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TSX Venture Exchange and Gold

The Venture’s 2015 December uptrend began on the same day that the Fed hiked interest rates for the first time in nearly a decade.  On Wednesday, the Fed is widely expected to increase rates by another quarter point, and it’s reasonable to expect the Venture (and probably Gold) to respond positively again once that news is out of the way.  Janet Yellen, who has dovish instincts, will also be holding her first news conference since July after this meeting, and may use the opportunity to balance off the rate hike with some cautious language entering 2017.

In comparing trading activity last year to this year, it’s obvious the Venture is now in much healthier shape.  In December 2015, the Index was in the last gasp of a prolonged bear market and declined in 10 out of the first 11 sessions that month leading into the Fed decision.  This year, the Index has posted 4 winning sessions out of 7 in December and there’s ample technical evidence to suggest that the Venture’s correction from its August 848 high ended November 14 at 717.

History is clearly on the side of the “BARGAIN HUNTERS” right now as the Venture has not only entered its best period of seasonal strength on the calendar, but the second leg of its bull market is now in its early stages.

As for Gold, we’re looking for a very specific signal in the coming days that could make investors a lot of money…

Click here to read the rest of today’s Week In Review And A Look Ahead, and learn more about how to cash in on the next phase of this Venture bull market, with a risk-free Pro, Gold or Basic subscription featuring a 100% money-back guarantee, or login with your username and password.

Gold has traded between $1,158 and $1,173 so far today…as of 11:30 am Pacific, bullion is off $11 an ounce at $1,159…Silver, at $16.81, has retreated 18 cents…Copper is up 2 pennies at $2.65…Nickel has surged 15 cents to $5.14…Crude Oil has added 59 cents per barrel to $51.43 while the U.S. Dollar Index has climbed nearly two-thirds of a point to 101.65…

Gold is headed for its 5th straight weekly loss with selling pressure driven by the near certainty of a Fed rate hike next week which has kept the U.S. dollar very strong…once the news is out on a Fed hike, and depending on Janet Yellen’s language, Gold has a good chance of immediately regaining some lost ground…strong technical support exists around $1,150 and down to $1,130…

Holdings of the SPDR Gold Trust fell another 0.34% to 860.71 tonnes yesterday…SPDR holdings have fallen nearly 9% since November and are on track for a 5th straight week of losses…

Interest rate futures imply that traders see an almost 100% chance the Fed will raise rates by a quarter point next week, and about a 50% chance the central bank will hike by at least another quarter point by June 2017, according to CME Group’s FedWatch…

U.S. Vice-President Joe Biden gave a speech in Ottawa last night, preaching the religion of climate change (“the greatest threat of our generation”) to the converted while reminiscing about the Obama Presidency with Justin Trudeau and the federal Liberals…as the National Post’s John Ivison wrote this morning, “The Obama and Trudeau governments have a relationship so deep and rich you could grow oak trees in it”…

Unfortunately for Trudeau, who was unwisely 100% convinced he’d be dealing with Hillary Clinton, the incoming Trump administration is rejecting everything Obama stood for…

From a competitive standpoint, Canada is now facing serious challenges given very divergent policy paths with its largest trading partner…this raises the prospects of a “brain drain” and a flight of capital…

Meanwhile, there’s an alarming report in today’s Financial Post regarding the resistance to resource infrastructure projects in Canada…as part of a 4-month investigation, the Financial Post identified 35 projects worth $129 billion in direct investment – mostly private money – that are struggling to move forward or have been sidelined altogether because of opposition from environmental, aboriginal and/or community groups…the downside is adding up: slower growth, lower Canadian Oil prices, investment chill, less control over domestic resources, over-reliance on the U.S. market, regulatory gridlock…

The good news today is that we’re even closer to a very strong move in the Venture!…

In Today’s Morning Musings…

1. Updates on the U.S. dollar and the euro – key euro level to watch as it pertains to Gold…

2. Crude Oil in the $70’s in 2017?…

3. The world is looking up again with Kopin!…

4. U-turn! – Uranium stocks finish the week strong…

5. Daniel’s Den – this rubber band has snapped!…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

Check back later this morning for today’s Mornings Musings.

1. Gold premiums in China held near 3-year highs this week, around $28 to $30, amid fears of limited supply of the precious metal due to import curbs, while demand in India remained subdued despite lower prices related to a severe cash crunch…the import restrictions in China are part of the country’s efforts to limit outflows of the yuan after the currency’s slide to its weakest in more 8 eight years, a fact that has not gone unnoticed by the incoming Trump administration…Gold demand in India remained subdued despite a drop in prices as retail demand was squeezed by a cash shortage, while jewellers were delaying purchases in anticipation of lower prices…

2. Gold is on track for its 5th consecutive week of declines in advance of what’s almost certain to be a rate hike next week from the Federal Reserve…Gold demand in India remains subdued despite a drop in prices as retail demand has been squeezed by a cash crunch brought about by Prime Minister’s Modi’s demonetization scheme…dealers in the world’s No. 2 consumer of the metal were offering a discount of up to $5 an ounce this week over official domestic prices that include a 10% import tax…

3. Base metal prices are steady this morning with Nickel leading the way with a gain of 13 cents per pound or nearly 3%…the Philippines’ output of Nickel ore fell 16% in the 3rd quarter from a year earlier, government data show, after the world’s top supplier of the metal suspended some mines in a clampdown on so-called environmental violations…the Southeast Asian nation has already stopped work at 10 of its 41 mines in a campaign backed by President Rodrigo Duterte against what the government says is irresponsible mining…a group of a further 20 more faces possible suspension…Environment and Natural Resources Secretary Regina Lopez, an anti-mining zealot, told Reuters there will “definitely” be more mine suspensions when the ruling on the 20 facing suspension is released, possibly within a few days…

4. Oil prices are a higher for a second consecutive session on hopes that non-OPEC producers meeting in Vienna would agree to cut output to bolster the group’s own agreement to limit production…Oil ministers from OPEC countries will meet non-OPEC producers in Vienna tomorrow to seek help in curbing a global glut…WTI is up 69 cents at $51.53 as of 7:00 am Pacific while the HOU on the TSX (double bull Crude ETF) is 18 cents higher at $8.50…updated Crude chart in today’s Morning Musings…

5. Altai Resources (ATI, TSX-V) has been one of the Venture’s big movers this week, jumping more than 50% with the stock trading at 10 cents after the first 30 minutes of trading today…2.7 million shares traded yesterday…technically, the stock’s 500-day moving average (SMA) has reversed to the upside, ending a long decline…

6. Morumbi Resources (MOC, TSX-V), a subscriber recommendation at 9.5 cents in October, has hit a new multi-year high of 28 cents this morning…the company has acquired the producing El Mochito Zinc mine in Honduras, pending final authorization for the deal (expected shortly) from the government in Honduras…we’ll be highlighting another strong Zinc play over the weekend…

7. Clean Commodities (CLE, TSX-V) announced this morning that results of its inaugural soil/till sampling program at its Labrador Trough Project have revealed several distinct and prospective Ni-Cu-PGE targets on the property…of high importance is Cluster A1 located immediately north of the SQ8 VTEM anomaly on Northern Shield Resources‘ (NRN, TSX-V) Sequoi Property where drilling commenced late last month…the anomalous cluster hosts several samples over 200 ppm Ni and 100 ppm Cu, with coincident anomalous PGE’s and Co…the Ni and Cu values are several times higher than those reported from the area of the SQ8 anomaly by NRN in its November 22 news release…the drill rig is the truth machine and we’ll soon find out if massive sulphides exist at Sequoi…

Gold has traded between $1,169 and $1,179 so far today…as of 10:30 am Pacific, bullion is off $2 an ounce at $1,171…Silver, at $16.98, has retreated 11 cents…Copper is up a penny at $2.63…Nickel is down 12 cents at $5.01…Crude Oil has jumped more than $1 a barrel to $50.78 while the U.S. Dollar Index has surged nearly a full point to 101.10…

Holdings of SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, dropped 0.72% percent to 863.67 tonnes yesterday…holdings have fallen more than 8% since the beginning of November…there were inflows into Silver yesterday, though…

Gold is under minor pressure today but it’s holding up well in light of another pulse higher in the greenback, triggered this time by the ECB’s decision to extend its bond-buying program (albeit at a modestly reduced rate) by at least another 9 months…the ECB will maintain its monthly purchase volume at 80 billion euros until March 2017 as planned, but will reduce it to 60 billion euros as of April…it kept all its interest rates unchanged…speaking at a news conference following the announcement, ECB President Mario Draghi said the decision didn’t constitute a move to “taper” or a gradual phase-out of the bond-buying program.  “Tapering has not been discussed today,” he said. “The presence of the ECB on the markets will be there for a long time.” 

That was all traders needed to hear to sell the euro and load up on more U.S. dollars…the extension of the program marks a further divergence between the world’s two most important central banks…the Fed is widely expected to raise short-term interest rates when it meets next week…

This Better Not Be Like The Herbert Hoover Rally!

After yesterday’s powerful advance, the Dow has posted gains in 18 of the past 22 sessions and 12 record closes since the election…the Trump rally in the Dow stands at 1,217 points or 6.6% through yesterday…the S&P and the Nasdaq, meanwhile, have risen 4.8% and 3.9% since November 8, respectively…

Significantly, the closely-watched Dow Transports broke out yesterday to its first record high since 2014…

While Trump is assembling an impressive team, and talking about a direction that’s pleasing to the ears of Wall Street traders, investors’ short-term expectations for the economy could be running a little ahead of where they should be…rejigging the American economy after 8 years of suffocating regulations and burdensome new taxes on businesses and individuals is going to make more than just a few months to fix…the real impact of the Trump Revolution may not be felt until sometime in 2018…

History certainly shows that an immediate post-election party on Wall Street doesn’t always translate to a near-term strong economy or stock market…in the most dramatic example, Herbert Hoover enjoyed a 13% market surge following his 1928 victory – just before the country plunged into the Great Depression…conversely, markets initially dropped after Obama got elected in 2008, but he was saved by extraordinary monetary policy measures in the wake of the Great Crash…

Trump To Unleash Oil & Gas Sector

The Trump rally has added more than 1,300 points to the Dow including today’s trading (hedge funds got it wrong again!).

In another example of how Canada and the U.S. are going in opposite directions on the regulatory front (not good for Canada from a competitive point of view), President-elect Trump is expected to nominate Oklahoma Attorney General Scott Pruitt to serve as head of the U.S. Environmental Protection Agency (EPA)…Pruitt has been a fierce critic of the EPA, and has been tied to the Oil and gas industry, which aligns with Trump’s desire to loosen energy regulations…

“Environmental protection, what they do is a disgrace; every week they come out with new regulations,” Trump said during one of many television interviews earlier this year…

Pruitt became the top prosecutor for Oklahoma, which has extensive Oil reserves, in 2011, and has challenged the EPA multiple times since, including in a pending lawsuit to throw out the EPA’s Clean Power Plan…the policy is the centerpiece of Obama’s climate change strategy and requires states to curb carbon output…

Oklahoma is ranked #1 in the Fraser Institute’s latest annual survey released this week on the top jurisdictions in the world for investing in petroleum exploration and production…as we’ve pointed out, that same survey has dropped Alberta to 43rd position out of 96…that is the most damning indictment yet of how politicians in that province, from “Progressive” Conservatives in recent years to the socialists now in power, have destroyed wealth in that province with horrendous policy decisions in the Oil and gas space and the economy in general…anger is understandably building among the electorate as evidenced by the chants at a rally this week of “Lock Her Up” in reference to Premier Rachel Notley…the collapse in Oil prices cannot be used as an excuse – every Oil-producing jurisdiction in the world has had to deal with that issue, and Alberta’s neighbor – with a very different mix of policies – has been able to vault to 4th in the Fraser Institute rankings…historically, it used to be the opposite – Saskatchewan once suffered under socialism while Alberta thrived…now the tables have been turned…question of the day, which also applies very much to investing – why is it there are so many people who either ignore history or simply don’t learn from it?…

Nickel Update

iPath Bloomberg Nickel Subindex Total Return ETN (JJN, NYSE)

Nickel has considerably more upside for 2017 as demonstrated by this morning’s updated chart for the iPath Bloomberg Nickel Subindex Total Return ETN (JJN, NYSE)…we initially posted a chart on the JJN in mid-July, shortly after the metal pushed past $4.50 a pound and was looking very bullish (“a profound change in the Nickel market” as we stated)…since then, the metal has climbed another 10%+ as investors see improved demand-supply dynamics…

There’s no question that Nickel has entered a bullish new cycle after plunging into extremely oversold conditions at the end of last year and early this year (JJN reflects the returns that are potentially available through an unleveraged investment in Nickel futures contracts, so the ETN will essentially move in lockstep with Nickel prices)…

Note the +DI/-DI bullish cross that took place in July…key near-term resistance is $14.78, 70 cents above yesterday’s closing price for this instrument…what we anticipate for 2017 is the JJN (at a minimum) testing the area between Fib. resistance at $17.71 and the long-term downtrend line which currently intersects through Fib. resistance around $20…that implies that Nickel prices will rise by at least another 25% to more than $6 a pound, perhaps significantly higher...they’ve already advanced >30% this year…

There is money to be made in Nickel!…

In Today’s Morning Musings…

1. Venture update – bargain hunter’s paradise…

2. The world is looking up again with Kopin!…

3. Updates on BLO, GGI, CEM and others…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

Check back later this morning for today’s Mornings Musings.

1. The ECB has announced a continuation of the bank’s generous asset-buying program, although a reduced pace of purchases is set to start from April next year…current asset purchases of 80 billion euros ($86 billion U.S.) a month were due to end in March 2017, but will now be extended until at least December 2017 and will be cut to 60 billion euros a month beginning in April…benchmark interest rates were left unchanged…ECB President Mario Draghi says “the risk of deflation has largely disappeared” but the ECB’s economists see a slower pickup in inflation than in September, with consumer prices seen rising by 1.5% in 2018 as against an earlier projection of 1.6%…importantly, the 1.7% rate of inflation forecast for 2019 is below the central bank’s target, which helps explain why the bond buying program has been extended…

2. Silver has a habit of leading Gold in one direction or the other, and yesterday it climbed to a 3-week high thanks in part to a large inflow into Silver-backed ETFs…Silver gained by roughly 3 x as much as Gold for a time yesterday, driving the Gold-Silver ratio below 69…unlike Gold, Silver ETFs saw inflows of 76 tonnes yesterday…Silver is off 9 cents at $17.00 as of 7:00 am Pacific while Gold has eased slightly to $1,170 with strength in the U.S. dollar…

3. The Venture is aiming for its 9th winning session out of 11 as a new uptrend begins to take shape on the charts (an updated look at the Venture in today’s Morning Musings)…the key resistance band is 770 to 784…once that is overcome, the Index could accelerate sharply to the upside…

4. Canadian Zeolite (CNZ, TSX-V) has reached an agreement with Isodiol, a Southern California-based hemp cannabidiol (CBD) innovator, to research and develop CBD and Zeolite-infused products and supplements intended for human and animal consumption…this also has significant implications for the branding of Zeolite, which can only help CNZ as the benefits of Zeolite and the many applications of it are explained to a much broader audience…CNZ is off 3 pennies at $1.77 through the first 30 minutes of trading…

5. Altai Resources (ATI, TSX-V) is one of the Venture volume leaders in early trading, up 2.5 cents at 9.5 cents as of 7:00 am Pacific…the stock’s 500-day moving average (SMA) has reversed to the upside, ending a long decline…

6. An interesting drill result from Tower Resources (TWR, TSX-V) this morning with the stock set to begin trading at 7:30 am Pacific following a trading halt…assays from a 3,400-m program at its flagship Rabbit North Project near Kamloops were highlighted by a 200-m intersection in drill hole RN-008 grading 0.30% Cu and 0.15 g/t Au (0.42% CuEq) including a 72-m interval of 0.47% Cu and 0.2 g/t Au (0.63% CuEq)…that result is consistent with Copper grades at operating mines in the region and will need to be followed up with an extensive new program…Tower expects the remainder of results by the end of the month…TWR closed yesterday at resistance, 16 cents…next resistance is the yearly high at 20.5 cents…geologically speaking, RN-008 is a significant hole but how much it’ll immediately excite the market remains to be seen – the trading halt will likely prove to have been more exciting for TWR investors…

7. The first 2 drill holes targeted within the “Rivage Gap” have located new high-grade Gold mineralization at Bonterra Gold’s (BTR, TSX-V) Gladiator Project in northern Quebec, resulting in the addition of over 500 m of strike length to the Gladiator deposit…drill hole BA-16–40 intersected 64.3 g/t over 2 m at 130 m below surface while drill hole BA-16–42 cut 8.7 g/t over 3 m at over 300 m below surface…the “Rivage Gap”, with an approximate length of 500 m, is an untested section beyond the western extension of the Gladiator Gold zone…the successful intersection of Gold mineralization in the Rivage Gap provides Bonterra confirmation that the strike length of the Gladiator deposit has now been increased to over 1.2 km from its previously drilled length of 700 m and joins the Rivage Zone with the main Gladiator Zone…

Gold has traded between $1,165 and $1,181 so far today…as of 11:30 am Pacific, bullion is up $5 an ounce at $1,174…Silver, at $17.15, has jumped 45 cents…Copper is off 5 pennies at $2.62…Nickel has retreated 9 cents to $5.14…Crude Oil is 68 cents lower at $50.25 while the U.S. Dollar Index has lost one-third of a point to 100.25…

There are some very divergent outlooks among major analyst groups regarding Gold’s path in 2017 (we take the bullish side given the signals being sent by the Venture)…Credit Suisse gave its updated view yesterday, calling for the yellow metal to average $1,338 an ounce as it draws support from increased trade protectionism, geopolitical-related currency volatility and improved Asian demand…the bank looks for $1,275 Gold in the 1st quarter and $1,400 in the final 3 months of 2017…

Looking ahead, Credit Suisse argues against the view of many pundits that President-elect Donald Trump’s fiscal policies are likely to hurt Gold…the market has factored in an expectation that a mix of U.S. tax cuts, deregulation and infrastructure spending will boost the economy, pushing up real interest rates and strengthening the U.S. dollar. “We counter that trade protectionism and anti-immigration policies are negative for growth and positive for inflation,” Credit Suisse said…

Meanwhile, no one seems to be talking much about the likelihood of higher U.S. budget deficits and debt, and the impact that could have on Gold, though Credit Suisse did touch on that briefly in its report…

It appears that just about everyone who has been highly motivated to dump Gold prior to next week’s Fed meeting and an interest rate has already done so after the metal hit an intra-day low of $1,157 Monday…Gold should take its next cue from how dovish the ECB comes across in its meeting tomorrow…the central bank is expected to change the terms of its asset-purchase program to alleviate a bond shortage and extend purchases beyond March 2017…

Alberta’s Drop In Fraser Institute Rankings Is An Embarrassment

The fact that Alberta, once a magnet for investment and the heartbeat of Canadian capitalism, has plummeted in the global rankings of most favored jurisdictions for investing in Oil and gas, should be an embarrassment to that province and Canada as a whole…Alberta now ranks 43rd out of 96 nations (barely ahead of the Philippines!), according to the Fraser Institute’s newest survey released yesterday, though neighbor Saskatchewan proudly sits 4th behind Oklahoma, Texas and Kansas (thanks to Brad Wall)…

Former Premier Ralph Klein is rolling over in his grave as he looks at what Alberta has become under the mismanagement of the former Progressive Conservatives and now the NDP without one sharp business person in its entire caucus…of course Alberta’s troubles, as bad as they are, almost pale in comparison to the disaster that has unfolded in Ontario under an incompetent and corrupt long-term Liberal regime there, some of whom left to impose their wrong-headed ideas at the federal level…when will Canadians wake up to the fact that wealth is being destroyed across much of this country due to Big Government policy prescriptions, often shaped around radical globalist ideas regarding “climate change”?…this problem will likely become much more of a focus for Canadians if the U.S. economy, going in a very different direction than Canada’s under a Trump administration, starts to accelerate through tax cuts, deregulation, and a rejection of the overheated “save the planet” rhetoric that originated from the far left in Europe and spread like a cancer in North America…

In Today’s Morning Musings…

1. An undervalued Zinc-Copper play, starting to move, with $5 million in the bank and high-grade Gold exposure as well…

2. TSX Gold Index update – putting bull market volatility into an historical context…

3. Colorado Resources (CXO, TSX-V) expands into Nevada to complement flagship KSP Project in Heart of Gold Camp…

4. Daniel’s Den – more Uranium opportunities!…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

Check back later this morning for today’s Morning Musings.

1. Outflows in global Gold ETFs continued for an 18th straight day yesterday but the metal is getting a lift today from short covering ahead of tomorrow’s ECB meeting and next Wednesday’s Fed meeting…yields on 10-year U.S. Treasury notes have eased slightly today as well…as of 7:00 am Pacific, Gold is up $10 an ounce at $1,179 while Silver has powered 43 cents higher to $17.11…

2. The TSX Gold Index has rebounded 7% to 196 from its November 23 intra-day low of 183…we’ll have an updated Gold Index chart later this morning…the Venture is up 3 points in early trading to 751…

3. What’s next for Canadian Zeolite (CNZ, TSX-V)?…one of the top-performing stocks on the Venture this quarter hit a new high of $1.95 during the first 30 minutes of trading…we’ll have an updated chart in today’s Morning Musings…

4. Colorado Resources (CXO, TSX-V) has supplemented its flagship KSP Project in the Heart of Gold Camp with the acquisition of an advanced Gold property in Nevada with high-grade potential that can be worked on outside of the exploration season in the Golden Triangle…CXO has completed a deal on favorable terms to earn 100% of the Green Springs Property where a hole drilled in an un-mined zone last year returned 41.1 m grading 4.6 g/t Au near-surface and bottomed in 1.6 g/t Au at a depth of 105 m…the 14 sq. km property is located approximately 50 miles south of Kinross Gold’s (K, TSX) Bald Mountain/Alligator Ridge mine…the turnaround has started in CXO, and we’ll have an updated chart in today’s Morning Musings…

5. Nevsun Resources’ (NSU, TSX) latest drilling at its Timok Copper-Gold Project in Siberia continues to confirm continuity and the high-grade nature of the Upper Zone…results released this morning featured 182.3 m grading 4.2% Cu and 4.8 g/t Au including 40.5 m @ 11.6% Cu and 12.9 g/t Au…an aggressive infill drilling program continues (only 25% has been completed) in addition to work on the Pre-Feasibility Study…

6. Vendetta Mining (VTT, TSX-V), advancing a high-grade Zinc-Lead project in Australia with NYSE-listed Solitario, touched a new 52-week high of 16 cents in early trading today…we’ll be uncovering another overlooked Zinc stock in today’s Morning Musings…

7. Natan Resources (NRL, TSX-V) has increased its financing to $4 million, half of which is hard dollars at 20 cents while the other half is flow-through at 25 cents…Natan recently entered into an option agreement with Globex Mining to acquire a 100% interest in the 32 sq. km Montalembert Gold property 100 km southwest of Chibougamau in Quebec’s Abitibi mining district…Montalembert is an under-explored high-grade opportunity within 5 km of a paved highway…