and is open to the north and west…the eastern anomaly, which includes the “Dillard” target identified in 2011 by Fjordland, measures approximately 2,000 m by 1,500 m and is open to the north and east…both areas also have Copper and Gold soil anomalies coincident with the geophysical anomalies…FEX closed at 2.5 cents yesterday…

Probe Mines Ltd. (PRB, TSX-V) Update

We’ve stated this many times before – one of the best exploration stories in the country at the moment is Probe Mines‘ (PRB, TSX-V) Borden Lake Gold Project in northern Ontario where the company is outlining a high-grade system southeast of the main deposit…Agnico Eagle Mines (AEM, TSX) took a slice of Probe last spring (9.9%) and for good reason, as this deposit continues to look better all the time…4 rigs are carrying out expansion and infill drilling in the southeast, and an updated NI-43-101 resource estimate will be released later this year…Probe has weakened slightly recently due to the 6-session losing skid for Gold stocks, but any weakness in Probe in our view is an opportunity worth pouncing on…Fibonacci support at $1.70 coincides with the EMA(20) on John’s 2.5-year weekly chart at $1.67…in addition, the rising 50-day SMA is at $1.71, immediately beneath the rising 200-day SMA…so there’s tremendous support around current levels…as always, perform your own due diligence…as of 7:30 am Pacific, PRB is up 2 cents at $1.75…

GoldQuest Mining Corp, (GQC, TSX-V) Update

Initial results from GoldQuest Mining’s (GQC, TSX-V) drill program along the Guama trend, immediately west of the company’s Romero discovery, are due shortly, but the market’s expectations seem to be somewhat subdued – especially given yesterday’s bearish trading activity…a support band was broken yesterday, but this will require confirmation today as shown in John’s 2.5-year weekly chart…on a positive note, RSI(2) on the 1-year daily chart has dipped to an extreme level not seen since the end of June, immediately prior to the start of a new uptrend…technically and from a momentum standpoint, however, there’s no question that GQC is at a critical juncture as far as the short-term is concerned – an important move in one direction or the other is coming (at least that’s what the chart is saying)…all’s quiet in GQC through the first hour of trading today…

Note: Jon holds share positions in PRB and GQC.

Updated at 7:45 am Pacific

Gold slipped below $1,300 overnight and has fallen as low as $1,278 this morning where there is some support (near Friday’s intra-day low)…we”ll see if it can rally to close back above $1,300 support today as it did Friday, but clearly there is some technical pressure on bullion at the moment…as of 7:45 am Pacific, Gold is down $20 an ounce at $1,284…Silver is off 13 cents at $19.59…Copper is up a penny at $3.17…Crude Oil is $1.14 lower at $105.42 while the U.S. Dollar Index is off one-third of a point to 81.55…

China’s net Gold imports from Hong Kong fell 4.8% in June when the government also curbed the use of bullion in financing deals…mainland buyers purchased 101 metric tons, after deducting flows from China into Hong Kong, compared with 106 tons a month earlier, according to calculations by Bloomberg based on data from the Hong Kong statistics department today…

Impairments among base and precious metals companies have totaled more than $30 billion for Gold and $2.7 billion for base metals so far in 2013…what’s shocking is that the cumulative number since 2008 likely exceeds $200 billion, according to Frank Holmes at www.usfunds.com…with roughly 20 companies expected to report in the coming 2 weeks, the number could rise significantly…

Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, have declined another 0.2%  to 917.14 metric tons, the lowest since February 2009, according to data on the fund’s website…investors in Gold ETF’s have sold around 650 metric tons of bullion so far this year, driven by improving prospects for the U.S. economy and expectations for a scaling back of the QE3…this is equivalent to the amount that rushed into the market 8 months after the collapse of Lehman Brothers when investors were searching for a safe haven, according to the World Gold Council…

After a strong July in which it posted a gain of 7.3%, Gold bulls have lost some momentum during the first few trading days of August with the price dropping below $1,320 on a closing basis, and perhaps below $1,300 on a closing basis today…sustained declines under the 20-day moving average (SMA), at $1,302 entering today, would be a negative signal for the near-term…Gold needs to bust through the stiff resistance band between $1,320 and $1,350 as that will put the bears on the defensive and set the stage for a potential strong rally…we believe that’s a very possible 3rd quarter scenario…below is a 2-year weekly chart from John…it takes out the “noise” of a shorter-term daily chart and shows that while the primary trend remains bearish, it has also started to weaken…RSI(14) is recovering out of oversold conditions…again, the $1,350 resistance area is key…a strong support band exists between $1,150 and $1,180…investor patience is required…

2-Year Weekly Gold Chart

Gold Stocks – Time For A Recovery?

The chart below shows that Gold stocks are down on average more than 40% year-on-year…historically, this kind of drop has offered an attractive entry point on the rare occasions when it has occurred…the last time this happened, Gold stocks went on to post a 160% return on a year-on-year basis…

Kenyan Government Doubles Gold Royalties, Revokes Some Mining Licenses

Yet another example of jurisdictional risk which is just 1 factor that has hurt Gold stocks the last couple of years…the Kenyan government has revoked some mining licenses and doubled Gold royalties to 5%, according to Reuters…all licenses issued between January 14 and May 15, 2013 – with the exception of the oil and gas sectors – have been revoked, and a panel has been created that will review all licenses granted since January 2003…Najib Balala, Kenya’s mining secreatary, said the government, which was elected in April, wants to “ensure the country gains from the mineral potential”…if that’s the case, they have a funny way of showing it…the African nation has proven deposits of titanium, Gold and coal, and possible reserves of Copper, magnese, niobium and rare earths…Pacific Wildcat Resources Corp. (PAW, TSX-V), with assets in Kenya, was halted prior to the open this morning with news pending…

Producers Hit Hardest As Financings Drop In Q2

Some interesting figures from IntierreRMG, a resource intelligence company geared toward exploration and mining companies…in its State of the Market: Mining and Finance Report, the company stated what everyone already knows – how financings across the sector have decreased substantially in 2013 due to falling metal prices, nervous banks and risk-adverse investors…they gave some interesting specifics, however…the 555 global companies monitored by the IntierraLive mining database that had an end-June market capitalization of over $100 million raised just $1.43 billion in the 2nd quarter of this year, compared with $4.08 billion in the first 3 months of the year, a drop of 65%…IntierraRMG added that funding by exploration companies in its database fell 28% to $1.04 billion in the 2nd quarter…

Exodus Out Of Gold Nearing Its End:  World Gold Council

The exodus out of Gold this year, triggered by heavy exchange traded fund (ETF) selling, is likely nearing its end, according to an executive at the World Gold Council (WGC), who expects prices to pick up toward the end of this year…“We feel that speculative money has largely come out of the Gold market,” Marcus Grubb, managing director of investment at the WGC, told CNBC this morning…“Gold is nearer the bottom than the top right now,” he added…“You’ll see a stronger market towards the end of the year, and into next year”…contrary to what many believe, Grubb says that higher interest rates will not be negative for the precious metal…“A lot of analysis shows if real rates stay between 0 to 4%, Gold can return about 7-8% per annum or more…that’s our point of difference with the longer term bear view of Gold, even rising rates could be positive if real rates aren’t too high,” he said…in addition, he argues that investors should not underestimate the support physical demand will provide to the Gold market…“A huge amount of demand coming from India and China has underpinned the market at this level,” he said, adding that China’s rebalancing towards a consumption-driven economy will be even more positive for Gold demand…

Today’s Markets

Markets are under pressure across the board today…adding to woes, Atlanta Fed president Dennis Lockhart said the initial taper in the central bank’s asset purchase program could come as early as September…Lockhart said he was not disappointed by the July unemployment report and said he’ll be watching data closely for “the next few weeks” to see if the economy is on track for faster growth…the Dow is down 116 points through the first 75 minutes of trading…

The TSX has fallen 159 points as of 7:45 am Pacific with the Gold Index off for the 6th straight session at 169…RSI(2) on the daily Gold chart is very close to its low in late June, so a rebound in the Index is likely imminent…the Venture is down 7 points at 916…

Japan’s benchmark index reversed earlier losses overnight to rally 1% as the yen weakened while the rest of Asian stocks were mixed in choppy trading…the Nikkei closed up 143 points to 14401…the International Monetary Fund yeserday made a fresh call on Japan’s government to bring its flow of red ink under control, saying the central bank’s monetary easing could backfire if investors believe it is “monetizing” the growing mountain of government debt, a step that often leads to financial turmoil…China’s Shanghai Composite closed at a 3-week high, gaining 10 points to finish at 2061…the market will be paying close attention to trade and industrial production data out of China later this week…

European shares are down modestly in late trading overseas…a report published by the British Retail Consortium showed U.K. retailers enjoyed their best July in 6 years…meanwhile, Italy’s 2nd quarter GDP figures showed the Italian economy contracted for the 8th consecutive quarter but shrank less than analysts had expected, in line with the broader trend in the euro zone and offering hope that the country is slowly emerging from recession…

Is Richmont Mines Inc. (RIC, TSX) Turning The Corner?

From technical and fundamental perspectives, there are signs that Richmont Mines (RIC, TSX) – down nearly 90% since early last year – is starting to “turn the corner”…last Friday, the company reported a 2nd quarter loss of just over $1 million, following losses of $2.24 million and $2.6 million (on continuing operations) the previous 2 quarters…there are a couple of important developments concerning Richmont…first, continuing exploration and development of RIC’s promising Island Gold deep project could be a critical catalyst in propelling this company forward again…currently, there are 4 rigs at Island Gold…14,000 metres of exploration drilling took place during Q2…additional drilling continues, largely comprising step-out holes from previously established inferred resources in the “C” zone which appears to be an extension of the areas currently being mined but at higher grades and greater widths…in February, RIC released an initial inferred resource for the C zone at depth (1.5 million tonnes grading 10.73 g/t Au for 508,000 ounces) and an updated resource estimate is expected to be provided before the end of next month…the language in last Friday’s RIC news release suggests the company likes what it’s seeing in the core “with preliminary analysis indicating that the C zone continues to expand and remains open in all directions”…this is very positive…the company has also lined up a potential credit facility that it could tap into for up to $50 million to finance the long-term development of this project…as of June 30, Richmont had $26 million in working capital and virtually no long-term debt ($1.3 million)…so we could see some impressive drill results from Island Gold in the near future…what’s also encouraging about Richmont is that they’ve been able to substantially reduce costs at their Beaufor Mine in Quebec…the nearby Camflo Mill is also now running at full capacity (1,200 tonnes per day), a level expected to continue for the remainder of 2013 and through 2014 with added material from the W zone and Monique projects…after disappointments at Francoeur and Wasamac, and a substantial drop of course in Gold prices, it has been a very tough year-and-a-half for Richmont but there now appears to be some light at the end of the tunnel…

Technically, the stock is also looking healthier…a key event to watch for is a breakout above the downsloping wedge as John shows in this 1-year weekly chart…RIC closed Friday at $1.58 for a total market cap of $63 million, and is down just a few pennies in early trading today…it hit a post-Crash low of $1.37 near the end of June…

Eldorado Gold (ELD, TSX)

Eldorado Gold (ELD, TSX) is leading by example among producers…ELD produced 184,000 ounces of Gold during Q2 at an average cash operating cost of $478 per ounce (vs. 141,000 ounces at $480 in Q2 2012), and recorded net income for the most recent quarter of $43.3 million or 6 cents per share…”Our Gold mines continue to perform to plan and generate significant cash flows,” stated CEO Paul Wright…“With its strong balance sheet and comparatively low-cost Gold mining operations, Eldorado is well positioned to confront the recent weakness in Gold prices”…

Below is a 1-year ELD weekly chart from John…note the break above the down trendline…it’s now retracing back to that trendline which is normal technical behavior, so look for strong support around this $7 level…ELD is off 30 cents at $7.36 as of 7:45 am Pacific…

Updated Venture Exchange Chart

After 4 consecutive weekly gains, the Venture declined by just a single point last week with today of course being the first trading day of the new week after yesterday’s holiday…importantly, the Index held support at 918 last week…the rising 20-day moving average (SMA) is at 913 while the 50-day SMA has flattened out at 915…a reversal to the upside in the 50-day will be necessary in order to power the Index through critical resistance at 970…John’s 9-month daily chart below gives us encouragement that the very gradual trend higher recently could accelerate as the quarter progresses…importantly, the ADX trend indicator remains bullish at the moment…

Macro Enterprises Inc. (MCR, TSX-V)

Macro Enterprises (MCR, TSX-V) 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 announced superb Q1 earnings near the end of May, and has gained about 60% since then when we introduced it to our readers…since late last year, 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…Friday, MCR hit a new all-time high of $4.95…note John’s Fib. level, though, in this 6-month weekly chart…as always, perform your own due diligence…

Aldrin Resource Corp. (ALN, TSX-V)

If you’re bullish on the Fission-Alpha uranium play in Saskatchewan, as we are, then you should also be paying attention to Aldrin Resource Corp. (ALN, TSX-V) which we’ve been tracking with interest over the last few months…ALN has staged a confirmed breakout above the 11-cent level, an event we’ve been anticipating, and below is a 6-year monthly chart from John that shows the next major technical resistance around 18 cents…an August field program will follow up any anomalies detected by a high-resolution radiometrics survey covering the company’s Triple M Property, 10 km southwest and on trend to the Patterson Lake discovery…the primary goal of the airborne geophysical surveys and surface geochemical work is to generate the best drill collar locations to test the already-identified basement conductors when drilling starts, as anticipated, next January…ALN is down a penny at 11.5 cents as of 7:45 am Pacific…

Silver Update Including Charts

HSBC looks for Silver to trade in a range of $17 to $23 an ounce for the remainder of 2013, with rising supply to constrain rallies but greater jewelry, industrial, coin, bar and Indian import demand to be supportive influences…the bank has upped its average 2013 price forecast to $22.90 an ounce from $21…it left its forecasts for the next 2 years at $20 and $20.25…“Silver prices will be determined largely by the interplay between currency levels, monetary and fiscal policies, geopolitics, the price of other precious metals, notably Gold, and Silver’s underlying supply/demand fundamentals,” HSBC said…a couple of interesting notes from HSCB’s commentary…the bank lists total supply of 1.08 billion ounces for 2013, with mine output seen rising to 805 million this year from 787 million last year and Silver scrap sales edging up to 260 million from 254 million…meanwhile, shifting expectations toward U.S. monetary policy have dented the strength of investment demand, the bank said…the net-long position of Comex speculators fell to historically low levels…ETF demand remains positive but is dropping…“We have cut our 2013 forecast for ETF demand growth to 20moz from 50moz, the lowest annual increase on record,” HSBC said…“That the ETF’s are up on the year is impressive, but we expect tepid growth to curb rallies”…

Short-Term Silver Chart

Silver has a very strong support band between $17.50 and $19.50, with sell pressure declining gradually as shown in this 3-year weekly chart…

Long-Term Silver Chart

RSI(2) has been in extreme oversold territory on this long-term chart for quite some time now, and recently has come off its lows but is still only at 7.69%…if history is any guide, RSI(2) on this 11-year monthly chart is telling us that these aren’t the right conditions to be dumping Silver – the best time to be a seller is when RSI(2) is at much higher levels…if anything, now is probably a good time to accumulate in anticipation of a rally at the very least…

Note: John, Terry and Jon do not hold share positions in RIC, ELD, MCR or ALN.

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.

Gold has had to deal with a slew of economic data this week, both from the U.S. and globally, but has managed to hold up extremely well which has to be considered highly encouraging…bullion fell as low as $1,282 overnight on fears of a strong U.S. non-farm payrolls number for July, but as we mentioned yesterday the ADP report set up a lot of traders/investors for disappointment today as it so often does…non-farm payrolls showed a gain of only 162,000 in July, well below the 6-month average of 205,000…analysts polled by Reuters expected to see a jump of 184,000 in July, after a 195,000 uptick in the previous month…whispers in the bond market yesterday were for a number of 210,000 or higher…the Federal Reserve had a more dovish tone this week on prospects for the U.S. economy, so it now really seems unlikely – especially after this morning’s jobs report – that it will start to scale back its bond-buying program as early as next month as many pundits have been predicting…the U.S. labor market remains stuck in quicksand…most of the job creation in July came on the low end – in the retail trade and hospitality industry of bartenders and wait staff, with respective gains of 47,000 and 38,000…get ready for a potential major rally in Gold over the next couple of months, and the Venture certainly stands to benefit from that…

As of 7:00 am Pacific, Gold is up $2 an ounce at $1,311 after a more than $30 reversal…Silver touched the $19.20 area overnight but has rebounded to $19.88 for a gain of 25 cents…Copper is up 3 pennies to $3.19…Crude Oil is $1 lower at $106.89 while the U.S. Dollar Index is off more than one-quarter of a point to 82.05…

Peter Marrone, chairman and CEO of Yamana Gold Inc. (YRI, TSX) stated during the company’s second quarter conference call yesterday that Gold is finding good support between $1,250 and $1,350 an ounce…he said it’s only a matter of time before Gold prices move higher in the longer term…he added that while some people are focusing on higher interest rates in the U.S. as a catalyst for lower Gold prices, research from the World Gold Council has proven that is not the complete story…

India’s neighbour Pakistan has decided to temporarily ban the import of Gold for q month in order to save its foreign currency reserves and to curtail the rampant smuggling going on in the nation…following the Indian government’s decision to discourage Gold import by imposing 8% duties, among other measures, buyers have reportedly shifted to Pakistan where the precious metal has been allowed to be imported duty-free since 2001…

Editor’s Note: Due to the long holiday weekend (Canadian markets are closed Monday), the BMR crew is taking a 3-day break (no Week In Review And A Look Ahead over the weekend) and our next posting will be Tuesday morning at approximately 5:00 am Pacific, followed by a special update that morning at about 9 o’clock Pacific…we expect next week to be busy on a number of fronts, including northwest British Columbia – so stay tuned…

Today’s Markets

Asian markets were all higher overnight with Japan’s Nikkei average leading the way with a strong gain of 460 points of 3.3% to close the week at 14466…investors cheered robust global economic data and a commitment to easy monetary policy from global central banks…China’s Shanghai Composite held steady at 2029…

European markets are down modestly in late trading overseas…

In New York, the Dow has retreated 51 points as of 7:00 am Pacific…stocks soared to new highs yesterday with the S&P 500 rising above 1,700 for the first time ever at 1,706…July’s ISM manufacturing survey rose a surprising 4.5 points, to 55.4, the highest reading in 13 months and the biggest 1-month increase since 1996…the TSX is up 7 points while the Venture has slipped 1 point to 920…expect a quiet day on the Canadian markets due to the holiday Monday…

Zenyatta Ventures Ltd. (ZEN, TSX-V) Update

Zenyatta Ventures has fallen for 5 straight sessions (through yesterday) and by nearly $1 a share since the release of assay results from its Albany graphite deposit 2 days ago…the results were very positive, quite consistent with those released at the beginning of July, but the stock was simply due for a pullback after a climb from a low of $2.30 in mid-June…the 6-week run to $5.00 a share created overbought conditions that needed to be cleansed…for review purposes, below is a ZEN chart that John posted at the beginning of this week after the stock over-shot the Fibonnaci $4.50 level by about 10%…John’s Fib. numbers are typically quite accurate, and the negative divergence between RSI and price – and the generally overbought conditions – were a warning sign of a potential near-term correction…the up trend line (about $4.25) did not hold as support…ZEN slipped as low as $3.27 in early trading today after closing at $3.58 yesterday… however, the 50-day moving average, currently around $3.20, provides excellent support and ZEN has started to rally from that area…it’s now off just a dime at $3.48…a couple of other notes…as you can see in John’s chart from Monday, there’s also strong support around the $3.70 area, so it’ll be interesting to see if ZEN can close above that level today after breaching it slightly on a closing basis yesterday…as of this morning, RSI(2) has hit extreme oversold levels witnessed during other important lows, so a rebound does appear imminent based on that fact alone…as always, perform your own due diligence…

ZEN July 29 Chart (Repeated) For Reference Purposes (Support Areas)

Yukon Dan – British Columbia’s Gold, Exploration & Mining Ambassador

This morning, we have more on Dan Moore – affectionately known as “Yukon Dan” – who is doing an incredible job of bringing “Gold Fever” to thousands of British Columbia students through classrooms and other venues…he’s teaching them not only about the art of Gold panning, but – even more importantly in our view – he’s instilling in them an understanding and appreciation of how vital the mining industry is to this province and the entire country…he’s a valuable educator at a time when young people and adults alike are exposed more than ever to the distorted views of environmentalists and some in the mainstream media who want to see less exploration and mining…he vividly recalls an incident a couple of years ago when he was approached by a lady at a rock and gem show…

“She came up to my booth and looked at what I had,” he recalled during a breakfast meeting with us a week ago…”She said mining is deplorable, we should not have mining, there are so many dangers to it, it’s not healthy and blah blah blah…And then I took one look at the lady and I said to her, the lipstick you have on your lips, ma’am, came from mining…And the keys I hear jingling in your pocket, they came from mining…Do you own a car?, I asked her…She said yes she did…I replied, well, that’s mining too…Why are you so upset because of mining when you have a car and you have lipstick?, I asked…And when I said that, she put her tail between her legs and she went out the front door…She didn’t want to talk to me no more…So I kind of opened her eyes, perhaps, because her keys are minerals, her lipsticks are minerals, and she’s complaining to me about the environmental issues related to mining…If you are into mining these days, it’s a must to know that in B.C. and elsewhere there are laws and rules that you must abide by…And if mining companies do not, they get heavily fined….Reclamation must be done…When you close a mine, you have to put everything back the way it was before you leave that area…I’m 100% for that…There are rules regarding exploration as well“…

When it comes to teaching about panning for Gold and why exploration and mining are so integral to our everyday lives, there’s no one better in our view than “Yukon Dan” who was once again booked solid each day in the months of April, May and June with extensive classroom presentations in British Columbia from Grades 1 through 12…during the rest of the year, he spreads his message at fairs, festivals, rock and gem shows, birthday parties –  you name it…he was also a big hit at January’s Cambridge Resource Show in Vancouver where we first met him…

“I’m very proud to say with my teaching at schools and educating kids, I’ve had students leave the school system who are now in the mining field,” he stated…”My first part of a presentation, I will start talking about the Gold rush and what brought people to Canada…Then within 2 minutes I show them what they’re looking for which would be a $6,000 Gold nugget…When I show that to the kids, that captivates them because I tell them they can still find Gold…We will never run out of Gold in British Columbia, and that’s when their eyes and ears perk up…When I tell them there are places they can go to pan for Gold for free, and what they find they can keep, they just devour it…To me that’s precious…Gold is not hard to find in B.C. and the kids know this is something they can do with mom and dad for free“…

The story of  Yukon Dan is a fascinating one, and it’s why BMR is also pleased to announce that it has joined the likes of Teck Resources (TCK.B, TSX), New Gold Inc. (NGD, TSX) and others in becoming an official sponsor of the upcoming Fraser River Gold Panning Championships (August 22-25) and Dan’s overall efforts at educating the young people of B.C. (and elsewhere) about the mining industry in general…his impact has been incredible, and his work is hugely important – especially at a time when the mining industry is hurting and also under attack from “environmentalists”…

The upcoming Fraser River Gold Panning Championships at the Anderson Creek Campground are expected to attract about 170 participants (all ages from 2 and up, beginners to pros) and lots of onlookers as well…on August 22 and 23, Yukon Dan will be be teaching the art of Gold panning to all competitors for free in the town of Yale on the Fraser River from 1 pm until 4 pm…metal detecting competitions will take place August 23 while the Gold Panning competitions will be August 24 and 25 (Saturday and Sunday)…check out Yukon Dan’s web site for more details – www.YukonDan.com….campground spots are filling up very quickly, and competitors will be coming from as far away as Austria…

“This event in August is a competition that’s loved by all and is open to anybody, kids to adults, beginners to pros, from all over the world,” Dan stated…”It’s hands-on, everybody gets professional Gold miners for coaches if you need it…Everybody goes home with real Gold, so it makes for a very fascinating competition…The other thing is that its family oriented…The monies that we charge are very minimal and that’s to get more people to come out and have some fun, learning about our Canadian history and our natural resources and our heritage…Gold mining to me is #1 in British Columbia…And every time that snow melts, that water brings down the Gold and that’s a good thing“…

“The Anderson Creek campground is a beautiful site…It leads right into the Fraser River which is just breathtaking…The competition is at the campground, not at the River itself, and that’s for insurance reasons because of somebody potentially hurting themselves at the River which is possible…The Fraser River Gold rush started in 1858 when thousands of people came up to that area…It was home to over 25,000 people at that time, mostly because of the Gold…at $17 to $35 an ounce, a lot of folks got very, very wealthy, and then they kept going north“…

“The Fraser River has always had an immense history of Gold and Gold mining,” Dan continued…”I was just up there last week and the water dropped 15 feet…there were already half a dozen Gold panners panning…and to see that is priceless…we need the people to go out and learn about mining…we have to get them to learn about the everyday uses of mining because mining is involved with everything we use…

“Anybody can pan for Gold,” he says…”It doesn’t matter if you’re ailing in one way or another…You just sit down on a chair and you pan for Gold…You don’t put too much dirt in your pan if you can’t lift too much…And the atmosphere – you got the trains on each side of the Fraser River, they’re still used for transportation and taking good s from point A to point B, and all through the Fraser Valley…And that brings back the history, too, when you you’re panning for Gold…You get to hear these trains go back and forth…And to me, that;s a beautiful noise in my ears“…

We’ll be following Yukon Dan’s progress closely…check out his web site at www.YukonDan.com for more information including contact numbers…

Gold has traded in a range between $1,307 and $1,329 so far today but weakened over the last 30 minutes after 2 new reports showed the pace of growth in the U.S. manufacturing sector has accelerated, though construction spending fell…as of 7:15 am Pacific, bullion is down $10 an ounce at $1,313…Silver is off 9 cents at $19.72…Copper is up 6 cents to $3.17 after an official gauge showed Chinese manufacturing expanded in July, exceeding expectations….Crude Oil has climbed $2.52 a barrel to $107.55 while the U.S. Dollar Index is up half a point at 82.19…

The Federal Reserve left the future timing of U.S. monetary policy changes “up in the air” yesterday, and we get the distinct impression they may not begin scaling back their bond-buying program in September as many pundits have been expecting…economic growth in the U.S. continues to be lackluster (the Fed actually slightly downgraded its outlook for economic growth in the statement it released at the conclusion of its 2-day meeting yesterday) and it also noted that inflation is below its target level…Gold strengthened as a result late in the day to close above support at $1,320 after falling as low as $1,305…bullion ended a 3-month slide and closed 7.3% higher for July…August-September are typically strong months for Gold, as physical buying in the Asian markets ramps up for the wedding season and other events, so despite this morning’s weakness there’s clearly an excellent opportunity for a push through resistance at $1,350 in the coming weeks which would give the Venture and producers a much-needed lift…the Crude Oil chart remains very bullish and could provide important underlying support for bullion through the remainder of the summer…of course the all-important U.S. non-farm payrolls report is due tomorrow and that could certainly be a market-moving event in both the Gold and equity markets…

Mixed News From China’s Manufacturing Sector

China’s manufacturing sector managed to stay in expansionary phase in July, according to official government data on Thursday, defying forecasts of a contraction…the official manufacturing Purchasing Managers’ Index (PMI) rose to 50.3 in the month from 50.1 in June, and better than a Reuters consensus estimate of 49.9…the key 50 threshold separates expansion from contraction…the official PMI data came even as a private gauge of manufacturing activity showed a far more downbeat picture…the final reading of the HSBC China PMI, also released on yesterday, fell to an 11-month low of 47.7 in July from 48.2 in June, in line with its flash estimate released last week…official Chinese PMI is more skewed to larger and state-owned companies while the HSBC figure reflects smaller companies, hence the divergence…smaller companies in China are having a more difficult time at the moment…expect more stimulus out of China, which is also bullish for commodity markets…Chinese government officials said yesterday they will maintain a steady economic growth pace despite “highly complicated” conditions at present…the statement came after a meeting of the Chinese politburo…

ECB Confirms Former Guidance, No Surprises From Bank Of England

The Bank of England left the size of its bond-buying program unchanged today and held its key lending rate at a record low of 0.5%, where it has stood since March 2009…the central bank’s Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($570 billion)…meanwhile, ECB President Mario Draghi repeated this morning that interest rates would remain at present or lower levels for an extended period of time, a move the bank hopes will support a recovery in the euro zone later this year and in 2014…“The Governing Council confirms that it expects the key ECB rates to remain at present or lower levels for an extended period of time,” Draghi told a press conference after the bank left its main interest rate on hold, as expected, at a record low of 0.5%”…Draghi’s forward guidance, first issued last month, surprised financial markets, and was in stark contrast to the ECB’s tradition of never pre-committing on future rate decisions…

Today’s Markets

Investors cheered China’s official PMI figure and drove the Shanghai Composite 35 points higher overnight to close at 2029…all Asian markets were strong, led by Japan’s Nikkei average which climbed 337 points or 2.5% to close at 14006…

European shares are higher in late trading overseas European shares were higher in early afternoon trade on Thursday as investors reacted to earnings news, economic data and rate decisions from the ECB and the Bank of England…

Markets are robust in New York and Toronto today…as of 7:15 am Pacific, the Dow has surged 143 points to 15643…initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 326,000, the lowest level since January 2008, the Labor Department reported this morning…economists polled by Reuters had expected first-time applications to rise to 345,000 last week…the TSX is up 129 points while the Venture has added 4 points to 921…Zenyatta Ventures (ZEN, TSX-V) has recovered after bouncing strongly off chart support at $3.75, its early trading low…it’s off just a few pennies at $4.06 as of 7:15 am Pacific…

TSX Gold Index Updated Chart

The TSX Gold Index continues to display some bullish undertones, though investor patience is critical as it could be a few weeks yet before this Index really starts to gain traction…for July, the Gold Index was up 7.6% vs. Gold’s 7.3% increase and the Venture’s more modest 4% gain…the Gold Index appears to be on track for a positive Q3 after successive quarterly declines of 13%, 16% and 33%…the recent bearish trend on this 5-year weekly chart is clearly weakening as shown by the ADX indicator, and the strong support band between 150 and 160 has held…lately, there has been excellent support at 180…what we’d like to see is a reversal to the upside in the 50-day moving average (SMA) – same with the Venture – but that could take a few more weeks to unfold…if and when that occurs, the stage is set for a strong move to finish the quarter…the Index is currently down a point at 181…

Barrick, Kinross And Yamana Report Challenging 2nd Quarters

Barrick Gold Corp. (ABX, TSX) posted a 2nd-quarter loss today due to an $8.7 billion impairment charge largely on account of the recent slump in Gold prices…the world’s largest Gold producer reported a loss of $8.56 billion, or $8.55 per share, compared with a profit of $787 million, or 79 cents per share, in the year-ago quarter…excluding 1-time items like the impairment charge, earnings were 66 cents a share…revenue fell 1.3% to $3.2 billion…ABX is up over 30 cents through the first 45 minutes of trading this morning…

Kinross Gold (K, TSX) has posted a $2.4-billion impairment charge because of lower Gold price assumptions and a previously announced loss on Fruta del Norte (Ecuador) that the miner abandoned a few months ago…the latest charge brings Kinross’s writedowns to $8-billion over the past 18 months, exceeding the miner’s current market capitalization of about $6.1-billion…Kinross‘ all-in sustaining costs were $1,072 an ounce in Q2 vs. $970 in the 2nd quarter of 2012, and they are continuing to rise…Kinross expects to be within its 2013 forecast guidance for production (2.4 million to 2.6 million attributable AuEq ounces), production cost of sales ($740 to $790 per AuEq ounce) and all-in sustaining costs ($1,100 to $1,200 per Au ounce sold)…the company has reduced its 2013 capital expenditure forecast to approximately $1.45-billion from $1.6-billion…Kinross has also suspended its upcoming semi-annual dividend…it’s down sightly through the first 45 minutes of trading…

Yamana Gold (YRI, TSX), which also reported yesterday, is doing much better than Kinross in terms of its all-in sustaining costs and other factors…Yamana suffered a net loss of $7.9-million in Q2 on revenues of $430.5 million vs. earnings of $43 million on revenues of $535.7 million during the same period last year…all-in sustaining costs during the latest quarter were $950 per Gold equivalent ounce on a co-product basis, a 6% or approximately $64 per Gold equivalent ounce reduction from Q1 this year…based on its assessment of potential impairments, the company has concluded that there are no impairment charges in respect to its mineral interests as of June 30 this year…Yamana believes that adverse changes in metal price assumptions will be partially offset by other inputs that will result in lower costs and updated mine plans…the company initiated a wide ranging cost-savings program in the 2nd quarter of this year…the stock, however, is off 58 cents to $10.15 as of 7:15 am Pacific…

GoldCorp Updated Chart (G, TSX)

One producer that appears to be looking better these days (at least that’s what the chart is saying) is GoldCorp (G, TSX), despite the fact it also reported a tough 2nd quarter recently which included a $1.9-billion writedown…the writedown helped lead to a 2nd quarter net loss of $1.93-billion or $2.38 a share, compared with net income of $268-million or 26 cents a year ago…profit excluding the writedown and other one-time items was 14 cents a share, trailing the 23-cent average of 19 estimates compiled by Bloomberg…sales fell 18% to $889-million for the quarter, missing the $1.15-billion average estimate…still, for what it’s worth, equities research analysts are mostly bullish with regard to Goldcorp at the moment…3 analysts have rated the stock with a sell rating, 4 have assigned a hold rating and 10 have issued a buy rating to the company’s stock…GoldCorp currently has a consensus rating of “Hold” and a consensus target price of $35.74…below is a 10-month weekly chart from John which shows an encouraging basing pattern…GoldCorp is down slightly in early trading today…

Pacific Potash (PP, TSX-V) Update

Pacific Potash (PP, TSX-V) came out swinging this morning, defending its unique position in the Brazilian market as it gets set to commence a drill program at its highly prospective Amazonas Potash Property, and stating it’s “in agreement with a statement made by K+S Aktiengesellschaft that the pricing for potash fertilizers being spread by the media are unjustified and that they do not reflect the current supply-and-demand situation in the potash market”…(the K+S Group is one of the world’s leading suppliers of standard and speciality fertilizers)…

Pacific Potash also stated this morning that it “is of the opinion that it is uniquely positioned in the Brazilian market, having a substantial logistical cost advantage, being located within a few hundred kilometres of the end-user for its product. Brazil is the third-largest consumer of potash globally and is also the world’s fastest-growing potash market, as its fastest-growing and largest industry is agribusiness. The country has an estimated 30 per cent of the world’s remaining arable farmland and is poised for long-term growth within this sector. The Brazilian National Fertilizer Association (ANDA) has released data showing that 2012 potash consumption increased (9.3 per cent year over year) to a record 8.1 million tonnes of potassium chloride (KCl), 93 per cent of which was imported. The country currently has only one operating potash mine, the Taquari-Vassouras mine in the Sergipe basin, which produces approximately 700,000 tons of KCl per year (7 per cent of Brazil’s demand). Presently, the cost of shipping, freight, importation duties and taxes can cost well over $100 per ton in addition to the potash spot price. A project located in the Amazonas potash basin supplying to the N-P-K blending plants locally in Brazil would incur shipping and logistical cost of in the neighbourhood of $30 to $50 per ton”…

Macro Enterprises Inc. (MCR, TSX-V)

Macro Enterprises Inc. (MCR, TSX-V) 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 announced superb Q1 earnings near the end of May…since late last year, it has risen in Zenyatta-like fashion…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…yesterday, MCR hit a new all-time high of $4.40 where it’s trading at as of 7:15 am Pacific…below is an updated 6-month weekly chart from John…

Happy Times Coming For Happy Creek Minerals? (HPY, TSX-V)

Another interesting exploration in British Columbia we’re keeping a close eye on is Happy Creek Minerals‘ 165-sq. km Fox Tungsten Property near 100 Mile House…tungsten is a very strategic metal and prices have been on a steady rise since March…a 1,200 metre drill program (12 to 15 holes) began in mid-July at Fox, a “unique and attractive discovery that has produced some of the best tungsten drill results in the Western world,” according to President David Blann…the geological mapping and results from drilling in 3 areas prior to this year’s program suggest a main calc silicate/skarn unit hosting variable concentrations of tungsten of around 25 to 40 metres in thickness and approximately 2 kilometres by over 1 kilometre in dimension…multiple (stacked) mineralized zones may occur…positive values of tungsten occur in rock, stream sediment, soil and drill core in a 10-kilometre-by-3-kilometre area at Fox, so there seems to be plenty of exploration upside at this large property…HPY closed yesterday at 17 cents…trading has been light in July but activity could pick up this month in anticipation of results…the technicals have been strengthening somewhat recently as well as John showsin this 20-month weekly chart…

Note: Jon holds a share position in HPY.