Gold is steady this morning…as of 6:55 am Pacific, the yellow metal is up $4 an ounce at $1,586…it traded in a narrow range overnight…Silver is 30 cents higher at $27.40…Copper is up 2 pennies at $3.43…Crude Oil is flat at $84.44 while the U.S. Dollar Index is off slightly at 83.28…
Commercial traders’ net short position in Silver is at an all-time record low…the COT structure is also very favorable at the moment for Gold, copper and even oil, and experience shows it’s never wise to bet against the commercials – they are seldom wrong…what this tells us is that the next big move this quarter is going to be to the upside…
Something to watch closely this week will be the Dollar Index and whether it can push through stiff resistance at 83.50…below is a 6-month chart from John after the Index closed Friday at 83.35, a gain of nearly 2 points for the week…
The euro, meanwhile, continues to look weak…the question now is whether it can hold a support band between 119 and 122.5…it’s up slightly this morning at 122.92…
China Inflation Continues To Ease
China’s consumer and producer prices eased more than expected in June…that may signal falling demand for goods from the world’s second-biggest economy but it also confirms that China has plenty of room for growth-supporting policy measures over the second half of the year…they can cut rates further, they can ease credit, they can expand fiscal stimulus, so there will be plenty of support for the Chinese economy to ensure a “soft landing” – particularly since there will also be a leadership transition in the fall…China will do everything it can to guarantee economic and social stability given the political dynamics at play…more economic data will be coming out of China at the end of the week – specifically, GDP, retail sales and industrial output on Friday…last week, China cut its benchmark interest rate for the second time in less than a month…
Increased Likelihood Of QE3?
The U.S. Federal Reserve should unleash a new round of bond purchases to bring down unemployment, even at the risk of driving inflation temporarily higher, one of the Fed’s most dovish policymakers said this morning…”Additional monetary accommodation is needed to more quickly boost output to its full potential level,” Chicago Federal Reserve Bank President Charles Evans said in remarks prepared for delivery to the Sasin Bangkok Forum…”The economic circumstances warrant extremely strong accommodation”…
Meanwhile, economists at Wall Street’s top bond-trading firms now put the likelihood of a third round of quantitative easing at 70%, a Reuters poll showed Friday, up from 50% on June 20…the Fed next meets to discuss policy on July 31 and August 1, and on September 12 and 13…
Today’s Markets
The Venture Exchange is up 2 points at 1213 as of 6:55 am Pacific while the Dow is off 54 points and the TSX is 38 points lower…
Asian markets were down significantly overnight with China’s Shanghai Index falling 53 points or 2.71% to 2171, putting it just above its January low…
Corporate earnings season kicks off after the close today with aluminum giant Alcoa reporting for the second quarter…traders and investors will be watching corporate earnings numbers closely, especially considering the recent slowdown in the global economy…
Kaminak Gold (KAM, TSX-V)
Kaminak Gold (KAM, TSX-V) has released positive drill results this morning from its Coffee Project in the Yukon, significantly expanding the strike length of the Supremo T3 and T4 Gold zones to greater than 1,600 metres and 1,400 metres, respectively, therefore connecting the Supremo and Latte Gold zones…new results from these zones include 12.5 g/t Au over 13 m; 15.5 g/t Au over 11 m; 10.5 g/t Au over 13 m; 29.2 g/t Au over 3 m; 2.9 g/t Au over 32 m and 35 g/t Au over 4.5 m…Kaminak has completed over 30,000 metres of drilling since March with at least 20,000 more to go…as of 7:00 am Pacific, KAM is up 14 cents at $1.87…
Avion Gold (AVR, TSX)
Avion Gold Corp. (AVR, TSX-V), which has fallen sharply in recent months in part over concerns about Mali, released record second quarter 2012 production results this morning of approximately 28,637 ounces of Gold from its Tabakoto operation in Mali, West Africa…the company has now set two consecutive quarterly records for the amount of Gold produced in a single quarter with year-to-date Gold production of 54,894 ounces after refinery adjustments…Avion says it’s well on its way to achieving its upgraded production guidance of 95,000 to 102,000 ounces of Gold for 2012…
Technically, it appears that Avion may have bottomed out in the low 40’s as John shows in the chart below…as of 6:55 am Pacific, AVR is 4 pennies higher at 60 cents…
Robex Resources (RBX, TSX-V)
Another company with interests in Mali that has been knocked down recently is Robex Resources (RBX, TSX-V) which closed Friday at 15 cents, half a penny above its rising 1,000-day moving average (SMA)…it has a strong support band between 12 and 12.5 cents…selling pressure has been intense lately which indicates a possible bottom…this is another in a long list of stocks that needs to break out of its down trendline to confirm a bullish new phase…as of 6:55 am Pacific, RBX is off half a penny at 14.5 cents…
My buy lot in GBB may be filled very soon… I hope…
Comment by Theodore — July 9, 2012 @ 6:41 am
How can the market punish RIC so severely. Crazy.
Comment by Alexandre — July 9, 2012 @ 6:52 am
Jon,
You forgot to comment on GBB’s drill results released earlier today. Your baby you talked a lot about some time ago now. Even you visited the company and had a good relation with management. Now with SGS they seem back on track. Continueing mineralisation and also some good higher grade intersections. What happend that you’re not commenting on GBB as we were used to. There is still news out. Why not making a phonecall with Frank or Roger. Perhaps an interview. So easy to do and to get more info out. Were is the Jon from some while back? Be consequent. Have a good evening.
Arjan
Comment by Arjan — July 9, 2012 @ 10:06 am
zerohedge.com/news/south-american-silver-plummets-bolivia-announces-it-will-nationalize-one-worlds-largest-silver-
Comment by Hugh — July 9, 2012 @ 10:51 am
@Arjan – you are not the first to ask BMR this question.
Comment by Hugh — July 9, 2012 @ 10:52 am
Very quiet for GBB…. no turnover means bad news for me. My buy lot for GBB is still set at 8.5 cents and sell lots at 12.5 cents and 14.5 cents. The news may boost the stock to move up but the support remains weak. Great selling pressure at 11-12 cents mark … don’t be fooled by the level II orders. Real players will never put on the board as they buy or sell directly to the market. I scooped some at 9 cents today but my main lot is at 8.5 cents waiting to be filled. Let us see tomorrow.. if my sell lot(s) can be filled. My average cost is now 9 cents. We are all waiting for BMR’s comments about GBB news.
Comment by Theodore — July 9, 2012 @ 2:33 pm
All you RBW holders, prepare for BMR to stop the daily pump of RBW soon and to move on to another stock that they have loaded up on. It was GBB everyday last year, now occasionally they can be shamed into commenting. These guys are not here out of the goodness of their hearts (nor should they be), so if you think they are not well positioned prior to their “campaign”… think again.
Comment by mike — July 9, 2012 @ 7:18 pm
There are very few gold juniors who have not not been severely punished in this market the good bad and the ugly have all met the same fate.I still believe that rbw will surprise on the upside anyday now.All stock picker letters have not done well so give bmr a break time will tell
Comment by gil — July 9, 2012 @ 7:32 pm
Mike
I think there are few who have questioned BMR’s motives behind this site, myself included. However I am still willing to give them the benefit of the doubt, their DD is thorough and these are risky markets to begin with not to mention the horrible state of the gold junior markets. My guess is they stopped following GBB because the news from them has been slow and not worthy of much excitment. I hope long term they turn around becuase I am still holding after buying in a much higher prices 🙁
Comment by Hugh — July 10, 2012 @ 2:09 am
@hughy. Gbb has no news or excitement???? 43101 1.5m ounces. How many compliant ounces does RBw have again?????
Comment by Heath — July 10, 2012 @ 4:18 am
@Heath – I agree GBB has a good story unfolding but the news has not been powerful enough to negate the neagtive news, delayed 43-101, dilution, bust-up with Genivar, Frank paying himself too much and then when the 43-101 hit it wasnt what the market had it hyped up to be when the share was in the 70s, and then all this against a weak market backdrop.
Comment by Hugh — July 10, 2012 @ 4:40 am
Gbb has the potential to be a great mine if they do not get a great buy out price first. Weak management and no large backers have hurt them in this weak junior market. That being said…if they can get private financing or a jv from bigger boys without dilution but rather from poured gold..then they have the potential to not only survive but be a great success. Osisko did not move until after their second 43-101. There are few juniors that did not have hic ups along the way on their path to success. Gbb has learned and must think out of the box…the gold is huge and is there. It is a matter of time and presenting the gold in the ground to the money.
Comment by Natalie — July 10, 2012 @ 4:55 am