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Gold has traded between $1,161 and $1,179 so far today…as of 9:30 am Pacific, bullion is down $8 an ounce at $1,168 after a better than expected U.S. jobs report for May…Silver is off a nickel at $16.02…Copper fell to a 6-week low of $2.66 but has since recovered to $2.69, up a penny…Copper stockpiles are near 14-month highs as tracked by the London Metal Exchange…Crude Oil is down slightly at $57.94 while the U.S. Dollar Index has jumped three-quarters of a point to 96.43…

PwC’s latest global mining industry report, Mine 2015, shows that the combined market capitalization of the top 40 mining companies in the world plummeted 16% in 2014 to $791 billion – the same level it was 10 years ago…

Gold didn’t get the help it needed from this morning’s jobs report – U.S. employers ramped up hiring last month and wage gains accelerated, suggesting the labor market has stabilized and is gaining momentum after a weak start to 2015…we’ll see if that momentum can be sustained…non-farm payrolls rose a seasonally adjusted 280,000 in May, the Labor Department reported this morning, led by gains in professional and business services, leisure and hospitality and health care…the unemployment rate, which is obtained from a separate survey of U.S. households, was 5.5% in May, up slightly from 5.4% the prior month…

While private sector average hourly earnings aren’t surging, they modestly exceeded expectations (up 8 cents or 0.3% in May to $24.96)…

Meanwhile, Canada’s employment rolls surged in May, with about 58,900 new jobs created overall – most of those being full-time positions and mainly in the private sector…the unexpectedly large jump in employment was the best performance since October 2014 when 62,200 more people found work…the previous big gain was 93,000 in April 2012, Statistics Canada said today…last month’s net new job total surpassed economists’ forecast for an increase of about 10,000 positions…

Oil Update

No surprise here – OPEC has decided to maintain its official production levels (30 million barrels per day) for at least another 6 months, Saudi Arabia’s Oil Minister Ali al-Naimi announced today…oversupply has dominated markets following the group’s decision not to cut production at its last meeting in November…

OPEC members have been pumping Oil at full tilt in recent months, with analysts suggesting they have in fact breached their 30 million-a-day ceiling…Saudi Arabia in particular has deep pockets and continues to focus on market share while trying to inflict some pain on regional rival Iran and put the squeeze on marginal North American shale producers…

Russia In Focus At Upcoming G-7 Meeting

President Obama plans to urge European leaders this weekend not to waver from sanctions against Russia, pursuing what the White House is calling a “steady as she goes” policy while accusing Moscow of flagrantly violating a ceasefire agreement in Ukraine…for the second year in a row, Russia’s moves on Ukraine are looming over the G-7 Summit which is bringing leaders of the world’s largest industrialized democracies to Germany for 2 days of meetings starting Sunday…the gathering comes a year after the leaders booted Russian President Vladimir Putin from their group in protest over the Ukraine crisis that now has killed more than 6,400 people…

Canadian Prime Minister Stephen Harper told the Associated Press yesterday that Russia should never be allowed back in the G-7 as long as Putin is President…

Cyber-Espionage?

This is being described by U.S. officials as one of the largest known thefts of government data in history – The Wall Street Journal reported this morning that U.S. officials suspect that hackers in China stole the personal records of as many as 4 million people in one of the most far-reaching breaches of government computers…the FBI is probing the breach, detected in April at the Office of Personnel Management…the agency essentially functions as the federal government’s human resources department, managing background checks, pension payments and job training across dozens of federal agencies…

U.S. 10-Year Treasury Yield Vs. Gold

U.S. Treasuries are plunging today, sending yields soaring, after the monthly jobs report came in stronger than expected…

This 2.5-year weekly chart shows how the TNX (10-Yr Treasury yield) has broken out above a downtrend line in place since the beginning of last year…Fib. resistance at 2.32% has also been cleared today (currently at 2.39%)…since late last year, Gold has mostly moved in the opposite direction of the TNX…

Today’s Equity Markets

Asia

China’s Shanghai Composite surged another 1.5% overnight, reaching a fresh 7-year high as it closed the week at 5023…

Europe

European markets were down moderately today…Greece had a 300 million euro payment due to the International Monetary Fund today but it informed the fund yesterday that it would bundle 4 payments due this month into 1 lump payment of 1.5 billion euros, which is due June 30…so they’ve kicked the can down the road for a few more weeks…

North America

The Dow is down 54 points as of 9:30 am Pacific…in Toronto, the TSX is off 28 points while the Venture is bucking the trend and is up 4 points to 688…

VANC Pharmaceuticals Inc. (NPH, TSX-V) Update

VANC Pharmaceuticals (NPH, TSX-V) has repeatedly tested Fib. resistance at 55 cents since breaking above a short-term downtrend line in early April…the 50-day SMA has flattened out and is now just starting to turn higher, while RSI(14) has formed a bullish “W”…this is looking good but patience with this one has been the key over the past couple of months…

NPH is off a penny at 54 cents through the first 3 hours of trading…

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

Fairmont Resources (FMR, TSX-V) announced this morning that drilling is expected to commence next week at its Forestville quartzite property in Quebec…interestingly, while doing reconnaissance work in preparation for drilling, geologists identified a new quartzite zone located 2 km east of the main quartzite horizon…the new zone is exposed on surface for a minimum 25 m by 300 m, and is in the vicinity of a previously reported sample that returned 99.91% SiO2…the chemical and physical properties of the quartzite at Forestville are being tested as a potential raw material source of high-purity glass, fibre optics, ferrosilicon and silicon metal…meanwhile, Fairmont is continuing discussions with potential customers for its Buttercup dense aggregate property which is fully permitted for production…

FMR is off a penny at 15 cents as of 9:30 am Pacific…

Fission 3.0 Corp. (FUU, TSX-V) Update

John first alerted us to bullish technical developments in the chart for Fission 3.0 (FUU, TSX-V) near the end of April when the stock was trading at 11.5 cents…FUU is performing according to script with buy pressure (CMF) still increasing…RSI(14) held key support at 50% and continues to climbing higher…

Fission 3.0 is armed with about $5 million in cash and a strategic portfolio of uranium properties in the Athabasca Basin upon which to build shareholder value in the coming months…

FUU is unchanged at 14 cents as of 9:30 am Pacific…

Skeena Resources Ltd. (SKE, TSX-V)

An interesting development in the market this week that most investors probably overlooked was the announcement Wednesday that Skeena Resources (SKE, TSX-V) has closed $8.1 million in financings, more than originally anticipated, to be directed primarily toward advancing the company’s flagship high-grade Gold project, known as Spectrum, which is about 75 km southeast of the Sheslay district in northwest British Columbia…keep in mind, the chairman of this company is Ron Netolitzky who was recently inducted into the Canadian Mining Hall of Fame for his two past successes in NW B.C. –  the Snip and Eskay Creek mines…

We’ll get into more detail regarding Spectrum next week, a fascinating project that features high-grade Gold zones within a broader halo of Cu-Au porphyry mineralization…the company is targeting 2–3 million ounces grading 12 g/t Au in multiple closely spaced, steeply dipping parallel zones…an historical resource (please note that this precedes NI-43–101 and as such is not to be relied upon) outlined 614,000 tonnes grading 12.3 g/t Au (244,000)…the deposit was drilled to an average of only 100 to 150 m below surface, and the East Creek target approximately 1.5 km to the north of the Central Zone appears very promising – quite possibly an extension of the system…

Below is a map from Skeena’s web site showing the location of the property…Skeena completed the Spectrum acquisition late last year…the project was inactive for more than 20 years due to a park and right-of-way issue that has now been resolved…

The company anticipates drilling this summer…we suggest our readers put Skeena on their radar screens and consider taking a position only after drill permits have been received…

SKE 2-Year Weekly Chart

This 2-year chart shows how SKE has strong support at 6 cents (Fib. level) which is also just above the bottom of a downsloping flag…if they can drill beginning in July as hoped (again, permits are pending), SKE could be a strong performer during Q3…

Note:  Jon holds a share position in FMR.

Gold has traded between $1,172 and $1,187 so far today…as of 8:30 am Pacific, bullion is down $12 an ounce at $1,173 ahead of tomorrow’s U.S. jobs report…Gold has not benefited from a lower greenback this week, frustrating the bulls…bullion may need a really weak jobs number tomorrow to prevent a further slide…Silver is off 34 cents to $16.14…Copper is down 3 cents at $2.68…Crude Oil has slid $1.47 a barrel to $58.17 while the U.S. Dollar Index is off slightly at 95.36…

The Fed’s third round of bond buying would have had a bigger impact if not for Washington’s political gridlock, former Dallas Fed CEO and President Richard Fisher said today on CNBC’s “Squawk Box”…

“For all the criticism of QE3, including my own criticism, it would have worked a heck of a lot better if we had had fiscal authorities that actually got something done, if we didn’t have a feckless President and a feckless Congress,” Fisher stated…the people who tax, spend and regulate have failed the American people, Fisher added (our emphasis), and he couldn’t be more accurate in that analysis…

IMF Cuts U.S. Growth Forecast, Urges Fed To Delay Rate Hike Until 2016

The Federal Reserve should hold off from raising interest rates until the first half of 2016, the International Monetary Fund said today as it cut its U.S. growth forecast for the second time in 3 months…the lender also said that the dollar was “moderately overvalued” and a further marked appreciation would be “harmful” in a statement released in Washington today on its annual checkup of the U.S. economy…

“The FOMC should remain data dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident,” the IMF said. “Based on the fund’s economic forecast, and barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016.”

Oil Update

OPEC tomorrow is expected to keep a group output target of 30 million barrels per day, a “ceiling” it has actually been exceeding for most of the last 2 years, weakening prices…the cartel is now pumping about 2 million bpd more than needed, analysts say, feeding a glut that has left millions of barrels stored on tankers without a buyer and kept prices at close to half their peak levels last year…Saudi Arabia in particular has deep pockets and continues to focus on market share while trying to inflict some pain on regional rival Iran and put the squeeze on marginal North American shale producers…

Energy advisors Wood Mackenzie have echoed the views of many analysts, saying it was unlikely OPEC would agree to cut production and the group’s Crude output was likely to stay above its official 30 million bpd ceiling through 2016…

Meanwhile, strong global fuel demand has helped support Oil prices despite the glut…in China, almost 2 million new cars are sold every month despite its economic slowdown…demand is also strong in Europe…Goldman Sachs said Europe’s high diesel consumption was a risk to the bank’s bearish outlook for Brent prices…

WTIC 6-Month Daily Chart

As mentioned previously, the big test for WTIC is a strong band of resistance in the low-to-mid $60’s…since the beginning of May, Crude has not been able to sustain a price above $62, and buy pressure has turned into weak sell pressure with RSI(14) trending lower as well…strong support around $54 could be tested before WTIC attempts again to push through key resistance…

Today’s Equity Markets

Asia

China’s Shanghai Composite was volatile in overnight trading, falling more than 4% before reversing to close up nearly 1% at 4947…

Europe

European markets were down moderately today…yesterday, in his news conference, ECB President Mario Draghi said markets should get used to volatility…Greek Prime Minister Alexis Tsipras will resume talks with EU leaders tomorrow in an 11th-hour attempt to strike a deal to release much-needed bailout aid after more than 4 hours of negotiations in Brussels last night failed to achieve a breakthrough, according to the Financial Times…high-ranking members of Greece’s governing radical left Syriza party say they cannot accept a deal proposed by the country’s creditors…the Athens stock market was down sharply today…

North America

The Dow is down 100 points as of 8:30 am Pacific…U.S. non-farm productivity fell at a 3.1% annual rate in the 1st quarter, down sharply from the previously reported 1.9% rate…

In Toronto, the TSX is off 133 points while the Venture has slipped 5 points to 686…support at 680…

TSX 25-Year Monthly Chart

This is a “Big Picture” look at the TSX going back more than 2 decades (25 years)…interestingly, just before the Crash of 2008, you can see how it had just made another failed attempt to push through an upsloping channel at a time of extended overbought RSI(14) conditions…that previous resistance around 15000 is currently acting as support, aided by a rising 300-day moving average (SMA) at 14967…the Index has dropped below its 300-day on only a handful of occasions over the last 2 years, all between late last year and early this year…

Probabilities appear to favor a higher TSX over the second half of the year given the upsloping wedge that’s currently in place, and the pattern of gradually increasing buy pressure…

Discovery Ventures Inc. (DVN, TSX-V) Update

Discovery Ventures (DVN, TSX-V) has perked up this week following news that (subject to satisfactory due diligence by the investor and Venture Exchange approval) the company has entered into a definitive binding agreement with an investor to secure credit facilities totaling $7 million to Discovery…the investor is Dan Omeniuk from Oakbank, Manitoba, who’s President of privately-held Trappers Transport Ltd. out of Winnipeg…Discovery would use proceeds from the credit facilities to advance its high-grade Willa deposit (aided by its nearby Max mill) in southeast British Columbia…Omeniuk would also become President and CEO of Discovery…interesting developments which we’ll continue to follow…

Discovery plunged from a high of 41.5 cents in the 3rd quarter last year to a low of 9 cents in late March…it has been volatile over the last few years, and certainly has the potential to roar back to previous highs – especially if the tone of the overall junior resource market improves over the last half of the year…the Willa-Max Project has a lot of merit to it given the robust PEA that was released in May of last year, and the excellent condition of the Max mill…

Below is a 3-year weekly chart from John…DVN has traded primarily in a horizontal channel between 13 cents and 40 cents since 2012…it’s up 1.5 cents at 17.5 cents as of 8:30 am Pacific…

Klondex Mines Ltd. (KDX, TSX) Update

Despite all the gloom and doom in the Gold sector over the last couple of years, some companies have out-performed the market tremendously which underscores the importance of selectivity…Klondex Mines (KDX, TSX) is a great example with its successful high-grade operation in Nevada…

Look below at how this stock has performed since early 2013…the company reported net income of $10.1 million or 8 cents per share on revenue of $47.3 million in the 1st quarter of this year…

KDX is off 2 pennies at $3.41 through the first 2 hours of trading…the 50-day SMA, currently $3.10, has been providing solid support this year…a big gap has opened between the current price and the uptrend line, so look for potential opportunities here on a pullback…

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

Our non-resource chart of the day is Tribute Pharmaceuticals (TRX, TSX-V) which continues to look very strong, despite easing off slightly from its morning high today, after breaking out recently above a pennant formation…

TRX is unchanged at $1.30 as of 8:30 am Pacific…

Note:  John, Terry and Jon do not hold share positions in DVN, KDX and TRX…

Gold has traded between $1,186 and $1,195 so far today…as of 8:00 am Pacific, bullion is down $2 an ounce at $1,191…Silver is off 19 cents at $16.56…Copper has slid 2 pennies to $2.72…Crude Oil is down 74 cents at $60.52, though U.S. Crude inventories have dropped for a 5th straight week, while the U.S. Dollar Index has fallen another half point to 95.36…

McKinsey & Company, a respected global management consulting firm, has published a study showing that worldwide mining operations are as much as 28% less productive today than a decade ago…it attributes increases in capital expenditures and operating expenditures as having the greatest impact on productivity trends…up-sizing projects by increasing the productive capacity of the project to shorten the mine life did not yield the higher IRR’s predicted by the models…

Turkey’s highest Gold price in more than 3 years appears to be curbing the appetite for the metal in the 4th-biggest buyer…the country imported 1.65 metric tons of bullion in May, 21% less than a month earlier and the least since July of 2014, the Istanbul Gold Exchange’s web site showed yesterday…Turkish Q1 consumer demand for bullion slid 42% from a year earlier, according to World Gold Council data…

A good sign for Gold’s prospects over the next year if you’re a contrarian – investors have cut holdings in bullion-backed exchange-traded products to the lowest since 2009 as surging stock markets from China to the U.S. have hurt demand for the metal…the assets contracted 5.45 metric tons, or 0.3%, to 1,594.08 tons as of yesterday, according to data compiled by Bloomberg…the hoard has slumped 39% since reaching a record 2,632.52 tons in December 2012, shrinking by 33% in 2013 and a further 9.3% last year…

Gold 34-Year Monthly Chart Update

This 34-year chart shows how Gold has been in a “Wave 4” correction since late 2011…one cannot rule out the possibility that “Wave 4” could deepen to the Fib. 50% level, just above $1,000, but this would likely be followed by a powerful “Wave 5” move to the upside that would ultimately lead to a new all-time high…

It’s also possible that Gold is now essentially at the end of “Wave 4” with rock-solid support on a long-term monthly chart at an uptrend line cutting through about $1,180 as we showed Monday…

Venture-U.S. Dollar Index Comparative Chart

The direction of the U.S. Dollar Index is key to understanding the Venture trend, and what’s encouraging from a Venture standpoint is that the greenback has run out of steam after a parabolic move from last summer that led to a double top formation in March-April…the recent rally in the Dollar Index was merely a test of new resistance at the uptrend line where it broke down from in late April as you can see in this 9-month daily chart through the end of May…our interpretation (and, so far, John has been very accurate with the greenback) is that the Dollar Index could ultimately test the 88 Fib. support level – a bearish trend that would definitely be supportive of the commodity sector and the Venture over the coming months…a weaker dollar scenario would suggest that the Fed won’t initiate a rate hike until sometime in 2016…

What Ferbus Tells Us About The Impact Of A Higher Greenback

The FRB/US model of the U.S. economy, which the public was able to fully access last year on the Fed’s web site, is one of several that Federal Reserve Board staff consults for forecasting and the analysis of macroeconomic issues, including both monetary and fiscal policy…

Fed officials rely heavily, but certainly not exclusively, on Ferbus’s calculations, which suggest that the hit to the U.S. economy of the parabolic move in the dollar from last summer to March is just beginning to be felt…according to Ferbus, a 10% increase in the exchange rate ripples through the economy gradually…in the 1st quarter after the shock, growth is shaved by a negligible 0.08% and the inflation rate by 0.1%…but the impact grows steadily for 3 years, as producers, exporters, importers and consumers adjust their habits…after 2 years, about 0.75% will have been lopped off GDP…

The much higher dollar since last summer has already negatively impacted the U.S. economy in 2015, and Ferbus tells us that those affects can be expected to intensify over the final half of the year – this is ultimately what may cause the Fed to delay a rate hike until 2016…

Click on the link below if you want to know more about Ferbus – not a perfect model but a useful tool nonetheless…

Meet The Fed’s Friend, Ferbus

Venture-U.S. Dollar Index Comparative Chart

The extreme gap between the Dollar Index and the Venture on this 15-year monthly chart is quite similar, on an inverse basis, to the huge gap that emerged in early 2011 when the Venture topped out at 2465 while the Dollar Index hit the low 70’s and then started a recovery that led to last summer’s parabolic move…

We expect to see a gradual closing of this gap over the next few months…notice also how the Venture %K hit an extreme low in late 2014, a mirror image of the extreme high in late 2010 – more evidence that we have seen the bottom of this market…

Today’s Equity Markets

Asia

Asian markets were mixed overnight with China’s Shanghai Composite essentially unchanged…the yuan is now Asia’s leading currency for doing business with China, trumping the Japanese yen and the Hong Kong dollar as Beijing aggressively pushes it through international trade channels…within Asia, the yuan now accounts for 31% of payments exchanged with China, up from 7% just 3 years ago, according to the latest data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a provider of payments services…the data from Swift excludes payments by central banks…

Europe

European equities are up significantly today after the ECB held its key interest rates unchanged…at his monthly press conference following the ECB governing council meeting, bank President Mario Draghi also raised inflation expectations for this year to 0.3%…inflation next year is seen at 1.5%…this is helping the euro today…

North America

The Dow is up 146 points as of 8:00 am Pacific…private sector job creation in the U.S. swung higher in May after a lackluster April, with companies adding 201,000 positions for the month, according to payroll firm ADP…the number was in line with expectations for a 200,000 gain thanks largely to a big jump in service sector jobs…

In Toronto, the TSX has gained 74 points while the Venture has added 2 points to 691…

Ivanhoe Energy Inc., a company that proposed using a unique heavy oil technology to develop its Tamarack thermal Oilsands project in northern Alberta, has been declared bankrupt after it failed to reach a restructuring proposal under the Bankruptcy and Insolvency Act…in a news release yesterday, the Robert Friedland-backed Vancouver-based company, which also has projects in Ecuador and Mongolio, said it worked “diligently” with major creditors and its court-appointed trustee, Ernst & Young, since filing a notice of its plan on Feb. 20 but no “viable restructuring proposal” resulted…

Biorem Inc. (BRM, TSX-V)

Readers may wish to perform their due diligence on Biorem (BRM, TSX-V), an environmental biotechnology company that designs, manufactures and distributes a comprehensive line of high-efficiency air emissions control systems used to eliminate odors, volatile organic compounds and hazardous air pollutants…BRM, which has only 13 million shares outstanding, has reported a strong turnaround in its financial performance over the last 2 quarters, including Q1 2015 as announced Monday (revenue of $4.8 million and net earnings of $528,000)…

BRM is up 3 cents to 32 cents as of 8:00 am Pacific after touching a high of 37 cents in early trading…

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

Gold has traded between $1,185 and $1,197 so far today…as of 8:00 am Pacific, bullion is up $5 an ounce at $1,194…Silver is up 4 cents at $16.74…Copper has added a penny to $2.74…Crude Oil is 77 cents higher at $60.97 while the U.S. Dollar Index has tumbled more than a full point to 96.11 – supportive for the Venture…

The next couple of weeks are packed with events that could significantly impact the Gold market as well as equities…ECB, OPEC and G-7 meetings are taking place in the coming days while the Fed of course meets June 16-17…Greece has a payment due to the IMF on Friday, and that’s also when the U.S. employment report for May will be released…225,000 non-farm payrolls are expected, barely higher than the 223,000 in April…while there was some encouraging U.S. economic data yesterday, the big data picture still doesn’t illustrate the robust growth that would encourage the Fed to initiate a rate hike until probably the end of this year (December) at the earliest…

Oil Update

A weaker dollar and upbeat comments by Saudi Arabia’s Oil minister have given a boost to Oil prices today ahead of OPEC’s Friday meeting…the market consensus is that the Oil cartel will maintain its official production ceiling at 30 million barrels a day (they’re actually exceeding that slightly) as producers like Saudi Arabia continue their strategy of defending their market share…that strategy is working, Saudi Oil minister Ali al-Naimi said yesterday as he arrived in Vienna…Naimi, a key figure in the global Oil market, said that Oil demand is picking up and supply is slowing down, but Naimi also acknowledged that there is still a problem of an Oil surplus…

Later today, the American Petroleum Institute will publish its U.S. oil inventory report and market participants expect another decline…the U.S. Energy Information Administration will follow with its official estimate of Crude inventories and production tomorrow…

Gold vs. U.S. Dollar, Loonie & Euro

Below is a chart going back to the beginning of 2014, showing how Gold has held up quite well against the U.S. dollar despite the greenback’s surge since last summer…overall, bullion is down nearly 4% vs. the greenback over the last 17 months…

Against the euro, Gold has jumped 19% since the beginning of 2014 while the metal has gained 12% vs. the Canadian dollar…

Copper Long-Term Chart Update

Copper remains firmly within its long-term uptrend support which goes back to 2002…significantly, important bottoms in the RSI(14) at the 30% level since 1999 have coincided with key price lows and turning points – 61 cents (1999), 60.5 cents (2001), $1.25 (2008) and $2.42 (beginning of 2015)…

Watch for a potential breakout of Copper above the current downsloping flag during the second half of this year…

Today’s Equity Markets

Asia

China’s Shanghai Composite gained another 83 points or 1.7% overnight, closing at 4912…the next big test for the already technically overbought Shanghai is if it can push above resistance at 5000…interestingly, on this 20-year monthly chart, there has never been such a negative correlation between equities in China and the CRB Index…that gap will likely narrow during the second half of the year…

As expected, India’s central bank has lowered its key repo rate by 25 basis points to 7.25%…this is the Reserve Bank of India’s (RBI) third rate cut of the year, after lowering interest rates by the same amount in January and March…

Europe

European markets are mixed in late trading overseas as investors focused on the continuing negotiations regarding Greece’s debt problems (they face a $328 million payment to the IMF Friday) and new economic data…

North America

The Dow has lost 14 points through the first 90 minutes of trading…

In Toronto, the TSX is up 56 points as of 8:00 am Pacific while the Venture has shed 3 points to 688…

The chart below from Bloomberg shows how cash levels for junior exploration companies on the Venture have dwindled substantially (about 65%) since the beginning of 2012, though the rate of decline slowed noticeably in 2014…

Equitas Resources Corp. (EQT, TSX-V) Update

A few days ago, a member of our BMR team unexpectedly ran into Equitas Resources Corp. (EQT, TSX-V) President Kyler Hardy in Vancouver, renewing an acquaintance…Hardy seemed very relaxed and upbeat, quite content in his new role as President of Equitas – a company he has made some excellent progress with since coming on board late last year…he and his team are gearing up for a busy summer…

On May 13, Equitas released encouraging results from a VTEM plus airborne survey completed on its Garland Property, 30 km southeast of the Voisey’s Bay mine in Labrador…9 areas of conductivity prospective for Nickel-Copper sulphides have been identified with most responses at the very limit of, or significantly deeper than, detection limits of historic surveys…this is certainly a speculative play to watch closely over the next several months…exploration on the target areas is expected to commence in late June…evaluation of the anomalies will include mapping and prospecting, 30 line km of large-loop EM surveys, and up to 4,000 m of diamond drilling…

Since the discovery of the Voisey’s Bay deposit in the early 1990’s, small parcels of Garland have been owned by 9 separate companies…this is the first time that this large property has been consolidated under 1 owner…

EQT has been in a gradual uptrend since its restructuring late last year as you can see on this 2+ year weekly chart…the uptrend line and the rising 200-day moving average (SMA) at 7 cents are providing strong support…

EQT is unchanged at 10 cents as of 8:00 am Pacific…

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

Gold has traded between $1,184 and $1,205 so far today…as of 8:30 am Pacific, bullion is up $3 an ounce at $1,193…Silver has added 13 cents to $16.83…Copper is off slightly at $2.73…Crude Oil has retreated 77 cents to $59.53 while the U.S. Dollar Index has jumped more than half a point to 97.68 (see updated chart below)…

Federal Reserve Vice Chair Stanley Fisher, speaking today at the International Monetary Conference in Toronto, said that he views the world economy as still growing very slowly, and that “confidence in the financial system and the growth of the economy has been profoundly shaken.”

He added that it’s unclear if we’re in secular stagnation or a debt super-cycle, and warned against complacency bred from financial stability.  “We should not make the mistake of believing that we have put an end to financial crises,” he said, later adding that “one reason we should worry about future crises is that successful reforms can breed complacency about risks.”

Oil Update

Energy firms pulled another 13 rigs from U.S. Oil fields last week, the biggest drop in 4 weeks, according to fresh data Friday…this confirmed that a near 6-month slump in activity has yet to run its course despite a rebound in Crude oil prices…it was the 25th straight weekly decline, bringing the total rig count down to 646, the lowest since August 2010…

Gold Long-Term Chart

This long-term monthly chart shows how Gold continues to remain at or above an uptrend line that goes back to the beginning of the bull market that started in 2001…this is particularly impressive considering the parabolic move in the greenback that started last summer and continued until mid-March…

Fib. support ($1,185) coincides with the current position of the uptrend line…RSI(14) has broken above its downtrend line and has been putting in a series of slightly higher highs and higher lows since the spring of 2013…

This 20-year chart, along with the 2.5-year weekly that we’ve been updating on a regular basis, appear to be the most reliable in terms of gauging Gold’s direction and possible breakout/breakdown points…

U.S. Dollar Index Update

While the greenback’s value is down modestly from its March peak, the Fed’s own models show the currency’s drag on the economy is likely to grow in coming months (more on that later this week)…this and other factors could prompt some Fed officials to lower their latest growth forecasts, to be released at the next Fed policy meeting June 16-17 – and to wait even longer to move on rates…

As expected, the Dollar Index has rallied back to its uptrend line (now resistance) where it broke down from in late April…price and RSI(14)  have completed a “head and shoulders” while a double top pattern also formed in the Dollar Index in March-April…nothing’s impossible, but it would be very surprising – based on these patterns – if the greenback took off sharply to the upside again over the near to short-term and eclipsed the March-April highs…this is also something the Fed would likely not want to see…

Today’s Equity Markets

Asia

China’s Shanghai Composite was turbo-charged overnight, soaring more than 200 points or nearly 5% to close at 4829…for the year, Chinese stocks are now up almost 50%…

The country’s manufacturing sector presented a mixed picture in May, as an official gauge of factory activity recorded modest gains while a private index pointed to continuing sluggishness…analysts said that the conflicting results meant that Beijing probably would roll out more government support in the months ahead to spur momentum…

Europe

European markets were mixed today…

North America

The Dow is flat as of 8:30 am Pacific…

Some encouraging U.S. economic data this morning, which helped the greenback…manufacturing once again managed to remain in expansion territory in May, slightly beating expectations, according to the latest data from the Institute for Supply Management (ISM)…the ISM said its PMI showed a reading of 52.8% in May, up from an April reading of 51.5%…

U.S. construction spending surged in April to the highest level in nearly six-and-a-half years as outlays increased broadly, pointing to some pockets of strength in the economy…

Meanwhile, though consumer spending in April posted its weakest performance in 3 months, a solid gain in income growth could help boost spending in the future…the Commerce Department reported that consumer spending was flat in April after a revised 0.5% increase in March, which had been the biggest gain since last August…personal income rose a healthy 0.4% after being unchanged in March…

In Toronto, the TSX is off 18 points as of 8:30 am Pacific while the Venture is down 1 point to 691…

Venture Updated Long-Term Chart

This long-term monthly Venture chart provides encouragement that the Index is slowly but surely healing from a potential final low in December of last year…RSI(14) is emerging out of a similar pattern it went through during the Crash of 2008; the -DI indicator is moving down after touching previous extreme peak levels reached in 2013 and 2008; and the SS %K, after dropping even lower than its 2008 extreme, is now showing upside momentum and is very close to the point of a bullish %K/%D cross…

In other words, the worst clearly appears to be over and better days are ahead…what the Venture needs now is a catalyst, a reason to capture momentum by pushing through critical resistance just above 700…the catalyst could be a weakening greenback and higher commodity prices, and/or a major new discovery…

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

Integra Gold (ICG, TSX-V) continues to look very strong, fundamentally and technically, and what occurred last week is a confirmed breakout above the Fib. 30-cent resistance level…buy pressure as shown by the CMF remains strong…

ICG is unchanged at 34 cents as of 8:30 am Pacific…

Fairmont Resources (FMR, TSX-V) Update

An important technical development in this 2+ year weekly chart for Fairmont Resources (FMR, TSX-V) – a breakout above a downsloping channel in place since late last year, as well as Fib. resistance at 14 cents…fundamentally, the company is well-positioned to begin unlocking the value of its high-grade industrial mineral properties in Quebec, led by the Buttercup which is fully permitted for production…

Increasing momentum is very evident here with RSI(14) pushing through resistance at 50%, in addition to the move above the downsloping channel…

Silver Short-Term Chart

Silver has recently been digesting recent gains after almost touching Fib. resistance just below $18 as expected…strong support at $16.60 and also at the top of the downtrend line (dotted blue) where Silver broke out from in May…

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 FMR.