Gold has traded between $1,278 and $1,296 so far today…as of 8:30 am Pacific, bullion is up $12 an ounce at $1,293 thanks to a weaker-than-expected U.S. jobs report this morning…for July, Gold fell 3.4%, its biggest monthly drop this year but it’s still in positive territory overall through the first six months of 2014 (in contrast, all the gains in the Dow this year have been wiped out)…Silver is down 2 cents to $20.37…Copper is off 2 pennies as well to $3.21…Crude Oil has slipped another 81 cents to $97.36 while the U.S. Dollar Index has fallen more than one-tenth of a point to 81.30…the Dollar Index posted its biggest monthly gain since February of last year…
Euro zone deflationary concerns and data showing the biggest rise in labor costs in the U.S. in more than five years years in the second quarter both contributed to knocking Gold lower yesterday…on the positive side, there are signs of Chinese physical demand picking up after the drop below $1,300, according to HSBC. “Bullion’s premium on the Shanghai Gold Exchange, a gauge on China’s Gold appetite, rose to $3.20/oz U.S., the highest since 13 May,” the bank stated in a late report yesterday. “Despite a seasonally weak period for Gold buying, physical buyers have reacted positively to cheaper prices. This may help stem further price losses, in our view.”
There were no sales or purchases to or from the SPDR Gold ETF yesterday…holdings stand at 801.84 tonnes…
Today’s Equity Markets
Asia
China’s official PMI rose a better-than-expected 51.7 in July, eclipsing the country’s 51 reading in June…meanwhile, HSBC’s final July reading also came in at 51.7, which was an 18-month high…the Shanghai Composite posted early gains but eventually reversed and closed down 16 points in sympathy with yesterday’s weak global markets…Hong Kong stocks snapped an 8-day winning streak while Japan’s Nikkei lost 98 points to finish the week at 15552 after hitting a 6-month high in recent days…
Europe
European markets were down significantly again today, hitting 3-month lows…a second batch of manufacturing PMI readings showed growth in the sector eased slightly in the euro zone from the month before…
North America
The Dow has lost another 50 points as of 8:30 am Pacific, creating the most oversold RSI(2) conditions of 2014 on the 1-year daily chart as the Index approaches support at its rising 200-day moving average (SMA)…the Dow is down for the seventh session out of eight, a decline of more than 600 points…
Hiring by U.S. employers remained robust in July, if a bit slower than previous months, with a broad-based rise in payrolls extending a half-year streak of strong employment gains…non-farm employment rose by a seasonally adjusted 209,000 last month, the Labor Department reported this morning…payrolls rose by 298,000 in June, revised up from an earlier estimate of 288,000, and May’s gain was revised up to 229,000 from an earlier estimate of 224,000…no doubt there will also be an upward revision in this month’s numbers…
July’s gain extended a streak that has seen non-farm employers add 200,000 or more jobs in six consecutive months for the first time since 1997…
In other economic data this morning, the ISM manufacturing index hit a 3-year high with a better-than-expected reading of 57.1 in July…construction spending fell 1.8% in June and a gauge of consumer sentiment from the University of Michigan/Thomson Reuters declined slightly in July…
The TSX is off 127 points while the Venture is off slightly at 1001 as of 8:30 am Pacific…
KSM Project Wins Environmental Approval
Seabridge Gold (SEA, TSX) bucked the trend yesterday, jumping above $10 a share for the first time since June 30 after gaining provincial environmental approval for its $5.3-billion proposal to tap its massive Copper and Gold deposit 65 km north of Stewart…KSM boasts proven and probably reserves of 38.2 million ounces of Gold, 191 million ounces of Silver, 9.9 billion pounds of Copper and 213 million pounds of Molybdenum…over its 52-year mine life, the project is estimated to generate 1,800 construction jobs and 1,040 operating jobs…federal environmental approval for KSM is still pending…
Pretium Resources Inc. (PVG, TSX) Update
Adjacent to KSM, Pretium Resources (PVG, TSX) continues to rapidly advance the high-grade Brucejack Project…the company announced closing this week of an offering that raised $49.5 million…net proceeds will be used to finance environmental and engineering activities at Brucejack along with permitting of the project and continued exploration activities…
Pretium is at a “sweet spot” on this 2-year weekly chart…as you can see below, the share price has been climbing within an upsloping channel throughout 2014 and is now rebounding after touching the bottom of that channel this week…RSI(14) appears to have found support at the 50% level and the 200-day SMA has reversed to the upside after being in decline since late 2012…buy pressure since March has been sustained after intense sell pressure since late 2012…a healthy Pretium is a positive sign, and will also help keep investor interest focused on prolific northwest British Columbia…
PVG is up 6 cents at $7.52 through the first two hours of trading today…
Garibaldi Resources Corp. (GGI, TSX-V) Update
Speaking of northwest B.C., the calendar has flipped into August and it’s reasonable to expect a sudden surge in news flow from the Sheslay district this month…Garibaldi Resources (GGI, TSX-V) will play a major role in that with its 260 sq. km Grizzly Project which is being advanced to the drilling stage…highly respected geologist Charlie Greig, who has been assisting Pretium with the Brucejack Project, is also involved in helping GGI unlock the secrets of the Grizzly…
Of course Garibaldi also has a highly interesting situation unfolding in Mexico with the Rodadero North Project and the Silver Eagle target in particular…more results are pending…between Rodadero North, La Patilla and the Grizzly, GGI has a powerful 1-2-3 punch confirmed technically by a chart that shows a clear path to continued multi-year highs as you can see in the updated 10-year monthly below…there are three main resistance levels ranging from the high 30’s to near 60 cents followed by the previous high (2006) around 90 cents…with no cheap stock overhanging the market (one of very few Venture companies not to have carried out a significant financing over the last five years), GGI is in an unusually strong position vs. most of its peers…August and September should be very interesting to watch with potential discoveries for GGI in both Mexico and B.C…
U.S. Dollar Index Updated Chart
A recent “awareness” chart from John suggested the possibility of an imminent bullish move in the U.S. Dollar Index after it broke above both its 50 and 200-day SMA’s and an RSI(14) downtrend line in place for more than a year…we’ve seen spikes before in the Dollar Index and they’re usually accompanied by increased volatility in the equity markets and Gold, though Gold and the Dollar Index don’t always move in opposite directions…
The Dollar Index does face strong Fib. resistance between 81.76 and 82.40 as you can see in this 2.5-year weekly chart…watch for a potential pullback to what should be new RSI(14) support at 50%…
Crude Oil (WTIC) Updated Chart
While the Dollar Index has broken above an RSI(14) trendline, Crude Oil has done the opposite…strong resistance now exists at the declining 50-day SMA at $103…Crude Oil has also broken below strong support at $98.70…we’ll take a look at a longer-term WTIC chart Tuesday for a broader perspective on the state of this market…
Note: John and Jon both hold share positions in GGI.
