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Gold has traded between $1,177 and $1,191 so far today…as of 9:00 am Pacific, bullion is up $1 an ounce at $1,186…Silver is flat at $16.70…Copper has lost 3 pennies to $2.76…Crude Oil has slipped 34 cents to $48.34…the U.S. and 5 other world powers are in the final day of talks (unless they extend them) over a nuclear deal that could see the energy-rich country increase Oil exports to world markets…the U.S. Dollar Index, meanwhile, is up half a point at 98.37…

Gold is headed for a 3rd straight quarterly fall (see updated chart below) while the dollar is on track for its best quarter since 2008 against a basket of major currencies, boosted as the Fed moves toward raising rates – perhaps sometime during the 2nd half of this year – while most other major central banks are loosening monetary policy…

The always important U.S. monthly jobs number is due Good Friday when North American equity markets are closed…economists polled by Reuters forecast a 245,000 gain in U.S. jobs in March which would be down significantly from February’s robust figure of 295,000…employment gains have been above 200,000 for 12 consecutive months, the longest such run since 1994…

Ben Bernanke, who stepped down as Fed Chairman early last year and became a senior fellow at the Brookings Institution in Washington, has launched his own blog which will no doubt draw great attention from many market observers…he has spent the past year writing a book on his time at the Fed (scheduled to be published this fall) and giving speeches.  “Now that I’m a civilian again,” Bernanke wrote, “I can once more comment on economic and financial issues without my words being put under the microscope by Fed watchers.”

China’s Asian Infrastructure Development Bank

Interestingly, China has created the Asian Infrastructure Investment Bank (AIIB) and has given it U.S. $50 billion in seed money…National Post writer Matthew Fisher says “the move has caused apoplexy” in Washington and Tokyo.  “The worry,” Fisher states, “is that China will soon write the rules for international banking, effectively gaining a veto over many development projects in Asia.”  Britain, France, Germany, Italy, South Korea, and Australia have jumped on board the AIIB…Jack Lew, U.S. Treasury Secretary, called the creation of the AIIB a threat to “our international credibility and influence.”

Gold Long-Term Monthly Chart

Below is a 20-year monthly Gold chart that shows how bullion continues to “dance on the edge” of its uptrend support line that has remained intact since 2001…it’s critical that this support holds (keep in mind, this is a monthly chart), otherwise the risk of a plunge to the $1,000 level becomes increasingly likely…Fib. support on this long-term monthly chart is also in the $1,180’s while the next Fib. level is $1,007…

Encouragingly, RSI(14) last year broke above a downtrend line in place since its late 2011 high…the SS indicator has done the same…at some point down the road, everyone may look back at Gold’s 40% drop from $1,924 to last November’s low around $1,130 as an historic buying opportunity…some analysts, however, take the view that Gold has not yet found a bottom, that a final “capitulation” is still in the works…

This chart will be a valuable guide for the weeks ahead…

Today’s Equity Markets

Asia

China’s Shanghai Composite cooled off overnight, losing 37 points to finish at 3749…China’s central bank has lowered minimum down-payment levels on second homes nationwide, scrapping a key policy aimed at controlling housing prices as it seeks to boost the economy…the People’s Bank of China said the minimum deposit for individuals buying additional housing would be set at 40%, according to a statement on its web site…the level was previously 60% to 70%, China’s Xinhau news agency said…in addition, select homeowners who have held a property for 2 years or more will be exempted from a sales tax, the finance ministry announced…

The new moves are part of “Beijing’s broader package of policies to stabilize economic growth and dis-inflationary pressures,” according to HSBC…as policymakers become increasingly concerned, analysts expect more easing measures in the coming weeks.  “A 50-basis-point cut in the policy rate, a 200-basis-point cut to the reserve requirement ratio…in the coming months, if not weeks,” HSBC stated…

Despite further efforts to open up its capital account, the use of the Chinese yuan as a currency for world payments fell two places to 7th in February, with a share of 1.81%, according to the Society for Worldwide Interbank Financial Telecommunications, or Swift, in a report today…that compares with a record high 2.17% in December, according to the organization that is used by banks to coordinate international transactions…the 20.4% drop compared with January is a reversal from November when the yuan broke into the top 5 of world payment currencies, overtaking the Canadian dollar and the Australian dollar by value…

Europe

European markets were down today but still posted strong gains for the quarter…euro zone unemployment data today ticked down to 11.3% in February, from 11.4% in January…this was its lowest rate since May 2012…a flash figure for euro zone inflation came in at –0.1% in March, up from February’s number…

North America

The Dow is off 105 points as of 9:00 am Pacific…the TSX is up 17 points while the Venture is off a point at 679 through the first 2-and-a-half hours of trading…

Again, we remind our readers to keep an eye on International Montoro Resources (IMT, TSX-V) which confirmed this morning that drilling is now underway at the Pecors anomaly (Ni-Cu-PGE target) near Elliot Lake in northern Ontario, immediately west of Sudbury…the first hole had reached a depth of 221 m as of last night…

Both IMT and the Ontario Geological Survey have carried out some outstanding research in this area, and the massive Pecors magnetic anomaly was given even more credence with the results of a lake sediment geochemical survey covering the area which outlined a Cu-Ni anomaly proximal to the magnetic anomaly…

IMT is unchanged at 8.5 cents as of 9:00 am Pacific…favorable chart patterns and the possibility of drilling success at Pecors should make for an exciting April for IMT…

Venture Updated Charts

If the Venture can overcome chart resistance at 680, the possibility of an April surprise to the upside becomes more likely…the recent bullish “W” in the RSI(14) on this 6-month daily chart is an encouraging sign…the 50-day moving average (SMA), currently 683, has also started to reverse to the upside but this trend needs to gain traction and accelerate…a sharp breakout through the 680’s on strong volume is exactly what the Venture needs from a technical standpoint…

Venture 6-Month Daily Chart

Venture 5-Year Weekly Chart

This 5-year weekly Venture chart shows increasing buy pressure (CMF), reversing the trend that started in the 3rd quarter of last year and peaked in late 2014/early this year…the weakening of the bearish phase since September is clearly evident in the ADX indicator, and the RSI(14) is trending higher…the Index just needs a catalyst to gain momentum…

NexGen Energy Ltd. (NXE, TSX-V) Update

NexGen Energy Ltd. (NXE, TSX-V) announced this morning that it has drilled off-scale radioactivity (greater than 10,000 counts per second) approximately 3.7 km northeast and along trend from the Arrow zone on its 100%-owned Rook I Property in the Athabasca basin…a 4th drill rig, recently mobilized to the property, has joined 1 other drill rig in testing this new discovery, named Bow, which is coincident with a recently located radon anomaly that tracks the strike of a VTEM conductor for approximately 730 m and is up to 140 m wide (this particular radon anomaly has the highest reading of all known radon anomalies in the area)…

NXE 2-Year Weekly Chart

NexGen has been quite volatile over the last year but has been following a general uptrend featuring higher lows…it’s now threatening to break out of an ascending triangle with chart resistance in the low 50’s…

NXE is up 2 pennies at 52 cents on strong volume as of 9:00 am Pacific…

Merger Rumors

Teck Resources Ltd. (TCK, B) climbed as much as 15% intra-day yesterday on a Bloomberg report regarding a possible merger with Chilean Copper miner Antofogasta PLC…the rumors were vigorously denied by Teck with some carefully chosen words in a news release issued shortly after the market closed…

“Teck reports that it is not in discussions with Antofagasta in relation to any form of transaction,” the company said in a brief statement.  “There are no other corporate developments that justify any significant movement in its share price.”

Bloomberg, which is quite skilled at spotting some smoke, cited unidentified sources as saying that the companies had held early-stage talks…as a side note, it’s interesting we’re hearing much more about Antofogasta over the last few months…it’s known that they are looking with intense interest at numerous projects in North America, and British Columbia is apparently very high on their list…

In any event, our readers would be wise to keep an eye on Teck for several reasons…

From a technical perspective, Teck has been an excellent reflection of the state of the overall resource market since early 2011…as you can see in the 6-year monthly chart below, Teck has been trading within a downsloping channel since peaking at nearly $55 a share…it closed yesterday at $19.45 and is in retreat this morning…nonetheless, Teck has been strengthening since its January 14 intra-day low of $12.46 with the now-rising 50-day SMA providing strong support…

A confirmed breakout above the long-term downtrend line, currently in the low $20’s, would be extremely significant – a strong clue that the resource market is ready for a major turnaround…

In British Columbia, Teck has clearly demonstrated its continued strong interest in the Schaft Creek deposit (Cu-Au-Mo-Ag) by increasing the 2015 budget for the Schaft Creek Joint Venture with Copper Fox Minerals Inc. (CUU, TSX-V) to nearly $5 million as announced 2 weeks ago…approximately 120 km to the northwest, Teck has maintained a large land position, contiguous to the southern border of Garibaldi Resources‘ (GGI, TSX-V) Grizzly Project, in the Sheslay district, and this is the result of promising results obtained by Teck…

Readers should also keep an eye on the Kliyul Cu-Au Prophyry Project (drilling upcoming) in north-central B.C., about 65 km southeast of the past producing Kemess mine, that Teck has optioned from Kiska Metals Corp. (KSK, TSX-V)…

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

Gold has traded between $1,181 and $1,195 so far today…as of 8:30 am Pacific, bullion is down $16 an ounce at $1,182…Silver is off 33 cents at $16.64…Copper is up 2 pennies to $2.79…Crude Oil has given up 57 cents to $48.30 while the U.S. Dollar Index has added more than half a point to 98.00…

TD Securities, in a precious metals outlook published recently, questions the sustainability of the supply/demand balance in the Gold market due to declining reserves…2014 marked the 3rd straight year of reserve declines, with exploration spending being reduced as miners focused on capital preservation…total reserves for the large-cap producers are down around 24% from the 2011 peak…the decline highlights that existing exploration budgets are not sufficient to keep pace with current mining depletion…

Yellen:  Gradual, Gradual, Gradual…

Fed Chair Janet Yellen struck a moderate tone in a speech late Friday at a conference sponsored by the San Francisco Fed, and that’s one reason equity markets are buoyant today – along with talk of more stimulus coming from China…

“I expect that conditions may (our emphasis) warrant an increase in the federal funds rate target sometime this year,” Yellen stated Friday…she said she was “cautiously optimistic” that growth would top 2.3% this year and that the unemployment rate would fall further…consumer spending is likely to rise “at a good clip,” she added, though fresh numbers this morning were a little disappointing…

Yellen stressed several times that the Fed would be cautious in its actions and that subsequent rate hikes likely would be gradual…in fact, she used the words “gradual”, “gradually”,  and “gradualist” 14 times in her prepared remarks…

Today’s Markets

Asia

China’s Shanghai Composite keeps motoring along…the index hit a fresh 7-year high overnight, soaring nearly 100 points or 2.6%, as markets interpreted weekend comments from Zhou Xiaochuan, governor of the People Bank’s of China, as an indication of further stimulus…Zhou warned yesterday that the world’s 2nd-largest economy needs to be vigilant for signs of deflation (which are quite evident, actually)…

Japan’s Nikkei average climbed 126 points overnight to close at 19411…

Europe

European stocks rose broadly today on hints of more monetary easing from China and solid confidence numbers from the euro zone…Greece’s Syriza-led government on Friday presented ideas on fresh proposals for economic overhauls, but so far officials from the ECB, EU and IMF aren’t convinced the suggested reforms are detailed enough…with debt payments due over the next few weeks, many economists believe the country will run out of money at some point in April unless the next portion of bailout cash is released…

North America

The Dow is bouncing back strongly after last week’s decline…as of 8:30 am Pacific, the Dow is up 264 points…

U.S. consumer spending barely rose in February as households boosted savings to their highest level in more than 2 years, the latest sign that economic growth slowed sharply in the 1st quarter…the Commerce Department said today that consumer spending edged up 0.1% (slightly less than expected) after an unrevised 0.2% drop in January…households cut back on purchases of big ticket items like automobiles…

In other economic data released this morning, personal income in February rose 0.4%, above expectations of 0.3% increase…

In Toronto, the TSX has added 175 points through the first 2 hours of trading while the Venture, trying to gain traction above key resistance at Friday’s close, is off 1 point at 680…

Stephen Poloz, head of the Bank of Canada, said a slump in Oil prices is having an “atrocious” effect on the Canadian economy but a cheaper currency and a U.S. revival should help exports drive a recovery, according to a report this morning from the Financial Times…

TSX Updated Chart

Since mid-December, the TSX has remained within an upsloping channel as shown in this 6-month daily chart…the index bounced off the uptrend support line on Friday after 3 straight days of declines…April looks promising as a “Wave 5” move appears to be underway with a key level being 15300 which constitutes both chart and Fib. resistance…

Doubleview Capital Corp. (DBV, TSX-V) Update

We like the trend – results keep improving each time Doubleview Capital (DBV, TSX-V) has returned to the Hat Property in northwest B.C.’s Sheslay district for a fresh round of drilling…last week, the company announced that Dr. Abdul Razique, the company’s recently recruited chief geoscientist with an impressive background in major porphyry deposits, is now leading a crew on the property to begin preparations to re-start drilling…

But first, there’s the important issue of hole #23 which was halted at a depth of 650 m just prior to Christmas for the winter shutdown…assays have been released for the first 400 m of that hole, showing the best results yet in drilling at the Hat including a 110.9-m section beginning at a depth of 270.6 m that graded 0.73% CuEq (overall, so far, H-23 includes 332.4 m grading 0.48% CuEq)…a 3rd and wider chalcopyrite-pyrite zone was visually observed starting at 402 m and continuing to at least 520 m (this core still needs to be logged, cut and sent in for assaying)…H-23 features increased potassic alteration relative to other holes, a very positive sign…importantly, the property is now showing the potential for significantly higher grades than it did a year ago when the initial discovery was made, and that’s key…much has been learned over the last several months…

On a broader level, a growing consensus seems to be that the Lisle discovery zone, where most of the 23 holes at the Hat have been drilled to date, is merely the southeastern edge of a much larger porphyry system that pinches and swells over a general NW-SE trending corridor more than 3 km long and approximately 2 km wide…

We have great confidence in Dr. Razique’s understanding of world class porphyry systems, given his intense involvement with Reko Diq in western Pakistan and our lengthy interview with him just recently…prior to joining DBV last month, Dr. Razique spent the previous year-and-a-half evaluating projects in B.C., Quebec and the U.S. on behalf of a major mining and exploration company and its joint venture partners…

To view Part 1 of our video feature (just under 90 seconds), click on the arrow below…

Amarc Resources Ltd. (AHR, TSX-V) Update

There’s lots happening in British Columbia…we do expect the Sheslay district to heat up profoundly with the potential for near-term new discoveries…not only of course is Doubleview on the cusp of a major breakthrough, but Garibaldi Resources (GGI, TSX-V) has already kicked off its 2015 exploration season at the Grizzly which will lead to first-ever drilling – and we know what their success ratio is like on drill holes elsewhere…

Further south in the Cariboo region, meanwhile, Amarc Resources (AHR, TSX-V) is garnering increased attention as predicted following its announcement in late November that was overshadowed by the overall market turmoil at the time…

Volume has picked up significantly in AHR this month, and the company has the funds to carry out a follow-up round of drilling…AHR traded as low as 6.5 cents in December and hit a new 52-week high of 18 cents March 19…

In late November, Amarc reported highly encouraging results from an initial 9-hole drill program at the company’s IKE Project in the Cariboo region…this is an early-stage bulk-tonnage porphyry Copper-Molybdenum-Silver discovery in the heart of a producing area…all 9 holes intersected chalcopyrite and molybdenite mineralization from surface and over a broad area measuring 1,200 m east-west by 600 m north-south and to depths of approximately 500 m…

Interval highlights included 247 m grading 0.42% CuEq in IK-14-001; 234 m @ 0.43% CuEq in IK-14-002; and 308 m @ 0.41% CuEq in IK-14-006…these results, along with post-drilling geological, geochemical and geophysical surveys completed outward from the drilled area, indicate that the IKE porphyry system has the potential to host a significant resource…this is still early in the game…AHR can be expected to aggressively follow up on this discovery…

John’s 3-year weekly AHR chart shows a “Big Picture” bullish trend with a confirmed breakout above the 10-cent level early this month with a recent confirmed breakout above Fib. resistance at 15 cents…buy pressure has recently replaced a long period of sell pressure…

Below is an updated 3-year weekly chart for AHR which closed Friday at 17 cents…

Eskay Mining Corp. (ESK, TSX-V) Update

As regular BMR readers know, we love northern British Columbia…geologically, it is so richly endowed…the Sheslay area, we predict, will become a world-class Cu-Au porphyry district, handsomely rewarding investors who can envision that now, but up and down northern B.C. there are still enormous opportunities for new discoveries of various types despite all that has been found (just the tip of the iceberg, really) over the past couple of decades…

Eskay Mining (ESK, TSX-V) is a company we initially introduced to our readers when it was trading at just 6 cents a year ago…given the collapse of the Venture to a record low in December, it’s quite remarkable that ESK is trading at 15 cents right now but that’s a testament to the quality of the company’s holdings…

ESK controls 40 sq. km surrounding the prolific past producing Eskay Creek mine, and they have some giant neighbors – Pretium Resources (PVG, TSX) and Seabridge Gold (SEA, TSX)…while it was in operation, Eskay Creek was the second richest deposit in North America and the 5th largest Silver producer in the world…a technical adviser for ESK is the highly respected James Rogers who was Chief Geologist at the Eskay Creek mine between 1994 and 2003…Rogers prepared an ESK corporate presentation last summer which is available on their web site – we suggest our readers check it out…

Recently, Eskay added well-known geologist Charlie Greig to its technical team…Greig is a master at his craft and consults for Pretium as well as Garibaldi…

Technically, ESK broke out above a long-term downtrend a year ago and that’s initially what caught our attention along with a surge in volume…

Below is a 3-year weekly ESK chart from John…little news but this stock has been under heavy accumulation for a reason, we suspect…

Niogold Mining Corp. (NOX, TSX) Update

In northwest Quebec, Niogold Mining (NOX, TSX-V) continues to find high-grade shoots surrounded by lower-grade halos that characterize the wider, mineralized shear zones at its 100%-owned Marban deposit…recent results included 15.8 m @ 4.95 g/t Au, including 4.2 m grading 12.58 g/t Au, in hole MB-14–372 at a vertical depth of 120 m…the infill program has been increased from 40,000 m to 50,000 m…

Technically, NOX has performed exceptionally well in turbulent markets since the beginning of last year…consistently, it has found strong support at its rising 200-day moving average (SMA), currently 29 cents…

Buy pressure continues to increase as indicated by the CMF…excellent possibilities here for the balance of 2015…

Silver Short-Term Chart

Silver got a boost recently when it broke out of a short-term downsloping flag that was in place since late January…the metal found support at the bottom of that flag during the middle of this month which was critical…the chart now suggests that a consolidation has now started after the rather rapid ascent (15%) from the monthly low of $15.20…

The metal reacted in January at $18.50 (almost exactly at chart and Fib. resistance) and then went into a consolidation phase within the downsloping channel…we were waiting for a move above or below that channel, and it came at the end of the week of the Fed policy statement…

In December, Silver finally staged a definitive breakout above a downtrend line that was in place since the summer (note how the downtrend line became new support that month)…this gave Silver the fuel it needed to test higher levels…

Silver Long-Term Chart

This 34-year monthly chart continues to give hope that Silver could be in the very early stages of a powerful “Wave 5” move to the upside, though we caution that this could take some time to play out (if indeed this theory is correct)…the reasons for such a possible move are also not clear at the moment…

RSI(14) has bounced off previous long-term support which will need to hold along with key price support in the immediate vicinity of $15…

One note of concern on this chart is the sell pressure that has prevailed since the beginning of 2013, after a decade-long period of buy pressure…based on historical patterns, sell pressure could persist for a considerable time yet – though that doesn’t necessarily mean that the price can’t still trend higher…nonetheless, it would be encouraging to see this sell pressure begin to abate…it has eased off only very slightly in recent months…

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

After nearly two dozen drill holes and detailed expert analysis, a new picture is rapidly emerging at Doubleview Capital Corp.’s (DBV, TSX-V) Hat Project in northwest B.C.’s Sheslay district.

This is not unusual in the evolution of a major discovery – at a certain point, as results improve with each round of drilling, and fresh geological eyes are cast upon a growing deposit, the “dots” all of a sudden begin to connect.

That’s what’s happening at the Hat where hole 23, as we predicted earlier, is a game-changer.  More intense potassic alteration, higher grades, thickening zones, greater understanding of the entire system – these are all reasons why Dr. Abdul Razique, Doubleview’s newly-recruited and first-ever chief geoscientist, is as excited as you’ll find anyone in the industry right now.  He’s convinced the Hat has world-class potential as B.C.’s newest alkalic Gold-Copper porphyry discovery, now kicking into high-gear after initial drilling commenced from the grassroots stage less than two years ago.

More results are pending from hole 23, specifically from a chalcopyrite-pyrite zone below 400 m visually interpreted to continue to a depth of at least 520 meters (the 110.9-metre section beginning at a depth of 270.6 m included 74.2 m grading nearly 1% CuEq)…keep in mind, everything changed at Red Chris when Imperial Metals (III, TSX) started drilling below 400 m.

The way H-23 is evolving, it’s speculative but reasonable to conclude that the next batch of assays could produce some eye-popping numbers for the section between 400 m and 650 m.  And to think that this is quite possibly just the southeastern edge of a much larger system, rather than the central core…

Given developments at the Hat and Dr. Razique’s impressive credentials, we felt it was imperative to meet this individual as quickly as possible and introduce him to our readers.  His impact on the Hat Project, and the Sheslay district in general, could prove to be hugely significant.

To view Part 1 of our video feature (just under 90 seconds), click on the arrow below.

Note:  John and Terry do not hold share positions in DBV.  Jon does hold a share position in DBV.

TSX Venture Exchange and Gold

March started miserably for the Venture, with 10 losing sessions out of 12, but may end on a very encouraging note.

The Venture continued to strengthen last week and added 10 points to finish at 681, a key potential breakout area defined by Fib. resistance and the 50-day moving average (SMA).  Trading Monday and Tuesday to close out the month will be critical as a confirmed breakout would suggest a surprisingly strong move to the upside could be in the works for April.

It’s no coincidence that the Venture turnaround started Wednesday, March 18, when the Fed emerged from its 2-day policy meeting with a statement that was dovish enough to take the wind out of the sails of the greenback.  It appears the Dollar Index hit a temporary top this month of just under 101 after its fastest rise, since last summer, in 40 years.  This has given commodities and the Venture some much-needed relief.  Additional dollar weakness next month would create the conditions for a Venture breakout through important chart resistance around 707.

If some companies can also show some success on the exploration front – there’s nothing like a blockbuster drill hole to get investors excited, that’s what this market needs – then the Venture has a chance to snap out of a 7-month slump in a powerful way.

Significantly, Venture support in the 650’s (Fib. level) held during a rocky first half of the month as it did during January.  John’s 4-month daily chart shows RSI(14) with strong up momentum as the Index attempts to gain traction above the indicated SMA-20.

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 in 2013 is that it forced producers (at least most of them) to start to become much more lean in terms of their cost structures. Producers, big and small, have started to make hard decisions in terms of costs, projects, and rationalizing their their overall operations. 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 carry out exploration or put Gold (or other) deposits into production, thanks to the ignorance of many politicians and the impact of radical and vocal environmentalists (technology has made it easier for groups opposing mining projects to organize and disseminate information, even in remote areas around the globe). Ultimately, all of these factors are going to eventually create a supply problem and therefore great opportunities in Gold and quality Gold stocks.  Think about it, where are the next major Gold deposits going to come from?  On top of that, grades have fallen significantly just over the past decade.

Gold

Gold popped as high as $1,220 this past week as the greenback cooled off and tensions flared up in the Middle East.  Friday’s minor pullback was bullion’s first losing session out of 8.  For the week, it was up $16 to close at $1,198.

This 6-month daily chart shows how Gold’s RSI(14) broke above a downtrend line immediately following the Fed announcement March 18.  Bullion has climbed 5% since its low of $1,142 which is exactly where it rallied from sharply a few months ago.

Bullion’s immediate challenge is to overcome the psychologically important $1,200 level.  Following that, there’s a cluster of Fib. resistance between $1,217 and $1,264.

Gold 2.5-Year Weekly Chart

This longer-term weekly chart gives a helpful broader perspective of Gold’s “ups” and “downs” over the last 2-and-a-half years.  What’s particularly encouraging at the moment is the bullish crossover in the SS – strong rallies have typically emerged from this pattern going back to the spring of 2013.

Note how the RSI(14) on this 2.5-year chart has moved within a 30% to 60% channel for the past year (currently at 46%), and how the Gold price has been bouncing around within a downsloping flag.  Eventually, there will either be a breakout above the flag or a breakdown below it.  How soon is anyone’s guess, but that’s what we need to be watching for.

After a 7% surge the previous week, Silver added another 24 cents to close at $16.97 (updated charts Monday morning).  Copper strengthened again as well, adding 2 cents to finish at $2.76.  Crude Oil gained more than $2 a barrel to $48.87 while the U.S. Dollar Index fell half a point to 97.38.

The “Big Picture” View Of Gold

 

Gold has traded between between $1,192 and $1,207 so far today…as of 8:30 am Pacific, bullion is down $7 an ounce at $1,197…it has climbed for 7 straight sessions, its longest winning streak since 2012…Silver has fallen 12 cents to $16.98…Copper is off 3 pennies at $2.77…Crude Oil has retreated $1.51 a barrel to $49.92 while the U.S. Dollar Index is up slightly at 97.47…

Caution over bullion’s price rally was evident as SPDR Gold Trust continued to see outflows yesterday…holdings fell nearly 6 tonnes to 737.24 tonnes, the lowest since January…physical demand across Asia has also reportedly slowed this week as the rally in prices has restrained buying…Gold faces resistance at $1,200, the 100-day moving average (SMA) at $1,208, and the March high of $1,223 (slightly above a Fib. level, see updated chart below)…

Markets will be paying close attention to a speech by Fed Chair Janet Yellen that’s scheduled to begin 25 minutes before stock markets close today in North America…her speech is part of the Federal Reserve Bank of San Francisco’s Conference on “The New Normal for Monetary Policy”…

Japan Drifts Further Into Deflation

The “new normal” for monetary policy hasn’t done much for Japan, except create an equity bubble…the country is drifting back toward deflation, 2 years after launching a radical monetary policy experiment to cure the affliction, which underscores the difficulties in pulling the world’s 3rd-largest economy out of its long slump…

The government said today that its most closely watched price gauge was flat in February from a year earlier, far below the 2% target that the central bank had aimed to hit by this spring…it was the lowest level since May 2013 for the CPI, excluding fresh food prices and the effects of a tax increase…in the 7 quarters since the Bank of Japan Governor first fired what he calls his “bazooka”, Japan’s GDP has grown at a sluggish average annual pace of about 0.2%…

The Middle East Powder Keg

“I am looking at the map,” said a U.S. defense official, in a Wall Street Journal report yesterday by Jay Solomon and Gerald F. Seib.  “I am looking at (Islamic State) affiliates. I am looking at all the fighting. And I am wondering who is the archduke that is going to get assassinated and kick off a big war.”

At the moment, despite a Saudi Arabia-led coalition taking aim at Iran-backed Houthi rebels in Yemen, there’s virtually no threat of an immediate or near-term disruption to world Crude supplies from this conflict (Yemen is a minor producer)…however, this week’s developments are nonetheless extremely serious and threaten to make Yemen center stage for an increasingly bitter clash between the Sunni-majority Saudi Arabia and Shiite-majority Iran…the possibility of a broad-scale Sunni-Shiite war breaking out in the Middle East, anytime over the next year, cannot be dismissed…

The Houthi minority group has overrun most of Yemen in the past 7 months and seized control of the capital and government…Saudi Arabia is the main ally of Yemen’s U.S.-backed president, Abed Rabbo Mansour Hadi, and the kingdom said its airstrikes were in defense of what it considers the legitimate government of Yemen…Hadi has reportedly fled to Saudi Arabia after being chased by the Houthis…

Yemen is also the home of al-Qaeda in the Arabian Peninsula – AQAP, often described by experts as the terror group that represents the greatest threat to the American homeland, despite its lower profile in comparison to the likes of ISIS which is also capitalizing on the chaos in Yemen…

Crude Oil Updated Chart

There are some important changes in the 6-month daily chart for Crude that suggest a rally could be in the works, perhaps fueled by a Middle East “risk premium”…it’s still too early to say for sure, but below are some significant technical developments to consider despite this morning’s pullback…

Over the last 2 sessions, Crude has broken above its 50-day SMA ($48.69) and a downtrend line (the downtrend line could be tested shortly on a retrace prior to a surge higher)…RSI(14) has pushed convincingly above the 50% level, and a bullish +DI/-DI cross has occurred…the key level to watch is around $53…a possible scenario here is a run into the high $50’s where Crude reacted in December…a cluster of Fib. resistance exists between $57 and $65…

Overall, the bearish fundamentals (the world is awash in Oil) and the major technical breakdown that occurred last year still point to the possibility of Crude ultimately sliding into the $30’s…a significant rally from current levels could certainly occur but should be viewed skeptically if it does…

WTIC 6-Month Daily Chart

Gold Updated Chart

Gold is currently fighting chart resistance at $1,200…however, a bullish +DI/-DI cross has occurred in this 6-month daily chart for the first time since the beginning of the year…this was followed by a major rally in Gold…

Bullion really does need to conquer the $1,220 area to get “momentum” traders back on its side and put the bears on the defensive…

Today’s Markets

Asia

China’s Shanghai Composite gained 10 points overnight to close near a 7-year high despite weak data…industrial profits for the first 2 months of 2015 fell 4.2% on year, the worst decline since 2012…Japan’s Nikkei fell 185 points or nearly 1% on deflationary concerns and weaker than expected retail sales…

Europe

European markets were mixed today…

North America

The Dow is up 21 points as of 8:30 am Pacific…U.S. economic growth cooled in the fourth quarter as previously estimated, with businesses throttling back on inventory and equipment investment but robust consumer spending limiting the slowdown in the pace of activity…GDP expanded at a 2.2% annual rate, unrevised from last month’s forecast, the Commerce Department said today in its 3rd estimate…the economy grew at a 5% clip in Q3…

The government also reported that after-tax corporate profits fell at a 1.6% rate in the 4th quarter as a strong dollar dented the earnings of multinational corporations…

In Toronto, the TSX is off 70 points while the Venture has slid 2 points to 677…a close above resistance at 680 today would be technically significant…

Cannabix Technologies Inc. (BLO, CSE, BLOZF, OTC) Update

We’re keeping a very close eye on our favorite speculative non-resource play, Cannabix Technologies (BLO, CSE), which is now threatening to break out of a bullish pennant that started to form last month after the stock erupted from 17.5 cents to 77 cents in just 8 sessions (massive accumulation, it appears) between February 2 and February 11…Cannabix, of course, is a first-mover in the potentially hugely lucrative marijuana breathalyzer space, and the company is now conducting internal testing of the alpha version of its breathalyzer prototype with medical marijuana users…

Cannabix’s technology is drawing increased attention, and not just among investors, so the move early last month could prove to be a harbinger of things to come…

This 5-month daily chart, based on BLO’s OTC listing as Stockcharts.com still does not provide charts for CSE-listed companies, shows the current attempted breakout above the pennant…confirmation of a breakout has not yet occurred, but this is a classic bullish technical pattern with imminent possibilities…

BLO opened slightly lower on light volume this morning and is currently off a penny at 47 cents on the CSE as of 8:30 am Pacific…

International Montoro Resources Inc. (IMT, TSX-V) Update

Technically and fundamentally, International Montoro Resources (IMT, TSX-V) is looking exceptionally strong heading into April…drilling is expected to commence imminently (within a few days) at the Company’s Serpent River Project in northern Ontario, immediately west of Sudbury, where the massive Pecors anomaly represents a high-value Ni-Cu-PGE target and the potential for an important new discovery…the source of the anomaly apparently resides in the older underlying Archean basement rocks…the Ontario Geological Survey has conducted some significant studies regarding Pecors and their conclusions support the findings of IMT’s technical team…

One thing is for certain – this first deep hole is going to generate some buzz…

Technically, the IMT chart shows an acceleration of a bullish trend with the growing possibility of a major breakout above a 6-month horizontal channel, similar to the pre-breakout patterns John correctly identified recently in both NioCorp Developments (NB, TSX) and North Arrow Minerals (NAR, TSX-V)…as always, perform your own due diligence…

Terrax Minerals Inc. (TXR, TSX-V) Update

Terrax Minerals (TXR, TSX-V) has been firming up recently with a winter drill program in progress at its Yellowknife City Gold Project in the Northwest Territories…in the Crestaurum Zone, the company continues to hit higher-grade mineralized shoots, as reported March 11, within a discrete shear striking northwest and dipping southeast…the shear has been followed on surface for approximately 4 km and has been drilled over 1.2 km of strike length up to a depth of approximately 100 m from surface…results from more holes are pending from the Crestaurum Zone (the Barney Zone is also being drilled with a 2nd rig), and drilling is scheduled to continue until spring break-up early next month…

The Yellowknife City Gold Project encompasses almost 100 sq. km of contiguous land immediately north of the city of Yellowknife in the Northwest Territories…through a series of acquisitions, the company claims it now controls 1 of the 6 major high-grade Gold camps in Canada – and the least explored…

Technically, TXR has successfully pushed above a downtrend line on this 2.5-year weekly chart…Fib. support held at 25 cents last year, and TXR has now closed for 2 straight sessions above Fib. resistance at 37 cents…

Note:  John and Jon both hold share positions in BLO.  Jon holds a share position in IMT.

Gold has shot back up above $1,200 an ounce as tensions have erupted in the Middle East with Saudi Arabia and a coalition of Arab partners launching “Decisive Storm” in Yemen…Saudi Arabia has pledged to contribute 150,000 soldiers and 100 war planes in the coalition that includes Jordan, Bahrain, Kuwait, Morocco, Qatar, Sudan, Pakistan and Egypt – all who so far have offered fighter jets or naval ships…as of 9:15 am Pacific, Gold is up $10 an ounce at $1,205 after reaching an intra-day high of $1,220…Silver is up 17 cents at $17.13…Copper has added 3 pennies to $2.81 while the U.S. Dollar Index has recovered slightly to 97.08…

Airstrikes are in progress against military bases held by Shiite Houthi rebels in Yemen as Iran – believed to be using the Houthis to seize control of that country – warned that Riyadh was taking a “dangerous step”…the decision by Saudi Arabia and the region’s Sunni monarchies to intervene in Yemen, on behalf of President Hadi who was forced to flee for his safety, raises the stakes in their rivalry with predominantly Shiite Iran, which has raged in Syria, Iraq and elsewhere in the region…

A statement today from Tehran’s Foreign Ministry spokeswoman Marzieh Afkham did not name Saudi Arabia but called the airstrikes an “invasion”…the statement went on to claim that the campaign would worsen the already deteriorating situation in Yemen…

U.S. national security strategy has failed in Yemen, not to mention elsewhere, and the consequences are beginning to pile up…in a joint statement issued by U.S. Senators John McCain (R-Ariz.) and Lindsay Graham (R-S.C.), “A country (Yemen) that President Obama recently praised as a model for U.S. counter-terrorism has now become a sectarian conflict and a regional proxy war that threatens to engulf the Middle East.” 

The conflict in Yemen won’t immediately change Oil’s current supply problem – Yemen is 39th on the list of world energy producers according to the EIA – but geographically and politically, it’s located in a very strategic part of the Middle East…and in order to export to Europe, Arab producers have to ship Oil past Yemen’s coastlines via the Gulf of Aden to get to the Suez Canal….

How the Iran-Saudi Arabia dynamic plays out in the coming weeks is going to be highly interesting to say the least…

Gold Tidbits

SPDR Gold Trust, the world’s largest Gold-backed ETF, continues to see outflows, though this could quickly change given geopolitical events…the fund’s holdings fell 0.2% to 743.21 tonnes yesterday…how physical demand holds up in the face of rising prices will be a key factor to watch…in China, Gold premiums, a good indicator of demand, have eased to about $2-$3 an ounce, compared with $6-$7 last week…

Only 3 emerging market central banks took advantage of weaker Gold prices in February and added to their reserves, according to the latest data from the International Monetary Fund (China not included)…Kazakhstan’s central bank was the biggest Gold purchaser, buying 2.6 tonnes and boosting its reserves to 196.1 tonnes…this was the 29th consecutive month that the central bank has added to its Gold reserves…also buying Gold in February were the Tajikistan and Malayasia central banks, which each increased their reserves by 0.6 tonnes…notably absent on the buy side for the second straight month was Russia, though the Putin regime did add considerable quantities of Gold to its reserves last year from April to December…Russia’s was the biggest Gold purchaser among central banks in 2014 (174.8 tonnes), according to data compiled by the World Gold Council…

U.S. Dollar Index 2+ Year Weekly Chart

The greenback is in a corrective phase which has the potential to extend a little deeper than most traders/investors may expect given the extreme overbought conditions that prevailed for more than 6 months as seen in John’s 2+ year weekly chart this morning…the first primary support band stretches from 93 to 96…

Keep in mind, the Dollar Index has experienced its fastest rise in more than 40 years, and the Fed gave some signals last week that such a powerful move over a short period of time was contributing to a slowing down of the U.S. economy and could threaten the Fed’s target of boosting inflation to the 2% level (a sharply higher dollar imports deflation)…

Long-Term U.S. Dollar Index Chart

The strength of the move in the greenback since last summer has been fueled in part by a major technical breakout above a symmetrical triangle that formed after the early 2009 high of just under 90 (the rise from the 2008 low to the 2009 high was 24%…by comparison, the jump from the May 2014 low of 78.93 to this month’s high of 100.71 was 27.6%)…

Overall, the Dollar Index is clearly in a new long-term bull market with the 120 level quite possible over the next year or two, but during this cycle there will be some significant corrections to unwind temporarily overbought conditions as we’ve also seen in Gold…historically, at times, the greenback and bullion have moved in tandem to the upside, though generally they’ve had an inverse relationship…

Today’s Markets

Asia

Asian markets were mostly lower overnight, though China’s Shanghai Composite bucked the trend with a gain of 22 points to close at 3682…

Europe

European markets were down significantly today on concerns over the Middle East and Greece…airline stocks were also under pressure following reports that the crash of Germanwings A320 may have been a deliberate act…

North America

The Dow is off 10 points as of 9:15 am Pacific…Federal Reserve policymaker Dennis Lockhart said today that economic growth in the first quarter looks very soft and that a rate hike should come in the middle of the year or later…

In Toronto, the TSX is down 39 points after nearly 3 hours of trading…investment in Canadian Oil plays has peaked and will not reach 2014 levels for at least another 5 years, according to new report from the Conference Board of Canada released yesterday…the report downplays the possibility of a quick recovery in the Canadian Oil-patch, where cumulative employment, investment and revenue numbers have dropped along with Oil prices…the think tank is now forecasting further drops in all of those metrics, and is predicting lower overall activity until 2020 at the earliest (unless, of course, events in the Middle East spin out of control and supplies there are significantly disrupted)…

The Venture is flat at 677 as of 9:15 am Pacific…it has posted 5 winning sessions out of 6 after declining in 10 out of the first 12 trading days this month…Noront Resources (NOT, TSX-V), this week’s big mover, climbed as high as 67 cents in early trading today and is currently up 3 pennies at 62 cents…another Nickel play that’s gathering momentum is International Montoro Resources (IMT, TSX-V) which is up half a penny at 8.5 cents as of 9:15 am Pacific…drilling is commencing imminently at the massive Pecors anomaly at IMT’s Serpent River Project east of Sudbury…

Doubleview Capital’s (DBV, TSX-V) geological crew is back on the Hat Property in the Sheslay district, preparing for the next phase of drilling as reported this morning…first, they will be examining core from the widest chalcopyrite-pyrite zone in H-23 (from about 402 m to at least 520 m)…the hole (through 400 m) has already produced the highest Gold-Copper grades to date in drilling at the Hat…

Increasing volume and a potential breakout looming in Cannabix Technologies (BLO, CSE)…BLO is up 2 pennies at 46 cents as of 9:15 am Pacific…

Venture Updated Chart

Key Venture resistance to watch is 680…that’s a Fib. level and the still-falling 20-day SMA…a confirmed push through 680 will add fuel to the fire…

The NOT Factor

Historically, as we’ve pointed out previously, Noront Resources (NOT, TSX-V) has been a useful leading indicator for the Venture, and NOT has surged this week after news Monday and a confirmed technical breakout…overall, it has been a very strong performer since bottoming in December around 25 cents…we can only conclude that this move by NOT has to be considered a positive sign for the Venture going into Q2 and the balance of the year…

Below is a long-term NOT–Venture comparative chart…

North Arrow Minerals Inc. (NAR, TSX-V) Update

North Arrow Minerals (NAR, TSX-V) is an excellent Canadian discovery opportunity for 2015 given the prospects for the company’s diamond projects, specifically Qilalugaq and Pikoo…highly encouraging initial bulk sample results from Qilalugaq sent NAR northward recently, while a 3,000 m drill program began about 6 weeks ago at Pikoo in Saskatchewan…

Technically, there are 4 key “takeaways” regarding John’s updated 8-month NAR daily chart…

1.  The current uptrend support line (“accumulation” zone is in the 70‘s)

2.  The breakout in January above the downtrend line

2.  The breakout above the horizontal channel and Fib. resistance at 55 cents

4.  The reversal in January to the upside in the 50-day moving average (SMA) which is now at 65 cents…

NAR is off 2 pennies at 80 cents as of 9:15 am Pacific…

Integra Gold Corp. (ICG, TSX-V) Update 

Integra Gold Corp. (ICG, TSX-V) continues to make significant progress with its high-grade Lamaque Gold Project in Val-d’Or…the pace of activity is impressive…since the beginning of the year, Integra has completed 19,811 m of diamond drilling in 46 holes with 8 drill rigs as part of its 50,000 m 2015 winter drill program on several key targets…of this drilling, approximately 11,668 m in 21 holes has been completed at the Triangle deposit where 5 rigs are active…initial results from Triangle were released Tuesday and included numerous high-grade intercepts including 14.79 g/t Au over 10 m in TM-15-02…

In John’s most recent ICG chart in December, he pointed out how the stock had managed to hold important support in the 15-17 cent range and was likely due for a new uptrend after bottoming at 14 cents in early November…

ICG has performed exceptionally well so far this year and a confirmed breakout has occurred above the Fib. 30-cent resistance level…this remains an important play to keep a close eye on through the balance of 2015…

Note:  John, Terry and Jon do not hold share positions in NAR.  Jon holds share positions in DBV and IMT.