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Gold has traded between $1,167 and $1,176 so far today after Friday’s biggest single-day sell-off in more than a year…as of 8:15 am Pacific, bullion is down $1 an ounce at $1,168…Silver is off 15 cents at $15.78…Copper has added a nickel to $2.67…Crude Oil is up $1 a barrel to $50.59 while the U.S. Dollar Index has retreated slightly to 97.63 following Friday’s sharp rise…

Physical demand from emerging markets will be key in supporting bullion through the rest of this month, which is normally one of the weakest periods of the year…the Shanghai Gold Exchange saw withdrawals of 412 metric tons through the end of February…that’s a robust number and means that Chinese demand is on track for a potentially very big 2015…additionally, imports by India are expected to surge this month following the government’s decision to maintain current tax rates…the expectation had been for taxes on imports to drop, causing locals to hold off on purchases during February…

Sprott Asset Management’s Rick Rule told Kitco in an interview at PDAC that he continues to see Gold as an excellent store of value.  “I’ve seen a room at Motel 6 where an ounce of Gold would by you 6 nights, and now an ounce of Gold buys you 16 nights. That’s what Gold is supposed to do,” he said. “There are people who have different expectations for Gold…for people like me, Gold hasn’t disappointed at all.”

Updated Gold Chart

This 2.5-year weekly Gold chart has proven to be highly reliable…what it shows is bullion trading within a downsloping flag since the spring of 2013…it met resistance at the top of the flag in late January, and potentially could once again test strong support at the bottom of the flag, currently around $1,100…there are other support levels above $1,100, however, including a band between $1,130 and $1,150 that held last November…

Over the past year, RSI(14) has moved within a 30% to 60% channel, and is currently at 39%…

Again, physical demand will be critical in keeping a floor under the price of Gold in the days ahead…

Gold vs. 10-Year Treasury Note

Gold has an inverse relationship with the U.S. 10-year Treasury Note, and this fact has been very evident over the last month or so as the yield on the 10-Year (TNX) has shot up from below 1.7% near the end of January to just over 2.2%…that surge in the yield has been accompanied by an equally significant drop in the price of Gold…

What’s highly encouraging for Gold is that the TNX is rapidly approaching stiff resistance at its declining 200-day moving average (SMA)…at the same time, RSI(2) is at a high extreme of 96% based on Friday’s close…

There’s every reason the believe the TNX will back off shortly, giving bullion some support…

Oil Update

Canadians of all political stripes should be outraged at the unprecedented attack on this country’s Oil industry by an American President…never has an American President launched such a scathing misinformation campaign against a Canadian industry, especially the Oil sector which is so vital to both American and Canadian energy security…Obama ratcheted up his reckless rhetoric again Friday in a town-hall session at a South Carolina college, declaring:  “The way that you get Oil out in Canada is an extraordinarily dirty way of extracting Oil (another lie from this President). “Obviously,“ he added, “there are always risks in piping a lot of Oil through Nebraska farmland and other parts of the country.”

Rising Canadian imports over the last decade have – thankfully – allowed Americans to rely less on Oil imports from OPEC, including ghastly regimes such as Venezuela…

And of course the network of Crude Oil pipelines in the U.S. is already extensive, and pipelines have proven to be safer and more efficient than rail at moving Oil (a CN Rail train carrying Crude Oil had an accident over the weekend in northern Ontario with some Oil spilling into a local river system)…there are approximately 55,000 miles of Crude Oil trunk lines (usually 8 – 24 inches in diameter) that connect U.S. regional markets, but Keystone XL is a symbol that’s being targeted by radical American environmentalists who just hate Oil and have a naive ally in the White House…

Obama’s relentless and increasing attacks on Canada’s Oil industry are not only shameful for an American President, but outright silly – secure access to Canadian Oil was a key aim of U.S. negotiators during NAFTA negotiations…this is not the way for a U.S. President to handle the largest bilateral trading relationship in the world, and the overall special relationship that exists between the 2 countries…fortunately, all Republicans and a good number of Democrats in Congress don’t share Obama’s views regarding Keystone or Canadian Oil…

U.S. Oil Rig Count Dips Below 1000

The U.S. oil-rig count fell by 64 to 922 in the latest week, data from Baker Hughes Inc. confirms…that marks the 13th straight week of declines and the first time since June 2011 that the number of Oil rigs had dipped below 1,000…however, it’s important to point out that there’s a major disconnect between the rig count and production activity which hasn’t stabilized just yet…

Goldman Sachs Calls For $40 Crude

Goldman Sachs is calling for a further 25% drop in Crude Oil prices to around $40 a barrel…after tumbling 60% since June into early this year, WTIC rallied by almost a third between late January through February on the back of Middle East supply disruptions, strong winter demand and high refinery margins…

“While we continue to forecast a strong demand recovery in 2015, we believe that sequentially weaker activity, the end of winter and the end of potential restocking demand, will lead to a sequential deceleration in demand-growth as we enter the spring,” the bank said.

Today’s Equity Markets

Asia

China’s Shanghai Composite jumped 60 points or nearly 2% overnight to close at 3302 as bank stocks led the way…data over the weekend showed a 48% surge in China’s exports for the month of February, sharply above analysts’ forecasts…however, the figures were likely distorted by a number of factors including comparisons with a weak tally a year ago as authorities cracked down on export fraud, as well as the timing of the Lunar New Year holiday…

Japan’s Nikkei average fell 180 points overnight…the Japanese economy grew slower than initially estimated in the October-December quarter, a sign that anemic household spending and business investment after a recession last year are weighing more heavily on the nation’s recovery than previously thought…GDP grew an annualized 1.5% in the October-December period, down from an initial reading of 2.2% in February, but still showed the country emerging out of recession…

Europe

European markets are mixed in late trading overseas…the ECB launched its 1 trillion euro ($1.1 trillion U.S.) bond-buying program today…

North America

The Dow is up 97 points through the first 75 minutes of trading today…there are no major U.S. economic reports today…highlighting this week’s data will be Thursday’s release of February retail sales figures…

Apple Inc. (AAPL, NASDAQ) will also be in focus today as it holds its first major event of the year…the company is set to formally unveil the price and final features of its watch at a meeting in San Francisco which kicks off at 10 a.m. Pacific…

In Toronto, the TSX is down 27 points as of 8:15 am Pacific while the Venture is off 2 points at 687…

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

As a Phase 2 drill program continues, one cannot help but believe there are more stellar results to come for Garibaldi Resources (GGI, TSX-V) at its high-grade Rodadero Silver-Gold Project in central Sonora State, Mexico…

Results from the first 15 holes at Silver Eagle demonstrate a nearly flat-lying tabular mineralized body that remains wide open for expansion, particularly to the north and the south…the structural “tie-in” between Silver Eagle and the Reales target to the south is key, as upcoming initial drilling at Reales could add significantly to the size of this emerging deposit…meanwhile, the bonanza grades intersected in SE-14–15 – a 150-meter step-out to the north of discovery hole SE-14–01 – are strong evidence that this very shallow high-grade system indeed has “legs” to it…feeder zones are also quite possibly present at depth…

“We’re In A Very, Very Large System”: GGI President/CEO Steve Regoci

As impressive as Silver Eagle is becoming, GGI President and CEO Steve Regoci is focused on the bigger picture of what’s evolving overall at the nearly 50 sq. km Rodadero package…

Silver Eagle and Reales are just 2 of a dozen targets identified to date…immediately to the east and southeast of the “SR High-Grade Zone”, and several km to the north, the mineralogy at Rodadero changes to a mix of high-grade Silver and high-grade Gold, trending east-west, as confirmed through surface sampling…

Gold-rich drill targets have already been defined at Tarichi and La Tortuga…

In an exclusive interview with BMR, Regoci had the following comments on developments at Rodadero:

“The secret to Rodadero is the scale of it,” Regoci stated.   “We’re in a discovery process.  A lot of people suggested that we made a discovery with the first hole at Silver Eagle.  Yes, but we’re in a very, very large system as our latest news states.  There are going to be a number of bodies I think that are all connected at depth.  The structures are there.  Everything’s lined up along these crosscutting structures.  There has been a huge amount of pressure and fluid driven through here.  I’m really excited about what this is going to evolve into.  It’s not just about Silver Eagle.  It’s not just about Tarichi.  It’s about Rodadero.  It looks to me like a mineral complex that could be a world class situation for our shareholders.”

GGI 2-Year Monthly Chart

This 2-year monthly GGI chart shows a bullish “Wave 5” pattern now in progress after “Wave 4” bottomed at 15 cents, approximately the same level as the top of “Wave 1” which is significant from a technical perspective…accumulation in GGI has been strong and steady since the end of 2013, and the ADX indicator confirms the primary bullish trend…

Walker River Resources (WRR, TSX-V) Update

Speaking of high-grade targets, Walker River Resources (WRR, TSX-V) will be taking aim at some very prospective ones shortly at its Lapon Canyon Gold Project in Nevada…with a financing now complete and approved by the Venture, and a market cap of only $2 million, we see some exciting near-term possibilities for this play…we’ll be detailing the favorable geology at Lapon Canyon this week and why WRR has such an excellent opportunity for immediate drilling success…

Technically, the scenario here is extremely bullish given the recent breakout on record volume above the downtrend line, the rising 50-day SMA, and the RSI(14) uptrend that started in late October last year…

Silver Short-Term Chart

Silver has been trading within a downsloping channel since near the end of January, and the test now it whether it finds support at the bottom of that channel where it’s currently resting…

The metal reacted in January at $18.50 (almost exactly at chart and Fib. resistance) and has been consolidating in recent weeks within this downsloping channel…a move outside of that channel – either up or down – would be technically very significant…

RSI(14) has dropped below a previous support level and is now at 35%, a drop in half from late January…

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 in early December)…

The December 1 dramatic move from an intra-day low of $14.15 to a close above $16 was technically highly significant…as expected, superb support was demonstrated at $15 and is also evident around $15.60…

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 move are also not clear…

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 slightly in recent months…

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

TSX Venture Exchange and Gold

After closing at resistance at the end of February, the Venture declined each day last week (18 points overall) and closed at 689, 3 points above its still-rising 50-day moving average (SMA).  The Venture has been tracking Oil more closely than Gold, but Friday’s biggest drop in bullion in more than a year didn’t help plus the broader markets were under pressure as well.

Very slowly, the Venture has been recovering from its December record low of 637.  Since breaking above a downtrend line in late January, as seen on today’s 6-month daily chart, the Venture has found strong support around 660.  Buy pressure has turned into sell pressure (CMF), but we also saw that briefly near the end of January before the Index reversed higher.

On the ground, more success stories are always helpful.  Garibaldi Resources (GGI, TSX-V) bucked the trend Friday, thanks to stellar results from its Rodadero high-grade Silver-Gold Project.  It’s a selective market but excellent opportunities exist among the small percentage of companies who are pushing hard and delivering superior results.

Venture 2-Month Daily Chart

This 2-month daily chart shows the Fib. and chart resistance at 707, plus a cluster of Fib. support between 654 and 680.  The Index has fallen below its 20-day SMA for the first time since January.  However, that technical weakness was an accumulation opportunity back then.  The same could be true now.

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 erased its 2015 gains after Friday’s $29 an ounce setback (its worst single day since December 2013) which extended bullion’s weekly loss to $45 an ounce or 3.7%.  Markets viewed the U.S. jobs report as stronger-than-expected, increasing the possibility of a Fed rate hike as early as June.  This sparked a surge in the Dollar Index and the sell-off in bullion.  An over-reaction?  Quite possibly.

A Fed rate hike in June is far from a certainty, and behind the headline jobs numbers there were some weaknesses in the report including virtually no wage inflation.  A day earlier, the Labor Department revealed that 4th quarter productivity – the amount of goods and services that each worker producers – didn’t grow at all from the year-earlier period.  The U.S. economy isn’t exactly on fire and economic growth has been stuck between 2% and 2.5% since the expansion began.

What will be interesting this coming week is if this drop in Gold encourages emerging market buying, in particular from China and India.  Demand in China was reported to be solid on Friday with prices on the Shanghai Gold Exchange at a $4 to $5 premium to the global benchmark.

Technically, Gold started showing some weakness at the beginning of February after touching a January high of $1,308, the top of a downsloping flag in place since the spring of 2013.  Strong support exists at different levels from the bottom of that flag, $1,110, all the way to the $1,180 area.  Monday’s action will confirm if there’s a breakdown below $1,180.

Silver fell 64 cents last week to close at $15.93.  Copper slid 7 cents to $2.62.  Crude Oil was essentially unchanged at $49.61 while the Dollar Index jumped by more than 2 points to finish at 97.72.

The “Big Picture” View Of Gold

Gold has traded between $1,171 and $1,200 so far today following release of this morning’s U.S. jobs report which may not have been as strong as the headline number suggested…still, markets are thinking today that a Fed rate hike in June is much more of a possibility…as of 9:00 am Pacific, bullion is down $26 an ounce at $1,172…we’ll see if physical buying will support technical weakness…Silver has declined 33 cents to $15.87…Copper is off 4 cents at $2.62…Crude Oil is down 87 cents at $49.89 while the U.S. Dollar Index, which broke out yet again this week, is up more than a full point to 97.64 (see updated chart below)…

It was reported this morning that PDAC welcomed 23,578 attendees from over 100 countries for this year’s event that ended Wednesday in Toronto…while attendance was impressive, it snapped a 4-year streak of over 25,000 attendees…

Nothing like the enticement of some Gold to lose a little weight…Dubai residents who participated in the city’s weight-loss challenge will get their golden reward shortly…according to media reports, the municipal government is expected to hold an award ceremony March 15, handing out 40 kilograms of Gold to more than 7,356 residents who participated in the 2014 “Your Child’s Weight In Gold” weight-loss campaign…

U.S. Hits Debt Limit March 16

On a more serious note, unless Congress takes action, the U.S. will hit its debt limit on March 16, but will begin taking “extraordinary measures” by next Friday to finance the government on a temporary basis, according to the U.S. Treasury…CNBC is reporting that in a letter this morning to House Speaker John Boehner and other House and Senate leaders, Treasury Secretary Jack Lew said that his office will be forced to suspend the issuance of State and Local Government Series securities next Friday unless the debt limit is increased…

Robust U.S. Jobs Report

Despite the brutal winter conditions, U.S. job creation boomed in February as non-farm payrolls grew by a seasonally adjusted 295,000 jobs, the Labor Department reported this morning…the unemployment rate, calculated from a separate survey of households, fell to 5.5% from January’s 5.7%…the drop shows employers are hiring steadily, though some of the decline can be attributed to more Americans dropping out of the labor force last month…economists surveyed by The Wall Street Journal had expected payrolls to increase by 240,000 in February and the jobless rate to fall to 5.6%…

The economy has now added more than 200,000 jobs for 12 straight months…that steady hiring, however, has largely failed to translate into faster wage growth – another metric the Fed is monitoring closely…average hourly earnings among private sector workers rose just 3 cents last month to $24.78…wages were up 2% from a year earlier, a slightly slower annual gain than January’s annual gain of 2.2%…the figure suggests underlying slack remains in the labor market, despite an unemployment rate that has fallen from 6.7% a year earlier…

It’s important to note that millions of Americans remain on the sidelines of the labor force…the labor force participation rate fell to 62.8% in February (near the lowest level since the late 1970’s) from 62.9% in January…

U.S. Dollar Index Updated Chart

As expected, after a brief consolidation, the Dollar Index has turned higher yet again with another major technical breakout above the mid-90’s…the power of this trend has been obvious for some time…this has to be of concern to the Fed as an out-of-control dollar has deflationary implications and also carries the potential of slowing the U.S. economic recovery…

Next measured Fib. resistance is above 100…the 50-day moving average (SMA), rising steeply since last summer, has provided rock-solid support on the move up from the low 80’s…

Today’s Equity Markets

Asia

China’s Shanghai Composite was off 7 points overnight to close the week at 3241 while Japan’s Nikkei jumped more than 200 points to finish just shy of 19000…

Europe

European markets were mixed today…a second reading of euro zone Q4 GDP was left unrevised…it was up 0.3% from the 3rd quarter, and year-on-year it gained 0.9%…the euro currency, which was at $1.40 last spring, is now trading below $1.10 for the first time in 12 years and seems likely to be headed toward parity with the dollar…

North America

The Dow is off 191 points as of 9:00 am Pacific…tech giant Apple Inc. (AAPL, Nasdaq) is joining the DJIA, replacing AT&T, according to Dow Jones this morning…the change is expected to take place after the market close on March 18…

In Toronto, the TSX has fallen 92 points through the first 2-and-a-half hours of trading…the Venture is off 6 points at 691, holding up relatively well considering the weakness in both Gold and Oil…

The loonie is off sharply today, trading just above 79 cents…Canada reported its second-highest trade deficit on record in January as prices for the nation’s Oil shipments plunged…the deficit widened to $2.45 billion, doubling from a revised trade gap of $1.22 billion in December, according to Statistics Canada…

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

Highly encouraging news out late yesterday following the close from Garibaldi Resources (GGI, TSX-V) regarding assay results and the ongoing Phase 2 drill program and regional exploration at its 100%-owned Rodadero Silver-Gold Project in central Sonora State, Mexico…

The latest numbers show a growing Silver Eagle high-grade mineralized system as a 150-meter step-out to the north from discovery hole SE-14-01 hit 6 m of 346 g/t Ag (11.2 oz/ton) including a spectacular 1,307 g/t Ag (42 oz/ton) over 1.5 m)…besides the fact that the high-grade system obviously carries to the north, these grades are at extremely shallow depths – the 6-m section was between 10 and 16 m…

Results from 15 drill holes unequivocally demonstrate that a deposit is in the making here, and it’s clearly open in all directions…models of other deposits in Mexico indicate the strong possibility that what Garibaldi is seeing at Silver Eagle, the adjoining Reales target, and other areas throughout the 50 sq. km Rodadero Project is merely the surface expression of a much larger system as Dr. Craig Gibson has emphasized (and Gibson has his name behind some big discoveries in Mexico)…in other words, the scale of Rodadero cannot be underestimated at this point…GGI could in fact be sitting on Mexico’s next major precious metals discovery in a previously overlooked area…continued drilling will obviously shine further light on this possibility…and deeper holes are coming, as the company stated yesterday…

Importantly, the Silver Eagle and Reales targets have been linked structurally which implies a potential strike length in excess of 2 km…that’s just for this western side of Rodadero…to the east, there are drill-ready Gold-rich and Silver targets, so this fascinating early discovery is going to become even more interesting throughout the coming weeks…

The real kicker with Garibaldi – 2 projects (Rodadero and the Grizzly) are advancing concurrently, each with huge upside potential that could change the face of this company…interestingly, despite a couple of feet of snow on the ground, GGI also reported yesterday that this year’s exploration has started at the Grizzly…the drills aren’t turning there yet, but they obviously must have stumbled on something of interest to get crews in there so early…

Much more on GGI next week…the pullback in Gold and Silver hasn’t helped GGI today, which has also had just 1 down day out of the last 9…as yesterday’s news is absorbed over the coming days, however, GGI has an opportunity gain some serious traction over the near-term…

Fairmont Resources Inc. (FMR, TSX-V) Update

We have more junior resource sector coverage coming from Quebec shortly and that includes fresh follow-up on a special situation we initially introduced to our readers a couple of months ago – Fairmont Resources (FMR, TSX)…

Fairmont is an industrial minerals company focused exclusively on Quebec, and we see an opportunity here that is very worthy of our readers’ due diligence given the suite of advanced and early-stage properties that FMR has assembled and is developing…share structure, as always, has to be an important consideration and Fairmont has just 18 million shares outstanding…what’s also critical in the current market environment is the opportunity to generate cash flow, and Fairmont has that ability after recently receiving its certificate of authorization from Quebec authorities which allows for up to 300,000 tonnes annually of titano-magnetite production…

Most quarries in Canada are privately owned and many are exceptionally profitable…Fairmont’s management team is highly experienced in this area and has the ability to effectively leverage the Buttercup, near Chicoutimi, and its other holdings to drive organic growth…

Technically, we also see a lot that we like in Fairmont…below is a 3-year weekly chart that shows how the impressive primary uptrend from late 2013 remains firmly intact despite the pullback from last year’s 30-cent high…

The 300-day moving average (SMA) continues to rise, confirming the “Big Picture” trend, a bullish low cross has occurred in the Slow Stochastics while the ADX indicator remains solidly bullish…

FMR closed at 17 cents yesterday…

NioCorp Developments Ltd. (NB, TSX-V) Update

NioCorp Developments (NB, TSX-V) is yet another special situation that has performed very well…technically, John’s call on the breakout last month above 80 cents was bang-on with NB up another 12 cents as of 9:00 am Pacific today at $1.12…on Monday, NB moves “up the ladder”, so to speak, as it graduates from the Venture to the TSX…

On February 23, NioCorp released an updated NI-43–101 resource estimate for its Elk Creek Niobium deposit…as a result of positive indications from the company’s continuing metallurgical testing and development program, Titanium (TiO2) and Scandium (Sc) were added to the mineral resource statement…both of these metals can be recovered with simple additions to the existing process flowsheet, according to NioCorp, and would provide additional revenue streams that would complement the planned production of Ferroniobium…the company is currently assessing these prospective revenue contributions, and plans to announce the results of a preliminary economic assessment for the project shortly…

The updated chart shows Fib. measured resistance at $1.13…

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

Gold has traded between $1,197 and $1,206 so far today…as of 2:35 am Pacific, the yellow metal is down $1 an ounce at $1,200...Silver is off 2 cents at $16.20…Copper is up a penny at $2.66…Crude Oil is up 67 cents at $52.20 while the U.S. Dollar Index has added one-fifth of a point at 96.16 as it threatens to overcome yet another resistance level…

This is an abbreviated edition of Morning Musings as we make our way back up to Quebec to continue some coverage there before returning to the West Coast…

Gold traders will be keeping an eye on the European Central Bank’s policy meeting today…the ECB, which starts its bond-buying program of more than 1 trillion euros this month, is expected to detail the plan after the meeting…

Juniors Still Out-Muscle Seniors In Making Discoveries

Excellent article from PDAC by Kip Kean regarding discoveries by juniors (www.MineWeb.com, “Juniors Do It Better Than Seniors”) after a presentation by Richard Schodde, the principal at MinEx Consulting…juniors beat seniors at finding deposits, both by bang for buck and in the number of discoveries made.  “In the last decade juniors did a 30% better job,” Schodde noted in his presentation covering the state of the Canadian exploration industry…

As Kean explained, “He (Schodde) broke down data covering 2005-2014. Seniors spent $12.5 billion on exploration in Canada, while juniors spent $14.6 billion.  While they put roughly the same amount of money into the ground, seniors only made 21 discoveries while juniors made 66 over the past decade.”

Oil Update

There’s a record amount of bets against Oil right now, according to a commodity research firm, increasing the chances that the short Crude trade may have run its course…as John’s WTIC chart pointed out last night, Crude finally appears to be gaining some traction above resistance at $50 a barrel…U.S. government data showing commercial Crude stockpiles hitting a record high last night, rising twice as much as expected, failed to push prices down…

An effort by Senate Republicans to override President Obama ’s veto of a bill approving the Keystone XL pipeline failed yesterday, the latest twist in a lengthy saga over the contentious project…the 62-37 vote fell short of the required 67 yes votes needed to override the President’s veto of a bill that would have authorized construction of the 1,179-mile pipeline…8 Democrats joined all Republicans in voting to override the President…

Updated Gold Chart

Another critical week for Gold, and it’ll be interesting to see how it reacts tomorrow when the U.S. Labor Department releases the monthly jobs report…

Bullion continues to consolidate around support at the $1,200 level…encouraging is the series of higher lows since early November as you can see on this 6-month daily chart – $1,130, $1,142, $1,167 and $1,190…historically, March is 1 of the weakest months of the year for Gold…the extent of physical buying from Asia will be crucial over the next few weeks…

TSX Gold Index Updated Chart

The TSX Gold Index has declined in each of the 1st 3 trading sessions this month but still has a rising 50-day SMA at 173 and a cluster of Fib. support between 158 and 175…sell pressure has intensified since late February, but the downside risk at this point is limited in our view given the tremendous support around 160…

Today’s Equity Markets

Asia

China’s Shanghai Composite is trading about 1% lower overnight following news that the government has set the country’s GDP target at 7% for 2015 – the lowest growth target in more than a decade…

Japan’s Nikkei is bucking the trend on a slightly weaker yen…

Europe

European markets are higher in mid-morning trading overseas…yesterday, euro zone composite PMI data showed that euro zone business activity continued to expand in February, although at a slower rate than expected…

North America

The Dow today will try to snap a 2-session losing skid that has sent the index down nearly 200 points…in Toronto, the TSX finished  51 points lower yesterday to close at 15083 while the Venture slipped back below 700…it closed down for the 3rd straight session at 698…

Updated Venture Chart

The Venture reacted at Fib. and chart resistance at 707 and will try to reboot for another shot at that important area…the rising 20-day SMA at 696 is the first immediate support below current levels…note the general trend of higher highs and higher lows since late January…

RSI(14) will have to hold around the 50% level…

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

North Arrow Minerals (NAR, TSX-V) is looking very solid as it consolidates near new support at 80 cents…this 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 last week while a 3,000 m drill program began recently at Pikoo in Saskatchewan)…

Technically, there were 3 key “takeaways” regarding this 8-month daily chart…

1.  The breakout above the downtrend line

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

3.  The reversal to the upside last month in the 50-day moving average (SMA)

Canada Carbon Inc. (CCB, TSX-V) Update

Recently, Canada Carbon (CCB, TSX-V) reported that it was halfway through its first 1,500 m drill program at its Miller Property where it’s focused on expanding graphite mineralization and defining a resource…the company is also talking up the potential of Miller to host high quality dimensional stone…wide intersections of white marble were intersected in drill holes last year at the property, and this is being investigated further in the current program…

Technically, CCB is fighting resistance around 29 cents but the overall bullish trend is getting stronger (ADX indicator), so the likelihood of another breakout here is increasing…

Note:  John, Terry and Jon do not hold share positions in NAR or CCB.

Gold is trading slightly higher this evening after falling a few dollars an ounce Wednesday…as of 7:30 pm Pacific, bullion is up $4 at $1,204…Silver has added 3 cents to $16.25…Copper is flat at $2.66…Crude Oil is up another 25 cents to $51.78 while the U.S. Dollar Index is up slightly at 96.00, threatening to break above yet another resistance level…

This is a special evening and shortened version of BMR Musings due to this being the final day of PDAC…our regular morning version resumes tomorrow…

China lowered its economic growth forecast to about 7% this year at the opening of the country’s biggest political event of the year, ushering in what leaders have dubbed a “new normal” of slower growth in the world’s second-largest economy…this will be the mainland’s lowest growth target in 11 years, according to a speech by premier Li Keqiang at the annual National People’s Congress, down from 7.5 last year – a sign of the government’s increased focus on quality over quantity as it seeks to overhaul the country’s growth model…

Equity Markets

Asia

China’s Shanghai Composite is off about 1% in early Thursday trading…

Europe

European markets were up moderately today…the ECB meets tomorrow – it may reveal details on the timing of the bond-buying program announced earlier in the year…

North America

The Dow fell for the second straight session today, losing 106 points to close at 18907…stocks held to earlier declines despite the Fed’s Beige Book showing optimism on an expanding economy in most regions, with some pressure from energy and winter weather…the report also said there are some wage hikes in separate industries…

The U.S. ADP national employment report for February was released today and showed a rise of 212,000, which was in line with expectations…traders and investors are looking ahead to Friday’s critical jobs report from the Labor Department…the key non-farm jobs number is expected to be up 240,000 in February…

In Toronto, the TSX fell 51 points while the Venture was off for the third straight session, declining 4 points to close at 698…

Crude Oil Updated Chart

A couple of very encouraging short-term signs regarding Crude Oil is that the very strong bearish trend is clearly weakening, and WTIC is beginning to overcome resistance at the still-declining 50-day moving average (SMA) which currently is almost exactly $50…that level has also been long-term support…if WTIC can start to gain traction above $50, this would be certainly be helpful for the Venture as the CDNX-WTIC correlation has been so high for much of the last year…

Saudi Arabia’s oil minister said today he expected Oil prices, which hit a near 6-year low in January, to stabilize, signalling cautious optimism about the market outlook…

Below is a WTIC 2-year weekly chart…it’s possible that a reversal to the upside in the 50-day could occur here in March, and that would supply from fresh fuel for a further advance…

WTIC-Venture Comparative

Interestingly, while the correlation between the Venture and WTIC has been very tight for the last year, the Venture since mid-December has been out-performing Crude and that’s a very positive sign…

The Venture led WTIC to the downside…is it now leading WTIC to the upside?…

PDAC Wraps Up In Toronto

Monday and Tuesday in particular were robust days at PDAC which wrapped up this afternoon at the Metro Toronto Convention Centre…in general, we noted increased optimism regarding the junior resource market for 2015, but it’s a market that remains highly selective…majors are clearly kicking a lot of tires at the moment – that was very evident here the last few days – which means we’re likely to see an acceleration of the M&A activity that has picked up over the last couple of months…

Chuck Jeannes, the CEO of Goldcorp Inc. (G, TSX), believes investor sentiment is starting to turn positive regarding Gold mining stocks.  “I find there’s some green shoots of optimism emerging,” Jeannes stated in an interview with the Financial Post at PDAC…Jeannes said he’s had dozens of meetings with large institutional investors over the last couple of weeks, and noted that more and more of them are coming around to the idea that the Gold price has found a bottom around $1,200 an ounce…

Dundee Capital Markets’ Martin Murenbeeld says sentiment is now “constructive” regarding Gold and investors should start looking at the industry again. “We have been telling our clients that this is a good year to start averaging in again into the resource sector.”

“Truckloads” Of Impressive Rusty Boulders – Is Visible Gold Mines (VGD, TSX-V) Onto Something?

At BMR, we followed Visible Gold Mines (VGD, TSX-V) rather extensively in 2011 but underestimated the resolve and strategic long-term thinking of President and CEO Martin Dallaire when the overall market turned increasingly sour that year…

Dallaire’s Visible Gold Mines (VGD, TSX) has caught the imagination of investors, not to mention the attention of some heavy hitters in the industry, and that was very evident during these 4 days at PDAC as the VGD booth was a hotbed of activity…

VGD is enjoying success with its Project 167 that comprises a whopping 1156 mining claims covering 611 sq. km in northern Quebec…it’s located approximately 320 km north of Chibougamau in the James Bay region in the heart of Plan Nord territory…

Below is a picture of Dallaire at the VGD booth displaying some of the high-grade boulders that have put the company on the trail of a potential important grassroots Gold discovery…10 holes have been completed in the current initial drill program (results pending)…

VGD 16-Month Weekly Chart

This is a phenomenal chart as VGD has soared from just above a penny in late 2014 to a high of 26.5 cents in early February…focus on the upsloping channel and the cluster of Fib. support in the mid-to-upper teens…

Last October, McEwen Mining Inc. (MUX, TSX), a company founded by its chairman Rob McEwen, who is also the founder and former Chairman and CEO of Goldcorp, subscribed for 8,333,333 units ($500,000) in a VGD private placement…in addition, accounts managed by Goodman & Company, Investment Counsel Inc., a wholly owned subsidiary of Dundee Corp., of which Ned Goodman acts as Chairman, invested $1 million in combined hard dollars ($375,000 @ 6 cents) and flow-through ($625,000 @ 8 cents)…

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

Our favorite non-resource play is also extremely volatile, and Cannabix Technologies (BLO, CSE) demonstrated that again today as it traded between a high of 45 cents and a low of 31 cents on the CSE…it closed down 4 pennies at 39.5 cents…

Importantly, RSI(2) is now at an extreme low of just 1% – the mirror image of the situation a few weeks ago when the stock soared to 77 cents intra-day February 11…

Below is a BLO chart in U.S. dollars, based on the OTC listing as Stockcharts.com does not yet provide charts for CSE-listed companies…note the strong “accumulation” zone beginning at 25 cents U.S. (30 cents CDN)…

We see an exciting year for BLO as it continues to advance its marijuana breathalyzer…at the beginning of this week the company announced it has produced an alpha version of the breathalyzer prototype and is now testing the device internally with medical marijuana users…

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

Note:  Due to the early start and early finish Wednesday (the final day) at PDAC, we will be posting Wednesday’s Musings later in the day (post-market)…

Gold has traded between $1,201 and $1,215 so far today…as of 8:25 am Pacific, bullion is down $3 an ounce at $1,203…Silver has fallen 20 cents to $16.15…Copper is off a nickel at $2.63…Crude Oil is up 46 cents to $50.03 while the U.S. Dollar Index has retreated one-quarter of a point to 95.26…

Commodity analysts from HSBC are warning investors and traders to not ignore the current global easing trend as highlighted by China’s interest rate cut over the weekend. “Greater international liquidity – even if the Fed is tightening – is Gold-friendly,” they say…

Interest rate differentials between the United States and Europe are also making Gold a valuable alternative to European bonds…

Near-Term Indian Gold Demand Should Pick Up

The Indian government has decided to maintain an import duty on the country’s Gold imports…imports had slowed in the weeks leading up to the budget announcement, as some wholesalers delayed purchases in anticipation of a tax cut…imports are expected to rise in the near-term now that the uncertainty is removed…January imports totaled around 50 tons, according to Commtrendz, a commodity consulting firm based in Mumbai, compared with a monthly average of 90 tons in the second half of 2014…data for February are yet to be released, but traders and analysts said imports remained subdued last month…still, India’s demand for Gold tends to slow during the winter months and usually picks up from April through June as the country’s wedding season swings into high gear…

Gold futures in India yesterday traded about $4 above the price for Gold in the physical market for immediate delivery, indicating buyers are returning…

Eldorado Has Permit Revoked

Greece’s unpredictable new energy minister has revoked Eldorado Gold’s (ELD, TSX) permit to build a processing plant at its Skouries Gold mine in northern Greece…keep in mind, a bunch of communists and academics are now running this country and over a very short period of time they have already inflicted immense damage to Greece’s improving reputation as a place where one might want to consider investing money or doing business…as simple as that…the current Greek government can’t be trusted and that’s likely a sentiment also shared by other members of the euro zone, and financiers around the globe…Greece probably has no intention of paying its debts, meaning its expulsion from the euro zone is likely inevitable…The Wall Street Journal reported this morning that even with the recent “extension” Greece was granted, the country will have trouble paying its bills through the end of this month…the clock is ticking…

Obama Goes From Keystone Circus With Canada To Deeper Mess With Israel

Take this, Mr. President…the ranking Democrat on the Senate Foreign Relations Committee, Robert Menendez of New Jersey, broke from the White House at a conference last night (American Israel Public Affairs Committee) and demanded much tougher terms for any nuclear agreement with Iran…he also strongly backed Israeli Prime Minister Netanyahu’s appearance today before Congress. “I will be proud,” he stated, “when I escort the Prime Minister to the House chamber.”

The Israeli Prime Minister is now addressing a joint session of Congress, warning wisely of the growing threat of Iran, minus of course the President and Vice-President who apparently have more important things to do…

Meanwhile, Fox News reported this morning that former Obama campaign workers have launched campaign teams throughout Israel that experts say are indirectly funded with U.S. State Department grants – and which are solely focused on ousting the Prime Minister, who has a well-chronicled adversarial relationship with Obama…while there is no concrete evidence Obama is personally pulling strings to undermine Netanyahu in the March 17 vote, polls show a strong majority of Israelis believe he is.  “You cannot prove a direct link,” said Danny Ayalon, Israel’s ambassador to the U.S. from 2002-2006. “But there is a dotted line. So a lot of Israelis…connect the dots.”

On Keystone, the pipeline got an emphatic endorsement yesterday from a powerful backer of President Obama who questioned the President’s handling of the file. “I would have passed Keystone,” Warren Buffett said in an interview with CNBC.  “I think that we have an enormous interest in working with Canada, as they have in working with us. That Oil is going to get sold. If we make it more difficult for them, who knows how they’ll feel about making things more difficult for us someday.”

PDAC:  Finding Gems Amid The Wreckage

John Kaiser hasn’t given up hope on the junior resource sector but again at PDAC he’s sounding the alarm over the number of companies in financial distress.  “717 companies have negative working capital, 291 have between $0 and $500,000, 554 still have between $500,000 and $20 million – those are the ones that are most likely to survive.”  

Kaiser is making an obvious argument…however, there are a considerable number of gems among those 1,000 companies with working capital from the negative range to $500,000 – companies holding valuable assets (great land packages) who will find a way to survive and thrive…some will also be bought out at higher share prices, so don’t write them off…investors should focus some energies on finding those gems because a percentage of them will ultimately generate massive returns…one can also not underestimate the resiliency of “lifestyle companies” – many of them have managed to hold on longer than expected during the 75% plunge in the Venture…those are the companies that suck valuable money out of the sector and need to disappear like this frigid eastern winter…unfortunately, too many of them are finding creative ways to hang on…

Plenty of interest shown at PDAC in Copper-Gold porphyry projects in British Columbia, in particular, for a variety of reasons – it’s a safe jurisdiction (relative to most other places around the globe), the geology is so highly prospective, and there is plenty of water access which is a growing issue among some larger companies right now…

Gold 2.5-Year Weekly Chart 

Gold is trading almost exactly in the middle of a downsloping flag that formed in 2013…this is a key chart to focus on in the weeks ahead…Gold has been finding strong chart support around $1,200 and that critical area needs to continue to hold…

Gold will eventually do 1 of 2 things – it will either break out above the downsloping flag, and power higher, or it will collapse below the flag…in a lot of ways, the early November low in Gold showed the earmarks of an important bottom…in addition, the bullish technical posture of many Gold stocks is a clue that a breakout by Gold during the 2nd or 3rd quarter is a strong possibility…

Updated Copper Chart

The breakdown below $3 in Copper last year implied a likely test of lower levels, which is why it’s so critical to keep an eye on key technical developments in any metal or stock…

Copper has found support at $2.50 and is now trading within a descending triangle that features a slowly tightening “squeeze” between resistance and a long-term uptrend support line…this is sure to get resolved sometime this year…in the meantime, the metal is range-bound and the parameters are very clearly defined…

RSI(14) has bounced up from previous support and sell pressure is in decline for now…this is why we’ve seen Copper strengthen recently, and a move back up toward resistance at $3 is certainly a possible scenario during this first half of 2015…

Today’s Equity Markets

Asia

China’s Shanghai Composite fell more than 2% overnight, shedding 72 points, as a surprise interest rate cut by the central bank over the weekend failed to sustain gains in the market…news that 24 Chinese companies won regulatory approval for listings didn’t help matters…

Europe

European stocks reversed early gains today as investors favored a cautious approach ahead of a key European Central Bank monetary policy meeting later in the week…retail sales in Germany were up 2.9% in January, year-on-year…however, there was another worrisome report on the deflation front coming out of the EU, as its producer price index was down 0.9% in January from December, and down 3.4% year-on-year…

North America

The Dow is off 95 points as of 8:25 am Pacific on disappointing auto sales…arguably the most important economic report of the month is coming up this Friday – the U.S. jobs report…

What’s Next For The Nasdaq?

Yesterday, the Nasdaq hit 5000 for the first time in 15 years but there is no evidence – based on both technical and fundamental factors – that this market is in a “bubble” like it was in early 2000…that doesn’t rule out the possibility of a near-term correction to help cleanse temporarily overbought conditions, but the Nasdaq is a much different beast than it was a decade-and-a-half ago…

At the moment the Nasdaq is trying to bust through the top of an upsloping channel…strong resistance exists at 5100…eventually, we do see the Index reaching much higher levels – note the 7537 Fib. measured resistance…that’s 50% to the upside from here, but the timeline for that is uncertain at this point…

In Toronto, the TSX is down 127 points as of 8:25 am Pacific while the Venture is flat at 704…

Venture 3-Year Weekly Chart

The Venture’s extreme oversold conditions from late last year have steadily abated since mid-December, and RSI(14) on this 3-year weekly chart has pushed above 30%…

Key near-term resistance is 707 where is where the Index closed last Friday…a confirmed breakout above that level should quickly carry the Venture to the next important resistance at 745…that’s a 5% move that would translate into significant gains in a select number of plays…

Noront Resources Ltd. (NOT, TSX-V) Updated Chart

Interestingly, Noront Resources (NOT, TSX-V) over the years has been a reliable leading indicator of the direction of the Venture…at the moment, NOT continues to look solid and is threatening to overcome Fib. resistance in the mid-40’s…buy pressure remains dominant and RSI(14) has strong up momentum as you can see in the chart below…

This is a much more encouraging signal that the one NOT gave last summer when its EMA(20) went into decline prior to the collapse of the Index…importantly, this gives more weight to the argument that the Venture will soon push above resistance at 707…

On Sunday, just in time for PDAC, Ottawa and Queen’s Park announced that the governments are jointly planning to spend $785,000 to study an east-west road Ring of Fire…Noront has lobbied for this road for the last few years…

NOT is up half a a penny at 46.5 cents as of 8:25 am Pacific…

 Note:  John, Terry and Jon do not hold share positions in NOT.