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Gold is under pressure following release of a stronger-than-expected U.S. jobs report for October…as of 7:30 am Pacific, bullion is down $24 an ounce at $1,284…Silver is off 34 cents at at $21.34…Copper is down a penny at $3.23…Crude Oil is up slightly at $94.38 while the U.S. Dollar Index has surged more than half a point to 81.42…

Excellent article this morning on China’s Gold appetite by Mineweb’s Lawrence Williams – www.mineweb.com…

U.S. Jobs Number Beats Expectations

U.S. job creation unexpectedly surged in October despite dimmed expectations from the impasse in Washington…there were a net 204,000 new jobs created for the month, though the unemployment rate rose to 7.3%…analysts were expecting a jobs number between 100,000 and 120,000…private sector employment expanded by 212,000, the best gain since February, driven by a service-sector gain of 169,000…the government sector only shed 8,000 positions…employment gains for September and August were revised up by a total of 60,000…September now shows a gain of 163,000 jobs, up from 148,000,while August is at 238,000, up from 193,000…will this be enough for the Fed to start “tapering” as early as next month, as some pundits are speculating?…unlikely…any tapering is still likely at least several months away as incoming Fed Chairman Janet Yellen, believed to be even more dovish than Ben Bernanke, will want to see the kind of consistent monthly job growth (200,000+) that will be required in order to significantly further reduce the unemployment rate…more political wrangling in Washington is coming up, as well, which isn’t conducive to Fed tapering…

Today’s Markets

The Dow is up 75 points through the first hour of trading…the TSX has added 54 points while the Venture, trying to snap a 9-session losing skid, is up a point at 932 (despite the drop in Gold, a good sign) and resting at support…

Asian markets were weaker overnight with China’s Shanghai Composite, despite some encouraging economic data, falling 23 points to close the week at 2106…mainland exports rose by a better-than-expected 5.6% in October from a year earlier, well above economists’ forecast for a rise of 3.2%…China is expected to unveil some major economic reforms following this weekend’s meeting of its ruling Communist Party…some analysts have speculated, for various reasons, that the price of Gold could benefit from this weekend’s summit – we’ll what happens…

European shares are down modestly in late trading overseas…Standard and Poor’s (S&P) has cut France’s credit rating to AA from AA+…the move comes almost two years after the country lost its top-rated AAA status…S&P said it downgraded France because high unemployment in the country was making it hard for the government to make important reforms which would boost growth…“The downgrade reflects our view that the French government’s current approach to budgetary and structural reforms to taxation, as well as to product, services, and labour markets, is unlikely to substantially raise France’s medium-term growth prospects,” S&P said in a statement today…the French government responded by saying that its debt rating was one of the safest in the euro zone…S&P said it expected government debt to hit 86% of GDP in 2015 and unemployment to remain above 10% until 2016…the country’s Finance Minister, Pierre Moscovici, said S&P had made “critical and inexact judgements”…

U.S. Dollar Index Chart Update

The strong October jobs number is giving the U.S. Dollar Index a boost today…after falling below a 2.5-year up trendline on the weekly chart in September, we caution that the Dollar Index has some heavy lifting to do, however, even if there is a confirmed breakout above resistance at 81 cents…below is an updated chart from John…it’ll be interesting to see how the Index performs over the next couple of trading sessions, and then we’ll examine a fresh chart next week…

TSX Gold Index Chart Update

The TSX Gold Index appears to have formed a double bottom pattern, and this is encouraging in terms of the outlook for the Gold price…interestingly, like the Venture, the Gold Index RSI(14) has also been climbing an up trendline since the early summer…the overall bearish trend is clearly weakening as evidenced by the ADX indicator…below is a 2.5-year weekly chart…the Gold Index is off 2 points at 171 as of 7:30 am Pacific…

Garibaldi Resources Corp. (GGI, TSX-V) Update

Garibaldi Resources (GGI, TSX-V) has to be one of the few companies on the Venture that’s on track to drill at least two properties between now and the end of the year, and that’s just one more reason why we like this company so much – management is delivering on its promise to stay active in an effort to unlock project value, no matter what the overall market conditions are…GGI is drilling once again in Mexico, in a cost-effective manner with its own rig, and of course the company continues to generate regular royalty income as well from a pilot coal program…in B.C., GGI has been very busy putting the pieces of the Grizzly puzzle together and prioritizing drill targets for 2014…news on developments at the Grizzly is expected soon…

After yesterday’s market close, GGI announced it has resumed drilling at the Locust target – part of the company’s large Tonichi Project in Sonora State…drilling to date at Locust has outlined a broad envelope of shallow mineralization along a 5 km trend, quite possibly the near-surface expression of an underlying Au-Cu porphyry system…yesterday, the company reported very interesting results from the westernmost hole drilled so far – a large step-out that was drilled from a topographically high area and hit a supergene zone above the water table and a hypogene Gold-Copper zone deeper in the hole…mineralization generally improved with depth (the hole was drilled to only 191 metres) and a 37-metre interval graded 0.42 g/t Au and 0.21% Cu (significant Au-Cu porphyry mineralization was returned over a 104.6 metre core length)…they’ve gone to the valley floor to immediately follow up on that intercept with a hole (MAR-13-03) designed to intersect sulphide mineralization and a second potential supergene zone at increased depth…there are large porphyry deposits surrounding Tonichi, so GGI has a chance to drill into something quite significant – they’re in a rich geological district…

Dr. Craig Gibson, one of the world’s leading geological authorities on Mexico, is overseeing GGI’s exploration programs at Tonichi and elsewhere…he’s also the one who recently came up with the La Patilla Gold Property for GGI, a higher-grade near-surface Gold system that has potential for near-term production (small open-pit) in the Rosario district to the south…this could be the property that GGI drills next as per yesterday’s news…

With financial strength, activity on the ground throughout the winter, a proven inventory of high quality properties, and a strong management and geological team, GGI clearly fits into the top 10% of Venture companies that should thrive as the market rebounds…the share structure is clean with no warrants as the company hasn’t had to do a financing in nearly 5 years…accumulating these type of situations on any weakness – especially when they’re trading right near their working capital positions as GGI is now – is a recipe for making money in the market, short-term and long-term…

Below is an updated GGI chart from John showing strong support at current levels…the stock landed yesterday on its rising 200-day moving average (SMA) at 8 cents…as of 7:30 am Pacific, GGI is up a penny at 9 cents…

Azincourt Uranium Inc. (AAZ, TSX-V) Chart Update

As in GGI, any weakness is an opportunity in our view with Azincourt Uranium (AAZ, TSX-V) which will be active this winter with its PLS North Property (JV with Fission) in the Athabasca basin…AAZ has been trading in a horizontal channel between 20 cents and 33 cents since April, and it’s just a matter of time we believe before a confirmed breakout occurs above that channel…AAZ is unchanged at 30.5 cents as of 7:30 am Pacific…

Note: John sold his 100,000 Twitter shares intra-day yesterday.  John and Jon both hold share positions in GGI.

It has been a volatile day for Gold so far with bullion reacting to the ECB rate cut decision and some U.S. economic data…as of 7:40 am Pacific, Gold is down $6 an ounce at  $1,312…it has traded as low as $1,296 and as high as $1,327…Silver is down 11 cents at $21.70…Copper is unchanged at $3.22…Crude Oil is off nearly $1 a barrel to $93.86 while the U.S. Dollar Index has climbed two-thirds of a point to $81.14 with the euro under pressure…81 is an important resistance level for the Dollar Index – tomorrow will be a key day for the greenback with the jobs report…

The European Central Bank has cut its main interest rate to 0.25% from 0.50%…economists had said a cut was a possibility with annual inflation in the euro zone running well below the central bank’s target…Gold got an initial lift from the ECB decision, but pulled back due to strength in the dollar…inflation has been particularly low – and unemployment very high – in parts of the euro zone periphery…in Spain, inflation was 0.5% in the year to September…in Italy it was 0.9%…Ireland has had no inflation in the year to September…in Greece, prices have been falling since July…so the ECB is clearly concerned about deflation…

Tomorrow should prove interesting for Gold with the release of the U.S. jobs report for October…it’s expected to show the fewest jobs created since July due in part to the recent U.S. government partial shutdown, but investors have likely already factored in a weak jobs report – the question is, will it be worse than expected or better than expected?…consensus forecasts call for October non-farm payrolls to increase anywhere from 100,000 to 120,000…they rose 148,000 in September, down from 193,000 in August…

U.S. Q3 GDP Growth Less Impressive Than It First Appears

The U.S. economy grew faster than expected in the 3rd quarter as businesses restocked shelves, but a slowdown in consumer and business spending pointed to underlying weakness…GDP expanded at a 2.8% annual rate, the quickest pace since the 3rd quarter of 2012, the Commerce Department stated this morning…the figure was an acceleration from a 2.5% clip in the 2nd quarter and beat economists’ expectations for a 2% rate…however, inventories contributed nearly a full point to GDP in Q3 (excluding inventories, the economy grew at a 2% rate after expanding at a 2.1% pace)…in addition, consumer and business spending growth both slowed sharply during the quarter, so the higher-than-expected GDP number is quite deceiving…will the Fed start tapering in December given this environment?…not likely…

What’s Happening In Russia? – Growth Forecast Slashed

The Financial Times reported this morning that Russia has drastically slashed its long-term economic growth forecast, warning that the country’s growth will fall behind the global average in the next 12 years…the adjustment marks Moscow’s first official admission that the economic growth model that has underpinned President Vladimir Putin’s rule is falling apart…the economy ministry says it now expects the economy to grow at an annual rate of just 2.5% through to 2030, down from its previous forecast of 4.3% made just 6 months ago…data for GDP growth in the third quarter are due next week, and are also expected to show a continued slowdown…

Today’s Markets

Asian markets were modestly lower overnight…China’s Shanghai Composite fell 10 points to finish at 2129…some important economic data from China is due tomorrow, ahead of this weekend’s Communist Party’s policy meeting…Japan’s Nikkei average, meanwhile, closed 109 points lower at 14228…European shares were mixed today…

The Dow is down 40 points through the first 70 minutes of trading after closing at another all-time high yesterday…the TSX is off 30 points while the Venture has shed 3 more points…it’s at 938 as of 7:40 am Pacific…

CDNX Chart Update

The Venture has declined for 8 consecutive trading sessions, which some investors undoubtedly find discouraging, but keep in mind the Index is underpinned by strong support…below is a 1-year weekly chart from John…RSI(14) has been climbing an uptrend line since the early summer, and the Index itself is now just above an uptrend support line which also coincides with its 100-day moving average (SMA)…so the retracement, so far at least, from the recent high of 974 has been very normal…RSI(2) on the daily chart hit its lowest level yesterday since late June…

North American Nickel Inc. (NAN, TSX-V) Update

North American Nickel (NAN, TSX-V) had a strong day yesterday, climbing 6 cents to close at 39.5 cents, on speculation regarding more drill results from the company’s Maniitsoq Project in Greenland which came out this morning…hole MQ-13-028 returned a 24.75-metre interval, 182 metres down the hole, grading 3.19% Ni, 1.14% Cu and 0.11% Co…NAN has clearly made an interesting discovery at Imiak Hill but the big excitement won’t come until the 2014 drill program kicks in…

Below is an updated chart from John as we’ve been following this play rather closely since August after the company first reported promising results from drilling at Maniitsoq…note the significant resistance in the high 30’s…NAN is trading lower on the news this morning, giving up all of its gains yesterday – down 6 cents at 33.5 cents as of 7:40 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V)

Discovery Ventures (DVN, TSX-V) announced a bold move yesterday, taking advantage of the current market environment to cut a deal with Roca Mines Inc. for an exclusive option to acquire 100% of FortyTwo Metals Inc., a wholly-owned subsidiary of Roca…the challenge for DVN is that the total purchase price is $5.7 million – $5 million of that payable in cash, and the balance in shares at 25 cents…Discovery, the Venture’s volume leader yesterday, says it intends to finance the acquisition of FortyTwo through one or more private placements on terms to be determined…FortyTwo Metals holds, among other assets, the past producing Max Mine and associated claims, mining leases, and infrastructure near Trout Lake – approximately 135 km north of Discovery’s Willa Project in the heart of the Slocan Mining District…one of Discovery’s aims here, obviously, is to be able to truck material from Willa north for processing… it’s interesting to note that FortyTwo also holds tax pools accumulated to date of approximately $50-million…

DVN is quiet so far today with just 25,000 shares traded (unchanged at 23 cents) as of 7:40 am Pacific after more than 7 million shares changed hands yesterday on the Venture…23 cents is a Fib. resistance level as shown in this 2.5-year weekly chart…

Arianne Phosphate Inc. (DAN, TSX-V)

As we’ve mentioned previously, readers should keep an eye on Arianne Phosphate (DAN, TSX-V) which recently came out with a very positive feasibility study for its Lac a Paul Project in Quebec…DAN climbed as high as $1.69 following the news and has since retraced to the $1.40’s where there was previous resistance…as of 7:40 am Pacific, DAN is unchanged at $1.48…potential takeover candidate in 2014…

Note: John, Terry and Jon do not hold share positions in NAN, DVN or DAN…

Gold has traded between $1,309 and $1,323 so far today…as of 7:45 am Pacific, bullion is up $6 an ounce at $1,318…Silver is 17 cents higher at $21.88…Copper has added a penny to $3.25…Crude Oil has rebounded by more than $1 a barrel to $94.51 after touching a 5-month low…WTI had lost 5.4% in the past 7 trading days…its 14-day RSI fell to 25.9 yesterday, the lowest reading since June, 2012…the U.S. Dollar Index is off one-quarter of a point to 80.42…

Mineweb reported this morning that it was told by Finance Ministry officials in India told that the government’s many steps to contain Gold imports are working as expected…“Though imports of Gold and Silver had slid over 80% to $0.8 billion in September, India received over $9.6 billion from two foreign schemes, which were announced in September, to attract foreign funds and help the country bridge the current account deficit.  Moreover, healthy growth was witnessed in housing loans to individuals by public sector banks, with an increase of 42% in the first quarter and 61% increase in the second quarter.  Jewellers hope these positive signals would bring an end to India’s Gold curbs,” Mineweb’s Shivam Seth reported from Mumbai…

Traders would be limited in the positions they can hold in oil, wheat, Gold and other commodities under a proposal approved by the U.S. Commodity Futures Trading Commission yesterday (a federal judge rejected an earlier version from the CFTC on grounds that the agency failed to show why the limits were needed)…the CFTC proposal, which will be open for public comment for 60 days, would cap the number of futures contracts a company can hold in 28 commodities…the limits were sought by Congress after airlines, trucking firms and consumer groups blamed speculators for surging fuel prices in 2008…

Today’s Markets

The Dow hit a new intra-day all-time high this morning and is up 89 points as of 7:45 am Pacific…the TSX has gained 41 points while the Venture is up 1 point at 947…the Venture has declined, albeit rather gently, for 6 consecutive sessions with RSI(2) hitting its lowest point yesterday since late June…this market has plenty of support around current levels as we showed in charts the past couple of days…

Discovery Ventures (DVN, TSX-V) is the Venture volume leader so far today after announcing it has entered into an agreement with Roca Mines for an exclusive option to acquire 100% of FortyTwo Metals Inc., a wholly owned subsidiary of Roca…FortyTwo Metals holds, among other assets, the past producing Max Mine and associated claims, mining leases, and infrastructure near Trout Lake – approximately 135 km north of Discovery’s Willa Project in the heart of the Slocan Mining District…one of Discovery’s aims here, obviously, is to be able to truck material from Willa north for processing…other projects in the Willa area could also potentially benefit…it’ll be interesting to see if they can pull this off as the price tag includes a cash payment of $5 million…DVN is up half a penny at 23.5 cents on volume (all exchanges) of nearly 6 million shares through the first 75 minutes of trading…

Graphite One Resources (GPH, TSX-V) continues to edge higher…it’s the third most active Venture stock as of 7:45 am Pacific, up half a penny at 18.5 cents on total volume (all exchanges) of 1.7 million shares…it faces resistance at 19.5 cents…

European, Asian Markets

European shares were up modestly today in advance of a rate decision tomorrow by the ECB…the European Commission says it expects the euro zone economy to shrink this year by 0.4% before recovering to grow by 1.1% in 2014…that rather gloomy forecast has bolstered expectations for the ECB to cut interest rates, but that may not happen at this next meeting…last Thursday, the EU reported that inflation for October dropped to 0.7% year-over-year – the lowest inflation reading since November, 2009…this is well below the central bank’s inflation target of 2% and may ultimately force the ECB to cut interest rates…this in turn may hurt the euro (a stronger euro is generally positive for Gold)…

Retail sales in the 17 countries that share the euro fell in September, as consumer spending remained fragile in the face of high unemployment and slow wage growth…the decline in retail sales will likely add to mounting pressure from financial markets and governments on the ECB to take steps to steer the euro zone away from excessively low inflation and prolonged stagnation…

Asian markets were mixed overnight…Japan’s Nikkei average climbed 112 points, though China’s Shanghai Composite declined 18 points to close at 2140…

Shanghai Composite Updated Chart

John’s updated 6-month daily chart for the Shanghai, through the end of trading yesterday, shows a market that touched a low of 1850 in late June, climbed 23% to a high of 2270 in September, and now is trying to hold support within a Fib. band (50% to 61.8%) between 2100 and 2137, just slightly above today’s close…the correction of roughly 7% after the powerful move from late June to mid-September is very normal…it’s possible the Index could retrace to the Fib. 38.2% target (2055) but it would be important for support to hold there…the Shanghai usually correlates well with the Venture and the CRB Index, so a healthy market in China is good to see…

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

True Gold Mining (TGM, TSX-V) released drill hole results Monday that have significantly expanded the footprint of one of its five deposits (Kao) at its 856 sq. km Karma project in Burkino Fasco…this large project, which includes four other closely spaced deposits – Goulagou I, Goulagou II, Rambo and Nami – with a proposed central processing facility is currently undergoing a feasibility study, which remains on schedule for release by the end this quarter…results released Monday extended Gold mineralization with significant widths and grades by an additional 2,000 metres from the northern edge of the Kao deposit, doubling the size of the Gold footprint at Kao…metallurgical test results indicate strong, rapid recoveries for oxide material at the Kao deposit…

Below is a 2.5-year weekly TGM chart…note the very strong technical support in the low 30’s…as of 7:45 am Pacific, TGM is up half a penny at 34 cents…

Madalena Energy Inc. (MVN, TSX-V)

Madalena Energy (MVN, TSX-V) appears to be consolidating after hitting a new 52-week high of 60 cents last week following the breakout above the 50-cent area…MVN has been somewhat volatile but overall has shown steady progression this year with strong liquidity, so it has been one of the top-performing Venture plays and will likely continue to be given the company’s fundamentals and the technical posture of the stock…below is an updated 2.5-year weekly chart from John…there is solid support at 50 cents which is also just a few pennies above the rising 50-day moving average (SMA) – even stronger support in the low 40’s…MVN is up a penny at 55 cents as of 7:45 am Pacific…

Brigus Gold Corp. (BRD, TSX-V)

We continue to keep a close eye on Brigus Gold (BRD, TSX) as underground drilling continues at its Black Fox Mine where some interesting high-grade intersections have been hit below existing resources…from a technical standpoint, the downtrend line which was previously resistance should now serve as support as the stock continues to consolidate after surging from the low 50’s to a high of 80 cents in less than 3 weeks…BRD is down a penny at 72 cents as of 7:45 am Pacific…

Gold slipped as low as $1,309 overnight but is now trading near its high of the day, up $3 an ounce at $1,318 as of 5:00 am Pacific…Silver is up 4 pennies at $21.70…Copper is flat at $3.24…Crude Oil is off 20 cents at $94.42…WTIC is near a 4-month low amid speculation that U.S. inventories increased for a 7th straight week…the U.S. Dollar Index, meanwhile, is essentially unchanged at 80.58…

Bullion has fallen for the past 5 trading sessions and a 6th consecutive daily drop would be the longest losing run since May…physical demand from 2 key players – China and India – has been soft in recent days, according to reports…

Holdings in Gold-backed ETP’s fell 0.3 metric tons to 1,875 tons yesterday, remaining at the lowest since April, 2010, according to data compiled by Bloomberg…

“Jim Sinclair’s $50,000 Gold Call – Let’s Hope It Doesn’t Happen” – interesting article yesterday by Lawrence Williams at www.mineweb.com…Sinclair’s current shorter-term predictions are that Gold will hit $1,650 this year, rise to $2,400, fall back and then move up to between $3,200 and $3,500 by the end of 2016…if only we all had a crystal ball…Sinclair says he also sees unprecedented manipulation of prices in the precious metals markets which has been causing distortion, with huge amounts of paper Gold so far being successful in keeping the Gold price down…

Today’s Markets

Asian markets were mixed overnight…China’s Shanghai Composite overcame early weakness to close 8 points higher at 2157…trading in Japan resumed after a public holiday yesterday, and the Nikkei average climbed 24 points to finish at 14225…Japan’s monetary base grew 45.8% in October from a year earlier to 186.87 trillion yen, hitting a record high for the 8th straight month as the Bank of Japan kept pumping money into the financial system to beat deflation under its ultra-loose monetary policy, the central bank said yesterday…eventually, how can this not have important ramifications?…

European equities came under moderate pressure today after the European Union’s Commission released a relatively subdued outlook for the economy in its Autumn forecast…

Stock index futures in New York as of 5:00 am Pacific are pointing toward a slightly lower open on Wall Street…

Signs Of More Structural Reform In China

A report from Associated Press says Chinese leaders have ordered local officials to stop expanding industries such as steel and cement in which supply outstrips demand, a cabinet statement says, in a sign previous orders to cut overcapacity were ignored…Beijing has been trying since 2009 to cut excess production capacity, which has triggered price-cutting wars that threaten the financial health of some industries…but lower-level leaders whose promotions depend on economic development have continued to support local industries…in a video conference yesterday, planning officials warned local leaders to stop ignoring orders to reduce overcapacity in industries including steel, cement, aluminium and glass…“Those who still violate discipline will be heavily punished,” said the deputy director of the cabinet planning agency, the National Development and Reform Commission, Hu Zucai, according to the government newspaper China Daily…

Many Americans Already Perceive China As World’s Dominant Economic Power

More than one quarter of Americans currently perceive China as the world’s dominant economic power, according to a new survey (GfK North America with TheStreet), a reflection of the changing global order…while China’s economic strength has been on the rise, particularly over the last decade, the size of the mainland economy at $8.23 trillion is just over half that of the U.S. at $15.68 trillion, according to 2012 GDP data…however, China is seen overtaking the U.S. as the world’s largest economy by 2030, according to the National Intelligence Council, an analytical arm of the U.S. government’s Office of the Director of National Intelligence…

U.S. Dollar Index Updated Chart

The direction of the U.S. Dollar Index is critical to both Gold and the Venture Exchange…recently, the Index found support as expected at 79 before rebounding and challenging resistance at 81 yesterday…it may challenge that resistance again in the coming days…the major pattern remains bearish, however, in particular due to the breakdown in September of the 2.5-year uptrend on the weekly chart…a bearish downsloping channel has now developed, and that’s likely to keep the Dollar Index under pressure…this suggests the Fed will likely maintain the pace of its current bond buying program well into 2014, longer than most pundits are now predicting…

Venture – U.S. Dollar Index Comparative Chart

The very close correlation between the Venture and the U.S. Dollar Index means investors in the junior exploration sector must keep a close eye on the direction of the greenback…below is a 15-year monthly CDNX-U.S. Dollar Index comparative chart…any major weakness in the Dollar Index (i.e., a break below strong support at 79) would give the Venture a much-needed boost…

Fission Uranium Corp. (FCU, TSX-V) Update

Fission Uranium (FCU, TSX-V) announced yesterday the discovery of a 6th mineralized zone at PLS, a significant step-out (525 metres) west of the initial discovery zone…PLS has been expanding rapidly eastwards, so hole PLS13-118 (21.5 m total composite mineralization) to the west is an important development in terms of the potential scale of this project…additional drilling will focus on this new zone…

FCU gained 6 cents yesterday on the news to close at $1.09…volume was nearly 1 million shares (all exchanges)…technically, FCU has been under some pressure in recent weeks but very strong support exists from 96 cents…yesterday, the stock climbed back above its still-rising 100-day moving average (SMA) at $1.07…

Investor patience with FCU should be rewarded…this is a very strong play in every respect…below is a 6-month daily chart from John…

Azincourt Uranium Inc. (AAZ, TSX-V) Update

Azincourt Uranium (AAZ, TSX-V), which has joint-ventured PLS North with Fission, continues to perform well…yesterday, AAZ broke above resistance at 33 cents, closing at 34 cents…this breakout requires confirmation today…for short-term traders, the time to accumulate aggressively was when this was in the low-to-mid 20’s, as John’s charts were showing…the low-to-mid 30’s could become new support…

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

Probe Mines (PRB, TSX-V) has consistently out-performed Gold and the TSX Gold Index since the late spring, and we see no reason why that trend won’t continue as the company’s promising Borden Lake deposit continues to evolve…at some point before year-end, it seems likely that PRB will push through resistance around $2.20 and start a fresh move higher…fundamentally and technically, this is another strong play…PRB closed yesterday at $2.16…

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

Gold traded as low as $1,311 overnight but has rebounded to $1,319 as of 7:30 am Pacific for a gain of $3 an ounce…Silver is off a nickel at $21.82… Copper is under some pressure, down 4 cents to $3.24…Crude Oil is relatively unchanged at $94.71 while the U.S. Dollar Index, after nearly touching resistance at 81 overnight, has backed off to 80.60…

China’s net Gold imports from Hong Kong declined marginally in September but overall are considered strong, with one investment bank citing this as an example of the continued shift toward more demand in Eastern nations than in the West…shipments to China from Hong Kong were 116.3 metric tons in September, with exports to Hong Kong of 6.9…this left net imports of 109.4 metric tons, down 0.7% from 110.2 the prior month, according to news reports…however, September was China’s 5th consecutive month of net imports in excess of 100 tons (more than 800 tons through the first 9 months of this year, double the first 9 months of last year)…the high import figure, which is well ahead of a supply deficit, could be due to purchases by the central bank, analysts said…China does not publish Gold trade data and the numbers from Hong Kong, a main conduit for Gold into China, give the best picture of the country’s trade of the precious metal…China’s central bank is planning to increase the number of firms allowed to import and export Gold and also ease restrictions on individual buyers of the precious metal, according to a draft policy document…Commerzbank said Chinese imports so far have exceeded the outflows from global Gold exchange-traded products, which it lists at just shy of 703 metric tons in the first nine months of the year…“This is further evidence that Gold demand is shifting from West to East,” Commerzbank said…

Fed’s Bullard:  “What’s The Hurry” To Taper QE?

Some interesting comments from St. Louis Fed President James Bullard in an interview on CNBC this morning…“85 billion dollars is a torrid pace, I will give you that. And a trillion dollars a year is a torrid pace,” he acknowledged. “I’d rather get out it if we can, but I’d like to meet our goals”…he said he also sees “room on the balance sheet,” which is approaching $4 trillion, for continued buying. “If you look at the size of the balance sheet relative to GDP, who’s got the biggest one, Japan, Europe, U.K., U.S.?  We’re fourth out of those guys,” he continued. “If something bad is going to happen…with the balance sheet, these other central banks should have passed that and already had that experience and they haven’t.”

Speaking at a conference in Sydney, Australia, today, Dallas Fed President Dallas Richard Fisher said a “fiscally irresponsible” U.S. government counteracted the effects of accommodative Fed policy (source: CNBC)…he also added that he didn’t expect the central bank’s bond-buying program to increase or go on indefinitely…

Today’s Markets

China’s Shanghai Composite was unchanged overnight, closing at 2150…markets in Japan and India were closed for public holidays…

European shares were modestly higher today…

In North America, the Dow is up 15 points through the first 1 hour of trading…the TSX has gained 5 points while the Venture is up 4 points at 959 as of 7:30 am Pacific…

CDNX 1-Year Weekly Chart Shows Underlying Technical Strength

Below is a revealing 1-year weekly chart from John that shows how the Venture has been progressing, albeit slowly, from its late June low of 859 which coincided with Gold’s low of $1,179…the overall uptrend at the moment is clear to see – RSI(14), at just 46%, continues to climb an uptrend line, the CMF shows steady accumulation, while the Index itself is now supported at 2 levels – between roughly 950 (the rising 50-day SMA) and 955, and also around 930 in the immediate vicinity of the rising 100-day SMA…the 930 area also corresponds with an uptrend support line…the “squeeze” is on, so to speak, as John has pointed out in this chart…given the accumulation signals, these rising moving averages and the uptrend lines, the balance of probabilities in our view is that it’s just a matter of time before the Venture overcomes stiff resistance around 970…a very gently rising market like we’ve seen in the last several months builds a strong foundation of support and is preferable to the sharp rallies over short periods (6 weeks to 2 months) witnessed in late 2011, early 2012 and mid-2012 that weren’t sustainable…

If the current trend continues, the outlook for first half of 2014 has to be considered bullish…

Abcourt Mines Inc. (ABI, TSX-V)

Bottom-fishers may wish to keep an eye on Abcourt Mines (ABI, TSX-V) which, in difficult markets over the past couple of years, has done an admirable job of bringing its Elder Mine near Rouyn-Noranda into production…the first Gold bar was poured last month and full production capacity is expected during the 1st quarter of next year…4,839 tonnes of Gold mineralization were processed from Oct. 1 to Oct. 11…at least 30,000 more tonnes are expected to be processed by the end of December…ABI stated that the average mill head grade and recovery rates were “close” to the estimates made by Roche Ltd. Consulting Group in their November, 2012, PEA (5.48 g/t Au and 94%, respectively)…milling results will be used to validate resources and recovery rates in preparation for a feasibility study expected to be completed early next year…we visited the Elder Mine site in early 2011…Abcourt has an attractive asset with strong exploration upside as well…revenues from Gold sales should allow the company to keep further share dilution to a minimum (currently there are approximately 180 million shares outstanding)…

Abcourt will keep on ticking…below is a 10-year monthly chart…note the very strong support at 5.5 cents, and resistance at 10 cents…given an improvement in the fundamentals, it’s reasonable to expect that ABI will finally break above its long-term down trendline at some point next year…worth keeping on the radar screen…as always, perform your own due diligence…ABI is off half a penny at 7.5 cents as of 7:30 am Pacific…

Gold Standard Ventures Corp. (GSV, TSX-V) Chart Update

From a technical standpoint, Gold Standard Ventures (GSV, TSX-V) is a great example of what happens when a stock breaks above a long-term down trendline…this occurred with GSV in early October, as John pointed out at the time, following the release of positive drill results from their Railroad Project in Nevada…GSV made an immediate powerful move to the $1 level…since then, it has been consolidating…GSV is heading into what should be a much more positive 2014…next resistance levels are 96 cents and $1.20 as John shows in this 2.5-year weekly chart…GSV is up a penny at 93 cents as of 7:30 am Pacific…

Brigus Gold Corp. (BRD, TSX)

Brigus Gold (BRD, TSX) reported another impressive high-grade intersection last week (18.09 g/t Au over 37.8 m) from underground drilling at its Black Fox Mine in Timmins, Ontario…the 3rd hole is now in progress, and the company expects to drill another dozen or so holes in this current phase…these thick, high-grade intersections directly below current mining operations are very positive – if they continue, Brigus should be able to expand resources at Black Fox significantly…technically, some consolidation in the stock is now occurring which is healthy – look for support around the down trendline which was previous resistance…as of 7:30 am Pacific, BRD is off 1 cent at 75 cents…

Updated Silver Charts

6-Month Daily Chart

Silver met short-term resistance last week at $23…the Fib. 38.2% support at $21.40 is strong, so that’s the range Silver is in at the moment until it breaks one way or the other…

Long-Term Silver Chart

Below is an updated 13-year monthly chart that shows that Silver has likely completed a 3-wave corrective phase…very strong long-term support exists at $20…Silver should have a much better 2014…

Note: John, Terry and Jon do not hold share positions in ABI, GSV or BRD.

TSX Venture Exchange and Gold

The Venture declined each day last week in a healthy correction that took the Index back to new support in the low-to-mid 950’s.  It closed Friday at 955, down 19 points or 2% for the week (Gold slipped 2.7%).

There was no confirmed breakout above 970 resistance recently, but that doesn’t mean such an event is not in the works.  The current technical posture of the Venture is still very positive and investor patience is critical.  The Index held up well last week despite a sell-off in Gold, a change in behavior for the Venture that first emerged in August.  The 50-day moving average (SMA) is at 950 and continues to rise, while the 100-day SMA around 930 is now reversing to the upside which is an important development.  Fundamentally, of course, this market would benefit tremendously from higher Gold prices and a fresh discovery.  This continues to be a time to search for bargains, in our view, and plant the seeds that will yield a very bountiful harvest in 2014.

Below is as 3-month daily chart from John.  RSI(7) is unwinding an overbought condition – look for it to stabilize and reverse higher during the upcoming week.

The Seeds Have Been Planted (And Continue To Be Planted) For The Next Big Run In Gold Stocks

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 (at least most of them) to start to become much more lean and mean in terms of their cost structures. 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 showed that 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.  As for the juniors, focus on the small universe of companies that have the ability to execute both on the ground and in the market – companies that have the cash, the expertise, the properties and the drive to make discoveries that majors will buy.  And companies that haven’t obliterated their share structures over the past couple of years.

Gold

Gold met resistance in the $1,360’s last week, just as John’s chart suggested it would.  A chart support band is between $1,306 and $1,315.  Gold remains range-bound until a catalyst drives it through the $1,360’s or pushes it below strong Fib. support in the $1,270’s.  The behavior of the Venture, and the fact the U.S. Dollar Index has broken below a 2.5-year uptrend, suggests to us that Gold has more upside potential in the coming weeks and months than most investors realize.

Silver meet resistance at $23 last week and closed at $21.87, down 63 cents.  Copper added 2 pennies to $3.28 on encouraging economic news out of China.  Crude Oil plunged to its lowest level since late June, falling $3.28 a barrel to $97.85.  The U.S. Dollar Index, meanwhile, found support as expected at 79 and climbed 1.5 points to finish the week at 80.72.  It’s now trading near the top of a resistance band between 80 and 81, and will have a very difficult time sustaining a move above 81.  This should be supportive of both Gold and the Venture.

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 $3.5 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, deflationary concerns around the globe and the prospect of Fed tapering by the end of the year (not likely now) had a lot to do with Gold’s plunge during the spring below the technically and psychologically important $1,500 level, along with the strong performance of equities which drew money away from bullion.  June’s low of $1,179 may have been the bottom for bullion – time will tell.  We do, however, 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 this 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 4 years and strictly through word-of-mouth we have built a loyal following.

We’re continuing with our plans to ultimately construct a very unique investment and money-management resource site that goes considerably beyond what we have now.  We focus a great deal on the Gold, Silver and Copper markets as well as trends in the global economy, in addition of course to the technical health of the TSX Venture Exchange (CDNX).  An important component of this site, as well, will always be original research on high quality junior exploration companies or small producers 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, and we are being more selective than ever in the current market environment.  We look for companies with the ability to execute both on the ground and in the market, who are determined to build shareholder value, which actually excludes most Venture stocks.  However, investors must understand that the companies we do put forward for our readers’ due diligence 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.

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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 traded between $1,308 and $1,329 so far today…as of 7:05 am Pacific, bullion is down $13 an ounce at $1,310…Silver is off 6 cents at $21.85…Copper is flat at $3.29…Crude Oil has slid by more than $1 a barrel to $95.24 while the U.S. Dollar Index has shot up by more than one-third of a point to 80.64…it’s now trading within a stiff resistance band between 80 and 81 that it will likely have great difficulty climbing out of…

Gold demand in India continues to be a problem…lack of supply, due to stringent government measures to curb imports and trim the nation’s current account deficit, has driven up prices and curbed consumers’ voracious appetite for Gold jewelry as the festive season begins…the sluggish overall economy isn’t helping matters, either, though India’s stock market hit a new all-time high intra-day today…

Jewelry stores across the country typically see a surge in sales in the days leading up to the widely celebrated Hindu festival of Diwali, which falls on November 3…this year, however, jewelers aren’t enjoying the buying frenzy they’re accustomed to according to various reports…

“It’s been very, very slow. Sales are down 50% compared to last year. There’s no demand because prices have soared so much, the economy is slow and inflation is high. This Diwali is a flop,” said Sunil Tejnani, co-owner of Tikamdas Hiranand, a family-run jeweler located in Mumbai’s Zaveri Bazar – a major jewelry market in the city (source: CNBC)…

Gold prices in India have risen swiftly in recent months, driven by depreciation in the rupee, a recovery in global prices, an increase in taxes and a premium on the London price due to local supply issues…

Today’s Markets

Some upbeat economic data helped China’s Shanghai Composite gain 8 points overnight to close at 2150…two separate readings of Chinese factory activity in October were released today…China’s official PMI (purchasing managers index) rose to 51.4 from 51.1 in September, beating Reuters’ estimate of 51.2…meanwhile, HSBC’s final reading of factory activity hit a 7-month high, unchanged from last week’s flash estimate…

European shares are mixed in late trading overseas…

In New York, the Dow is up 75 points through the first 35 minutes of trading…

The TSX has gained 21 points as of 7:05 am Pacific…the Gold Index is under pressure, down 6 points at 174, after Barrick Gold Corp.’s (ABX, TSX) announcement of a whopping $3 billion U.S. financing (163.5 million shares at $18.35 per share), the company’s first financing in more than 4 years…Barrick intends to use $2.6-billion of the net proceeds to redeem or repurchase outstanding debt…

The Venture is off 2 points at 957 and has held up well despite the weakness in Gold yesterday and again today…the Venture has consistently shrugged off some significant down days in bullion since August, an encouraging sign…

CRB Index Updated Chart

The CRB Index is at critical support as shown in this 20-year monthly chart update from John…RSI(14) peaked at 70 in early 2011 when the Index recovered to a post-crash high of nearly 375 at the same time as the Venture climbed back to a high of 2465…RSI(14) on the CRB chart has held at the 40 level or higher since late 2009, and yesterday’s 278 close by the Index puts it right at the support of the lower Pitchfork Tine…one can argue that the bear market that started in 2011 has bottomed out…keep in mind that the CRB Index did not hit its post-Crash low until early 2009, a few months after the Venture finally bottomed out around 700…the Venture (up nearly 12%)  has out-performed the CRB Index (up just under 1%) since late June of this year which is a positive sign as the Venture will typically lead the CRB in one direction or the other…it’ll be critical to keep a close eye on the action in the CRB Index over the next 2-3 months…

Azincourt Uranium Inc. (AAZ, TSX-V) Chart Update

Besides Fission Uranium Corp. (FCU, TSX-V), the leader of the pack, two PLS area uranium plays we’ve liked the most in recent months have been Azincourt Uranium (AAZ, TSX-V) and Aldrin Resource Corp. (ALN, TSX-V) and both have progressed very well as they inch closer to winter drill programs…readers who have accumulated AAZ in the 20’s  are now seeing their patience pay off as AAZ is now threatening to push through stiff resistance in the low-to-mid 30’s after closing yesterday at 33.5 cents on volume of 1.5 million shares (all exchanges)…since April, the stock has been trading in a horizontal channel between 20 cents and 33 cents…below is a 15-month weekly chart from John…note the high bullish volume over the last couple of weeks…AAZ is unchanged at 33.5 cents as of 7:05 am Pacific…

Contact Exploration Inc. (CEX, TSX-V) Chart Update

An energy play that we believe is poised for success both fundamentally and in the market is Contact Exploration (CEX, TSX-V) which we have been mentioning frequently in recent weeks…volume is encouraging, and the stock is now right at channel resistance and threatening to break out as you can see in John’s 2.5-year weekly chart…RSI(14) is in good position to move higher and buy pressure has now replaced sell pressure which was dominant since April…as always, perform your own due diligence…CEX is up a penny at 29 cents, where there’s a significant offer, through the first 35 minutes of trading today…

Gold Canyon Resources Inc. (GCU, TSX-V)

One of our readers inquired about Gold Canyon Resources (GCU, TSX-V) which continues to develop its promising Springpole Gold Project in northern Ontario…very oversold conditions definitely emerged in GCU during the spring and into the early summer, and the stock hit what appears to have been an important low of 19 cents near the end of June – just when both the Venture and Gold hit their lows of 859 and $1,179, respectively…

GCU is focusing its efforts on relatively low-cost but critical work needed to advance the Springpole Project…with $6 million in working capital as per the latest financials (ending Aug. 31), the company believes it has adequate resources to accomplish the following over the next 12 months:

• Continue all baseline surveys required for future permitting;
• Work toward an exploration accommodation agreement with first nations communities;
• Pursue permits needed to build an exploration trail to site;
• Initiate certain engineering studies in preparation for launching a future prefeasibility study;
• Conduct exploration drilling of the soft mineralized material immediately underneath lake bottom where previous drilling was unable to recover core for sampling.

Technically, the stock does have some momentum at the moment and could certainly take a run at the next resistance level which is 53 cents…GCU closed yesterday at 39.5 cents…keep in mind that about 12 million shares from an August financing at 23 cents become free-trading in just over a month, so expect some selling of those shares in December as certain investors will elect to just ride the 40-cent, 2-year warrants…share structure, as we often emphasize, is critical, and many companies including GCU have been hurt by dilutive financings…GCU is unchanged at 39.5 cents as of 7:05 am Pacific…

Zenyatta Ventures (ZEN, TSX-V) Chart Update

Zenyatta Ventures (ZEN, TSX-V) has managed to hold critical support around the $2 level, and gained 21 cents yesterday to close at $2.45…technically, ZEN has strong support at $2.05 and two resistance levels to keep an eye on – $2.45, yesterday’s close, and $2.93, about 25 cents below the falling 50-day moving average (SMA) which will also be a hurdle…given the volatility of ZEN and the current support/resistance areas, this is a traders’ market at the moment…overall momentum has certainly waned since ZEN surged to an all-time high of $5 in late July…ZEN is up 6 cents at $2.51 as of 7:05 am Pacific…

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