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Gold has traded between $1,298 and $1,310 so far today…as of 7:15 am Pacific, bullion is up $3 an ounce at $1,303…Silver is up a penny at $20.80…Copper is off a penny at $3.19…Crude Oil has recovered another $1.35 a barrel to $102.55…the rise comes on news that the U.S. used more of its backup Oil than at any time in the past half year…the “hefty” draw in Crude Oil inventories, which fell by 7.5 million barrels according to data from the Energy Information Administration, was the largest weekly drop in six months…the U.S. Dollar Index is up slightly at 80.54…a new round of U.S. sanctions on Russia, which weighed on stocks with exposure to the country, helped send Palladium to 13-1/2-year highs…the metal is chiefly sourced from Russia…Russian stocks (the market there is down over 4% this week) and the ruble came under sharp pressure today…

Gold is trading around its 100-day moving average (SMA) but a test of strong chart and Fib. support in the $1,280’s, coinciding with the 200-day SMA, can’t be ruled out as John has shown…two attempts at a major smack down of bullion prices have occurred this week – a $1.4 billion sale Monday and another $2.3 billion dump Tuesday, but Gold hasn’t been knocked out by those two separate hard blows…geopolitical hotspots are perhaps helping to put a floor underneath bullion prices…SPDR Gold Trust said its holdings fell 2.7 tonnes to 806.03 tonnes yesterday, while physical demand in Asian markets has failed to pick up in any meaningful way despite the recent price drop…but buyers are out there somewhere and absorbing any selling pressure…

A jump in India’s Gold imports during June could deter the government from lifting import restrictions, some analysts say…government data show Gold imports rose 65% year-on-year last month to $3.12 billion…while the government doesn’t publish tonnage data, UBS estimates this to be around 74 metric tons, based on the average Gold price for the month…this would be the highest monthly inflow for the year so far, the bank says…the country’s trade deficit, meanwhile, hit an 11-month high…

Gold prices slumped to their lowest level in more than three weeks on Tuesday after Federal Reserve Chair Janet Yellen said interest rates could rise sooner than expected if the U.S. labor market continues its robust recovery pace…Yellen’s comments reignited concerns among many traders – and they could be wrong on this – that demand for a zero-yielding asset like Gold would erode when interest rates turn higher as returns from bonds and equities will lure away investors…

China’s Appetite For U.S. Debt Continues

Investors wrestling with what is driving the surprise U.S. bond rally of 2014 got a clue yesterday, fingering a familiar suspect: China…the world’s most populous nation boosted its official holdings of Treasury debt maturing in more than a year by $107.2 billion for the first five months of 2014, according to U.S. data released yesterday…according to a report in the Wall Street Journal, that’s the biggest first-five-month increase since record keeping began in 1977 and surpasses the $81 billion bought by China for all of 2013…the scale of Chinese buying helps explain why the yield on the benchmark 10-year Treasury note has tumbled this year to nearly 2.5% from 3% at the end of 2013…yields fall as prices rise…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 12 points overnight to close at 2056…June home price data for China will be released tomorrow…Japan’s Nikkei slipped 9 points…Australia’s benchmark S&P ASX 200 hit a six-year intra-day high and also ended at its highest level since May 28…

Europe

European markets are down modestly in late trading overseas…

North America

The Dow is down 12 points through the first 45 minutes of trading…U.S. housing starts and building permits unexpectedly fell in June, suggesting the housing market recovery is still struggling to get back on track after stalling in late 2013…

The Dow posted its 15th record-high close of the year yesterday, thanks to a rally in tech shares after Intel posted strong third-quarter guidance…meanwhile, economic data also helped to boost sentiment…the Federal Reserve’s Beige Book found the economy expanding at a modest to moderate pace with consumer spending up in all of the Fed’s districts…another report had U.S. factory output increasing for a fifth month in June…

The U.S. economy is “stronger than people think,” Wells Fargo Chairman and CEO John Stumpf told CNBC today.  “We were all surprised by the first-quarter GDP,” he said in a “Squawk Box” interview.  “Who knows what second quarter will be, but I think it will surprise on the upside.”  GDP contracted at a 2.9% annual rate the first quarter, the economy’s worst performance in five years…economists expect GDP to grow around 3% in the second quarter.  If you exclude housing, the Wells Fargo CEO said, the economy is better now than it was during the boom years of 2000 to 2008.  “Energy is booming, way better than it was then…autos, they might sell 17 million new vehicles this year.”  He also said U.S. manufacturing is coming back and so is agriculture.

The TSX is up 22 points while the Venture is unchanged at 1009 as of 7:15 am Pacific…

CRB Seasonality Chart

Further to our very revealing CRB charts yesterday, July and August are typically strong months for commodity prices – hence a near-term turnaround should be expected given this “seasonality” effect and the fact that the CRB Index has been driven into oversold territory in recent weeks…

Canadian Dollar Chart Update

Encouraging a weaker loonie clearly appears to be a deliberate strategy of Canada’s central bank (they’re “talking” the currency down) as this will have benefits in terms of increased exports, slightly higher inflation and stronger corporate earnings in some cases (which should help the TSX)…a lower dollar is also positive for Canadian Gold producers…

This 2.5-year weekly chart shows a loonie with major chart and Fib. resistance at 94 cents and the retreat from this level has started with the currency now trading at 93 cents…declining 200-day and 300-day SMA’s at 94 cents and 92.5 cents, respectively, are also putting downward pressure on the loonie…the biggest threat to the Bank of Canada’s dollar strategy during the second half of this year would be a potential major breakout in Oil prices above $110 a barrel…

Shanghai Composite Updated Chart

Very interesting long-term chart on the Shanghai Composite which is showing clear signs of an upside reversal – the question is, what will be the catalyst for that?…also intriguing (a fact we’ve pointed out before) is that the Shanghai and the Venture have correlated quite closely since the beginning of 2006 (they both peaked in 2007 and bottomed in mid-2013), so any indication that the Shanghai is about to power higher has to be considered bullish for the Venture…

Highbank Resources Ltd. (HBK, TSX-V) Update

What a performer Highbank Resources (HBK, TSX-V) has been since we introduced it to our readers in the spring in the mid-teens…HBK captured our attention as soon as it overcame long-term resistance at 15 cents, and recently a confirmed breakout occurred above Fib. resistance at 20 cents…yesterday, HBK hit an intra-day multi-year high of 30 cents…next major long-term resistance sits at 35 cents but keep in mind that HBK may have to digest its recent gains after jumping nearly 50% over just the last five trading sessions…

Highbank has been climbing higher as it moves closer to the production stage at its Swamp Point North aggregate project along tidewater near Stewart…

HBK is unchanged at 29.5 cents as of 7:15 am Pacific after opening down a penny at 28.5 cents…

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

North American Nickel (NAN, TSX-V) announced the start of drilling about a month ago at its highly promising Maniitsoq Nickel-Copper-PGE sulphide project in southwest Greenland…the opportunity for an exciting new discovery at Maniitsoq clearly exists, and the company is well-funded to carry out its extensive exploration plans this summer…

Technically, NAN has been performing to script and our last chart (June 27) warned of temporarily overbought conditions that could unwind to support around 50 cents…NAN climbed as high as 65 cents but has since retraced to the 50-cent level, just a couple pennies above its rising 50-day SMA which has provided rock-solid support since the beginning of the year…

NAN is up 2 cents at 52 cents on very light volume as of 7:15 am Pacific…

Note:  John, Terry and Jon do not hold share positions in HBK or NAN.

Gold has stabilized after a sharp two-day drop and has traded between $1,294 and $1,304 so far today…as of 7:45 am Pacific, bullion is up $9 an ounce at $1,303…Silver is 7 cents higher at $20.79…Crude Oil has recovered $1.19 a barrel to $101.15…Libya’s Oil production has returned to its highest level in five months following the faster-than-expected ramp-up of its largest Oil field, according to official data…this has contributed to Oil’s recent weakness…Copper is down a penny at $3.22 while the U.S. Dollar Index has gained more than one-tenth of a point to 80.51…

According to reports, a massive $1.37 billion sale of Gold futures hit the market at New York open Monday and that’s what got Gold off to a bad start this week…strong technical support exists in the $1,280’s, however, and the pullback was helpful in terms of cleansing temporarily overbought conditions that emerged last week…

Fed Chair Janet Yellen’s testimony before the Senate Banking Committee yesterday was mostly Gold-neutral, though about an hour into her testimony prices suddenly slipped below $1,300 an ounce for the first time since June 19…most observers said they did not feel that the Fed chief had suddenly become more hawkish – other than suggesting rates could rise sooner than expected if the labor market keeps improving rapidly.  “A high degree of monetary policy accommodation remains appropriate,” Yellen stated yesterday (she’s testifying again today before a House committee).  “Although the economy continues to improve, the recovery is not yet complete.”

Yellen gave a strong message that the Fed is going to be data-dependent, which means the markets will be more focused than ever on economic numbers over the coming months.  “If the labor market continues to improve more quickly than anticipated by the Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned. Conversely, if economic performance is disappointing, then the future path of interest rates likely would be more accommodative than currently anticipated.”

Dallas Fed President Richard Fisher, who is a voting member of the Fed’s policy committee this year, will give a speech on monetary policy at University of Southern California beginning at 9:00 am Pacific today…also, the Fed will release its Beige Book report on economic conditions at 11:00 am Pacific…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell 3 points overnight to close at 2067…the world’s second largest economy grew 7.5% in the second quarter, above estimates for a 7.4% increase…meanwhile, other data showed June industrial output rising a stronger-than-expected 9.2% on year and June retail sales increasing an annual 9%, in line with expectations…the growth in Q2 GDP was aided, however, by a government mini-stimulus package designed to boost spending on infrastructure including railways and social housing…the gap between investment and consumption in China still remains wide, and consumer spending needs to pick up in order to bring more balance to growth…

Japan’s Nikkei average fell 16 points overnight to finish at 15379…

Europe

European markets are up strongly (better than 1%) in late trading overseas, bolstered by heavy buying in the basic resources sector with exposure to China…

North America

The Dow is up 41 points as of 7:45 am Pacific, hitting a new all-time high this morning…

The TSX has gained 117 points while the Venture is up 4 points at 1011 through the first 75 minutes of trading…

CRB Index Short-Term Chart

Below is an important chart going back nearly a year that shows the CRB Index (Reuters/Jeffries) in heavily oversold conditions, based on RSI(14), comparable to the situation late last year prior to a move that ultimately led to a substantial advance (nearly 12%) in just over three months…

After hitting a yearly high of 313.27 in late June, the CRB has quickly corrected by plunging 6% to an area of very strong support just above the rising 200-day moving average (SMA) coinciding with a Fib. retrace level…this is a classic pullback within a primary uptrend, so we expect the CRB to begin recovering shortly (it’s up 1 point to 297 as of 7:45 am Pacific) and ultimately push to a new yearly high during the second half of 2014…this matches well with the outlook for the Venture which has also retreated to strong support around the 1000 level – no surprise there…

CRB Index Longer-Term Chart

This 2-year weekly CRB Index paints a very similar picture as the short-term chart – the Index is now in an area of superb support…a further decline of just a few more points appears possible, but the bottom may already have been put in at 294.61 given the convergence of chart and Fib. support in the low 290’s, and the current position of the SS which is now clearly oversold…

What’s also interesting is that Citigroup estimates that money managers poured roughly $7.5 billion into commodities markets during the first half of this year, after net redemptions of $30 billion in the year-earlier half and withdrawals of $50 billion in all of 2013…the commodities sector hit bottom last year, and that included Gold and the Venture in our view…how Goldman Sachs’ analyst Jeffrey Currie could still be calling for Gold to plunge to $1,050 later this year is beyond comprehension given the many technical indicators that give a remarkably different perspective…historically, Gold has also rebounded significantly in the year following a major plunge (the 2013 drop was nearly 30%)…

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

The $40+ drop in Gold and the 16-point decline in the Venture the last two days impacted even the top performers this year on the CDNX, not the least of which is Garibaldi Resources (GGI, TSX-V) which pulled back from a multi-year high of 32.5 cents Friday to a 27-cent close yesterday, though on very modest volume…one of the biggest mistakes investors make is not understanding normal volatility – healthy retraces – within a primary uptrend…as a result, they can suddenly become fearful on a minor pullback when instead they should be bargain-hunting…as smart consumers, we take advantage of store sales but investors don’t often apply that principle to the emotionally-driven market…

RSI(2) on the GGI 1-year daily chart hit oversold levels yesterday not seen since the May pullback in the stock which presented an ideal buying opportunity just above 20 cents…new support is now in the upper 20’s as defined by several indicators, including Fib. levels and moving averages…

Fundamentally, there are few companies on the Venture in a better position for a discovery this summer – GGI has two growing and exciting opportunities in Mexico with Rodadero and La Patilla (early drilling success at both) and of course the Grizzly in the Sheslay district is a potentially explosive situation as the summer progresses…we expect the Sheslay area to kick into high gear shortly…to use a baseball analogy, GGI has runners on base at huge Sheslay Field with some heavy hitters getting ready to step up to the plate…others, of course, are taking big swings as well which should lead to some exciting activity in the weeks ahead…

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

It’s safe to assume that the first batch of results should be coming soon from GoldQuest Mining (GQC, TSX-V) which commenced a 10,000-m drill program in early May in the immediate vicinity of its Romero deposit in the DR…the program is designed to identify new mineralized bodies which could increase the mineral resources in the Romero project area…geologically, this is a prolific district and the possibility of some sort of “glory hole” from GQC this summer (as we’ve seen in the past) certainly exists…an airborne program, regional mapping and ground IP have identified a number of strong targets both close to Romero and along the belt…so GQC is aiming not to not only build the existing Romero resource, but uncover fresh deposits as well that could potentially enhance the overall economics of the project…

Technically, this 2-year chart essentially tells us that GQC continues to consolidate in a channel between 25 cents and 40 cents…at 27.5 cents this morning, GQC is near the bottom of that channel where there is obviously strong support…the 200-day SMA has flattened out after a long decline and is currently sitting just a fraction below 30 cents…

Gold Bullion Development Corp. (GBB, TSX-V)

It has been a while since we’ve done a GBB chart, but some readers have requested one – we actually have two this morning…

We’ll start with the good news first…

The long-term chart (10-year monthly) clearly shows an overall trend reversal after a brutal drop from the late 2010 high in the low 90’s to the 2013 low of just 2 cents…the recent strength can be attributed to both fundamental (upcoming “rolling” production start at Granada) and technical factors…as you can see on this chart, GBB has finally broken above a long-term downtrend line…in addition, it appears that the RSI(14) hit bottom last year and it’s now moving up from a flat “W” which is bullish…

GBB Short-Term Chart

The 6-month daily chart for GBB shows overbought technical conditions emerged at the end of last week and Monday when GBB hit a new 52-week high of 7.5 cents…as a result, a consolidation is now under way and the stock needs to find a strong support level before potentially pushing higher again…RSI(14) is generally a very useful guide and the 50% level on the 6-month chart should probably hold…look for support as well at the rising 10 and 20-day moving averages (SMA’s)…

Keep in mind that GBB has 260 million shares outstanding and continued high volume is required in order to “clean up” this stock due to a lot of cheap flow-through financings…we still believe very much in the Granada Property for both its production and exploration potential…

GBB is unchanged at 5.5 cents as of 7:45 am Pacific…

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

Gold has traded between $1,292 and $1,315 so far today…as of 8:30 am Pacific, bullion is down another $9 an ounce at $1,298 after yesterday’s plunge…Silver is a dime lower at $20.80…Copper is unchanged at $3.24…Crude Oil has fallen $1.77 a barrel to $99.14 while the U.S. Dollar Index has strengthened one-fifth of a point to 80.37…

Yesterday’s $30+ drop was Gold’s steepest single day decline since December 19 (a previous excellent buying opportunity) when traders were digesting the Fed’s announcement that it would begin winding down its stimulus program…the winds of volatility are shaking a few loose apples from the tree and are also helping to unwind some temporarily overbought conditions that emerged at the end of last week – the third straight week of gains – as shown in John’s updated 6-month daily chart this morning…potentially impacting Gold today and tomorrow will be Janet Yellen’s Congressional testimony on interest rate policy and the economy…she will follow today’s discussion with the Senate Banking Committee with testimony tomorrow before the House Financial Services Committee…the sharp drop in Gold yesterday came amid speculation in some circles that Yellen would present a more hawkish view on monetary policy in her two days of testimony given recent encouraging U.S. data…

Interestingly, holdings in the SPDR Gold Trust – the world’s largest Gold-backed exchange-traded fund – rose 8.68 tonnes to 808.73 tonnes yesterday, according to Bloomberg data…but domestic prices in top buyer China fell to a discount to the global benchmark today, from being on par in the previous session, in a sign of weak physical buying…demand in other parts of Asia is also subdued, dealers said…

Israel accepted an Egyptian-proposed deal today to end its week-old air war with Hamas, but the Islamic terrorist group (certain mainstream media like to refer to Hamas as a “movement”) rejected a truce (saying it wasn’t consulted by Cairo) and continued its rocket barrages into Israel…Israel has responded by resuming its attacks on the Gaza Strip to go after Hamas…there are plenty of hotspots around the globe to underpin support for Gold…

Today’s Equity Markets

Asia

China’s Shanghai Composite edged slightly higher overnight while Japan’s Nikkei average climbed 98 points to a one-and-a-half week high after snapping a five-day losing skid yesterday…as expected, the Bank of Japan left monetary policy unchanged following a two-day meeting but the central bank did cut its economic forecast for the current fiscal year to 1% from an earlier projection of 1.1%…

Europe

European markets were down modestly today…

North America

The Dow is off 6 points at 17049 as of 8:30 am Pacific…U.S. retail sales increased less than expected in June as receipts at automobiles dealerships surprisingly fell…however, so-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of GDP increased a solid 0.6% in June…

Interesting remarks from Yellen this morning in the full policy report accompanying her testimony.  “Valuation metrics in some sectors do appear substantially stretched—particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.”

The TSX is down 70 points while the Venture has slipped 10 points to 1010 as of 8:30 am Pacific…RSI(2) on the Venture on the 1-year daily chart has hit an extreme low with the Index in an area of solid support…

Venture 3-Year Weekly Chart

This fresh 3-year weekly Venture–Gold comparative chart shows the Venture’s RSI(14) continuing to follow an uptrend line while holding at a modest 56%…the trend suggests that we can expect later in the third quarter is the RSI(14) to push into the overbought zone for an extended period…notice the importance of the Venture’s move above its long-term downtrend line late last year…

A strong Venture support band exists between 1000 and 1020…

Gold 6-Month Daily Chart – Levels To Watch 

What’s important for Gold is to make a sustained move above a well-defined resistance band between $1,320 and $1,330…the surge late last week could not be sustained, perhaps due in part to temporarily overbought conditions, and on an intra-day basis the metal also came within just a few dollars of chart resistance at $1,350 as previously noted…a reaction therefore was not surprising…

This morning, Gold has fallen below a chart support band between $1,306 and $1,310, contributing to more technically-driven selling…

There is strong Fib. support in the $1,280’s that also coincides with the 200-day moving average (SMA), so that’s an area bullion may have to test…

RSI(14) on this 6-month daily chart has quickly unwound and is now below 50%…

10-Year Treasury Note-Gold Chart Comparative

Worries about higher interest rates do haunt the Gold market, a zero-yielding asset, but they should also haunt governments – federal, state and provincial – who are concerned about the fragile economy recovery and their own debt-servicing costs…

Below is an “awareness” chart (20-year monthly) that compares the 10-Yr. U.S. Treasury Note yield with Gold…interestingly, you can see how a “squeeze” is developing in the 10-Yr. Treasuries…will be interesting to see during the second half of this year if there’s a confirmed breakout above the downsloping channel…

Silver 6-Month Daily Chart – Levels To Watch

Silver’s temporarily overbought condition is unwinding with RSI(2) on this 6-month daily chart plunging below 20% yesterday after climbing into the mid-90’s…

Strong chart support exists at $20.75 with Fib. support ranging from $19.50 to $20.33…critical resistance around $22…

Kaminak Gold (KAM, TSX-V) Update

John’s June 12 chart on Kaminak Gold (KAM, TSX-V) hinted of good things to come when the stock was trading in the 80’s, and KAM really ignited yesterday following the news of a strategic private placement…the company announced it had entered into subscription agreements with Ross Beaty and Zebra Holdings (a company owned by a trust which settlor was the late Adolf H. Lundin)…the purchasers have each agreed to make an investment of $6.76-million (collectively $13.52-million) into Kaminak by way of a non-brokered private placement at 80 cents per unit…the company’s cash position will be approximately $26.5-million following completion of the PP…last month, investors responded favorably to results from a NI-43-101 Preliminary Economic Assessment for Kaminak’s Coffee Project in the Yukon…

Two important comments regarding this chart which are things to look for in other situations – note how KAM broke above a long-term downtrend line earlier this year, retraced to the downtrend line which became new support, and formed an inverted head and shoulders pattern in the process…technically, this is yet another example of how the junior resource market has bottomed when you see charts like this…some minor near-term consolidation is possible (KAM does face some resistance around the $1 level) but any weakness should present a good opportunity for later this quarter, especially now that Beaty is a significant shareholder…

KAM is up 3 pennies at $1.08 as of 8:30 am Pacific…

Condor Resources Inc. (CN, TSX-V)

We continue to keep a close eye on Condor Resources (CN, TSX-V) which has more results coming from its Soledad Property in Peru (under option to Mariana Resources Ltd.)…the key will be SDH-012, another deep hole that visually may have been intriguing given the language used in the news release (this was a near-vertical hole, drilled to 437-m depth in breccia No. 5, to test for possible higher-grade feeder zones and indications of underlying mineralized porphyry)…

CN reported a very interesting drill result July 3 from Soledad as the first deep hole (SDH-009) returned 174 m of mineralized breccia (from 92 m to 266 m) that averaged 4.4 g/t Au Eq (0.74 g/t Au, 114 g/t Ag and 1.2% Cu)…

Technically, the key for CN will be to push through resistance at 14-15 cents on a closing basis…after its initial run-up July 3-4 from 7 cents to a high of 15 cents, CN retraced to Fib. support between 9 and 11 cents, as expected, before rebounding and climbing as high as 17 cents intra-day Friday, though it closed Friday at 14.5 cents…patience is key and waiting for more results is likely the wisest strategy…

CN is off half a penny at 13.5 cents as of 8:30 am Pacific…this is yet another stock that has broken out above a long-term downtrend line…

Note:  John, Terry and Jon do not hold share positions in KAM or CN.

Gold is pulling back to begin the week…as of 8:00 am Pacific, bullion is off $30 an ounce at $1,309 after dipping as low as $1,302…Silver has retreated 50 cents to $20.95…Copper is off a penny at $3.24…Crude Oil has slipped 43 cents to $100.40 while the U.S. Dollar Index is relatively unchanged at 80.18…

Gold rallied to a 3.5-month high late last week, coming within just a few dollars of the important $1,350 resistance level, after minutes of the Federal Reserve’s last meeting showed a dovish tone while concerns about Portugal’s largest listed bank sparked heavy selling of equities…Portugal bond yields lowered further today after the country’s biggest bank took steps aimed at reassuring investors of its stability, calming peripheral debt markets after their first episode of contagion this year…

Physical buying from Asia remains lackluster and will need to pick up, which it often seems to do during the second half of the third quarter, in order to help Gold overcome resistance at $1,350…RSI(14) shot up into slightly overbought territory at 73% on the 6-month daily chart at the end of last week, and the combination of technical factors and profit-taking has contributed to selling pressure today…the $1,300 area will be interesting to watch while the 6-month chart shows strong Fib. support in the $1,270’s and $1,280’s…

Geopolitical hotspots and a U.S. President seemingly incapable of effectively handling foreign policy may help underpin support for Gold in the months ahead, and indeed could be a driver for higher prices…U.S. Senator and former Presidential candidate John McCain (R., Ariz.), in a CNN interview yesterday, said the world is “in greater turmoil than at any time in my lifetime.”  Those are significant words from McCain who has always shown a strong pulse for global threats…

As Wall Street Journal reporters Jay Solomon and Carl E. Lee wrote over the weekend, “A convergence of security crises is playing out around the globe, from the Palestinian territories and Iraq to Ukraine and the South China Sea, posing a serious challenge to President Barack Obama’s foreign policy and reflecting a world in which U.S. global power seems increasingly tenuous.  The breadth of global instability now unfolding hasn’t been seen since the late 1970s, U.S. security strategists say, when the Soviet Union invaded Afghanistan, revolutionary Islamists took power in Iran, and Southeast Asia was reeling in the wake of the U.S. exit from Vietnam.”

Today’s Equity Markets

Asia

China’s Shanghai Composite gained 20 points overnight to close at 2067, its highest level since June 17 ahead of Wednesday’s second-quarter growth report…China’s economy likely expanded 7.4% in the three months to June 30 from a year earlier, according to the median of 44 economists’ estimates compiled by Bloomberg… Japan’s Nikkei advanced 133 points overnight to finish at 15297…

Europe

European markets are up strongly in late trading overseas, bolstered by merger and acquisition activity in the pharmaceutical sector, and a very positive tone to begin the week on Wall Street…

North America

It’s a big week for U.S. corporate earnings…Q2 earnings in the U.S. are likely to be the next major driver of global markets…Alcoa (AA, NYSE), which reported last week, is generally a reliable guide and that is fueling expectations for a strong overall quarter for earnings growth and an upbeat assessment for the balance of the year…meanwhile, markets will also be focusing on Federal Reserve Chair Janet Yellen who is set to begin giving testimony to Congress tomorrow…

The Dow has surged 135 points as of 8:00 am Pacific, hitting a fresh intra-day all-time high…better-than-expected earnings from Citigroup (C, NYSE) have given the bulls reason to cheer this morning…

The TSX is up 51 points while the Venture is down 3 points at 1020 as of 8:00 am Pacific…Gold Bullion Development (GBB, TSX-V), which encouragingly has hit a new 52-week high of 7.5 cents, is the Venture’s most active resource stock through the first 90 minutes of trading…GBB announced this morning that it has now signed an agreement with IamGold Corp. (IMG, TSX) to process ore from the Granada Gold Property at IMG’s Westwood mill facilities…GBB’s first goal is to ship a trial-milling batch of 30,000 tonnes for milling in October prior to winter freeze up…subsequent milling will continue in April of next year…

Venture 6-Month Daily Chart

The Venture fell 15 points last week after encountering resistance around 1040…the retreat should be considered normal and healthy from a technical standpoint as a very strong support band runs from the 1000 level (the rising 50-day moving average) to 1020…this should be the final pullback before a sustained third quarter move that powers the Index through the mid-March high of 1050 to at least the 1150 resistance area…

Below is an updated 6-month daily chart from John…the rising 50 and 100-day SMA’s are within that band of Fib. support between 1000 and 1020…

Venture 5-Year Weekly

This updated 5-year weekly chart shows a very, very healthy Venture with RSI(14) at 57% continuing to follow an uptrend line…it has plenty of room to move higher as Q3 progresses…the CMF shows a trend of increasing buy pressure while the ADX indicator is highly encouraging…the smart money is going long…

West Point Resources Inc. (BLO, CSE) Update

One company in the non-resource sector we’re extremely excited about is West Point Resources (BLO, TSX-V)…we initially brought BLO to our readers’ attention the first day it began trading on the CSE June 26 (in the mid-to-high teens)…this is a company with such a simple and compelling story, so we’re not at all surprised by the investor interest in BLO which has traded as high as 32 cents on average daily volume through its first 11 sessions of more than 1 million shares…while certainly speculative, BLO has tremendous upside potential in our view – it has an exciting product, the company is well-financed, the share structure is attractive, and management knows what it’s doing…

This morning, West Point announced it has contracted KLN Klein Product Development of Vancouver to complete the first prototype of the Cannabix Marijuana Breathalyzer (CMB)…as expected, West Point is drawing considerable investor attention on the CSE and in the media regarding this patent pending technology which puts the company at the leading edge of future commercial development of a roadside marijuana breathalyzer that could be hugely beneficial for law enforcement…the CMB may also have other practical applications, such as testing employees in certain workplace environments where intoxication by THC can be hazardous…the breathalyzer provides rapid detection of very recent use of marijuana (i.e., within a couple of hours) which makes this technology so potentially significant…

Keep in mind, the current alcohol breathalyzer market in North America is worth in excess of $3 billion…the growing social acceptance of marijuana has already contributed to many road fatalities and that problem is only going to get worse…BLO has an important solution to help address that problem…

Below is a chart for how BLO has traded since starting on the CSE June 26…in its early days, BLO is showing strong support in the low 20’s…as of 8:00 am Pacific, BLO is off 2 pennies at 24 cents…

Silver Technical Update

Silver has broken out above one important downtrend line but remains susceptible to a minor pullback given temporarily overbought conditions…RSI(2), for example, closed last week at 86% with the metal still slightly below strong resistance around $22…Fib. support levels on the 6-month daily chart range from $19.50 to $20.33, so a retrace into that range is certainly very possible…

This 11-year monthly chart confirms that the metal has exceptional support in the high teens…note the two downtrend lines on this chart – a confirmed breakout has occurred above one of those downtrend lines…

If and when Silver clears stiff resistance at $26, watch out – you’ll want to back up the truck and load up…

Silver Seasonality Chart

Over the last two decades, July, August and September have proven to be Silver’s shiniest months of the year…there’s no reason to believe that pattern won’t continue…

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

Aided by a variety of factors, including fresh violence in the Middle East, Gold is making an important move this morning, pushing through the mid-$1,330’s and climbing as high as $1,346.  As of 7:30 am Pacific, Gold is up $12 an ounce at $1,339 while equity markets are under pressure.  The Venture, down 7 points at 1026, is holding up well and is underpinned by exceptional support between 1000 and 1020.

As a guide, below is a re-post of John’s Gold chart from Monday (prior to this move).  The significance of today’s action (the weekly close tomorrow will be critical) – is that Gold is finally above a long-term downtrend line on this 2-year weekly chart – something it failed to do in March – though this does require confirmation.

Chart resistance is at $1,350 and $1,400.  We’ll have much more on Gold Monday (or prior to with special updates if necessary) when Morning Musings resumes as we are currently on special assignment travel.

Silver is up 29 cents at $21.39 as of 7:30 am Pacific.  The next major resistance is $22.  Silver has confirmed a breakout above a short-term downtrend line going back to 2013, a significant development.

 

 

 

Gold has traded between $1,321 and $1,328 so far today as it inches closer to a potential significant breakout…as of 7:45 am Pacific, bullion is up $5 an ounce at $1,325…Silver has climbed 7 cents to $21.09…Copper is up a penny at $3.24…Crude Oil, which has had its longest losing skid since December 2009, is down 93 cents to 102.47 (see updated WTIC chart below)…Libya’s largest Oil field is ramping up production much faster than expected and may reach two-thirds of its output capacity by the end of today, according to a report in the Wall Street Journal…the U.S. Dollar Index is down one-tenth of a point to 80.04…

Editor’s Note:  BMR is on special assignment travel over the next four days and regular postings after today resume Monday morning…in the meantime, the comments section will remain open, and we will be posting in the event of any major breaking developments…we appreciate your understanding…

Assets in the SPDR Gold Trust, the metal’s biggest ETP that counts billionaire John Paulson as its largest holder, have erased this year’s decline…bullion’s 2014 rally is outpacing equities, Treasuries and bonds, defying bearish forecasts from several quarters including of course Goldman Sachs…

Yesterday, SPDR holdings rose 2.09 metric tons to 800.28 tons…they are now up 0.3% this year after falling as much as 2.7% through May 21 to the lowest since December 2008…last year, assets tumbled 552.6 tons, or 41%, as futures plunged 28%, the most in three decades…in an interview with Bloomberg’s Debarati Roy, Jeff Sica, who helps oversee $1 billion at Sica Wealth Management in Morristown, New Jersey, stated:  “People are seeing the need for Gold again.  Geopolitical unrest across the globe is imploding, and people are realizing that they need to start hedging against future inflation.”

Peter Schiff, CEO of Euro Pacific Capital and a well-known Gold bull and dollar bear, told Bloombeg, “There is still a lot of skepticism in the market, but once we see gold go above $1,400, we will see more buyers come out.  At some point, the fear of Gold going to $1,000 will be replaced by ‘I don’t want to miss out’.”

Today’s Equity Markets

Asia

China’s consumer-price index rose 2.3% in June from a year ago moderating from a 2.5% year-over-year increase in May and slightly below than the 2.4% gain projected in separate Dow Jones News Wires and Reuters surveys of economists. Meanwhile, the producer-price index dropped 1.1% from a year earlier, compared with a 1.4% decline in May…Bank of China, one of the country’s biggest state-owned banks, led the broad decline in the banking sector with a nearly 3% loss after China’s state broadcaster accused the bank of assisting in money-laundering and fraudulent transactions…

Europe

European markets are mixed in late trading overseas…

North America

The Dow is up 47 points as of 7:45 am Pacific…investors are anxiously awaiting minutes from the Federal Reserve’s Open Market Committee later in the day…in particular, traders will be looking for comments about inflation in the minutes from the June 18 meeting, after Fed Chair Janet Yellen said in a post-meeting press briefing that the pick-up in CPI was just “noise”…

The TSX has gained 39 points while the Venture is off a point at 1027 as of 7:45 am Pacific…

Updated Crude Oil (WTIC) Chart

The slide in Crude Oil prices since near the end of June should be viewed as a very normal pullback with the primary uptrend still very much intact as you can see in this 2-year weekly chart…there are three levels of key support – $102.50, the bottom of the current upsloping channel that will likely prevent WTIC from falling below $100, while the rising 200-day moving average (SMA) at $95.66 can be expected to continue to provide formidable support in the event Crude were to dip below $100…RSI(14) is at 53% and should hold at the 50% level, limiting the potential of any further declines…

Venture Relative To Gold

This is one of the most important charts for readers to grasp as it really puts into clear perspective where the Venture is at in its current cycle and what that means for Gold…

Over the past year, there has been an important pattern change in the relationship between the Venture Exchange and Gold…historically, the Venture has proven to be an exceedingly reliable leading indicator of the future direction of Gold prices – a great recent example being the Venture’s breakdown months before Gold peaked at just over $1,900 an ounce in September, 2011…this leading indicator pattern goes right back to the days of the Venture’s predecessor, the old Vancouver Stock Exchange…

Since late last year, we’ve repeatedly shown charts – a plethora of technical evidence – demonstrating that the Venture bear market ended in late June of last year when the Index touched 859…in October, the Index broke above a long-term downtrend line and then repeatedly tested that downtrend line as new support until late December when it finally took the path of least resistance and headed north…after hitting some headwinds at 1050 in mid-March, the Venture – not unexpectedly – retreated to a “comfort zone” where it has been testing a very strong support band in the immediate vicinity of 970 which was critical resistance for many months last year…

Below is an updated 10-year monthly chart from John that shows how the Venture’s out-performance vs. Gold is a bullish indicator for both…on the chart below, you’ll see three uptrend lines – one that’s currently in progress – and two downtrend lines…the best time to be invested in the Venture (and Gold for that matter) is when the Index (the black line on this chart) is out-performing the yellow metal as it is now…this Venture uptrend vs. Gold has been established since the second quarter of last year and should continue for an extended period, during which time we also expect Gold to ultimately push higher…

Venture 3-Year Weekly Updated Chart

John’s 3-year weekly Venture chart has been so incredibly valuable over the last year as it has given the primary direction of this market…still plenty of upside with RSI(14) at only 59%…buy pressure remains strong and we’re now in the most extended period of buy pressure in three years…note last year’s double bottom reversal pattern…

Pure Gold Mining Inc. (PGM, TSX-V)

We suggest readers perform their due diligence on Pure Gold Mining (PGM, TSX-V), formerly Laurentian Goldfields…Pure Gold recently consoldiated its position in the prolific Red Lake district with the acquisitions of the Madsen Property and the adjacent Newman-Madsen Property…together, these properties make up a 50 sq. km land package of contiguous, primarily patented ground, collectively known as the Madsen Gold Project…Pure Gold now holds the third largest land package in the Red Lake region which includes two past-producing mines, existing mine infrastructure, current mineral resources, and multiple highly prospective exploration targets in a geological setting analogous to other modern high-grade discoveries in the Red Lake region…more on this interesting play next week…PGM is well-funded and yesterday announced the start of its 2014 exploration program…PGM is off a penny at 41 cents as of 7:45 am Pacific…it has 97 million shares outstanding…

Calibre Mining (CXB, TSX-V) Update

Calibre Mining (CXB, TSX-V) is very active with excellent geological prospects in Nicaragua including the Eastern Borosi Project which was recently optioned by Iamgold Corp. (IMG, TSX)…Eastern Borosi hosts Gold-Silver resources in two deposits and a series of well-defined low-sulphidation epithermal Gold-Silver targets…a 3,400-m drill program was recently announced and will commence shortly…

Yesterday, CXB provided an encouraging update with regard to its Minnesota Gold Project JV in Nicaragua with B2Gold Corp. (BTO, TSX)…

Technically, John recently noted how CXB broke out above a 2-year downtrend channel – a very bullish development…sure enough, CXB has been gaining strength and closed a penny higher yesterday at 7 cents on total volume (all exchanges) of 1.8 million shares…it’s unchanged through the first 75 minutes of trading today…

Cypress Development Corp. (CYP, TSX-V) Update 

We like the primary direction of Zinc and Silver prices – a good reason to continue to keep an eye on Cypress Development (CYP, TSX-V) which announced plans June 25 for a Phase 2 drill program to follow up on strong Phase 1 results at its 100%-owned Gunman Zinc-Silver oxide project in Nevada…the 1,140-acre property is located directly west of Barrick Gold’s (ABX, TSX) Bald Mountain Gold mine complex on the southern Carlin mineral trend in White Pine County…

On June 12, CYP reported results from a Phase 1 program that included RC hole GMRC-9 which returned a 175-foot downhole interval of 12% Zn  and 121 g/t Ag, and hole GMRC-5 which returned a 55-foot section of 21% Zn and 147 g/t Ag…

There has been a substantial increase in volume in CYP recently and the stock has also overcome resistance at 3 cents as you can see in this 10-year monthly chart…

CYP is unchanged at 4 cents as of 7:45 am Pacific…

Canamex Resources Corp. (CSQ, TSX-V)

Nice results the other day from Canamex Resources (CSQ, TSX-V) from RC drilling at its Bruner Gold Project in Nevada…B-1425, drilled into the East zone at the historic resource area, intersected 145 feet (44.2 m) grading 0.20 opt Au (6.97 g/t Au) from 40 to 185 feet (12.2 to 56.4 m) depth…within this zone is a high-grade interval from 60 to 85 feet (18.3 to 25.9 m) that graded 0.81 opt (27.91 g/t Au) Gold and 9.55 opt (327.3 g/t) Ag…

Technically, CSQ faces measured Fib. resistance at 19 cents…it’s up 2.5 cents at 18.5 cents as of 7:45 am Pacific…

Note:  John, Terry and Jon do not hold share positions in PGM, CXB, CYP or CSQ.

Gold has traded between $1,313 and $1,326 so far today…as of 8:30 am Pacific, bullion is down $5 an ounce at $1,313 (John has an updated Gold chart below)…Silver has reversed 11 cents lower to $20.94…Copper is up a penny at $3.24…Crude Oil, on its longest losing skid (7 sessions) since December 2009, is off a penny at $103.52…expectations that halted Libyan exports would return to the global market have been the key factor in the recent softening of Oil prices…the U.S. Dollar Index is down slightly to 80.16…

Gold prices continue to defy bearish forecasts…money managers increased net-long positions for a fourth straight week through July 1 and holdings in exchange-traded products are climbing at the fastest pace since 2012, according to COT data from Bloomberg…assets in bullion-backed global ETPs increased by 12.6 metric tons last week, the most since November 2012…holdings are rebounding after six straight quarterly declines that began in early 2013…

Bloomberg also reports that Gold sales from Australia’s Perth Mint climbed to 39,405 ounces in June, a four-month high…sales of American Eagle Gold coins by the U.S. Mint totaled 48,500 ounces in June, up 37% from May and the most since January…

Today’s Equity Markets

Asia

China’s Shanghai Composite added 4 points overnight in cautious trading as investors await a raft of data due this week, including consumer price inflation tomorrow and trade balance figures on Thursday…Japan’s Nikkei average slipped 65 points to 15314…

Europe

European markets were generally down about 1% today…the “Quote of the Day” from Europe – “[Europe] cannot be the only economic zone of the world that doesn’t consider its currency as a weapon…as a key asset to promote its economy,” Fabrice Bregier, chief executive of Airbus passenger jet business, told the Financial Times in an interview as he said the ECB should intervene to push the value of the euro against the dollar down by 10% from an “excessive” $1.35 to between $1.20 and $1.25…

North America

The Dow is off 149 points as as of 8:30 am Pacific…traders are interpreting the weakness yesterday and today as a breather following last week’s brisk rally, with market participants awaiting further insight into Federal Reserve officials’ thinking on interest rates later in the week, as well as the start of the second quarter earnings season…corporate earnings will certainly provide a test for this buoyant equity market…

Goldman Sachs on Sunday moved up its forecast for the first interest rate hike to the third quarter of 2015 from the first quarter of 2016, based on the strong improvement in the labor market and overall financial conditions over the past few months…the non-farm-payrolls report for June, published last Thursday, showed 288,000 jobs were added to the U.S. economy last month, far beating analysts’ expectations – though it’s important to note there were still some underlying weaknesses in that report which we’ll get into tomorrow…things aren’t looking quite as bright underneath the shiny exterior of President Obama’s job creation record…

The TSX has lost 148 points while the Venture is 7 points lower at 1024 through the first two hours of trading…as John’s charts showed Saturday, the Venture faces minor near-term resistance at 1039, so this mild pullback isn’t surprising…great support between 1000 and the 20-day SMA just below 1020…given the overall technical posture of the Venture, these soft retreats which we’ll see from time to time will be buying opportunities…

Gold Chart Update

Below is a very interesting 2-year weekly Gold chart from John that shows how bullion is very close to a potential significant breakout…this could unfold imminently or may take a few more weeks – exact timing is impossible to predict, but the bullish case is strong…

First, note how bullion broke above a short-term downtrend line early this year and then surged higher before encountering resistance at a long-term downtrend line…it pulled back to an area of support, and in June (historically the metal’s worst month of the year) Gold took off to the upside again…it’s now threatening once more to push through that long-term downtrend line…RSI(14) at 55% on this 2-year weekly chart has plenty of room to move higher…

The 50-day SMA has recently reversed to the upside while the 200-day SMA at $1,288 has flattened out, perhaps gearing up to turn higher sometime this quarter…

The Proven Success of Garibaldi Resources’ (GGI, TSX-V) Use Of Technology

Further to our comments yesterday, Garibaldi Resources’ (GGI, TSX-V) effective use of hyperspectral remote sensing technology and proprietary data generated from that have been a key factor in identifying a minimum of eight high-grade Silver targets (some with Gold potential as well) including Silver Eagle along a 10-km NW-SE trend at Rodadero North…it’s important to point out that this same technology was instrumental in the discovery of the Don Ese area (the Temoris option) in another part of Mexico that became a home run for Garibaldi in 2009 when it sold that option to Paramount Gold & Silver (PZG, TSX and NYSE) for cash and 6 million shares of PZG…this morning, PZG came out with a revised resource estimate for its San Miguel deposit, and resources at the high-grade Don Ese portion increased substantially to 599,000 tonnes at 2.88 g/t Au and 254 g/t Ag in the measured category, and 2,807,000 tonnes grading 2.81 g/t Au and 206 g/t Ag in the indicated category for a total of more than 300,000 ounces of Gold and more than 23 million ounces of Silver – that’s just the Don Ese part of San Miguel…in total, in the new model, Paramount’s estimated global measured and indicated ounces of Gold increased a robust 76% to 1,123,000 while estimated measured and indicated ounces of Silver rose 44% to 77.1 million…GGI’s proven track record of highly effective exploration in Mexico bodes well for a near-term important discovery at Rodadero, plus of course in northwest B.C. where GGI controls more than of the large mineralized corridor in the prolific Sheslay district which should heat up again shortly…

Condor Resources Inc. (CN, TSX-V) Update

Condor Resources (CN, TSX-V) reported a very interesting drill result last Thursday from its Soledad Property in Peru which is under option to Mariana Resources Ltd. – CN nearly doubled to close at 13 cents on volume of more than 6 million shares after the first deep hole (SDH-009) returned 174 m of mineralized breccia (from 92 m to 266 m) that averaged 4.4 g/t Au Eq (0.74 g/t Au, 114 g/t Ag and 1.2% Cu)…

As we showed in John’s chart Friday, CN faced resistance around 14 cents and indeed it reacted after touching a high of 15 cents…the stock got a little ahead of itself after such a quick climb…the retreat has been quite normal from a technical perspective with a strong band of Fib. support between 8 and 11 cents…it’s worth watching this one closely as results for two more holes are due shortly…of particular significance could be SDH-012, another deep hole that visually may have been intriguing given the language used in the news release (this was a near-vertical hole, drilled to 437-m depth in breccia No. 5, to also test for possible higher-grade feeder zones and indications of underlying mineralized porphyry)…the results of this hole will be critical…

Below is an updated chart from John showing the Fib. support…CN is off half a penny at 10.5 cents as of 8:30 am Pacific…

Discovery Ventures Inc. (DVN, TSX-V) Update

There’s a lot of merit to what Discovery Ventures (DVN, TSX-V) has put together in southeastern B.C. – a synergistic package that includes the high-grade Willa deposit (Cu-Au and some Ag) and the nearby Max mine and milling facilities (fully permitted)…the recently released PEA shows a very high IRR (412%) for the WillaMAX Project, though this is not based on proven mineral reserves but measured and indicated resources…

WillaMAX has some significant advantages including a very low capex, and it appears the company has secured the financing it needs…as the wheels go into motion in an attempt to put the Willa into production, DVN has a chance to turn into a star performer this summer if the Venture behaves as expected and metal prices continue to increase…

Technically, DVN recently staged a confirmed breakout above 23 cents which becomes new support…DVN is off 1.5 cents at 24 cents as of 8:30 am Pacific…as always, perform your own due diligence…

Adventure Gold Inc. (AGE, TSX-V) Update

Another company worthy of our readers’ attention during this third quarter is Adventure Gold (AGE, TSX-V) which broke above its long-term downtrend line earlier this year, and is now supported by a rising 200-day SMA at 16 cents…the company has a strong management and geological team, and an assortment of quality properties, not the least of which is the Val d’Or East Project (Pascalis)…initial results from an ongoing 3,000 m drill program at Val d’Or East were very encouraging…volume has been light in AGE but has a good chance of picking up significantly as the summer progresses and more results flow in…

Technically, the first support level is 22 cents as shown on the 2.5-year weekly chart below…a very strong support band also exists between 16 and 19 cents (19 cents is also where the rising 50-day SMA currently sits)…

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

Gold is down $6 an ounce at $1,314 as of 7:30 am Pacific…Silver has retreated 24 cents to $21.91 (see updated Silver charts below)…Copper is up a penny at $3.24…Crude Oil is 61 cents lower at $103.45 while the U.S. Dollar Index is relatively unchanged at 80.25…

Gold producers will return to net hedging for the first time since 2011 this year, GFMS analysts at Thomson Reuters said Friday, after Polyus Gold – Russia’s largest producer – announced last week a two-year program to sell Gold forward…the company said that it had entered into financing contracts to sell 310,000 ounces of Gold over two years to boost the certainty in its cash flow and operating margins.  “The Polyus announcement means that net hedging for 2014 is now a foregone conclusion,” William Tankard, manager of precious metals mining at GFMS Research & Forecasts, said. “There is no scope in my view to see the activity announced outweighed by the ongoing run rate of hedging coming off.”

The Global Hedge Book Analysis released by Societe Generale and Thomson Reuters GFMS Friday showed Gold producers increased their hedged positions for the first time since 2012 in the first quarter…as of March 31, the hedge book volume stood at 87 tonnes, the report said, up 9 tonnes or 11% from the previous quarter…the hedge book peaked at over 3,000 tonnes in the third quarter of 1999, according to GFMS, the last year of net hedging before 2011…

Economists at HSBC are once again lowering their global growth forecast for 2014 as the world adjusts to new economic realities in the face of massive uncertainty…in a research note released July 4, and based on their report published June 28, the firm pointed out that economists have stuck to the old adage that growth will eventually return to its long-term trend as inflation hits central banks’ targets; however that has not been the case as economic growth has “been persistently lower than expected,” the economists said in the note, adding, “Either the post-crisis financial hangover is longer lasting than expected or the world economy has succumbed to a lower structural rate of growth.”  The international financial institution now expects global growth to hit 2.4% in 2014, down from their previous forecast of 2.6% and well short of the pre-crisis range of 3.5% to 4.0%.

Copper Updated Chart

Despite ongoing concerns among various analysts regarding the prospects for world economic growth, Dr. Copper and Dr. Venture are both suggesting the global economy is healthy enough to perhaps surprise to the upside during the second half of 2014 with plenty of demand for commodities…most central banks will be happy to see some inflation kick in, though they need to be careful about what they wish for…

On Saturday, we gave the latest “Big Picture” view of the Venture which is unequivocally bullish…below is an updated Copper chart…the metal is looking more bullish and has moved from a low of $2.88 in mid-March through resistance at $3.20…over the near-term, it’ll be interesting to see if Copper can form a base just above $3.20…a strong band of resistance exists between $3.30 and $3.40…

Today’s Equity Markets

Asia

Asian markets were quiet overnight…China’s Shanghai Composite gained half a point to 2060 while Japan’s Nikkei average slipped 58 points to 15379…

Europe

European markets are down modestly in late trading overseas…disappointing industrial output data from Germany for the month of May – the country’s industrial production index for May showed output fell 1.8% month-on-month…

North America

The Dow, which topped 17000 for the first time last Thursday, is down 42 points through the first hour of trading…the TSX has fallen 68 points while the Venture is off 1 points at 1037…

Venture-Gold 5-Year Weekly Comparative Chart

This 5-year Venture–Gold comparative chart shows how the Venture broke above its long-term downtrend line ahead of Gold late last year…as we’ve previously noted, the Venture’s out-performance vs. Gold over the last year has been a significant pattern change and historically has been a precursor to rising bullion prices…

What’s particularly impressive is the Venture’s RSI(14) uptrend – this market clearly bottomed in oversold conditions in the second quarter of last year, and a bullish new cycle is now firmly entrenched with a potential sharp acceleration of the uptrend possible over the next couple of months…

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

Garibaldi Resources (GGI, TSX-V) has momentum and many other factors in its favor at the moment, and on Friday the stock hit a nearly 3-year closing high of 27 cents…this morning’s long-term GGI chart from John suggests the potential for a spectacular summer – certainly the fundamentals are lined up for that given developments on the ground in Mexico and what could unfold in the emerging world class Sheslay Cu-Au porphyry district…the Sheslay area should heat up again soon as more results start flowing in from several companies, including GGI, and activity ramps up further…

Importantly, GGI appears to be on the verge of a significant Silver discovery in Mexico, based on the most recent news (high-grade, near-surface, and potential scale at Rodadero North)…furthermore, GGI continues to exhibit the perfect combination of characteristics that are found only in a small percentage of publicly traded junior resource companies:

• Superb management and geological group with focus and determination
• Outstanding properties/”blue sky” potential
• Proven record of success
• Financial strength
• Highly favorable share structure with virtually no dilution in five years
• Market awareness and the ability to communicate

Yes, all of the above qualities are rarely found in a junior exploration company…these features separate the wheat from the chaff in this business, and investors who understand that point can build incredible wealth by selecting the right company…this sector is littered with junk – weak management, share structures that have been obliterated, etc. – but there are nonetheless exceptional opportunities at the moment…GGI is one of them in our view…its success on the ground is accelerating…the company has also developed a brand and is delivering on that brand…

When so many companies were running scared last year, GGI kept its feet moving forward and pounced on opportunities that have helped build shareholder value with tremendous growth potential still ahead…this company is being rewarded in the market for its forward thinking and its strategic and cost-effective use of technology to quickly and accurately pinpoint potential new discoveries…

We see an explosive third quarter unfolding for the Venture which is now undeniably in a bullish new phase…certain companies – Garibaldi being one of them – will be leaders in this environment and will significantly out-perform the market as they simply have all the right ingredients, the special characteristics described above…

Keep in mind, Garibaldi has no “cheap paper” holding it down…no significant financing has been carried out in over five years – essentially no dilution since early 2009 when GGI hit a home run and sold the Temoris option (a Silver discovery) to Paramount Gold & Silver…we see a strong possibility of more home runs for GGI in both Mexico and northwest B.C. that could translate into mind-boggling gains for investors…

Updated GGI Chart

GGI has staged a confirmed breakout above Fib. resistance at 25 cents and John outlines the next measured Fib. resistance levels to keep an eye on (those aren’t price targets, just theoretical levels based on Fib. and technical analysis)…this is a powerful-looking chart, and the bullish trend is intensifying as demonstrated by the ADX indicator…

Interestingly (this is not shown on the chart), GGI’s 1,000-day moving average (SMA) is now reversing to the upside after a decline that started in late 2008…history shows, with other stocks, that that’s a huge technical development…it’s a signal that something very big could be in store for GGI as 2014 progresses…this train is on the move and gaining speed…

Highbank Resources Ltd. (HBK, TSX-V) Update

Highbank Resources (HBK, TSX-V) is an excellent position to take advantage of the potential boom in LNG projects in British Columbia (though Asian prices for liquefied natural gas have fallen to their lowest levels since April 2011) in addition to the current expansion of the Port of Prince Rupert as seen in the picture below…

We initially brought HBK to our readers ‘ attention in the spring when it was broke out above 15 cents, and it has gained nearly 50% since then after Friday’s 23-cent close…the company is moving closer to the production stage at its Swamp Point North aggregate project along tidewater near Stewart…

Technically, new support exists at 20 cents where there was previous Fib. resistance…this 10-year monthly chart shows two critical long-term resistance levels – 15 cents, which HBK overcame, and 35 cents…as always, perform your own due diligence…

HBK is unchanged at 23 cents as of 7:30 am Pacific…

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

Calgary-based Contact Exploration (CEX, TSX-V) has been a stellar performer this year and remains one of our favorite junior oil and gas plays…CEX’s 50-day SMA – currently at 41 cents – has been a close supporting moving average since September of last year, so the low 40’s area is clearly attractive…a breakout has occurred above measured Fib. resistance at 38 cents, with the next Fib. resistance at 54 cents…

CEX is off 2 pennies at 44 cents as of 7:30 am Pacific…

Silver Short-Term Chart

This 6-month daily chart shows how extreme RSI(2) conditions persisted over nearly two weeks in June…RSI(2) is currently at a more moderate 66% but will likely need to unwind a little more…SS is also very overbought at 91.84…hence a mild pullback in Silver should be expected before the next major push higher…this view is also consistent with a recent sharp increase in commercial short positions…John has outlined three Fib. retracement levels – $20.33, $20.08 and $19.82…

Silver 3-Year Weekly Chart

Silver’s support band between $17.50 and $19.50 is like the 970 support area for the Venture – it will hold, and Silver has now boldly pushed above that support band…the $19.50 area should hold on any near-term pullback to cleanse temporarily overbought technical conditions…the $22 area is important resistance on this chart…

Early this year, Silver broke above a downtrend line in place since late 2012 on this 3-year weekly chart…similar to the Venture pattern during the fourth quarter of last year, Silver has found support at the top of this downtrend line…overall sell pressure has been in decline since early 2013…slowly but surely, the metal is on its way higher but expect the pattern to be a couple of steps forward, one step back…

Silver Long-Term Chart

This 11-year monthly chart confirms that the metal has exceptional support in the high teens…note that there are two downtrend lines on this chart – Silver has closed above one of those downtrend lines, but barely…expect more activity in the immediate vicinity of that downtrend line (now new support) before a decisive move above it at some point during Q3…

If and when Silver clears stiff resistance at $26, watch out – you’ll want to back up the truck and load up…

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