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Happy Memorial Day to our American friends, as the United States honors the men and women who gave their lives in service to enable this great nation to live freely and fully…this special observance began in the years following the Civil War and was originally known as Decoration Day…it gradually came to be known as Memorial Day…

This important American holiday also marks the unofficial start of summer…about 37.2 million Americans will travel 50 miles or more from home over this long weekend, the most in 10 years according to AAA…

U.S. stock markets of course are closed after hitting new all-time highs last week…Canadian markets are open but volume and news flow are much lighter than normal…

Gold has traded between $1,202 and $1,209 so far today…as of 9:00 am Pacific, bullion is up $2 an ounce at $1,208…Silver has added a nickel to $17.13…Copper is unchanged at $2.79…Crude Oil has gained 34 cents to $60.06 while the U.S. Dollar Index, after rallying 3 points last week, is up slightly at 96.40…the Dollar Index will face very strong resistance at 97 which is the declining 50-day moving average (SMA) in addition to both the uptrend support line and the neckline from where it recently broke down after a double top formation in March-April…

Bernanke Weighs In On Yuan

China needs to create deep and liquid markets to avoid currency risks as it makes the yuan a convertible currency, former Federal Reserve Chairman Ben Bernanke said at a speech in Shanghai today, according to a report from Bloomberg.  “China needs to avoid currency mismatch as it opens its capital account,” Bernanke stated.  “For a currency to be internationally traded, what you need most is liquid markets. A deep market means people can get their money out.”

China is in the final stages of opening up its capital account, giving global investors greater access to its stock and bond markets while making it easier for citizens to put their money in offshore assets…a freer flow of funds is needed for policy makers to achieve their goal of getting the yuan recognized as a reserve currency when the International Monetary Fund conducts a review in October…

Yellen On Rate Hike – Two Big “Ifs”

Federal Reserve Chair Janet Yellen said Friday she expects to begin raising interest rates later this year – if the job market improves, and if inflation climbs closer toward its target rate which the Fed believes it will…

In her speech Friday to the Greater Providence (Rhode Island) Chamber of Commerce, Yellen described the U.S. economy as “well positioned for continued growth” but at the same time she highlighted a number of headwinds that threaten progress…job wages have been disappointing, and too many people who want full-time jobs are instead working part-time…she also noted a lackluster housing recovery and modest business investment…the Fed has kept its key benchmark rate at a record low near zero since December 2008…

“I think it will be appropriate at some point this year to take the initial step to raise the federal-funds rate target and begin the process of normalizing monetary policy,” Yellen said…however, when the central bank finally begins to raise rates, she emphasized it would proceed cautiously, “which I expect would mean that it will be several years before the federal funds rate would be back to its normal, longer-run level.”

The New Alberta

In the entire history of Canadian politics, never – not even during the disastrous Bob Rae days in Ontario – has there ever been a less qualified cabinet in charge of a province as what we see in Alberta after yesterday’s official swearing-in ceremony for the NDP cabinet…

“We have an efficient and lean cabinet to get down to work and to deliver results. This is a cabinet built to work and to get the job done,” Notley blurted out, wearing orange shoes while organizers handed out free popsicles in a carnival-style gathering of thousands of NDP idealists on the grounds of the Alberta legislature in Edmonton…

“My friends, it is spring time in Alberta, and a fresh wind is blowing,” Notley added…

Unfortunately for Alberta, that wind Notley and others feel is actually the beginning of a major storm that’s going to blow away a large amount of wealth the private sector has created in this resource-rich province over the last couple of decades in particular…a massive exodus of investment and human capital is almost certain to occur over the next 4 years (benefiting B.C. and Saskatchewan in particular) given the NDP agenda and the make-up of this cabinet which certainly isn’t representative of what has been Canada’s hotbed of entrepreneurship – Notley’s crew consists entirely of teachers, social workers, union activists, and a few left-wing labour lawyers…the business leaders of Alberta will have no confidence in this ragtag group, and they will act accordingly…it’s “lean” only because the premier had no talent pool to draw from out of more than 50 candidates who were elected, one of whom has already embarrassed the party for posting some outlandish cartoon on social media…

If Alberta were a company, its annual revenue of $44 billion would be $10 billion more than than that of the biggest Canadian corporation, the Royal Bank of Canada…what’s even more scary, this is a cabinet overseeing 173 billion barrels of Oil that this province has been blessed with…

God help Alberta…Kevin O’Leary recent said a “horror movie” is unfolding in this province…that was probably an understatement…

The NDP will raise Oil and gas royalties, increase the corporate tax rate by 20% (from 10% to 12%), stick it to upper-income individuals, raise the minimum wage to $15 an hour from $10.20 within 3 years, withdraw support for essential Oil pipeline projects, eliminate a health levy introduced by the previous government as a deficit control measure, massively expand government funded childcare and other welfare schemes, and…who knows what else…rest assured, at some point they’ll announce they’re “forced” to introduce a provincial sales tax…keep in mind, too, that the Premier’s Chief of Staff is none other than Brian Topp, a long-time NDP hack from eastern Canada with strong union ties who has never been a friend of the Oil industry…that’s a story for another day…

What this means for investors is that, suddenly, Alberta now carries significant “jurisdictional risk“…things will not be “A-OK” in Alberta, as Notley promises, and investors with exposure to that province would be wise to be very cautious…tens of thousands of jobs will be lost and housing prices will decline sharply as capital and people move to friendlier territory…

Copper – Reasons For Optimism 

This is an update to a fascinating chart going back 20 years that we first posted a couple of weeks ago…

Copper recently enjoyed its best weekly performance since 2011…during that process, it pushed above an RSI(14) downtrend line that has been in place since shortly after the 2011 all-time high of $4.65 a pound…the metal has now retraced back to the downtrend line – what we need to watch is whether this area now holds as new support…

The long-term uptrend support line from the 2001 low held through the major sell-off that took Copper down to $2.42…notice also the 4 circled RSI(14) lows…they each corresponded with important market bottoms and were followed by powerful upside moves…

Currently, the metal is trading within a bullish downsloping flag on this monthly chart, sell pressure continues to abate significantly, and the -DI indicator has likely peaked…

This is not to say Copper is about to immediately “go through the roof”…what this chart does give us, though, is compelling evidence that a major turnaround is in its early stages, that $2.42 was likely the bottom of a correction that spanned nearly 4 years…a breakout above the downsloping flag would certainly confirm this interpretation…

Today’s Equity Markets

Asia

After last week’s 8.1% advance, the strongest since the week ending December 5, 2014, China’s Shanghai Composite surged another 3.3% overnight to close at 4814…

This is clearly an over-heated market, but John predicted the surge and it’s expected to encounter major resistance at the 5000 level based on this 20-year monthly chart…

Europe

London and German stock markets were closed today, so trading in Europe was quieter than usual…stocks in Greece tumbled (the Athens Index was down more than 3%) as fears of a potential Greek exit from the euro zone remained in the backdrop after the country’s interior minister, Nikos Voutsis, threatened to default on loan repayments due to the International Monetary Fund…

North America

A quiet day on Canadian markets with the U.S. Memorial Day holiday…in Toronto, the TSX is off 9 points while the Venture has given up 2 points to 701 as of 9:00 am Pacific…non-resource plays continue to dominate Venture trading…

Mezzi Holdings (MZI, TSX-V), which has been flashing bullish technical signals recently as John’s latest chart showed, is up 2.5 cents to 24.5 cents as of 9:00 am Pacific…newly-listed BitGold Inc. (XAU, TSX-V) resumes trading at 9:30 am Pacific after announcing that it has entered into an acquisition agreement to purchase the operating and intellectual property assets of GoldMoney Network Ltd., among the world’s largest private managers of precious metal assets…as John Kaiser wrote, “This thing has a technology spin to it, nobody understands what it’s potentially worth, so it can be worth whatever you want it to be.”

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

Keep an eye on Cannabix Technologies (BLO, CSE) this week – “decision time” is drawing near, from a technical standpoint, as the stock is near the apex of a symmetrical triangle (within a broader downsloping flag)…BLO showed some life on Friday, rebounding from a low of 32.5 cents to close at 35 cents…

Silver Short-Term Chart

Silver is digesting recent gains after almost touching Fib. resistance just below $18 as expected…the top of the downtrend line (around $16.50) that it recently broke out above should now provide new support…

Silver Long-Term Chart

An explosive push higher – is this actually a scenario that could unfold in Silver over the next couple of years?…quite possibly, given the look of this 34-year monthly chart, though at the moment it’s hard to understand all the factors that could come into play to generate the kind of “Wave 5” move that appears to be in the works here…

It seems quite possible that the bottom of “Wave 4” came late last year when Silver briefly plunged to just above $14 an ounce…RSI(14) has managed to hold support which goes back to 2001…

Sell pressure continues to remain strong, however, as shown by the CMF – amazingly, at levels not seen in nearly 25 years since the low of $3.51…this intense sell pressure at the moment, which could continue for a while yet, should therefore be viewed in a larger context as a bullish contrarian indicator…

Note:  Jon holds a share position in BLO.

TSX Venture Exchange and Gold

The Venture rose for the second straight week on a modest increase in volume, closing Friday at 703 – just 4 points below critical resistance.  Significantly, short-term moving averages (10 and 20-day SMA’s) have reversed to the upside.  Sell pressure (CMF) on our regular 5-month daily chart has decreased rapidly over the last week, a pattern similar to mid-March when the Index started a 7.6% advance over 21 trading sessions.  The coming week is the Venture’s best chance in the last 4 months to stage a technical breakout and challenge the next major resistance around 750.

The Venture has shown exceptional support since December, and has managed to stay at or above its gently rising 100-day SMA since early April.  A key market to watch, of course, is the U.S. Dollar Index which rallied last week – not an unexpected event after it sold down to temporary support.  On any rally it faces considerable resistance in the upper 90’s given the double top pattern that formed in March and April, in addition to some other bearish indicators.

Further gains in the CRB Index are also likely between now and the end of the summer, as John has shown in recent charts, and Copper (a reliable leading indicator) is looking very interesting as well from a broad perspective, despite last week’s pullback.  Crude Oil likely found its bottom in the low $40’s while strength in Gold producers suggests a 3-year correction in the yellow metal may indeed have ended last November.  So the Venture’s upside potential as this quarter progresses exceeds its downside risk, a very different scenario than the one that existed last September when the Index simply fell apart technically, driven largely by the collapse in Crude prices.  Yes, the resistance just above 700 is frustrating but the Venture has also been building a strong base over the last 5 months.

5-Month Daily Venture Chart

Last weekend, we stated we were watching closely for the imminent potential of a sharp decrease in sell pressure on this 5-month daily chart.  That’s exactly what occurred over the shortened 4-day trading week.  Every indicator on this chart now points to a much greater chance than mid-April for a near-term breakout above 707. 

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 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

Not surprisingly, Gold met resistance in the $1,220’s last week but also held support at $1,200.  For the week it was off $17 as it closed at $1,206, a 1.3% drop, despite a 3.2% gain in the U.S. Dollar Index.  Support at $1,200 is also now bolstered by a rising 50-day SMA, currently sitting at $1,197.

Below is one of the most reliable charts we’ve produced for Gold – the 2.5-year weekly.  The current bullish pattern in the SS shows that bullion once again could be gearing up for a test of the top of the downsloping flag which currently cuts through the $1,270’s (immediate resistance in the $1,220’s and then $1,240).

Silver eased off 42 cents last week to $17.07 (updated Silver charts Monday morning).  Copper retreated 11 cents to $2.79 but still looks healthy.  Crude Oil found resistance again in the low $60’s and finished flat for the week at $59.99.  The U.S. Dollar Index, meanwhile, surged 3 points to 96.14 but that rally doesn’t concern us any more than the one in April when the Index bounced back to its March high to form a double top.

The “Big Picture” View Of Gold

As Frank Holmes so effectively illustrates at www.usfunds.com, the long-term bull market in Gold has been driven by both the Fear Trade and the Love Trade.  The transfer of wealth from west to east, and the accumulation of wealth particularly in China and India, has had a huge impact on bullion and will continue to support prices.   Despite Gold’s largest annual drop in 3 decades in 2013, the fundamental long-term case for the metal remains solidly intact based on the following factors:

Gold has traded between $1,206 and $1,216 so far today…as of 8:00 am Pacific, bullion is relatively unchanged at $1,206 in lighter activity ahead of Monday’s U.S. Memorial Day holiday…the yellow metal is headed for its biggest decline in 4 weeks but importantly has held support at $1,200…Silver is flat at $17.11…Copper is off 4 cents at $2.80…Crude Oil is 70 cents lower at $60.02 while the U.S. Dollar Index has reversed higher to 95.99 after dipping just below 95 early this morning (prior to the release of CPI data)…

Gold has not moved more than 3% on either side of $1,200 since mid-March…holdings in SPDR Gold Trust, the world’s largest Gold-backed ETF, have slid to their lowest level in 4 months this week which is interesting considering that the metal also hit a 3-month high…support has been coming from somewhere…reports say that Gold buying was slow in Asia this week – money in China continues to chase equities with the Shanghai Composite powering nearly 3% higher today…

In their latest research report published Wednesday, commodity analysts from Macquire gave an upbeat assessment for Gold over the final several months of this year.  “Lower-for-longer global interest rates and still-robust emerging market demand should allow the Gold price to make steady gains in the second half of 2015 and 2016,” they stated…

Data from Thomson Reuters’ Lipper service showed yesterday that investors in U.S.-based funds pulled $597 million out of funds that specialize in commodities and precious metals in the week ended May 20, the biggest outflow since December 2013…what immediately followed that, of course, were significant upside moves in the commodity sector with prices trending higher until the U.S. dollar started its parabolic move over the summer…

QE Love-Fest

In Portugal today, approximately 150 central bank governors, academics and financial market representatives were invited to an economics event which was probably more like a QE love-fest…ECB President Mario Draghi, speaking this morning, said the economic outlook for the euro zone is looking “brighter today than it has done for 7 long years.”

The Fed’s Janet Yellen, meanwhile, is making a speech on the U.S. economy to the Providence Chamber of Commerce beginning at 10 am Pacific – investors will obviously be paying close attention to what she has to say…there is consensus among analysts that a Fed rate hike is now being pushed back to September, but there’s also a growing risk that the Fed will postpone a move until even 2016 – they are clearly in a difficult spot given the weakness in the economy that has continued into Q2…

Today’s Equity Markets

Asia

Financials, insurers and brokerage houses led the charge on the Shanghai overnight as the index hit a fresh 7-year high, closing up 128 points at 4658…meanwhile, Japan’s Nikkei turned positive late in the session to finish at its highest level since April 2000, extending gains into a 6th consecutive day…

Europe

European markets are mixed in late trading…Germany’s final figure for Q1 GDP came in at 0.3%, confirming an earlier flash estimate…

North America

The Dow is off 21 points as of 8:00 am Pacific…U.S. consumer prices moderated in April on weak gasoline prices, but rising shelter and medical care costs boosted underlying inflation pressures with the so-called core CPI, which strips out food and energy costs, making its biggest jump (0.3%) since January 2013…this is the number the markets focused on when it was released at 5:30 am Pacific, reversing the greenback higher which in turn erased Gold’s mild gains…

In the 12 months through April, the CPI fell 0.2%, the largest decline since October 2009, after dipping 0.1% in March…

In Toronto, the TSX has lost 13 points after the first 90 minutes of trading while the Venture is 2 points higher at 702 as it once again threatens to challenge critical resistance at 707…

BitGold Inc. (XAU, TSX-V) Update

Plenty of investor appetite for BitGold Inc. (XAU, TSX-V) since it made its Venture debut just over a week ago on May 13…it closed at $2.70 that first day, and climbed as high as $8 intra-day Wednesday before closing at $4.63 yesterday on a retracement…continued volatility is likely…

XAU was halted just prior to the open this morning, pending news…below is a look at XAU’s first 6 days of trading with Fib. support and resistance levels…

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

As things get ready to heat up in northwest B.C.’s Sheslay district, what’s significant about this Doubleview Capital (DBV, TSX-V) chart is the breakout above the downsloping flag and the very strong new support at the top of that flag which coincides with a Fib. level and the 200-day moving average (SMA)…the 200-day is also now beginning to reverse to the upside after being in decline since the 4th quarter of last year…in addition, while it’s not shown on this chart, DBV also sports a rising 500-day SMA at 14 cents, underscoring the primary bullish trend that started in 2013…

These highly encouraging technicals jive with the consistently improving fundamentals at the Hat Property where it has become increasingly apparent in recent months that DBV has a world class Gold-Cu alkalic porphyry deposit in the making…

DBV is up 1.5 cents at 17 cents as of 8:00 am Pacific…

Claude Resources Inc. (CRJ, TSX)

Despite challenging market conditions, there have been several outstanding success stories among producers including smaller-scale ones…we’ve pointed out how Richmont Mines (RIC, TSX) turned the corner financially last year, with that stock tripling in value since July, while Claude Resources (CRJ, TSX) has also experienced a similar turnaround with superb results in the market…

Claude recently reported 1st quarter net profit of $5.1-million, or 3 cents per share, a $10.2-million difference from the 1st quarter of 2014…this is related to improvements in Gold production, sales volumes, ore grades and operational efficiencies at its flagship Seabee mine in Saskatchewan…a declining all-in sustaining cost per ounce profile for the remainder of the year bodes well for the company (fortunately, their operations are in mining and business-friendly Saskatchewan, not neighboring Albertastan)…

CRJ is certainly worthy of our readers’ due diligence and should be watched closely, especially in the event of a potential corrective pullback to the uptrend support line…nearest Fib. resistance is 80 cents on this 3-year weekly chart…

Houston Lake Mining Inc. (HLM, TSX-V)

We’ll have more on this situation next week – look at this 10-year monthly chart for Houston Lake Mining (HLM, TSX-V) which has a very interesting Lithium Project in Ontario…we’re bullish on Lithium, and what’s fascinating here is how HLM broke above a 7-year downtrend line last year and continues to significantly out-perform the market…

HLM is unchanged at 18 cents as of 8:00 am Pacific…

Tribute Pharmaceuticals Canada Inc. (TRX, TSX-V)

Our non-resource chart of the day is Tribute Pharmaceuticals (TRX, TSX-V) which is looking very strong after breaking out above a pennant formation…it’s up another 12 cents at $1.25 as of 8:00 am Pacific…

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

Gold has traded between $1,201 and $1,214 so far today…as of 9:30 am Pacific, bullion is down $5 an ounce at $1,205…Silver is 4 cents higher at $17.12…Copper is up 2 pennies at $2.84…Crude Oil has added $1.69 a barrel to $60.67, partly due to fresh concerns regarding Iraq and recent gains made by ISIS…the Islamic State insurgency has yet to affect Iraq’s exports to world markets but the potential for a future disruption clearly exists…meanwhile, the U.S. Dollar Index has retreated one-quarter of a point to 95.29 on weaker than expected PMI and housing numbers this morning…

The minutes released yesterday of April’s FOMC meeting showed that many committee members felt it was unlikely economic data would support a June rate hike…there were no major surprises in the minutes as markets have almost completely ruled out a rate hike in June, pushing back expectations to September – at the earliest…this will likely cap any rallies by the greenback and prevent the U.S. Dollar Index from pushing through key resistance levels that have emerged since the March-April double top…this in turn will create a more positive environment for commodities and the Venture, which appears ready again to challenge resistance just above 700…

Geopolitical Fires

The Obama administration’s strategy to contain and degrade ISIS continues to suffer setbacks, and one has to wonder where this is all headed and how it could potentially impact a broad spectrum of markets at some future point, just as previous conflicts have…only days after capturing the key Iraqi city of Ramadi, ISIS now controls over half of Syrian territory after seizing the village and archaeological site of Palmyra yesterday…

Meanwhile, foreign militants fighting under the black flag of ISIS are conquering territory in northern Afghanistan, terrorizing residents and outmatching the Taliban’s brutality, according to reports from NBC which were backed up by comments last night by Lt. Col Anthony Shaffer, a former military intelligence officer and Fox News contributor who was interviewed by Bill O’Reilly…Shaffer said sources told him that ISIS has taken control of 5 northern provinces in Afghanistan and has also taken over the drug trade in the south…interestingly, he added that the fighters are going after mineral resources in northern Afghanistan, including Lithium…

Bush To Obama:  “Stop Insulting Our Neighbor To The North”

Twice during an appearance yesterday in Portsmouth, New Hampshire, presumed Republican Presidential candidate Jeb Bush suggested that the U.S. relationship with Canada is in need of serious repair…speaking broadly about the need to remake U.S. foreign policy once President Obama leaves office, Bush told a crowd of about 60 voters that he would seek to restore relations with allies around the globe.  “It means stop insulting our neighbor to the north. It’s hard to imagine how we could have a bad relationship with Canada, but under this administration we’ve managed to do it,” he said.

Crude Oil Update

Crude Oil is not going in the direction Goldman Sachs or others may want it to…the technical dynamics in this market really started to shift during the first half of April, as John pointed out through some short-term and long-term charts, and what seems increasingly certain is that an important double bottom formed in this market in mid-March…that’s good news for investors and companies who are still trying to recover from the shock of a quick 60% drop in prices from last year’s high…

Encouragingly, strong new support has been built in the mid-$50’s which now includes the rising 50-day moving average (SMA)…any consolidation from the sharp advance from mid-March may not break below $54…on the upside, WTIC will likely require time to overcome strong resistance in the mid-to-upper $60’s…

Despite the partial recovery in prices, a quarter of the jobs directly and indirectly tied to the Canadian Oil and gas space could be wiped out this year…as many as 185,000 jobs, or 25% of the 720,000 workers in Canada linked to the Oil patch – could be affected as the industry navigates through the downturn, according to a forecast published earlier this week…

B.C. Open For Business – Lessons For The New Alberta

British Columbia is sweetening its offering with iron-clad “cost certainty” assurances to the Petronas-led consortium in a final push to establish a liquefied natural gas project and set the stage for a “new era of economic activity” in the province, Premier Christy Clark said yesterday…Petronas and its Asian partners including Indian Oil Corp. and Japan Exploration are weeks away from making a final investment decision on an LNG project on the West Coast…yesterday, the B.C. government and Petronas signed an agreement towards a $36-billion LNG project near Prince Rupert…it’s worth noting that while the Alberta NDP has created a great deal of uncertainty in the Oil and gas sector in that province by promising a “royalty review”, the pro-business B.C. government is taking a much different approach – it has given Petronas assurances that its royalty rates will never change..

Euro Chart Update

The euro is performing according to script – it reacted at Fib. resistance at 115 as expected, but has very strong support around 110 which is just above the rising 50-day SMA…

What’s important about this 7-month daily chart is that it shows the trend is bullish after the formation of a double bottom in March and April – a mirror image of the current state of the U.S. Dollar Index…in the environment of a stronger euro and a weaker greenback, commodities and the Venture have a much better opportunity to gain traction…

A Bad Day For China’s Richest Man

How’s this for a sudden drop in one’s portfolio value – Li Hejun, who was China’s richest man until this week, saw his fortune fall by as much as $15 billion in half an hour yesterday when shares in solar panel firm Hanergy plummeted 47% in Hong Kong trading…nearly $20 million was wiped off the company’s market value before the stock was halted, pending news…investors, regulators and analysts have questioned Hanergy’s rapid share rise, and how the company was turning a profit, for months…they’ve used the company as an example of the risk of investing in emerging markets…

Today’s Equity Markets

Asia

China’s equity markets stood out amid mixed trading in the region overnight, as investors bet on further economic stimulus from Beijing after a preliminary reading of the country’s massive factory activity came in below expectations…the HSBC flash Purchasing Managers’ Index (PMI) came in at 49.1, indicating that the country’s manufacturing sector contracted for a 3rd straight month in May…the reading was weaker than the 49.3 print forecast by Reuters, but better than the 48.9 final showing in March…

The Shanghai gained 84 points or nearly 2% to close at 4530, its highest level in more than 3 weeks…

Europe

European markets eked out small gains today…fresh data today showed the region’s economy continued to lose momentum in May, with Markit’s composite flash PMI falling to 53.4 from 53.9 in April, below analysts’ expectations…

European economists at HSBC say that Greece should be able to negotiate a deal with its European creditors to unlock enough money for bailout funding, allowing the country to meet its June debt obligations to the International Monetary Fund…however, they also warn that this is just a short-term solution…

North America

The Dow is up 19 points as of 9:30 am Pacific…U.S. home resales unexpectedly fell in April as tight inventories pushed prices higher, giving a cautious signal on the strength of the housing market…meanwhile, the U.S. manufacturing sector continues to hold just above contraction levels, according to the latest flash PMI data…private research firm Markit said its May flash estimate PMI fell to a level of 53.8, compared to April’s final reading of 54.1…according to consensus reports, economists were expecting to see a reading at 54.6…

In Toronto, the TSX has jumped 134 points while the Venture has added 4 points to 699…

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

Integra Gold (ICG, TSX-V) rose 2 cents to 29.5 cents on its second-best volume day ever yesterday (8.8 million shares, all exchanges) following more positive drill results from its Lamaque South Gold Project in Val d’Or…volume like that goes a long way in terms of soaking up paper from more than 30 million flow-through shares placed last December…

From a technical perspective, overbought RSI(14) conditions from February have unwound with this indicator now turning higher after finding support at the 50% level…ICG’s bullish trend is very pronounced, so a breakout above the Fib. 61.8% resistance level as shown in this 2-year weekly chart seems highly probable…

ICG is up half a penny at 30 cents as of 9:30 am Pacific…

C02 Solutions Inc. (CST, TSX-V) Update

Below is an update of John’s 3-year weekly chart on CO2 Solutions Inc. (CST, TSX-V), as requested by some readers, which was originally posted May 11…CST is drawing considerable investor interest with its patented technology addressing carbon emissions, and this morning the stock hit a new multi-year high of 34 cents before backing off to 30.5 cents as of 9:30 am Pacific…it’s quite possible that Fib. resistance at 30 cents could turn into new support – it’ll be interesting to see how CST finishes the week…RSI(14) is certainly in overbought territory at 88% but this condition can sometimes persist for a while, simply due to the momentum factor…

The chart is an excellent example of what can happen with a stock when it breaks above a downtrend line…CST briefly fell below Fib. support at 8 cents in January but quickly re-established that support when it pushed above the downtrend line in February…this month it broke out of a trading channel, after releasing full pilot testing results April 29…the company describes its technology as a new economic benchmark for low-cost carbon capture…

Note:  John, Terry and Jon do not hold share positions in ICG or CST.

Gold has traded between $1,203 and $1,212 so far today…as of 7:45 am Pacific, bullion is up $2 an ounce at $1,210…Silver is 6 cents higher at $17.13…Copper is off a penny at $2.81…Crude Oil has added 57 cents to $58.56 while the U.S. Dollar Index has gained another one-quarter of a point to 95.55…yesterday’s gains in the Dollar Index marked the first significant bounce after a 5-week losing skid, but a major band of resistance now exists between approximately 95.5 and 97…the greenback began rising yesterday after an ECB official said the central bank would move up some of its planned asset purchases…the dollar later extended its advance after official data showed construction on new U.S. homes increased by 20.2% in April, the fastest rate since 2007…other U.S. economic indicators recently have not been so encouraging…

India’s government has unveiled draft rules for a program that aims to put Gold owned by households and institutions to productive use…while this program could help Asia’s 3rd largest economy meet demand for the yellow metal through local supplies and cut imports, which have been a major contributor to the country’s trade deficit, it’s critical to understand that the monetization scheme would be a key step toward making Gold an important part of the larger financial system in India and a fungible asset class…ultimately, this should drive further interest in the yellow metal…

The program, which has the support of the World Gold Council, includes encouraging Indians to vest the Gold in their possession with banks and earn interest on it…if successful, this would fundamentally alter the perception of consumers toward the precious metal and make them view it like they do any other financial savings instrument in a country where Gold traditionally has been hoarded in homes as a hedge against inflation and currency depreciation…

The WGC has been stressing the need for the introduction of a structured and customer friendly Gold monetization program as well as an India branded Gold coin as key policy measures, which will enhance Gold’s economic value…

Soma Somasundaram, managing director in Mumbai of the World Gold Council, stated:  “Demand for Gold in India is interwoven with culture, tradition, the desire for beauty and financial protection. It would be futile to control Gold demand knowing how much the passion for Gold drives savings itself. We believe the solution to meeting India’s enduring appetite for Gold lies not in restricting the import of Gold, but in making better use of the Gold that is already in the country, making it a productive fungible asset class like any other financial savings. The need of the hour is to re-engage all stakeholders to develop a coherent long-term ‘India Gold Policy’ that results in a robust infrastructure for Gold, drives standardization and transparency, encourages Gold-based investment products and supports the economic priorities of the country. With India at the center of the global Gold eco-system, it is imperative that we find ways of mobilizing and monetizing the 22,000 tonnes of Gold in Indian households to fund economic growth.”

Somasundaram believes the the new initiatives, especially the introduction of an Indian Gold coin which is now in the works, could begin to profoundly shape the behavior of future Gold buyers in that country…

Short 9-Month Daily Chart

Silver took off last week after breaking above a downtrend line, and raced right toward Fib. resistance just below $18 as expected…the top of that downtrend line (around $16.50) should now provide support as the metal digests its recent gains and prepares for another challenge of the important $18 area…

Economist Notes Possible Triggers For Next U.S. Recession

HSBC chief economist Stephen King said that historical trends show that recessions hit every 8 or 9 years and the last one in the U.S. ended 6 years ago…if history is any indication, the U.S. could be facing another recession in the next 3 years…what’s worse, he said, is that policy makers don’t appear to have the ammunition needed to fight another one…

King noted that there could be several triggers for the next recession; a collapse in “overvalued equity markets”, leading to an “implosion of demand”; a sizeable slowdown in the Chinese economy; systemic failures across the pension fund and life-insurance industries; and even a premature tightening of interest rates from the Federal Reserve…

“Whatever the likely cause of the next recession, the recovery seen so far has not enabled policymakers to replenish their ammunition; growth has returned but policy has not ‘normalized’, he said in his op-ed. “The U.S. economy is like a ship sailing across the ocean without lifeboats. Other nations are following in convoy behind. For all their sakes, we must hope to avoid recessionary icebergs.”

Today’s Equity Markets

Asia

A better-than-expected gross domestic product (GDP) for the first 3 months of 2015 helped Japan’s Nikkei outperform the region today as it gained nearly 1% to close at 20197…Asia’s 2nd-largest economy expanded an annualized 2.4% from the previous quarter, beating expectations for growth of 1.5%, indicating that Japan may be headed toward a path of steady growth…

China’s Shanghai pushed 31 points higher overnight to close at 4428…

Europe

European markets are mixed in late trading overseas…

North America

The Dow is up 18 points as of 7:45 am Pacific after closing at a new record high yesterday…investors will be closely scrutinizing Fed minutes from last month’s meeting when they’re released at 11:00 am Pacific today…the statement from that month removed all calendar references to the timing of a short-term interest rate hike…Chicago Fed President Charles Evans said today, according to a report from Reuters, that a rate hike is not likely to be appropriate until early 2016…

Long-Term Dow Chart

This updated long-term Dow chart from John suggests equity markets will continue to benefit from an accommodating Fed…next measured Fib. resistance on this 10-year monthly chart is 19033…note the support from the rising 200-day (blue line) and 500-day (red line) moving averages (SMA’s) since 2010…RSI(14) has formed another bullish “W” and is currently at 69% with room to push higher…the Dow has surged nearly 12000 points or a whopping 183% from its 2009 low…this can’t last forever but the Fed will likely keep the party going for a while yet…

In Toronto, the TSX is up 45 points as of 8:00 am Pacific while the Venture is flat at 695…Integra Gold (ICG, TSX-V) is this morning’s most active Gold junior after reporting more encouraging results from its Lamaque South Project in Val d’Or…hole TM-15–25 intersected the thickest interval ever reported from the Triangle area with 10.73 g/t Au over 16 m in the C4 extension zone…this zone contributed more than 30% of the ounces to the company’s previous resource estimate and has been expanded significantly with step-out holes intersecting high-grade mineralization over 200 m away in multiple directions…

ICG is up 2.5 cents at 30 cents as of 7:45 am Pacific on total volume (all exchanges) of more than 3 million shares…John’s most recent ICG chart (May 14) showed Fib. resistance at 30 cents, so ICG could be gearing up to overcome that in the near future…

TSX Updated Chart

The TSX is at a key juncture and must continue to hold a wedge support line, slightly below the 50-day SMA at 15168, that has been in place since the beginning of the year…RSI(14) has also been meeting resistance at 60% since late last year on this 2.5-year weekly chart…this market could swing either way – some answers should come soon…

Note:  John and Jon do not hold share positions in ICG.

Gold held on to its gains today from the end of last week which was particularly encouraging given a significant bounce in the U.S. Dollar Index from Friday’s 4-month low…

In evening trading, as of 10:00 pm Pacific, Gold is down $3 an ounce at $1,222…Silver has retreated 18 cents to $17.50…Copper is off slightly at $2.89 while Crude Oil is flat at $59.42…

This is an abbreviated special evening edition of BMR Musings on this Victoria Day holiday in Canada…Canadian markets were closed today, while the Dow and S&P 500 both hit new record highs…regular BMR Morning Musings will resume Wednesday as most of our crew takes an extended long weekend break in preparation for what we believe could be a busy and exciting finish to the 1st half of the year over the next 6 weeks…

With heightened concerns regarding the Middle East, a potential near-term default event by Greece (it’s like a horse with 3 broken legs at the moment, who’s going to shoot it?), and an American economy that’s performing below expectations, Gold has an excellent chance this week to push through stiff resistance in the $1,220’s…what we could see over the coming weeks is another attempt by bullion to push above a downsloping channel that has been in place since 2013 as shown in John’s 2.5-year weekly chart…this chart, which we updated last Thursday, has served as an extraordinarily helpful guide…a confirmed breakout above the top of this channel would really put momentum on Gold’s side and force the bears into retreat…however, such an event would require a major catalyst…the top of that downsloping channel – it’s cutting through the $1,270’s at the moment – has obviously acted as an impenetrable wall against bullion for more than 2 years…

U.S. Dollar Index Updated Chart

What served as great support for the Dollar Index from last summer to just recently – an uptrend line along with the 50-day moving average (SMA) – now represents resistance on any rallies…the primary trend over the next several months is expected to be bearish based on this 9-month daily chart featuring a double top pattern that formed in March and April…ultimately, a test of Fib. resistance at 88 seems likely and that’s a significant drop from current levels – enough to give commodities and the Venture a nice lift…technical deterioration in the Dollar Index intensified near the end of last month as it started to become increasingly clear that 1st quarter weakness in the U.S. economy was due to more than just bad weather and a West Coast port strike…

Economic numbers in focus this week will include housing starts (Tuesday), existing home sales (Thursday) and the CPI (Friday)…the Fed’s meeting minutes, due to be released Wednesday, will also be closely scrutinized…

Equity Markets

Asia

Asian markets are surging in early Tuesday trading…China’s benchmark Shanghai Composite has gained 117 points or nearly 3% with infrastructure-related companies leading the way, while Japan’s Nikkei is back above the 20000 level…

Europe

European markets finished mostly higher today despite growing concerns about the future of cash-strapped Greece…

North America

The Dow set a record today for the 5th time in 2015, climbing 26 points to finish at a new closing high of 18299…the S&P 500, meanwhile, closed at a record high for the 3rd day in a row, gaining 6 points to 2129…

Canadian markets re-open Tuesday morning with the TSX aiming for its 3rd straight daily advance while the Venture begins the new week just 5 points shy of 700…

Venture 3-Year Weekly Chart

The Venture will take the path of least resistance in the not-too-distant future, and that’s likely to be above 700 given the posture of this 3-year weekly chart…

RSI(14), currently at 41%, is following an uptrend and is expected to continue its gradual rise to at least 50% where it’s likely to meet strong resistance, at least temporarily…this could coincide with the 745 level on the Venture, the next target area once 707 is cleared…

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

As Fairmont Resources (FMR, TSX-V) edges closer to generating cash flow from its Buttercup Project, John’s updated 2-year chart confirms the strong possibility of a breakout this week – so this is one situation we’ll be keeping a close eye on given fundamental and technical developments…the outlook for the industrial minerals sector in Quebec is looking increasingly attractive, and Fairmont is extremely well-positioned with a project fully permitted for high-grade titano-magnetite aggregate production and a growing list of potential buyers (at PDAC, some impressive dimensional stone samples from the Buttercup were also attracting considerable curiosity – this could be another product line from the Buttercup and a very valuable one)…

Technically, FMR is threatening to break out above a downsloping channel that has been in place since the 4th quarter of last year – not surprising given the very attractive share structure (only 18.5 million O/S) and an advanced project like the Buttercup…all things considered, a $2.5 million market cap makes this an unusual opportunity in our view…

Antibe Therapeutics Inc. (ATE, TSX-V) Update

In the non-resource space, Antibe Therapeutics (ATE, TSX-V) appears to be back on track after resuming development of its lead drug, ATB-346…

We like the possibilities here, just from a technical standpoint…Fib. resistance at 22 cents is a key level to watch – ATE closed half a penny above that on Friday, and RSI(14) has formed a bullish “W“…the SS indicator is showing strong up momentum while excellent support (Fib. and the rising 50-day SMA) exists at 18 cents…

Note:  Jon holds a share position in FMR.  John holds a share position in ATE.