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Gold has backed off from an overnight high of $1,224…as of 8:30 am Pacific, bullion is down $5 an ounce at $1,209…Silver is off a dime at $16.47…Copper is a penny lower at $2.68…Crude Oil has reversed and added 90 cents to $50.70 while the U.S. Dollar Index is essentially unchanged at 95.46…

Near-term, Gold is facing resistance at its 20-day SMA at $1,225…critical support on the long-term monthly chart held in February as we show in 1 of our charts this morning…

Gold-backed exchange-traded products continued to attract investors in February, albeit at a slower pace compared to January when global inflows were the strongest since November 2012…Data compiled by SPDR Gold Shares, the world’s largest ETP, shows that Gold held in trust grew by 4.5 tonnes last month, down compared to inflows of 49.35 tonnes recorded in January…

China Further Loosens Monetary Policy

A surprise interest-rate cut by China’s central bank underscores concerns about growth in the world’s second-largest economy…the People’s Bank of China said it would cut a quarter of a percentage point off benchmark lending and deposit rates, less than 4 months after the last reduction…the central bank pointed to looming deflation as a trigger for the move…

China’s move is believed to be the 18th rate reduction by global central banks already this year…the world remains awash in accommodative monetary policy, and whether that ultimately translates into a pick-up in economic growth and inflation later this year remains to be seen…

Israeli Prime Minister Arrives In U.S.

This will be interesting to watch – a showdown this week between the White House and Israeli Prime Minister Benjamin Netanyahu, another critical bilateral relationship President Obama has fumbled…if a President can’t act wisely with America’s staunchest friends, such as Israel and Canada (Obama has limited interest in the U.S.-Canadian relationship), how he can be trusted to deal effectively with American’s adversaries?…

Netanyahu arrived in the U.S. yesterday, 2 days before a scheduled speech before Congress which has rankled the Obama administration…the visit has far-reaching implications for developments in the Middle East, specifically as they relate to Iran which the President oddly and dangerously has been trying to cozy up to…the Republican-controlled Congress can be expected to greet Netanyahu with great enthusiasm and this will no doubt put the President on the defensive and elevate the role of Congress in the critical debate over Iran…

Events In Russia

The strongest and most unambiguous statement from a foreign leader on the murder of Russian opposition leader Boris Nemtsov came not from the American President, but Canadian Prime Minister Harper:

“Mr. Nemtsov will be remembered as a fearless advocate of democracy, human rights and the rule of law in Russia. A leader unafraid to voice essential truths, even in the face of violent intimidation, he was also a prominent opponent of Russia’s aggression in Ukraine and the illegal occupation of Crimea.

“On behalf of Canadians, I extend my profound condolences to Mr. Nemtsov’s family, friends and associates. Those responsible for this brazen crime must be held to account in a swift, transparent and independent investigation.

“In this shameful act of violence, the Russian people have lost an important voice in their country’s political debate.

“Tonight, Canada honours Mr. Nemtsov’s courage and his dedication to building a free, just and open society in Russia. His example will undoubtedly continue to inspire others in his homeland and around the world.”

PDAC 2015

Mining legend Robert Friedland opened the 4-day PDAC conference by telling a commodities outlook seminar that “the ladies and gentlemen that go out and look for mineral deposits are the good guys.”

Friedland’s comments were an obvious swipe at the environmentalist extremists running amok around the globe, including some of them who “greeted” PDAC attendees near the front of the Metro Toronto Convention Centre yesterday as captured in this BMR photo…

Gold 20-Year Monthly Chart

After a blistering January, Gold fell $70 an ounce in February but still held critical support on the long-term monthly chart between $1,180 and $1,200…an uptrend support line going back to 2001 intersects through this area which is also highlighted by the Fib. 61.8% retracement level ($1,185)…

Interestingly, both RSI(14) and Slow Stochastics have broken out above their downtrend lines…Gold’s generally bearish technical posture over the last few years has clearly weakened, but the integrity of this monthly chart must remain intact…in other words, a breakdown below the long-term support line would embolden the bears…

Today’s Equity Markets

Asia

China’s Shanghai Composite got a boost overnight from the PBOC’s rate cut and advanced 26 points to finish at 3336…meanwhile, HSBC’s final reading of China’s manufacturing sector in February came in at 50.7, much higher than the flash reading of 50.1 and the official February reading announced over the weekend, which showed a second straight month of contraction due to unsteady exports and slowing investment…

Japan’s Nikkei average edged higher…sentiment was helped by news that the country’s trillion-dollar public pension fund bought a more-than-expected $15 billion worth of domestic shares in the Q4…

Europe

European markets finished slightly lower today…

North America

The Dow has surged more than 100 points through the first 2 hours of trading while the Nasdaq has touched the 5000 level for the first time in 15 years…the early gains extend last month’s rally into March…in February, major benchmarks posted their biggest monthly percentage gains in more than 2 years…the Dow advanced 5.6%, its best month since January 2013 while the S&P gained 5.5%, marking its strongest performance since October 2011…

The pace of U.S. manufacturing growth fell in February to its slowest in 13 months, according to an industry report released this morning…the Institute for Supply Management (ISM) said its index of national factory activity fell to 52.9 from 53.5 the month before…the reading was shy of expectations of 53.1, according to a Reuters’ poll of economists, and was the lowest reading since January 2014…

In Toronto, the TSX has gained 39 points as of 8:30 am Pacific…the Venture, meanwhile, is off 2 points at 705 after closing at important resistance (707) Friday…

Venture 2-Month Daily Chart Update

The Venture has technical momentum at the moment…what’s encouraging is that as the Index flirts with resistance, indicators are far from overbought – this enhances the probability of a breakout above 707…back-to-back daily closes above 707 would confirm the breakout with the next major resistance at 750 as shown on this 2-month daily chart…

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

Cannabix Technologies (BLO, CSE), our favorite non-resource play since it made its debut on the CSE last summer, has kicked off March on a powerful note with the announcement this morning that it has completed an alpha version of the Cannabix marijuana breathalyzer prototype…fabrication of prototype parts, creation of firmware, circuit boards, electronics and detection modules are all completed in the Alpha version which has been developed in concert with KLN Klein Product Development Inc. of Vancouver…

Cannabix will now begin testing the device internally with medical marijuana users…in addition, the company is continuing to work with consultants and scientists to maximize THC sensitivity, detection and reliability of the device for use as a roadside and workplace drug impairment tool…

The excitement around this product is only going to intensify in the weeks and months ahead…technically, BLO appears poised to break out of a pennant formation as shown in John’s chart posted Friday…

BLO is up 6 cents at 57 cents on the CSE as of 8:30 am Pacific…

Garibaldi Resources Corp. (GGI, TSX-V) Updated Chart

To use a baseball analogy, Garibaldi Resources (GGI, TSX-V) has pulled off an exciting triple play – Rodadero, La Patilla and the Grizzly…in this business, a company is lucky if it has 1 project that’s successful…GGI is in the enviable position of advancing 3 projects in a cost-effective manner – and at least 2 of them (Rodadero and the Grizzly) have the kind of scale and geological potential/power that could ultimately lead to a buy-out of this company by a major…

After news regarding La Patilla last Wednesday, GGI is expected to provide a major exploration update this week on Rodadero where the company has outlined an intriguing system of high-grade targets over a 10-km long NW/SE trending corridor…if just some of these targets start to connect, watch out as the Silver Eagle discovery at Rodadero could be but a corner of a very big picture at this project…

Technically, a confirmed breakout has occurred in GGI above the 50-day SMA and a downtrend line in place since early last fall…buy pressure/volume are increasing rapidly and the ADX indicator shows a bullish crossover…

GGI is up a penny at 19.5 cents as of 8:30 am Pacific…

Cadillac Trend Update

We’ll have much more on our Cadillac Trend visit in the week ahead as we put our information together, and that includes more excerpts from our discussion with Gold Bullion Development Corp. (GBB, TSX-V) President and CEO Frank Basa…

We see tremendous opportunities in this part of northwest Quebec in 2015…

GBB is nearing the production stage at Granada where the LONG Bars Zone has as much growth potential as ever…meanwhile, up the road a little to the north is Abcourt Mines (ABI, TSX-V) Elder mine where production continues…some fresh drilling will also commence there soon as part of a 1,500-m drill program that Abcourt has initiated on 3 of its properties in the region…

This 10-year Abcourt chart speaks volumes…ABI’s turnaround will come when it’s able to break out above the downtrend line in place since 2006 on this monthly chart…a low bullish cross in the SS offers encouragement…

Silver Short-Term Chart

Silver has been trading within a downsloping channel since near the end of January…support at the bottom of the channel is just below $16…resistance at the top of the channel is $17…

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 bounced off previous support but needs to find its way back above the 50% level to restore some bullishness in the market…

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 Short-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 BLO and GGI.

TSX Venture Exchange and Gold

9:00 am Eastern 

Good day from the PDAC International Convention, Trade Show & Investors Exchange, the world’s leading Convention for people, companies and organizations in, or connected with, mineral exploration.  BMR continues its eastern trip after a visit to the historic mining community of Rouyn-Noranda, Quebec, and we’ll have more on developments in northwest Quebec, including the Granada Gold Property, in tomorrow’s morning Musings posted directly from PDAC.  We’re here through Wednesday.

Venture Finishes February On Strong Note

The Venture concluded February on a very positive note by closing at its highest level since January 2.  Over the last 2 sessions the Index broke out of its recent trading range between 678 and 700, and now begins March exactly at chart and Fib. resistance – 707.  This resistance must be overcome in order for the Venture to take a run higher with the next major critical level being 750.

The Venture’s 6-month daily chart shows several important developments:

1.  A confirmed breakout above the 50-day SMA (this moving average is currently at 683) which significantly has now reversed to the upside – historically, this is typically accompanied by bullish behavior;

2.  A confirmed breakout (during the second half of January) above the downtrend line in place since September;

3.  RSI(14) has formed a bullish “W” and at 64% still has plenty of room to move higher;

4.  Increasing buy pressure (CMF indicator) and a weak bullish trend that’s gaining strength (ADX indicator).

Bollinger Band Width remains low.  If we’re going to see increased volatility, it could certainly be to the upside.

The Venture gained 4.4% in February despite a drop in the price of Gold.  Crude Oil, however, posted its first monthly gain since June.  The Index continues to correlate more closely with Oil than bullion.

Historically, we all know the Venture has a history of some stumbles in March and the month is also not usually favorable for Gold.  Could this time be different?  There’s no reason why not, especially if Oil can hold up and gain further traction (let’s hope the “PDAC Curse” doesn’t return in 2015).

We Need A Discovery, Some Excitement

If there was ever a time the Venture could use a major new discovery, it’s now.  But that’s made more difficult by the fact that there has been a continuing reduction in the number of companies actually drilling and carrying out significant exploration.  Some possibilities do exist, however, in various jurisdictions, and we’ll be following those situations closely.

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 6-Month Daily Chart

It was an important week for Gold to hold support, especially being month-end, and it managed to do that as well as snap a 4-week losing skid.  Chinese buyers returned to the market after the week-long Lunar New Year holiday break and renewed physical buying kept bullion from falling below the critical support band between $1,180 and $1,200.  It dropped as low as $1,190 but rebounded to close the week at $1,214, a $10 jump from the previous Friday.

For the month, Gold was off $70 an ounce or 5.5% after a $100 advance in January.

This 6-month chart shows RSI(14) now on the upswing and the next Fib. resistance at $1,217.  Look at the pattern of higher levels since early November – $1,130, $1,142, $1,167 and $1,190.  This is clearly encouraging, and Gold stocks held up well during February’s price drop and are looking quite bullish entering March.

The “Big Picture” View Of Gold